WEBVTT - The Sovereign Individual Investment Thesis with Phillip Bonello 0:00:04.600 --> 0:00:07.680 So the big question is this, how do investors like 0:00:07.880 --> 0:00:11.800 us get access to the ideas, information, and most importantly, 0:00:12.039 --> 0:00:14.800 the right people that give us the tools and information 0:00:15.000 --> 0:00:19.000 we need to make informed and educated decisions to have success. 0:00:19.600 --> 0:00:22.360 That is the question, and this podcast will give us 0:00:22.360 --> 0:00:25.520 the answers. This is Mark Moss, your host. Let's get 0:00:25.520 --> 0:00:28.000 this started. Hello, and welcome to another episode of the 0:00:28.000 --> 0:00:31.880 Market Disruptors podcast. Today I am sitting down with Philip Bonello, 0:00:32.560 --> 0:00:35.360 previously with Ikey Guy Fund. He has been doing research 0:00:35.440 --> 0:00:38.519 into bitcoin and crypto for a number of years and 0:00:38.560 --> 0:00:41.400 has some amazing insights from all the research that he's done. 0:00:41.440 --> 0:00:46.080 And today we dig into a paper, a investment thesis 0:00:46.120 --> 0:00:48.479 that he's put together based off of the book The 0:00:48.600 --> 0:00:51.720 Sovereign Individual. If you haven't read the book, I highly 0:00:51.760 --> 0:00:53.680 recommend it, but today we'll give you the cliff notes 0:00:53.680 --> 0:00:56.640 of it. But there's three points that the book makes 0:00:56.640 --> 0:01:00.000 and he makes into this investment thesis, which is well, 0:01:00.120 --> 0:01:01.480 I'm not gonna spoil it for you're gonna have to 0:01:01.520 --> 0:01:03.120 pay attention, but we get into some great talks. The 0:01:03.120 --> 0:01:06.360 book is amazing. It was written in seven on the 0:01:06.360 --> 0:01:09.640 internet was just in its early stages, and it's amazing 0:01:10.000 --> 0:01:12.920 how prophetic this book is and all the things that 0:01:13.000 --> 0:01:15.319 are coming coming to fruition today. It seems like the 0:01:15.360 --> 0:01:19.520 book was just recently written. So anyway, it's a great conversation. 0:01:19.840 --> 0:01:22.400 You're gonna learn a lot about what this technology is doing, 0:01:22.480 --> 0:01:25.440 the shift that's happening in the world, the behavior changes 0:01:26.200 --> 0:01:29.240 that are happening right now, and what the world, you know, 0:01:29.240 --> 0:01:31.720 the global macrof picture of the world is doing right 0:01:31.760 --> 0:01:35.000 now to really push the adoption of the branding technology. 0:01:35.040 --> 0:01:37.520 A great conversation, a great book, and let's just go 0:01:37.520 --> 0:01:40.000 ahead and just jump right into it. Everyone. Welcome to 0:01:40.040 --> 0:01:43.319 the Market Disruptors Podcast Today. I am joined by Philip Vonello. 0:01:43.400 --> 0:01:46.240 He has previously had a research over at Ikey. Guy 0:01:46.440 --> 0:01:49.400 has been researching crypto assets and bitcoin um and has 0:01:49.440 --> 0:01:53.200 some really good insights. He's written a paper recently about 0:01:53.240 --> 0:01:55.360 a book on the sovereign individual and kind of an 0:01:55.400 --> 0:01:58.320 investment thesis around that which was was amazing, kind of 0:01:58.360 --> 0:02:00.400 rock the world. Everyone's been talking about it, and so 0:02:00.480 --> 0:02:02.520 I wanted to have him on to discuss that. I'm 0:02:02.520 --> 0:02:07.400 super excited. Welcome Philip, Hey, thanks Mark, thanks for having me. Yeah. 0:02:07.440 --> 0:02:09.880 So um, you know, we've we've we've had the privilege 0:02:09.919 --> 0:02:12.280 to talk a little bit. I read your paper, Um, so, 0:02:12.400 --> 0:02:14.560 lots of stuff to dig into. But before we do that, 0:02:14.880 --> 0:02:16.320 maybe just kind of fill us in a little bit 0:02:16.360 --> 0:02:18.959 on what you've been working on and kind of where 0:02:18.960 --> 0:02:24.200 you're at right now. Yeah. So, like you said, I 0:02:24.200 --> 0:02:26.519 worked in sorry for a little bit, uh than with 0:02:26.600 --> 0:02:29.440 head research. I guy. Recently, I've just been taking some 0:02:29.520 --> 0:02:34.079 time off exploring different kind of avenues. And one of 0:02:34.160 --> 0:02:35.840 the things that I've been digging into a bunch of 0:02:36.000 --> 0:02:39.000 just kind of a worldview. So, as you mentioned, I 0:02:39.120 --> 0:02:42.919 recently published kind of an investment thesis based on the 0:02:42.960 --> 0:02:47.560 book The Sovereign Individual, which is a really trucient book 0:02:47.600 --> 0:02:53.000 written in I'm almost embarrassed to say that I read 0:02:53.040 --> 0:02:56.880 it recently because it's such a a lot of a 0:02:56.880 --> 0:02:58.640 lot of people in the bigcoin space really love The 0:02:58.639 --> 0:03:02.680 Sovereign Individual the book, and it really was an eye 0:03:02.720 --> 0:03:06.120 opener for me. Yeah. So the last couple of years 0:03:06.200 --> 0:03:08.920 you've been doing research, Um, tell us a little bit 0:03:08.960 --> 0:03:12.640 about the kind of research that you've been doing though. Yeah. 0:03:12.720 --> 0:03:16.200 So in two thousand and eighteen, I really dug in 0:03:16.280 --> 0:03:20.160 and tried to understand why any of these crypto assets 0:03:20.200 --> 0:03:22.360 were valuable. So what that kind of led me to 0:03:22.480 --> 0:03:26.760 is building out a series of different frameworks. So essentially 0:03:26.840 --> 0:03:29.240 the way that I look at the entire crypto asset 0:03:29.280 --> 0:03:32.160 world is through the ones of productive assets and non 0:03:32.240 --> 0:03:35.560 productive assets. So you can think think of non productive 0:03:35.560 --> 0:03:39.520 assets as something like bitcoin. By holding X, you don't 0:03:39.520 --> 0:03:43.280 get any any why there's no exhougenists cash flow, right, um, 0:03:43.360 --> 0:03:45.920 similar to something like gold. Uh. And then in the 0:03:45.920 --> 0:03:50.560 productive asset category, if you hold X, you get why right, 0:03:50.600 --> 0:03:53.320 there's an exhaugenists cash flow coming into the system. Uh. 0:03:53.360 --> 0:03:56.840 Something you know that's something like Auger, right, where with 0:03:56.880 --> 0:03:59.760 Auger you can you can stake rep and you're going 0:03:59.840 --> 0:04:03.000 to get a certain amount of and returned to the 0:04:03.040 --> 0:04:07.160 proportion of REP that you stay. So that really led 0:04:07.200 --> 0:04:10.200 me to build out a series of valuation models. It 0:04:10.280 --> 0:04:13.720 really helped frame my thinking for the entire space. Uh. 0:04:13.760 --> 0:04:16.599 And I kind of took that thinking and evaluated the 0:04:16.680 --> 0:04:20.400 broader ecosystem and um kind of how value accruise in 0:04:20.400 --> 0:04:24.080 the in the whole system. In the crypto stack, I 0:04:24.080 --> 0:04:27.200 would say, so you really dug into these different assets 0:04:27.200 --> 0:04:31.960 and kind of classified them into productive and nonproductive. Um. 0:04:32.000 --> 0:04:34.560 But then were you also kind of looking at UM. 0:04:34.600 --> 0:04:36.240 It sounds like you were also looking at maybe like 0:04:36.279 --> 0:04:39.640 the act the macro economic picture as well, to see 0:04:39.720 --> 0:04:42.400 where do these new assets, where do they fit into 0:04:42.400 --> 0:04:45.720 the big picture of kind of where the world's at. Yeah, 0:04:45.760 --> 0:04:47.560 So a lot of what we did I was thinking 0:04:47.560 --> 0:04:50.200 about the macro perspective, given what's going on in the 0:04:50.200 --> 0:04:54.320 world right now, what is the demand for these crypto assets? Uh, 0:04:54.520 --> 0:04:57.159 you know bigcoin sets that are really pretty interesting space, 0:04:57.200 --> 0:05:00.280 and that it's both a risk asset but it's trying 0:05:00.320 --> 0:05:02.680 to be this reserve asset. I think the rest of 0:05:02.680 --> 0:05:05.440 crypto is pretty solidly and kind of the risk asset 0:05:05.480 --> 0:05:10.120 category M and then and then taking a step deeper, 0:05:10.160 --> 0:05:14.039 it's okay, based on that macro perspective, what is the 0:05:14.080 --> 0:05:18.000 crypto macro looking like right now? And broadly the crypto 0:05:18.040 --> 0:05:20.599 macro a lot of time is influenced by Bitcoin, and 0:05:20.600 --> 0:05:23.280 so we use a lot of enchain metrics to kind 0:05:23.279 --> 0:05:27.800 of study cycle UM and and how we think all 0:05:27.839 --> 0:05:30.120 coins are going to react to the bigcoin cycle and 0:05:30.480 --> 0:05:32.880 how bigcoin is gonna react and so on and so forth. 0:05:33.480 --> 0:05:36.799 And then and then the final level was digging deeper 0:05:36.800 --> 0:05:39.839 into each one of the projects, analyzing the product that 0:05:40.120 --> 0:05:42.279 each one of them had, and then the asset that 0:05:43.040 --> 0:05:45.760 each one of those had with relation to the product. Um. 0:05:45.880 --> 0:05:48.600 Like I said, a lot of these are nonproductive assets, 0:05:48.600 --> 0:05:52.400 and in our view, there's not really a link between 0:05:52.640 --> 0:05:56.840 that non productive asset, uh, and I guess you know 0:05:56.880 --> 0:06:00.080 the product. Yeah, yeah. I I like looking at the 0:06:00.120 --> 0:06:02.760 macro view, especially when you're dealing with like technology like this, 0:06:02.839 --> 0:06:05.120 because it gives you I I kind of feel like 0:06:05.160 --> 0:06:07.880 the bigger picture is almost easier to see than the 0:06:07.920 --> 0:06:10.719 small picture. Like if someone says, hey, Mark and I 0:06:10.720 --> 0:06:12.800 get asked us all the time, like where's bitcoin going 0:06:12.839 --> 0:06:14.240 to be in a week or in a month, And 0:06:14.279 --> 0:06:16.800 I'm like, I don't really know, but I kind of 0:06:16.880 --> 0:06:18.159 have a feeling of where it's going to be in 0:06:18.160 --> 0:06:21.000 five years from now. Um And and a lot of 0:06:21.000 --> 0:06:22.680 times I think about it like you watch one of 0:06:22.680 --> 0:06:24.640 those movies where people go back in you know, in 0:06:24.680 --> 0:06:27.159 a time machine, and if they touched one little thing 0:06:27.200 --> 0:06:28.440 and then they go back to the future, it makes 0:06:28.480 --> 0:06:30.800 this massive impact. And that's kind of like we can 0:06:30.800 --> 0:06:33.320 see these little things happening today that have that massive impact. 0:06:33.400 --> 0:06:36.919 That's pretty cool. UM. So thanks for giving us that 0:06:36.920 --> 0:06:40.440 background I think it's important to to get your perspective 0:06:40.480 --> 0:06:42.920 as we move into this. But so, so you wrote 0:06:43.000 --> 0:06:45.000 this kind of investment thesis off this book The Sovereign 0:06:45.040 --> 0:06:47.839 Individual Um, which as you said, is kind of big 0:06:47.880 --> 0:06:50.000 in the in the in the bitcoin space, maybe because 0:06:50.040 --> 0:06:52.960 it was for telling of what was going to happen, right, 0:06:53.000 --> 0:06:59.360 I mean the book was written there wasn't really I mean, 0:06:59.360 --> 0:07:01.359 the Internet was a round, but it wasn't even really 0:07:01.560 --> 0:07:04.159 hadn't even really taken hold yet. So for them to 0:07:04.200 --> 0:07:06.680 write this book at that time was a pretty big, 0:07:07.160 --> 0:07:09.040 pretty big deal. It was like they did a good job. 0:07:09.080 --> 0:07:12.000 So kind of give us the overview of what the 0:07:12.000 --> 0:07:14.200 books about and maybe your investment thesis you pulled out 0:07:14.200 --> 0:07:16.680 of it. Yeah. So, I mean one of the things 0:07:16.720 --> 0:07:18.720 that's that's really interesting about the book is that they 0:07:19.000 --> 0:07:21.960 do a pretty good job of predicting bitcoin. You know, 0:07:23.040 --> 0:07:25.160 they think that there's going to be a currency that's 0:07:25.200 --> 0:07:27.400 backed by gold. So they're a little off in that respect, 0:07:27.800 --> 0:07:34.120 but but still pretty incredible insight. I Mean, broadly, what 0:07:34.240 --> 0:07:39.720 The Sovereign Individual talks about is the logical violence, uh, 0:07:39.760 --> 0:07:43.600 and how that has really affected big trends throughout history, 0:07:43.680 --> 0:07:48.840 so especially starting with kind of the agricultural movement. With 0:07:48.960 --> 0:07:51.600 our with humans moved to agriculture, we started to have 0:07:51.640 --> 0:07:55.880 their mergence of personal property, and with their emergence of 0:07:55.960 --> 0:08:01.280 personal property, violence at scale uh really became valuable. So 0:08:01.440 --> 0:08:04.520 we we saw the rise of these different types of 0:08:05.600 --> 0:08:09.400 bureaucratic entities, these different kind of organizations to really uh 0:08:10.240 --> 0:08:16.000 ah provide protection for groups of individuals who needed that protection. Right. 0:08:16.680 --> 0:08:19.960 And and then as we move into the information age, 0:08:20.560 --> 0:08:24.000 a lot of that stuff gets turned on its head. Uh. 0:08:24.160 --> 0:08:29.040 So there's there's reduced information asymmetry. Uh, you know, there's 0:08:30.640 --> 0:08:33.920 the potential for money that is outside the control of 0:08:34.280 --> 0:08:39.800 a central government. And then encryption completely changes the logic 0:08:39.880 --> 0:08:42.440 of violence and the way that individuals can protect themselves. 0:08:42.720 --> 0:08:46.480 So for the first time, really, um, an individual can 0:08:46.720 --> 0:08:49.760 hold let's say a billion dollars and and there there 0:08:49.840 --> 0:08:53.720 the way that they protect that billion dollars is just 0:08:53.840 --> 0:08:56.400 about as good as the way that the US government 0:08:56.400 --> 0:08:59.880 would protect that billion dollars. Right. Encryption decreases the cost 0:09:00.040 --> 0:09:04.600 of protection and decrease. It also decreases the leverage that 0:09:04.720 --> 0:09:09.120 violence has on people. Yeah. Yeah, So let's let's unpack 0:09:09.200 --> 0:09:11.640 that a little bit. So you talk about information technology. 0:09:11.720 --> 0:09:15.680 So the Internet was information technology, right, so decentralized information. 0:09:15.760 --> 0:09:20.080 So previous to the Internet, Um, information you said had 0:09:21.280 --> 0:09:25.440 eight what do you call it? Asymmetric information? I forget 0:09:25.480 --> 0:09:30.280 to work just there's uh information asymmetry. Right, So certain 0:09:30.440 --> 0:09:33.680 certain organizations have control over all this information and they 0:09:34.080 --> 0:09:37.760 distributed only to their members and think about about it 0:09:37.800 --> 0:09:40.280 like that. Yeah, and so information was controlled and really 0:09:40.320 --> 0:09:42.200 you could chase this all the way back to you know, 0:09:42.240 --> 0:09:45.080 Martin Luther times in in Europe and whatever, the four 0:09:45.480 --> 0:09:48.840 dreds where the church kind of controlled the scripture and 0:09:48.880 --> 0:09:50.880 it wasn't until the printing press came out that then 0:09:50.920 --> 0:09:53.560 it was able to spread that information. And that's what 0:09:53.720 --> 0:09:57.079 broke the power at the church had over and uh 0:09:57.160 --> 0:09:59.440 and the Internet has taken that a step further, right, 0:09:59.480 --> 0:10:04.320 So we have kind of leveled the plane field on information. YEA, yeah, 0:10:04.400 --> 0:10:09.520 that's exactly that's exactly right. Um, I mean yeah, sorry, 0:10:09.520 --> 0:10:13.000 go ahead, Well I was gonna say so because the 0:10:13.040 --> 0:10:17.760 information is now spread out and across borders, across the globe. 0:10:18.280 --> 0:10:21.720 You made the point, right, it's broken down the jurisdictional barriers. 0:10:21.720 --> 0:10:23.840 So now instead of like one country that kind of 0:10:23.840 --> 0:10:25.680 has all the information Now it's kind of starting to 0:10:25.720 --> 0:10:30.920 be global. Yeah, absolutely, and I think that's um, that's 0:10:30.960 --> 0:10:34.520 one of the biggest drivers to this, this broader trend. 0:10:35.240 --> 0:10:38.880 Everyone has access to the same information, so everyone can 0:10:38.920 --> 0:10:41.880 be educated in relatively the same way. And when everyone 0:10:41.920 --> 0:10:44.720 can be educated in the same way, then everyone can 0:10:44.760 --> 0:10:48.640 do mostly the same jobs, jobs that used to be 0:10:48.720 --> 0:10:52.199 considered skill to work. Right, And so when you think 0:10:52.240 --> 0:10:56.080 about kind of mean reversion, uh, the people who used 0:10:56.120 --> 0:10:58.160 to do that skilled work in the developed countries are 0:10:58.360 --> 0:11:00.800 are used to these high wages, but now they're being 0:11:00.880 --> 0:11:04.600 undercut by people who can provide those those same that 0:11:04.640 --> 0:11:07.800 same level of work for potentially a quarter of the 0:11:07.880 --> 0:11:12.560 quarter of the cost, right, And so it seems relatively inevitable, 0:11:12.559 --> 0:11:16.920 inevitable that there's going to be this mean reversion from 0:11:16.960 --> 0:11:19.760 both the developed countries and the developing countries. And so 0:11:20.880 --> 0:11:22.280 I think that was that was one of the key 0:11:22.320 --> 0:11:26.040 insights that I took away from the book m just 0:11:26.200 --> 0:11:31.840 this idea of decreasing information asymmetry. There's a decreasing value 0:11:31.840 --> 0:11:36.120 to location, so the exit costs are are much easier. 0:11:36.200 --> 0:11:39.839 You know, let's let's say, uh, my wages personally are 0:11:39.880 --> 0:11:42.320 are going down. I can no longer afford to live 0:11:42.679 --> 0:11:45.160 in l A, So I have to go to a 0:11:45.160 --> 0:11:50.280 different jurisdiction, a jurisdiction that might be more business friendly. Uh. 0:11:50.400 --> 0:11:54.800 They have lower taxes, um. You know, they have subsidies 0:11:54.800 --> 0:12:00.320 for starting up entrepreneurial ventures, um and and and it's 0:12:00.320 --> 0:12:02.160 really easy to do that because I can run I 0:12:02.200 --> 0:12:06.120 can run my business from anywhere in the world. We're 0:12:06.280 --> 0:12:09.520 we're previously you know. Uh, there's there's a lot of 0:12:09.559 --> 0:12:12.320 value in being in the central locations. And we haven't 0:12:12.400 --> 0:12:15.640 quite seen that shift fully yet, but you can see 0:12:15.679 --> 0:12:17.560 the beginnings of it. I mean it's it's definitely not 0:12:17.760 --> 0:12:20.000 fully shifted, but we've definitely seen the beginnings of it. 0:12:20.080 --> 0:12:23.440 What's interesting is, at least I don't know, I haven't 0:12:23.480 --> 0:12:26.760 fact checked it, but a decade ago maybe there's an 0:12:26.760 --> 0:12:29.079 author Daniel Pink He wrote a book called A Whole 0:12:29.080 --> 0:12:32.959 New Mind, And basically the point that he made in 0:12:33.000 --> 0:12:35.320 the book is that, um, the whole world has been 0:12:35.320 --> 0:12:38.760 set up for technical roles. College teaches people technical, SA 0:12:38.880 --> 0:12:42.800 t s are technical. All the jobs were technical, right, engineers, etcetera. 0:12:43.760 --> 0:12:46.640 But because of the Internet, as you're saying, UM, now 0:12:46.679 --> 0:12:50.320 it's taken technical roles and made them commodities. And so 0:12:50.400 --> 0:12:53.599 now being the engineer or whatever, the codeer, the developer 0:12:54.120 --> 0:12:55.960 is not where you want to be because now that's 0:12:55.960 --> 0:12:58.199 been commoditized, right, I can hire does dozen them over 0:12:58.200 --> 0:13:00.839 in New Delhi or whatever. And so he calls it 0:13:00.880 --> 0:13:02.280 a whole new mind because we kind of have a 0:13:02.280 --> 0:13:05.080 creative side and analytical side of the brain supposedly, And 0:13:05.080 --> 0:13:07.480 he said, in order to be successful in this new age, 0:13:07.800 --> 0:13:09.679 you have to use the creative side of your brain. 0:13:10.080 --> 0:13:11.959 And instead of being like if you think of like 0:13:12.000 --> 0:13:14.120 an orchestra, instead of being the best troumbone player, the 0:13:14.160 --> 0:13:17.560 best horn player, you're the conductor. And I can't play 0:13:17.559 --> 0:13:19.520 the music better than any of those people, but I 0:13:19.520 --> 0:13:23.079 can make them make beautiful music together. Yep. And and 0:13:23.080 --> 0:13:28.079 and those people today have more leverage than ever before. Right, 0:13:28.120 --> 0:13:32.440 So uh there's creative people, yeah, the creative people. Right. 0:13:32.480 --> 0:13:38.000 So essentially, entrepreneurs and investors have more leverage than they 0:13:38.000 --> 0:13:41.000 ever had before because, uh, they can be really creative. 0:13:41.000 --> 0:13:43.880 They can coordinate all these resources while they're sitting in 0:13:43.920 --> 0:13:47.840 the living room. Right. Um. On the flip side of that, 0:13:48.000 --> 0:13:53.960 workers have more competition than than ever before. So uh, yeah, 0:13:54.040 --> 0:13:57.040 you know, work, work, works, smart, not hard, you know, 0:13:57.080 --> 0:14:00.600 there maybe something something to that. Yeah, well, the school 0:14:00.640 --> 0:14:03.000 systems definitely have not kept up with the with the 0:14:03.080 --> 0:14:05.760 changes of technology, and so there's still training everyone to 0:14:05.800 --> 0:14:08.320 be technical, technical, technical, but we've gone to a creative 0:14:08.320 --> 0:14:11.880 world and so um, there's a there's a big challenge there, 0:14:11.880 --> 0:14:13.360 which we'll get into. I know, you start talking a 0:14:13.360 --> 0:14:15.160 lot about education, and that's the part that I'm pretty 0:14:15.160 --> 0:14:19.440 passionate about. It's interesting though, you know when you look 0:14:19.440 --> 0:14:21.160 at what's going on in the world today with you know, 0:14:21.240 --> 0:14:23.320 all over the world right now, right from Iran and 0:14:23.400 --> 0:14:26.160 Lebanon and Hong Kong, especially Hong Kong, but Chile, and 0:14:26.240 --> 0:14:29.280 I mean you name it right, it's erupting and especially 0:14:29.280 --> 0:14:33.640 like in Hong Kong. Um but it, as you called it, 0:14:33.680 --> 0:14:37.840 borderless information reduces jurisdictional barriers and and I find it 0:14:38.040 --> 0:14:42.080 like hard to believe that in this world today a 0:14:42.200 --> 0:14:45.840 country can still own you, Yeah, like your own you're 0:14:45.920 --> 0:14:49.160 you're basically slave, right, You're owned by the country. And 0:14:50.040 --> 0:14:52.720 how in the US, right half of my wages go 0:14:52.800 --> 0:14:57.080 to the government and I can't leave. Yeah, I mean 0:14:58.120 --> 0:15:00.520 I think that's a cheat problem. I think there are 0:15:00.920 --> 0:15:05.560 some technical challenges to that. Right, our systems are set 0:15:05.640 --> 0:15:09.000 up in a way that we inherently give over our 0:15:09.120 --> 0:15:12.600 data when when we use a given application. Um. But 0:15:13.080 --> 0:15:16.400 like what you were talking about as far as high taxation, 0:15:17.120 --> 0:15:19.920 it's gonna be really interesting interesting in the coming years 0:15:20.800 --> 0:15:24.800 with kind of the wealth tax, you know, the whole 0:15:24.840 --> 0:15:28.800 movement of tax the billionaires, um, and potential for something 0:15:28.840 --> 0:15:33.160 like m M T. Right, Really wealthy people especially will 0:15:33.160 --> 0:15:36.640 probably be leading the charge of Okay, how do I 0:15:36.680 --> 0:15:40.120 protect my well here? Um? I might have to either 0:15:40.160 --> 0:15:43.320 protect it from seizure or if they're protected from inflation, right, 0:15:43.360 --> 0:15:47.720 And you know, the coins are pretty pretty interesting tool 0:15:47.760 --> 0:15:50.360 for that. If you look at how um, you know, 0:15:50.560 --> 0:15:53.440 life has evolved, um, I mean not since the beginning, 0:15:53.480 --> 0:15:55.360 but just you know, you look at like Game of 0:15:55.400 --> 0:15:57.960 Thrones or whatever, right, and it's just like little tribes 0:15:58.000 --> 0:15:59.960 and the one would attack the other one to see 0:16:00.000 --> 0:16:02.440 older resources. And so you know, you kind of had 0:16:02.480 --> 0:16:05.200 to get these like kingdoms which then became countries, and 0:16:05.200 --> 0:16:08.040 still countries were taken over the countries to steal their resources. 0:16:08.680 --> 0:16:11.360 But now moving into like this more information age, which 0:16:11.360 --> 0:16:13.160 I guess we'll get to like a near encryption part, 0:16:13.360 --> 0:16:15.280 which is now we can protect our resources in a 0:16:15.320 --> 0:16:18.520 completely different way, which means the threats that we have 0:16:18.560 --> 0:16:20.200 are not the same as they always have. Like someone 0:16:20.240 --> 0:16:22.120 can't just come take over my house because my assets 0:16:22.160 --> 0:16:24.160 aren't or my you know, it's not in my house, right, 0:16:24.240 --> 0:16:29.160 it's like digital or whatever. Yeah, and you know, there 0:16:29.200 --> 0:16:32.440 there are still levers to be pulled in the physical world. 0:16:32.640 --> 0:16:37.760 You can still be attacked physically, still be killed, right, Um, 0:16:37.880 --> 0:16:42.360 but more and more assets are outside of the purview 0:16:42.440 --> 0:16:46.200 of of kind of government government interference, outside of just 0:16:46.280 --> 0:16:54.640 physical coercion. I and and that that's a really interesting trend. Yeah. Yeah, So, um, 0:16:54.720 --> 0:16:57.760 while I see the information being uh this kind of 0:16:58.320 --> 0:17:02.120 commercial or more or list kind of jurisdictional thing dropping, 0:17:02.320 --> 0:17:04.640 it's gonna be interesting to see how that plays out. Um. 0:17:04.680 --> 0:17:07.800 I know you quoted um Jil Carlson and she had 0:17:07.800 --> 0:17:10.280 talked about how the Internet grew up and it and 0:17:10.320 --> 0:17:14.119 it created this borderless um you know, mind share, information share, 0:17:14.359 --> 0:17:18.159 but financials got left behind. And it reminded me of 0:17:18.480 --> 0:17:20.880 a story I saw Eric Vorhees right a while ago 0:17:20.920 --> 0:17:23.680 where he kind of talked about, imagine if we had 0:17:23.720 --> 0:17:26.639 this internet and instead of this Internet, that connected the 0:17:26.640 --> 0:17:29.040 whole world and we all shared information. Imagine if we 0:17:29.080 --> 0:17:31.280 each had our own little regional internet and we just 0:17:31.320 --> 0:17:33.719 had the United States Internet and there was a China Internet. Well, 0:17:33.720 --> 0:17:35.639 I guess there was a China Internet, but you know, 0:17:35.920 --> 0:17:38.280 each country had their own little internet, and how different 0:17:38.280 --> 0:17:41.399 it would be. And then he made the point, well, okay, 0:17:41.400 --> 0:17:43.720 now that you've imagine that, well, that's exactly how money works. 0:17:44.480 --> 0:17:47.560 And so um. Anyway, it's interesting to to kind of 0:17:47.600 --> 0:17:51.520 look back and see how the information has been decentralized 0:17:51.560 --> 0:17:55.600 and how hopefully money's next there. Yeah, which takes us 0:17:55.640 --> 0:17:58.320 to the second point of your paper, which was that 0:17:58.920 --> 0:18:00.680 or from the book, which is the creation of non 0:18:00.760 --> 0:18:05.440 sovereign digital money. And I guess that kind of creates 0:18:05.520 --> 0:18:08.879 competition with the money, which once we have competition with 0:18:08.920 --> 0:18:11.440 the money, then you said, it decreases the power of 0:18:11.480 --> 0:18:16.200 inflation and taxation. Yeah, and and so so take take 0:18:16.240 --> 0:18:19.080 a quick step back. You know, when I started thinking 0:18:19.119 --> 0:18:24.680 about this thesis broadly, I looked at it through uh 0:18:24.960 --> 0:18:29.200 kind of sources of demand and I use acquired defend 0:18:29.760 --> 0:18:33.360 bond learn and feel as kind of the sources there 0:18:33.680 --> 0:18:36.160 and what are what are those? Those are? Those are 0:18:36.200 --> 0:18:40.199 like the five human motivations. Yeah, and you know, we 0:18:40.280 --> 0:18:44.080 can like it's up for debate what what are the 0:18:44.160 --> 0:18:47.800 primary human motivations? But I, uh, we we know for 0:18:47.840 --> 0:18:51.280 sure greed and fear right to at least yeah, yeah, 0:18:51.760 --> 0:18:54.840 you know, so acquired defend. But I think there you know, 0:18:54.920 --> 0:18:58.040 there's a there definitely is an inherent desire to learn, 0:18:58.400 --> 0:19:00.919 there's a there's a design are to be loved, So 0:19:01.000 --> 0:19:03.840 that's kind of the bonding. And I think there is 0:19:03.920 --> 0:19:07.240 a desire to feel or to escape right from from 0:19:07.280 --> 0:19:11.520 your mind or what have you. And so U four 0:19:11.560 --> 0:19:14.000 of those are borrowed from the book Driven, which which 0:19:14.800 --> 0:19:17.840 talks about it in a different context. But I the 0:19:17.880 --> 0:19:20.800 reason I wanted to look at things, uh through the 0:19:20.880 --> 0:19:24.440 lens of demand is because I really like the way 0:19:24.440 --> 0:19:29.040 that Jeff Bezos framed uh. You know, he he talked 0:19:29.080 --> 0:19:33.000 about people ask them all the time what's changed or 0:19:33.000 --> 0:19:35.760 what's going to change in ten years, and he always says, well, 0:19:35.880 --> 0:19:38.359 it's a lot easier to look at what's not going 0:19:38.400 --> 0:19:41.520 to change, right, And I think broadly you can look 0:19:41.560 --> 0:19:46.040 at human motivations and how they're not going to change. Um. 0:19:46.160 --> 0:19:50.720 But what's interesting in the crypto space is that I 0:19:50.760 --> 0:19:55.120 think there is a behavior change that needs to happen, right, 0:19:55.160 --> 0:19:59.760 So we're very much focused on, uh, this idea of 0:20:00.080 --> 0:20:05.840 acquire agreed right now, and to an extent, have ignored 0:20:08.200 --> 0:20:12.720 kind of our defensive practices. We outsource, we outsource protection. 0:20:13.440 --> 0:20:16.439 And this is evident in and the way that we 0:20:16.560 --> 0:20:20.159 use applications today because all like Facebook has all of 0:20:20.200 --> 0:20:24.560 our data, Google has all of our data. Right. Um, 0:20:24.600 --> 0:20:26.600 it's just the way that it's set up. And people 0:20:26.600 --> 0:20:31.199 people brought like pretty much don't care. So one of 0:20:31.240 --> 0:20:35.960 the trends that I see is is as it um 0:20:36.080 --> 0:20:40.640 is that we'll see this, uh, this motivation of defend, 0:20:40.920 --> 0:20:46.000 this need for defensive technologies to increase, right, and so 0:20:46.000 --> 0:20:49.800 so the idea of digital money is kind of a 0:20:50.080 --> 0:20:54.879 defensive technology. People don't really care about it until they 0:20:54.920 --> 0:20:58.760 have to. You ask most people right now, they say, oh, 0:20:58.800 --> 0:21:02.360 the U S dollars. Fine, it's it's the US dollar, right. 0:21:03.040 --> 0:21:05.320 But I think there's all different levels to that, right. 0:21:05.359 --> 0:21:08.040 So I work with all types of investors and go 0:21:08.080 --> 0:21:10.159 through training stuff. And it's like in the beginning, when 0:21:10.200 --> 0:21:12.240 you're young and you have and you don't have much money, 0:21:12.359 --> 0:21:14.480 you're just risky, right, You're greedy, I need to get 0:21:14.480 --> 0:21:16.680 more money. But as you get older and you have money, 0:21:16.760 --> 0:21:18.960 than it switches and now you have to protect that money. 0:21:18.960 --> 0:21:21.840 Were like, you're young and single and you're thinking about yourself. Well, 0:21:21.840 --> 0:21:23.719 now I'm a father and I have kids, and like, 0:21:23.800 --> 0:21:27.639 you're better to be sure I'm ready to protect that family. Right. So, 0:21:27.680 --> 0:21:30.760 I think our motivations as humans are the same, but 0:21:30.800 --> 0:21:34.840 they change as we go through life. Maybe yeah, yeah, 0:21:34.880 --> 0:21:38.520 that that's definitely possible. And uh, I think it's probably 0:21:38.560 --> 0:21:43.159 an environmentally dependent um you know, some someone someone in 0:21:43.240 --> 0:21:45.560 Venezuela is definitely a lot more sensitive to the idea 0:21:45.560 --> 0:21:50.520 of inflation than someone in uh from the US. Um 0:21:50.560 --> 0:21:54.600 And and I think I think that those environmental factors 0:21:54.600 --> 0:22:00.600 definitely affect the demands our motivations. So so so that's 0:22:00.640 --> 0:22:02.359 kind of what I what I argue in the paper 0:22:02.920 --> 0:22:06.720 that we have this technology, we have the ability to 0:22:06.760 --> 0:22:11.600 opt out of these systems. We understand the supply right, 0:22:12.280 --> 0:22:16.040 twenty one million bitcoin. That's a great narrative, but I 0:22:16.040 --> 0:22:19.680 think a lot of people are you know, they're they're 0:22:19.760 --> 0:22:22.400 arguing about demand. Where is the demand going to come from? 0:22:22.480 --> 0:22:26.119 And uh, as we see more capital controls, as we 0:22:26.200 --> 0:22:29.680 see increase inflation, as we see increased taxation, then the 0:22:29.800 --> 0:22:36.359 demand for an asset like bitcoin will increase. And with that, 0:22:36.760 --> 0:22:39.160