1 00:00:00,120 --> 00:00:02,720 Speaker 1: Hello, and welcome to another episode of the Mark Mass Show, 2 00:00:02,720 --> 00:00:05,960 Speaker 1: where we talk about, of course, the decentralized Revolution, talking 3 00:00:05,960 --> 00:00:08,479 Speaker 1: about the way the world is changing from a centralized 4 00:00:08,520 --> 00:00:10,320 Speaker 1: world to a decentralized world as we look at it 5 00:00:10,320 --> 00:00:13,600 Speaker 1: through the lens of politics, finance, and technology. And you know, 6 00:00:13,840 --> 00:00:15,640 Speaker 1: I like to bring to you some education to change 7 00:00:15,680 --> 00:00:17,919 Speaker 1: the way you think, some of the latest breaking news 8 00:00:17,920 --> 00:00:20,560 Speaker 1: so you can stay with this revolution step by step, 9 00:00:20,560 --> 00:00:23,040 Speaker 1: and of course some interesting people so you don't have 10 00:00:23,079 --> 00:00:24,800 Speaker 1: to just listen to me all the time. And that's 11 00:00:24,840 --> 00:00:27,520 Speaker 1: what I have for you right now. I'm joined in 12 00:00:27,520 --> 00:00:30,680 Speaker 1: the studio today with Eric Yates. He's the author of 13 00:00:30,760 --> 00:00:33,920 Speaker 1: The Seventh Property. You can find him on Twitter at 14 00:00:34,080 --> 00:00:38,880 Speaker 1: Eric Yeakes. That's y a key, k Ees and Eric, 15 00:00:38,920 --> 00:00:39,920 Speaker 1: thanks for joining me today. 16 00:00:40,280 --> 00:00:42,239 Speaker 2: Hey, thanks for having me. Man, Let's get into it. 17 00:00:42,560 --> 00:00:43,640 Speaker 3: Yeah, let's get into it. 18 00:00:43,680 --> 00:00:45,879 Speaker 1: You know, so you wrote this book, the Seventh Property, 19 00:00:46,479 --> 00:00:50,440 Speaker 1: talking about Bitcoin, the Monetary Revolution, and I thought it 20 00:00:50,479 --> 00:00:51,960 Speaker 1: was I thought it was really good. There's there's some 21 00:00:52,000 --> 00:00:54,200 Speaker 1: really good points that I want to dig into. And 22 00:00:54,560 --> 00:00:57,720 Speaker 1: you know, something that I kind of see you talking 23 00:00:57,720 --> 00:01:01,480 Speaker 1: about here in this Monetary Revolution and the Seventh Property 24 00:01:01,720 --> 00:01:04,960 Speaker 1: of Money and Currency so I want to talk about 25 00:01:04,959 --> 00:01:07,280 Speaker 1: your thesis in the book. But let's set this up 26 00:01:07,280 --> 00:01:09,120 Speaker 1: a little bit. You know, I believe that one of 27 00:01:09,160 --> 00:01:12,399 Speaker 1: the problems that people have, and I'm sure you would agree, 28 00:01:13,000 --> 00:01:17,399 Speaker 1: specifically with money and finance and even more specifically with bitcoin, 29 00:01:17,760 --> 00:01:21,840 Speaker 1: is that they don't even understand money. And if you 30 00:01:21,840 --> 00:01:24,560 Speaker 1: don't understand money, then you can't understand these other things. Now, 31 00:01:24,560 --> 00:01:26,960 Speaker 1: people think they understand money because we all use money, 32 00:01:26,959 --> 00:01:28,839 Speaker 1: we get paid in money, we have in my walllets, whatever, 33 00:01:28,880 --> 00:01:29,160 Speaker 1: so we. 34 00:01:29,120 --> 00:01:30,559 Speaker 3: All think we know it, but we don't. 35 00:01:31,200 --> 00:01:34,360 Speaker 1: So I was thinking, maybe you could maybe tell us 36 00:01:34,400 --> 00:01:37,560 Speaker 1: what you think some of these misconceptions are with money, 37 00:01:37,640 --> 00:01:42,160 Speaker 1: and then what's what the main attributes of money are? 38 00:01:43,840 --> 00:01:44,240 Speaker 2: Totally? 39 00:01:46,680 --> 00:01:49,880 Speaker 4: Yeah, you know, when I wrote the book, the first 40 00:01:49,960 --> 00:01:53,400 Speaker 4: chapter was focused on that exact idea. I think when 41 00:01:53,400 --> 00:01:55,720 Speaker 4: I was first going down the rabbit hole of trying 42 00:01:55,720 --> 00:01:58,160 Speaker 4: to understand what is money? There were bits and pieces 43 00:01:58,160 --> 00:01:59,920 Speaker 4: that I collected along the way. You know, I heard it, 44 00:02:00,200 --> 00:02:02,880 Speaker 4: what are the properties of money? What are the functions 45 00:02:02,880 --> 00:02:06,160 Speaker 4: of money? In Safety's book, he talks about money across 46 00:02:06,280 --> 00:02:09,920 Speaker 4: different dimensions, and you know, Carl Menger defines it as 47 00:02:09,960 --> 00:02:12,280 Speaker 4: a good salability and there's all these different frameworks from 48 00:02:12,320 --> 00:02:15,080 Speaker 4: which people piece it together. So when I was writing 49 00:02:15,120 --> 00:02:16,920 Speaker 4: the book, I was like, okay, like how does all 50 00:02:16,919 --> 00:02:19,720 Speaker 4: this stuff piece together? And I put together this graphic 51 00:02:19,720 --> 00:02:21,600 Speaker 4: in the book where I basically show, you know, at 52 00:02:21,639 --> 00:02:24,360 Speaker 4: the very top we kind of have like the original definition. 53 00:02:24,400 --> 00:02:27,000 Speaker 4: You know, nineteenth century Carl Menger was defining money as 54 00:02:27,240 --> 00:02:29,600 Speaker 4: the most salable good, the good that can be sold 55 00:02:29,680 --> 00:02:32,040 Speaker 4: at an arm's length that ease more more so than 56 00:02:32,080 --> 00:02:35,919 Speaker 4: anything else. And there are certain goods that ultimately became 57 00:02:36,160 --> 00:02:40,080 Speaker 4: more saleable than other goods. And then that kind of 58 00:02:40,080 --> 00:02:43,079 Speaker 4: boils down into okay, well, how do we think about saleability. Well, 59 00:02:43,080 --> 00:02:46,200 Speaker 4: we can think about salability basically across the three dimensions, 60 00:02:46,200 --> 00:02:47,919 Speaker 4: which is kind of how safety and defines it in 61 00:02:47,960 --> 00:02:50,919 Speaker 4: the baitcoin standard. You know, we have salability across time. 62 00:02:51,440 --> 00:02:54,359 Speaker 4: We can you know, things that hold value very well 63 00:02:54,360 --> 00:02:56,960 Speaker 4: over time. We have saleability across space, things that we 64 00:02:56,960 --> 00:03:01,040 Speaker 4: can move across space very easily. And then saleability across scales, 65 00:03:01,120 --> 00:03:04,720 Speaker 4: things that we can easily group and divide. So it's like, okay, well, 66 00:03:05,480 --> 00:03:07,840 Speaker 4: now that we understand across these three dimensions, then. 67 00:03:07,800 --> 00:03:10,960 Speaker 1: And then just to kind of to expand on that saleability, 68 00:03:11,040 --> 00:03:12,960 Speaker 1: meaning that people will take it. 69 00:03:13,480 --> 00:03:14,639 Speaker 2: People will take it. 70 00:03:14,200 --> 00:03:17,519 Speaker 1: It replaced the barter system, and if you don't want 71 00:03:17,520 --> 00:03:19,520 Speaker 1: my chicken or my goat, then we don't have a deal, 72 00:03:19,760 --> 00:03:22,280 Speaker 1: and so we use a medium of exchange instead. It's 73 00:03:22,320 --> 00:03:24,440 Speaker 1: the most saleable good to the point that you made. 74 00:03:24,639 --> 00:03:26,600 Speaker 1: And just for everybody listening, what that means is the 75 00:03:26,600 --> 00:03:28,080 Speaker 1: good that everybody will. 76 00:03:27,880 --> 00:03:31,560 Speaker 4: Accept, exactly right, exactly, yeah, it's the one that everybody's 77 00:03:31,639 --> 00:03:33,560 Speaker 4: kind of agreed upon. This is the most common good 78 00:03:33,600 --> 00:03:36,800 Speaker 4: in primitive societies. It was something that was typically very 79 00:03:36,840 --> 00:03:39,760 Speaker 4: often utilized. In a modern economy, it's a little bit different, 80 00:03:40,120 --> 00:03:43,520 Speaker 4: but nonetheless, the three functions of money when we think about, 81 00:03:43,640 --> 00:03:45,680 Speaker 4: you know, money being a store value, or a medium 82 00:03:45,680 --> 00:03:48,360 Speaker 4: of exchange or a unit of account, those kind of 83 00:03:48,400 --> 00:03:51,040 Speaker 4: line up pretty well with salability across the three dimensions, right, 84 00:03:51,040 --> 00:03:54,200 Speaker 4: Like a store value function means it's something that's highly 85 00:03:54,240 --> 00:03:56,920 Speaker 4: saleable across time. It's something that holds its value really 86 00:03:56,960 --> 00:04:00,720 Speaker 4: well over time. Medium of exchange function is very similar 87 00:04:00,720 --> 00:04:04,000 Speaker 4: to it's something widely accepted across spaces. And unit of 88 00:04:04,000 --> 00:04:06,560 Speaker 4: account function it's something that we can easily group and 89 00:04:06,560 --> 00:04:09,840 Speaker 4: divide very well, and thus measure money in. So what 90 00:04:09,880 --> 00:04:12,720 Speaker 4: I boiled all that down to is, well, there's these 91 00:04:12,800 --> 00:04:17,479 Speaker 4: properties of money that ultimately say whether something's going to 92 00:04:17,600 --> 00:04:21,520 Speaker 4: be good at those functions. And you know, there's kind 93 00:04:21,560 --> 00:04:25,159 Speaker 4: of like six primary properties of money, and you know, 94 00:04:25,200 --> 00:04:27,320 Speaker 4: the most important, most common being like a very scarce 95 00:04:27,400 --> 00:04:28,400 Speaker 4: form of money is something. 96 00:04:28,240 --> 00:04:28,880 Speaker 2: That's very good. 97 00:04:28,880 --> 00:04:33,640 Speaker 4: We have things like portability, divisibility, et cetera. And money's 98 00:04:33,680 --> 00:04:36,680 Speaker 4: always been defined throughout history kind of within this groupings. 99 00:04:36,920 --> 00:04:39,000 Speaker 4: You can say, there's other ways of looking at it, 100 00:04:39,000 --> 00:04:41,039 Speaker 4: but generally speaking, it's kind of like this common framework 101 00:04:41,080 --> 00:04:43,760 Speaker 4: we operate off of. And when I was going into 102 00:04:43,800 --> 00:04:45,880 Speaker 4: the research and I was thinking about bitcoin, and I 103 00:04:45,960 --> 00:04:49,120 Speaker 4: was like, okay, well, all of these properties of money 104 00:04:49,200 --> 00:04:52,320 Speaker 4: that kind of enabled moneies to emerge originally, like gold 105 00:04:52,320 --> 00:04:56,640 Speaker 4: and silver, these are what made people naturally converged upon 106 00:04:56,680 --> 00:04:58,719 Speaker 4: those types of money because they had these properties that 107 00:04:58,760 --> 00:05:02,279 Speaker 4: are very scarce. They're poor enough, they were divisible enough. 108 00:05:02,440 --> 00:05:04,440 Speaker 4: When we moved into the modern economy and we had 109 00:05:04,440 --> 00:05:10,080 Speaker 4: paper money, we sacrificed a lot of the ultimate decentralized 110 00:05:10,160 --> 00:05:12,320 Speaker 4: nature that these originally had. You know, when we had 111 00:05:12,360 --> 00:05:15,560 Speaker 4: coinage systems originally emerging, it was the merchant class that 112 00:05:15,680 --> 00:05:17,800 Speaker 4: was doing it. It wasn't governments that was creating that. 113 00:05:18,279 --> 00:05:20,760 Speaker 4: And people were finding a lot of primitive forms of 114 00:05:20,760 --> 00:05:25,159 Speaker 4: money themselves and creating it themselves and verifying it amongst themselves. So, 115 00:05:25,520 --> 00:05:30,119 Speaker 4: you know, in antiquity, money was something that was pretty decentralized, 116 00:05:30,600 --> 00:05:33,880 Speaker 4: and this trend throughout history was basically that as money 117 00:05:33,920 --> 00:05:36,680 Speaker 4: became more efficient for transactions, as we moved from a 118 00:05:36,800 --> 00:05:39,000 Speaker 4: you know, gold system to a paper type system that's 119 00:05:39,040 --> 00:05:42,880 Speaker 4: backed by gold, that required more intermediaries to enter into 120 00:05:42,920 --> 00:05:46,200 Speaker 4: the system, and that ultimately made the system more centralized 121 00:05:46,200 --> 00:05:49,400 Speaker 4: to the point where the money didn't serve its fundamental 122 00:05:49,400 --> 00:05:53,039 Speaker 4: properties anymore. Gold no longer was scarce on a gold standard. 123 00:05:53,040 --> 00:05:55,159 Speaker 4: Eventually we moved that into fiat money, where the supply 124 00:05:55,240 --> 00:05:57,760 Speaker 4: money isn't scarce at all, and it's quite the opposite. 125 00:05:58,080 --> 00:06:02,560 Speaker 4: So the the seventh property that I kind of defined 126 00:06:02,640 --> 00:06:07,040 Speaker 4: throughout all this is that this trend of centralization. Bitcoin's 127 00:06:07,040 --> 00:06:10,400 Speaker 4: primary innovation is that we're reverting back to that original 128 00:06:10,440 --> 00:06:13,640 Speaker 4: idea of what money was, where people were creating it themselves. 129 00:06:13,720 --> 00:06:16,240 Speaker 4: Much like bitcoin can be mined by anybody, people were 130 00:06:16,279 --> 00:06:19,880 Speaker 4: storing it themselves, much like anybody can store bitcoin on themselves, 131 00:06:20,200 --> 00:06:23,440 Speaker 4: and people are verifying it amongst one another themselves, much 132 00:06:23,520 --> 00:06:25,320 Speaker 4: like how you can do that with bitcoin. Bitcoin's kind 133 00:06:25,360 --> 00:06:28,120 Speaker 4: of returned to the anti created form of money, which 134 00:06:28,160 --> 00:06:31,600 Speaker 4: is actually just returning to the optimal form of money, 135 00:06:31,600 --> 00:06:34,599 Speaker 4: which we can now do in this modern technological framework 136 00:06:34,640 --> 00:06:37,760 Speaker 4: with the Internet. So the true innervation of bitcoin was 137 00:06:37,800 --> 00:06:40,640 Speaker 4: that it has not only all the efficiency of our 138 00:06:40,680 --> 00:06:43,880 Speaker 4: current fiat type system with paired with the Internet, it's 139 00:06:43,880 --> 00:06:47,920 Speaker 4: actually much more efficient and it's still decentralized without having 140 00:06:47,960 --> 00:06:50,159 Speaker 4: to sacrifice that as we have throughout history. So that 141 00:06:50,200 --> 00:06:52,240 Speaker 4: was kind of like the primary idea around the thesis. 142 00:06:53,160 --> 00:06:55,360 Speaker 1: So it goes back to the essentialized nature where each 143 00:06:55,400 --> 00:06:56,600 Speaker 1: of us can get it. So if you kind of 144 00:06:56,600 --> 00:06:59,960 Speaker 1: go back to some of these previous iterations of money, 145 00:07:00,279 --> 00:07:03,359 Speaker 1: whether it's seashells or rocks or feathers or whatever, it was, 146 00:07:03,440 --> 00:07:05,960 Speaker 1: again that was decentralized. So I can go collect the seashells, 147 00:07:06,960 --> 00:07:08,760 Speaker 1: I can go collect the rocks, the feathers, whatever they 148 00:07:08,800 --> 00:07:09,159 Speaker 1: may be. 149 00:07:09,240 --> 00:07:10,640 Speaker 3: I can go collect the gold. 150 00:07:11,040 --> 00:07:13,160 Speaker 1: Obviously, it starts getting more centralized when you get to 151 00:07:13,160 --> 00:07:16,280 Speaker 1: the money changers, the goldsmiths who made the coins, things 152 00:07:16,320 --> 00:07:20,320 Speaker 1: like that. But still I get that, and so I 153 00:07:20,320 --> 00:07:24,640 Speaker 1: guess the seventh property isn't so much a different property 154 00:07:24,680 --> 00:07:29,560 Speaker 1: such as portable, portability, divisibility, durability, but rather that it 155 00:07:29,720 --> 00:07:34,600 Speaker 1: just goes back to kind of the original decentralized nature 156 00:07:34,640 --> 00:07:34,840 Speaker 1: of it. 157 00:07:35,240 --> 00:07:35,480 Speaker 2: Yep. 158 00:07:35,560 --> 00:07:38,800 Speaker 4: So I define it as in the book immutability, and 159 00:07:38,920 --> 00:07:43,440 Speaker 4: it's defined as a decentralized production, storage, and verification of money. 160 00:07:44,120 --> 00:07:47,440 Speaker 4: So immutability is a term that means like resistant to change, 161 00:07:47,480 --> 00:07:49,720 Speaker 4: and that's ultimately what bitcoin is. It has this property 162 00:07:49,720 --> 00:07:53,160 Speaker 4: of immutability which is enabled by the fact that you 163 00:07:53,200 --> 00:07:56,520 Speaker 4: can decentralize in a decentralized manner. You can produce, store, 164 00:07:56,560 --> 00:07:57,280 Speaker 4: and verify it. 165 00:07:57,680 --> 00:07:58,560 Speaker 3: Yeah. 166 00:07:58,720 --> 00:08:01,280 Speaker 1: Yeah, I think if we run through some of those attributes, 167 00:08:01,320 --> 00:08:02,960 Speaker 1: So some of those properties I think, you know, for 168 00:08:03,000 --> 00:08:05,720 Speaker 1: people to kind of think about. So one of them 169 00:08:05,960 --> 00:08:08,480 Speaker 1: is scarcity, which obviously you talked about and the FIA 170 00:08:08,600 --> 00:08:11,440 Speaker 1: money is the opposite of scarceh right, it's it's endless. 171 00:08:11,640 --> 00:08:14,360 Speaker 1: Jeff Boo says that abundance and money is scarcity and 172 00:08:14,360 --> 00:08:17,200 Speaker 1: everything else, and so that's kind of where we're at. 173 00:08:17,360 --> 00:08:20,560 Speaker 1: But most people don't really understand that basic concept. Again, 174 00:08:20,640 --> 00:08:22,120 Speaker 1: that this big misconception there. 175 00:08:22,360 --> 00:08:27,360 Speaker 3: But I think probably all across the board. I mean, 176 00:08:27,400 --> 00:08:28,680 Speaker 3: bitcoin seems to win. 177 00:08:29,000 --> 00:08:31,480 Speaker 1: I mean it's it's more portable, it's more divisible, it's 178 00:08:31,520 --> 00:08:36,600 Speaker 1: more durable. The saleability piece of it might still be 179 00:08:36,679 --> 00:08:39,920 Speaker 1: the one in question, but that's rapidly that's rapidly growing 180 00:08:39,960 --> 00:08:41,800 Speaker 1: as well. I mean, you could pretty much use bitcoin 181 00:08:41,920 --> 00:08:44,000 Speaker 1: anywhere in the world at this point. I think it's 182 00:08:44,640 --> 00:08:47,000 Speaker 1: based off of transactions. It's in like a top five 183 00:08:47,040 --> 00:08:49,040 Speaker 1: currency in the world already, something like that. 184 00:08:50,360 --> 00:08:50,800 Speaker 2: Totally. 185 00:08:50,920 --> 00:08:53,679 Speaker 4: It's uh, and that's one of the kind of like 186 00:08:53,840 --> 00:08:56,880 Speaker 4: vague a lot of these ideas around money, they are 187 00:08:57,000 --> 00:08:59,320 Speaker 4: vague ideas. So you know, you were to be on 188 00:08:59,360 --> 00:09:01,320 Speaker 4: Twitter debating an economist on the other side of this, 189 00:09:01,920 --> 00:09:04,079 Speaker 4: they would say like, oh, it's not widely accepted enough. 190 00:09:04,120 --> 00:09:06,040 Speaker 4: And then the question becomes, well, how do you define 191 00:09:06,040 --> 00:09:08,800 Speaker 4: what widely accepted is as a globally accepted you know, 192 00:09:08,840 --> 00:09:11,040 Speaker 4: bitcoin can be accepted on any continent, it can be 193 00:09:11,120 --> 00:09:13,160 Speaker 4: accepted by anybody with an Internet connection. 194 00:09:13,200 --> 00:09:14,440 Speaker 2: That's that's pretty widely accepted. 195 00:09:14,960 --> 00:09:16,640 Speaker 1: I got an option, I gotta I gotta cut you 196 00:09:16,679 --> 00:09:17,880 Speaker 1: off right there. We're going to have to take a 197 00:09:17,920 --> 00:09:19,800 Speaker 1: quick break. If you're just tune in you're listening to 198 00:09:19,840 --> 00:09:21,839 Speaker 1: the Mark mass Show. I'm sitting down with Eric Yaks, 199 00:09:21,880 --> 00:09:24,600 Speaker 1: the author of the Seventh Property, Bitcoin and Monetary Revolution. 200 00:09:24,640 --> 00:09:27,080 Speaker 1: We're back more talking about this money and how it 201 00:09:27,080 --> 00:09:28,520 Speaker 1: can change the world. In a second, we'll take a 202 00:09:28,600 --> 00:09:30,040 Speaker 1: quick break. Don't go away, I'll be right back. 203 00:09:30,760 --> 00:09:31,480 Speaker 3: All right, Welcome back. 204 00:09:31,520 --> 00:09:33,040 Speaker 1: If you just tune in, you're listening to the Mark 205 00:09:33,080 --> 00:09:35,520 Speaker 1: Moss Show. I'm sitting down with Eric Yaks, the author 206 00:09:35,559 --> 00:09:38,840 Speaker 1: of the Seventh Property, Bitcoin and the Monetary Revolution. 207 00:09:39,400 --> 00:09:40,360 Speaker 3: You know, Eric, I kind of. 208 00:09:40,360 --> 00:09:42,360 Speaker 1: Cut you off there, we were jumping into this commercial break, 209 00:09:42,400 --> 00:09:46,679 Speaker 1: but you know, you were talking about bitcoin going back 210 00:09:46,720 --> 00:09:49,480 Speaker 1: to this kind of like decentralized nature, which I love. 211 00:09:49,840 --> 00:09:55,040 Speaker 1: I also think about it, and you mentioned immutability. Also, 212 00:09:55,200 --> 00:10:00,199 Speaker 1: it's permissionless, and it's also borderless, and so it's sort 213 00:10:00,240 --> 00:10:03,160 Speaker 1: of like this neutral money, right, it's not tied to 214 00:10:03,200 --> 00:10:06,560 Speaker 1: a commodity good and it's not tied to a nation state. 215 00:10:08,000 --> 00:10:10,240 Speaker 1: Is that something big that you see, like the ability 216 00:10:10,320 --> 00:10:13,839 Speaker 1: to store value that's not tied to any specific geography, 217 00:10:15,040 --> 00:10:16,480 Speaker 1: any government, anything like that. 218 00:10:17,679 --> 00:10:20,880 Speaker 4: Yeah, it's It's one of the biggest aspects of bitcoin 219 00:10:21,679 --> 00:10:25,120 Speaker 4: and one of the primary drivers I think of its 220 00:10:25,160 --> 00:10:27,360 Speaker 4: adoption in the future is going to be associated with 221 00:10:27,360 --> 00:10:29,800 Speaker 4: that idea. I think that over the past you know, 222 00:10:29,800 --> 00:10:32,559 Speaker 4: a few years, this bitcoin's gained a lot of prominence. 223 00:10:34,520 --> 00:10:36,720 Speaker 4: You know, a lot of narratives brought it into the 224 00:10:36,760 --> 00:10:39,360 Speaker 4: fray and people would say, you know, it's digital gold, 225 00:10:39,640 --> 00:10:43,120 Speaker 4: or you know, bitcoin is this inflation hedge, and these 226 00:10:43,160 --> 00:10:46,440 Speaker 4: narratives kind of grew and I, you know, I don't 227 00:10:46,440 --> 00:10:48,480 Speaker 4: think that those are the right frameworks. I think truly 228 00:10:48,520 --> 00:10:51,600 Speaker 4: the idea of really thinking about what bitcoin is is 229 00:10:51,679 --> 00:10:54,640 Speaker 4: pointing to those ideas. If it's this neutral globally political 230 00:10:54,640 --> 00:10:58,920 Speaker 4: monetary system, it's an alternative monetary system that people opting into. 231 00:10:59,360 --> 00:11:02,000 Speaker 4: And we think about out what's happening today in the economy. 232 00:11:03,160 --> 00:11:03,839 Speaker 2: You know, we have. 233 00:11:03,920 --> 00:11:07,760 Speaker 4: The most rapid interest rate increase that the FED has made, 234 00:11:08,320 --> 00:11:11,800 Speaker 4: and that's happening while we have more debt in our 235 00:11:11,960 --> 00:11:14,680 Speaker 4: economy that we ever have, when we're hitting you know, 236 00:11:14,840 --> 00:11:17,520 Speaker 4: historic levels inflation that we haven't seen in forty years, 237 00:11:17,960 --> 00:11:22,080 Speaker 4: and these guys don't know what they're doing. And this 238 00:11:22,320 --> 00:11:24,800 Speaker 4: monetary system of these people who control our money, they're. 239 00:11:24,600 --> 00:11:25,640 Speaker 2: Just winging it right now. 240 00:11:26,080 --> 00:11:28,800 Speaker 4: And we have an option to opt into this neutral 241 00:11:29,040 --> 00:11:31,439 Speaker 4: system that anybody can be a part of that's global 242 00:11:31,440 --> 00:11:34,720 Speaker 4: and it's borderless, and we're we're getting really close to 243 00:11:34,720 --> 00:11:37,200 Speaker 4: that inflection point where that narrative I think, is going 244 00:11:37,240 --> 00:11:39,079 Speaker 4: to become much more obvious, It's going to become much 245 00:11:39,080 --> 00:11:41,199 Speaker 4: more widespread, and that's when we're really going to start 246 00:11:41,240 --> 00:11:43,839 Speaker 4: to see that inflection point and adoption bigcoin to truly 247 00:11:43,880 --> 00:11:45,239 Speaker 4: achieve its value proposition. 248 00:11:45,559 --> 00:11:48,440 Speaker 1: I mean, certainly, as we're watching FA currencies die left 249 00:11:48,480 --> 00:11:50,720 Speaker 1: and right all around us, we're seeing countries go into 250 00:11:51,200 --> 00:11:56,240 Speaker 1: massive inflation Lebanon, Turkey, you know, Peru, Argentina. 251 00:11:56,320 --> 00:11:57,559 Speaker 3: We could saider it rattle them all off. 252 00:11:57,600 --> 00:11:59,760 Speaker 1: But as we're seeing that, then they have a choice. 253 00:11:59,760 --> 00:12:01,680 Speaker 1: Those people in those countries are like, well, I can't 254 00:12:01,800 --> 00:12:03,679 Speaker 1: have this currency anymore, So what do I do? I 255 00:12:03,720 --> 00:12:06,640 Speaker 1: can't really get us dollars, Gold's hard to get. Well, 256 00:12:06,679 --> 00:12:08,760 Speaker 1: there's bitcoin, right, And so we're starting to see that 257 00:12:09,080 --> 00:12:12,199 Speaker 1: take place. I'm curious though, to the point that you're 258 00:12:12,200 --> 00:12:15,400 Speaker 1: making about these different narratives from digital goal to whatever, right, 259 00:12:15,480 --> 00:12:18,280 Speaker 1: and the way that I kind of look at it 260 00:12:18,320 --> 00:12:20,520 Speaker 1: is sort of like the problem is with humans is 261 00:12:20,559 --> 00:12:22,280 Speaker 1: that we're not in any good imagining in the future. 262 00:12:22,320 --> 00:12:24,040 Speaker 1: All we can do is imagine better versions of what 263 00:12:24,080 --> 00:12:27,480 Speaker 1: we already know, and then we try to understand things 264 00:12:27,600 --> 00:12:31,880 Speaker 1: based off of some of being relative to something else. So, 265 00:12:31,920 --> 00:12:35,000 Speaker 1: if you think about when electricity was first invented, the 266 00:12:35,120 --> 00:12:40,120 Speaker 1: killer application was a light bulb. So what is this electricity. 267 00:12:39,480 --> 00:12:41,840 Speaker 3: Thing, Well, it's sort of like a digital candle. 268 00:12:41,960 --> 00:12:45,800 Speaker 1: I guess which it was, but it became so much more, right, 269 00:12:46,200 --> 00:12:48,280 Speaker 1: And so we think about what does this internet thing? Well, 270 00:12:48,280 --> 00:12:50,960 Speaker 1: I guess it's the way we have these digital message boards. Well, sure, 271 00:12:51,000 --> 00:12:53,800 Speaker 1: we didn't know we'd have a cloud or with our 272 00:12:53,840 --> 00:12:56,120 Speaker 1: car being navigated around traffic using social media because we 273 00:12:56,120 --> 00:12:58,520 Speaker 1: didn't have that stuff. Right, So we think about bitcoin, 274 00:12:58,920 --> 00:13:01,840 Speaker 1: digital culture, digital gold. It is digital gold to bank 275 00:13:01,840 --> 00:13:04,960 Speaker 1: count in your pocket. Okay, it's that too. Do you 276 00:13:05,000 --> 00:13:08,079 Speaker 1: think that as these narrative change, it will be even 277 00:13:08,120 --> 00:13:11,080 Speaker 1: bigger than that? So if you think, if you think 278 00:13:11,160 --> 00:13:16,760 Speaker 1: in broader terms, what is money? Money's communication communicates value? 279 00:13:17,040 --> 00:13:20,319 Speaker 1: So is it a communication network a value exchange network? 280 00:13:20,360 --> 00:13:21,160 Speaker 3: What does that even mean? 281 00:13:22,280 --> 00:13:22,679 Speaker 2: Yeah? 282 00:13:23,559 --> 00:13:28,960 Speaker 4: So here here's how I view this point. I think that, yeah, absolutely, 283 00:13:29,040 --> 00:13:33,560 Speaker 4: like bitcoin is this synthetic digital online commodity like gold, 284 00:13:33,640 --> 00:13:36,720 Speaker 4: and that there's certainly true there's so many parallels between that. 285 00:13:36,880 --> 00:13:40,079 Speaker 4: But I think that the innovation of bitcoin and what 286 00:13:40,120 --> 00:13:43,160 Speaker 4: its potential could be and why I guess actually I'll 287 00:13:43,200 --> 00:13:45,040 Speaker 4: start with why does this matter? 288 00:13:45,160 --> 00:13:45,360 Speaker 2: Right? 289 00:13:46,040 --> 00:13:50,520 Speaker 4: Depending on the level of potential that bitcoin ultimately achieves 290 00:13:50,960 --> 00:13:55,440 Speaker 4: will determine the ultimate market price that it finds equilibrim at, 291 00:13:55,440 --> 00:13:58,240 Speaker 4: how much of the market size it'll ultimately saturate at. 292 00:13:58,520 --> 00:14:02,600 Speaker 4: If bitcoin's just becomes digit gold, then it's effectively just 293 00:14:02,640 --> 00:14:04,640 Speaker 4: going to be this reserve asset and we're going to 294 00:14:04,679 --> 00:14:07,280 Speaker 4: be using other assets on top of it that are 295 00:14:07,640 --> 00:14:10,920 Speaker 4: dependent upon it for trade in some form, which means 296 00:14:10,920 --> 00:14:12,920 Speaker 4: a supply that's probably going to expand a lot, and 297 00:14:12,960 --> 00:14:14,679 Speaker 4: there's going to be some sort of like fractional reserve 298 00:14:14,720 --> 00:14:18,040 Speaker 4: type nature to it. If that does happen, bitcoin probably 299 00:14:18,080 --> 00:14:21,160 Speaker 4: won't achieve its full market potential, Whereas if we don't 300 00:14:21,200 --> 00:14:24,000 Speaker 4: have a system like that and bitcoin becomes this global 301 00:14:24,000 --> 00:14:26,960 Speaker 4: payment network of money. At the other extreme, the market 302 00:14:27,000 --> 00:14:29,120 Speaker 4: size of bitcoin is in the hundreds of trillions, as 303 00:14:29,120 --> 00:14:31,360 Speaker 4: opposed to a few tens of trillions. 304 00:14:30,840 --> 00:14:31,880 Speaker 2: Like it would be for gold. 305 00:14:32,160 --> 00:14:35,560 Speaker 4: So bitcoin's potential in the span at which it can 306 00:14:35,600 --> 00:14:38,800 Speaker 4: expand throughout the world is massively determined by this question 307 00:14:38,840 --> 00:14:41,080 Speaker 4: of what technology is going to be built on top 308 00:14:41,080 --> 00:14:43,680 Speaker 4: of bitcoin and ultimately how is that going to be 309 00:14:43,760 --> 00:14:46,800 Speaker 4: propagating Bitcoin throughout the Internet for various functions beyond just 310 00:14:46,800 --> 00:14:50,320 Speaker 4: being a store of value. So when I view it 311 00:14:50,520 --> 00:14:54,560 Speaker 4: long term, I view bitcoin as it's going to be 312 00:14:54,560 --> 00:14:57,480 Speaker 4: the base layer, substrate of a new financial system that's 313 00:14:57,520 --> 00:15:00,400 Speaker 4: going to be neutral. It's going to be global, and 314 00:15:00,440 --> 00:15:02,040 Speaker 4: it's not going to be run by any sort of 315 00:15:02,040 --> 00:15:05,560 Speaker 4: political initiative. And as long as this system is kept 316 00:15:05,680 --> 00:15:11,320 Speaker 4: very informationally transparent and there aren't any points of centralized 317 00:15:11,360 --> 00:15:13,840 Speaker 4: attack over it, and it's a highly competitive type system, 318 00:15:14,480 --> 00:15:16,640 Speaker 4: then I think we're going to see bitcoin not just 319 00:15:16,680 --> 00:15:19,360 Speaker 4: become a store of value. We're going to also see 320 00:15:19,400 --> 00:15:21,520 Speaker 4: it become a medium exchange and unit of account for 321 00:15:21,560 --> 00:15:23,920 Speaker 4: the global capital markets. And at which point the value 322 00:15:23,920 --> 00:15:27,360 Speaker 4: bitcoins and the hundreds of trillions, and that's going to 323 00:15:27,400 --> 00:15:30,000 Speaker 4: be the full potential that is really going to allow 324 00:15:30,120 --> 00:15:34,560 Speaker 4: society to achieve an independent monetary network, Because if it's 325 00:15:34,560 --> 00:15:36,640 Speaker 4: just digital gold and we still stay on some central 326 00:15:36,640 --> 00:15:39,240 Speaker 4: bank type system, but bitcoin expands so much that you know, 327 00:15:39,280 --> 00:15:41,440 Speaker 4: say central banks are forced to start adopting it as 328 00:15:41,480 --> 00:15:44,200 Speaker 4: a reserve asset. Fine, that's a great thing for bitcoin. 329 00:15:44,240 --> 00:15:46,920 Speaker 4: That's not going to fundamentally change freedom throughout the world 330 00:15:46,960 --> 00:15:49,560 Speaker 4: and the property rights that the individual has. So this 331 00:15:49,920 --> 00:15:52,640 Speaker 4: a political neutral system and it expanding across all these 332 00:15:52,680 --> 00:15:57,200 Speaker 4: chasms with a you know, strong, competitive, informationally transparent financial system. 333 00:15:57,760 --> 00:15:59,720 Speaker 4: That's you know, what I'm a part of this industry for, 334 00:15:59,760 --> 00:16:01,680 Speaker 4: and that's what I expected to ultimately achieve. 335 00:16:03,160 --> 00:16:04,440 Speaker 3: I guess, yes. 336 00:16:04,640 --> 00:16:06,080 Speaker 1: So I see all that, and I want to talk 337 00:16:06,120 --> 00:16:09,240 Speaker 1: about that, what that potential monetary system looks like. And 338 00:16:09,240 --> 00:16:10,880 Speaker 1: I know I've heard you on some other interviews talking 339 00:16:10,920 --> 00:16:12,880 Speaker 1: about you know, and you kind of hinted on that, 340 00:16:13,040 --> 00:16:15,000 Speaker 1: like if we have other assets on top of it, 341 00:16:15,040 --> 00:16:16,840 Speaker 1: and does it expand in fractional reserve So I. 342 00:16:16,800 --> 00:16:17,440 Speaker 3: Want to get into that. 343 00:16:17,480 --> 00:16:19,480 Speaker 1: But just jumping back into this question for a second. 344 00:16:20,880 --> 00:16:24,920 Speaker 1: If you think about bitcoin as a open borderless, permissionless, 345 00:16:24,920 --> 00:16:29,640 Speaker 1: CENSORSIP resistant, immutable network, well what else couldn't that network 346 00:16:29,680 --> 00:16:32,960 Speaker 1: be used for other than money? So sure, everything has 347 00:16:32,960 --> 00:16:35,880 Speaker 1: a first killer application. The Internet was email, electricity was 348 00:16:35,880 --> 00:16:43,360 Speaker 1: a light bulb. So for example, we now have ordinals, okay, 349 00:16:43,480 --> 00:16:46,160 Speaker 1: and that's like NFTs okay, whatever, that's stupid people argue 350 00:16:46,160 --> 00:16:48,760 Speaker 1: against it whatever, But what if we were able to 351 00:16:48,880 --> 00:16:52,080 Speaker 1: put or not. What if we are able to put 352 00:16:52,600 --> 00:16:56,160 Speaker 1: books or three D printed guns or other things that 353 00:16:56,200 --> 00:16:58,760 Speaker 1: the government want to censor, and now anybody in the 354 00:16:58,800 --> 00:17:02,840 Speaker 1: world open borderless mission listenship could access that data. Right, 355 00:17:03,080 --> 00:17:05,080 Speaker 1: that's like one example. It's hard for us to imagine 356 00:17:05,119 --> 00:17:06,400 Speaker 1: where these things can go because we don't have those 357 00:17:06,400 --> 00:17:09,679 Speaker 1: building blocks. It'd be like when steel was invented, you know, 358 00:17:09,680 --> 00:17:11,720 Speaker 1: two hundred years ago, going, oh, one day we'll have 359 00:17:11,720 --> 00:17:15,160 Speaker 1: spaceships like we didn't know that. Or I know you've 360 00:17:15,160 --> 00:17:17,639 Speaker 1: been talking about like fetimint right, and so Fetiman's a 361 00:17:17,680 --> 00:17:20,439 Speaker 1: way to pool money, but you can also do like 362 00:17:20,480 --> 00:17:24,280 Speaker 1: private messaging in that pool. So now it's like a 363 00:17:24,280 --> 00:17:28,280 Speaker 1: communication protocol. We've seen Jack Dorsey with his Web five 364 00:17:28,800 --> 00:17:31,959 Speaker 1: where they're taking these decentralized IDs, these d IDs and 365 00:17:32,000 --> 00:17:36,879 Speaker 1: they're hashing it in the Bitcoin blockchain because it's a decentralized, 366 00:17:37,040 --> 00:17:40,320 Speaker 1: you know, censorship resistant platform. So like, these are those 367 00:17:40,440 --> 00:17:44,080 Speaker 1: three examples of use cases of this open borderless permission 368 00:17:44,080 --> 00:17:48,399 Speaker 1: that sensor persistant network that aren't really money uses m. 369 00:17:49,560 --> 00:17:52,200 Speaker 2: Yeah, I agree, it's it's actually Eric. 370 00:17:52,280 --> 00:17:54,119 Speaker 1: Sorry, before you before you answer that I want to 371 00:17:54,160 --> 00:17:55,720 Speaker 1: hear what you have to say. I know you're interested 372 00:17:55,720 --> 00:17:57,320 Speaker 1: in the venture capital side of it, so that's why 373 00:17:57,359 --> 00:17:58,760 Speaker 1: I'm trying to ask you these questions. But I got 374 00:17:58,800 --> 00:18:00,679 Speaker 1: to take a quick break. So if you're just tuning in, 375 00:18:00,680 --> 00:18:02,880 Speaker 1: you're listening to the Mark Maas Show. Of course we're 376 00:18:02,880 --> 00:18:05,840 Speaker 1: talking about the decentralized Revolution. I'm talking with Eric Yates, 377 00:18:05,880 --> 00:18:07,760 Speaker 1: the author of the Seventh Property. 378 00:18:07,480 --> 00:18:08,679 Speaker 3: Bitcoin, the Monitary Revolution. 379 00:18:08,720 --> 00:18:10,320 Speaker 1: I'm gonna take a quick break, but you don't want 380 00:18:10,320 --> 00:18:12,359 Speaker 1: to miss what's next, so don't go away, all right, 381 00:18:12,359 --> 00:18:14,360 Speaker 1: Welcome back. If you're just tune in, you are listening 382 00:18:14,400 --> 00:18:17,679 Speaker 1: to the Mark Maas Show, sitting down with Eric Yikes, 383 00:18:17,760 --> 00:18:21,160 Speaker 1: the author of the Seventh Property, Bitcoin and the Monetary Revolution. 384 00:18:21,560 --> 00:18:23,000 Speaker 1: And before the break, I kind of had to cut 385 00:18:23,040 --> 00:18:25,280 Speaker 1: you off before your answer, so hopefully we left everybody. 386 00:18:25,000 --> 00:18:25,760 Speaker 3: On that cliffhanger. 387 00:18:25,960 --> 00:18:29,439 Speaker 1: But I was given examples of potentially other use cases 388 00:18:29,480 --> 00:18:33,040 Speaker 1: of this network other than monetary uses, and so I 389 00:18:33,080 --> 00:18:34,280 Speaker 1: was just curious on your thought of that. 390 00:18:35,480 --> 00:18:37,720 Speaker 4: Yeah, and the way that I think about this question 391 00:18:37,800 --> 00:18:42,240 Speaker 4: is exactly what you said. This is a global data 392 00:18:42,280 --> 00:18:45,000 Speaker 4: store and the most secure network in the world. It's 393 00:18:45,040 --> 00:18:47,240 Speaker 4: the true source of information that we can depend on 394 00:18:47,240 --> 00:18:49,200 Speaker 4: because we know that we can't attack this network, could 395 00:18:49,440 --> 00:18:53,480 Speaker 4: know that this ledger of information cannot be changed. Now 396 00:18:53,520 --> 00:18:55,879 Speaker 4: we know that whatever information we decide to record on 397 00:18:55,920 --> 00:18:57,680 Speaker 4: that is information that can't be changed. And that's a 398 00:18:57,760 --> 00:19:01,520 Speaker 4: very valuable proposition that you know, I'm not smart enough 399 00:19:01,640 --> 00:19:04,480 Speaker 4: to understand every implication that could possibly emerge from that, 400 00:19:04,960 --> 00:19:07,760 Speaker 4: but you know, and I think, like going back to 401 00:19:07,880 --> 00:19:09,720 Speaker 4: like what I expect a lot of this to be, 402 00:19:10,200 --> 00:19:13,480 Speaker 4: it's you know, I think the I think the ordinal's 403 00:19:13,560 --> 00:19:16,560 Speaker 4: point is a really good point. So it's something where 404 00:19:16,680 --> 00:19:19,880 Speaker 4: right now people are just trading JPEGs and they're inscribing 405 00:19:19,920 --> 00:19:22,720 Speaker 4: a little bit of information on the blockchain, and then 406 00:19:22,800 --> 00:19:25,080 Speaker 4: they're using that to say, we have these pictures that 407 00:19:25,080 --> 00:19:26,800 Speaker 4: we like and it's a collectible's market, and that's how 408 00:19:26,800 --> 00:19:29,199 Speaker 4: it's emerging. What could it be in the future. I 409 00:19:29,240 --> 00:19:34,160 Speaker 4: think that long term, I guess, like, well, there's two 410 00:19:34,160 --> 00:19:37,960 Speaker 4: points if we think about today how our system works. 411 00:19:38,320 --> 00:19:40,800 Speaker 4: You know, the title to your home is something that's 412 00:19:40,880 --> 00:19:44,040 Speaker 4: very valuable and you can't live in the title to 413 00:19:44,119 --> 00:19:46,360 Speaker 4: your home, but it provides you a claim to your home. 414 00:19:46,400 --> 00:19:48,000 Speaker 4: And what does that mean when we say provides a claim, Well, 415 00:19:48,000 --> 00:19:49,600 Speaker 4: it means that we have a legal system backing. It's 416 00:19:49,600 --> 00:19:51,840 Speaker 4: where if somebody else breaks into your house while you're gone, 417 00:19:51,880 --> 00:19:54,600 Speaker 4: locks you out and says you can't come back in here, 418 00:19:54,840 --> 00:19:56,360 Speaker 4: you can go to the government and they can get 419 00:19:56,359 --> 00:19:58,160 Speaker 4: guns and they can pull that person out of your house. 420 00:19:58,400 --> 00:20:02,240 Speaker 4: So that's kind of an interesting point, right. These claims 421 00:20:02,280 --> 00:20:05,320 Speaker 4: in these contracts and the protection of property rights within 422 00:20:05,359 --> 00:20:09,239 Speaker 4: our society are valuable because they enable us to do 423 00:20:09,320 --> 00:20:13,479 Speaker 4: something like that, and they're predicted under judicial system. So 424 00:20:13,520 --> 00:20:16,600 Speaker 4: when I think about what would make these types of 425 00:20:16,640 --> 00:20:19,560 Speaker 4: this type of information valuable. A claim to something on 426 00:20:19,600 --> 00:20:22,520 Speaker 4: an immutable blockchain, Well, it does need to be respected 427 00:20:22,560 --> 00:20:24,320 Speaker 4: by some sort of authority if we want to have 428 00:20:24,400 --> 00:20:26,439 Speaker 4: that same type of use case for it. So if 429 00:20:26,480 --> 00:20:29,480 Speaker 4: there is a form of legal system backing that eventually 430 00:20:29,480 --> 00:20:32,040 Speaker 4: emerges within a society around it, I could see that 431 00:20:32,080 --> 00:20:35,280 Speaker 4: being pretty valuable. And in which case, you know, any 432 00:20:35,320 --> 00:20:37,359 Speaker 4: sort of asset like a stock or a bond or 433 00:20:37,359 --> 00:20:39,920 Speaker 4: anything could be inscribed on this ledger and. 434 00:20:40,440 --> 00:20:44,280 Speaker 1: Except if you have to rely on this offline authority 435 00:20:44,359 --> 00:20:48,240 Speaker 1: to back up the claim to the house. So I 436 00:20:48,280 --> 00:20:51,880 Speaker 1: went to the crypto conference the Consensus Conference last year 437 00:20:51,880 --> 00:20:54,600 Speaker 1: in Austin, and my head spinning, like what are all 438 00:20:54,640 --> 00:20:57,000 Speaker 1: these people here doing, and what's the best thing you've seen? 439 00:20:57,000 --> 00:20:58,840 Speaker 1: And everyone's talking about these deeds on the blockchain. I'm like, 440 00:20:58,880 --> 00:21:00,639 Speaker 1: what's the point, right? So I let you live on 441 00:21:00,680 --> 00:21:04,359 Speaker 1: my house, I have in the blockchain, I have the deed, 442 00:21:04,600 --> 00:21:05,560 Speaker 1: but now you don't pay. 443 00:21:05,560 --> 00:21:06,240 Speaker 3: I have to get you out. 444 00:21:06,240 --> 00:21:07,800 Speaker 1: Well, I got to go to the court and then 445 00:21:07,800 --> 00:21:09,320 Speaker 1: they're gonna want me to prove I own it, so 446 00:21:09,320 --> 00:21:10,520 Speaker 1: they have to go to the recorder, and then I 447 00:21:10,520 --> 00:21:11,960 Speaker 1: have to get the police and all those things. Then 448 00:21:12,080 --> 00:21:13,879 Speaker 1: what's the point of the blockchain? So it seems like 449 00:21:13,880 --> 00:21:17,199 Speaker 1: it works really good for digitally native stuff totally. Not 450 00:21:17,359 --> 00:21:19,159 Speaker 1: for like physical stuff. 451 00:21:19,320 --> 00:21:19,679 Speaker 3: I don't know. 452 00:21:19,720 --> 00:21:22,400 Speaker 1: That's kind of my opinion and feel free to very 453 00:21:22,640 --> 00:21:26,840 Speaker 1: differ off that. But for digitally native stuff like a 454 00:21:26,840 --> 00:21:30,040 Speaker 1: three D printed gun schematic. You know, we know I'm 455 00:21:30,080 --> 00:21:34,400 Speaker 1: going to talk about in another segment, this massive move 456 00:21:34,480 --> 00:21:36,840 Speaker 1: for censorship. Of course you saw like the restrict Act, 457 00:21:36,960 --> 00:21:40,520 Speaker 1: but it's coming from every direction, from every country, massively 458 00:21:40,520 --> 00:21:43,600 Speaker 1: control the Internet and just sensor everything. And so we're 459 00:21:43,640 --> 00:21:45,280 Speaker 1: going to have the need for that more and more, 460 00:21:45,359 --> 00:21:48,959 Speaker 1: and so digitally native stuff for sure, we're gonna need 461 00:21:49,000 --> 00:21:49,600 Speaker 1: a place for that. 462 00:21:51,040 --> 00:21:51,240 Speaker 2: Yeah. 463 00:21:51,320 --> 00:21:53,760 Speaker 4: Yeah, And it's the part I'm trying to make is 464 00:21:53,760 --> 00:21:57,040 Speaker 4: that exactly these things require some sort of legal backing. 465 00:21:57,119 --> 00:21:59,240 Speaker 4: So it's like, what's the efficiency that it ultimately like 466 00:21:59,280 --> 00:22:02,280 Speaker 4: provides this society. Whereas you know, as long as the 467 00:22:02,280 --> 00:22:05,480 Speaker 4: title system works, it works. It's just maybe perhaps a 468 00:22:05,520 --> 00:22:07,560 Speaker 4: more efficient form of transfer, which I think is probably 469 00:22:07,560 --> 00:22:10,120 Speaker 4: true for a lot of these things. 470 00:22:10,320 --> 00:22:12,159 Speaker 2: But you know, I. 471 00:22:14,320 --> 00:22:17,400 Speaker 4: Think that in terms of long term a lot of 472 00:22:17,440 --> 00:22:20,919 Speaker 4: the value proposition that can emerge from being able to 473 00:22:20,920 --> 00:22:23,520 Speaker 4: inscribe data simply being able to like prove knowledge of 474 00:22:23,640 --> 00:22:25,960 Speaker 4: very valuable things in a way that we couldn't prove 475 00:22:26,000 --> 00:22:28,639 Speaker 4: knowledge about something before, which will have you know, a 476 00:22:28,640 --> 00:22:29,960 Speaker 4: lot of implications I think. 477 00:22:29,840 --> 00:22:32,280 Speaker 3: Down the line, Yeah, and transfer data. 478 00:22:32,359 --> 00:22:34,440 Speaker 1: Right, So, like I said, like the movie what is 479 00:22:34,480 --> 00:22:36,400 Speaker 1: it Fahrenheit four fifty one right where they go around 480 00:22:36,400 --> 00:22:38,480 Speaker 1: and burn all the books. I don't know if you've 481 00:22:38,480 --> 00:22:40,919 Speaker 1: seen that, read the book or the book, and then 482 00:22:40,920 --> 00:22:43,480 Speaker 1: they made a movie about it, but basically they said, 483 00:22:43,480 --> 00:22:45,800 Speaker 1: you know, the world erupted into a civil war because 484 00:22:45,880 --> 00:22:49,560 Speaker 1: everyone saw a different information, not too unlike where we're at, right, 485 00:22:49,600 --> 00:22:52,320 Speaker 1: now to opposite sides. And so the way to solve 486 00:22:52,359 --> 00:22:54,119 Speaker 1: everything was to get rid of all the information and 487 00:22:54,160 --> 00:22:55,800 Speaker 1: have one arbitrary of truth. 488 00:22:56,080 --> 00:22:57,280 Speaker 3: So they went around burning all the books. 489 00:22:57,280 --> 00:22:58,840 Speaker 1: And so if we want to they were trying to 490 00:22:58,840 --> 00:23:01,240 Speaker 1: protect those books, and they were trying to memorize the books. 491 00:23:02,119 --> 00:23:04,440 Speaker 1: But we could just inscribe them into the bitcoin blockchain 492 00:23:04,480 --> 00:23:06,800 Speaker 1: and then no one could ever get rid of those books, right, Like, 493 00:23:06,880 --> 00:23:12,200 Speaker 1: that'd be right, That'd that'd be pretty beneficial. Anyway, interesting, 494 00:23:12,280 --> 00:23:15,240 Speaker 1: let's talk about back back to kind of what we 495 00:23:15,320 --> 00:23:18,560 Speaker 1: see happening right now, which I think is arguably the 496 00:23:18,680 --> 00:23:22,240 Speaker 1: biggest use case, uh, the most important use case in 497 00:23:22,280 --> 00:23:24,760 Speaker 1: the world. We say, fix the money, fix the world, 498 00:23:25,800 --> 00:23:28,200 Speaker 1: and so we can probably point back to almost any 499 00:23:28,200 --> 00:23:30,639 Speaker 1: problem in society pointing it back to a problem with 500 00:23:30,680 --> 00:23:33,359 Speaker 1: the money. And so let's talk about what you think 501 00:23:33,440 --> 00:23:38,199 Speaker 1: happens with that, you know, this future world you had 502 00:23:38,240 --> 00:23:39,719 Speaker 1: hinted before, and I kind of want to come back 503 00:23:39,760 --> 00:23:42,960 Speaker 1: to that. If we wanted to get off of just 504 00:23:43,040 --> 00:23:45,439 Speaker 1: the store of value and kind of use it more 505 00:23:45,440 --> 00:23:47,480 Speaker 1: of a medium exchange, do we have other assets on 506 00:23:47,520 --> 00:23:48,000 Speaker 1: top of it? 507 00:23:48,720 --> 00:23:51,360 Speaker 3: Could those inflate it? Would that turn into fractional reserve. 508 00:23:52,000 --> 00:23:54,080 Speaker 1: Uh, do you have some ideas on how you think 509 00:23:54,119 --> 00:23:55,000 Speaker 1: that could play out? 510 00:23:55,880 --> 00:23:56,600 Speaker 2: Oh, quite a. 511 00:23:56,520 --> 00:24:00,719 Speaker 4: Bit, Mark, Yeah, you're going to have to shut me up, 512 00:24:00,760 --> 00:24:05,720 Speaker 4: but yeah, I think that I think the best way 513 00:24:05,760 --> 00:24:11,960 Speaker 4: to start is the idea is that if we if 514 00:24:12,000 --> 00:24:15,840 Speaker 4: bitcoin is going to remain a form, is going to 515 00:24:15,960 --> 00:24:19,200 Speaker 4: you know, move into the medium exchange aspect without turning 516 00:24:19,200 --> 00:24:23,800 Speaker 4: into some type of fractional reserve system, then we need 517 00:24:23,800 --> 00:24:28,560 Speaker 4: the system to emerge in a way where either this 518 00:24:28,600 --> 00:24:31,040 Speaker 4: would be like the Lightning network for example, you can 519 00:24:31,080 --> 00:24:35,360 Speaker 4: always voluntarily exit from participating in the Lightning network back 520 00:24:35,359 --> 00:24:37,919 Speaker 4: to just owning your bitcoin on the base chain. So 521 00:24:38,080 --> 00:24:40,520 Speaker 4: that's an incredibly valuable characteristic and I think that that 522 00:24:40,600 --> 00:24:43,040 Speaker 4: kind of like qualifies Lightning is like a layer on 523 00:24:43,119 --> 00:24:45,639 Speaker 4: top of bitcoin. I feel like the idea of layers 524 00:24:45,720 --> 00:24:47,920 Speaker 4: is misused a bit. There's a lot of things that 525 00:24:48,080 --> 00:24:51,160 Speaker 4: are you know, more like on the side of bitcoin 526 00:24:51,200 --> 00:24:54,080 Speaker 4: that it probably aren't. I would define a layers something 527 00:24:54,119 --> 00:24:56,240 Speaker 4: where you have to be able to voluntarily exit back 528 00:24:56,280 --> 00:24:59,280 Speaker 4: to the layer below it in order for it to 529 00:24:59,280 --> 00:25:01,800 Speaker 4: be considered that anything else is just kind of using 530 00:25:01,800 --> 00:25:05,320 Speaker 4: bitcoin in some sort of way. And I think that 531 00:25:05,760 --> 00:25:08,280 Speaker 4: when you think about what could emerge in fractional reserve 532 00:25:08,760 --> 00:25:11,119 Speaker 4: When we think about what's happening with like fetiment that 533 00:25:11,200 --> 00:25:14,240 Speaker 4: you were mentioning earlier, they're sharing e cash, and it's 534 00:25:14,280 --> 00:25:18,680 Speaker 4: technically possible that if you are participating in fetiment and 535 00:25:18,680 --> 00:25:20,800 Speaker 4: you're using e cash for a form of trade, people 536 00:25:20,840 --> 00:25:23,280 Speaker 4: that are issuing it could issue more without you knowing it. 537 00:25:23,800 --> 00:25:27,400 Speaker 4: And the complexity of all that we could talk about 538 00:25:27,480 --> 00:25:29,440 Speaker 4: for a while. But I think the high level takeaway 539 00:25:29,480 --> 00:25:31,600 Speaker 4: of all of it is that if we move into 540 00:25:31,640 --> 00:25:35,240 Speaker 4: systems where there is a receipt to Bitcoin that we're 541 00:25:35,320 --> 00:25:39,280 Speaker 4: using in some form, then that opens up vectors for 542 00:25:39,600 --> 00:25:42,439 Speaker 4: whether or not we could have a fractional reserve system. 543 00:25:42,520 --> 00:25:44,600 Speaker 4: But and I think that this is going to be 544 00:25:44,640 --> 00:25:47,680 Speaker 4: a key area criticism, but I think that the solution 545 00:25:47,840 --> 00:25:50,960 Speaker 4: is more so I don't think it actually will be 546 00:25:51,000 --> 00:25:53,080 Speaker 4: as big of a deal. If these notes do emerge, 547 00:25:53,080 --> 00:25:57,160 Speaker 4: the question is going to ultimately become how efficient are 548 00:25:57,200 --> 00:25:59,919 Speaker 4: these systems, how transparent is the information, and ultimately how 549 00:26:00,040 --> 00:26:02,640 Speaker 4: competitive does it become, Because when we talk about digitally 550 00:26:02,720 --> 00:26:05,720 Speaker 4: native assets that are underlying some sort of note within 551 00:26:05,760 --> 00:26:08,680 Speaker 4: the system, if the information is transparent enough and there's 552 00:26:08,800 --> 00:26:11,480 Speaker 4: enough competition then it's going to be very very hard 553 00:26:11,600 --> 00:26:15,320 Speaker 4: in the system to actually run a fractional reserve type institution. 554 00:26:15,800 --> 00:26:18,080 Speaker 4: I think that for the first time in history, we'll 555 00:26:18,080 --> 00:26:23,040 Speaker 4: probably see a naturally emerging full reserve system, which we 556 00:26:23,080 --> 00:26:25,480 Speaker 4: actually have never seen really in history. We've had examples 557 00:26:25,520 --> 00:26:28,200 Speaker 4: of like one off full reserve institutions that have kind 558 00:26:28,200 --> 00:26:30,879 Speaker 4: of been relegated to being a full reserve for a 559 00:26:30,880 --> 00:26:35,119 Speaker 4: period of time, typically in markets throughout history. Because information 560 00:26:35,240 --> 00:26:38,480 Speaker 4: wasn't as transparent, the government was always meddling in how 561 00:26:38,520 --> 00:26:42,040 Speaker 4: the system functioned and creating these perverse incentives which reduced 562 00:26:42,040 --> 00:26:45,399 Speaker 4: the amount of competition and increase the centralization that always 563 00:26:45,440 --> 00:26:48,879 Speaker 4: caused fractional reserve to emerge somehow. Now that we're in 564 00:26:48,960 --> 00:26:52,719 Speaker 4: such a transparent system, it's just going to be very 565 00:26:52,840 --> 00:26:54,439 Speaker 4: very hard. So I think that if we do get 566 00:26:54,480 --> 00:26:58,200 Speaker 4: to maturity within this, even if we do have note 567 00:26:58,200 --> 00:27:02,280 Speaker 4: type systems, it's going to be very easy for individuals 568 00:27:02,359 --> 00:27:05,720 Speaker 4: to bankrupt any sort of institution that goes fractional reserve. 569 00:27:05,760 --> 00:27:07,479 Speaker 4: I mean, we can even see that within the Fiat 570 00:27:07,520 --> 00:27:10,600 Speaker 4: system today with how quickly bank runs are happening with 571 00:27:10,720 --> 00:27:14,000 Speaker 4: just simply mobile money applications. Imagine that being a digitally 572 00:27:14,080 --> 00:27:17,040 Speaker 4: native bitcoin system where the user has full control over everything, 573 00:27:17,720 --> 00:27:19,800 Speaker 4: it's going to be very hard for these institutions to 574 00:27:19,840 --> 00:27:21,120 Speaker 4: maintain fractional reserves. 575 00:27:21,880 --> 00:27:23,880 Speaker 1: Yeah, it's certainly going to change thing. We're seeing how 576 00:27:24,280 --> 00:27:27,399 Speaker 1: social media has just changing the speed has had a 577 00:27:27,400 --> 00:27:29,679 Speaker 1: big effect on the banks, and so you can just 578 00:27:29,800 --> 00:27:32,119 Speaker 1: figure out where that's going to go, leading to more 579 00:27:32,119 --> 00:27:34,040 Speaker 1: bank rungs and make it much harder for the banks 580 00:27:34,080 --> 00:27:36,440 Speaker 1: to keep that. If you're just tuning in, you're listening 581 00:27:36,480 --> 00:27:38,919 Speaker 1: to the Mark Mass Show, I'm sitting down with Eric Yanks, 582 00:27:38,960 --> 00:27:42,120 Speaker 1: the author of the Seventh Property, Bitcoin and Monetary Revolution. 583 00:27:42,520 --> 00:27:44,320 Speaker 1: We're going to come back a little bit and talk 584 00:27:44,480 --> 00:27:46,880 Speaker 1: more about the future of this system. Don't go away, 585 00:27:46,920 --> 00:27:48,560 Speaker 1: We'll be right back, all right, Welcome back. If you're 586 00:27:48,560 --> 00:27:50,560 Speaker 1: just tune in, you're listening to the Mark Mass Show, 587 00:27:50,800 --> 00:27:52,840 Speaker 1: I'm sitting down with Eric Yeks, the author of the 588 00:27:52,840 --> 00:27:54,120 Speaker 1: Seventh Property. 589 00:27:53,680 --> 00:27:55,440 Speaker 3: Bitcoin and the Monetary Revolution. 590 00:27:55,760 --> 00:27:57,800 Speaker 1: Now, Eric, before the break, I had to cut you 591 00:27:57,840 --> 00:28:01,320 Speaker 1: off there. We were talking about this fractional reserve system 592 00:28:01,359 --> 00:28:04,679 Speaker 1: that could happen and how potentially with technology, moving money 593 00:28:04,680 --> 00:28:06,400 Speaker 1: faster could be harder to maintain. 594 00:28:07,640 --> 00:28:10,920 Speaker 3: You know a couple of things I think about that one. 595 00:28:12,240 --> 00:28:14,719 Speaker 1: Bitcoin is kind of this first asset that gives us 596 00:28:14,760 --> 00:28:18,320 Speaker 1: the store value and the velocity all in one asset. 597 00:28:18,440 --> 00:28:20,200 Speaker 3: Right, So typically with gold, we would. 598 00:28:20,000 --> 00:28:21,880 Speaker 1: Need to add debt on top of it in order 599 00:28:21,920 --> 00:28:23,880 Speaker 1: to get that velocity, and we don't. We don't have 600 00:28:23,960 --> 00:28:28,040 Speaker 1: to do that, So that that's one thought. Like, So, 601 00:28:28,200 --> 00:28:31,160 Speaker 1: I know you're talking about like lightning and potential other layers, fetiment, 602 00:28:31,280 --> 00:28:31,760 Speaker 1: et cetera. 603 00:28:32,960 --> 00:28:34,000 Speaker 3: It doesn't really need it. 604 00:28:34,040 --> 00:28:36,720 Speaker 1: I mean, I suppose we need that second layer lightning 605 00:28:36,800 --> 00:28:40,480 Speaker 1: to move it faster, although it's still just one asset, 606 00:28:40,520 --> 00:28:42,560 Speaker 1: it's still just bitcoin. But I think the point that 607 00:28:42,600 --> 00:28:44,440 Speaker 1: you're making is when you put the bitcoin into a 608 00:28:44,520 --> 00:28:47,760 Speaker 1: lightning channel or a fetti mint, then there's potential to 609 00:28:47,880 --> 00:28:50,640 Speaker 1: increase that. They could they could add more units to that, right, 610 00:28:50,640 --> 00:28:52,600 Speaker 1: that's kind of what you're talking about. They could inflate 611 00:28:52,640 --> 00:28:56,640 Speaker 1: that or create that fractional reserve, right right, And and 612 00:28:57,000 --> 00:28:58,840 Speaker 1: aren't and aren't we so answer to that? But also 613 00:28:58,880 --> 00:29:02,600 Speaker 1: aren't we already seeing fractional reserve? Didn't we see FTX 614 00:29:02,640 --> 00:29:04,360 Speaker 1: with you know, one point five billion dollars worth a 615 00:29:04,360 --> 00:29:07,520 Speaker 1: bitcoin on their books? People thought they had bitcoin at FTX, 616 00:29:07,560 --> 00:29:10,440 Speaker 1: but really they had, was it like one bitcoin or 617 00:29:10,440 --> 00:29:12,640 Speaker 1: half a bitcoin or something like that to work maybe 618 00:29:12,640 --> 00:29:13,400 Speaker 1: already seeing that. 619 00:29:14,040 --> 00:29:16,960 Speaker 4: Oh yeah completely, and the system that we're in is 620 00:29:17,080 --> 00:29:19,880 Speaker 4: not you know, I'm thinking much more long term once 621 00:29:19,880 --> 00:29:22,240 Speaker 4: we kind of converge upon like a bitcoin standard. But yeah, 622 00:29:22,280 --> 00:29:24,760 Speaker 4: certainly the system has all the prefers incentives that are 623 00:29:24,800 --> 00:29:27,840 Speaker 4: needed to create a fractional reserve system, especially when we 624 00:29:27,880 --> 00:29:30,560 Speaker 4: have c FI operators that are you know, creating paper 625 00:29:30,560 --> 00:29:34,200 Speaker 4: bitcoin on top of it. I think that in order 626 00:29:34,320 --> 00:29:37,719 Speaker 4: for the incentives to all align eventually. This is very 627 00:29:37,720 --> 00:29:39,480 Speaker 4: long term proposition of what it would look like in 628 00:29:39,480 --> 00:29:42,120 Speaker 4: the world on a bitcoin standard for the foreseeable future. 629 00:29:42,160 --> 00:29:45,000 Speaker 4: As long as we have centralized providers within this type 630 00:29:45,000 --> 00:29:47,800 Speaker 4: of system, and as long as it remains free as 631 00:29:47,880 --> 00:29:50,480 Speaker 4: it's an adolescence, I expect us to continue to see, 632 00:29:50,560 --> 00:29:54,920 Speaker 4: you know, fraudulent actors do this, which is why we're 633 00:29:54,920 --> 00:29:57,880 Speaker 4: towing a very interesting line when we're innovating finance and money, 634 00:29:58,560 --> 00:30:02,400 Speaker 4: because the it's not just bringing new products to market 635 00:30:02,520 --> 00:30:05,480 Speaker 4: that can if you don't like the product, then you 636 00:30:05,520 --> 00:30:07,360 Speaker 4: don't have to use it again. It's if you don't 637 00:30:07,400 --> 00:30:09,480 Speaker 4: like the product, you lose a lot of your wealth. 638 00:30:09,600 --> 00:30:12,520 Speaker 4: Oftentimes for people that aren't totally informed, which is one 639 00:30:12,560 --> 00:30:14,480 Speaker 4: of the hard parts about this industry and one of 640 00:30:14,560 --> 00:30:16,760 Speaker 4: the things that people have to be really careful about. 641 00:30:16,960 --> 00:30:21,280 Speaker 4: But I think that so yes, the fractional reserve aspects 642 00:30:21,280 --> 00:30:23,080 Speaker 4: I expect to exist for a while when it comes 643 00:30:23,120 --> 00:30:26,840 Speaker 4: to exchanges and the way that they're operating. Hopefully after 644 00:30:26,880 --> 00:30:31,040 Speaker 4: this last cycle, more people learn their lesson and the 645 00:30:31,080 --> 00:30:33,920 Speaker 4: system starts to mature and become a bit more efficient. 646 00:30:34,120 --> 00:30:37,480 Speaker 4: But I think once we're in a digitally native system 647 00:30:37,680 --> 00:30:40,480 Speaker 4: of operators where they're still going to be centralized providers, 648 00:30:40,520 --> 00:30:42,240 Speaker 4: I'll be clear, But once we're on like a Bitcoin 649 00:30:42,360 --> 00:30:46,880 Speaker 4: standard of some form, that's when things change quite a bit. 650 00:30:47,000 --> 00:30:49,240 Speaker 4: So a way that I think about a lot of 651 00:30:49,240 --> 00:30:52,760 Speaker 4: this right now, if we operate on the lightning network 652 00:30:52,800 --> 00:30:57,000 Speaker 4: in the future, then lightning institutions Lightning has certain issues 653 00:30:57,120 --> 00:31:01,080 Speaker 4: right like lightning is naturally could seyentralize over time, We 654 00:31:01,120 --> 00:31:02,960 Speaker 4: don't totally know, but there's a lot of incentives that 655 00:31:03,000 --> 00:31:06,520 Speaker 4: are probably driving into a system of banking type institutions, 656 00:31:06,880 --> 00:31:08,719 Speaker 4: which may not be a bad thing as long as 657 00:31:08,760 --> 00:31:12,280 Speaker 4: it remains competitive. So if you're depositing like and to 658 00:31:12,320 --> 00:31:15,720 Speaker 4: explain this for listeners to. If you are if you 659 00:31:15,720 --> 00:31:17,320 Speaker 4: want to participate in the Lightning network and you want 660 00:31:17,320 --> 00:31:19,120 Speaker 4: to send bitcoin to somebody, then you can easily just 661 00:31:19,520 --> 00:31:22,360 Speaker 4: put bitcoin into the Lightning network and whatever amount that 662 00:31:22,400 --> 00:31:24,040 Speaker 4: you've put in is the amount that you can send. 663 00:31:24,040 --> 00:31:26,560 Speaker 4: That's pretty simple. But if you're a merchant and you 664 00:31:26,600 --> 00:31:27,920 Speaker 4: know you have a store and you want to go 665 00:31:28,000 --> 00:31:31,880 Speaker 4: sell some amount of bitcoin, you're limited by the amount 666 00:31:32,040 --> 00:31:35,480 Speaker 4: of capacity that you can accept from the other person 667 00:31:35,480 --> 00:31:37,520 Speaker 4: you've opened a channel with when you put that lightning in. 668 00:31:38,040 --> 00:31:42,080 Speaker 4: So because of that, that limitation means that there's probably 669 00:31:42,080 --> 00:31:45,000 Speaker 4: going to be centralized providers who are saying, Okay, we 670 00:31:45,080 --> 00:31:47,120 Speaker 4: have a lot of bitcoin that we're sitting on, we 671 00:31:47,160 --> 00:31:50,320 Speaker 4: can open up a channel with you, and if you can, 672 00:31:50,400 --> 00:31:52,440 Speaker 4: you can pay us a fee and we'll allow you 673 00:31:52,480 --> 00:31:54,320 Speaker 4: to accept. You know, if you're a store and you're 674 00:31:54,320 --> 00:31:56,840 Speaker 4: bringing in, you know, one hundred thousand dollars in sales 675 00:31:56,880 --> 00:31:59,800 Speaker 4: every day online or something, then they can provide you 676 00:31:59,800 --> 00:32:02,040 Speaker 4: a capacity for a fee so that you can accept 677 00:32:02,040 --> 00:32:05,400 Speaker 4: that on the Lightning network. That's fine, but it'll create 678 00:32:05,440 --> 00:32:09,480 Speaker 4: centralization over time. So it's arguably we'll probably create some 679 00:32:09,600 --> 00:32:12,960 Speaker 4: type of lightning banking system that will emerge that's providing 680 00:32:13,000 --> 00:32:15,080 Speaker 4: that capacity for people who are accepting a lot of 681 00:32:15,160 --> 00:32:21,200 Speaker 4: lightning payments, and that system. As that emerges, that type 682 00:32:21,240 --> 00:32:24,360 Speaker 4: of system could become fractional. 683 00:32:23,880 --> 00:32:25,880 Speaker 2: In some form. There is a risk of it. 684 00:32:26,960 --> 00:32:30,280 Speaker 4: So we do know on the digitally native side that 685 00:32:31,680 --> 00:32:33,320 Speaker 4: the amount of bitcoin that somebody has, because we can 686 00:32:33,400 --> 00:32:35,680 Speaker 4: verify that on chain, But what we don't know is 687 00:32:35,880 --> 00:32:38,240 Speaker 4: if that person is taking on any sort of loan 688 00:32:38,640 --> 00:32:43,640 Speaker 4: that's outside of what this institution is doing. So, you know, 689 00:32:43,720 --> 00:32:45,600 Speaker 4: I could go set up a lightning big tomorrow. I 690 00:32:45,640 --> 00:32:48,720 Speaker 4: can have one hundred biitcoin in my address, and I 691 00:32:48,760 --> 00:32:51,440 Speaker 4: can make a bunch of you know, I could be 692 00:32:51,480 --> 00:32:54,360 Speaker 4: taking out loans outside of this system that are ultimately 693 00:32:54,360 --> 00:32:57,520 Speaker 4: creating a fractional liability on top of it. So like 694 00:32:58,120 --> 00:33:01,239 Speaker 4: that's something that will probably exist today. I think that 695 00:33:01,600 --> 00:33:04,360 Speaker 4: the scenario that's going to make it really hard for 696 00:33:04,440 --> 00:33:06,640 Speaker 4: a lot of these systems to be fractionals. Like if 697 00:33:06,680 --> 00:33:12,280 Speaker 4: you envision this new digitally native world, you could go 698 00:33:12,720 --> 00:33:14,280 Speaker 4: and there's gonna be a lot of people that are 699 00:33:14,320 --> 00:33:16,760 Speaker 4: speculating against that because moving money is going to be 700 00:33:16,760 --> 00:33:18,920 Speaker 4: so cheap and efficient, it's going to be really easy 701 00:33:19,040 --> 00:33:20,680 Speaker 4: to put these guys out of business, so we can 702 00:33:20,720 --> 00:33:22,320 Speaker 4: look at their own chain address, we can say, okay, 703 00:33:22,320 --> 00:33:25,280 Speaker 4: you have this much, and if there's like a certain 704 00:33:25,280 --> 00:33:27,680 Speaker 4: amount of claims that are being put out on top 705 00:33:27,720 --> 00:33:30,280 Speaker 4: of that, it'd be easy enough to go buy those claims, 706 00:33:31,120 --> 00:33:34,840 Speaker 4: redeem them and take out you know, some form of 707 00:33:35,720 --> 00:33:37,880 Speaker 4: for people that aren't as familiar with there's flash loans, 708 00:33:37,920 --> 00:33:39,959 Speaker 4: which is a way of like scaling a really instant 709 00:33:40,000 --> 00:33:42,680 Speaker 4: loan for like an arbitrage trade that allows people to 710 00:33:42,760 --> 00:33:46,480 Speaker 4: scale transactions very rapidly for arbitrage. And because you could 711 00:33:46,480 --> 00:33:50,160 Speaker 4: do that and this would probably be more this would 712 00:33:50,200 --> 00:33:53,400 Speaker 4: be a better example would probably be instead of doing 713 00:33:53,400 --> 00:33:55,080 Speaker 4: this for a lightning bank, if you were to look 714 00:33:55,120 --> 00:33:58,520 Speaker 4: at like a feediment that's issuing not it's not bitcoin 715 00:33:58,600 --> 00:34:02,520 Speaker 4: lightning cash that you're issuing on top of a bitcoin reserve. 716 00:34:03,000 --> 00:34:05,520 Speaker 4: If you're expecting that fetiment to be issuing too much 717 00:34:05,520 --> 00:34:07,640 Speaker 4: e cash, you can buy a bunch of e cash 718 00:34:07,680 --> 00:34:09,680 Speaker 4: out of the market and then go redeem them all 719 00:34:09,680 --> 00:34:10,920 Speaker 4: at the FTAMAN and see if you can put them 720 00:34:10,960 --> 00:34:14,000 Speaker 4: into insolvency. And there's it's just going to be so 721 00:34:14,040 --> 00:34:16,080 Speaker 4: efficient for people to do that, and we can have 722 00:34:16,120 --> 00:34:19,120 Speaker 4: all these mechanisms like flash loans to instantly create arbitrage 723 00:34:19,160 --> 00:34:22,920 Speaker 4: when it's on chain type trades that it's gonna be 724 00:34:22,920 --> 00:34:24,880 Speaker 4: hard to run a fractional reserve institution. 725 00:34:25,360 --> 00:34:28,440 Speaker 1: Yeah, and the and the transparency. I mean, it's the 726 00:34:28,480 --> 00:34:32,040 Speaker 1: bitcoin network is not private. I'm sorry, it's private. It's 727 00:34:32,080 --> 00:34:35,799 Speaker 1: a it's anonymous. It's not private's anonymous, right, So it's 728 00:34:35,800 --> 00:34:37,879 Speaker 1: like it's yeah, pseudonymous. 729 00:34:37,920 --> 00:34:39,000 Speaker 3: So you have the visibility. 730 00:34:39,000 --> 00:34:40,839 Speaker 1: You can see how much bitcoin there is, and then 731 00:34:40,920 --> 00:34:42,719 Speaker 1: well it looks like they're you know, they're creating more 732 00:34:42,760 --> 00:34:45,879 Speaker 1: and then you could easily pull that out, et cetera, 733 00:34:45,960 --> 00:34:47,680 Speaker 1: and so you can create runs on the bank. We 734 00:34:47,719 --> 00:34:49,080 Speaker 1: don't have a lot of time left, but I was 735 00:34:49,160 --> 00:34:51,640 Speaker 1: just curious as I was thinking about that, you know, 736 00:34:51,760 --> 00:34:53,440 Speaker 1: something I wanted to dig into. We're gonna have time 737 00:34:53,480 --> 00:34:58,279 Speaker 1: at this point, but you know, thinking about people trying 738 00:34:58,320 --> 00:35:01,359 Speaker 1: to earn yield on bitcoin, and so if you think 739 00:35:01,400 --> 00:35:05,160 Speaker 1: about like people would put their money in the banks historically. 740 00:35:05,719 --> 00:35:08,279 Speaker 1: One obviously gold was very slow and clunky, so I'd 741 00:35:08,280 --> 00:35:09,839 Speaker 1: give to the bank. They'd speed it up by giving 742 00:35:09,840 --> 00:35:12,640 Speaker 1: me paper closertificates, and so then we put our money 743 00:35:12,640 --> 00:35:15,880 Speaker 1: into the bank. One because I need someone to store 744 00:35:15,960 --> 00:35:18,440 Speaker 1: my money, and I need someone to control the payments. 745 00:35:18,840 --> 00:35:20,920 Speaker 1: Let me send money in and out of that bank. 746 00:35:21,200 --> 00:35:24,200 Speaker 1: And then also historically we would earn yield as the 747 00:35:24,200 --> 00:35:25,880 Speaker 1: bank would loan that money out, they would pay me 748 00:35:25,920 --> 00:35:28,600 Speaker 1: percentage back. But if I don't need them to store 749 00:35:28,600 --> 00:35:31,400 Speaker 1: my money anymore, and I don't need them to handle 750 00:35:31,400 --> 00:35:34,160 Speaker 1: payments for me anymore, then the only function left would 751 00:35:34,160 --> 00:35:35,879 Speaker 1: be the yield. Of course, bank's pay no yields. That's 752 00:35:35,920 --> 00:35:37,520 Speaker 1: kind of out of the equation. But I kind of think, 753 00:35:37,760 --> 00:35:39,960 Speaker 1: you know, Jeff Boose says that it's hard to see 754 00:35:40,000 --> 00:35:42,520 Speaker 1: the new system when you're living in the existing system. 755 00:35:42,719 --> 00:35:45,320 Speaker 1: And so like, in this existing system with massive inflation, 756 00:35:45,800 --> 00:35:49,440 Speaker 1: we need some sort of yield. But maybe in that 757 00:35:49,520 --> 00:35:52,080 Speaker 1: new bitcoin world we don't need the yield. We're not 758 00:35:52,120 --> 00:35:53,959 Speaker 1: chasing yield all the time. If we were really living 759 00:35:54,000 --> 00:35:56,880 Speaker 1: in a deflationary world, a world of abundance, maybe we 760 00:35:56,880 --> 00:35:58,839 Speaker 1: would need to go chase yield and it would take 761 00:35:58,840 --> 00:36:02,600 Speaker 1: away that third need for the banking system totally. You 762 00:36:02,600 --> 00:36:04,279 Speaker 1: got about thirty five seconds, Go ahead, tell me what 763 00:36:04,280 --> 00:36:04,520 Speaker 1: you think. 764 00:36:05,080 --> 00:36:06,359 Speaker 2: All right, Yeah, so here we go. 765 00:36:06,600 --> 00:36:10,720 Speaker 4: The number one. Yeah, if we're dealing with a disinflationary 766 00:36:10,800 --> 00:36:13,560 Speaker 4: type supply currency, then we probably are not going to 767 00:36:13,719 --> 00:36:16,359 Speaker 4: be as interested in finding interest on it in order 768 00:36:16,400 --> 00:36:18,799 Speaker 4: to keep up within our current system. Inflation is why 769 00:36:18,840 --> 00:36:21,879 Speaker 4: we want the interest. And then two, the other big 770 00:36:21,920 --> 00:36:23,759 Speaker 4: thing is in this new system, there's actually gonna be 771 00:36:23,800 --> 00:36:26,680 Speaker 4: ways of earning a rate of interest by supplying liquidity 772 00:36:26,719 --> 00:36:29,600 Speaker 4: to the Lightning network without assuming any sort of counterparty 773 00:36:29,680 --> 00:36:31,319 Speaker 4: risk like you do at a bank like banks today, 774 00:36:31,400 --> 00:36:34,760 Speaker 4: or just credit funds. And we're assuming these like leveraged 775 00:36:34,840 --> 00:36:37,719 Speaker 4: long credit fund risk for your savings, which is like 776 00:36:37,960 --> 00:36:41,240 Speaker 4: this absurd scenario that should never exist. In the first place. 777 00:36:41,560 --> 00:36:44,359 Speaker 4: Lightning banks would just be deposit the baitcoin. You can 778 00:36:44,400 --> 00:36:48,279 Speaker 4: earn a minimal rate of risk risk free, not risk free, 779 00:36:48,520 --> 00:36:50,520 Speaker 4: but you can put into effectively a hot wallet that's 780 00:36:50,560 --> 00:36:52,920 Speaker 4: your risk, earn a rate of return on top of that. 781 00:36:53,200 --> 00:36:54,919 Speaker 4: And you can also lease liquidity and earn a great 782 00:36:55,000 --> 00:36:56,640 Speaker 4: rate of return, So you can earn yield through that 783 00:36:56,680 --> 00:36:58,960 Speaker 4: without assuming risk from a counterparty. You actually don't even 784 00:36:58,960 --> 00:37:01,240 Speaker 4: have to go through a bank. You can do that yourself. 785 00:37:01,760 --> 00:37:03,640 Speaker 4: So those are the two things that I think are 786 00:37:03,640 --> 00:37:07,240 Speaker 4: going to be really big in terms of people want yield. 787 00:37:07,440 --> 00:37:11,120 Speaker 4: And while fractional reserve can incentivize that. I think that 788 00:37:11,160 --> 00:37:13,040 Speaker 4: there's going to be much more efficient ways of doing 789 00:37:13,080 --> 00:37:16,399 Speaker 4: that that are can be done by the individual as 790 00:37:16,440 --> 00:37:19,480 Speaker 4: well as you know, I don't think that that will 791 00:37:19,480 --> 00:37:22,080 Speaker 4: be as attractive in a disinflationary type system. 792 00:37:22,600 --> 00:37:23,160 Speaker 3: Yeah. 793 00:37:23,280 --> 00:37:24,920 Speaker 1: Man, there's so much to dig into there. I'd love 794 00:37:24,960 --> 00:37:26,759 Speaker 1: to talk more about that, but we're out of time. 795 00:37:26,880 --> 00:37:28,640 Speaker 1: Maybe another time we'll have to get into that. If 796 00:37:28,640 --> 00:37:30,239 Speaker 1: you just tune in your listen to the Mark Mass Show, 797 00:37:30,239 --> 00:37:32,360 Speaker 1: I've been sitting down with Eric Yeks. He is the 798 00:37:32,440 --> 00:37:35,520 Speaker 1: author of the seventh property, Bitcoin and a Monetary Revolution. 799 00:37:35,600 --> 00:37:37,320 Speaker 1: Will put links to that book in the show notes. 800 00:37:37,480 --> 00:37:39,359 Speaker 1: You should go buy a copy and read up on it. 801 00:37:39,800 --> 00:37:41,280 Speaker 3: And that's what we got. Thanks so much for listening.