1 00:00:04,600 --> 00:00:07,680 Speaker 1: So the big question is this, how do investors like 2 00:00:07,880 --> 00:00:11,800 Speaker 1: us get access to the ideas, information, and most importantly, 3 00:00:12,039 --> 00:00:14,840 Speaker 1: the right people that give us the tools and information 4 00:00:15,000 --> 00:00:19,000 Speaker 1: we need to make informed and educated decisions to have success. 5 00:00:19,600 --> 00:00:22,319 Speaker 1: That is the question, and this podcast will give us 6 00:00:22,360 --> 00:00:25,480 Speaker 1: the answers. This is Mark Moss, your host. Let's get 7 00:00:25,520 --> 00:00:30,400 Speaker 1: this started. Welcome to another episode of the Market Disruptors podcast. 8 00:00:31,040 --> 00:00:34,519 Speaker 1: You know, understanding the intricacies of the global financial markets 9 00:00:34,760 --> 00:00:38,040 Speaker 1: is difficult, if not almost impossible for the average person. 10 00:00:38,560 --> 00:00:42,600 Speaker 1: It takes a lot of specialty training, education and dedication 11 00:00:42,840 --> 00:00:45,600 Speaker 1: to study these markets and understand how they work. And 12 00:00:45,600 --> 00:00:48,040 Speaker 1: today we sit down with Nick Batia. He's a researcher 13 00:00:48,200 --> 00:00:52,360 Speaker 1: with Tantra Labs. He's an adjunct professor at usc speaking 14 00:00:52,440 --> 00:00:55,600 Speaker 1: and teaching about the bond market, the financial market, and 15 00:00:55,640 --> 00:00:57,800 Speaker 1: he gives us some great insights. We're get into some 16 00:00:57,840 --> 00:01:01,720 Speaker 1: conversations talking about his three of money, how it works 17 00:01:01,800 --> 00:01:07,479 Speaker 1: different types of assets, from currencies, treasuries, oil, gold, et cetera. 18 00:01:07,640 --> 00:01:11,399 Speaker 1: Of course cryptocurrencies bitcoin. We talked about what he saw 19 00:01:11,480 --> 00:01:15,440 Speaker 1: in the traditional financial markets buying and selling treasuries that 20 00:01:15,640 --> 00:01:18,640 Speaker 1: kind of caused him to want to jump over into bitcoin. 21 00:01:18,880 --> 00:01:21,480 Speaker 1: Full time. We have a lot of good conversations about 22 00:01:21,480 --> 00:01:26,200 Speaker 1: bitcoin itself, specifically, including how it's exactly where it needs 23 00:01:26,200 --> 00:01:29,440 Speaker 1: to be today, how it's scaling, what the evolution of 24 00:01:29,440 --> 00:01:32,360 Speaker 1: bitcoin looks like today, and where it's going over the 25 00:01:32,360 --> 00:01:35,559 Speaker 1: next five and ten years. We both agree it's exactly 26 00:01:35,600 --> 00:01:37,280 Speaker 1: where it needs to be, it's doing exactly what it 27 00:01:37,319 --> 00:01:40,120 Speaker 1: needs to be doing, and it's on the course to 28 00:01:40,160 --> 00:01:42,280 Speaker 1: set it up for a huge success in the future. 29 00:01:42,480 --> 00:01:44,800 Speaker 1: It was a great conversation with Nick that I really enjoyed. 30 00:01:45,160 --> 00:01:47,600 Speaker 1: So let's go ahead and just jump right into it. Everyone, 31 00:01:47,680 --> 00:01:50,560 Speaker 1: Welcome to another episode of the Market Disruptors podcast. Today, 32 00:01:50,600 --> 00:01:53,600 Speaker 1: I'm joined by Nick Botia. He has a he does 33 00:01:53,640 --> 00:01:58,040 Speaker 1: research with Tantra Labs and open Nodes. He's also an 34 00:01:58,080 --> 00:02:01,760 Speaker 1: adjunct professor at USC talking about finance and bond markets 35 00:02:01,760 --> 00:02:03,760 Speaker 1: and stuff. So many things that we could talk about. 36 00:02:03,760 --> 00:02:06,320 Speaker 1: We're trying to keep appointed. I'm excited for this interview. 37 00:02:06,360 --> 00:02:09,000 Speaker 1: So Nick, welcome to the show. Thank you for having me. 38 00:02:09,000 --> 00:02:12,480 Speaker 1: I appreciate it. Yeah. So, like I said, there's a 39 00:02:12,520 --> 00:02:14,000 Speaker 1: lot of things we could talk about, but but I 40 00:02:14,040 --> 00:02:16,400 Speaker 1: want to keep it on track. But before we dive 41 00:02:16,480 --> 00:02:18,120 Speaker 1: into all that, why don't you just kind of give 42 00:02:18,160 --> 00:02:21,200 Speaker 1: us a background of of kind of how you got here, 43 00:02:21,200 --> 00:02:24,320 Speaker 1: on what you're working on right now. Sure. So I 44 00:02:24,600 --> 00:02:28,240 Speaker 1: joined the bitcoin industry formally just a few months ago 45 00:02:28,600 --> 00:02:34,200 Speaker 1: as a research strategist for open node payment processor that's 46 00:02:34,280 --> 00:02:38,320 Speaker 1: enabled by the Lightning Network UM, as well as Tantile Labs. 47 00:02:38,560 --> 00:02:43,480 Speaker 1: It is a hedge fund. They're both here in Los Angeles. UM. 48 00:02:43,520 --> 00:02:47,639 Speaker 1: They're both extremely exciting opportunities UM, and I'm really happy 49 00:02:47,639 --> 00:02:50,440 Speaker 1: to be part of both of them. Before that, I 50 00:02:50,560 --> 00:02:55,079 Speaker 1: was part of the traditional finance industry. I was a 51 00:02:55,120 --> 00:02:58,800 Speaker 1: bond trader trading US treasuries and other interest rate products 52 00:02:58,840 --> 00:03:02,239 Speaker 1: for an asset manager UM for a few years, and 53 00:03:02,480 --> 00:03:04,440 Speaker 1: worked at a hedge fund before that for a couple 54 00:03:04,480 --> 00:03:07,960 Speaker 1: of years. UM. So I'm really just excited to have 55 00:03:08,080 --> 00:03:12,000 Speaker 1: made the transition from the bond market to bitcoin. Yeah. 56 00:03:12,120 --> 00:03:15,160 Speaker 1: So what a what a big jump to go from 57 00:03:15,160 --> 00:03:18,960 Speaker 1: like traditional finance working with billions or trillions of dollars 58 00:03:19,320 --> 00:03:22,720 Speaker 1: to go into like this small kind of brand new technology. Uh. 59 00:03:22,960 --> 00:03:25,960 Speaker 1: What was that decision like to go from you know, 60 00:03:26,000 --> 00:03:29,360 Speaker 1: the big traditional market to something that's like risky and 61 00:03:29,440 --> 00:03:32,800 Speaker 1: unproven and small. Sure, well, it was a process that 62 00:03:32,919 --> 00:03:37,160 Speaker 1: happened over a few years. First started with my interest 63 00:03:37,160 --> 00:03:40,560 Speaker 1: in bitcoin and the dive down the all the bitcoin 64 00:03:40,640 --> 00:03:43,960 Speaker 1: rabbit holes, um, and that you know process lasted a 65 00:03:43,960 --> 00:03:47,000 Speaker 1: couple of years. Then I started writing about bitcoin last 66 00:03:47,080 --> 00:03:50,240 Speaker 1: year and some of that work was embraced by the 67 00:03:50,280 --> 00:03:54,240 Speaker 1: bitcoin community. They encouraged me to write more and I 68 00:03:54,480 --> 00:03:56,960 Speaker 1: wanted to have conversations about some of the things that 69 00:03:57,000 --> 00:04:00,760 Speaker 1: I was interested in, and all that snowball all into 70 00:04:01,280 --> 00:04:04,880 Speaker 1: meeting real bitcoiners in person and starting to form relationships, 71 00:04:05,560 --> 00:04:09,800 Speaker 1: going to events and uh, and then the gravity of 72 00:04:09,800 --> 00:04:13,720 Speaker 1: bitcoin just kind of pulled me in. And in the end, UM, 73 00:04:13,880 --> 00:04:17,479 Speaker 1: I made the you know decision that it was it 74 00:04:17,560 --> 00:04:21,279 Speaker 1: was time. I love that the gravity of bitcoin pulls 75 00:04:21,279 --> 00:04:23,640 Speaker 1: you in. Man, it's success all in, doesn't it. So 76 00:04:23,720 --> 00:04:28,760 Speaker 1: when you were working for like a traditional manager institutional manager, UM, 77 00:04:28,800 --> 00:04:30,520 Speaker 1: and you were trading treasuries, like I said, I mean, 78 00:04:30,560 --> 00:04:32,640 Speaker 1: those are those are big markets, global markets, So you 79 00:04:32,680 --> 00:04:35,400 Speaker 1: were looking at like the big kind of macro global 80 00:04:35,480 --> 00:04:38,280 Speaker 1: picture when you were when you're doing those things, and UM, 81 00:04:38,360 --> 00:04:40,840 Speaker 1: what what were you looking at? Um? What were there 82 00:04:40,839 --> 00:04:42,800 Speaker 1: certain things that you were seeing that that we're kind 83 00:04:42,800 --> 00:04:45,440 Speaker 1: of pushing asset prices around that kind of caused alarm 84 00:04:45,520 --> 00:04:48,680 Speaker 1: for you. Well, you know, one of the things as 85 00:04:48,720 --> 00:04:50,880 Speaker 1: a treasury trader that you really sink your teeth in 86 00:04:51,240 --> 00:04:55,119 Speaker 1: is this bull market that treasuries have been in for 87 00:04:55,800 --> 00:04:59,680 Speaker 1: uh three three plus decades in the United States, um 88 00:04:59,720 --> 00:05:04,000 Speaker 1: SA the eighties when interest rates were at and so 89 00:05:04,200 --> 00:05:06,760 Speaker 1: then you start to ask yourself, why have rates been 90 00:05:06,760 --> 00:05:11,120 Speaker 1: trending lower for decades even though they can pop higher 91 00:05:11,600 --> 00:05:14,000 Speaker 1: for a couple of years at a time. If you 92 00:05:14,120 --> 00:05:18,080 Speaker 1: zoom out, what you see is just this persistent demand 93 00:05:18,160 --> 00:05:21,800 Speaker 1: for US treasuries. So I started to ask myself what 94 00:05:21,880 --> 00:05:25,920 Speaker 1: are the things that cause this persistent demand? And those 95 00:05:25,920 --> 00:05:28,160 Speaker 1: were the things that I ended up focusing on. And uh, 96 00:05:28,400 --> 00:05:31,760 Speaker 1: you know, some of those things are just the unlimited 97 00:05:31,800 --> 00:05:38,400 Speaker 1: demand for safety and liquidity um of of safe, relatively 98 00:05:38,480 --> 00:05:42,080 Speaker 1: safe assets versus all the other risky assets out there. 99 00:05:42,560 --> 00:05:44,920 Speaker 1: Let's let's unpack that just a little bit. So um, 100 00:05:46,080 --> 00:05:48,080 Speaker 1: for those that aren't aren't kind of tuned in, what 101 00:05:48,200 --> 00:05:50,920 Speaker 1: are treasuries? Real quickly? I mean, how how does that? 102 00:05:51,040 --> 00:05:54,520 Speaker 1: How does that work? Right? So, treasuries are obligations from 103 00:05:54,560 --> 00:05:58,039 Speaker 1: the US government, So they are it's a it's a 104 00:05:58,120 --> 00:06:04,800 Speaker 1: debt instrument, and and the buyer the bond is lending 105 00:06:04,839 --> 00:06:07,200 Speaker 1: money to the US government, and over time, the US 106 00:06:07,279 --> 00:06:10,919 Speaker 1: government pays back that that lender with interest payments and 107 00:06:10,920 --> 00:06:13,560 Speaker 1: then eventually the principle at the end, the reason why 108 00:06:13,680 --> 00:06:18,200 Speaker 1: treasuries are held as this quote unquote risk free asset, 109 00:06:18,520 --> 00:06:21,920 Speaker 1: even though we know that the government could default, um, 110 00:06:22,320 --> 00:06:25,040 Speaker 1: the fact of the matter is that they haven't, and 111 00:06:25,560 --> 00:06:31,000 Speaker 1: that precedent the US government's credit worthiness has positioned treasury 112 00:06:31,000 --> 00:06:34,240 Speaker 1: bonds as the quote unquote risk free asset of the 113 00:06:34,400 --> 00:06:38,520 Speaker 1: entire financial system. Right, and so because of that, because 114 00:06:38,560 --> 00:06:41,000 Speaker 1: the dollars the reserve currency of the world, and the 115 00:06:41,080 --> 00:06:43,560 Speaker 1: United States has kind of been the underpinnion of the 116 00:06:43,560 --> 00:06:47,080 Speaker 1: financial system. That's why their bond, where their treasury is 117 00:06:47,120 --> 00:06:49,360 Speaker 1: the most risk free asset, and they have the track 118 00:06:49,400 --> 00:06:52,159 Speaker 1: record I guess as well, not defaulting, that's right. And 119 00:06:52,440 --> 00:06:55,480 Speaker 1: uh and uh part of part of that is that 120 00:06:55,839 --> 00:06:59,080 Speaker 1: the dollar isn't backed by gold anymore, so you know, 121 00:06:59,240 --> 00:07:03,719 Speaker 1: the people look for, uh an asset that is a 122 00:07:03,839 --> 00:07:07,080 Speaker 1: safe haven away from the dollar. Um, they look to 123 00:07:07,160 --> 00:07:10,640 Speaker 1: US treasuries because the dollar is not backed by anything 124 00:07:10,680 --> 00:07:13,720 Speaker 1: but the treasury or the bond is backed by the government. 125 00:07:13,840 --> 00:07:17,080 Speaker 1: The credit of the government. That's right. Well, see, the 126 00:07:17,080 --> 00:07:22,720 Speaker 1: thing is that the dollar is backed by the Federal reserve, right. Um, 127 00:07:22,800 --> 00:07:25,600 Speaker 1: that's if you have a cash note, those are federal 128 00:07:25,640 --> 00:07:29,120 Speaker 1: reserve notes. Um. Dollars that are in a bank are 129 00:07:29,800 --> 00:07:34,800 Speaker 1: liabilities of that bank, their dollar deposits, and so those 130 00:07:34,880 --> 00:07:39,040 Speaker 1: dollar deposits aren't backed by anything but that bank. And 131 00:07:39,120 --> 00:07:41,840 Speaker 1: that's really why people seek the safe haven of treasuries 132 00:07:42,280 --> 00:07:44,720 Speaker 1: in the financial system. It's kind of the default thing 133 00:07:44,760 --> 00:07:48,400 Speaker 1: that you own instead of bank deposits because you don't 134 00:07:48,440 --> 00:07:50,400 Speaker 1: want to have to trust that bank. You'd rather trust 135 00:07:50,400 --> 00:07:53,360 Speaker 1: the government. Right. And so we're talking like on the 136 00:07:53,440 --> 00:07:57,600 Speaker 1: billion scale, the trillion scale, so like other sovereigns, right, 137 00:07:57,680 --> 00:08:00,800 Speaker 1: other governments and things like that. Yeah, and you said, 138 00:08:00,840 --> 00:08:03,160 Speaker 1: over the last thirty years, we've had this massive demand 139 00:08:03,240 --> 00:08:05,840 Speaker 1: growth for that for those treasuries as interest rates have 140 00:08:05,960 --> 00:08:10,520 Speaker 1: gone down. Um. Is that is that because other governments 141 00:08:10,520 --> 00:08:12,640 Speaker 1: are kind of falling left and right, in the US 142 00:08:12,720 --> 00:08:16,280 Speaker 1: just continues to get stronger and stronger. Well, it's a 143 00:08:16,320 --> 00:08:20,920 Speaker 1: combination of several things. Um, inflation rates in general have 144 00:08:20,960 --> 00:08:25,040 Speaker 1: been low in the Western world for a long time, 145 00:08:25,600 --> 00:08:30,640 Speaker 1: and UM growth expectations as well. UM. And so you know, 146 00:08:30,800 --> 00:08:33,960 Speaker 1: interest rates are kind of that combination of growth and 147 00:08:34,040 --> 00:08:37,800 Speaker 1: inflation expectations of the future, and so as those two 148 00:08:37,840 --> 00:08:41,640 Speaker 1: things have trended down, so have interest rates. Now, I 149 00:08:41,720 --> 00:08:44,480 Speaker 1: mean currently, right now we're seeing the kind of this 150 00:08:44,559 --> 00:08:47,280 Speaker 1: race to the bottom where all these other governments are 151 00:08:47,320 --> 00:08:50,040 Speaker 1: starting to try to devalue their currency to kind of 152 00:08:50,040 --> 00:08:52,520 Speaker 1: play that game. And so that's only making the US 153 00:08:52,600 --> 00:08:58,160 Speaker 1: dollar stronger or the treasury is even stronger and more demand. Well, um, 154 00:08:58,160 --> 00:09:02,079 Speaker 1: it's it's it's interesting because the US dollar is the 155 00:09:02,120 --> 00:09:07,000 Speaker 1: center of the financial system and for that reason, um, 156 00:09:07,000 --> 00:09:09,400 Speaker 1: as goes the US goes the rest of the world, 157 00:09:09,600 --> 00:09:12,200 Speaker 1: and so I actually like to think more in terms 158 00:09:12,280 --> 00:09:15,439 Speaker 1: of the rest of the world trying to devalue their 159 00:09:15,440 --> 00:09:18,000 Speaker 1: currency is simply just a reaction to what's going on 160 00:09:18,040 --> 00:09:24,240 Speaker 1: in the dollar system. Right. Okay, Now you talked about 161 00:09:24,720 --> 00:09:26,960 Speaker 1: we talked about treasuries, but when you were looking at 162 00:09:26,960 --> 00:09:29,880 Speaker 1: the macro markets, I mean, did you look at treasuries, 163 00:09:29,960 --> 00:09:33,000 Speaker 1: which are you know, credit essentially of the government. But 164 00:09:33,320 --> 00:09:35,800 Speaker 1: you kind of referenced before you also looking at gold 165 00:09:36,120 --> 00:09:40,680 Speaker 1: and oil equities? How they all related together. Um, gold 166 00:09:40,720 --> 00:09:44,080 Speaker 1: and oil obviously our commodities, those are real world assets. 167 00:09:44,120 --> 00:09:48,079 Speaker 1: That's that's real wealth, right versus treasuries just being credit. 168 00:09:48,760 --> 00:09:51,719 Speaker 1: How do you see those moving together or or what 169 00:09:51,960 --> 00:09:54,600 Speaker 1: do you see there when you look at those together? Yeah, 170 00:09:54,640 --> 00:09:57,800 Speaker 1: so the best thing you can try to do is 171 00:09:58,640 --> 00:10:02,640 Speaker 1: UM just under stand which wants to watch. Trying to 172 00:10:02,679 --> 00:10:06,079 Speaker 1: predict which causes the other to move or how they 173 00:10:06,120 --> 00:10:09,680 Speaker 1: all react in you know, in relation to each other 174 00:10:10,240 --> 00:10:14,920 Speaker 1: is really almost an impossible task. And unless you um 175 00:10:14,960 --> 00:10:17,680 Speaker 1: you know, you have the quantitative tools, which actually there 176 00:10:17,679 --> 00:10:22,160 Speaker 1: are a few hedge funds out there that you know, 177 00:10:22,240 --> 00:10:26,040 Speaker 1: have dedicated hundreds of millions of dollars into the infrastructure 178 00:10:26,040 --> 00:10:31,360 Speaker 1: to analyzing this data. So tracking it, being able to 179 00:10:31,360 --> 00:10:33,720 Speaker 1: try to predict it is not something that I did. 180 00:10:33,800 --> 00:10:35,559 Speaker 1: The only thing that I was trying to do is 181 00:10:36,200 --> 00:10:40,640 Speaker 1: look at what was moving and why it was moving 182 00:10:41,200 --> 00:10:43,160 Speaker 1: and and try to understand, you know, some of the 183 00:10:43,200 --> 00:10:49,840 Speaker 1: relationships between asset classes, equity, fixed income, currencies and commodities. 184 00:10:50,200 --> 00:10:52,600 Speaker 1: I guess what I was asking is UM. So. I 185 00:10:52,679 --> 00:10:55,720 Speaker 1: just recently did a video on YouTube where I talked 186 00:10:55,760 --> 00:11:00,120 Speaker 1: about UM the doubt of gold ratio and we I 187 00:11:00,160 --> 00:11:02,160 Speaker 1: was basically talking about, you know, which a lot of 188 00:11:02,400 --> 00:11:04,600 Speaker 1: people are kind of in tune with, but like gold 189 00:11:04,679 --> 00:11:07,920 Speaker 1: being real wealth or real value. It's priced in dollars, 190 00:11:07,960 --> 00:11:09,880 Speaker 1: and it looks like gold is getting more expensive. It 191 00:11:09,920 --> 00:11:12,040 Speaker 1: looks like houses are getting more expensive. Looks like all 192 00:11:12,040 --> 00:11:13,880 Speaker 1: these things are getting more expensive. But really the dollar 193 00:11:14,040 --> 00:11:17,400 Speaker 1: is going down in value. And you when you look 194 00:11:17,440 --> 00:11:20,079 Speaker 1: at um, when you look at home, the medium home 195 00:11:20,120 --> 00:11:22,200 Speaker 1: price in the United States fifty years ago was twenty 196 00:11:22,280 --> 00:11:27,200 Speaker 1: seven thousand. Today it's two. But when you price it 197 00:11:27,200 --> 00:11:29,319 Speaker 1: in gold, it's kind of priced the same amount of 198 00:11:29,320 --> 00:11:31,439 Speaker 1: ounces per gold or whatever. So that's I guess that's 199 00:11:31,440 --> 00:11:33,880 Speaker 1: what I was curious about. So over the last you know, 200 00:11:33,920 --> 00:11:36,560 Speaker 1: since nine seventy one or whatever, as that money supply 201 00:11:36,640 --> 00:11:39,520 Speaker 1: has been exploding, I would imagine we've probably seen similar things, 202 00:11:39,520 --> 00:11:44,240 Speaker 1: like in the treasury bond market. Um. Yeah, they definitely 203 00:11:44,320 --> 00:11:48,760 Speaker 1: the the cost of living and especially the cost of 204 00:11:49,120 --> 00:11:53,120 Speaker 1: things that have been subsidized by government programs. UM like 205 00:11:53,280 --> 00:11:57,680 Speaker 1: the mortgage market and uh, the student loan market and 206 00:11:57,840 --> 00:12:02,040 Speaker 1: the healthcare market. These three things have massive government subsidies 207 00:12:02,040 --> 00:12:05,880 Speaker 1: here in the United States. UM. And it just leads 208 00:12:05,920 --> 00:12:11,640 Speaker 1: to higher and higher prices bubbles, that's right, anywhere they 209 00:12:11,640 --> 00:12:14,880 Speaker 1: want to put money because it creates artificial demand, right, 210 00:12:14,920 --> 00:12:17,600 Speaker 1: And so you create artificial demand and it produces bubbles. Now, 211 00:12:17,800 --> 00:12:21,160 Speaker 1: you wrote a paper recently called the Triumvirate, which was 212 00:12:21,440 --> 00:12:23,400 Speaker 1: which was really cool as well received in the community. 213 00:12:23,400 --> 00:12:25,520 Speaker 1: I know, I got a lot of a lot of 214 00:12:25,800 --> 00:12:27,920 Speaker 1: publicity and and there was some really good stuff in there. 215 00:12:27,920 --> 00:12:29,880 Speaker 1: And you talked about a little bit about the history 216 00:12:29,880 --> 00:12:33,440 Speaker 1: of money, um, gold and then dollars built on top 217 00:12:33,480 --> 00:12:36,160 Speaker 1: of gold. Um. But really there was a point where 218 00:12:36,160 --> 00:12:38,960 Speaker 1: the euro dollar was created. It kind of change the 219 00:12:39,000 --> 00:12:43,840 Speaker 1: whole system. Um before really we even lost the gold standard. 220 00:12:44,320 --> 00:12:47,360 Speaker 1: What was that difference? Maybe real quickly as you walk 221 00:12:47,400 --> 00:12:51,880 Speaker 1: through that sure, so um, what you did, what basically 222 00:12:51,880 --> 00:12:56,400 Speaker 1: happened was in Europe after World War two, UM and 223 00:12:56,480 --> 00:12:58,880 Speaker 1: the breton Wood system was started, where the dollar was 224 00:12:58,920 --> 00:13:03,800 Speaker 1: the reserve currency. Banks in Europe needed a way to 225 00:13:03,840 --> 00:13:07,760 Speaker 1: settle balances between each other, so they came up with 226 00:13:07,960 --> 00:13:13,880 Speaker 1: this system of a dollar liability and uh that wasn't 227 00:13:13,920 --> 00:13:19,760 Speaker 1: connected to the federal reserve regulated onshore US dollar system. 228 00:13:20,000 --> 00:13:23,200 Speaker 1: But what were they using before that? Just dollars? That's well, 229 00:13:23,360 --> 00:13:28,160 Speaker 1: they were using the balances between the between um between 230 00:13:28,320 --> 00:13:31,920 Speaker 1: the two banks. And so those balances, whether they were 231 00:13:31,960 --> 00:13:37,160 Speaker 1: denominated in the currency Europe or in gold um. They 232 00:13:37,679 --> 00:13:43,840 Speaker 1: weren't able to facilitate the economic activity that was required 233 00:13:43,880 --> 00:13:46,800 Speaker 1: of them in dollars because they just couldn't have the 234 00:13:46,840 --> 00:13:51,960 Speaker 1: access to that many dollars with their own in currency, 235 00:13:52,120 --> 00:13:55,360 Speaker 1: the euro dollar to help facilitate that trade. That's right. 236 00:13:55,400 --> 00:13:58,320 Speaker 1: So they still had dollars, right, and those dollars um 237 00:13:58,880 --> 00:14:04,680 Speaker 1: were actual notes, and but that only limits them to 238 00:14:05,000 --> 00:14:07,440 Speaker 1: facilitate the amount of dollars that they had. So if 239 00:14:07,440 --> 00:14:09,240 Speaker 1: they wanted to grow their business, they have to come 240 00:14:09,280 --> 00:14:11,280 Speaker 1: up with something else. So they came up with this 241 00:14:11,320 --> 00:14:15,360 Speaker 1: tool called the euro dollar to actually facilitate payment beyond 242 00:14:15,360 --> 00:14:19,600 Speaker 1: the actual dollars that they had, right and so um 243 00:14:19,680 --> 00:14:21,840 Speaker 1: that was a big turning point. You think in like 244 00:14:21,920 --> 00:14:25,680 Speaker 1: the the the change in our money from golden dollars 245 00:14:25,680 --> 00:14:28,360 Speaker 1: to then kind of the system that we have today. Well, 246 00:14:28,400 --> 00:14:32,240 Speaker 1: what happened was the supply of these euro dollars started 247 00:14:32,280 --> 00:14:35,280 Speaker 1: to increase and then they started to mix in with 248 00:14:35,440 --> 00:14:39,720 Speaker 1: regular on shore dollars. So the Federal Reserve admitted sometime 249 00:14:39,960 --> 00:14:42,520 Speaker 1: by the nineteen eighties that they had lost track of 250 00:14:42,560 --> 00:14:46,440 Speaker 1: the money supply and they went from targeting money supply 251 00:14:46,640 --> 00:14:49,720 Speaker 1: in their monetary policy to the price of money, which 252 00:14:49,800 --> 00:14:52,520 Speaker 1: was you know, the federal refunds rate. They started targeting 253 00:14:52,560 --> 00:14:55,280 Speaker 1: interest rates instead of the money supply because they actually 254 00:14:55,280 --> 00:14:59,400 Speaker 1: didn't they lost track of it completely. And they they 255 00:14:59,440 --> 00:15:03,320 Speaker 1: they have ad did this, uh, you know, slowly, but 256 00:15:03,480 --> 00:15:07,560 Speaker 1: surely you know since the nineteen eighties, and um, in 257 00:15:07,600 --> 00:15:10,480 Speaker 1: some papers that I was reading in preparation for this article. 258 00:15:10,760 --> 00:15:12,440 Speaker 1: Sure they used to track it. They used to say, 259 00:15:12,480 --> 00:15:14,680 Speaker 1: like because it was backed by gold, and they'd say, 260 00:15:14,720 --> 00:15:17,320 Speaker 1: like how many times more than gold? And then they 261 00:15:17,320 --> 00:15:18,840 Speaker 1: at tracked it for quite a while and then they 262 00:15:18,880 --> 00:15:21,720 Speaker 1: just gave up and said, I forget it. Right, Um, 263 00:15:21,880 --> 00:15:24,320 Speaker 1: you made a point that that in the paper, you 264 00:15:24,320 --> 00:15:26,600 Speaker 1: made a point that at that point, Um, the dollars 265 00:15:26,640 --> 00:15:30,360 Speaker 1: were no longer that risk free trade, and that's kind 266 00:15:30,360 --> 00:15:33,800 Speaker 1: of what started pushing everybody into the treasuries. That's right, shift, 267 00:15:34,320 --> 00:15:37,240 Speaker 1: that's right. So once the Fed you know, admits that 268 00:15:37,280 --> 00:15:40,920 Speaker 1: they've kind of lost track of the supply of the dollar, um, 269 00:15:40,960 --> 00:15:44,160 Speaker 1: the whole system realizes that the dollar is just a 270 00:15:44,240 --> 00:15:48,480 Speaker 1: banking liability and not really an asset that's worth holding 271 00:15:48,480 --> 00:15:51,960 Speaker 1: onto for any long duration of time. And so that's 272 00:15:52,000 --> 00:15:55,000 Speaker 1: what causes the demand for US treasuries because you can 273 00:15:55,040 --> 00:15:57,680 Speaker 1: think just think of it as the dollar substitute, and 274 00:15:57,720 --> 00:16:00,440 Speaker 1: if the dollar is a banking line of liability, then 275 00:16:00,480 --> 00:16:04,440 Speaker 1: you just substitute it with the government's liability. And that 276 00:16:04,600 --> 00:16:10,280 Speaker 1: is basically what happened in the capital markets where um 277 00:16:10,480 --> 00:16:14,200 Speaker 1: cash doesn't actually sit in cash, it sits in treasuries, 278 00:16:14,240 --> 00:16:16,960 Speaker 1: T bills, et cetera, because that's a safe way to 279 00:16:17,000 --> 00:16:21,400 Speaker 1: store dollars. It's interesting, you know. I saw just recently, 280 00:16:21,680 --> 00:16:23,040 Speaker 1: in the last couple of weeks, I think I saw 281 00:16:23,040 --> 00:16:27,920 Speaker 1: a survey and it said something like maybe up to 282 00:16:27,960 --> 00:16:30,840 Speaker 1: thirty percent of people still think the dollar is backed 283 00:16:30,840 --> 00:16:34,120 Speaker 1: by gold. And really there was kind of the sly 284 00:16:34,920 --> 00:16:38,440 Speaker 1: switcher rue bait and switch whatever, where the dollar still 285 00:16:38,520 --> 00:16:41,600 Speaker 1: looks the same, right, they changed it at the top 286 00:16:41,680 --> 00:16:42,920 Speaker 1: that some of the text a little bit, but for 287 00:16:42,920 --> 00:16:44,360 Speaker 1: the most part of the dollars the same, so the 288 00:16:44,360 --> 00:16:47,920 Speaker 1: most people think it's still the same. Um. I thought 289 00:16:47,920 --> 00:16:50,760 Speaker 1: it was interesting is that people thought it was still 290 00:16:50,760 --> 00:16:55,080 Speaker 1: backed by gold. I wonder how many people never even 291 00:16:55,160 --> 00:16:58,640 Speaker 1: knew it was even backed by gold, though that's probably 292 00:16:58,680 --> 00:17:01,920 Speaker 1: a pretty high number. Yeah, I mean, it's it's it's funny. 293 00:17:02,000 --> 00:17:05,800 Speaker 1: I um, you know, I didn't start trying to understand 294 00:17:05,800 --> 00:17:10,399 Speaker 1: what the dollar was until I started studying economics, uh 295 00:17:10,640 --> 00:17:13,680 Speaker 1: in in college. So you know, I think that it's 296 00:17:13,720 --> 00:17:17,240 Speaker 1: just not on most people's radar. The dollar is their 297 00:17:17,359 --> 00:17:21,000 Speaker 1: store value, it's their medium of exchange, and it's their 298 00:17:21,080 --> 00:17:25,679 Speaker 1: unit of account. The dollar works, um. And so because 299 00:17:25,720 --> 00:17:28,679 Speaker 1: of that, uh, people tend to not notice. But if 300 00:17:28,720 --> 00:17:30,560 Speaker 1: you zoom out like you were saying, and you look 301 00:17:30,840 --> 00:17:34,000 Speaker 1: over a multidecade time horizon, that's when you start that's 302 00:17:34,000 --> 00:17:36,359 Speaker 1: when you start to notice that maybe this isn't the 303 00:17:36,440 --> 00:17:40,560 Speaker 1: best way to store value. Yeah, that's such a good 304 00:17:40,600 --> 00:17:43,000 Speaker 1: point that you made. Just like in the last week, 305 00:17:43,440 --> 00:17:45,919 Speaker 1: another tweet that that kind of went around the world 306 00:17:46,040 --> 00:17:49,520 Speaker 1: was that I think it was Larry Cernac posted or 307 00:17:49,560 --> 00:17:52,960 Speaker 1: something and said that you know, the dollar by design 308 00:17:53,119 --> 00:17:56,840 Speaker 1: is supposed to inflate by two annually, and even though 309 00:17:56,880 --> 00:17:59,280 Speaker 1: it steals money from people or value from people, they're 310 00:17:59,280 --> 00:18:02,120 Speaker 1: not supposed to be storing their wealth in in dollars, right, 311 00:18:02,440 --> 00:18:05,600 Speaker 1: And he said they should be buying treasuries. Um. But 312 00:18:05,880 --> 00:18:08,680 Speaker 1: as the point you just made, which I agree with, yeah, 313 00:18:08,680 --> 00:18:10,560 Speaker 1: I was, person has no idea. They just think that 314 00:18:10,600 --> 00:18:14,200 Speaker 1: they store their money in dollars, right, Yes, And that's 315 00:18:14,240 --> 00:18:18,080 Speaker 1: why we also see that most of the stock market 316 00:18:18,840 --> 00:18:21,439 Speaker 1: is owned by UM. You know, I think it's ten 317 00:18:21,520 --> 00:18:24,879 Speaker 1: or fifteen percent of the American population, So you know, 318 00:18:24,880 --> 00:18:31,600 Speaker 1: most people don't own financial assets in general. Yeah, what's 319 00:18:31,600 --> 00:18:34,639 Speaker 1: interesting when you go through history, and again bitcoin drags 320 00:18:34,680 --> 00:18:37,040 Speaker 1: you into all these different little rabbit holes as we 321 00:18:37,080 --> 00:18:38,479 Speaker 1: call them. But when you go through history, you can 322 00:18:38,520 --> 00:18:41,119 Speaker 1: see how UM, you know, in the mid I don't know, 323 00:18:41,160 --> 00:18:45,040 Speaker 1: fourteen fifteen century, the whole world got onto the standardized 324 00:18:45,080 --> 00:18:47,720 Speaker 1: gold system where all the coins had the same size 325 00:18:47,760 --> 00:18:50,640 Speaker 1: and weight, and how it just blew up free trade 326 00:18:50,920 --> 00:18:53,359 Speaker 1: and allowed everyone to start specializing. And then the world 327 00:18:53,359 --> 00:18:57,360 Speaker 1: had several hundred years of massive prosperity UM during that period, 328 00:18:58,800 --> 00:19:03,080 Speaker 1: and UM people were able to specialize, store their value 329 00:19:03,119 --> 00:19:06,880 Speaker 1: and have it retain its purchasing power. But today, let's 330 00:19:06,880 --> 00:19:09,480 Speaker 1: even if you're the best brain surgeon in the world, 331 00:19:09,680 --> 00:19:11,040 Speaker 1: you should be able to be a good brain surgeon 332 00:19:11,040 --> 00:19:13,439 Speaker 1: and park your money, have its store its value. But 333 00:19:13,560 --> 00:19:16,880 Speaker 1: you can't, and so now everyone's forced to be an investor. 334 00:19:17,920 --> 00:19:20,040 Speaker 1: And then it's created this whole financial system that would 335 00:19:20,040 --> 00:19:22,800 Speaker 1: wouldn't even be necessary if we could just store our value. 336 00:19:23,280 --> 00:19:25,960 Speaker 1: That's right, that's what happens. And when you're in a 337 00:19:26,119 --> 00:19:29,040 Speaker 1: credit based or debt based money system is that it 338 00:19:29,119 --> 00:19:33,840 Speaker 1: has to gradually inflate to stay alive. And it caused 339 00:19:33,920 --> 00:19:36,480 Speaker 1: yet it causes everybody to have to be an investor. 340 00:19:37,320 --> 00:19:41,639 Speaker 1: What's interesting, And you have the traational finance background, and 341 00:19:41,680 --> 00:19:44,680 Speaker 1: it seems like a lot of people still because maybe 342 00:19:44,760 --> 00:19:47,679 Speaker 1: the way that's predominantly taught is that we have to 343 00:19:47,720 --> 00:19:50,720 Speaker 1: have this inflationary system, which I think is the point 344 00:19:50,720 --> 00:19:53,160 Speaker 1: that he was trying to make on that tweet, because 345 00:19:53,480 --> 00:19:56,080 Speaker 1: we need this system to inflate. And I sent a 346 00:19:56,119 --> 00:19:59,240 Speaker 1: follow up tweet out and I said, would you rather 347 00:19:59,480 --> 00:20:02,399 Speaker 1: your money I'm more in the future or less in 348 00:20:02,440 --> 00:20:05,680 Speaker 1: the future. And everybody, of course wants more money or 349 00:20:06,000 --> 00:20:09,200 Speaker 1: to buy more in the future. Um, but they want 350 00:20:09,280 --> 00:20:12,199 Speaker 1: us to believe we need our money to inflate. But 351 00:20:13,440 --> 00:20:15,400 Speaker 1: really it's the debt, right. Do you want to pay 352 00:20:15,560 --> 00:20:17,880 Speaker 1: less for your debt in the future or pay less 353 00:20:17,960 --> 00:20:20,720 Speaker 1: or pay more for your debt? Right? Yes? And I'm 354 00:20:20,760 --> 00:20:22,959 Speaker 1: glad you brought that up because it's one of the 355 00:20:22,960 --> 00:20:24,679 Speaker 1: things that I'm going to be spending a lot of 356 00:20:24,720 --> 00:20:28,320 Speaker 1: time on over the next several months is coming up 357 00:20:28,359 --> 00:20:31,760 Speaker 1: with an answer to your question about UM, how do 358 00:20:31,800 --> 00:20:35,600 Speaker 1: we answer the criticism that we need to have this 359 00:20:35,720 --> 00:20:40,520 Speaker 1: moderate early, moderately inflationary system UM, and that you know, 360 00:20:40,760 --> 00:20:44,920 Speaker 1: the deflationary system of bitcoin is bad. So I'm I'm 361 00:20:44,920 --> 00:20:47,640 Speaker 1: gonna be spending a lot of time researching, writing, trying 362 00:20:47,680 --> 00:20:50,480 Speaker 1: to come up with ideas, asking some smart people there. 363 00:20:50,520 --> 00:20:55,520 Speaker 1: There have been great pieces written about bitcoins, specifically with 364 00:20:55,560 --> 00:20:59,000 Speaker 1: this UM, but also in terms of the gold system 365 00:20:59,040 --> 00:21:02,320 Speaker 1: that we used to have UM. So I'm looking to 366 00:21:02,960 --> 00:21:05,800 Speaker 1: research and summarize some of that stuff. I think. I mean, 367 00:21:05,840 --> 00:21:09,280 Speaker 1: I think an inflationary currency only we're only helps, is 368 00:21:09,320 --> 00:21:12,760 Speaker 1: only good in a credit based system. UM. In a 369 00:21:12,840 --> 00:21:16,560 Speaker 1: non credit based system, you want a deflationary currency, of course. 370 00:21:16,920 --> 00:21:18,919 Speaker 1: And and they want to say, well, people want to 371 00:21:18,960 --> 00:21:21,960 Speaker 1: feel like their true wages are going up, UM, But 372 00:21:22,080 --> 00:21:24,520 Speaker 1: I don't know. I think even though yeah, our wages 373 00:21:24,520 --> 00:21:26,159 Speaker 1: went from four dollars and our eight dollars an hour, 374 00:21:26,280 --> 00:21:28,840 Speaker 1: we know that they buy less today. So I don't 375 00:21:29,160 --> 00:21:32,119 Speaker 1: that's not a great argument. What's that It's not a 376 00:21:32,119 --> 00:21:34,760 Speaker 1: great argument to say that people, you know, want to 377 00:21:34,840 --> 00:21:36,880 Speaker 1: feel like the numbers are going up, so that's why 378 00:21:36,920 --> 00:21:40,120 Speaker 1: we have an inflationary system. No, it's not a good 379 00:21:40,200 --> 00:21:42,320 Speaker 1: argument at all, you know, so it only helps the 380 00:21:42,320 --> 00:21:45,040 Speaker 1: people with the credit. Now. You also made a point 381 00:21:45,080 --> 00:21:49,480 Speaker 1: in that Triumgrant article that really the banks broke um 382 00:21:49,520 --> 00:21:52,320 Speaker 1: the dollar in two thousand seven, and and now we're 383 00:21:52,400 --> 00:21:56,120 Speaker 1: in a system of permanent disrepair? You said, yes, And 384 00:21:56,200 --> 00:21:58,720 Speaker 1: so why is that? What happened there? Well? So the 385 00:21:58,800 --> 00:22:03,480 Speaker 1: system of euro dollar interbank liabilities UM was kind of 386 00:22:04,680 --> 00:22:10,920 Speaker 1: uh free reign system, strike of the pen um, not 387 00:22:11,000 --> 00:22:14,760 Speaker 1: with a lot of limits, and not with really any 388 00:22:14,760 --> 00:22:18,640 Speaker 1: worry uh what would go wrong? Um? And then when 389 00:22:18,680 --> 00:22:21,760 Speaker 1: it did go wrong in two thousand and seven and 390 00:22:21,800 --> 00:22:25,639 Speaker 1: they realized that you can't just leverage up six two 391 00:22:25,680 --> 00:22:31,920 Speaker 1: one and survive um. That at that from that point forward, 392 00:22:32,400 --> 00:22:36,640 Speaker 1: the banks trust of each other really just started to unwind. 393 00:22:37,200 --> 00:22:40,000 Speaker 1: And so the reason why I say that we're in 394 00:22:40,080 --> 00:22:44,000 Speaker 1: permanent disrepair is because we keep from going through these 395 00:22:44,040 --> 00:22:47,920 Speaker 1: periods where banks uh just stop lending to each other 396 00:22:48,240 --> 00:22:50,840 Speaker 1: and we can see that the system is not the 397 00:22:50,880 --> 00:22:53,600 Speaker 1: same as it used to be. Now you say that 398 00:22:53,680 --> 00:22:55,960 Speaker 1: in two thousand seven, So that's that right before the 399 00:22:55,960 --> 00:22:59,840 Speaker 1: great financial crash happened, Um, they realized they can't leve 400 00:23:00,119 --> 00:23:04,320 Speaker 1: up fifty one. But did they really? Aren't they levered 401 00:23:04,400 --> 00:23:09,760 Speaker 1: up that much? Today we're worse. Well, sure, So the 402 00:23:09,800 --> 00:23:13,560 Speaker 1: way that the central bank backs the system um makes 403 00:23:13,680 --> 00:23:17,679 Speaker 1: the banks comfortable with taking risk. They just know that 404 00:23:17,720 --> 00:23:20,879 Speaker 1: the their fellow banks are not the ones that are 405 00:23:20,920 --> 00:23:22,840 Speaker 1: going to that are going to step in and keep 406 00:23:22,840 --> 00:23:25,320 Speaker 1: the system alive. It's the central bank. And so the 407 00:23:25,440 --> 00:23:29,600 Speaker 1: FED came in in two thousand and eight and two 408 00:23:29,640 --> 00:23:32,640 Speaker 1: thousand and nine and two and ten and basically said 409 00:23:33,080 --> 00:23:36,560 Speaker 1: we're going to provide all the liquidity that you'll ever need. 410 00:23:37,080 --> 00:23:39,560 Speaker 1: And so, yeah, why would the banks go to each 411 00:23:39,600 --> 00:23:43,160 Speaker 1: other anymore? Right? They wouldn't. When when doesn't that doesn't 412 00:23:43,200 --> 00:23:45,840 Speaker 1: that almost make them more reckless knowing that hey, now 413 00:23:45,840 --> 00:23:48,159 Speaker 1: we have this back stopping and we're always gonna get 414 00:23:48,200 --> 00:23:51,880 Speaker 1: built out. Well, actually it's turned into something kind of 415 00:23:53,119 --> 00:23:57,480 Speaker 1: scary where they are kind of reckless for most of 416 00:23:57,560 --> 00:23:59,879 Speaker 1: the quarter and then as we go into quarter end 417 00:24:00,440 --> 00:24:04,840 Speaker 1: they have to window dress, as we call it, um. 418 00:24:04,960 --> 00:24:06,720 Speaker 1: They just have to make their balance sheets look good 419 00:24:06,720 --> 00:24:09,080 Speaker 1: for all the regulators, and they start paring down a 420 00:24:09,080 --> 00:24:12,400 Speaker 1: bunch of risks with each other, and so really bad 421 00:24:12,440 --> 00:24:15,520 Speaker 1: things can happen on quarter ends or year ends as 422 00:24:15,560 --> 00:24:20,320 Speaker 1: we saw last December, as we saw this September. Um, 423 00:24:20,480 --> 00:24:24,120 Speaker 1: you you you have a system where you have kind 424 00:24:24,119 --> 00:24:27,480 Speaker 1: of make believe risk for eighty days of eighty out 425 00:24:27,480 --> 00:24:29,400 Speaker 1: of every ninety days, and then you have to reconcile 426 00:24:29,480 --> 00:24:34,000 Speaker 1: to reality. It's not a great system, you know. I 427 00:24:34,080 --> 00:24:36,560 Speaker 1: like to say that, like people like to say like 428 00:24:36,640 --> 00:24:38,960 Speaker 1: knowledge is power, and I like to say that, really, 429 00:24:39,000 --> 00:24:42,960 Speaker 1: only actionable knowledge is power. Otherwise I think ignorance is bliss. 430 00:24:43,240 --> 00:24:45,760 Speaker 1: And a lot of times, like you've you peel, you 431 00:24:45,760 --> 00:24:47,720 Speaker 1: peek behind the curtain, you see this stuff and then 432 00:24:47,720 --> 00:24:51,040 Speaker 1: you can't unsee it. So I'm curious, um, you know, 433 00:24:51,119 --> 00:24:54,280 Speaker 1: being that you were studying this in in in uh 434 00:24:54,359 --> 00:24:57,640 Speaker 1: you know, becoming a professor and working for these institutional managers, 435 00:24:58,480 --> 00:25:02,000 Speaker 1: did you then you made this shift into this brand 436 00:25:02,000 --> 00:25:04,840 Speaker 1: new financial system technology, which is kind of scary. But 437 00:25:05,280 --> 00:25:07,719 Speaker 1: was it almost like what you were seeing going on 438 00:25:07,920 --> 00:25:10,520 Speaker 1: was so bad that you knew that system is doomed 439 00:25:10,520 --> 00:25:12,440 Speaker 1: and you might as well jump onto the lifeboat. We 440 00:25:12,520 --> 00:25:18,119 Speaker 1: had a chance. Yeah, not not doomed, uh necessarily, but 441 00:25:18,480 --> 00:25:24,760 Speaker 1: um beyond actionable repair. Um not something that I could 442 00:25:25,200 --> 00:25:28,280 Speaker 1: try to go out and fix. So let's work on 443 00:25:28,359 --> 00:25:33,680 Speaker 1: something that we can build and we can change and um, 444 00:25:33,720 --> 00:25:36,840 Speaker 1: you know, something something exciting. And it was basically yeah, 445 00:25:36,920 --> 00:25:39,800 Speaker 1: kind of that black hole of this system is it's 446 00:25:39,920 --> 00:25:42,280 Speaker 1: maybe it's not doomed tomorrow or even in the next 447 00:25:42,359 --> 00:25:48,080 Speaker 1: ten years, but it's decaying and uh not something flexable. Yeah, 448 00:25:48,119 --> 00:25:50,080 Speaker 1: you know, I want to you know, I want to 449 00:25:50,080 --> 00:25:52,680 Speaker 1: have something that excites me, you know, with a long 450 00:25:52,800 --> 00:25:55,680 Speaker 1: term I like how you say that because a lot 451 00:25:55,680 --> 00:25:58,000 Speaker 1: of people in the bitcoin space we talked about it 452 00:25:58,160 --> 00:26:01,280 Speaker 1: where it's an alternative system, so we can just opt 453 00:26:01,280 --> 00:26:03,920 Speaker 1: out and so we don't have to wait for one 454 00:26:03,960 --> 00:26:06,760 Speaker 1: to crash before the other takes off, and we can 455 00:26:06,800 --> 00:26:09,040 Speaker 1: just kind of build this alternate system. And that's I 456 00:26:09,040 --> 00:26:11,600 Speaker 1: guess that's what you are trying now to push. Yeah, 457 00:26:11,640 --> 00:26:16,240 Speaker 1: it's definitely a parallel system. Um, you know, I don't. 458 00:26:16,880 --> 00:26:21,480 Speaker 1: I mean, I it's hard to see, um, the United 459 00:26:21,520 --> 00:26:25,919 Speaker 1: States relinquishing control that it has um in a short 460 00:26:26,720 --> 00:26:29,280 Speaker 1: in a short time horizon. Uh you know, with the 461 00:26:29,400 --> 00:26:33,320 Speaker 1: with the with the tool that they have in the dollar. Um. 462 00:26:33,359 --> 00:26:36,960 Speaker 1: So yeah, we have to build a parallel system and 463 00:26:37,000 --> 00:26:39,760 Speaker 1: make it as good and then better as the dollar system. 464 00:26:39,800 --> 00:26:42,399 Speaker 1: Before you know, we can say, hey, you should you know, 465 00:26:42,520 --> 00:26:45,840 Speaker 1: you should come over to the bitcoin world and that's 466 00:26:45,840 --> 00:26:48,520 Speaker 1: just gonna take time. Yeah, I know. I think I 467 00:26:48,680 --> 00:26:50,840 Speaker 1: always like to say people are expecting way too much, 468 00:26:50,840 --> 00:26:53,320 Speaker 1: way too soon. I did a video where I talked 469 00:26:53,359 --> 00:26:56,439 Speaker 1: about how the dollar and actually you know, the reserve 470 00:26:56,480 --> 00:26:58,600 Speaker 1: currency has changed about every hundred years for the last 471 00:26:58,600 --> 00:27:01,280 Speaker 1: five six years, and I made I just I just 472 00:27:01,400 --> 00:27:04,720 Speaker 1: really broke down the change from Britain the sterling into 473 00:27:04,720 --> 00:27:07,320 Speaker 1: the dollar and how really it was about a thirty 474 00:27:07,400 --> 00:27:11,440 Speaker 1: to forty year process and today we're seeing the same 475 00:27:11,480 --> 00:27:13,400 Speaker 1: thing happen. But it's going to happen over a thirty 476 00:27:13,520 --> 00:27:15,439 Speaker 1: to four year process. It kind of happens with a whimper, 477 00:27:15,480 --> 00:27:18,640 Speaker 1: not a bang, as as I said, UM, so kind 478 00:27:18,680 --> 00:27:20,000 Speaker 1: of like what you're saying, we can start to build 479 00:27:20,000 --> 00:27:23,880 Speaker 1: that alternate system. Now, well, we didn't get super deep 480 00:27:23,960 --> 00:27:27,840 Speaker 1: into the existing system today. But in your article the 481 00:27:27,880 --> 00:27:31,879 Speaker 1: Tranprit you talk about the trying the three pieces. I 482 00:27:31,920 --> 00:27:35,359 Speaker 1: guess right that bitcoin can kind of build this alternative 483 00:27:35,359 --> 00:27:36,919 Speaker 1: system you want to break down with those three r 484 00:27:36,960 --> 00:27:41,080 Speaker 1: for us. Yeah. So what I'm basically referencing is that 485 00:27:41,119 --> 00:27:46,160 Speaker 1: in the world of uncertainty, uh, people and investors want 486 00:27:46,520 --> 00:27:50,959 Speaker 1: things that are safe and liquid. The reason that UM, 487 00:27:51,119 --> 00:27:54,359 Speaker 1: even things that are even things that are relatively safe, 488 00:27:54,440 --> 00:27:58,280 Speaker 1: can be extremely a liquid and uh, it defeats the 489 00:27:58,280 --> 00:28:00,919 Speaker 1: purpose of the safety in the first place. And so 490 00:28:01,400 --> 00:28:05,000 Speaker 1: to buy it right, right, right, And so the combination 491 00:28:05,040 --> 00:28:08,320 Speaker 1: of safety and liquidity is what people are going to seek. 492 00:28:08,400 --> 00:28:11,000 Speaker 1: And so what I see is and I reduced all 493 00:28:11,040 --> 00:28:13,840 Speaker 1: government bonds to US treasuries because they're the dominant, but 494 00:28:13,920 --> 00:28:18,040 Speaker 1: you could you could consider all UM global government bonds, 495 00:28:18,080 --> 00:28:23,200 Speaker 1: you know, including those in Europe and Australia and Canada, etcetera. 496 00:28:23,640 --> 00:28:25,800 Speaker 1: You know, a lot of government bonds that have really 497 00:28:25,840 --> 00:28:29,200 Speaker 1: really strong track records. So these government bonds is one 498 00:28:29,280 --> 00:28:33,920 Speaker 1: asset that people are going to and have flocked towards. UM. 499 00:28:34,040 --> 00:28:36,840 Speaker 1: Gold is another. As we see, the long term price 500 00:28:36,880 --> 00:28:40,600 Speaker 1: of gold has been in steady appreciation, you know, give 501 00:28:40,720 --> 00:28:44,480 Speaker 1: or take. Uh, you know the interim volatility that we 502 00:28:44,520 --> 00:28:49,000 Speaker 1: saw during quantity of easing and UM and then bitcoin. 503 00:28:49,080 --> 00:28:52,160 Speaker 1: We all know what's happened to the bitcoin price since 504 00:28:52,200 --> 00:28:54,400 Speaker 1: two thousand and nine when it did not have a 505 00:28:54,440 --> 00:28:57,719 Speaker 1: price UM because it didn't you know, it just started 506 00:28:57,760 --> 00:29:02,280 Speaker 1: to exist. So these three rethinks, uh, these three assets, 507 00:29:02,320 --> 00:29:06,160 Speaker 1: these three asset classes I believe will be in massive 508 00:29:06,200 --> 00:29:12,320 Speaker 1: demand over the next couple of decades and as bioins treasuries, 509 00:29:12,400 --> 00:29:17,320 Speaker 1: gold and um uh, bitcoin and bitcoin, and that Bitcoin 510 00:29:17,480 --> 00:29:20,840 Speaker 1: will start to take up more and more of that 511 00:29:20,920 --> 00:29:26,440 Speaker 1: demand amongst those three assets. Right now, bitcoin um is 512 00:29:26,480 --> 00:29:30,680 Speaker 1: still significantly less than one percent of the total market 513 00:29:30,720 --> 00:29:34,240 Speaker 1: value of this trianvirt um. But in two thousands seven, 514 00:29:34,320 --> 00:29:38,880 Speaker 1: during that interim bitcoin bubble, uh, bitcoin was over one 515 00:29:38,920 --> 00:29:43,360 Speaker 1: percent of you know, the market for treasuries, gold and bitcoin. 516 00:29:43,800 --> 00:29:46,320 Speaker 1: So that's pretty incredible. And as we see that go 517 00:29:46,400 --> 00:29:51,360 Speaker 1: from one percent to five over the next several years, Um, 518 00:29:51,400 --> 00:29:53,520 Speaker 1: that's you know, that's why I want us. I want 519 00:29:53,560 --> 00:29:56,520 Speaker 1: US bitcoin ers to monitor where we are in relation 520 00:29:56,560 --> 00:30:00,280 Speaker 1: to these other two assets. Uh. It's I'm curious because 521 00:30:00,280 --> 00:30:02,480 Speaker 1: you talk about them as risk free assets. And I 522 00:30:02,520 --> 00:30:05,760 Speaker 1: understand you made the case like treasuries or bonds are 523 00:30:05,840 --> 00:30:08,240 Speaker 1: backed by the faith of the government. They've never failed, 524 00:30:08,240 --> 00:30:10,080 Speaker 1: so it's pretty risk free. They're gonna pay you back. 525 00:30:10,680 --> 00:30:12,440 Speaker 1: Maybe it won't be worth as much, but they're gonna 526 00:30:12,440 --> 00:30:14,920 Speaker 1: pay you back. Right. Gold is is real wealth, real 527 00:30:15,000 --> 00:30:17,480 Speaker 1: value the central banks or stock pond. That's risk free. 528 00:30:17,640 --> 00:30:20,280 Speaker 1: But how do you call bitcoin or risk free asset 529 00:30:20,360 --> 00:30:25,440 Speaker 1: today it's yeah, it's more a colloquial way to describe it. Um, 530 00:30:25,560 --> 00:30:28,280 Speaker 1: nothing is risk free, like you said, the treasuries can 531 00:30:28,520 --> 00:30:32,040 Speaker 1: um be worth zero of the US government defaults uh 532 00:30:32,400 --> 00:30:36,120 Speaker 1: where they keep inflating them away right right? And then UM, 533 00:30:36,160 --> 00:30:41,400 Speaker 1: you know technically your gold isn't risk free because um, 534 00:30:41,440 --> 00:30:47,000 Speaker 1: you know it could be faked or um used sees exactly. Um, 535 00:30:47,040 --> 00:30:50,880 Speaker 1: and your bitcoin isn't risk free because um, you know 536 00:30:51,240 --> 00:30:54,400 Speaker 1: show to fifty six could break or you know, something 537 00:30:54,400 --> 00:30:56,680 Speaker 1: could happen to bitcoin. So nothing in this world is 538 00:30:56,760 --> 00:31:02,840 Speaker 1: risk free. However, Um, there is this echelon of safety 539 00:31:02,840 --> 00:31:07,520 Speaker 1: and liquidity that gold has reached um through thousands of 540 00:31:07,600 --> 00:31:10,960 Speaker 1: years of track record, and that treasuries have reached through 541 00:31:11,800 --> 00:31:15,560 Speaker 1: um a hundred plus years of track record. The US 542 00:31:15,640 --> 00:31:21,200 Speaker 1: government has had different forms of obligations since its inception, um, 543 00:31:21,200 --> 00:31:25,800 Speaker 1: and bitcoin has eleven years of track record. So UM, 544 00:31:25,880 --> 00:31:29,040 Speaker 1: let's see the let's see bitcoin where it is with 545 00:31:29,120 --> 00:31:33,680 Speaker 1: twenty years of track record, where you know, versus where 546 00:31:33,800 --> 00:31:37,760 Speaker 1: golden treasuries are after hundreds or thousands of years. Yeah. Now, 547 00:31:37,800 --> 00:31:40,320 Speaker 1: currently it seems like the central banks are on a 548 00:31:40,440 --> 00:31:44,040 Speaker 1: mass buying spree of gold. Last year, they accumulated more 549 00:31:44,080 --> 00:31:46,840 Speaker 1: gold than anytime since nine since we got off the 550 00:31:46,840 --> 00:31:50,320 Speaker 1: gold standard. Um So, the central banks are buying gold 551 00:31:50,400 --> 00:31:53,320 Speaker 1: to hedge against their currencies, right to collapse and currencies. 552 00:31:53,800 --> 00:31:58,040 Speaker 1: Um So, you think at some point maybe as bitcoin 553 00:31:58,120 --> 00:32:01,160 Speaker 1: gets more trusted, the central banks are also buying because 554 00:32:01,160 --> 00:32:03,520 Speaker 1: so so central banks are buying treasuries, they're buying the bonds, 555 00:32:03,520 --> 00:32:05,960 Speaker 1: they're buying the gold. Two of those three you called, 556 00:32:06,000 --> 00:32:09,360 Speaker 1: and then eventually they'll start to buy bitcoin. Absolutely, well, 557 00:32:09,400 --> 00:32:12,160 Speaker 1: there's no I wouldn't have joined bitcoin if I didn't 558 00:32:12,160 --> 00:32:14,280 Speaker 1: think that. The answer to that was yes. So I 559 00:32:14,360 --> 00:32:17,560 Speaker 1: can't tell you when it's going to happen. Um I would. 560 00:32:18,560 --> 00:32:20,400 Speaker 1: Uh if I were to make a prediction, I would 561 00:32:20,400 --> 00:32:24,360 Speaker 1: say within a decade. But um, I think that it 562 00:32:24,400 --> 00:32:26,800 Speaker 1: will happen. And so what we're doing is trying to 563 00:32:26,840 --> 00:32:29,720 Speaker 1: build up this system to get to the point where they, 564 00:32:30,080 --> 00:32:32,480 Speaker 1: you know, they're forced to buy bitcoin because it's the 565 00:32:32,520 --> 00:32:37,160 Speaker 1: best risk adjusted investment that they can make. Yeah. Again, 566 00:32:37,200 --> 00:32:39,040 Speaker 1: there's so many pieces with bitcoin that does make it 567 00:32:39,120 --> 00:32:42,000 Speaker 1: so interesting, and one is the game theory that's been 568 00:32:42,000 --> 00:32:46,280 Speaker 1: built into it, and and having that fixed cap adds 569 00:32:46,320 --> 00:32:48,560 Speaker 1: to that. It's kind of like that game of musical chairs. 570 00:32:49,240 --> 00:32:51,400 Speaker 1: And it's interesting the position the U S is in because, 571 00:32:51,480 --> 00:32:55,479 Speaker 1: as you've made the case, the dollar is the reserve 572 00:32:55,520 --> 00:32:58,440 Speaker 1: asset that you know, it's the it's the risk free trade, 573 00:32:58,480 --> 00:33:01,760 Speaker 1: et cetera. And it's also the weapon that the United 574 00:33:01,760 --> 00:33:05,000 Speaker 1: States employees, right with the being uh sanctions and whatnot. 575 00:33:05,480 --> 00:33:08,239 Speaker 1: And so really the US is the country that has 576 00:33:08,280 --> 00:33:10,960 Speaker 1: everything to lose, and so they're gonna have to fight 577 00:33:11,000 --> 00:33:14,360 Speaker 1: against bitcoin the most, whereas other countries they don't care. 578 00:33:14,400 --> 00:33:16,320 Speaker 1: They don't have a reserve asset, so they're going to 579 00:33:16,400 --> 00:33:20,000 Speaker 1: be faster to adopt bitcoin. Uh. Do you see something 580 00:33:20,040 --> 00:33:22,360 Speaker 1: like that kind of playing out that maybe changes the 581 00:33:22,400 --> 00:33:26,320 Speaker 1: power structure. Yeah, the the US does have a lot 582 00:33:26,360 --> 00:33:31,000 Speaker 1: to lose, um for sure, but a currency is a 583 00:33:31,120 --> 00:33:35,640 Speaker 1: very powerful tool for government. So um, I you know, 584 00:33:35,680 --> 00:33:39,480 Speaker 1: I think that they all are thinking in terms of um, 585 00:33:39,520 --> 00:33:43,560 Speaker 1: you know, will we lose power if we lose the 586 00:33:43,600 --> 00:33:47,680 Speaker 1: power of the currency. Um. Yeah, so not just the US, 587 00:33:47,760 --> 00:33:50,960 Speaker 1: but sure as the reserve currency, the US does might 588 00:33:51,040 --> 00:33:53,160 Speaker 1: have the most to lose. But I mean I really 589 00:33:53,200 --> 00:33:57,040 Speaker 1: don't see the US fighting bitcoin. Um. I think that 590 00:33:58,120 --> 00:34:03,000 Speaker 1: the I think bitcoin as freedom of speech freedom of expression, 591 00:34:03,840 --> 00:34:09,120 Speaker 1: freedom to use software, UM, freedom to store your wealth, 592 00:34:09,160 --> 00:34:12,960 Speaker 1: and whatever you want. I think that bitcoin is kind 593 00:34:12,960 --> 00:34:15,799 Speaker 1: of does have a lot of American ideals, and I 594 00:34:15,920 --> 00:34:20,400 Speaker 1: just don't see any real fight against, um, the legality 595 00:34:20,520 --> 00:34:25,200 Speaker 1: of bitcoin here in the United States. I love your optimism, 596 00:34:25,200 --> 00:34:27,719 Speaker 1: and I hope you're right. It is American. It was 597 00:34:27,760 --> 00:34:29,440 Speaker 1: created here in America, right, I mean it is. It 598 00:34:29,520 --> 00:34:31,439 Speaker 1: is American, it should be American, and like you said, 599 00:34:31,440 --> 00:34:34,040 Speaker 1: it does align its help with the American ideals. But 600 00:34:34,440 --> 00:34:37,719 Speaker 1: we also know that money is power, right Rothchild told us, 601 00:34:37,880 --> 00:34:39,640 Speaker 1: I care not who makes the nations laws, Let me 602 00:34:39,640 --> 00:34:42,279 Speaker 1: control the money. And so they can't give up the 603 00:34:42,400 --> 00:34:44,799 Speaker 1: control of money. And so it's like this, like what 604 00:34:44,840 --> 00:34:47,160 Speaker 1: are they gonna do? So I will see how that 605 00:34:47,160 --> 00:34:49,080 Speaker 1: plays out. But one of the things that we do 606 00:34:49,160 --> 00:34:55,440 Speaker 1: see is banks themselves fighting by you know, um, not 607 00:34:55,520 --> 00:35:01,120 Speaker 1: allowing their customers to access bitcoin services. Buying bitcoin gets 608 00:35:01,160 --> 00:35:05,560 Speaker 1: account shut down or uh exchange wires two exchanges are blocked. 609 00:35:05,719 --> 00:35:08,800 Speaker 1: So the banks are going to fight UM that. I 610 00:35:09,440 --> 00:35:13,120 Speaker 1: definitely believe the banks are gonna fight UM so UM, 611 00:35:13,160 --> 00:35:17,880 Speaker 1: but the US government, UM, I hope not. I and 612 00:35:17,880 --> 00:35:21,239 Speaker 1: I see some great trends we see Trace Mayor and 613 00:35:21,320 --> 00:35:26,560 Speaker 1: Caitlyn Long doing absolutely awesome things in Wyoming. And we 614 00:35:26,719 --> 00:35:31,160 Speaker 1: do see the conversation about bitcoin in d C progressing 615 00:35:31,280 --> 00:35:37,480 Speaker 1: very nicely after the entire Libra incident um, where you know, 616 00:35:37,680 --> 00:35:40,680 Speaker 1: Congress had to face the music and realize that this 617 00:35:40,719 --> 00:35:43,959 Speaker 1: whole cryptocurrency thing is not going away. And I think 618 00:35:44,000 --> 00:35:49,080 Speaker 1: that we heard insightful comments from people in Congress about bitcoin. 619 00:35:49,120 --> 00:35:53,239 Speaker 1: So I'm optimistic. Yeah, great, well we'll run with that. 620 00:35:53,400 --> 00:35:55,520 Speaker 1: And I the other thing that I like that you're 621 00:35:55,560 --> 00:35:59,040 Speaker 1: talking about is really you're talking about this long range perspective, 622 00:35:59,080 --> 00:36:00,920 Speaker 1: which I think is the most important thing. And I 623 00:36:00,960 --> 00:36:03,839 Speaker 1: think everything I commented already that people expect too much 624 00:36:03,880 --> 00:36:06,120 Speaker 1: too soon, and so you're talking about like in the 625 00:36:06,160 --> 00:36:09,360 Speaker 1: next decade and really in the in the big picture, 626 00:36:09,480 --> 00:36:12,520 Speaker 1: it's not that long, um, but you know you're talking 627 00:36:12,520 --> 00:36:15,359 Speaker 1: about like this this big picture, and we can talk 628 00:36:15,400 --> 00:36:18,319 Speaker 1: about like maybe the trajectory or or the evolution of 629 00:36:18,320 --> 00:36:21,640 Speaker 1: bitcoin just in the last ten years alone. And um, 630 00:36:21,920 --> 00:36:24,040 Speaker 1: I know something that you're working on, which is, you know, 631 00:36:24,120 --> 00:36:27,920 Speaker 1: currently bitcoin has started as this uh you know, potentially 632 00:36:28,000 --> 00:36:31,120 Speaker 1: for the white paper, is this this this cash, digital cash, 633 00:36:31,440 --> 00:36:34,400 Speaker 1: but now it's moved to this store of value narrative 634 00:36:34,719 --> 00:36:39,360 Speaker 1: because it's slow, because it takes time, it's expensive to 635 00:36:39,440 --> 00:36:42,839 Speaker 1: transfer and whatnot. But just like the evolution of money, 636 00:36:42,920 --> 00:36:45,160 Speaker 1: we're seeing bitcoin evolved as well. You want to talk 637 00:36:45,200 --> 00:36:48,480 Speaker 1: about that, yeah, so you know what you're what we're 638 00:36:48,520 --> 00:36:52,920 Speaker 1: referencing here is the advent of the lightning network, and 639 00:36:53,200 --> 00:36:57,959 Speaker 1: the Lightning network has made bitcoin um go from just 640 00:36:58,600 --> 00:37:02,319 Speaker 1: that store of value and moving asset to now that 641 00:37:02,440 --> 00:37:06,000 Speaker 1: asset with a currency layer on top of it. And 642 00:37:06,040 --> 00:37:13,480 Speaker 1: that currency layer is basically a standardized financial contract um, 643 00:37:13,520 --> 00:37:17,840 Speaker 1: you know, between bitcoin users, and so it allows bitcoin 644 00:37:17,920 --> 00:37:21,040 Speaker 1: to be used now at the speed of light um 645 00:37:21,160 --> 00:37:26,360 Speaker 1: between users, and I think it's an incredibly important evolution 646 00:37:26,440 --> 00:37:31,319 Speaker 1: of bitcoin um here you know today. So to give 647 00:37:31,360 --> 00:37:33,440 Speaker 1: that just a little bit of context, So gold was 648 00:37:33,520 --> 00:37:37,040 Speaker 1: used as money for five thousand years. To to settle 649 00:37:37,040 --> 00:37:40,040 Speaker 1: in gold is very slow and expensive and clunky. If 650 00:37:40,040 --> 00:37:42,440 Speaker 1: I had to send you gold across the ocean, for example, 651 00:37:42,440 --> 00:37:44,640 Speaker 1: would take a long time and be expensive. And so 652 00:37:44,719 --> 00:37:47,120 Speaker 1: the banks gave us paper certificates and those could be 653 00:37:47,200 --> 00:37:50,360 Speaker 1: used easier. And so bitcoin maybe a little slow and clunky, 654 00:37:50,400 --> 00:37:52,960 Speaker 1: I mean, and now I mean to be real, I mean, 655 00:37:52,960 --> 00:37:55,600 Speaker 1: the chance for millions or billions of dollars in an 656 00:37:55,600 --> 00:37:59,160 Speaker 1: hour is not that slow and clunky. But going to 657 00:37:59,200 --> 00:38:01,520 Speaker 1: a layer to similar to like gold certificates, we have 658 00:38:01,600 --> 00:38:04,799 Speaker 1: lightning which is now speeding that up. And so the 659 00:38:04,840 --> 00:38:09,120 Speaker 1: evolution is kind of working just as it's intended to. Absolutely. Um, 660 00:38:09,160 --> 00:38:12,120 Speaker 1: you know you had gold and then you had gold certificates. Um, 661 00:38:12,200 --> 00:38:15,279 Speaker 1: we have dollars, and we have PayPal and Venmo and 662 00:38:15,320 --> 00:38:20,200 Speaker 1: so payments happen. Payment stacks are built in layers. And 663 00:38:20,640 --> 00:38:23,200 Speaker 1: the way to think about Lightning Network, if you've never 664 00:38:23,239 --> 00:38:26,400 Speaker 1: heard of it before, is it's an app and to 665 00:38:26,560 --> 00:38:28,600 Speaker 1: use the app, you just have to have real bitcoin 666 00:38:29,080 --> 00:38:31,960 Speaker 1: and so um, once you have real bitcoin and you 667 00:38:32,040 --> 00:38:37,160 Speaker 1: use Lightning, UM, bitcoin becomes instant. Yeah. Now, in the 668 00:38:37,200 --> 00:38:39,360 Speaker 1: beginning when Lightning was first coming out, and maybe if 669 00:38:39,400 --> 00:38:41,239 Speaker 1: people heard this where you have to open up a 670 00:38:41,320 --> 00:38:46,160 Speaker 1: channel and you have to deposit money into that channel. UM, 671 00:38:46,200 --> 00:38:48,560 Speaker 1: our services that are coming out now kind of taking 672 00:38:48,600 --> 00:38:50,600 Speaker 1: away that need to do that. And now I can 673 00:38:50,640 --> 00:38:53,480 Speaker 1: just download the app and just use Lightning directly. Uh 674 00:38:53,560 --> 00:38:57,960 Speaker 1: So we as a lightning industry are on a great 675 00:38:58,000 --> 00:39:02,920 Speaker 1: path forward. Um. Right now, there are a couple very 676 00:39:03,000 --> 00:39:06,600 Speaker 1: easy to use wallets and UM. Open node is a 677 00:39:06,760 --> 00:39:11,080 Speaker 1: very easy to use payment processor UM and so infrastructure 678 00:39:11,120 --> 00:39:14,720 Speaker 1: is being built right now in the Lightning network. UM. 679 00:39:14,840 --> 00:39:18,080 Speaker 1: I would say that we're still a little bit of 680 00:39:18,120 --> 00:39:22,600 Speaker 1: time away from it being able to process UM all 681 00:39:22,640 --> 00:39:26,439 Speaker 1: the transactions that go on in Bitcoin, for sure. UH. 682 00:39:26,480 --> 00:39:29,640 Speaker 1: At open node, we see most of our transactions are 683 00:39:29,680 --> 00:39:32,440 Speaker 1: done on the Lightning network, but most of the value 684 00:39:32,560 --> 00:39:35,839 Speaker 1: is done on the regular Bitcoin blockchain. So we still 685 00:39:35,880 --> 00:39:38,920 Speaker 1: see most of the value moving the regular way, but 686 00:39:39,520 --> 00:39:43,600 Speaker 1: the frequency of the transactions it's happening on the Lightning network. 687 00:39:43,680 --> 00:39:47,320 Speaker 1: So it's a really great UM, it's a really great progression. 688 00:39:47,960 --> 00:39:51,640 Speaker 1: So UM real quickly, UM we're using Lightning. Then all 689 00:39:51,640 --> 00:39:54,759 Speaker 1: those transactions are done off the main blockchain, which is 690 00:39:54,760 --> 00:39:59,000 Speaker 1: why they happen fast. That's right. They don't settle to 691 00:39:59,239 --> 00:40:02,960 Speaker 1: the main block chain unless one of the two parties 692 00:40:03,719 --> 00:40:06,400 Speaker 1: decides to do so. So you don't have the burden 693 00:40:07,239 --> 00:40:11,960 Speaker 1: of every transaction that you make confirming to the blockchain. 694 00:40:12,160 --> 00:40:14,560 Speaker 1: You can just keep editing or do new ones all 695 00:40:14,600 --> 00:40:17,120 Speaker 1: the time. UM and so as long as both parties 696 00:40:17,160 --> 00:40:20,480 Speaker 1: don't have uh the desire to close the channel, you 697 00:40:20,480 --> 00:40:23,520 Speaker 1: don't have to use the blockchain and not everything has 698 00:40:23,560 --> 00:40:27,239 Speaker 1: to be censorship resistant immutable. My Starbucks coffee doesn't have 699 00:40:27,320 --> 00:40:31,200 Speaker 1: to be saved for all time being censorship resistant, right well, 700 00:40:31,320 --> 00:40:33,680 Speaker 1: and that and that's and that's also the point here 701 00:40:33,680 --> 00:40:36,640 Speaker 1: about the Lightning network is that even though uh, you know, 702 00:40:36,719 --> 00:40:39,879 Speaker 1: there's a lot of fear around opening channels and how 703 00:40:39,880 --> 00:40:43,080 Speaker 1: do I do it and all that, um wallets are 704 00:40:43,080 --> 00:40:46,279 Speaker 1: abstracting that away. Open note is abstracting that away. We're 705 00:40:46,280 --> 00:40:48,520 Speaker 1: going to try to make it just really seamless so 706 00:40:48,560 --> 00:40:50,600 Speaker 1: that you don't have to think about those things. And 707 00:40:50,680 --> 00:40:55,480 Speaker 1: some of that might require a custodial solution. Um, you know, 708 00:40:55,560 --> 00:40:57,920 Speaker 1: we don't think that it's wise to keep any of 709 00:40:57,960 --> 00:41:01,719 Speaker 1: your bitcoin in the custod of an exchange or a 710 00:41:01,800 --> 00:41:05,080 Speaker 1: third party unless it's intra money and you just have 711 00:41:05,120 --> 00:41:07,720 Speaker 1: a plan to withdraw it or it's not that much money, 712 00:41:07,760 --> 00:41:11,279 Speaker 1: so twenty hundred bucks or for our merchants, um, you know, 713 00:41:11,360 --> 00:41:14,840 Speaker 1: they're accepting bitcoin and they're withdrawing their bitcoin within a 714 00:41:14,840 --> 00:41:17,480 Speaker 1: couple of days and so, um, you know, it's just 715 00:41:17,520 --> 00:41:21,400 Speaker 1: an infrastructure. Yeah, so yeah, I can already see how 716 00:41:21,480 --> 00:41:24,000 Speaker 1: much it's progressed just in the last year or so, 717 00:41:24,080 --> 00:41:27,839 Speaker 1: and it's and it's definitely exciting. So um, definitely something 718 00:41:27,880 --> 00:41:29,919 Speaker 1: to keep an eye on. And that's where you see 719 00:41:29,960 --> 00:41:33,240 Speaker 1: the evolution going. And and then that's why the banks 720 00:41:33,239 --> 00:41:36,320 Speaker 1: are scared. Right. So in my understanding, there's like three 721 00:41:36,360 --> 00:41:39,360 Speaker 1: functions of a bank. One is to store your money, 722 00:41:39,520 --> 00:41:41,960 Speaker 1: which we don't need anymore. Bitcoin can do that too, 723 00:41:42,239 --> 00:41:46,000 Speaker 1: is to settle the transactions, and three would be the 724 00:41:46,080 --> 00:41:50,239 Speaker 1: lending market. So um, bitcoin kind of takes most of 725 00:41:50,280 --> 00:41:53,920 Speaker 1: those functions away from them. Yeah, and uh, the lending 726 00:41:53,920 --> 00:41:58,160 Speaker 1: of bitcoin is something that will be very important ecosystem 727 00:41:58,239 --> 00:42:02,120 Speaker 1: to watch as bitcoin matures. The use of bitcoin as 728 00:42:02,200 --> 00:42:06,399 Speaker 1: collateral in loans UM is part of that equation. So 729 00:42:06,600 --> 00:42:08,960 Speaker 1: we look to see, you know, things that are happening, 730 00:42:09,640 --> 00:42:13,239 Speaker 1: um in the regulatory sphere that you know, bitcoin is 731 00:42:13,239 --> 00:42:17,440 Speaker 1: being accepted as this um safe collateral or a good 732 00:42:17,480 --> 00:42:21,080 Speaker 1: collateral for loans. And so any legal precedent that establishes 733 00:42:21,080 --> 00:42:25,120 Speaker 1: bitcoin as collateral is going to be huge for entities 734 00:42:25,160 --> 00:42:28,759 Speaker 1: being able to operate as bitcoin banks. Yeah, I got it, 735 00:42:29,680 --> 00:42:31,520 Speaker 1: all right, We're running out of time here, but I 736 00:42:31,640 --> 00:42:34,040 Speaker 1: just curious to ask you, so, do you think now 737 00:42:34,080 --> 00:42:36,880 Speaker 1: with lightning and making it really easy to send micro 738 00:42:37,000 --> 00:42:39,759 Speaker 1: transactions for cheap and fast. I mean, do you do 739 00:42:39,760 --> 00:42:42,040 Speaker 1: you think that's really gonna maybe be the piece to 740 00:42:42,080 --> 00:42:44,759 Speaker 1: start to finally push this adoption or do you you think 741 00:42:44,760 --> 00:42:48,080 Speaker 1: people are still gonna want to hold all their their bitcoin? Well, 742 00:42:48,120 --> 00:42:52,600 Speaker 1: I think it's The use cases are definitely, um, you know, 743 00:42:53,440 --> 00:42:57,000 Speaker 1: multiple fold for bitcoin. As we've talked about the need 744 00:42:57,080 --> 00:43:02,640 Speaker 1: to houddle bitcoin and store well away from your currencies 745 00:43:02,719 --> 00:43:06,840 Speaker 1: or or government bonds, even um won't won't won't go away, 746 00:43:06,920 --> 00:43:09,919 Speaker 1: and it will only continue to get stronger. The need 747 00:43:09,960 --> 00:43:14,719 Speaker 1: to use bitcoin for freedom of speech, transactions in sanctioned 748 00:43:14,760 --> 00:43:17,680 Speaker 1: countries or things of that nature, will not go away. 749 00:43:17,760 --> 00:43:19,839 Speaker 1: It's only going to grow. It's only going to grow. 750 00:43:20,239 --> 00:43:24,279 Speaker 1: And so Lightning Network, UM it enables all these new 751 00:43:24,320 --> 00:43:28,720 Speaker 1: business models. This concept of streaming money um micro transactions 752 00:43:29,880 --> 00:43:31,719 Speaker 1: with a currency that we can rely on has never 753 00:43:31,800 --> 00:43:35,520 Speaker 1: been done before. And so I'm really excited to see 754 00:43:35,560 --> 00:43:38,960 Speaker 1: how Lightning Network adds to bitcoin. But I can't say 755 00:43:39,000 --> 00:43:40,719 Speaker 1: that it's going to be the only thing or the 756 00:43:40,760 --> 00:43:43,279 Speaker 1: most exciting thing. It's just it's just another piece of 757 00:43:43,320 --> 00:43:46,840 Speaker 1: the puzzle. I love that perspective because you know, I 758 00:43:46,880 --> 00:43:49,160 Speaker 1: look back over the last you know, five six years 759 00:43:49,239 --> 00:43:50,680 Speaker 1: or whatever, I've been involved in the space, and I 760 00:43:50,719 --> 00:43:54,080 Speaker 1: see how my thinking changes and evolved, right, and and uh, 761 00:43:54,239 --> 00:43:56,880 Speaker 1: I started to think, like, maybe bitcoin doesn't need this 762 00:43:57,000 --> 00:43:59,160 Speaker 1: mass adoption. I mean, if it goes, if it takes 763 00:43:59,200 --> 00:44:01,600 Speaker 1: over the treasury more get the gold market, uh, the 764 00:44:01,640 --> 00:44:05,120 Speaker 1: offshore banking markets. I mean those are hundreds of killions 765 00:44:05,160 --> 00:44:07,800 Speaker 1: of dollars already, right, and you don't see anyone pushing 766 00:44:07,880 --> 00:44:11,440 Speaker 1: bitcoin or gold as like mass adoption. But then you 767 00:44:11,480 --> 00:44:15,359 Speaker 1: talk about the will we see censorship continue to grow? 768 00:44:15,400 --> 00:44:17,480 Speaker 1: And of course we will. We just saw the other 769 00:44:17,520 --> 00:44:21,840 Speaker 1: day PayPal blocked porn Hub, right, and and we're gonna 770 00:44:21,840 --> 00:44:25,160 Speaker 1: only see that grow and grow. So um, yeah, maybe 771 00:44:25,200 --> 00:44:27,400 Speaker 1: we we need it on both sides. Yeah, you know, 772 00:44:27,520 --> 00:44:30,719 Speaker 1: I I like to think about about it, um from 773 00:44:30,760 --> 00:44:33,799 Speaker 1: every different user. Um. You know, not everybody is going 774 00:44:33,840 --> 00:44:35,919 Speaker 1: to use bitcoin in the same way. And I don't 775 00:44:35,920 --> 00:44:39,439 Speaker 1: think we need mass adoption. We just need adoption one 776 00:44:39,480 --> 00:44:42,560 Speaker 1: person at a time, one institution at a time that 777 00:44:42,600 --> 00:44:45,200 Speaker 1: figures out they need bitcoin. That's how we get bitcoin 778 00:44:45,280 --> 00:44:48,520 Speaker 1: of grow. Awesome, We're gonna end it right there. I 779 00:44:48,560 --> 00:44:51,160 Speaker 1: love that. Um Nick, thanks so much for taking the 780 00:44:51,200 --> 00:44:53,640 Speaker 1: time to talk. It was a great conversation. Um, you've 781 00:44:53,640 --> 00:44:55,160 Speaker 1: been writing a lot of good stuff, like I said, 782 00:44:55,239 --> 00:44:56,840 Speaker 1: so where can people find some of that stuff that 783 00:44:56,840 --> 00:44:59,279 Speaker 1: you're writing and keep up with you? Right? So I'm 784 00:44:59,360 --> 00:45:04,080 Speaker 1: on Twitter at time value of BTC. Um, that's where 785 00:45:04,160 --> 00:45:06,399 Speaker 1: I linked to all my stuff. So I'm writing for 786 00:45:07,239 --> 00:45:11,120 Speaker 1: Open Note on their blog, UM Contra Labs on their 787 00:45:11,160 --> 00:45:14,600 Speaker 1: medium page UM as well. But I linked everything on 788 00:45:14,640 --> 00:45:18,200 Speaker 1: my Twitter. Awesome, and we'll put it in the notes 789 00:45:18,280 --> 00:45:20,799 Speaker 1: for everybody else. So Nick, thanks so much. All right, 790 00:45:20,840 --> 00:45:24,040 Speaker 1: thanks for having me. I appreciate it. Hey, if you 791 00:45:24,080 --> 00:45:27,759 Speaker 1: like this episode of The Market Disruptors Podcast, please help 792 00:45:27,840 --> 00:45:30,320 Speaker 1: us take this to the top of the podcast charts. 793 00:45:30,360 --> 00:45:33,560 Speaker 1: Just please do me a favor and rate, review and subscribe. 794 00:45:33,800 --> 00:45:36,520 Speaker 1: Taking fifteen seconds to just leave a quick review goes 795 00:45:36,560 --> 00:45:38,920 Speaker 1: a long way in helping us reach more people and 796 00:45:39,040 --> 00:45:42,160 Speaker 1: disrupt more markets. I really appreciate you listening and I'll 797 00:45:42,160 --> 00:45:44,520 Speaker 1: see you next time on The Market Disruptors Podcast.