Speaker 1: If you understood how much of your stuff is tracked
Speaker 1: right now inside this system, and you think it isn't.
Speaker 1: All of these connected systems are all part of that
Speaker 1: centralized control you are inside of that. Where are you
Speaker 1: safe in a centralized system that takes all of its
Speaker 1: control you through manipulated money? What is safe? Good luck?
Speaker 2: Over the last five years, the dollar has crashed to
Speaker 2: a point that it buys you fifty percent of those groups.
Speaker 2: So what you're afraid of has already happened. Are you
Speaker 2: thinking this is something more drastic coming that is going
Speaker 2: to happen sooner than later.
Speaker 1: We know for sure money is being debased. We know
Speaker 1: for sure you have a decentralized, secure protocol founded by
Speaker 1: energy that can't be changed. Bitcoin is repricing the world
Speaker 1: through the free market. It's the first global free market
Speaker 1: that's ever existed. Bitcoin would be the only thing remaining
Speaker 1: of value if we've never lived in a free market
Speaker 1: and our actions inside the other system are trying to
Speaker 1: get rich in a zero sum game where somebody has
Speaker 1: to lose because we won every single asset we're trading,
Speaker 1: than that system is really just a bet on how
Speaker 1: much is somebody else is going to lose because I'm
Speaker 1: going to win all on a centralized system and there's
Speaker 1: no way to fix them. The rate of improvement of AI,
Speaker 1: it will never be this slow again. It will never
Speaker 1: be this dumb again. If you don't use it, other
Speaker 1: businesses are going to use it to provide more value
Speaker 1: and it's going to remove labor at a staggering rate.
Speaker 2: All right, jeff Man, we had such a fun time
Speaker 2: hanging out in Abu Dhabi back in December. It seems
Speaker 2: like a world away at this point, and we had
Speaker 2: this conversation where we went outside and hung out for
Speaker 2: a little bit and I had a video guy there
Speaker 2: and we tried to capture the conversation and it just
Speaker 2: didn't come out. The audio just wasn't good enough. And
Speaker 2: since that time, it's been not even ninety days yet,
Speaker 2: so much of the world has changed. We were talking
Speaker 2: about bitcoin AI and AI agents, and since that time
Speaker 2: we've seen just the rise of this takeoff, and we've
Speaker 2: seen now multiple at least I've seen sure you have
Speaker 2: as well, multiple instances of AI agents going out and
Speaker 2: completing tasks autonomously and using bitcoin lightning to do transactions.
Speaker 2: I don't know if you've seen.
Speaker 1: This, Yeah, yeah, I have.
Speaker 2: Yeah. At that conference, I made the case that I
Speaker 2: think maybe one of the big use cases of a
Speaker 2: medium exchange might come from the machines, because they need
Speaker 2: a money that we that they don't have a they
Speaker 2: don't have a solution for at this point, and bitcoin
Speaker 2: seems to maybe solve that problem. Being personalists for example,
Speaker 2: high frequency transactions things like that, what do you think
Speaker 2: about how fast that space is growing and maybe it's
Speaker 2: necessity or you know, needing bitcoin or something like that
Speaker 2: to work.
Speaker 1: Yeah, And that was our conversation. Was fantastic, and I
Speaker 1: think that's a part of it. But but I don't
Speaker 1: think that's a key part of that medium of exchange.
Speaker 1: I think ultimately, ultimately built bitcoin is repricing the world
Speaker 1: through the free market. It's the first global free market
Speaker 1: that's ever existed. And like, if you want to talk
Speaker 1: about prices falling now or what, like, really what it's
Speaker 1: doing is it's lagging the It's the canary in the
Speaker 1: coal mine to a deflationary spiral of it out of
Speaker 1: a credit system that would would reset everything. And so
Speaker 1: in that event, bitcoin would be the only thing remaining
Speaker 1: of value. And you know that I know that, and
Speaker 1: so then when when that, Because that that credit system
Speaker 1: that we live in cannot be allowed to deflate without
Speaker 1: a complete collapse, you're going to see a massive liquidity
Speaker 1: or as that big print or the big distribute, yeah, exactly,
Speaker 1: or anything that we want to talk about it or
Speaker 1: lynn Alden that nothing stopped sys train. All of this
Speaker 1: is the same thing, right that the existing credit based
Speaker 1: system requires manipulation at exponential rates to offset the productivity
Speaker 1: that should flow to us in the form of lower
Speaker 1: prices through through AI and everything and everything else that
Speaker 1: we're building. So so taken, yes, I do think there
Speaker 1: is there is a case that some of these agents
Speaker 1: will use kind of lightning, and this is a medium
Speaker 1: of exchange. But the bigger, I think, the bigger change,
Speaker 1: the far greater change, is all prices are falling relative
Speaker 1: to bitcoin and and so essentially the energy backed system
Speaker 1: that's that can't be broken is repricing the world, and
Speaker 1: most people are pricing that energy backed system from a
Speaker 1: piece of paper that's being manipulated.
Speaker 2: That's happening, We're witnessing it. I think I remember, man,
Speaker 2: it wasn't that a few months ago one of my
Speaker 2: friends called me at night kind of panicking and he
Speaker 2: saw something on the news, and what is this, like,
Speaker 2: the Dollar's going to crash? Am I going to wake
Speaker 2: up one day and the money in my bank's going to
Speaker 2: buy me, you know, fifty percent half as much goods
Speaker 2: as it does right now. And I said, well, that's
Speaker 2: already happened over the last five years. The dollar has
Speaker 2: crashed to a point that it buys you fifty percent
Speaker 2: of those goods. So what you're afraid of has already happened.
Speaker 2: Whereas people think it's like this imminent thing though, where
Speaker 2: it's going to happen, I think it's happening. It's like
Speaker 2: a process more than an event, maybe unless it's like
Speaker 2: the gradually and then suddenly part which at some point
Speaker 2: diminishing returns I guess fall off of a cliff. But
Speaker 2: I mean, are you seeing this? I mean, obviously it
Speaker 2: seems to be accelerating, especially based off of where we're
Speaker 2: at right now at the time of this recording March tenth,
Speaker 2: But are you thinking this is something more drastic coming
Speaker 2: that is going to happen sooner than later.
Speaker 1: I think it's exactly what you just described. This has been,
Speaker 1: So it's interesting to watch people talk about bitcoin and
Speaker 1: everything and the existing financial system through a light switch
Speaker 1: moment rather than what's happening all of the time. We
Speaker 1: know for sure money is being debased. We know for
Speaker 1: sure you have a decentralized, a secure protocol bounded by
Speaker 1: energy that can't be changed. So both of those things
Speaker 1: are depending on your reality is what you're actually seeing.
Speaker 1: And so if you've been in bitcoin for five years,
Speaker 1: you know what's happened over the last five years. If
Speaker 1: you've been in bitcoin for ten years, you know what's
Speaker 1: happened over the last ten years. If you're in bitcoin
Speaker 1: five years from now, you know it's going to happen,
Speaker 1: and it's going to happen in a faster rate until like, yes,
Speaker 1: depending on what country you're in, there's going to be
Speaker 1: some missed, some massive dislocations and repricing events that could
Speaker 1: happen a lot faster. Right, that's just a failure of
Speaker 1: a currency that could I suspect the US currency is
Speaker 1: not going to fail anytime soon. So it's going but
Speaker 1: but it might print a lot more right and get
Speaker 1: away with it, and which would lead to a significant
Speaker 1: rise in at least in that currency's point of view.
Speaker 1: To Bitcoin. It just it fasts andates me watching people
Speaker 1: grapple with the one thing, like every day there's a
Speaker 1: new thing that they're saying. This is the reason when
Speaker 1: fundamentally nothing has changed for the last fifteen years. You
Speaker 1: knew one system was insolvent, it couldn't resolve resolve this problem.
Speaker 1: You knew that the system transition was underway. And so
Speaker 1: if you're mostly outside the system, if you're in bitcoin,
Speaker 1: these these dips just provide opportunity to accumulate more.
Speaker 2: Yeah, I guess just you know, not everybody has that certainty, right,
Speaker 2: Not everybody has that level of conviction, nor does anybody
Speaker 2: have the ability to tell the future either, And so
Speaker 2: I think then it probably comes down to the level
Speaker 2: of conviction and certainty that you have around that.
Speaker 1: And so so let's let's dig a little deeper on there.
Speaker 1: And because that's where the why this is, I think
Speaker 1: this is why it has It doesn't actually say anything
Speaker 1: about bitcoin. Bitcoin is just a ledger that every ten
Speaker 1: minutes there's a new block that is bounded by energy.
Speaker 1: You're you're grappling with something that is imposing a discipline
Speaker 1: on a world without discipline, because it's because it's like this.
Speaker 1: So the conviction is driven by this. I would I
Speaker 1: would venture to say the only conviction you would have
Speaker 1: to what you should spend all your time on is
Speaker 1: can Bitcoin stay the centralized and secure? Because if it,
Speaker 1: if it can or if it does, and you're waiting
Speaker 1: your probability probabilistic waiting of whether it does or not,
Speaker 1: it's actually the only thing that matters. And what we
Speaker 1: just described, there is nothing else that matters. If and
Speaker 1: you could say, I believe governments are going to attack it,
Speaker 1: I believe quantum is going to break at I believe,
Speaker 1: and all of those are beliefs, and you could assign
Speaker 1: a different probability. But if it stays decentralized and secure,
Speaker 1: it actually doesn't. It makes no difference. It is reprising
Speaker 1: the world.
Speaker 2: Right, Yeah, I think obviously we agree on that. I
Speaker 2: think back to just people not developing that conviction. We're
Speaker 2: still seeing a world where people are pushing XRP not
Speaker 2: understand the difference between you know, XRP or Solona or
Speaker 2: or whatever. Right, So for you to say, if it
Speaker 2: stays decentralized and securest most people don't even know what
Speaker 2: that means. They don't even understand what decentralization is and
Speaker 2: why bitcoin might be different than any one of the
Speaker 2: those other assets. And so I think you first have
Speaker 2: to come to that realization first, right.
Speaker 1: I think we're saying the same thing, and you've gone
Speaker 1: really deep on this subject. I've gone really deep on
Speaker 1: this subject. I've probably spent over ten thousand hours trying
Speaker 1: to disprove what I just said, spending all my time
Speaker 1: in it cannot stay decentralize and secure against natural centralization
Speaker 1: that we've always allowed through human So we have to
Speaker 1: be would I say to that is, if currencies have
Speaker 1: always been centralized, whether it's gold and then repriced, then
Speaker 1: we must be part of the thing that allows them
Speaker 1: to be centralized, and so it could. Can Bitcoin withstand
Speaker 1: that is really the ultimate, the ultimate question. Can it
Speaker 1: withstand us? How many of us know, how many of
Speaker 1: us run nodes? What does it look like? And so
Speaker 1: I went through the same thing that everybody would go through,
Speaker 1: and the cognitive dissonance of of there's no way this
Speaker 1: thing could do that, And then we're then coming to
Speaker 1: a greater appreciation of why I believed it would stay
Speaker 1: the centralized and secure. But again, I think we're saying
Speaker 1: the same thing. So it doesn't say anything about bitcoin.
Speaker 1: It says the cognitive dissonance that's going on in every
Speaker 1: single human mind in trying to understand something that's never
Speaker 1: been in existence before, Right, that's really what's happening. Yep.
Speaker 2: So you as a as a futurist, as a technologist,
Speaker 2: I mean you understand. It's just like it's really hard
Speaker 2: for people to imagine the future because typically we can
Speaker 2: only imagine better versions of what we have today. So
Speaker 2: when you have something completely different that we don't have,
Speaker 2: we try to then compare it to something. Well it's
Speaker 2: sort of like this, well it is, but it's not.
Speaker 2: And it was like that's well, it's sort of is not.
Speaker 2: So then it's very hard to understand, well, what is
Speaker 2: this thing that we don't know what it is? It's
Speaker 2: all these different things and will become something we can't
Speaker 2: even imagine today. But I think to the point that
Speaker 2: you were making earlier, you know, you're ten thousand hours in.
Speaker 2: That is what separates those who have put in the work.
Speaker 2: They can build that level of conviction, which then allows
Speaker 2: them to I think number one take larger position sizes,
Speaker 2: but then number two sort of have the ability to
Speaker 2: sort of ride out these volatility waves in ease and
Speaker 2: even dare I say, look for them opportunities opportunistically.
Speaker 3: You know.
Speaker 2: I remember it was this September of last year, which
Speaker 2: is not that long ago. I had I think Big
Speaker 2: One was in the mid sixties, sixty eight thousand. It
Speaker 2: dropped down to like sixty three thousand, so I had
Speaker 2: a little bit of extra cash. I moved the over
Speaker 2: to exchange to go ahead and get a buy and
Speaker 2: then it dropped to like fifty eight, and I was like, ah,
Speaker 2: buy a little bit more. And I'm like, I think
Speaker 2: it could drop to fifty. So I put a buy
Speaker 2: order in at fifty and it never got filled, you know,
Speaker 2: it never went down right, and it ran and then
Speaker 2: it you know, went to a hundred and then one
Speaker 2: o six and then one ten. I'm like, oh, man,
Speaker 2: I should have just got out the fifty eight.
Speaker 3: You know.
Speaker 2: If it drops back down, if it gets back into
Speaker 2: that eighty range, I'm backing up the truck.
Speaker 1: You know, and like here we are.
Speaker 2: So it's like we can sort of look for those moments.
Speaker 2: I'm curious what you think about just you know, obviously
Speaker 2: there's that right if it just saysy centralized and secure.
Speaker 2: And then there's the big print. And it's not just
Speaker 2: the US big print. I mean right now we have
Speaker 2: just in the last week China is now doing a
Speaker 2: big print and Germany and the EU just announced a
Speaker 2: big print for their security and stuff like that. So
Speaker 2: what's happening all over the world. But at the same
Speaker 2: time that's happening also the way technology is evolving is
Speaker 2: changing the world, right, So like sort of bringing it
Speaker 2: back to AI, which is sort of like the general markets,
Speaker 2: like big Darling sort of thing is we have like
Speaker 2: AI has been that big thing, Open AI, the way
Speaker 2: they're raising money, things like that. Then all of a
Speaker 2: sudden we see like deep Seat come out in China,
Speaker 2: which I think change the way we value traditional assets
Speaker 2: in a way. Like number one, they're able to produce
Speaker 2: an asset know this AI model way cheaper with way
Speaker 2: less GPUs, which then disrupted all the forecasts of Nvidia
Speaker 2: and tech companies. But also what it did is it
Speaker 2: disrupted the Nasdak. Well maybe some of the money will
Speaker 2: move from the US markets over to the China markets,
Speaker 2: So maybe the Nasdaq index is overvalued. Maybe the companies
Speaker 2: listed on the nas Deck overvalued, maybe all these AI
Speaker 2: companies are overvalued, Like whoa, what do we even know?
Speaker 2: And then it sort of laid open and exposed all
Speaker 2: these assumptions that we have because of this fiat system
Speaker 2: that we have, and so it almost looked like all
Speaker 2: of a sudden, we do need some sort of a
Speaker 2: new measuring or unit of account there.
Speaker 3: Yeah, so.
Speaker 1: This is the kind of way it. It boggles my
Speaker 1: mind that this is still so misunderstood because it's the
Speaker 1: same thing I wrote about six years ago. It's exactly
Speaker 1: the same thing. You would have exponential rate of technology improvement.
Speaker 1: The natural state of the free market is deflation, So
Speaker 1: that productivity in a free market because we only use
Speaker 1: the things that give us more value. So obviously we're
Speaker 1: going to use the things that give us more value
Speaker 1: and they would be coming at us so fast, which
Speaker 1: the output of that had to be deflation. And then
Speaker 1: and then in a free market, prices fall to the
Speaker 1: marginal cost of production. So, what's the marginal cost of
Speaker 1: production of a line of code that I used to
Speaker 1: say it all the time on your calculator app zero
Speaker 1: because it's a line of code, right, what's the marginal
Speaker 1: cost of a line of code created by other lines
Speaker 1: of code AI zero, what's what what does that look like?
Speaker 1: As it moves into physical goods, as it moves into robotics,
Speaker 1: and this AI is actually tackling all the physical goods
Speaker 1: almost zero because because those companies are going to compete
Speaker 1: everywhere to be able to put this, and then the
Speaker 1: cost of all those physical goods is going to fall
Speaker 1: at the same rate, and so that productivity means faster
Speaker 1: and faster product and people are measuring that productivity through
Speaker 1: the system that's stealing the productivity to try to make
Speaker 1: GDP go up. So it has to concentrate, it has
Speaker 1: to centralize. It's so if the natural state of the
Speaker 1: free market is deflation, if prices fall to the marginal
Speaker 1: cost of production, if if if this is true, which
Speaker 1: we know is for sure true, if you can nod
Speaker 1: your head, you can do all the research you want
Speaker 1: on that topic, then unfortunately, what it means is you've
Speaker 1: never lived in a global free market. All of the
Speaker 1: things you're pointing at and giving strength through your actions.
Speaker 1: This leader, this leader, this person's going to fix it.
Speaker 1: They're all centralizing functions and they have to be because
Speaker 1: it cannot let that system, that debt BAEd system, that
Speaker 1: credit based system which we live in and price everything
Speaker 1: from it. Won't let it collapse because you won't let
Speaker 1: it collapse. So every single conspiracy theory, all of those
Speaker 1: things are inside that system because they have to be
Speaker 1: inside that system because you won't let it collapse, right
Speaker 1: and and so so once you understand that, you you
Speaker 1: stop giving your time to You know, it's going to
Speaker 1: be a chaotic journey from one system to another as
Speaker 1: people have a hard time grappling with what I just described.
Speaker 1: But you stop giving your time to the system that's
Speaker 1: stealing your time and energy.
Speaker 2: So you're saying the more that you participate in the system,
Speaker 2: then you're reinforcing that system.
Speaker 1: Yeah, everything within it, every single we know, you know,
Speaker 1: a whole bunch of your listeners or know, gold gets
Speaker 1: co opted. It gets co opted by derivatives it's got
Speaker 1: and and and if that ever got reset, then it
Speaker 1: would say sink the system. So what they're really saying
Speaker 1: is with with and then But because it centralizes, it
Speaker 1: always gets repriced and and people cheat. People have always
Speaker 1: cheated on money, and so it always allows that you
Speaker 1: can't audit how much gold China has in the reserves.
Speaker 1: You can't. If we said we were going to audit
Speaker 1: Fort Knox, I don't think it'll be a true audit,
Speaker 1: and then you can't audit what everybody else says. Whereas bitcoins,
Speaker 1: blockchains getting audited every ten minutes, it doesn't care. So
Speaker 1: this centralized. So what we're saying with some of these
Speaker 1: assets within the system, is it really And I had
Speaker 1: to deal with this myself too. The cognitive distance I
Speaker 1: was dealing with it is if we've never lived in
Speaker 1: a free market and our actions inside the other system
Speaker 1: are trying to get rich in a zero sum game
Speaker 1: where somebody has to lose because we won. Every single
Speaker 1: asset we're trading within that system is really just a
Speaker 1: bet on how much is somebody else is going to
Speaker 1: lose because I'm going to win all on a centralized
Speaker 1: system and there's no way to fix it. And so
Speaker 1: that's what really pushed me into exploring it is a
Speaker 1: bit going different? First is it could it remain decentralized
Speaker 1: and secure against that power that you knew would have
Speaker 1: to try to attack it? And then where do I
Speaker 1: want to contribute my time? Because the free market isn't
Speaker 1: a zero sum game? The free market is a cooperative
Speaker 1: game where everyone wins if you and I make a trade,
Speaker 1: Like look at what we're doing right now in this
Speaker 1: riverside app, which costs you a fraction of what it
Speaker 1: would have cost to reach this many users right ten
Speaker 1: years ago, a fraction, and now you talk to this
Speaker 1: many users, and you can build a business by yourself
Speaker 1: effectively that by providing value to a whole bunch of people.
Speaker 1: The output of that exchange is more value for you
Speaker 1: and me, more value for everybody listening from the output
Speaker 1: of the exchange that's giving value, and so it's all
Speaker 1: around us and that is not a So the free
Speaker 1: market is is the the only thing we've ever found
Speaker 1: that allows us to exchange and actually in a cooperative
Speaker 1: game where everyone wins and and and we always but
Speaker 1: there's always people trying to cheat it, right.
Speaker 2: That's the that's sort of the downside of human nature,
Speaker 2: like always taking things too far. So it's like, then
Speaker 2: mine naturally once productivity gains or deflation, I suppose, right,
Speaker 2: so instead of carrying eight eight bricks one at a time,
Speaker 2: I make a wheelbarrow to carry eight bricks at once.
Speaker 2: So we want to get more output for less input.
Speaker 2: But then we take things too far and then we
Speaker 2: start trying to figure out, well, then how could we
Speaker 2: cheat the system there?
Speaker 1: We want our house to go up in value, we
Speaker 1: want our asset to go away up in value. And
Speaker 1: this Yeah, if you think through the logic, if we're
Speaker 1: part of the system that is choosing more value, how
Speaker 1: could that be true unless you lived in system distorting
Speaker 1: currency units? And then most people turn to the same current,
Speaker 1: the same things that have always stored value in those
Speaker 1: cheating systems, to try to protect their value from the cheating.
Speaker 2: Yeah.
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Speaker 2: Now one thing that I see as we move from
Speaker 2: one system to another, you know, I talk about you know,
Speaker 2: I'm back to the Abu Dhabi talk. I talked about
Speaker 2: sort of bitcoin's price in the future of twenty thirty
Speaker 2: to forty fifty. I mean I looked at it from
Speaker 2: a venture capital lens of like, what are the markets
Speaker 2: that are being disrupted, how much value can be taken
Speaker 2: from those markets, and how much could it grow? And
Speaker 2: so then you know, I signed some values to bitcoin
Speaker 2: that seem unreal and you know, astronomical unreal. And the
Speaker 2: typical reaction to hearing that bitcoin could be worth ten
Speaker 2: million or fifteen million or fifty million is like, yeah,
Speaker 2: that means the dollar's worth zero. That means it's you know,
Speaker 2: a million dollars for an egg or something like that,
Speaker 2: which in Zimbabwe, eggs were you know, a million dollars, right,
Speaker 2: a few a million dollars, But like from a venture
Speaker 2: capital lens, I think that's like a like that that's
Speaker 2: a big misunderstanding. Right, So it's like bitcoin is pulling
Speaker 2: value from other areas and other assets, and so like
Speaker 2: the dollar doesn't necessarily have to become worthless for bitcoin
Speaker 2: to rise in value.
Speaker 1: Right, So I think the best way to frame this
Speaker 1: is or away I frame it, whether it's best or not.
Speaker 1: Is this, If you divide the nine hundred trillion dollar
Speaker 1: balance sheet by twenty one million, you got forty three
Speaker 1: million dollars terminal value a bitcoin today's purchasing power. Right,
Speaker 1: and we know tomorrow there's gonna be a ton of
Speaker 1: printing and that nine hundred trillion all the assets within
Speaker 1: because if you if there wasn't printing, all the assets
Speaker 1: would collapse to zero. Right. Your house isn't worth what
Speaker 1: you think it is. Your house is only worth because
Speaker 1: the debt underneath it is deemed solvent, and it's insolvent,
Speaker 1: so it requires an input of massive manipulation of capital
Speaker 1: of of money, which will increase the nine hundred trillion higher,
Speaker 1: So your house will be worth more a relative to
Speaker 1: those currency units. But if you did the calculation again
Speaker 1: in two years, with more printing and the different value,
Speaker 1: then bitcoin would appear like it'll be a higher purchasing
Speaker 1: terminal purchasing power at that time exactly. And then the
Speaker 1: other thing that's happening at the same time, which would
Speaker 1: just actually probably more more powerful and hard to see,
Speaker 1: is that forty three million dollars per coin purchasing power
Speaker 1: is a terminal value again based on it stays decentralized
Speaker 1: and secure. You can do your own work, whether you
Speaker 1: think it will or not. But if it says decentralized
Speaker 1: and secure, then every year, all of that productivity gain
Speaker 1: the global free market is accruing to it because prices
Speaker 1: fall against the forty three million of purchasing power right
Speaker 1: now forever. So so it's and it's way bigger than
Speaker 1: people believe. Because if so, people are still right now
Speaker 1: we're talking about deep seek. Have you seen Manus? Yeah?
Speaker 2: I did last night. Yeah.
Speaker 1: So if you've played with that and everything else, you
Speaker 1: could create a team of agents doing this work for
Speaker 1: you to just don't do any path And these things
Speaker 1: are coming at a rate that every I don't know
Speaker 1: if you remember this. In my book, I said that
Speaker 1: that we're measuring we used to measure AI improvements in
Speaker 1: the year in decades, then years, then then months, then minutes,
Speaker 1: then seconds. We're getting into the months, and what's coming
Speaker 1: is the adminutes and then the seconds. That rate of
Speaker 1: improvement is at is such a staggering pace that people
Speaker 1: can't comprehend what it actually means. But if you just
Speaker 1: keep on coming back to saying the natural state of
Speaker 1: the free market is deflation, prices fall to the marginal
Speaker 1: cost of production, period, then all of that productivity gain.
Speaker 1: You take your forty three million dollars per coin today,
Speaker 1: all of those productivity gains are flowing to you as well.
Speaker 1: Because you shouldn't be measuring inflation from zero. You should
Speaker 1: may be measuring it from global productivity. And most people
Speaker 1: are measuring global productivity through the debt based system, and
Speaker 1: they can't see what's really happening because it has to extract.
Speaker 1: It cannot allow prices to fall, so it extracts that
Speaker 1: productivity and centralizes it.
Speaker 2: So what you're saying is rather than measuring it against
Speaker 2: a manipulated denominator like the US dollar, then you should
Speaker 2: measure it against something outside of that system, like bitcoin.
Speaker 2: And then you get a completely different answer exactly.
Speaker 1: And then if you just said so, that's why for me,
Speaker 1: I say, I keep on referring to Bitcoin as a decentralized,
Speaker 1: secure protocol bounded by energy. Right, So if you understand
Speaker 1: those words, each of those words decentral so nobody controls
Speaker 1: it secure, it cannot be broken, so it doesn't can't change,
Speaker 1: can't be broken, or it can change only if people
Speaker 1: determine who are nodes to change it in their best interests.
Speaker 1: Protocols are winner take all, so there is no need
Speaker 1: for any other coin. There is one Internet. You choose
Speaker 1: to be on it or off of it, and so
Speaker 1: protocols are winner take all, and they come in layers.
Speaker 1: They add more functionalities in layers, unlike technologies which winner
Speaker 1: take most. So what's happening is Bitcoin is evolving in
Speaker 1: layers and adding more functionality layers, and it's getting more decentralized,
Speaker 1: more secure all along. And so even most of this
Speaker 1: talk has only been on layer one, which would for
Speaker 1: a long time if you couldn't do anything on layer one,
Speaker 1: if it couldn't, if it couldn't scale, you would have
Speaker 1: all of these other coins by nature saying I have
Speaker 1: a better bitcoin, I have a better So it would
Speaker 1: be natural that the free market would would look at
Speaker 1: it because it would be so confusing to understand protocols.
Speaker 1: But that protocol bounded by energy if as long as
Speaker 1: it stays to the centralized and secure reprices.
Speaker 2: Everything, yep. And if you look back through technology and
Speaker 2: how it reaches you know that it reaches adoption diffusion
Speaker 2: over different stages in a cycle. It seems to follow
Speaker 2: the same repeatable pattern where in the beginning technology doesn't scale,
Speaker 2: and so you try all these other different paths, and
Speaker 2: then it does scale, and then it gets rid of
Speaker 2: all those other pasts. And so we've seen this in
Speaker 2: many other avenues, but in this case specifically, you know,
Speaker 2: to the point that you're making, you have all these
Speaker 2: alt coins that became faster and cheaper and more private
Speaker 2: and smart contracts, et cetera. But then once we've achieved
Speaker 2: been able to achieve the scaling on Bitcoin, then it
Speaker 2: sort of makes all those other chains irrelevant.
Speaker 1: Yeah, yeah, I can't. I can't still think of anything
Speaker 1: that I like where bitcoin is going that anything I
Speaker 1: would use. Actually, what you'd say is, I'm going to
Speaker 1: use a high cost database, right like his centralized controlled database,
Speaker 1: because that's what a blockchain it is. I'm going to
Speaker 1: use a high cost database to centralize. I just can't
Speaker 1: see any single thing.
Speaker 2: Did you see the piece that David Marcus put out
Speaker 2: the other day, I think it was just maybe two
Speaker 2: days ago, talking about what they're doing over at light
Speaker 2: Spark and you know the building on layer two, on
Speaker 2: Bitcoin layer two, and he basically said, you know, he
Speaker 2: ran if you know who David Marcus is for writing
Speaker 2: in the audience, I mean, he's like the payments He's
Speaker 2: the guy, the payments guy right from PayPal. He was
Speaker 2: the one that was behind Libra at Facebook. But he
Speaker 2: basically went into why Libra failed and how many people
Speaker 2: have asked him if he would launch now that they're
Speaker 2: sort of a clear runway from regulate regulator regulation standpoint,
Speaker 2: if they would do a Libra two point zero, and
Speaker 2: he just said, no, the market has moved on. There's
Speaker 2: no need for Libra two point zero. And one of
Speaker 2: the reasons that he gave is there wasn't really the
Speaker 2: ability to do it with bitcoin back then, but there
Speaker 2: is today number one, so to the point of scaling
Speaker 2: what we're talking about. But then he went on to say,
Speaker 2: you know what the nations want is no government. Well,
Speaker 2: each nation wants to be able to settle in their
Speaker 2: own currency, and no nation will settle for settling on
Speaker 2: somebody else's privatize, centralize database, and so there's only one
Speaker 2: option that's decentralized that will give them this neutral ability
Speaker 2: to do this on. Then they talked about how they're
Speaker 2: building on top of bitcoin, and he's inviting everyone to
Speaker 2: come build with them and stuff like that. But I thought,
Speaker 2: you know, the guy who understands payments very very well,
Speaker 2: sort of laying this out, breaking it down. I love
Speaker 2: it when I think it's funny, I should say, when
Speaker 2: I see all these people online and they're smarter than
Speaker 2: Larry Fink about money, and they're smarter than David Marcus
Speaker 2: about payments and whatever, right, And so to hear him
Speaker 2: lay this out and and break it down, I think
Speaker 2: it was pretty insightful. But it's saying exactly the things
Speaker 2: that we're saying. It wasn't ready then it is now,
Speaker 2: and there's just really no way forward for the world
Speaker 2: to work globally without this decentralized layer that nobody can control.
Speaker 1: Yeah, there is it. It's called cheating and global conflict
Speaker 1: in war.
Speaker 2: Well, I'm saying there's no way to really keep moving progressing.
Speaker 1: Yeah, exactly.
Speaker 2: I know I'm agreeing with Yeah, that would be devolving, right.
Speaker 1: Yeah, so so, and that's actually why I get back
Speaker 1: to all of the things inside the other system that
Speaker 1: most people are complaining about, are ensuring that. So you
Speaker 1: can feel the chaos, you can feel that. And I
Speaker 1: watch I watch people to take sides within this debate
Speaker 1: and screaming at it, and they don't know that that
Speaker 1: side on that system they're making it stronger. Use the
Speaker 1: example of it kind of Marches on Wall Street in
Speaker 1: two thousand and eight, burn things down, turnover cars, go
Speaker 1: home and sleep. Where did the money come to fix it?
Speaker 1: All from them?
Speaker 2: Yeah?
Speaker 1: Right from them? And so now I ask yourself, what
Speaker 1: are you doing with inside the system? And how are
Speaker 1: you sleeping it? Like like you like all of these
Speaker 1: things that are like it's feeding on your fear and
Speaker 1: you think there's an enemy on the other side of
Speaker 1: that fear inside that system, or you're a savior on
Speaker 1: the other side of that fear inside that system. There isn't. Yeah,
Speaker 1: it's all it's it's it has to be a different
Speaker 1: system the only thing that can And so you can
Speaker 1: tune out, you can just that I understand what I'm
Speaker 1: asking to do the work on bitcoin and actually understand
Speaker 1: how different this is. And that's a lot of people
Speaker 1: aren't ready to and I know you've done a lot
Speaker 1: of work to help people understand that. But as they do,
Speaker 1: they'll just they'll understand that. Here's why, here's why I
Speaker 1: believe the stays the centralize and secure because the people centralizing,
Speaker 1: trusting ets, trusting all of the other central briers aren't
Speaker 1: running nodes. The people, the people who know this are
Speaker 1: never going back to a corrupt system.
Speaker 2: So the people that are seemingly participating with bitcoin, but
Speaker 2: through these centralized mechanisms like ETFs, they're not helping the
Speaker 2: network statey centralized insecure.
Speaker 1: So there's a whole bunch of people that are worried
Speaker 1: that this is centrally controlled because government's for it and
Speaker 1: everything else. They don't realize how powerful the kind of
Speaker 1: voices and I'm not saying mine, but you know these people,
Speaker 1: you know these people all around the world, and they're
Speaker 1: running nodes, globally distributed nodes, and they are not going
Speaker 1: to allow this thing to be centralized. Right, So when
Speaker 1: that when that day comes that that that system says
Speaker 1: you're going to do this because we want you to
Speaker 1: do this. That might be a really bad day for
Speaker 1: the centralized system. That might be hypergrap picization.
Speaker 2: And in that event, and to your point, I mean,
Speaker 2: we've we've gained plan this out so many nights, late nights,
Speaker 2: maybe over over some drinks, maybe maybe not at many events,
Speaker 2: were sitting around game planning this out, like what are
Speaker 2: the ways that we can think of attacks here? But
Speaker 2: it seems like almost any one of those events leads
Speaker 2: to just a fork.
Speaker 1: That's it. Yeah, that's which is like great.
Speaker 2: Then you take your centralized coin over here, you take
Speaker 2: your new raised cap limit to forty one, but you
Speaker 2: take whatever it is that you want over here, and
Speaker 2: we'll just stick with old bitcoin over here. And that's
Speaker 2: why it doesn't work.
Speaker 1: Yeah, Just like so if you were if you were
Speaker 1: planning that attack, if you were trying to if you like,
Speaker 1: if you were deep deep state trying to plan that attack,
Speaker 1: you probably wouldn't try to attack it for another five
Speaker 1: six years. You would you would you would love bitcoin
Speaker 1: to go way up in price to resolve your underlying
Speaker 1: debt problem because it would it wouldn't resolve the debt,
Speaker 1: but it would result it would you would have an
Speaker 1: asset that would be worth a lot more so that
Speaker 1: the balance sheet would look better. And then you would
Speaker 1: and then all of the that you'd hope that a
Speaker 1: whole bunch of the bitcoiners had sold into your centralized
Speaker 1: thing because they were they were actually the entire time
Speaker 1: pricing in the US currency, right, and they were Now
Speaker 1: they got rich, and now they were part of this,
Speaker 1: and now they didn't care they weren't running nodes, and
Speaker 1: then and then and they got you didn't have the
Speaker 1: same kind of cipher punk ethic that is that is
Speaker 1: driving this thing that more and more people understand that
Speaker 1: these are structural changes in the world. One is a
Speaker 1: centralized system where every everybody's kind of in a control system.
Speaker 1: One is decentralized, where where where we we have freedom.
Speaker 1: And once you understand that, which I there's a whole
Speaker 1: bunch of people that don't, right, but more or learning
Speaker 1: each day, and as they learn, as they go from okay,
Speaker 1: I'm just going to accept a little I'm going to
Speaker 1: take a little bit of bitcoin. I'm going to and
Speaker 1: as you learn that path and then you become part
Speaker 1: of the network, You become one of the nodes in
Speaker 1: the network. Right, You're never going to change.
Speaker 2: Now what about you know what we see what we
Speaker 2: just saw this last week with President Trump and finally
Speaker 2: we got clarity. We got the executive order, the US
Speaker 2: Strategic Bitcoin Reserve. You know, there's a plan to add
Speaker 2: more you know, balance neutral, whatever, cost neutral, whatever, it is,
Speaker 2: all these different things. And there's plenty of people that
Speaker 2: are out there, more so probably some of the crypto
Speaker 2: people that are like, oh yeah, you bitcoiners, you're like
Speaker 2: everybody else, you're you know, begging for the government to
Speaker 2: buy it.
Speaker 3: You know.
Speaker 2: My take is that, well, I mean it was always
Speaker 2: coming for everything, so it's gonna work its way. But
Speaker 2: but back to the point of staying decentralized and secure,
Speaker 2: and now you have, you know, the biggest government to
Speaker 2: get the central know, the US dollar coming into it.
Speaker 2: So how do you think that affects things?
Speaker 1: So so, just like it affects when you make a
Speaker 1: choice you personally to move into this network. You can't
Speaker 1: be debased anymore. And you're participating in the first global
Speaker 1: free market ever. So what does that look like to you?
Speaker 1: And I know what it looks like to you because
Speaker 1: we've had these talks many late nights too. Your life
Speaker 1: gets better and better and better and better, and you
Speaker 1: worry less about all of the chaos everywhere else. Right,
Speaker 1: And that's true for every single person. You have a
Speaker 1: globally distributed open network that any single person, whether you're
Speaker 1: in Africa, whether you're any anywhere, you can make that
Speaker 1: same decision and your life starts to get better through that.
Speaker 1: As long as you're holding. For if you're trading, that
Speaker 1: doesn't exist. But if you're if you're holding, then that's
Speaker 1: then that's what happens. And you start to learn more
Speaker 1: about why this is just such a better choice for
Speaker 1: you now in your business. If it was the same,
Speaker 1: if a choice for you in your business, and then
Speaker 1: you'd make the business choice. You do the same thing,
Speaker 1: and you'd start converting your balance sheet. Over time. In
Speaker 1: a city or a state or a country, the same
Speaker 1: choice is happening. I can either I can either tax
Speaker 1: my citizens in this and then by the time I
Speaker 1: go to pay their's taxes on their services, I can't
Speaker 1: deliver the services because the money is broken underneath. Or
Speaker 1: I can deliver more services forever. I can make my
Speaker 1: country richer. Not only that, I can send a signal
Speaker 1: that to the world that we're open for a business
Speaker 1: on a free market, we're not freedom matters. And so
Speaker 1: if it's true, if freedom does matter, free markets are
Speaker 1: far more productive than centralized markets because there's more ideas competing,
Speaker 1: and there's more ideas competing for our value. So the
Speaker 1: thing that built the US in the beginning is and
Speaker 1: what created the constitution and the wars that they fought for,
Speaker 1: was every that equal you could move from Europe be free,
Speaker 1: and that's what created the productivity boom that was the
Speaker 1: US before money got captured. So that's just happening on
Speaker 1: bitcoin right now. And so of course governments that understand it,
Speaker 1: I would say it does the US government understand it.
Speaker 1: There's people within it that do. There's people that win
Speaker 1: within it that are trying to capture it, But just
Speaker 1: like there's people within bitcoin that understand it and people
Speaker 1: that were pricing it through the US dollar. So there's
Speaker 1: just such a complicated topic that I think each person
Speaker 1: is kind of understanding it from their own thing, and
Speaker 1: so I don't pay any attention to of course they're
Speaker 1: going to do it. I suspect at some point they
Speaker 1: will decide whether they want to try to cont sure
Speaker 1: it or if they are a free market, right, and
Speaker 1: we'll see in the nodes will decide right. Right.
Speaker 2: The one thing in the game theory that I love
Speaker 2: to kind of always throw out to people who are
Speaker 2: doubting this is just that by capturing it, by changing
Speaker 2: the hard cap, by doing any of those things, you
Speaker 2: basically make it worthless. And so anybody who was able
Speaker 2: to capture a large percentage of this would at least
Speaker 2: at this point be doing it to acquire more US
Speaker 2: dollars to build wealth, whether you're a micro strategy or
Speaker 2: even if you were the US sovereign wealth fun hoping
Speaker 2: to pay off your debt one at one point, right,
Speaker 2: And so by making these changes, you're essentially making it worthless.
Speaker 2: So really that'll only be done by like a hostile actor.
Speaker 1: It's it's even but and you know this how antifragile
Speaker 1: it is. Imagine how many attacks like if you really
Speaker 1: think through it. Because obviously the NSSAY is known about
Speaker 1: pitcoin for a long time. They all of the major
Speaker 1: governments all over the China's tried to stop at US
Speaker 1: has tried to stop at all Operation Chokepoint. Imagine how
Speaker 1: much this is in the highest levels trying to stop
Speaker 1: this thing. That brings freedom back to the world every individual,
Speaker 1: and you have no say so. Yes, there's going to
Speaker 1: be a ton of attacks. There still will be a
Speaker 1: ton of attacks. But every single person who's attacked it
Speaker 1: has not just attacked it. They could have done better
Speaker 1: themselves and for their entire thing, the ftx Celsius, every
Speaker 1: single person coinbase, if they just owned it, that owned
Speaker 1: the bitcoin instead of sold all the shit coins, they
Speaker 1: would have way more bitcoin attacking attacking it. The cheaters
Speaker 1: always lose against this, right, every single and that's what's
Speaker 1: so fascinating. A cooperative network benefits the honest.
Speaker 2: And then we have it playing out on a global,
Speaker 2: global scale. I mean, just today, the last couple of days,
Speaker 2: we've seen the EU announced they're going to finally roll
Speaker 2: out their central bank digital currency, and then they're coming
Speaker 2: out and bashing Trump directly saying that by doing these cryptocurrencies,
Speaker 2: like you're threatening their sovereignty somehow.
Speaker 1: Right, Yeah, and this is it. That's actually why I
Speaker 1: can't even listen to all of this because you you know,
Speaker 1: you we're listening to people like Laguard and all all
Speaker 1: these people that their only wealth, their only value to
Speaker 1: society is being at the top of a control system
Speaker 1: that's sucking value from society. Why am I paying any
Speaker 1: attention to that? Why am I? Why would I feed
Speaker 1: that anything? Right? The just the more you do in bitcoin,
Speaker 1: you realize, Okay, yeah, a lot of people are going
Speaker 1: to get caught in it, a lot of people are
Speaker 1: going to The chaos that it's going to ensue is
Speaker 1: is staggering. But yes, because that system must it must
Speaker 1: it must have you locked into it, yep, to to
Speaker 1: retain its power over you. Yeah.
Speaker 2: Yeah, I mean I remember years ago seeing a quote
Speaker 2: from the Guard saying, you know how any basically any
Speaker 2: new technology was a threat to financial their financial stability,
Speaker 2: which it is because it, you know, creative destruction creates
Speaker 2: those new ways. I want to jump into another topic,
Speaker 2: and maybe the last topic here there. You know, there's
Speaker 2: a lot of talk with you know, Michael Saylor and
Speaker 2: is now strategy acquiring all these bitcoin and what are
Speaker 2: they going to do with it at some point? And
Speaker 2: there's just talk of like maybe a bitcoin bank, which
Speaker 2: he never really confirmed or denied. But I saw this
Speaker 2: post surface the other day of holf Finny, one of
Speaker 2: the original developers on on bitcoin, and it was in
Speaker 2: one of the old message boards, and he talked about,
Speaker 2: you know, this future with bitcoin banks and how you
Speaker 2: know you would have holders of large amounts of bitcoin
Speaker 2: and they could launch their own banks and then launch
Speaker 2: their own currencies on top of bitcoin, and almost painted
Speaker 2: this sort of like free banking two point zero sort
Speaker 2: of narrative. I'm curious how you view the future in
Speaker 2: regard to banking. I mean, banking sort of seems to
Speaker 2: have mainly three functions, right, storing, you know, transmitting, and
Speaker 2: then lending. But how do you think of maybe what
Speaker 2: he had talked about, this future of bitcoin banks, you know,
Speaker 2: having bitcoin on the balance sheet, creating cash on top
Speaker 2: of it and things like that.
Speaker 1: So complicated topic, but it's this is the layering approach
Speaker 1: to bitcoin. So Bitcoin layer one, open, decentralized protocol, boundary
Speaker 1: by energy, but slow transactions. Right, the reason that's decentralized
Speaker 1: and secure is the slow transactions.
Speaker 2: So it slows a relative term.
Speaker 1: Yeah, so let's say five to seven transactions per second,
Speaker 1: so it can handle global banking for eight billion people.
Speaker 1: So then Lightning network Liquid are a whole bunch of
Speaker 1: different kind of layer twos emerge at first Lightning on
Speaker 1: the layer two looks like kind of a back like
Speaker 1: because it's a project, it's just on top of bit,
Speaker 1: why you don't need another coin. But in the first going,
Speaker 1: it doesn't work very well, like forty percent payments failure
Speaker 1: fail You need your own liquidity channels and everything else,
Speaker 1: because you just look like it is almost a garage network,
Speaker 1: right because it's just emerging. And today where you have
Speaker 1: probably ninety six percent of payments work each time every time,
Speaker 1: and it'll be ninety nine point ninety ninety nine and
Speaker 1: there's six hundred and fifty million people right now using
Speaker 1: Lightning liquid it's a staggering it's growing faster than the
Speaker 1: Internet it did in the nineties, and people still look
Speaker 1: at it like they looked at it five years ago.
Speaker 1: So what David Marcus was really saying is this is
Speaker 1: matured to a place that now you have a layered approach.
Speaker 1: That you have this layered approach. The next next thing privacy. Privacy.
Speaker 1: Lightning gives some privacy, but in a world where everyone
Speaker 1: came after this, it's not sufficient. It's not sufficient because
Speaker 1: they would attack tack those nodes at some point they're centralized.
Speaker 1: You can only use this bitcoin rather than this Bitcoin
Speaker 1: and they would attack it. So you had to develop
Speaker 1: massive privacy within within the technology, but in a layered
Speaker 1: approach that you don't have to have another coin, so
Speaker 1: you can extend the decentralized, secured nature and it can't
Speaker 1: be centralized and changed. That's that's why we invested in
Speaker 1: Fetti and Fetiment protocol. It's built on top of these
Speaker 1: intraoperable with it's complete privacy, and it gives you essentially
Speaker 1: a free banking error on top of bitcoin that that
Speaker 1: is completely private. So you and I, you and I
Speaker 1: two other people could run a run essentially nodes on
Speaker 1: top of this, in and out of in and out
Speaker 1: of lightning. We could have a circular economy ourselves. Right
Speaker 1: this is being used right now in Venezuela because of
Speaker 1: the dictatorship in Venezuela, and it can't be found. There's
Speaker 1: all of the communication is completely private, all of the
Speaker 1: all of the transactions are completely private, and it's growing
Speaker 1: really fast. It's being used and has some of the
Speaker 1: most scary places, and we can feel this authoritarianism, the
Speaker 1: centralizing of the system accelerate all over the world because
Speaker 1: the money is broken where where where This technology has
Speaker 1: already anticipated that problem a long time ago, built the
Speaker 1: built the like they it completely withstands anything here and
Speaker 1: is growing the other way, providing freedom to the world.
Speaker 1: Now it's early because and why is it early because
Speaker 1: most people don't know it even exists yet. But it's
Speaker 1: all integrated.
Speaker 2: Then, I mean you would put your bitcoin in and
Speaker 2: then you would get back, so that like the Bitcoin bank,
Speaker 2: you put your money in this bank and then you
Speaker 2: get back a representative token that you can spend that's
Speaker 2: faster and cheaper and more private.
Speaker 1: Yeah, so e cash is built into bitcoin in this way.
Speaker 1: That and then and then now, what would you have
Speaker 1: to worry about. You'd have to worry about if let's
Speaker 1: say you, me, two other people were the nodes. Could
Speaker 1: we cheat? Could we cheat? And say, we're going to
Speaker 1: fractionalize the e cash, so somebody thinks they have the cash,
Speaker 1: but it's not backed by bitcoin, and so there's a
Speaker 1: whole bunch of ways to be able to protect against that.
Speaker 2: But well, maybe I want it to be fractionalized.
Speaker 1: Yeah, and but yes, and maybe you do, and some
Speaker 1: people will try to cheat that.
Speaker 2: And then then well I don't know if it's necessarily
Speaker 2: even cheating, right, so it's like think of it as
Speaker 2: earning yield. I mean typically with the bank, you'd give
Speaker 2: your money to the bank, the bank would loan it
Speaker 2: out and they would give you some backup a yield
Speaker 2: on that for for you know, taking some risk with
Speaker 2: your money, so to speak.
Speaker 1: Right, I think here's what's what's happening. We have that
Speaker 1: that entire fractional system is failing, right because it requires
Speaker 1: more fractionalize. It's Ponzi scheme all the way down, right,
Speaker 1: and it needs more and more. Their yield comes from
Speaker 1: comes from that and the entire because because if it
Speaker 1: didn't have more fractional line, if it didn't have more
Speaker 1: monetary units, it fails. So so you're which, here's a
Speaker 1: simple way to say this, all of the money that exists.
Speaker 1: So if everybody paid back their debt, there would be
Speaker 1: no money, right, So so you know, and the money
Speaker 1: is loaned into existence. So when you take a loan
Speaker 1: for your house, you're adding money, right, and you're paying
Speaker 1: You're you're paying a fee to somebody that made it
Speaker 1: up from nothing to be to be able to be indentured.
Speaker 1: And then you're paying taxes on that as and more
Speaker 1: as as more and more money is lent into existence.
Speaker 1: This other system won't look like that, now, will people try?
Speaker 2: It doesn't have to be it doesn't doesn't have to
Speaker 2: be fractionalized, right, like misis would break down, you know,
Speaker 2: circulating credit versus you know commodity credit. Right, So it's
Speaker 2: like if I grew ten bushels of wheat, but I
Speaker 2: only needed to consume seven, I could loan you those
Speaker 2: three bushel of weet and you give me back three
Speaker 2: bushel a week next year, right for sure?
Speaker 1: For sure? And then in that case and in fetti right,
Speaker 1: So the money that e cash on top of this,
Speaker 1: it can be moved around at lightning speed, completely private,
Speaker 1: so you and I can trade and there's tiny, tiny
Speaker 1: fees on it and as global privacy. And so now
Speaker 1: question when would you take a loan, you know, in
Speaker 1: a in a in how much loan would you take
Speaker 1: in an environment an entire global system that the more
Speaker 1: value is coming each year? Right, So if you take
Speaker 1: huge loans when more value is coming each year, then
Speaker 1: the loan gets more expensive in real terms.
Speaker 2: Which is exactly why our debt based monetary system likes
Speaker 2: inflation totally. Yeah, yeah, I was just curious, like I said,
Speaker 2: I saw that that that that post from hal Finny,
Speaker 2: and I was just kind of thinking thinking that through
Speaker 2: a little bit. If you go back in however far back,
Speaker 2: I mean, I would imagine even before there was a
Speaker 2: currency system, medium, before a ledger, sit, before any of that,
Speaker 2: the first form of money had to have been credit, right, Like,
Speaker 2: you're my neighbor in the village, go ahead and borrow
Speaker 2: my whatever and bring me back a little bit extra, right.
Speaker 2: So I think credit would probably have been the first
Speaker 2: form of money before anything, all through the gold.
Speaker 1: Standard era, probably barter and then barter and then credit.
Speaker 2: Barter and then credit. Yeah, probably barter and then credit,
Speaker 2: and then all through the gold Standard era, I mean
Speaker 2: for thousands of years. You know, some people just make
Speaker 2: more money and store money, and they're well on to
Speaker 2: loan it the people who need.
Speaker 1: It, you know.
Speaker 2: So I just don't I don't see how that changes
Speaker 2: it's human nature. To the point that you're making, which
Speaker 2: is a very good point. It certainly changes the hurdle
Speaker 2: rate when you're gonna have to pay a higher amount
Speaker 2: back than what you borrowed. Until everything is priced on
Speaker 2: that system, I suppose.
Speaker 1: So, so that's the interesting thing. If you think through this,
Speaker 1: and this is where I completely agree with you, it's
Speaker 1: human nature because we were both the map and the
Speaker 1: territory and we don't know, we've never known another system.
Speaker 1: So it would be human nature. It would be all
Speaker 1: of our history books to talk about that system. And
Speaker 1: the system has changed, it's already changed. So what does
Speaker 1: does that mean? What it means is because of that
Speaker 1: human nature, there's going to be mispricing and opera and
Speaker 1: a whole bunch of people wiped out by what we
Speaker 1: just talked about over and over and over again, because
Speaker 1: they're going to try to operate the playbook that we've
Speaker 1: lived in in the last three thousand years on top
Speaker 1: of a system that doesn't care. Right. That's exactly so
Speaker 1: I think we're saying the same thing that human nation
Speaker 1: and what will change that as they get wiped out
Speaker 1: over and as they get whipsawed by the system that
Speaker 1: is every ten minutes, there's a new block and it
Speaker 1: doesn't care.
Speaker 2: Yeah, I was just saying that even in a new system,
Speaker 2: I think there's always a need for that.
Speaker 3: Right.
Speaker 2: So I've been a good steward of my wealth. I've
Speaker 2: built up more than I need. I've grown ten bushels
Speaker 2: a week, but I only need seven. Unfortunately for you,
Speaker 2: lightning came down and struck your wheatfield and burned up
Speaker 2: your wheat. But I know you're a great farmer. So
Speaker 2: how about I get you three bushels a week because
Speaker 2: you're going to I know you're going to grow it back,
Speaker 2: and next year you get me four bushels back. Like,
Speaker 2: there's always that need for credit, there's always hardships. It's
Speaker 2: just life, and somebody does better with it than somebody else.
Speaker 2: And so I just don't think that part changes.
Speaker 1: No, I just mean the what we're talking about is
Speaker 1: the amount on a system based on credit, then what
Speaker 1: people think of about So let's use the house as
Speaker 1: an example. A house is falling to it. We use
Speaker 1: credit for houses, and everybody thinks it's normal right now
Speaker 1: to have a million dollar mortgage, right right. It's only
Speaker 1: normal because of the system of underlying credit that has
Speaker 1: pushed up prices of houses to a monetary premium to
Speaker 1: support that. And if it fails, and so the prices
Speaker 1: will still rise in houses from that system. But if
Speaker 1: you measure that house and bitcoin, like my house and
Speaker 1: bitcoin in last five years has dropped from three hundred
Speaker 1: bitcoin to say twenty six bitcoin.
Speaker 2: Yeah, and so what is that saying.
Speaker 1: It's it's saying a house is falling back to its
Speaker 1: utility value right in the money that's valuable. Could I
Speaker 1: still take a loan for that? Yes, I could take
Speaker 1: a loan on to pay for the house today and bitcoin,
Speaker 1: but I know in four or five years that house
Speaker 1: is going to be one bitcoin. Yeah, right, So that
Speaker 1: means my loan gets more expensive. So or I lose
Speaker 1: a whole bunch of purchasing power to buy the house
Speaker 1: today rather than tomorrow because the house is falling to
Speaker 1: its utility value and that credit destruction or that is
Speaker 1: going to not be understood by very many people.
Speaker 2: Right, And yeah, that that is going to shift for sure.
Speaker 2: And I think the entire sort of almost retirement industry,
Speaker 2: if you will, will change, right where like you have
Speaker 2: all these people that are saving for twenty thirty, forty
Speaker 2: years and they're hoping they can live off four percent
Speaker 2: a year or something like that, But you won't need
Speaker 2: that yield when your money buys you more in the
Speaker 2: future instead of less. And so that that incessant need
Speaker 2: for you know, desire to earn yield to retire on
Speaker 2: or whatever. I think that part goes away. So, but
Speaker 2: but the need there's always going to be a need
Speaker 2: to borrow for some reason or another.
Speaker 1: Yeah. And what makes these conversations so fascinating is is
Speaker 1: is the change in something that is totally changed the rules. Yeah,
Speaker 1: and us grappling with the rule change and trying to
Speaker 1: predict kind of when how what that looks like. But
Speaker 1: if you step back and just say, Okay, which system
Speaker 1: would I want to be in? Yep? Right, as this
Speaker 1: is going to be chaotic because on the way through.
Speaker 2: That's one thing I like about is this force functioning
Speaker 2: where really you know, if you if you really study
Speaker 2: like the difference of a poor middle class or a
Speaker 2: wealthy person, and really, I should say the mindset of
Speaker 2: that person, you sort of have the poor mindset mentality
Speaker 2: or even in a middle class they basically work to live,
Speaker 2: work to pay their bills, so they earn to spend
Speaker 2: money on their house, in their car, and their lifestyle.
Speaker 2: They'll typically use credit to buy things they can't afford
Speaker 2: or to increase their lifestyle, whereas like a wealthy person
Speaker 2: is earning money not to live, they earn money to
Speaker 2: buy assets. Then the assets pay for them to live,
Speaker 2: and they don't use credit because they can't afford things.
Speaker 2: They use credit because it'scheaper to use somebody else's money
Speaker 2: than their own. And so bitcoin would almost force that function.
Speaker 2: Whereas to the point you were making about borrowing and
Speaker 2: bitcoin to pay for the house, but hard and hard
Speaker 2: to pay back the loan it but almost like you'd
Speaker 2: earn and put it into bitcoin and then borrow against
Speaker 2: the bitcoin to buy the house. Yeah, so it forces
Speaker 2: you into the correct form, which is buy to earn
Speaker 2: the assets and have the assets pay for the life.
Speaker 1: And think about that asset being repriced. So what we're
Speaker 1: talking about, so all of the people that are pricing
Speaker 1: those assets way too high and fia it terms because
Speaker 1: it's worked for the last forty to fifty years, are
Speaker 1: they they believe that their house is the house and
Speaker 1: the real estate asset and all of them, even though
Speaker 1: the taxes are going up and up on them because
Speaker 1: other people are paying those rents, they believe it's a
Speaker 1: safe store of value, and that safe store of and
Speaker 1: they keep on doing it, levering more and more to it.
Speaker 1: When we just described for the person that the person
Speaker 1: working for wages and moving those wages into bitcoin is
Speaker 1: repricing them right, right, That's it, That's what's happening. So
Speaker 1: it's really interesting and that that repricing can happen in Africa, Argentina, Peru,
Speaker 1: it can happen anywhere for anybody who wants to to
Speaker 1: do that. So what's happening today is you and I've
Speaker 1: talked a lot about this, the risk free rate of
Speaker 1: return is like forty three percent, right, if you're self
Speaker 1: custoding and if you're making seven or eight and real estate,
Speaker 1: you're losing thirty five percent a year to bitcoin. But
Speaker 1: you think you're winning because other people are losing faster
Speaker 1: than yeah.
Speaker 2: Yeah, and put it to numbers. I mean the media
Speaker 2: and US home price in twenty sixteen was like two
Speaker 2: hundred and sixty thousand. Today it's about four hundred and
Speaker 2: sixty thousand, so it's almost doubled in that time period.
Speaker 2: But it's gone from you know, a roughly twenty bitcoin
Speaker 2: down to about four bitcoin yep in the same time period.
Speaker 1: So it's describing that process. You've said it before. It's
Speaker 1: describing that process that is happening when people are asking
Speaker 1: when is this going to happen?
Speaker 2: It's happening.
Speaker 1: Yeah, it's happening. It keeps happening, it will continue to happen.
Speaker 2: One thing I will just throw out there, just because
Speaker 2: I'm an old real estate guy. I can't let it go.
Speaker 2: In America, it's a little bit different thirty year fixed mortgages.
Speaker 2: But more importantly, it's the tax treatment that we get.
Speaker 2: So Trump in his first term and now it just
Speaker 2: got reinstated, gives us like bonus depreciation, and we get
Speaker 2: like short term rental exclusions and things like that. So
Speaker 2: somebody with a W two income with earned income could
Speaker 2: get up to one hundred percent right off of an asset.
Speaker 2: So I could put ten percent down on a I
Speaker 2: could put ten thousand down one hundred thousand dollar home
Speaker 2: and write off one hundred thousand dollars of my income
Speaker 2: and have an extra ninety thousand dollars to buy bitcoin with.
Speaker 2: So and then I could have somebody I could have
Speaker 2: inflacent inflace in debt destruction. I could have tenants paying down.
Speaker 2: So that's a little bit more of an advanced strategy.
Speaker 1: But I think that's actually really important to call out too,
Speaker 1: because in all of these things, there's going to be
Speaker 1: tax strategies that you can take and play a system differently.
Speaker 1: And I think that's important too, mind you, and which
Speaker 1: plays into what I think will happen in bitcoin. Governments
Speaker 1: and states and are going to lower capital gains taxes
Speaker 1: and try to make this because they're going to try
Speaker 1: to attract the capital that.
Speaker 3: Is in this.
Speaker 2: So like you get better tax treatment if you keep
Speaker 2: it in then etf than if your custody yourself or
Speaker 2: something like that.
Speaker 1: Yeah, well I hope that's not the but they might
Speaker 1: try to do that and the but but just if
Speaker 1: you like it what else Salvador did, And you've been
Speaker 1: a number of times. I've been a number of times.
Speaker 1: The change is dramatic from opening up a free market
Speaker 1: and being bitcoin positive, the tourism. The change is so dramatic,
Speaker 1: and so that's going to be repeated and other countries
Speaker 1: are going to compete against that.
Speaker 2: Yeah, what would you say for the average person who
Speaker 2: hasn't put the time in that you have and doesn't
Speaker 2: understand the decentralized and secure theme, For the average person
Speaker 2: who's just came into bitcoin now with Trump and the
Speaker 2: Strategic Bitcoin Reserve and all of that talk, what would
Speaker 2: you say the biggest thing they'll probably be shocked about
Speaker 2: over the coming year would be how.
Speaker 1: Fast the world that they thought they lived in is disintegrating,
Speaker 1: and how that chaos is going to expand and ripple
Speaker 1: across It's just going to be if you're not expecting,
Speaker 1: if you don't realize how much which data is underlying,
Speaker 1: and how insolvent it is, and and and if you
Speaker 1: think Elon is going to save you because he's ripping
Speaker 1: out wasted bureaucracy, That wasted bureaucracy today is also they
Speaker 1: all have jobs, they all spend, they all buy houses,
Speaker 1: they all buy food, they all they all spend in
Speaker 1: the economy is part of the GDP. When you rip
Speaker 1: it out, you cause it deflationary collapse faster. So this
Speaker 1: is so there's so many people right now that cheering
Speaker 1: for one side or the other without the realization that
Speaker 1: underneath the whole thing, underneath the entire thing means to
Speaker 1: me so much printing that is just centralizing more because
Speaker 1: it's and so so I'm fascinated by how many people
Speaker 1: are taking a side within this and not understanding the
Speaker 1: implications of their side within this. So they and then
Speaker 1: talk about Europe or talking about Iran or talking about Israel.
Speaker 1: They're talking about. Of course, the entire system looks like
Speaker 1: it's based on corruptions. Of course it does, because it's
Speaker 1: based on manipulation of your time and energy and the
Speaker 1: things you're doing in that or going to the things
Speaker 1: you're going to do that is going to give away
Speaker 1: your power into the centralization, and it has to center
Speaker 1: go back to AI. The rate of improvement of AI.
Speaker 1: It's just it will never be this slow again. It
Speaker 1: will never say that again and again and again. It
Speaker 1: will never be this dumb again. It will never be
Speaker 1: this slow again. Never. It is going to go at
Speaker 1: a rate that your brain cannot comprehend, and you will.
Speaker 1: And if you don't use it, other businesses are going
Speaker 1: to use it to provide more value, and it's going
Speaker 1: to remove labor at a staggering rate.
Speaker 2: So either move to something that cannot be replaced, physical services,
Speaker 2: or get this, get with the program.
Speaker 1: And it's even physical services inside that. So if you
Speaker 1: lived in a control structure, if all of your stuff
Speaker 1: was inside that control structure, and you had cameras everywhere
Speaker 1: and monitor and you were driving an electric car that
Speaker 1: was going to they could turn off and you were
Speaker 1: in a bank, in a bank account, and you had gold,
Speaker 1: but you were in a bank account that could be
Speaker 1: turned off anytime. If you understood how much of your
Speaker 1: stuff is tracked right now inside this system, and you
Speaker 1: think it isn't. All of these connected systems are all
Speaker 1: part of that centralized control. You are inside of that.
Speaker 1: You're in the matrix centralizing with everything you're doing. There
Speaker 1: isn't There isn't a thing that is safe within that
Speaker 1: system you have. It's a different it's a system change,
Speaker 1: and bitcoin is repricing that it's outside because because you
Speaker 1: can self custody this, you can take this off and
Speaker 1: you can store the words in your head. You don't
Speaker 1: have to trust that system. It's it's immune from everything
Speaker 1: I just said. So so now just ask yourself, where
Speaker 1: am I spending my time? And what does that look like?
Speaker 1: There is no safety. There's what you people say, I
Speaker 1: got guns, I have a I have a ranch land.
Speaker 1: Think about think of what I'm saying, Think about think
Speaker 1: about robotic dogs, drones, drone swarms, all ai IE things.
Speaker 1: Where are you safe in a centralized system that takes
Speaker 1: all of its control through you through manipulated money? What
Speaker 1: is safe? Good? Luck, right, help build the other system,
Speaker 1: because that's what it frees you.
Speaker 2: There, you go, I think that's a perfect place to
Speaker 2: end it. Go build the other system. I say, build
Speaker 2: the world that you want.
Speaker 1: So bingo.
Speaker 2: I do get a little pet peeved by a lot
Speaker 2: of these bitcoiners who think they can just go disappear
Speaker 2: on a hill and with their six point two five
Speaker 2: bitcoin or whatever in emerge like like punk satani and
Speaker 2: like the whole world's changed for them. It's like, if
Speaker 2: you're not going to go build the world, who's going
Speaker 2: to do it?
Speaker 1: Yeah, it's that's That's it. This is what bitcoin, when
Speaker 1: you really realize it is it connects all of us
Speaker 1: on a global free market that can't be cheated. It's
Speaker 1: cooperative system. So so then then what you It's not
Speaker 1: saying anything about bitcoin, it's saying something about your choices.
Speaker 2: Mhm. Powerful. All right, Jeff Booth, we're gonna end it
Speaker 2: with that. You wrote a great book. You've referenced the
Speaker 2: multiple times. The Price of Tomorrow will link to that below.
Speaker 2: Anything new coming out of the pipe that people should
Speaker 2: be paying attention to.
Speaker 1: I'm towayhing around with a new new book, but I
Speaker 1: haven't completely committed to it yet, so we'll see.
Speaker 2: All right, Thanks so much, Jeff.
Speaker 1: Yeah, you're great. See anybody