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Speaker 1: So the big question is this, how do investors like

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Speaker 1: us get access to the ideas, information, and most importantly,

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Speaker 1: the right people that give us the tools and information

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Speaker 1: we need to make informed and educated decisions to have success.

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Speaker 1: That is the question, and this podcast will give us

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Speaker 1: the answers. This is Mark Moss, your host. Let's get

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Speaker 1: this started, all right, everyone, Welcome to another episode of

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Speaker 1: the Market Disruptors podcast. Today I am with Dan Held.

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Speaker 1: He's the co founder of Interchange, and he writes a

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Speaker 1: lot about bitcoin, bitcoin security, bitcoin as a store of value,

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Speaker 1: a lot of really good stuff on medium that's caught

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Speaker 1: my eye and so I wanted to dive in deeper

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Speaker 1: with him today. So, Dan, welcome to the show. Thanks

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Speaker 1: for having me excited. Yeah, I'm excited to jump into

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Speaker 1: some of these topics. Now. Um, I've read a lot

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Speaker 1: of your stuff, as I just said, but maybe for

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Speaker 1: those that haven't, why don't you just kind of tell

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Speaker 1: us who you are, what you're doing, and kind of

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Speaker 1: how you got here to this space right now? Yeah,

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Speaker 1: that sounds like good place to start. So I got

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Speaker 1: involved in the crypto space, or specifically bitcoin, because bitcoin

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Speaker 1: was the only thing and when I got in back

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Speaker 1: in and I had a friend paid me back for

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Speaker 1: a beer with a capacious coin and for those who

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Speaker 1: don't know what that is, that's the physical bitcoins that

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Speaker 1: you see in all the news articles and that they're

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Speaker 1: using different b roll footage on TV TV programs, And

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Speaker 1: so that was a good way for me to kind

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Speaker 1: of bridge that analog to digital world. And after I

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Speaker 1: got that, I googled what is bitcoin? Read a little

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Speaker 1: bit into it found that it had a really really

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Speaker 1: cool monetary policy that was rooted in Austrian economics, and

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Speaker 1: for me, as a libertarian and you know, Austrian economics guy,

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Speaker 1: that's what really attracted me to bitcoin. And January I

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Speaker 1: was relocated to San Francisco worked at a small investment firm.

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Speaker 1: They relocated me out here, and while out here, I

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Speaker 1: got plugged into the bitcoin meetup scene, which at the

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Speaker 1: time was only a dozen people including Jesse pal Crack

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Speaker 1: and Charlie Lee from light Coin, Jed Michaelo from Riple Stellar,

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Speaker 1: Fred and Brian from coin Base, and there's basically all

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Speaker 1: of us and a cooler PBRs and then March hits

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Speaker 1: and that's when the people forget that two specul of

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Speaker 1: the bubbles March when it went from ten to sixty,

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Speaker 1: and then like November December when I went from a

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Speaker 1: hundred to twelve hundred. So and then at first run in,

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Speaker 1: everyone had a problem in terms of checking the price,

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Speaker 1: the real time price of bitcoin, and so I saw

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Speaker 1: that as a potential opportunity. And while I didn't know

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Speaker 1: what the hell I was doing building products, I found

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Speaker 1: an engineering buddy of mine and I said, hey, let's

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Speaker 1: let's go build this. So I spent a bunch of

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Speaker 1: time looking at different other doing the research and other

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Speaker 1: mobile products, and I knew enough in photoshop that I

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Speaker 1: could design it. The dirty secret there being that I

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Speaker 1: couldn't design anything more complex. So people really liked the sleek,

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Speaker 1: simple aesthetics of the product, but truth be told, I

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Speaker 1: couldn't design anything anything with more complexity than that. So

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Speaker 1: that turned out to be a great thing because people

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Speaker 1: found value in the product right away. It was simple

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Speaker 1: and easy to use, and it became the most popular

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Speaker 1: crypto mobile product. Was that it's called zero block. Zero

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Speaker 1: block okay, yeah, and zero block had acquired by blockchain

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Speaker 1: dot Com in December and I came on board. There

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Speaker 1: was the first product manager, Zooming Forward, a bit to

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Speaker 1: keep the keep it kind of short. It was another

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Speaker 1: product as a product manager at another crypto company called

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Speaker 1: change Tip, which is micropayments over social media. After that,

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Speaker 1: I went to Uber where I worked on Writer Growth,

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Speaker 1: which is the Writer product team, Writer being the app

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Speaker 1: that we all called Uber. And then UM went after

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Speaker 1: that to come back to the crypto space where I

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Speaker 1: go found out a company called Interchange and we build

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Speaker 1: particuliar reconciliation tools for institutional traders and infrastructure. Cool. Well,

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Speaker 1: that's that's quite a history, UM looking back now today,

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Speaker 1: I mean, imagine how cool that is to sit around

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Speaker 1: with a case of PBS with with those with those

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Speaker 1: industry uh industry people. Was was probably pretty cool. You

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Speaker 1: probably didn't realize at the time, right what you had. Yeah,

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Speaker 1: I don't. At the time, I was I thought it

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Speaker 1: was just cool that people might up and talked about

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Speaker 1: bitcoin in person. Yeah, because that there was more than

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Speaker 1: like me and my my one buddy, you know, So

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Speaker 1: that was that was pretty cool. Yeah, that's interesting. I UM,

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Speaker 1: I have been an online pioneer. I started online business

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Speaker 1: in two thousand one at the bottom of the dot

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Speaker 1: com crash, which was a horrible time, but did did

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Speaker 1: really well. I've been kind of a professional investor for

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Speaker 1: twenty years as well. UM and I and being on

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Speaker 1: the online space, I had heard of bitcoin. I remember

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Speaker 1: specifically the bubbles as you're talking about, UM, but it

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Speaker 1: wasn't really until when I decided to jump in. And

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Speaker 1: and as you talk about with your kind of monetary

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Speaker 1: theory or your your ideologies that you have, I kind

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Speaker 1: of have the same. Where I grew up in a

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Speaker 1: really conservative home. UM. In high school, my parents sent

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Speaker 1: me to John Birch Camp. If you know what that is, um,

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Speaker 1: you'll know how you don't know how libertarian and right

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Speaker 1: wing I I was. And yeah, I was following a

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Speaker 1: newsletter from from called Sovereign Man. If you know about

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Speaker 1: that Simon Black, and uh, he's all about like having

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Speaker 1: the sovereign life and uh who's you know talks about

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Speaker 1: the importance of having secondary passports and off shore bank

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Speaker 1: accounts and and uh. Then I was like, well, bitcoin

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Speaker 1: is the same thing. Like I can have my sovereign

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Speaker 1: life with bitcoin, and so that's that's kind of I

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Speaker 1: was like, man, I gotta jump all in. So anyway, Uh,

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Speaker 1: same ideologies, but that brought us there. But that's cool.

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Speaker 1: So you've been around the space for quite a while. Um,

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Speaker 1: you've seen bitcoin rise in fall many times. Uh. One

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Speaker 1: of the things that you've been talking about that caught

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Speaker 1: my eye was the bitcoin security model. And I know,

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Speaker 1: when we just went through this bear market, the price

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Speaker 1: of bitcoin, you know, crashed too, then crashed again, and

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Speaker 1: there was a lot of talk about this this death spiral,

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Speaker 1: right because the prices would drop so far that the

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Speaker 1: security of the network would would be in jeopardy. And

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Speaker 1: I think maybe that's what kind of led to some

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Speaker 1: of these articles that you wrote. Yeah, you're talking about

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Speaker 1: the mining death spiral, right, Well, yeah, because if the

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Speaker 1: mining death bar goes down, the security of the network

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Speaker 1: is then affected. Yeah. Well, you know, It's the reason

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Speaker 1: why I wrote this article is that there's a certain

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Speaker 1: group of individuals of another prominent cryptocurrency, Um, and they

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Speaker 1: like to use, uh, the potential issues with Bitcoin's long

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Speaker 1: term security as a way to try to undermine confidence

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Speaker 1: to Bitcoin, which I find hilarious considering this currency, by

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Speaker 1: the way, it's called Ethereum. I find it hilarious that

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Speaker 1: the ethereum community looks at a hundred year potential issues

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Speaker 1: with Bitcoin while their own existing monetary policy is totally garbage.

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Speaker 1: So um or or lack of policy maybe right, precisely, right, yeah,

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Speaker 1: the lack of monetary policy of a laughable um sort

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Speaker 1: of way they go about choosing an inflation rate. And

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Speaker 1: so for them to criticize Bitcoin, this is like the

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Speaker 1: lost ditch effort to try to undermine confidence in bitcoin,

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Speaker 1: because if you undermine confidence in bitcoin's long term security,

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Speaker 1: it brings into question bitcoins twenty one million hardcap because

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Speaker 1: some hypothesize that you would need to have tail emission

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Speaker 1: essentially a low level of inflation passed the twenty one

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Speaker 1: million hardcap, and that violates, I think, from the core

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Speaker 1: tent of bitcoin. And after doing my research, I found

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Speaker 1: it's totally unwarranted. And when you say and when you

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Speaker 1: say that the tele emission you're talking about, so after

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Speaker 1: the miners stop earning rewards, meaning they don't make any

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Speaker 1: money anymore, what would be the point of them continuing too?

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Speaker 1: Mind blocks, that's what you're referring to it. Essentially, so

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Speaker 1: miners are they sink capex and opex, So capex being

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Speaker 1: the by bitcoin mining equipment, and opex is the electricity

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Speaker 1: miners expend that that expense Um too then earn a

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Speaker 1: percentage of block rewards going into the future, and a

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Speaker 1: block reward is every ten minutes a new block is

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Speaker 1: created in Bitcoin, and that block contains newly minted bitcoins,

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Speaker 1: which is called the block subsidy, and then it contains

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Speaker 1: transaction fees. The block subsidi decreases over time, and that

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Speaker 1: eventually produces twenty one million bitcoins. And some people worry

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Speaker 1: after the block subsidiy ceases to exist or after all

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Speaker 1: the bitcoins have been minted, which is in the year approximately,

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Speaker 1: that um that transaction fees won't compensate the miners enough

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Speaker 1: to protect the network, right, and so um, you've basically

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Speaker 1: kind of uncovered that may not be the case. I mean,

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Speaker 1: after that, those still have plenty of incentives. After that,

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Speaker 1: those rewards go away totally. Well a lot of this

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Speaker 1: So the ethereum crowd like to like to poke at

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Speaker 1: this because they felt like it would undermine the confidence

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Speaker 1: in bitcoin and the confidences that the twenty one million

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Speaker 1: hardcap would would potentially be manipulated, which is a pretty

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Speaker 1: good social attack factor. And so I felt like this

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Speaker 1: needed to be comprehensively addressed. And once I dug In deep.

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Speaker 1: I found that most of their thoughts behind this being

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Speaker 1: an initiative, we're predicated on a few papers from Ivy

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Speaker 1: League schools like Princeton and Harvard. And I read some

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Speaker 1: of these papers and after reading, you know, you read

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Speaker 1: a page or two in and you go, what the

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Speaker 1: hell because these papers essentially made ridiculous assumptions um absolutely

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Speaker 1: ridiculous assumptions. So for example, they assume the coins price

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Speaker 1: never increases. It's like, oh, of course the security is

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Speaker 1: going to be a problem if it never increases, right right, um?

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Speaker 1: Which also, if the price net for increases, that means

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Speaker 1: that the shared illusion of the number of participants in

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Speaker 1: the bitcoin network never grew. So bitcoin net grew beyond

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Speaker 1: ten or twenty million people, which means I think it

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Speaker 1: kind of failed. And the reason why the price increases important,

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Speaker 1: I'm guessing, is because of the of the blocks that

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Speaker 1: the happening that's coming, right, So the block reward is

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Speaker 1: getting cut in half, and it continues to get cut

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Speaker 1: in half, and so therefore the amount of bitcoin they

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Speaker 1: get goes down, but the value of that bitcoin should

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Speaker 1: be going up at the same time. That's right, And

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Speaker 1: that's what we've seen the last two happening in cycles.

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Speaker 1: Is that after the happening cycle, the price increases exponentially.

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Speaker 1: The increase in price brings around greater awareness and speculation,

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Speaker 1: which thereby draws in more users who thereby transact. So

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Speaker 1: the happening events create a supply shock. That supply shock

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Speaker 1: kick starts a new bowl run, and then that bowl

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Speaker 1: run brings the new people to transact, and those transaction

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Speaker 1: fees are place the decreased blocks up speak, got it.

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Speaker 1: I really liked your point about the miners. I mean

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Speaker 1: they're buying the equipment, which is a long term investment

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Speaker 1: that they have to recoup their their investment on, and

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Speaker 1: then they have their electricity investment as well. So, um,

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Speaker 1: I think that aligns them to the network right there.

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Speaker 1: They need to be good actors. They need to see

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Speaker 1: their their investments returned to them over a long period

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Speaker 1: of time, right Yeah. And so this I think is

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Speaker 1: a good good segue into how bitcoin security model works. Essentially,

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Speaker 1: bitcoin security works based on game theoretic um game since

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Speaker 1: you game three where the elements are around bitcoin mining

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Speaker 1: and revenue, so miners are compensated to protect the network. Um.

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Speaker 1: They think that that up from costs to be of

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Speaker 1: the machines, and then they have the continuing cost of

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Speaker 1: the offex of electricity, and then they get a certain

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Speaker 1: percentage of the block rewordpoint in the future, and the

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Speaker 1: percentage is determined based on how many other people are mining,

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Speaker 1: So what what percentage of the hashway they have? Essentially

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Speaker 1: and um what what has to happen is that bitcoin

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Speaker 1: miners are incentivized to behave properly because they're given a

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Speaker 1: block reward when they do. So. When they're given the

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Speaker 1: block reward, they've already sunk in cost, remember, so they're

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Speaker 1: just recouping their cost and they're hoping that they make

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Speaker 1: the profits. So the confidence and stability of the protocol

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Speaker 1: is paramount for them because they already have up front

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Speaker 1: costs and they're trying to make their money back. So

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Speaker 1: the game throoretic element here is that bitcoin miners will

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Speaker 1: largely not try to amenitbulue the network. We're engaging fifty

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Speaker 1: one percent attacks even if they had the hash rate,

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Speaker 1: because they would damage the confidence of the protocol, which

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Speaker 1: would damage their future cash flows. So that's the game

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Speaker 1: through retic element. UM. Now, the attack factor that most

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Speaker 1: people are worried about is a government attack factor where

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Speaker 1: they don't care about burning the money. So governments may

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Speaker 1: not care about buying billions of dollars of money equipment

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Speaker 1: and then that mining equipment becoming useless after they attack

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Speaker 1: the network. So that's what this covers is, you know,

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Speaker 1: what's the first of all, what's an appropriate um? It's

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Speaker 1: an appropriate level of security spend that makes the network secure?

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Speaker 1: How bad is an attack? Um? You know, will transaction

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Speaker 1: fees replace the box ups the over time? What have

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Speaker 1: we seen historically? What we see that, what does that

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Speaker 1: look like projected into the future, and then some modeling

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Speaker 1: around okay, what what does what do transaction fees look like?

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Speaker 1: And we'll we'll consumers and will businesses pay that transaction

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Speaker 1: fee to transact on the bitcoin network Because a lot

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Speaker 1: of people now a lot of the old bee cash

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Speaker 1: or crowd or the bitcoin is made for payments crowd,

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Speaker 1: they feel really strongly around how much it costs to

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Speaker 1: send a bitcoin transaction. And so I kind of comprehensively

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Speaker 1: cover the price elasticity of a on chain transactor transactor

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Speaker 1: that's using a block space, not just bitcoins, but any

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Speaker 1: block space, and then other real world comps as to

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Speaker 1: what they'd be willing to spend on the transaction. So

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Speaker 1: let's try to break this down for the average person

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Speaker 1: that's that's kind of listening to this. And and as

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Speaker 1: you said, right, that's one of the big attack vectors

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Speaker 1: that when when I hear people say, you know, what

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Speaker 1: could go wrong with bitcoin? Kind of that The two

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Speaker 1: maybe are ones that you've already addressed. One like as

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Speaker 1: you said, a nation state of sovereign trying to attack

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Speaker 1: it or to changing the hardcap. And so going back

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Speaker 1: to what you just said, with like a sovereign doing

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Speaker 1: an attack, they don't care about their investment. Um, people

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Speaker 1: think that's a risk. They think, oh, well, all the

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Speaker 1: mining is consolidated in China, so China could just take

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Speaker 1: over all the miners right there and do it. Um,

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Speaker 1: how big of a risk do you think that is? Um?

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Speaker 1: And I guess so, how big of a risk do

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Speaker 1: you think that really is? And and uh, yeah, that's

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Speaker 1: a great question. So you know, when I when I

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Speaker 1: store my bitcoin and the bitcoin ledger, I essentially have

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Speaker 1: ownership over x amount of coin that's represented in the ledger, right,

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Speaker 1: and bitcoin miners what they do is through proof of work,

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Speaker 1: so through the mining equipment plus electricity, they are producing

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Speaker 1: new coins, and then they are essentially validating and permanently

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Speaker 1: etching transactions into the recorded ledger via those new blocks.

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Speaker 1: So you can kind of think about it as uh,

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Speaker 1: you know, with the electricity spent by the miners to

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Speaker 1: mental bitcoin to protect the into validate transactions in that block.

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Speaker 1: It's essentially like layers and layers and layers of energy,

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Speaker 1: right that are that are continually pressing down upon all

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Speaker 1: the blocks previous before it. And and so when it

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Speaker 1: comes to when it when it comes to like essentially

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Speaker 1: the security the network, um, you know, when when these

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Speaker 1: transactions are validated. What people worry about is if you

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Speaker 1: had a entity that had the hash rate, they could

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Speaker 1: try to double spend or try to manipulate the tip

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Speaker 1: of the chain. Even even if that happened, though, it

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Speaker 1: still takes a tremendous more amount of energy to unwind

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Speaker 1: the chain. And even if someone tried to do that,

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Speaker 1: each individual who stored their money into the bitcoin ledger,

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Speaker 1: we all agreed upon a certain set of rules, and

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Speaker 1: those rules didn't have someone going, hey, I'd like to

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Speaker 1: unwind all of these transactions. So in the event that happens,

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Speaker 1: Bitcoin still don't die because all of the participants in

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Speaker 1: the network have their ledger balances and they can all

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Speaker 1: simply say, Okay, this malicious actor started to try to

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Speaker 1: unwind everything at point A, let's just start over at

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Speaker 1: point A. Um, so the chain, yeah, and for the chain,

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Speaker 1: which is an extreme case, right, this is a non

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Speaker 1: none advantageous sort of sort of environment. Right. But even

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Speaker 1: if a government did successfully try to influence the ledger

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Speaker 1: through a talk, they still would have a difficult time

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Speaker 1: on winding transactions because bitcoin, like every other money, is

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Speaker 1: merely a social insensus. We all believe in it and

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Speaker 1: that gives it value. So people aren't going to just

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Speaker 1: abandon the bitcoin blockchain and join another one, which would

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Speaker 1: all those other chances with people grew by the way.

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Speaker 1: People are going to say, hey, let's start over from

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Speaker 1: this point before these militilation has happened and change it

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Speaker 1: or figure out ways to protect it. So that's kind

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Speaker 1: of like a last resort. That's like a worst case scenario. Um.

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Speaker 1: But how resilient would it be to fending off an attack? So? Um,

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Speaker 1: I think the longer that an attack doesn't happen, the

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Speaker 1: harder it gets. I would guess, right, So, um, a

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Speaker 1: year from now, the attack would be harder than it

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Speaker 1: would be today, and then secondary which would mean it

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Speaker 1: would cost more money. But and also could the other

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Speaker 1: non bad actors, the other miners work to fight that off. Yeah,

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Speaker 1: that's right. I mean good actors could throw more hash

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Speaker 1: rate onto the network and that might super that might

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Speaker 1: become bigger than the malicious attacker. And so yeah, that's

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Speaker 1: a lot less to ch effort. There's many other I

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Speaker 1: think steps in between them that kind of make the

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Speaker 1: sort of attack not realistic. One even purchasing that much

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Speaker 1: equipment when everyone would notice it. You can't just you

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Speaker 1: can just jump onto the network with that much equipment

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Speaker 1: and no one would know that you even made that,

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Speaker 1: or that you tried to buy that equipment or by

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Speaker 1: the raw materials. Right, we'd all know that the Yeah,

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Speaker 1: we'd all known advance. Um, and if and if China

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Speaker 1: was moving their military to take over every single center,

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Speaker 1: we would know about we'd probably hear about that in

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Speaker 1: advance as well. Yeah, let's put it this way. In

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Speaker 1: a connected internet world, I don't think anything stays secret

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Speaker 1: for that long. And so you know, you know one,

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Speaker 1: it's you know, like, one, it's really hard to buy

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Speaker 1: all that equipment without anyone noticing. Two, you have to

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Speaker 1: be willing to burn the money, which you have to

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Speaker 1: go to your tax base and go, hey, by the way,

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Speaker 1: we decided to burn right now, that's five billion dollars,

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Speaker 1: but in the next bowl run, it might be a

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Speaker 1: hundred or a hundred billion dollars a year on mining revenue.

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Speaker 1: So hey, we're willing to burn fifty billion dollars to

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Speaker 1: attack on network that you all use. We have to

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Speaker 1: remember that citizens of these countries participated in decoin network,

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Speaker 1: and allies of it of this country participate in the network.

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Speaker 1: So if a country like the United States were to

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Speaker 1: attack Bitcoin, they would be attacking themselves and other countries.

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Speaker 1: So this isn't still cut and dry as to like, hey,

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Speaker 1: bitcoin is the enemy. Bitcoin is every one of us. Right,

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Speaker 1: were your friends, family, military members owned bitcoin? So when

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Speaker 1: you do that, you're permanently you're permanently attacking them. So

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Speaker 1: it's and you have to explain why you wanted to

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Speaker 1: burn fifty to a billion fifty billion dollars to the

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Speaker 1: people who don't even care about bitcoin, like, hey, I

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Speaker 1: don't even care about bitcoin? Why did we waste that

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Speaker 1: much money on this and you're not even guaranteed success

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Speaker 1: to destroy it? Yeah, exactly. So the biggest fear that

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Speaker 1: most people have as of a sovereign wanted to destroy it.

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Speaker 1: And the reality of it is pretty slim. I mean,

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Speaker 1: anything's possible, but the reality is pretty slim. And we

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Speaker 1: all know in advance. I think that's the biggest thing, right,

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Speaker 1: we all know advance, we'd have the ability to figure

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Speaker 1: something else out. And then the changing the hard cap,

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Speaker 1: that's another one I hear all the time. Um, but

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Speaker 1: again that would I mean, we saw how long SeGW

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Speaker 1: it took to get through, right, Um, imagine how hard

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Speaker 1: it would be to change the hardcap. So again we'd

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Speaker 1: know about that way in advance, which would all give

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Speaker 1: us a chance to make adjustments. Right. Well, yeah, you know,

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Speaker 1: to kind of finish out at the first part there. Um,

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Speaker 1: you know, as Bitcoin and the next bowl run, the

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Speaker 1: spend on mining annually and the revenue on mining annually

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Speaker 1: will be so large that it basically makes an attack

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Speaker 1: not feasible. Right now, Bitcoin with five billion dollars in

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Speaker 1: mining revenue annually is still somewhat weak. Um, but I

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Speaker 1: don't think governments really care about it at this moment,

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Speaker 1: so bitcoin is fortunate to have governments kind of look

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Speaker 1: the other way. UM the next bull run, I think

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Speaker 1: it becomes strong enough from a threshold security model, threshold

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Speaker 1: being like how much spend annually is is bitcoin bitcoin mining?

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Speaker 1: Or like how much revenue and generating UM. So I

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Speaker 1: think I think bitcoin is still a little weak right now,

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Speaker 1: but it's the strongest of any other cryptocurrency UM. But

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Speaker 1: in the next bull run, I think it will be

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Speaker 1: resistant to any attack by even the largest of countries.

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Speaker 1: Now switching gears back over to the twenty one million

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Speaker 1: hardcap essentially with the ethereum side, and some of these

386
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Speaker 1: intellectually dishonest researchers from those Ivy League schools hypothesizes that

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Speaker 1: Bitcoin's long term security is either not adequate or unstable,

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Speaker 1: which they use ridiculous assumptions to make that up. One

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Speaker 1: is that bitcoin's price and for increases. The other is

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Speaker 1: that there is no Layer one efficiency gains. For example,

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Speaker 1: they hypothesize that Layer one will never be more efficient

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Speaker 1: in terms of white size for transactions, which we have

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Speaker 1: smaller signatures coming up in the next year or two.

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Speaker 1: So that's pretty ridiculous um. They also they also hypothesize

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Speaker 1: that minors, instead of being focused on long term revenue

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Speaker 1: potential of their mining equipment, so focused on the you know,

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00:22:05,480 --> 00:22:08,399
Speaker 1: so as as mining equipment essentially reaches the limits of physics.

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Speaker 1: So miners the ASICs that they purchased, the chip sizes

399
00:22:11,680 --> 00:22:13,880
Speaker 1: get smaller and smaller and smaller, but eventually they can't

400
00:22:13,880 --> 00:22:17,399
Speaker 1: get smaller than that because of physics. Once that happens,

401
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Speaker 1: Bitcoin mining equipment will be built for a very very

402
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Speaker 1: long period of time, So the mining equipment will be

403
00:22:22,240 --> 00:22:26,040
Speaker 1: built to run forward decades, and the next scenario, the

404
00:22:26,080 --> 00:22:29,679
Speaker 1: long term cash flows become super stretched out and the

405
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Speaker 1: security of the network or the stability of the network

406
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Speaker 1: is paramount or recoup your cash to recoup yourself cost.

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Speaker 1: So these researchers or I don't even if I don't

408
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Speaker 1: even know if you could call them researchers. It was

409
00:22:41,280 --> 00:22:45,800
Speaker 1: so bad. The researchers claimed that and a fee only environment,

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Speaker 1: miners would play short term games trying to reorb or

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Speaker 1: manipulate transactions based on the size of the transaction, which

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Speaker 1: would mean that miners are willing to shoot them. Miners

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Speaker 1: are willing to take a small reward now to shoot

414
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Speaker 1: themselves in the foot where they're long term cash flows,

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00:23:01,320 --> 00:23:05,000
Speaker 1: which to be makes no sense. Um, And all of

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Speaker 1: this leads to the moment of people going Okay, So

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00:23:08,320 --> 00:23:11,040
Speaker 1: then all of these papers suggest, oh, well, you know,

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Speaker 1: bit quick and solve this non existent problem. They can

419
00:23:14,280 --> 00:23:16,639
Speaker 1: solve this non existent problem by violating the number one

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Speaker 1: rule a bitcoin, which is the twenty one million hardcare

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Speaker 1: by enabling a tail emission long term. So the hypothesis

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Speaker 1: is that transaction fees wouldn't be enough to compensate miners,

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Speaker 1: So what you'd have to do is have a long

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Speaker 1: perpetual inflation rate of one percent. Yeah, we see that,

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Speaker 1: I guess all through life. But really we see it

426
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Speaker 1: in this space specifically where people think that all these

427
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Speaker 1: potential problems that could happen somewhere way out in the

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Speaker 1: future have to be solved today and that's just not

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Speaker 1: the case. That's not how technology evolves, right, and so

430
00:23:49,640 --> 00:23:51,200
Speaker 1: UM to think that we have to figure that out

431
00:23:51,200 --> 00:23:54,479
Speaker 1: and solve that today, this seems yeah, I mean, and

432
00:23:54,480 --> 00:23:58,919
Speaker 1: it's also academic versus versus execution. You know, cipher Punk's

433
00:23:59,000 --> 00:24:02,640
Speaker 1: right code Satoshia was essentially an academic that broke production

434
00:24:02,760 --> 00:24:06,160
Speaker 1: code and published working models and environment you know, first

435
00:24:06,200 --> 00:24:09,200
Speaker 1: focusing on practical implications versus sitting in there and they're

436
00:24:09,240 --> 00:24:12,880
Speaker 1: well pedigreed office and hypothesizing and adding ridiculous assumptions into

437
00:24:12,880 --> 00:24:17,640
Speaker 1: a model and then loudly proclaiming it's broken. Right it's

438
00:24:17,800 --> 00:24:22,040
Speaker 1: uh yeah. Now, um, as as you started talking about

439
00:24:22,040 --> 00:24:25,440
Speaker 1: the security, and then it goes into the high cost security. Um,

440
00:24:25,920 --> 00:24:28,400
Speaker 1: then I think some of that and goes into why

441
00:24:29,000 --> 00:24:32,320
Speaker 1: it's such a good store of value because of that security? Um?

442
00:24:32,440 --> 00:24:34,240
Speaker 1: Does that Does that kind of lead into that segue

443
00:24:34,280 --> 00:24:36,359
Speaker 1: there a little bit? Yeah, I think we can make

444
00:24:36,400 --> 00:24:40,120
Speaker 1: that segue if the bitcoin because if the securities, if

445
00:24:40,119 --> 00:24:42,159
Speaker 1: the security is high, well, I guess we'd have to

446
00:24:42,200 --> 00:24:44,600
Speaker 1: make the use case as to why bitcoin is a

447
00:24:44,600 --> 00:24:48,439
Speaker 1: good store value. But obviously having my store of value

448
00:24:48,520 --> 00:24:51,480
Speaker 1: somewhere where it's secure is going to be one of

449
00:24:51,560 --> 00:24:54,520
Speaker 1: the primary things I would look for, and so the

450
00:24:54,600 --> 00:24:57,800
Speaker 1: security of the network would have to be considered. Yeah,

451
00:24:57,800 --> 00:25:00,119
Speaker 1: bitcoin is the most secure cryptocurrency network due to the

452
00:25:00,119 --> 00:25:03,200
Speaker 1: total a commulative energy, and that creates a market for

453
00:25:03,280 --> 00:25:06,520
Speaker 1: high value, highly secure transactions in bitcoin, which would be

454
00:25:06,560 --> 00:25:10,280
Speaker 1: central banks, governments, inter banks, corporate and other large value payments.

455
00:25:10,440 --> 00:25:13,760
Speaker 1: So essentially it's got the largest energy wall built around

456
00:25:13,760 --> 00:25:16,640
Speaker 1: its ledger, which attracts more and more liquidity, which makes

457
00:25:16,640 --> 00:25:20,120
Speaker 1: it bigger and bigger and bigger. Right now, one thing,

458
00:25:20,520 --> 00:25:24,080
Speaker 1: um that we hear a lot about is is with

459
00:25:24,160 --> 00:25:26,680
Speaker 1: Bitcoin and even all the other protocols that have been

460
00:25:26,680 --> 00:25:29,719
Speaker 1: released over the last couple of years, is speed speed

461
00:25:29,760 --> 00:25:34,080
Speaker 1: speed speed right Um? To me, I don't know if

462
00:25:34,119 --> 00:25:36,840
Speaker 1: that's really an argument anymore. It seems like we've kind

463
00:25:36,840 --> 00:25:41,200
Speaker 1: of figured out scaling. Um, what do you think about that? Yeah,

464
00:25:41,200 --> 00:25:44,440
Speaker 1: So when any cryptocurrency proclaims that they're faster or cheaper

465
00:25:44,480 --> 00:25:48,160
Speaker 1: than Bitcoin, that is a complete lie. There's much more

466
00:25:48,240 --> 00:25:50,960
Speaker 1: nuanced to it. So how proof of work works is

467
00:25:51,000 --> 00:25:54,560
Speaker 1: that proof of work isn't final, There is no technical finality.

468
00:25:55,000 --> 00:25:58,480
Speaker 1: Proof of work is increasing levels of finality. Like I

469
00:25:58,480 --> 00:26:01,960
Speaker 1: said before, bitcoin miners expand energy to do proof of work,

470
00:26:02,480 --> 00:26:05,800
Speaker 1: and through that, essentially through each new block, we have

471
00:26:06,000 --> 00:26:08,480
Speaker 1: more and more energy that's been used to mind that

472
00:26:09,200 --> 00:26:11,600
Speaker 1: those blocks, which means there's more and more through mon

473
00:26:11,680 --> 00:26:15,600
Speaker 1: dynamic guarantees that your transaction will be first, And that's

474
00:26:15,600 --> 00:26:19,359
Speaker 1: why exchanges make you wait x amount of confirmations before

475
00:26:19,400 --> 00:26:22,440
Speaker 1: they give you your bitcoints on their side, and those

476
00:26:22,560 --> 00:26:25,359
Speaker 1: X amounts of confirmations is the degree of confidence they

477
00:26:25,400 --> 00:26:28,560
Speaker 1: have in the finality of the payment. So, to be clear,

478
00:26:28,600 --> 00:26:32,160
Speaker 1: all proof of work systems are um degrees of finality

479
00:26:32,200 --> 00:26:34,600
Speaker 1: to where the longer it's been confirmed and they're more

480
00:26:34,600 --> 00:26:37,359
Speaker 1: blocks that have been confirmed after it, the more confidence

481
00:26:37,400 --> 00:26:39,520
Speaker 1: you have it will never be on wound. And after

482
00:26:39,520 --> 00:26:41,680
Speaker 1: a certain point that becomes so confident that you don't

483
00:26:42,240 --> 00:26:46,560
Speaker 1: need really any more guarantees. So when people talk about

484
00:26:46,600 --> 00:26:49,359
Speaker 1: confirmation times, so people will be like, oh, you know

485
00:26:49,400 --> 00:26:52,760
Speaker 1: bitcoin has ten minute blocks and lightcoin has I forget,

486
00:26:52,880 --> 00:26:56,680
Speaker 1: let's just say one minute blocks. Those blocks are somewhat meaningless.

487
00:26:56,800 --> 00:26:59,240
Speaker 1: That's not faster than bitcoin. It's just a less of

488
00:26:59,280 --> 00:27:03,399
Speaker 1: a degree of confidence because bitcoin or because lightcoin has

489
00:27:03,480 --> 00:27:06,359
Speaker 1: less proof of work. Um, it means that it takes

490
00:27:06,440 --> 00:27:09,280
Speaker 1: more blocks to have the same degree of confidence that

491
00:27:09,280 --> 00:27:11,719
Speaker 1: you would have bitcoin. So there is no such thing

492
00:27:11,760 --> 00:27:15,560
Speaker 1: as a faster cryptocurrency. You're just talking about a less

493
00:27:15,640 --> 00:27:20,120
Speaker 1: of a thermodynamic guarantee, and so you're essentially it's it's

494
00:27:20,200 --> 00:27:22,600
Speaker 1: visually feels that it's faster, but it's not because of

495
00:27:22,640 --> 00:27:26,000
Speaker 1: the guarantee is less, right, So to put that into

496
00:27:26,040 --> 00:27:29,600
Speaker 1: a little bit easier to explain. Basically, the finality means

497
00:27:29,600 --> 00:27:31,760
Speaker 1: that bitcoin can't be reversed. When you pay with your bank,

498
00:27:31,800 --> 00:27:33,920
Speaker 1: they can always pull those charges back. Your credit card

499
00:27:33,920 --> 00:27:36,560
Speaker 1: can pull those back for like six months. But with

500
00:27:36,560 --> 00:27:39,320
Speaker 1: with bitcoin, it's finality. I mean, it's final can't be

501
00:27:39,400 --> 00:27:42,199
Speaker 1: pulled back, and it's the amount of time it takes

502
00:27:42,200 --> 00:27:47,240
Speaker 1: for that finality to be confirmed. Um And so to

503
00:27:47,440 --> 00:27:51,720
Speaker 1: reach that you're saying is still fast, Yeah, well, you know,

504
00:27:51,760 --> 00:27:53,920
Speaker 1: and if you have layers on top of Bitcoin, like Lightning,

505
00:27:53,960 --> 00:27:57,280
Speaker 1: you have what would be perceived by the consumer to

506
00:27:57,280 --> 00:28:00,440
Speaker 1: be instantaneous, right, And that's what I was kind of

507
00:28:00,480 --> 00:28:03,520
Speaker 1: alluding to. With the scaling solutions that we have today,

508
00:28:04,240 --> 00:28:07,720
Speaker 1: with layer two um options and you know, set side

509
00:28:07,800 --> 00:28:09,840
Speaker 1: chains and all those things, it seems like we've kind

510
00:28:09,840 --> 00:28:12,960
Speaker 1: of we have the path to scaling that we need now. Yeah,

511
00:28:13,040 --> 00:28:15,399
Speaker 1: I think lightning is more more Lightning than side chains.

512
00:28:15,440 --> 00:28:17,159
Speaker 1: That's more than enough scaling that we need for the

513
00:28:17,200 --> 00:28:20,400
Speaker 1: next decade. They're not going to onboard three billion people

514
00:28:20,400 --> 00:28:24,040
Speaker 1: into bitcoin. I mean, I'm a I'm a permeable bitcoin guy,

515
00:28:24,080 --> 00:28:27,080
Speaker 1: but that's pretty unrealistic. I think we're going to see it,

516
00:28:27,920 --> 00:28:30,480
Speaker 1: you know, exponentially increasing the number of users that use it,

517
00:28:30,520 --> 00:28:34,560
Speaker 1: whether that be government, governments, banks, or people. But I

518
00:28:34,560 --> 00:28:36,480
Speaker 1: don't think we're gonna see three billion people get on

519
00:28:36,480 --> 00:28:38,640
Speaker 1: boarded right away, although it does seem like it does

520
00:28:38,640 --> 00:28:40,720
Speaker 1: seem like all the world governments are doing their best

521
00:28:40,760 --> 00:28:44,680
Speaker 1: to push people to bitcoin right now. Yeah, I think

522
00:28:45,080 --> 00:28:47,440
Speaker 1: I think it will happen pretty fast. I think the

523
00:28:47,520 --> 00:28:50,560
Speaker 1: regular adoption curve that we've seen with the specled of

524
00:28:50,600 --> 00:28:53,400
Speaker 1: bubble cycles, I think we're going to see a supercycle

525
00:28:53,480 --> 00:28:57,600
Speaker 1: happen because never before during bitcoins existence, other than the beginning,

526
00:28:58,040 --> 00:29:00,920
Speaker 1: that we've seen people lose faith in their governments in

527
00:29:01,080 --> 00:29:04,760
Speaker 1: mass across the world. When that happens. Bitcoin is a

528
00:29:04,840 --> 00:29:07,640
Speaker 1: special purpose built to be an excellent store of value.

529
00:29:07,680 --> 00:29:12,080
Speaker 1: So we could very well see you know, two hundred

530
00:29:12,120 --> 00:29:14,240
Speaker 1: million move over in a bitcoin over the course of

531
00:29:14,480 --> 00:29:19,000
Speaker 1: six months because they're trying to flee terrible central banking policies.

532
00:29:19,200 --> 00:29:20,880
Speaker 1: I want to get into the store of value stuff

533
00:29:20,880 --> 00:29:22,280
Speaker 1: because there was some stuff I heard you say that

534
00:29:22,320 --> 00:29:24,160
Speaker 1: really caught my eye. But before we just dip right

535
00:29:24,160 --> 00:29:26,959
Speaker 1: into that, um, we're talking about kind of the speed,

536
00:29:27,000 --> 00:29:29,160
Speaker 1: and we're talking about lightning and whatnot. And I know

537
00:29:29,320 --> 00:29:33,240
Speaker 1: you had kind of poked the poke the bear poked

538
00:29:33,280 --> 00:29:35,880
Speaker 1: the hornets nest a little bit with your talk about

539
00:29:35,920 --> 00:29:39,560
Speaker 1: so Toshi's original vision of venus s O V versus

540
00:29:39,600 --> 00:29:44,440
Speaker 1: a cash system. Um. And it does seem that the

541
00:29:44,560 --> 00:29:48,960
Speaker 1: narrative today really is store of value. Um. Obviously he

542
00:29:49,000 --> 00:29:53,040
Speaker 1: talked about cash cash system. You've talked about you know

543
00:29:53,160 --> 00:29:57,080
Speaker 1: why that may not be the case. Um. So do

544
00:29:57,120 --> 00:29:59,240
Speaker 1: you think it's it's better as a store of value.

545
00:29:59,560 --> 00:30:02,840
Speaker 1: They don't o hand in hand necessarily. Yeah, it's not

546
00:30:02,960 --> 00:30:06,920
Speaker 1: that they're mutually exclusive. It's that Bitcoin as a money

547
00:30:06,960 --> 00:30:09,320
Speaker 1: has to adopt in certain sort of its evolution. Is

548
00:30:09,400 --> 00:30:11,160
Speaker 1: to becoming money, it has to first start as a

549
00:30:11,240 --> 00:30:13,920
Speaker 1: store of value and then become the medium of exchange

550
00:30:13,920 --> 00:30:16,400
Speaker 1: and unit of account. The unit of account means like

551
00:30:16,440 --> 00:30:20,200
Speaker 1: your groceries are priced in dollers. Bitcoin won't be the

552
00:30:20,240 --> 00:30:22,760
Speaker 1: pricing mechanism for things because the purchasing power of the

553
00:30:22,800 --> 00:30:27,640
Speaker 1: bitcoin fluctuates so often that is not very realistic. The

554
00:30:27,680 --> 00:30:30,400
Speaker 1: fluctuation of the volatility and bitcoin's price relative to your

555
00:30:30,400 --> 00:30:33,320
Speaker 1: local fiat. Bitcoin has to become has to have a

556
00:30:33,360 --> 00:30:36,720
Speaker 1: lower volatility than your local fiat to become a medium

557
00:30:36,720 --> 00:30:39,160
Speaker 1: of exchange and unit of account, and that's a long

558
00:30:39,160 --> 00:30:42,160
Speaker 1: ways off. This is a we've never seen the evolution

559
00:30:42,160 --> 00:30:45,000
Speaker 1: of a new money in real time, you know. Gold.

560
00:30:45,600 --> 00:30:48,040
Speaker 1: Gold was a very long process that we don't have

561
00:30:48,080 --> 00:30:52,080
Speaker 1: a lot of visibility into, but we do. This point

562
00:30:52,160 --> 00:30:55,120
Speaker 1: is happening much much faster with bitcoin. And it's very

563
00:30:55,160 --> 00:30:56,760
Speaker 1: intuitive as well. It has to start out as a

564
00:30:56,760 --> 00:30:58,720
Speaker 1: store of value before it can be these other functions.

565
00:30:58,880 --> 00:31:02,240
Speaker 1: And so that's where think I understand the evolution of money,

566
00:31:02,240 --> 00:31:04,080
Speaker 1: and it kind of starts as a collectible then moves

567
00:31:04,120 --> 00:31:06,800
Speaker 1: to a store of value. Um, do you think we've

568
00:31:06,840 --> 00:31:09,280
Speaker 1: made it past the collectible into a store value already?

569
00:31:09,280 --> 00:31:12,120
Speaker 1: Are we still working through that stage? Well, that's a

570
00:31:12,160 --> 00:31:14,720
Speaker 1: great question. I would say we're in between the collectible

571
00:31:14,800 --> 00:31:18,520
Speaker 1: and a speculative store of value, which actually was confirmed

572
00:31:18,600 --> 00:31:24,000
Speaker 1: by the Fed yesterday drum hell, which was really really

573
00:31:24,080 --> 00:31:26,600
Speaker 1: cool to see that come from the FED. That definitely

574
00:31:26,600 --> 00:31:29,440
Speaker 1: shows that they know what's going on because it is

575
00:31:29,520 --> 00:31:31,800
Speaker 1: very much a speculative store of value, but it was

576
00:31:31,840 --> 00:31:33,720
Speaker 1: special purpose built to be that store of value, and

577
00:31:33,800 --> 00:31:36,440
Speaker 1: right now people are speculating that it will be adopted

578
00:31:36,480 --> 00:31:40,000
Speaker 1: worldwide from the government's banks and citizens across the world

579
00:31:40,080 --> 00:31:43,680
Speaker 1: as a recognized store of value. And he even he

580
00:31:43,720 --> 00:31:48,480
Speaker 1: even said like gold, right, that's right, Like that was

581
00:31:48,720 --> 00:31:51,400
Speaker 1: pretty wild. That was pretty wild to hear him say that,

582
00:31:51,640 --> 00:31:55,560
Speaker 1: and also really cool to see recently that the bitcoin

583
00:31:55,600 --> 00:31:58,560
Speaker 1: becoming a risk off trade or a safe haven asset.

584
00:31:59,160 --> 00:32:02,760
Speaker 1: That meme is also perpetuated in the investment banking space,

585
00:32:02,800 --> 00:32:06,800
Speaker 1: where we had like invest Co and other other big

586
00:32:06,880 --> 00:32:09,840
Speaker 1: players go hey and in bar plays as well saying

587
00:32:09,840 --> 00:32:12,080
Speaker 1: that bitcoin is goal two point oh. And so this

588
00:32:12,160 --> 00:32:15,120
Speaker 1: is a huge, huge turning point because most of these

589
00:32:15,120 --> 00:32:18,040
Speaker 1: banks were i think, really didn't understand what bitcoin is about,

590
00:32:18,080 --> 00:32:20,440
Speaker 1: and they talked about, oh, it's it's a it's a

591
00:32:20,520 --> 00:32:24,520
Speaker 1: cheap Pisa, cheap PayPal, And now they're all coming to realize,

592
00:32:24,560 --> 00:32:26,200
Speaker 1: now it's a goal two point it's a store of value,

593
00:32:26,400 --> 00:32:28,280
Speaker 1: it's a risk off trade, it's a safe haven asset.

594
00:32:28,560 --> 00:32:31,000
Speaker 1: And that's incredible because that's what a special purpose built

595
00:32:31,000 --> 00:32:33,520
Speaker 1: to be. And if more and more of the existing

596
00:32:33,560 --> 00:32:36,640
Speaker 1: institutions start to believe that, the more likelihood they're gonna

597
00:32:36,640 --> 00:32:39,440
Speaker 1: start moving billions or trillions of dollars into bitcoin. Yeah,

598
00:32:39,440 --> 00:32:43,080
Speaker 1: it's a self fulfilling prophecy at that point. So so

599
00:32:43,120 --> 00:32:46,200
Speaker 1: we we're seeing it evolved. It's going from collectible to

600
00:32:46,200 --> 00:32:49,360
Speaker 1: a store value. You believe that in line with Satoshi's

601
00:32:49,360 --> 00:32:52,680
Speaker 1: original vision. Um, the security is good because that's what

602
00:32:52,720 --> 00:32:56,280
Speaker 1: we want our store value to be. Um. There's a

603
00:32:56,280 --> 00:32:59,800
Speaker 1: lot of people that think that Peter Shift comes to mind, right,

604
00:33:00,120 --> 00:33:03,360
Speaker 1: that that that bitcoin has no value. And I would

605
00:33:03,400 --> 00:33:05,400
Speaker 1: argue that that's maybe you don't see the value that

606
00:33:05,440 --> 00:33:08,160
Speaker 1: other people do. And we do see, uh, this store

607
00:33:08,200 --> 00:33:12,200
Speaker 1: of value taking place in these other countries, you know,

608
00:33:12,240 --> 00:33:15,760
Speaker 1: in Iran or China or Venezuela. Right, so we do

609
00:33:15,840 --> 00:33:20,880
Speaker 1: see there's there's value there. Um, But I think you

610
00:33:20,960 --> 00:33:23,040
Speaker 1: have a case why you believe bitcoin is not just

611
00:33:23,120 --> 00:33:26,040
Speaker 1: a store of value, but is really the best store

612
00:33:26,080 --> 00:33:30,040
Speaker 1: of value. That's right. Yeah, So why is it better

613
00:33:30,080 --> 00:33:32,520
Speaker 1: you I know, you outline several different uh, you know,

614
00:33:32,680 --> 00:33:36,000
Speaker 1: stores of value that people would use today. How does

615
00:33:36,040 --> 00:33:38,480
Speaker 1: bitcoin stack up? Why is it the best option that

616
00:33:38,520 --> 00:33:41,400
Speaker 1: we have? Yeah, that's a that's a great question. So

617
00:33:42,240 --> 00:33:44,520
Speaker 1: if we look at you know, if we think about

618
00:33:44,560 --> 00:33:47,080
Speaker 1: money as different or store values, if we think of

619
00:33:47,200 --> 00:33:50,479
Speaker 1: money or store values as different species. Um, you know,

620
00:33:50,520 --> 00:33:52,840
Speaker 1: what is what is the genetic code that each of

621
00:33:52,840 --> 00:33:56,840
Speaker 1: those species has as a species of money, and what

622
00:33:57,000 --> 00:34:00,360
Speaker 1: are the traits that are surfaced from the genetic code.

623
00:34:01,000 --> 00:34:04,120
Speaker 1: And so if we look at the different types of

624
00:34:04,160 --> 00:34:08,240
Speaker 1: species of money, bitcoin has the most desirable genetic code

625
00:34:08,360 --> 00:34:12,360
Speaker 1: and that manifests itself via traits. So the closest equivalent

626
00:34:12,400 --> 00:34:14,799
Speaker 1: to bitcoin is gold gold, and that's why people call

627
00:34:14,800 --> 00:34:18,080
Speaker 1: it gold to point o or digital gold. Because bitcoin

628
00:34:18,640 --> 00:34:23,319
Speaker 1: isn't controlled by centralized entity. Bitcoin similarly uses proof of

629
00:34:23,360 --> 00:34:27,920
Speaker 1: work gold mining. You can't just mint gold via via

630
00:34:28,080 --> 00:34:29,680
Speaker 1: out of thin air. You have to go find it

631
00:34:29,719 --> 00:34:35,280
Speaker 1: and that requires resources um and bitcoin replicates that resource

632
00:34:35,320 --> 00:34:39,040
Speaker 1: consumption with the difficulty adjustments. So as the price of

633
00:34:39,080 --> 00:34:42,520
Speaker 1: gold increases, miners are willing to dig deeper and deeper

634
00:34:42,560 --> 00:34:46,560
Speaker 1: and expend more energy or costs to go find that gold.

635
00:34:46,600 --> 00:34:49,360
Speaker 1: And bitcoin has a similar function. As the price of

636
00:34:49,400 --> 00:34:52,440
Speaker 1: bitcoin goes up, the costiness to produce it goes up

637
00:34:52,480 --> 00:34:54,880
Speaker 1: as well. This is good for a lot of reasons,

638
00:34:54,880 --> 00:34:57,719
Speaker 1: one one being that the costiness of money gives it

639
00:34:57,840 --> 00:35:00,560
Speaker 1: some of its value in terms of the alley doesn't

640
00:35:00,600 --> 00:35:04,000
Speaker 1: come from the costliness, but the costliness ensures that there

641
00:35:04,040 --> 00:35:07,280
Speaker 1: is no free lunch. That the cost money money has

642
00:35:07,320 --> 00:35:10,440
Speaker 1: to have a true cost of capital. That's right. Otherwise

643
00:35:10,440 --> 00:35:12,759
Speaker 1: you could just print as much as you'd like. And

644
00:35:12,840 --> 00:35:16,480
Speaker 1: so the house rate or cost follows price. So as

645
00:35:16,480 --> 00:35:18,960
Speaker 1: the price increases, the cost of mind and bitcoin increases

646
00:35:19,000 --> 00:35:23,840
Speaker 1: as well, and that ensures the unforgeable costiness of the currency. Um,

647
00:35:23,920 --> 00:35:26,520
Speaker 1: you've got the scarcity element, which scarcity was a big

648
00:35:26,520 --> 00:35:28,879
Speaker 1: thing that's Atoshi focused on. I don't think a lot

649
00:35:28,880 --> 00:35:31,000
Speaker 1: of people really understand how much he focused on that.

650
00:35:31,920 --> 00:35:34,680
Speaker 1: Santoshi had a really great example that he wrote about

651
00:35:34,800 --> 00:35:37,520
Speaker 1: on the Bitcoin forums, which he said, essentially, you know,

652
00:35:37,640 --> 00:35:40,440
Speaker 1: imagine like a base medal, as scarce as gold, but

653
00:35:40,560 --> 00:35:43,520
Speaker 1: with the following properties of not being a good conductor

654
00:35:43,520 --> 00:35:47,520
Speaker 1: of electricity, not being strong, not being malleable, being boring

655
00:35:47,600 --> 00:35:50,600
Speaker 1: gray in color, and not being practical for any other purpose.

656
00:35:51,320 --> 00:35:53,400
Speaker 1: But it's one magical property was that it could be

657
00:35:53,440 --> 00:35:59,960
Speaker 1: transport transported over communications channel. And so essentially the TLDR

658
00:36:00,080 --> 00:36:02,040
Speaker 1: of that, as he goes, if there was nothing in

659
00:36:02,080 --> 00:36:04,200
Speaker 1: the world with intrinsic value that could be used as money,

660
00:36:04,560 --> 00:36:07,600
Speaker 1: only scarce but no intrinsic value, I think people would

661
00:36:07,600 --> 00:36:12,200
Speaker 1: still take up something and scarce here means limited potential supply.

662
00:36:13,040 --> 00:36:15,160
Speaker 1: And that's the brilliance of bitcoin and that's what makes it,

663
00:36:15,200 --> 00:36:17,759
Speaker 1: I think, more attractive than gold is you know, a

664
00:36:17,800 --> 00:36:20,319
Speaker 1: couple of different reasons. One, it's digital. You can't really

665
00:36:20,360 --> 00:36:23,799
Speaker 1: move gold around or around very easily. Bitcoin is more

666
00:36:23,840 --> 00:36:28,120
Speaker 1: divisible than gold. Um, I would argue, I would argue this,

667
00:36:28,200 --> 00:36:31,120
Speaker 1: let's see what else it's uh. And as far as

668
00:36:31,120 --> 00:36:33,920
Speaker 1: the scarcity, what I'd like to say on that is that, um,

669
00:36:33,960 --> 00:36:36,879
Speaker 1: you know, we have all these pH ds in economics

670
00:36:36,920 --> 00:36:38,839
Speaker 1: or finance and they're in these think tanks and they're

671
00:36:38,840 --> 00:36:42,279
Speaker 1: trying to control you know, the markets and whatnot. Um,

672
00:36:42,360 --> 00:36:44,440
Speaker 1: And a lot of times maybe they've gotten too smart

673
00:36:44,480 --> 00:36:47,200
Speaker 1: for their own good. But when you talk about scarcity, right,

674
00:36:47,200 --> 00:36:50,799
Speaker 1: we learned, I mean, every kid knows supply and demand. Right,

675
00:36:50,840 --> 00:36:54,319
Speaker 1: It's like pretty basic, uh, supplying demand, and that's where

676
00:36:54,320 --> 00:36:58,640
Speaker 1: that scarcity falls in. And Yeah, sometimes just going back

677
00:36:58,640 --> 00:37:01,240
Speaker 1: to those those core basic princes will seem so simple

678
00:37:01,280 --> 00:37:04,160
Speaker 1: but but so solid at the same time. Yeah, this,

679
00:37:04,480 --> 00:37:06,560
Speaker 1: you know, the twenty one million hardcap is an incredibly

680
00:37:06,600 --> 00:37:09,239
Speaker 1: important monetary policy. And that's what makes it much more

681
00:37:09,239 --> 00:37:12,560
Speaker 1: interesting than gold as well, is that gold is not

682
00:37:12,760 --> 00:37:16,800
Speaker 1: finite in this world. It is in somewhat finite qualities. However,

683
00:37:17,360 --> 00:37:19,879
Speaker 1: we could find a bunch of gold tomorrow, We could

684
00:37:19,920 --> 00:37:23,080
Speaker 1: find a huge, huge amount of goal tomorrow, which would

685
00:37:23,560 --> 00:37:27,200
Speaker 1: totally undermine confidence in the being used as a store

686
00:37:27,200 --> 00:37:31,160
Speaker 1: of value. And actually we know for certain that eventually,

687
00:37:31,200 --> 00:37:33,640
Speaker 1: when we make it to space, that some asteroids have

688
00:37:34,200 --> 00:37:37,040
Speaker 1: trillions of dollars worth of gold. So we know that

689
00:37:37,120 --> 00:37:41,080
Speaker 1: gold's lifetime is finite. As a species of money, It's

690
00:37:41,120 --> 00:37:46,880
Speaker 1: genetic code and traits are inherently um subpar, and bitcoin,

691
00:37:46,920 --> 00:37:49,279
Speaker 1: being the apex predator of money, will will consume it too.

692
00:37:49,320 --> 00:37:53,440
Speaker 1: Over time, the best store of value will always win. Right.

693
00:37:53,480 --> 00:37:56,280
Speaker 1: Gold is a remnants of our physical bodies and physical world,

694
00:37:56,280 --> 00:37:59,320
Speaker 1: but we're moving into a digital one. And the digital world,

695
00:37:59,440 --> 00:38:03,520
Speaker 1: combined with the lack of confidence over the supply, completely

696
00:38:03,600 --> 00:38:07,319
Speaker 1: undermines gold use cases a store value. And and really,

697
00:38:07,360 --> 00:38:10,000
Speaker 1: at the end of the day, you know, gold bugs,

698
00:38:10,320 --> 00:38:12,160
Speaker 1: and I'm a gold bug. I mean I've I've been

699
00:38:12,200 --> 00:38:14,640
Speaker 1: I've been a big believer in gold for a long time. Um,

700
00:38:14,680 --> 00:38:16,000
Speaker 1: you know, I thought we should have gone back to

701
00:38:16,040 --> 00:38:18,640
Speaker 1: the gold standard, and I still own gold today, so

702
00:38:18,719 --> 00:38:21,120
Speaker 1: not to not to uh not to come down on them.

703
00:38:21,800 --> 00:38:24,240
Speaker 1: I do agree with you that bitcoin makes a better

704
00:38:24,320 --> 00:38:27,000
Speaker 1: case for being a store value because of the digital properties.

705
00:38:27,040 --> 00:38:31,520
Speaker 1: As you've said, um, but you know, they want to

706
00:38:31,560 --> 00:38:34,880
Speaker 1: say that it has value, it has intrinsic value. I

707
00:38:35,000 --> 00:38:36,960
Speaker 1: like to say that. You know, my dad taught me

708
00:38:36,960 --> 00:38:39,120
Speaker 1: when I was a kid that something's only worthless someone

709
00:38:39,200 --> 00:38:42,640
Speaker 1: is willing to pay for it. So value subjective, And

710
00:38:42,880 --> 00:38:46,000
Speaker 1: that's exactly right. It's a it's a shared belief system.

711
00:38:46,239 --> 00:38:48,560
Speaker 1: And in gold, by the way, you know, a lot

712
00:38:48,560 --> 00:38:50,759
Speaker 1: of people go, oh, well, gold has utility. It's been

713
00:38:50,840 --> 00:38:53,640
Speaker 1: used in electronics, it's been used for jewelry. You know.

714
00:38:53,680 --> 00:38:58,080
Speaker 1: One gold had no other utility other than a store

715
00:38:58,080 --> 00:39:01,960
Speaker 1: of value for thousands of years, and only very recently

716
00:39:02,080 --> 00:39:04,439
Speaker 1: when we started to make electric electronics did it also

717
00:39:04,480 --> 00:39:08,360
Speaker 1: have additional value for that um right, which isn't necessarily

718
00:39:08,360 --> 00:39:10,880
Speaker 1: a good thing, because that means that its purpose is

719
00:39:10,880 --> 00:39:14,280
Speaker 1: split between a store of value and some raw utility,

720
00:39:14,320 --> 00:39:16,640
Speaker 1: which actually undermines its value as a store of value

721
00:39:16,640 --> 00:39:20,600
Speaker 1: because then the demand for it fluctuates, whereas demand simply

722
00:39:20,640 --> 00:39:23,279
Speaker 1: distilled as a store of value, demand is much more

723
00:39:23,280 --> 00:39:26,319
Speaker 1: pure and allows it to behave properly as a money Yeah,

724
00:39:26,360 --> 00:39:28,200
Speaker 1: what I what I liked about? Um, what I was

725
00:39:28,239 --> 00:39:30,799
Speaker 1: hearing you talk with Stephan Lavera. Also is you know

726
00:39:30,920 --> 00:39:33,520
Speaker 1: besides gold, which is what is the big talk. And

727
00:39:33,560 --> 00:39:35,759
Speaker 1: everybody knows about gold and the store value, but there's

728
00:39:35,760 --> 00:39:37,800
Speaker 1: also a lot of other places that people store value

729
00:39:37,840 --> 00:39:40,279
Speaker 1: or park their value. Right, So real estate is a

730
00:39:40,280 --> 00:39:42,720
Speaker 1: big one, which which has caused all types of problems

731
00:39:42,719 --> 00:39:45,239
Speaker 1: in the real estate market. Um, offshore banking is a

732
00:39:45,520 --> 00:39:48,040
Speaker 1: big one. Trillions of dollars ten tens of trillions of

733
00:39:48,040 --> 00:39:51,080
Speaker 1: dollars in each of those those categories, right, Yeah, hundreds

734
00:39:51,080 --> 00:39:53,799
Speaker 1: of trillions, agrees. And I live in San Francisco, and

735
00:39:53,880 --> 00:39:56,600
Speaker 1: we see this as a as a huge, huge problem

736
00:39:56,600 --> 00:39:59,520
Speaker 1: when the store value asset is not used for its original,

737
00:39:59,760 --> 00:40:03,640
Speaker 1: huge tility purpose to where you know, an average apartment

738
00:40:03,640 --> 00:40:06,000
Speaker 1: in San Francisco is at least a million dollars and

739
00:40:06,160 --> 00:40:09,120
Speaker 1: that's kind of like a really shitty one bedroom. Um,

740
00:40:09,160 --> 00:40:11,040
Speaker 1: if you wanted something nice, you're looking at two to

741
00:40:11,120 --> 00:40:14,680
Speaker 1: three million at a minimum. And so that's happening because

742
00:40:14,880 --> 00:40:19,000
Speaker 1: supply is constrained. Existing homeowners won't allow nobilions to be built,

743
00:40:19,640 --> 00:40:22,080
Speaker 1: and so people are starting to park their wealth increasingly

744
00:40:22,120 --> 00:40:24,439
Speaker 1: more and more into this real estate. But the real

745
00:40:24,560 --> 00:40:28,200
Speaker 1: estate isn't getting better. These are old, really crappy apartments.

746
00:40:28,760 --> 00:40:32,480
Speaker 1: These aren't brand new buildings. These are from nineteen thirties. Um,

747
00:40:32,560 --> 00:40:38,920
Speaker 1: they're terrible insulation, terrible plumbing, really bad layouts, no electronics support,

748
00:40:39,480 --> 00:40:41,480
Speaker 1: and you're just seeing you know, in terms of like

749
00:40:41,680 --> 00:40:45,720
Speaker 1: there's no cable routed through it. You're seeing these assets

750
00:40:45,760 --> 00:40:48,120
Speaker 1: being used as a store of value really damage the

751
00:40:48,120 --> 00:40:51,480
Speaker 1: social fabric of the community because because they're not being

752
00:40:51,520 --> 00:40:53,560
Speaker 1: allowed to be used for the utility that's a place

753
00:40:53,640 --> 00:40:55,920
Speaker 1: to live. Instead, they're being using used it as a

754
00:40:55,920 --> 00:40:59,560
Speaker 1: place to park money. It's totally changing who can live

755
00:40:59,560 --> 00:41:02,680
Speaker 1: in the city, how much is realistic to even pay

756
00:41:02,719 --> 00:41:05,400
Speaker 1: to live. And we see this problem as well in

757
00:41:05,440 --> 00:41:08,760
Speaker 1: New York and Vancouver where other people across the world,

758
00:41:08,800 --> 00:41:12,560
Speaker 1: like Russians and Chinese or parking their value in a

759
00:41:12,800 --> 00:41:15,040
Speaker 1: different store of value real estate assets. It's kind of

760
00:41:15,040 --> 00:41:18,000
Speaker 1: crazy when you start to see, um, the amount of

761
00:41:18,120 --> 00:41:22,400
Speaker 1: problems that really stem from having a poor store value

762
00:41:22,719 --> 00:41:25,160
Speaker 1: or no no store of value today. Right, so, um,

763
00:41:26,400 --> 00:41:29,480
Speaker 1: everyone's scrambling to store value somewhere and some go to stocks.

764
00:41:29,480 --> 00:41:31,600
Speaker 1: We've seen what's happened there. Some go to real estate

765
00:41:31,600 --> 00:41:34,920
Speaker 1: and look at all the problems that spiral from that totally.

766
00:41:35,080 --> 00:41:37,200
Speaker 1: And that's where you know, if we look at I

767
00:41:37,200 --> 00:41:40,719
Speaker 1: think one of bitcoin's best features is the immutability of

768
00:41:40,760 --> 00:41:44,880
Speaker 1: the transaction and the hard disease nature of the asset.

769
00:41:45,520 --> 00:41:48,880
Speaker 1: So with real estate, that's extremely easy to seize. So

770
00:41:49,080 --> 00:41:51,279
Speaker 1: hundreds of trillions of dollars at a snap of a

771
00:41:51,360 --> 00:41:54,840
Speaker 1: finger could be seized from you by your government across

772
00:41:54,880 --> 00:41:58,960
Speaker 1: the world. That is by far the easiest asset disease um.

773
00:41:59,080 --> 00:42:02,239
Speaker 1: And you look at gold. Gold's nice, but you have

774
00:42:02,280 --> 00:42:04,080
Speaker 1: to carry it, you have to validate it, you have

775
00:42:04,160 --> 00:42:06,720
Speaker 1: to store it. It's a little bit clunk here. Especially

776
00:42:06,760 --> 00:42:09,720
Speaker 1: in the digital world. Bitcoin is much much more efficient.

777
00:42:10,400 --> 00:42:12,759
Speaker 1: And then you look at like offshore banking. You know

778
00:42:12,840 --> 00:42:15,239
Speaker 1: that works until the US government really leads on that

779
00:42:15,320 --> 00:42:20,080
Speaker 1: offshore banking country like Switzerland where essentially the I R

780
00:42:20,200 --> 00:42:24,000
Speaker 1: S destroyed centuries worth of privacy and Switzerland, and so

781
00:42:24,040 --> 00:42:26,399
Speaker 1: we we've seen these other store value assets be kind

782
00:42:26,400 --> 00:42:32,000
Speaker 1: of hunted down over time and really not represents there

783
00:42:32,040 --> 00:42:36,560
Speaker 1: you know, true true ownership or true you know property

784
00:42:36,680 --> 00:42:40,799
Speaker 1: rights that you would have, and bitcoin gives you property rights. Yeah,

785
00:42:40,400 --> 00:42:45,320
Speaker 1: the censorship resistant and the immutable are the two really

786
00:42:45,360 --> 00:42:48,040
Speaker 1: big factors that make them jump out across all those,

787
00:42:48,120 --> 00:42:50,360
Speaker 1: like you said, offshore bank accounts. We've seen in Switzerland

788
00:42:50,960 --> 00:42:53,400
Speaker 1: they're taking the Russians money. Now, hundreds of millions of

789
00:42:53,440 --> 00:42:58,919
Speaker 1: dollars in accounts are gone real estate for sure. Um. Now,

790
00:42:59,360 --> 00:43:01,840
Speaker 1: So so we can see it's pretty easy from those

791
00:43:01,880 --> 00:43:06,880
Speaker 1: perspective censorship, resistance and mutability, portability. How it's how it's better.

792
00:43:07,440 --> 00:43:09,279
Speaker 1: One more thing just to touch on real quick would

793
00:43:09,280 --> 00:43:12,840
Speaker 1: just be the cost difference. So bitcoin is so expensive

794
00:43:12,840 --> 00:43:14,839
Speaker 1: and it costs so much money to transfer, and it's

795
00:43:14,840 --> 00:43:17,319
Speaker 1: never gonna work because of the high fees. But I

796
00:43:17,360 --> 00:43:19,839
Speaker 1: think you would argue that it's way cheaper than any

797
00:43:19,840 --> 00:43:22,239
Speaker 1: of those other stores of value. Yeah, that's right. A

798
00:43:22,239 --> 00:43:23,919
Speaker 1: lot of people, a lot of the old be cash

799
00:43:23,960 --> 00:43:25,439
Speaker 1: or crowd of a lot of the crowd that felt

800
00:43:25,440 --> 00:43:28,320
Speaker 1: that bitcoin is a cheap PayPal or a cheap visa,

801
00:43:28,440 --> 00:43:30,440
Speaker 1: which was totally incorrective. Is purpose built to be a

802
00:43:30,480 --> 00:43:34,040
Speaker 1: store value. Um. Hence twice a tocia. There's a bunch

803
00:43:34,040 --> 00:43:37,279
Speaker 1: of different reasons, but tocia refers to bitcoin as as

804
00:43:37,360 --> 00:43:41,520
Speaker 1: as as a precious metal. Five times. It also writes

805
00:43:41,560 --> 00:43:43,719
Speaker 1: in the first block in the blockchain, UK chancer on

806
00:43:43,760 --> 00:43:45,600
Speaker 1: the verge of second bailout for banks, which is the

807
00:43:45,600 --> 00:43:49,040
Speaker 1: only message of sociator writes into the blockchain, not Visa

808
00:43:49,080 --> 00:43:52,399
Speaker 1: on the verge rasing processing piece. So the original crowd

809
00:43:52,440 --> 00:43:55,719
Speaker 1: that felt that bitcoin was best best made for Visa

810
00:43:55,719 --> 00:43:57,960
Speaker 1: a cheap PayPal, they were really concerned a round bitcoins

811
00:43:58,000 --> 00:44:01,000
Speaker 1: transaction fees because as if they got too high, it

812
00:44:01,000 --> 00:44:05,160
Speaker 1: makes it not practical for day to day transactions. So firstly,

813
00:44:05,640 --> 00:44:09,080
Speaker 1: paying anything being any transaction fee is more expensive than

814
00:44:09,120 --> 00:44:13,200
Speaker 1: traditional payment methods, just to be clear, because yes, there

815
00:44:13,280 --> 00:44:15,080
Speaker 1: is a processing fee for my credit card, but I

816
00:44:15,120 --> 00:44:18,160
Speaker 1: don't feel it as a consumer, and same with my cash.

817
00:44:18,480 --> 00:44:20,919
Speaker 1: So people are like, oh, you know, technically you're paying

818
00:44:20,960 --> 00:44:22,640
Speaker 1: a transaction fee as a consumer, but I'm like, I

819
00:44:22,640 --> 00:44:24,480
Speaker 1: don't feel it, I don't hear it, I don't see it.

820
00:44:25,320 --> 00:44:28,160
Speaker 1: And so with bitcoin bitcoins like, hey, pay this transaction fee,

821
00:44:28,160 --> 00:44:30,759
Speaker 1: and a consumer who never had an upfront transaction fee

822
00:44:30,800 --> 00:44:33,880
Speaker 1: before it goes, what the hell is this especially for

823
00:44:33,880 --> 00:44:38,640
Speaker 1: a retail payment, um, you know, and then you know,

824
00:44:38,680 --> 00:44:42,560
Speaker 1: before we dive into you know, looking at bitcoins transaction fees,

825
00:44:42,640 --> 00:44:46,799
Speaker 1: relative to other types of store value transaction fees. We

826
00:44:46,920 --> 00:44:50,960
Speaker 1: must also remember that the cost to send any sort

827
00:44:51,000 --> 00:44:54,400
Speaker 1: of crypto asset is not just the transaction fee, but

828
00:44:54,480 --> 00:44:56,880
Speaker 1: it's also the exchange fee. How much money did you

829
00:44:56,880 --> 00:44:59,360
Speaker 1: have to spend to buy it, because typically that's between

830
00:44:59,400 --> 00:45:03,440
Speaker 1: ten ten BIPs and a hundred bibs at that's basis points,

831
00:45:03,480 --> 00:45:06,160
Speaker 1: So that scales with the size of your transaction, which

832
00:45:06,200 --> 00:45:09,799
Speaker 1: is a really nasty, nasty sort of a fee. And

833
00:45:09,840 --> 00:45:12,720
Speaker 1: then then you have volatility fee as well, because crypto

834
00:45:12,800 --> 00:45:16,080
Speaker 1: assets are very volatile. So but when you buy the asset,

835
00:45:16,160 --> 00:45:18,800
Speaker 1: between then and when you sell it to purchase whatever

836
00:45:18,840 --> 00:45:21,720
Speaker 1: item you'd like to purchase, you have a volatility fee,

837
00:45:21,960 --> 00:45:24,400
Speaker 1: and that as well scales with the size of the transaction,

838
00:45:24,440 --> 00:45:28,640
Speaker 1: which makes it super nasty. So for example, let's say

839
00:45:28,680 --> 00:45:32,600
Speaker 1: you have a light coin transaction that the transaction fee

840
00:45:32,680 --> 00:45:35,960
Speaker 1: is a penny, much cheaper than bitcoin, but it fluctuated

841
00:45:36,000 --> 00:45:37,719
Speaker 1: ten percent between when you bought it and when you

842
00:45:37,760 --> 00:45:40,440
Speaker 1: sold it, so you have on a ten dollar transaction,

843
00:45:40,440 --> 00:45:42,600
Speaker 1: you have a dollar fee on top of the penny fee,

844
00:45:43,080 --> 00:45:45,239
Speaker 1: and then as well, you had to pay you know,

845
00:45:45,480 --> 00:45:48,080
Speaker 1: maybe one percent to purchase it. So that's ten cents

846
00:45:48,080 --> 00:45:51,880
Speaker 1: on top of that too, and so uh, that's the

847
00:45:51,920 --> 00:45:53,840
Speaker 1: full cost of a transaction. So I just wanted to

848
00:45:53,880 --> 00:45:56,919
Speaker 1: highlight that before we dive into the into other story

849
00:45:57,000 --> 00:45:59,440
Speaker 1: value assets, because people don't really consider that when they

850
00:45:59,440 --> 00:46:02,040
Speaker 1: look at trans action fees for crypto assets. You just

851
00:46:02,040 --> 00:46:04,120
Speaker 1: look at the transaction for itself and they go, oh, man,

852
00:46:04,160 --> 00:46:06,719
Speaker 1: bitcoin is so much higher, and it's like, no, there's

853
00:46:06,760 --> 00:46:08,920
Speaker 1: other posts that are incurred when you transact across a

854
00:46:08,960 --> 00:46:11,279
Speaker 1: block space. I mean, and I think I think, you know,

855
00:46:11,480 --> 00:46:14,680
Speaker 1: it would be fair to compare it against other crypto assets,

856
00:46:14,760 --> 00:46:17,560
Speaker 1: but when you compare it against other stores of value,

857
00:46:17,640 --> 00:46:20,480
Speaker 1: I think it's no, no, no comparison. How cheap it is.

858
00:46:20,520 --> 00:46:22,840
Speaker 1: I mean, I own physical gold. If I want to

859
00:46:22,840 --> 00:46:25,200
Speaker 1: turn that into cash, I have to physically mail that

860
00:46:25,280 --> 00:46:29,200
Speaker 1: back to somewhere that it's expensive to mail gold across

861
00:46:29,239 --> 00:46:32,160
Speaker 1: the country, and uh, they charge me a hefty fee

862
00:46:32,200 --> 00:46:35,520
Speaker 1: to convert that for me, So totally totally. So you know,

863
00:46:35,600 --> 00:46:38,280
Speaker 1: gold is one of those that's that's immensely costly to send.

864
00:46:39,080 --> 00:46:40,799
Speaker 1: You have to have insurance for it, you know, if

865
00:46:40,800 --> 00:46:43,680
Speaker 1: you're doing bigger physical to gold delivery, like like the

866
00:46:43,760 --> 00:46:46,360
Speaker 1: New York Fed Transfer of three hundred metric times to

867
00:46:46,400 --> 00:46:50,879
Speaker 1: the Bundesbank, the German German Central Bank. That cost four

868
00:46:50,920 --> 00:46:54,320
Speaker 1: point eight million dollars and it took three years um.

869
00:46:54,360 --> 00:46:56,239
Speaker 1: You know, if you look at the average feed that

870
00:46:56,320 --> 00:46:58,879
Speaker 1: people paid a wire fiat money in the US, that's

871
00:46:58,920 --> 00:47:02,000
Speaker 1: between thirty and eighty dollars. If you look at the

872
00:47:02,040 --> 00:47:04,720
Speaker 1: cost to set up an offshore bank account, that's between

873
00:47:04,760 --> 00:47:07,960
Speaker 1: two and four thousand dollars plus the wiring fiat fee

874
00:47:08,120 --> 00:47:10,759
Speaker 1: that you incur every single time. And then you look

875
00:47:10,800 --> 00:47:12,920
Speaker 1: at real estate people are and by the way, real

876
00:47:13,040 --> 00:47:16,840
Speaker 1: estate is the most sensorible asset and the most seizable

877
00:47:16,840 --> 00:47:20,560
Speaker 1: asset out there. Chinese are buying thirty billion dollars of

878
00:47:20,680 --> 00:47:23,840
Speaker 1: US real estate annually, and they spend on on aferage

879
00:47:24,040 --> 00:47:27,600
Speaker 1: four hundred and thirty thousand dollars on these transactions. And

880
00:47:27,640 --> 00:47:30,160
Speaker 1: when they do that, they are paying closing costs, they're

881
00:47:30,160 --> 00:47:34,640
Speaker 1: paying maintenance costs, they're paying taxes like property taxes, all

882
00:47:34,680 --> 00:47:37,080
Speaker 1: of that money just to store their value into real estate.

883
00:47:37,280 --> 00:47:39,640
Speaker 1: And they're doing that at thirty billion dollars a year.

884
00:47:40,200 --> 00:47:43,959
Speaker 1: So bitcoin transaction fees are very cheap compared to something

885
00:47:44,040 --> 00:47:46,560
Speaker 1: I thought. I think we've made a very compelling case

886
00:47:46,640 --> 00:47:49,479
Speaker 1: as to why bitcoin is the best store of value,

887
00:47:49,560 --> 00:47:52,400
Speaker 1: especially compared to where the stores of value are today,

888
00:47:53,040 --> 00:47:56,000
Speaker 1: Like you said, with hundreds of trillions of dollars sitting

889
00:47:56,040 --> 00:47:58,920
Speaker 1: there that eventually will be sucked into what I you know,

890
00:47:59,000 --> 00:48:01,960
Speaker 1: the best store of value. UM, We're kind of running

891
00:48:01,960 --> 00:48:04,000
Speaker 1: short on time now, but I'd like to just ask

892
00:48:04,200 --> 00:48:07,440
Speaker 1: like a little bit of maybe forward thinking looking into

893
00:48:07,480 --> 00:48:10,440
Speaker 1: the future, if you will. Um. You mentioned that, Um,

894
00:48:10,480 --> 00:48:13,040
Speaker 1: there's an evolution right where it goes from collectible store

895
00:48:13,080 --> 00:48:16,160
Speaker 1: value eventually to a medium of exchange and then maybe

896
00:48:16,160 --> 00:48:19,959
Speaker 1: to a unit account. Um, do you see this going?

897
00:48:20,120 --> 00:48:21,959
Speaker 1: You know that? Do you see this evolution taking place

898
00:48:22,000 --> 00:48:23,920
Speaker 1: over a long period of time or do you think

899
00:48:24,280 --> 00:48:28,319
Speaker 1: there might be ways to uh speed this up complemented

900
00:48:28,400 --> 00:48:32,440
Speaker 1: by using bitcoin as an s o V. But then um,

901
00:48:32,480 --> 00:48:34,919
Speaker 1: having like a stable coin or something else that could

902
00:48:34,960 --> 00:48:39,440
Speaker 1: be used as that kind of cash mechanism. Yeah, interesting,

903
00:48:39,680 --> 00:48:43,040
Speaker 1: interesting poth process. Yeah, it's it's you know, I think

904
00:48:43,080 --> 00:48:45,400
Speaker 1: the problem at bitcoin is solving if we look at bitcoins,

905
00:48:45,440 --> 00:48:47,440
Speaker 1: you know, kind of like product market fit or protocol

906
00:48:47,440 --> 00:48:50,160
Speaker 1: market fit. Is to solve the problem with central banking

907
00:48:50,280 --> 00:48:52,600
Speaker 1: and to solve the problem of story in your assets

908
00:48:52,600 --> 00:48:54,360
Speaker 1: in a place that governments can't seeze it or a

909
00:48:54,400 --> 00:48:57,399
Speaker 1: more powerful adversary can't seaze it. And so to use

910
00:48:57,640 --> 00:49:01,080
Speaker 1: to use that super secure story value for payments, I

911
00:49:01,120 --> 00:49:04,879
Speaker 1: think is a multi tech paid process. As bitcoins volatility

912
00:49:05,040 --> 00:49:09,080
Speaker 1: slowly subsides over time as it absorbs more and more

913
00:49:09,200 --> 00:49:11,680
Speaker 1: market cap and becomes larger and larger and more liquid.

914
00:49:12,719 --> 00:49:16,840
Speaker 1: Then when it becomes less volatailed than your local fiat currency,

915
00:49:17,400 --> 00:49:19,960
Speaker 1: you'll start to denominate items and in bigcoin ors to

916
00:49:20,040 --> 00:49:23,400
Speaker 1: toss and use it as a medium of exchange. Um.

917
00:49:23,440 --> 00:49:28,399
Speaker 1: But that is a very long process generations, because money

918
00:49:28,440 --> 00:49:31,600
Speaker 1: is a shore belief system, and to change everyone's belief

919
00:49:31,600 --> 00:49:34,799
Speaker 1: and money isn't going to happen overnight. I think we'll see,

920
00:49:34,920 --> 00:49:37,399
Speaker 1: you know, leaps and bounds in terms of adoption, maybe

921
00:49:37,480 --> 00:49:39,960
Speaker 1: during periods where people lose faith in the government. Although

922
00:49:39,960 --> 00:49:43,160
Speaker 1: it is it is, it is somewhat surprising how fast, um,

923
00:49:43,280 --> 00:49:47,160
Speaker 1: the loss of gold belief has happened. I think, to me,

924
00:49:47,160 --> 00:49:50,960
Speaker 1: it's asked. I mean, you know, my kids, I mean

925
00:49:51,040 --> 00:49:53,120
Speaker 1: even the millennials, I don't think whatever that they don't

926
00:49:53,160 --> 00:49:56,560
Speaker 1: care about gold, don't even know about gold. Yeah, you know,

927
00:49:56,719 --> 00:49:59,960
Speaker 1: I'm thirty one, so I'm in the millennial cohort. Okay,

928
00:50:00,200 --> 00:50:04,719
Speaker 1: you know, I was originally attracted a gold back when

929
00:50:04,719 --> 00:50:06,440
Speaker 1: I was a libertarian, and then once I found Big Point,

930
00:50:06,480 --> 00:50:10,239
Speaker 1: I became pretty uninterested. Um, because yeah, I mean, it's

931
00:50:10,239 --> 00:50:12,920
Speaker 1: it's a it's a physical thing. You know. My my age,

932
00:50:13,120 --> 00:50:16,360
Speaker 1: the millennial age group, we were the first analog to

933
00:50:16,400 --> 00:50:20,360
Speaker 1: digital cohort. So we went from the transition from cassette

934
00:50:20,360 --> 00:50:25,080
Speaker 1: tapes two MP three's so into streaming. So we we

935
00:50:25,280 --> 00:50:28,200
Speaker 1: I saw the whole thing happened at once during my youth,

936
00:50:28,520 --> 00:50:30,680
Speaker 1: so I think our minds were a little bit more

937
00:50:30,719 --> 00:50:33,680
Speaker 1: malleable for this new idea of digital money that's not

938
00:50:33,680 --> 00:50:37,640
Speaker 1: controlled by a government. Definitely grew up on the Internet, definitely.

939
00:50:37,680 --> 00:50:39,560
Speaker 1: But so back to the question, just real quick. So

940
00:50:39,680 --> 00:50:42,840
Speaker 1: let's say, Um, let's say though in another country where

941
00:50:42,880 --> 00:50:47,040
Speaker 1: you know, the capital controls are increasing, the money's crashing. Um,

942
00:50:47,080 --> 00:50:49,360
Speaker 1: I want to get into bitcoin to store my value,

943
00:50:49,440 --> 00:50:51,920
Speaker 1: but I also need to spend money on a regular basis.

944
00:50:52,280 --> 00:50:55,919
Speaker 1: So I mean, do you see a temporary world over

945
00:50:55,960 --> 00:50:59,040
Speaker 1: the next couple of decades while there while bitcoin makes

946
00:50:59,040 --> 00:51:02,359
Speaker 1: its evolvement to where that could help, or you think,

947
00:51:02,400 --> 00:51:04,040
Speaker 1: I mean, you think will be stuck with the bitcoin

948
00:51:04,120 --> 00:51:08,479
Speaker 1: fiat system. Just future casting a little bit here. Yeah,

949
00:51:08,680 --> 00:51:10,120
Speaker 1: local said, don't think it's going to be a long

950
00:51:10,200 --> 00:51:13,600
Speaker 1: duration per local geo that you're in. If Bitcoin is

951
00:51:13,640 --> 00:51:16,360
Speaker 1: more stable than you're, like, more stable in terms of

952
00:51:16,400 --> 00:51:19,440
Speaker 1: price purchasing power than your local fiat currency, then I

953
00:51:19,440 --> 00:51:23,680
Speaker 1: could see people using that on a geo specific basis. Um.

954
00:51:23,680 --> 00:51:25,320
Speaker 1: I don't think it's gonna happen all at once. I

955
00:51:25,320 --> 00:51:27,440
Speaker 1: think we're going to see countries that have really terrible

956
00:51:27,440 --> 00:51:30,640
Speaker 1: monetary policies where the value of the purchasing power of

957
00:51:30,680 --> 00:51:33,560
Speaker 1: the local fiat is worse or fluctuating and worse than bitcoin.

958
00:51:34,080 --> 00:51:36,920
Speaker 1: Then Bitcoin will be used in the medium to exchange format,

959
00:51:37,400 --> 00:51:41,359
Speaker 1: likely and like a lightning esque transaction, because that makes

960
00:51:41,360 --> 00:51:44,840
Speaker 1: it a faster or cheaper, um a little bit easier

961
00:51:44,840 --> 00:51:48,640
Speaker 1: and also preserves privacy in uh In in the Manger

962
00:51:48,760 --> 00:51:51,680
Speaker 1: and the Manger theory, Manger is like one of the

963
00:51:51,920 --> 00:51:54,320
Speaker 1: original for those listening. You know Dan, but you know

964
00:51:54,400 --> 00:51:56,880
Speaker 1: he's one of the original guys in the Austrian school

965
00:51:56,880 --> 00:51:59,920
Speaker 1: of thought, I think right, um, And in one of

966
00:52:00,000 --> 00:52:02,080
Speaker 1: his papers, I can't quote it exactly top of my head,

967
00:52:02,120 --> 00:52:04,400
Speaker 1: but he had talked about where like it would be

968
00:52:04,440 --> 00:52:07,480
Speaker 1: almost impossible for new money to take uh, to take

969
00:52:07,480 --> 00:52:11,040
Speaker 1: hold and to grow unless there was some huge event

970
00:52:11,160 --> 00:52:15,080
Speaker 1: that caused people to do that. Um, And we're kind

971
00:52:15,080 --> 00:52:19,320
Speaker 1: of seeing that stage being set right now. So while

972
00:52:19,520 --> 00:52:23,879
Speaker 1: under normal circumstances it could take a really long time. Uh,

973
00:52:23,920 --> 00:52:25,800
Speaker 1: there are some factors that are sitting out there in

974
00:52:25,840 --> 00:52:27,640
Speaker 1: the world right now that could speed it up. That'd

975
00:52:27,640 --> 00:52:30,160
Speaker 1: be interesting to see. But that's all just speculates. I mean,

976
00:52:30,200 --> 00:52:33,720
Speaker 1: I've never been more bullish than all, you know, even

977
00:52:33,760 --> 00:52:36,200
Speaker 1: I think that the return per unit of risk that

978
00:52:36,239 --> 00:52:39,120
Speaker 1: you're taking a bitcoin right now is phenomenal. The fact

979
00:52:39,160 --> 00:52:41,160
Speaker 1: that it survived this long and survived a civil war,

980
00:52:41,360 --> 00:52:46,080
Speaker 1: survived long enough to get institutional adoption is fantastic. Um.

981
00:52:46,120 --> 00:52:48,319
Speaker 1: I don't see a lot that can kill bitcoin. I

982
00:52:48,320 --> 00:52:51,600
Speaker 1: think the risks are super minimal. I see an increasing

983
00:52:51,600 --> 00:52:56,320
Speaker 1: amount of demand in the future as people flee socialists policies,

984
00:52:56,360 --> 00:52:59,000
Speaker 1: as they flee bad central banking policies, as they flee

985
00:52:59,480 --> 00:53:02,680
Speaker 1: governments that they don't like. You know, bitcoin is essentially

986
00:53:02,719 --> 00:53:05,360
Speaker 1: a vote against any sort of risk in the mainstream world,

987
00:53:05,600 --> 00:53:07,160
Speaker 1: and I think there's a lot of risk that people

988
00:53:07,200 --> 00:53:10,520
Speaker 1: are seeing, whether it be political, um, you know, political,

989
00:53:10,640 --> 00:53:13,640
Speaker 1: financial or social unrest. I think we're seeing it kind

990
00:53:13,680 --> 00:53:16,799
Speaker 1: of bubbling up all across the world. And bitcoin is

991
00:53:16,800 --> 00:53:18,880
Speaker 1: that one antidote, and it's it's something that you can

992
00:53:18,920 --> 00:53:22,000
Speaker 1: make as a personal decision that gives you confidence in

993
00:53:22,000 --> 00:53:24,840
Speaker 1: your future because you can store your money, which is

994
00:53:24,880 --> 00:53:27,319
Speaker 1: your time, your store time and energy. You can store

995
00:53:27,360 --> 00:53:29,000
Speaker 1: that into something that you don't have to tell anyone

996
00:53:29,000 --> 00:53:31,239
Speaker 1: else about it, and that's a vote for you. It's

997
00:53:31,239 --> 00:53:33,480
Speaker 1: a vote for your future. And I think across the

998
00:53:33,520 --> 00:53:37,280
Speaker 1: world that's going to be an increasingly attractive option. Yeah. Wow,

999
00:53:38,040 --> 00:53:40,520
Speaker 1: such such a good uh, such a good statement. And

1000
00:53:40,360 --> 00:53:42,279
Speaker 1: I guess that's a really good statement for us to

1001
00:53:42,280 --> 00:53:44,160
Speaker 1: wrap up on because I know we've exceeded our time

1002
00:53:44,160 --> 00:53:46,800
Speaker 1: limit here. I've been writing down things as we're talking,

1003
00:53:46,800 --> 00:53:48,360
Speaker 1: and so many things I wanted to come back to.

1004
00:53:48,760 --> 00:53:50,640
Speaker 1: But man, we could just go on forever, and we're

1005
00:53:50,640 --> 00:53:53,040
Speaker 1: not going to do that, so we'll have to circle

1006
00:53:53,080 --> 00:53:54,440
Speaker 1: back around and do it again at a at a

1007
00:53:54,520 --> 00:53:57,759
Speaker 1: later time. Uh. But man, you have so much good

1008
00:53:57,760 --> 00:53:59,400
Speaker 1: stuff to say, and like I said, I've gotten so

1009
00:53:59,480 --> 00:54:02,240
Speaker 1: much out of out of reading your your medium posts

1010
00:54:02,280 --> 00:54:06,680
Speaker 1: and whatnot. So for anybody that wants to follow along,

1011
00:54:06,760 --> 00:54:08,839
Speaker 1: I mean, the best place to keep up. What what

1012
00:54:08,960 --> 00:54:12,680
Speaker 1: is your Twitter? Yes, so my Twitter is at dan Held. Um,

1013
00:54:12,719 --> 00:54:15,279
Speaker 1: my name on there is Dan hedel Held is my

1014
00:54:15,280 --> 00:54:18,360
Speaker 1: real last name. It's a lot of people think I

1015
00:54:18,360 --> 00:54:21,200
Speaker 1: made it up, but it's actually my real last name. Um.

1016
00:54:21,239 --> 00:54:23,200
Speaker 1: I like to think that. You know, in the past

1017
00:54:23,200 --> 00:54:26,520
Speaker 1: renamed ourselves after what we did, like Baker or Smith. Right,

1018
00:54:26,760 --> 00:54:31,280
Speaker 1: I was born to be a huddler. It's Dan Held

1019
00:54:31,520 --> 00:54:34,160
Speaker 1: on Twitter or dan Held dot com. Is is where

1020
00:54:34,160 --> 00:54:35,759
Speaker 1: my blog is. If you want to read more long

1021
00:54:35,840 --> 00:54:40,440
Speaker 1: form content. Just so everyone knows, each each blog put,

1022
00:54:40,520 --> 00:54:44,600
Speaker 1: each blog post has a corresponding tweet storm, So if

1023
00:54:44,640 --> 00:54:47,160
Speaker 1: you ain't got time for that, go read the tweet storm.

1024
00:54:47,160 --> 00:54:49,160
Speaker 1: It's a lot easier, I know, and now we don't

1025
00:54:49,200 --> 00:54:50,799
Speaker 1: have a lot of time in our day. So if

1026
00:54:50,800 --> 00:54:52,600
Speaker 1: you want the quick hits, go read the tweet storm.

1027
00:54:52,600 --> 00:54:54,040
Speaker 1: If you want them to get a little bit further,

1028
00:54:54,560 --> 00:54:57,520
Speaker 1: the long form articles create. It also comes with the soundtrack,

1029
00:54:57,880 --> 00:54:59,680
Speaker 1: which makes it I think a little bit more engaging,

1030
00:54:59,760 --> 00:55:01,440
Speaker 1: So you get a little bit of a reward if

1031
00:55:01,440 --> 00:55:03,680
Speaker 1: you go read the long form. Cool and we'll definitely

1032
00:55:03,719 --> 00:55:06,600
Speaker 1: put links to the to those to those resources in

1033
00:55:06,640 --> 00:55:08,359
Speaker 1: the show notes to anybody that's listening can just check

1034
00:55:08,360 --> 00:55:11,160
Speaker 1: out the links and UH, with that will wrap it up.

1035
00:55:11,200 --> 00:55:13,000
Speaker 1: Thanks so much, Dan for your time. I appreciate it.

1036
00:55:13,120 --> 00:55:16,520
Speaker 1: Thanks for having me. Cheers. Hey, if you like this

1037
00:55:16,560 --> 00:55:20,200
Speaker 1: episode of the Market Disruptors Podcast, please help us take

1038
00:55:20,200 --> 00:55:22,759
Speaker 1: this to the top of the podcast charts. Just please

1039
00:55:22,800 --> 00:55:26,120
Speaker 1: do me a favor and rate, review and subscribe. Taking

1040
00:55:26,160 --> 00:55:28,640
Speaker 1: fifteen seconds to just leave a quick review goes a

1041
00:55:28,719 --> 00:55:31,400
Speaker 1: long way and helping us reach more people and disrupt

1042
00:55:31,440 --> 00:55:34,319
Speaker 1: more markets. I really appreciate you listening and I'll see

1043
00:55:34,360 --> 00:55:36,520
Speaker 1: you next time on the Market Instructors podcast.