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0:02

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0:04

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0:09

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0:11

problem, and that the logical

0:13

conclusion of it was that

0:16

it was going to stop

0:18

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0:20

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0:22

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0:25

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0:51

thank you for having me back in Austin.

0:54

Unbelievable to have you here in

0:56

Austin. It's been a phenomenal week. This

0:58

has been a good week. A great

1:00

way to cap it off. I'm tired.

1:03

But takeover was a massive success again.

1:05

I've been to Austin like, I don't

1:07

know how many times, five or six

1:09

times. I don't know if I've ever

1:11

actually seen it, because I don't know

1:13

how many times, five or six times.

1:15

I don't know if I've ever actually

1:18

seen it. I don't know if I've

1:20

ever actually seen some of it this time.

1:22

And this is a great, you

1:24

know, occasion because it's the first time

1:26

we're recording in person with

1:28

you, you know, taking over the

1:31

show. And you'll usually have a

1:33

Airbnb somewhere, you know, kind of

1:35

off the beaten path. And we just

1:37

don't leave for a week straight. Yeah.

1:39

So it's great to create to

1:42

have you here in person. Thank you.

1:44

So earlier this week, I recorded a

1:46

show with Jeff Snyder. I think Jeff's

1:48

great, like just for full framing, I really don't

1:51

think he's a bad actor, I think he's incredibly

1:53

smart, I think he knows like the plumbing of

1:55

the monetary system really well, but he always bots

1:57

heads with Bitcoiners and like if you look through...

1:59

the YouTube comments on that video,

2:02

it's just everyone calling me an idiot.

2:04

And I don't think that's a fair

2:06

framing. And he's also like, I feel

2:08

like he's 90% Bitcoiner. Like he

2:11

believes in free markets, he doesn't want

2:13

the central bank, he doesn't like the

2:15

current financial system. But he kind of

2:17

gets hung up on Bitcoin, and probably

2:19

for a few reasons, maybe the main

2:22

one being kind of the in a

2:24

last, like it's a fixed supply currency.

2:26

And he wants to see elasticity. It

2:28

was both good and frustrating at the

2:31

same time because you were kind of

2:33

talking past each other at a lot

2:35

of points. And I didn't feel like

2:37

he was really in the in the

2:39

place to be receptive to your ideas.

2:42

I don't know. Do you think that's

2:44

fair? Yeah. I how long ago is

2:46

that it's probably like six months ago?

2:48

Something like that. Yeah. Yeah. And he

2:50

had made a comment. And what's his

2:53

firm called? You're a dollar university. That's

2:55

his like podcast. I don't know if

2:57

he works. And some of the background

3:00

which we talk on the on the

3:02

podcast, but for people listen to

3:04

this one is back before

3:06

I had gotten interested in Bitcoin,

3:09

I was trying to understand

3:11

what would happen when the

3:13

Fed tried to unwind post-financial

3:15

crisis QE. This was

3:18

in about 2016. And somebody,

3:20

somebody the recommended

3:22

I read Jeff's writings or blog. But

3:24

I did, and one of the

3:26

exercises that Jeff had done was

3:28

going back and reading all the

3:31

transcripts of the Fed during the great

3:33

financial crisis are leading up

3:35

to and thereafter, which isn't just

3:38

the minutes, it's the actual

3:40

verbatim transcripts, and

3:42

they're released five years after

3:44

the fact, and that five years

3:46

is designed to allow for the

3:48

central bankers, the people that actually

3:50

run each of the different. You

3:53

know Minneapolis Fed, Dallas Fed,

3:55

San Francisco Fed, to have

3:57

open discussion and debate without

4:00

somebody immediately looking over

4:02

their shoulder, but to

4:04

also have transparency. I went

4:07

back and read like all the

4:09

meetings from 2008-9, some of

4:11

the meetings from 2011, each one

4:13

of these is a couple

4:15

hundred pages, double space. But

4:17

so they're long meetings.

4:19

Anyways, that was formative

4:22

to me in the conclusion that

4:24

Like people always look to

4:26

the essential bankers at the Fed

4:28

or the ECB is in control

4:30

Yep, and that they weren't in

4:32

control I Can conclusion they were

4:35

always gonna have to print money.

4:37

They were they were consistently in

4:39

an objective way wrong So anyways

4:41

Before we get into the meat of

4:43

this discussion just to say that I

4:45

do have a lot of respect for

4:47

Jeff as well I think He

4:50

is very much I think philosophically

4:52

lined with with Bitcoin And but

4:54

a lot of people do struggle

4:56

with this idea of a currency

4:58

with a fixed supply. I

5:00

was somebody who got an

5:02

economics degree and was very

5:04

much a Keynesian basis and

5:06

that and people just really

5:09

struggle. They they struggle to

5:11

evaluate first principles and

5:13

my micro economic decision

5:15

points that you know, lead to,

5:18

you know, or effectively praxeology of

5:20

like what will lead to certain

5:22

outcomes. And they look at it

5:24

from the top down and that's

5:26

very much a Keynesian outlook and

5:28

people have blind spots and

5:30

Jeff has a massive blind spot because

5:33

I think of that top down looking

5:35

at the system as a whole rather

5:37

than individual decision

5:39

points on what will dictate.

5:41

why things exist the way

5:43

they do. So coming from

5:45

like you studied Keynesian economics,

5:47

did you have the same blind

5:50

spot when you first saw Bitcoin?

5:52

I don't think I had the same

5:54

blind spot, but I like to

5:57

think that I was predisposed to...

6:00

be against it to not think

6:02

for the same reasons that I

6:04

would say someone like Jeff might

6:06

I was also somebody who like

6:09

all the debt in the world

6:11

never made sense to me.

6:13

Yeah, never had any personal

6:15

debt, always had an aversion to

6:18

it, always felt like there

6:20

was something broken about it.

6:23

So I think that that

6:25

was something that despite having

6:27

this classical Keynesian education allowed

6:30

me to question things that

6:32

other people might not and then

6:34

be open to an entirely opposite

6:37

world economic view or

6:39

kind of fundamental way to

6:41

think about economics then is

6:43

classically trained in most

6:45

Western universities which is

6:47

very much a Keynesian

6:49

dominated educational system.

6:51

Okay, but the actual fixed

6:54

supply of Bitcoin never stood out

6:56

to you as like a big red

6:58

flag? No. Because I, through this process,

7:00

in part, having Jeff, sent

7:02

me down, you know, not directly,

7:04

but indirectly through his

7:07

writings and recommendations, sending down

7:09

this rabbit hole of the

7:11

Fed and their logic and

7:13

how in control, how what

7:15

they, you know, whether they

7:17

understand the consequences of their

7:19

action or not, what guides them, that

7:21

I figured out that they were

7:24

always going to have to print

7:26

money, I figured out why, and...

7:28

at an individual level, and this is

7:30

where I think if people are looking at

7:32

it from a system level, rather than

7:34

an individual level, they can easily get

7:36

to the wrong conclusion, which was I

7:39

figured out that they were going to have

7:41

to print money forever, and I figured out

7:43

as an individual holder of that

7:45

currency, that's a problem, and that

7:47

the logical conclusion of it was that

7:49

it was going to stop working as

7:52

a currency system, because you can't print

7:54

money and expect people to... Trade

7:56

their time goods and services for it. So

7:58

I had started from that anchor point

8:00

and that was fresh in my mind

8:02

as I started going down the

8:04

Bitcoin rabbit hole in for other reasons

8:07

but but similar time frame so

8:09

I was staring at okay there's

8:11

this problem and I was and then

8:13

I figured out that Bitcoin's all

8:15

purpose was to be money that couldn't

8:18

be printed and I put those two and

8:20

two together so I had the benefit

8:22

of my college education or

8:24

university education that allowed

8:26

me to test the assumptions. I

8:28

just didn't necessarily assume that they were

8:31

true because I was staring at a massive

8:33

problem that everyone suffered thinking

8:35

from first principles rather than

8:37

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is anchorwatch.com. So that is another

10:06

one of Jeff's hang-ups that we we

10:08

may get to, we may not, so he

10:11

obviously doesn't look at money printing the

10:13

same way we necessarily do. We had

10:15

a whole show on the old what

10:17

Bitcoin did with him and Lynn debating

10:19

that. We might get into that, we

10:21

might not, but let's start. So his

10:23

his thinking, and I'm gonna butcher this,

10:25

but I'll try my best, is that

10:27

when... Like bank reserves aren't the

10:29

same as money printing and bank

10:31

reserves don't actually go into the

10:33

economy so it doesn't, the way

10:35

we look at money printing as

10:37

Bitcoin as he thinks that's

10:40

not actual money printing. He's

10:42

wrong. Okay, let's start there then.

10:44

And a lot of, a lot of people,

10:46

and I think the root of his problem,

10:48

which is the root of a lot of

10:50

people's problem on this whole line of

10:52

thought, is that they look at the system

10:55

as a whole and they start to

10:57

become and I don't say this

10:59

in a negative way but

11:01

they look at it from the

11:04

macro rather than

11:06

individual decision

11:08

points and they get a

11:10

little bit what should I say

11:12

like being counterish

11:15

they think about it

11:17

just as numbers not in

11:19

terms of like what

11:22

the actual substance is

11:24

and so they a lot of people

11:26

from the macro world will say well when

11:28

the Fed does quantitative easing they'll

11:30

just swap they'll say this

11:32

they're swapping one liability for

11:34

another yeah and they'll say another thing

11:37

which is that the the reserves don't

11:39

leave the banking system yeah and to

11:41

try and elaborate on that point and again

11:43

like this is something that should come from

11:45

Jeff not me but I think his take

11:47

is that bank reserves can't be used in

11:49

the same way as money so they don't

11:52

actually trickle down into the economy. And that's

11:54

a false statement. And do you think that's

11:56

false because bank reserves collateralize the banks and

11:58

allow them to go out? buy other

12:00

assets with that collateral?

12:02

The bank reserves, when a

12:05

bank creates credit, reserves

12:07

transfer between banks.

12:09

So a bank can run out of

12:11

reserves. That's one. That is

12:14

what functionally happened to or

12:16

was about to happen to

12:18

Silicon Valley Bank. So the

12:20

Fed inserts and controls

12:22

the number of reserves in

12:25

total, but... Reserves move between

12:27

banks and if you take your deposits

12:29

to go to another bank and one

12:32

bank is left without any reserves

12:34

that bank fails So that's number one

12:36

two Reserves are actually transferred. They

12:38

can be converted to physical notes

12:40

So this is one other example

12:43

where these guys just get it

12:45

completely wrong that at the beginning

12:47

of the financial crisis. There was

12:49

only 900 billion dollars in existence

12:51

and that and there was about

12:53

350 billion in the banks in the

12:55

banks The net amount of

12:58

cash like physical bills that

13:00

have been taken out of the

13:02

bank since is Well over a

13:04

trillion closer to two trillion so

13:07

if the reserves that the

13:09

that the Fed creates through QE

13:11

Don't quote trickle down how has

13:13

nearly twice as much money been

13:16

taken out of them that existed

13:18

at the time of the financial

13:20

crisis. Yeah, so what happens is

13:23

the Fed creates reserves and then

13:25

a bank goes to the Treasury

13:27

and the Fed and says, I need

13:29

a certain amount of these converted

13:32

to actual Treasury notes, physical

13:34

bills, and they swap from

13:36

digital reserves to physical bills.

13:39

There's been over functionally more

13:41

than two entire bank runs on

13:43

the system that could only be

13:45

made possible because the Fed

13:48

created more reserves. So reserves

13:50

are lent, reserves can be

13:52

contributed and are converted to

13:54

physical bills. Those

13:56

are two objective facts the

13:58

way that a bank actually goes

14:01

out of businesses because they run

14:03

out of reserves. And when these

14:05

macro economists say, oh,

14:07

they're just swapping one liability,

14:09

a reserve for, say, something

14:12

like a treasury, and through QE,

14:14

what the Fed does is they

14:16

say, hey, JP Morgan, here's another

14:18

reserve, give me your treasury. They

14:20

essentially, and what we would refer

14:22

to that, or I would refer

14:25

it as they're monetizing the debt.

14:27

But more realistically. The

14:29

macro people, like someone

14:31

like Jeff Sires, they're

14:33

just swapping reserves. It's

14:35

like, no, they're not. They're

14:38

two different types of assets.

14:40

A treasury is a future claim

14:42

on dollars, and a reserve is

14:45

a dollar. It can be converted

14:47

to a physical banknote,

14:49

right there. And a second thing

14:51

is, you've never walked into

14:54

a grocery store and seen

14:56

a grocery store except.

14:59

US Treasuries as payment and the

15:01

question is why is because they're

15:04

they're they're a claim in the

15:06

future you owe dollars in the future

15:08

a reserve one for one increases deposits

15:10

in the banking system so like on

15:13

all three of those the macro people

15:15

are just wrong technically like they they look

15:17

at this system and they like they

15:19

zero in too close on something and

15:21

then they can't explain something that is

15:24

common sense to be like well why

15:26

why does the Fed do this if they're

15:28

just the same? Well, they do it

15:30

because debt is an obligation owed

15:32

in the future and a reserve is

15:34

something that can be transferred in

15:36

the banking system on demand. And so

15:39

to throw one more thing in there

15:41

that I think is one of Jeff

15:43

Snyder's points, is that a bank reserve,

15:45

you can give a bank more bank

15:48

reserves, but it doesn't mean it creates

15:50

demand for credit from their

15:52

customer. I agree with that statement.

15:55

Okay. And then I think so for

15:57

that reason. if you assume that bank reserves

15:59

aren't money. you assume that's not

16:01

creating money because there's no demand

16:03

for it. Is that right? Yeah. But the

16:05

reality is it is money, the Fed's doing

16:08

it for a reason because there's a little

16:10

liquidity crisis, and they are actual dollars,

16:12

and the Fed says it's themselves. They're

16:14

like, yeah, it's more akin to money

16:17

printing than anything. And then, you know,

16:19

combination of Jerome Powell and Ben Bernanke

16:21

on 60 Minutes have said this, or

16:24

they basically say that we literally just

16:26

credit an account with more money on

16:28

a computer on a computer. They

16:30

have to do that because there's

16:32

too many debt liabilities and that's

16:35

what a treasury is or a

16:37

mortgage-backed security is or corporate debt

16:39

that they purchase and any sort

16:42

of debt instrument has a maturity

16:44

date and the dollars are due

16:46

on that maturity date a reserve that

16:48

the Fed creates is something that

16:50

is dollar good today. And this is

16:53

where like... I get a little bit lost

16:55

in Jeff's argument in that he tries

16:57

to separate different types of money. So

16:59

it's like money and I think he

17:01

would describe that as ledger money. And

17:03

I don't understand the distinction

17:05

there. So I mean, and this

17:07

is where like oftentimes these macro

17:09

economists are many ways to like too smart

17:11

for their britches and they can't look at

17:14

it from a common sense perspective to be

17:16

like, well, if all of these things

17:18

are functionally the same and just like.

17:20

marginally different than why does

17:23

the Fed do it? Yeah. That

17:25

there must be this reason.

17:27

And that there are, the way

17:30

that I would describe it is

17:32

that there's, there's different

17:35

definitions of money,

17:37

and this is something like

17:39

base money, M1, M2,

17:41

and. The difference between that

17:43

spectrum like I look at and

17:45

say like the base money is

17:47

is the true like that's the

17:49

inception of like the actual dollar

17:51

supply and then M2 is basically

17:53

Credit that's been created like

17:55

actual debt such that if the Fed

17:57

didn't create any more base money It

18:00

doesn't matter if banks create

18:02

more credit, that credit would

18:04

in the future shrink because

18:06

the actual underlying base

18:09

money M0, if you were, is what

18:11

creates the governor of it. Where it's

18:13

like, hey, people oftentimes

18:15

think of like the banks

18:17

is creating money, it's really

18:19

the central bank that creates

18:22

money, and then there's leverage

18:24

created on top of that. But

18:26

all of that would unwind if the

18:28

Fed... didn't create more and what

18:30

ends up happening in a practical

18:32

perspective is very logical is that

18:34

the banks create more credit the

18:36

Fed starts to take the base money out

18:39

and then everybody figures out that the

18:41

show stopping and that the degree of

18:43

debt relative to base money and to

18:45

give people perspective it's like right now

18:48

in the US it's about a hundred

18:50

and one trillion of total debt liabilities

18:52

like very vanilla debt and there's about

18:54

seven trillion base money. What I'm saying

18:56

is that 101 trillion, it would naturally

18:59

collapse if the Fed didn't continue to

19:01

supply base money. And so someone

19:03

like Jeff would be like, well,

19:05

they're functionally the same as like,

19:07

no, they're functionally the same, it's like, no,

19:09

they're not. The all that credit that

19:11

exists in the system would shrink, it would

19:13

go from 101 to 90 to 80, it

19:16

would essentially feed on itself. That's what

19:18

happened during the great financial crisis

19:20

in 2008-9, which induces the Fed

19:22

to have to have to put more

19:24

quote money overnight, the actual dollars

19:26

that can satisfy the debts to

19:28

prevent the debt from collapsing on

19:30

itself. So they are 100% different

19:33

in their function of how

19:35

they're created and what can happen

19:37

with them in the banking system.

19:39

And so the only one that can

19:42

create dollars is the Fed at the

19:44

end of the day. And even the

19:46

banks that are viewed as creating credit,

19:48

they're not creating money in

19:50

the same way that the central

19:53

bank is. But that dynamic between.

19:55

The debt and the dollars is what

19:57

dictates that they're always going to have

19:59

to print more. And that's, you know, that's an example

20:01

of something where like Jeff, someone like Jeff Snyder, thinks it's terrible

20:03

that the Fed can create money, but... I mean, he doesn't think

20:05

the Fed can create money. He thinks the only thing they do, they have

20:07

any impact on is interest rates, and they're basically just a signal. Yeah, and

20:09

it's just, you know, I don't know what the right analogy is of the

20:11

frog boiling in the water that you've been in the water that you've been

20:14

in the water that you've been in the water that you've been in the

20:16

water that you've been in the water that you've been in the water

20:18

that you've been in the water that you've been in the water that you've

20:20

been in the water that you've been in the water that

20:22

you've been in the water that you've been in

20:24

the water that you've been in the water that

20:26

you've been in the water that you've been in

20:28

the water that you've been in the water that

20:30

you've been in the water that you've been in

20:32

the you know, that you can't take a fresh

20:34

look at it because you've been boiling for too

20:36

long. So I want to, and real simply from,

20:38

sometimes people can get lost in

20:41

these economic terms and

20:43

debates, but it's like, hey, Jeff,

20:45

financial crisis, there were

20:47

only 900 billion physical, I'm

20:49

talking like physical bank, no, something

20:52

I'd get out of my wallet

20:54

right now, like a green paper

20:56

bill, 900 billion. 350

20:58

billion existed in the

21:01

banks and 550 billion

21:03

existed outside like in

21:05

people's in circulation

21:08

in circulation and

21:10

more than two trillion physical

21:12

bills have or somewhere approximately

21:16

two years have been taken

21:18

out like green greenbacks. How

21:21

does that happen? Like explain

21:23

that happen. Yeah. And what happens is

21:26

the Fed creates money through QI, the

21:28

reserves, and then the banks say, I

21:30

need more physical bills because people are

21:32

withdrawing it from the banks. That's that.

21:35

I mean, that makes sense to me.

21:37

Yeah. And there are other consequences

21:39

of it to the digital banking

21:41

system, but 100 absolutely the Fed

21:43

creates money through QI. You know that

21:46

that statement, when someone tells you who

21:48

they are, believe them. Like, when Jerome

21:50

Powell tells you that they're

21:52

functionally creating money. Believe it.

21:54

Yeah, that makes sense. I want to go

21:56

back because it's interesting that you read all

21:58

of those Fed documents. When they were

22:01

responding to 2008, was

22:04

this something they had in their plans or was

22:06

this a complete knee -jerk reaction? It

22:09

was a

22:12

knee -jerk reaction, I

22:14

would say. And was this Bernanke? Yeah.

22:17

Okay. Bernanke, I believe

22:19

Yellen too. Yellen

22:21

was in there because

22:23

Yellen later took over for Bernanke, but

22:25

she was, I believe, the president of the

22:27

San Francisco Fed during this time. Okay. Yeah,

22:30

I mean, what I would describe

22:33

it was reactive. Reactive,

22:36

like trying one thing, it not working,

22:38

trying the other thing, it not working, and

22:41

then continuing to

22:43

just throw shit at the

22:45

wall. What option did they actually

22:47

have there? Presumably they had to do something

22:49

like this to just to keep the whole

22:51

financial sector afloat. Right, but

22:53

if you remember, or whether you

22:56

remember or not, what they

22:58

did was they, in

23:01

early 2008, they

23:04

began lowering interest rates. And

23:06

they lowered interest rates, something

23:08

like six or seven times,

23:12

like two zero from some, I don't know

23:14

what interest rates were before that. Yeah. 5%.

23:16

But it went down to close to zero, yeah.

23:18

To zero, to actual zero. Oh, it went

23:21

to actual zero. Yeah. Okay. But they

23:23

did that over the course of six or seven times,

23:25

they're like, oh, we're gonna lower it to 4%. And we're

23:27

gonna load three and a half, now we're gonna load

23:29

the three, now we're gonna load two and a half. It's

23:31

like, if they knew what they were doing, if

23:34

they had some end in mind, why

23:36

did they keep swinging and missing? And too often

23:38

people look at them and say, oh, the Fed's

23:40

in control, they know what they're doing. And you

23:42

go through and read this, you

23:45

would just understand how reactive that they

23:47

take one action and it doesn't work,

23:49

and then they take another, and then

23:51

eventually, whether something quote

23:53

works, whatever end they

23:56

wanted to see, starts

23:58

to happen, whether they were the causal relationship. to

24:00

it or not. And so they literally

24:02

reduce interest rates all these

24:04

times and then there was

24:06

the liquidity crisis. Then Lehman

24:08

Brothers failed and then they figured

24:10

out that they needed to print a

24:12

bunch of money as the solution. Because

24:14

rates can't go lower. Yeah. And the

24:17

way that I think about it, which

24:19

it's not necessarily the way that they

24:21

think about it, but they had a

24:23

liquidity crisis. In their minds

24:25

they were trying to target

24:28

lower interest rates, which you

24:30

need to supply more dollars

24:32

to lower interest rates, but

24:34

I don't know that they

24:36

were expressly targeting the

24:38

liquidity crisis instead

24:40

saying like, oh, if I lower interest

24:43

rates long enough, then

24:45

people will get more demand.

24:47

Yeah. Yeah. But the other side

24:49

of that is, you lower

24:51

interest rates from a

24:53

central control manipulation,

24:56

it reduces the incentive

24:59

to lend. Yeah, of course,

25:01

makes sense. Right. So,

25:03

like, even that as

25:05

a policy decision

25:07

of what will, what

25:09

will induce lending? Oh,

25:11

let's create a lower

25:14

incentive to lend. Well,

25:16

the only way that

25:18

that can actually

25:20

have the incentive

25:22

is to create so much

25:24

money and basically

25:26

break the... economic incentive

25:29

between the people that are lending

25:31

and the money, the people's money

25:33

who it is. So that actually

25:35

kind of leads quite nicely on

25:37

the elasticity thing because I think maybe

25:39

what Jeff would say, I don't know,

25:42

don't quote me on this, is that

25:44

when interest rates are being lowered

25:46

that much it also reduces

25:48

demand because it's signifying

25:50

something's broken or very wrong in

25:52

the system. I think that that's wrong

25:55

because If

25:58

interest rates are low

26:00

from a organic perspective.

26:03

If the economic environment

26:07

is driving the costs

26:09

of interest down,

26:11

the lower the rate of interest,

26:14

the more your incentive

26:16

to borrow. And so, but

26:19

that is not necessarily true

26:21

if it's. an

26:23

exogenous force that's manipulating it to

26:25

be so. So the way I was,

26:28

the central planning is the problem. Right,

26:30

in the way that I would think

26:32

about in the financial crisis, there

26:34

was a credit crisis. At the

26:37

time of the great financial crisis,

26:39

there was 52 trillion in the

26:41

US, 52 trillion of dollar denominated

26:43

debt. There were that 900 billion of

26:46

all dollars that existing, but

26:48

there were only 350 billion in

26:50

the US banking banking system. So

26:52

the way I look is like

26:54

52 trillion to 350

26:56

billion. Everybody needed

26:58

loans. So the fact that

27:00

you manipulate interest

27:03

rates lower doesn't increase

27:05

demand. It's that everyone

27:08

was going bankrupt. So

27:10

everyone needed credit. Yeah.

27:13

The only thing that was

27:15

going to satisfy that

27:17

was more dollars to flood

27:19

the system. present demand

27:21

to prevent them, you know,

27:23

any individual stakeholder from

27:26

blowing up, they needed money and

27:28

they were functionally willing to probably

27:30

pay whatever rate they could get

27:32

it at. Yeah. But when everyone figures

27:35

out that the music is stopping, no

27:37

one wants to lend money. Right. Which

27:39

when the Fed steps in? Was when

27:42

the Fed steps and to be

27:44

the lender of last resort, but

27:46

they're not lending. Capital

27:48

that actually exists are creating money out of thin

27:50

air to do that. Okay, so let's get on

27:52

to the the Bitcoin side of thing. So in

27:54

the debate you did, Jeff said something that I

27:56

thought was quite interesting. He said if Bitcoin had

27:58

an elastic supply, he thinks it take over the

28:01

world. Like we obviously think it's going

28:03

to take over the world anyway. But

28:05

I think we should probably start by

28:07

framing this. This is something you've said

28:09

a thousand times the last eight or

28:11

nine years or however long, but explain

28:14

why Bitcoin's fixed play is important.

28:16

Yeah, so this is one of those

28:18

examples where like a macro economist is

28:20

looking at the system as a total

28:22

of like what are the systems

28:24

needs? what is the goal

28:26

of the system to create

28:29

economic activity and economic output

28:31

and how do we optimize

28:33

the system top down? And

28:35

you start to look at that

28:37

system and say, man, if things

28:40

were just slowing down and I

28:42

could just access a little bit

28:44

of money to inject into

28:46

the system, then wouldn't

28:48

we all be better off? And

28:50

that there's this bean counter mathematical...

28:54

to myopic way of looking at

28:56

things that make you think that something's

28:59

possible and it's really not.

29:01

And in this context here,

29:03

direct question, it is that when

29:05

a macro economist can get lost

29:08

thinking about the system as

29:10

a whole or the top

29:12

down and lose sight of

29:14

the individual decision points and

29:16

the individual logic, it's that

29:19

any individual, if they were...

29:21

posed with this dilemma of can I be

29:23

paid in a form of money that can't

29:25

be printed versus one that can, which

29:27

one would you choose? 99 out of 100, 100

29:30

out of 100, 100, of 100. Jeff might

29:32

be the only one or I guess

29:34

even in Jeff's case, if I gave

29:36

him the chance to be paid in

29:38

a form of money that couldn't be

29:40

printed, he himself would probably accept that.

29:42

And if you add all those

29:44

individuals up from the bottom, the bottom

29:47

going up, you'll realize that that that

29:49

is why the It's an AB test,

29:51

and I can either opt into a

29:53

system that can't be printed or one

29:55

that does get printed easily and often,

29:58

the individual rational economic actor. saves

30:00

in the form of money that

30:02

can't be printed because it's what's

30:04

going to store value more. The

30:06

macroeconomist looks at it and says,

30:08

that's too rigid. But the Austrian

30:11

view is describing why things occur

30:13

the way they do rather than

30:15

trying to dictate a system-level top-down

30:17

control. someone might accept, yeah, if

30:19

it were possible to do without

30:21

some massively negative derivative consequence, maybe

30:23

we do that, but describing the

30:25

way the world actually works is

30:27

that 100% of the world would

30:29

choose the alternative, basically not granting

30:32

somebody else the authority to print

30:34

money. So again, just trying to

30:36

like steal man Jeff's point, I

30:38

think what he would say to

30:40

that is that like, Bitcoin is

30:42

great as a store of value,

30:44

but the free market has chosen.

30:46

an elastic supply currency in the

30:48

dollar as the like the choice

30:51

over and and that's not been

30:53

I even had this discussion with

30:55

them like well do you agree

30:57

that more people are adopting Bitcoin

30:59

that you know more people in

31:01

2025 own it and are adopting

31:03

that in 2021 and he would

31:05

say yes yeah so my point

31:07

of that is because he makes

31:09

those two points and they're in

31:12

conflict they contradict each other okay

31:14

explain that well He's saying that

31:16

the market has chosen a last

31:18

occurrence of the dollar, but then

31:20

he'll admit that more people are

31:22

choosing Bitcoin progressively. But would he

31:24

then talk about, say, stable coins

31:26

in Argentina and how they're choosing

31:28

a dollar over Bitcoin in those

31:30

places? Well, it doesn't matter because

31:33

they're just trading one fiat currency

31:35

with the last supply. He'll admit

31:37

that people are increasingly choosing to

31:39

store value in Bitcoin. So he

31:41

can't reconcile or he needs to

31:43

reconcile. Well, why is that happening?

31:45

If a quote, because the market

31:47

is actually in the process of

31:49

unselecting the dollar. They're, they're selecting

31:51

Bitcoin because that is a great

31:54

store of value, if you accept

31:56

that even though Bitcoin adoption is

31:58

increasing for the reason that it

32:00

stores value better, that still only

32:02

one in a hundred people probably

32:04

have any material exposure to it.

32:06

Well, what happens when 99 out

32:08

of 100 have material exposure? Because

32:10

it's the same incentive that's the

32:12

same incentive that's driven the first

32:15

one out of 100 is going

32:17

to be the incentive that drives

32:19

the next 99. That fixed supply

32:21

that opting into the opting into

32:23

the... to the system that no

32:25

one can print. So do you

32:27

see like he has a conflict

32:29

or a contradiction? He says the

32:31

market has chosen the Alaska supply,

32:34

but then he will admit people

32:36

are increasingly choosing the currency with

32:38

the fixed supply. Yeah. And he

32:40

can't bridge those two. He can't

32:42

say, well, the same thing that's

32:44

that's dictated that people have increasingly

32:46

chosen Bitcoin, what is going to

32:48

cause that to stop? He won't

32:50

sit and stop and stop and

32:52

say. What is it that's causing

32:55

those people? And it's the same

32:57

thing that's causing the first movers

32:59

to go going to cause all

33:01

the others. So this is like,

33:03

Alan Farrington wrote a piece on

33:05

this called Wittgenstein's Money, where he

33:07

talks about the economist that will

33:09

say, it's not a story value,

33:11

it's too volatile, it's not a

33:13

medium exchange, because no one's using

33:16

it, and it's not a account

33:18

for kind of the same reasons.

33:20

And his argument is that semantics

33:22

don't matter, and reality, people are

33:24

choosing Bitcoin. People are choosing Bitcoin.

33:26

He'll admit the people are choosing

33:28

Bitcoin. He then won't bridge to

33:30

Let me accept that the reason

33:32

why they are doing that is

33:34

because it's the form of money

33:37

that can't be printed and that

33:39

is the reason why it's storing

33:41

value and then trying to reconcile

33:43

well That is actually the market

33:45

choosing the opposite way of what

33:47

his First statement is that the

33:49

market has chosen the dollars like

33:51

no, they're actually in the process

33:53

of un choosing that it doesn't

33:56

just flash cut overnight where everyone

33:58

starts to figure out what money

34:00

actually is. One of these options

34:02

is something that cannon is printed

34:04

out of thin air. The other

34:06

one is one that no one

34:08

can control and that no one

34:10

can create more of and that,

34:12

you know, the reason of that

34:14

property is why it's a better

34:17

solution for them. Yeah, one thing

34:19

that bugged me in that is

34:21

he talked, he basically said the

34:23

world has store value assets and

34:25

we, like, it's not that interesting

34:27

to have another one and he

34:29

kept. comparing Bitcoin to like a

34:31

NASDAQ stock. Right. And I'd like

34:33

you to dive into why that's

34:35

not the case. So I think

34:38

I probably will have given a

34:40

better answer there, but don't say

34:42

that. They're listening to this one.

34:44

No, I'm trying to remember because

34:46

I felt like I nailed it.

34:48

But so, you know, people oftentimes

34:50

say, because, okay, he made that

34:52

comment. And it's that. You

34:55

know I made the comment before

34:57

that there's there's a reason why

35:00

you've never showed up at your

35:02

grocery store and been able to

35:04

spend US treasuries stocks like Apple

35:06

stock or Google stock their companies

35:09

and Their their goal is to

35:11

make a profit in money right,

35:13

but just like you've never showed

35:15

up at the grocery store and

35:17

been able to pay with your

35:20

US Treasury bill You've also never

35:22

shown up at the grocery store

35:24

and been able to pay with

35:26

your Apple stock or your Google

35:29

stock that money is the asset

35:31

that you save in and financial

35:33

securities like Google or Apple are

35:35

businesses that are taking risk with

35:38

the goal of making money. Bitcoin

35:40

is replacing the world's money and

35:42

companies like Google and Apple are

35:44

going to have to adopt Bitcoin.

35:47

But I had a fundamental level.

35:49

The way to think about it

35:51

is the value of that stock.

35:54

is valuable based on those

35:57

individuals' company's ability to earn

35:59

money. That a financial asset

36:01

like a stock or a bond

36:04

derives as value through cash flows

36:06

and Bitcoin is the cash flow.

36:08

And so with something like a

36:10

stock or a bond, there's

36:13

counterparty risk. There's performance

36:15

risk. The business has

36:17

to perform, but you also have

36:19

to trust the issuer of the

36:21

stock. There's a central issuer to

36:24

not issue more stock. There's also

36:26

like macroeconomic risk. There's competitive risk

36:28

in terms of, you know, how

36:30

many people are going to buy

36:32

iPhones? Yeah. How many people are

36:34

going to pay Google for advertising?

36:37

How's AI going to distort the

36:39

market? What if Brock comes out

36:41

and then, you know, steals all

36:43

the search from Google, their ability

36:45

to generate cash flow to generate

36:47

Bitcoin is impaired. So the reason why

36:50

that you've never shown up at a

36:52

grocery store with the ability to pay

36:54

in an Apple stock is because it's not

36:56

money. You know, and that people. generally

36:59

have been forced into monetary

37:01

substitutes as substitutes

37:04

stores of value because

37:06

central banks create money.

37:08

That's what Bitcoin is fixing.

37:11

And so it's like people

37:13

are using many things to

37:15

quote store value passively for

37:17

this reason that money is

37:20

engineered to lose value. In

37:22

reality, what a lot of that

37:24

quote store of value

37:26

substitution is is a function of

37:28

the bad money and it will be

37:30

replaced through sound money, which Bitcoin

37:32

is ultimately here to, you know,

37:35

what it's intending to solve. And so

37:37

someone might say, well, you haven't ever

37:39

showed up to a grocery store to

37:41

be able to spend Bitcoin. Well,

37:43

I've bought food with Bitcoin, I've

37:46

paid my rancher in Bitcoin and

37:48

there's a reason why he doesn't

37:50

take Apple stock that I can't transfer

37:52

a bear token like Bitcoin

37:54

to somebody. Like, I

37:56

can't transfer. So it

37:58

is a. It is, Bitcoin

38:00

is a, and money generally is an

38:02

asset without counterparty risk. And when I

38:05

send it to you, it's yours. You

38:07

can't do that with a stock. And

38:09

so I think in, in Jeff's, like

38:11

if Jeff slows down, he understands that

38:13

there's difference between money and a financial

38:15

asset, and that a financial asset is

38:17

valuable and its ability to earn money

38:19

and money is money at something. He's

38:21

just trying to make a point with

38:23

that properly. I think one of the

38:26

last things that's quite important to address

38:28

here is that, so Jeff likes the

38:30

idea of Bitcoin or so he says,

38:32

but he wants it to have an

38:34

elastic supply. So let's say somehow he

38:36

figured out how to make Bitcoin with

38:38

all the same properties, but just with

38:40

one difference where he figures out like

38:42

a way of making an elastic supply

38:44

with no central authority, why does Bitcoin

38:47

still win and like to steal trace

38:49

Mayors line? Why is it the Apex

38:51

Predator? Because

38:53

the form of money that

38:55

can't be printed is the

38:58

optimal form of money. And

39:00

that the only way that

39:02

Bitcoin is able to credibly

39:04

enforce its fixed supply is

39:06

because it works in a

39:09

system that removes the need

39:11

for a trusted third party.

39:13

That if you go to

39:15

100 out of 100 individuals,

39:17

again, you have to start

39:20

from that. Yeah, and

39:22

what Jeff's view is functionally,

39:24

if, if you could have,

39:26

if you, you know, say

39:28

there's 21 million and say

39:30

there's this economic calamity, if

39:32

there were a mechanism to

39:34

allow that 21 million to

39:36

be dynamic, so that you

39:38

could create, you know, not

39:40

necessarily by, he's not saying,

39:42

you need a central bank

39:44

to do this, he's expressly

39:46

saying, there needs to be

39:48

some other market mechanism, that

39:50

you need some dynamic way.

39:52

that everyone would be better

39:55

off if that 21 million

39:57

could go to say 21

39:59

million five hundred thousand to

40:01

ease that. Is that. pain

40:03

in that moment. But what

40:05

like one of the dilemmas

40:07

is what is the what

40:09

is the mechanism and who

40:11

is better off because what

40:13

I talk about when I'm

40:15

when I'm talking about individual

40:17

economic decision points is there's

40:19

the holders of the 21

40:21

million Bitcoin. There's a way

40:23

in theory for everyone to

40:25

get together to the supply.

40:27

Yeah, more. It's never going

40:29

to happen, but it could

40:31

happen. But the reason why

40:33

it never would is because

40:35

there's never going to be

40:37

an overwhelming majority of currency

40:39

holders that will all take

40:41

an economic action to harm

40:43

themselves. Yeah. They've adopted this

40:45

form of money. So that

40:47

individual decision point is there's

40:49

currency A and currency B.

40:51

Currency A has a fixed

40:53

supply. Currency B does not.

40:55

Currency B is... increase by

40:57

some market mechanism like Jeff

40:59

wants. Which one do you

41:01

want? Oh, I want the

41:03

one that can't be printed

41:06

at all. From a more

41:08

fundamental economic perspective, the form

41:10

of money that has the

41:12

lowest rate of change in

41:14

the supply is going to

41:16

have the most efficient trade

41:18

that the ability to price

41:20

things and have reliable pricing

41:22

is going to drive. It's

41:24

going to drive. more efficient

41:26

economic activity and what Jeff

41:28

misses fundamentally when the prices

41:30

of money is changing because

41:32

and the reason why Bitcoin

41:34

is such perfect money is

41:36

because the supply is cap

41:38

but demand for the currency

41:40

can change and supply and

41:42

demand for all the other

41:44

goods in the market change

41:46

that the thing that provides

41:48

the constant thing that makes

41:50

the money work is the

41:52

fixed nature or the relative

41:54

scarcity of the supply that

41:56

When the market is either

41:58

increasing demand for money or

42:00

reducing demand for for money

42:02

and prices are changing, that's

42:04

actually the market mechanism to

42:06

create equilibrium. And one of

42:08

the examples I used for

42:10

them was that when the

42:12

price of Bitcoin rises significantly,

42:14

money is supplied to the

42:17

market. That that is the

42:19

most efficient way to, that

42:21

the available supply of Bitcoin

42:23

is actually highly elastic to

42:25

price elasticity. So you start

42:27

with well if you went

42:29

to individual one through a

42:31

hundred or one through a

42:33

thousand or one through eight

42:35

billions of which one of

42:37

these two things would you

42:39

rather have if you you

42:41

know A versus B printed

42:43

versus not nothing about that

42:45

economic decision point changes because

42:47

the market is responding to

42:49

prices in a way that's

42:51

causing say people to want

42:53

to save more and invest

42:55

less or spend less It's

42:57

like self-referencing the market is

42:59

saying No, we've already over-invested.

43:01

What we need is more

43:03

savings. And so the prices

43:05

are changing and Jeff's saying,

43:07

well, wouldn't it be great

43:09

if there's this countervailing force?

43:11

But by definition, it would

43:13

be a force working against

43:15

the market itself. The market

43:17

resetting prices is responding to

43:19

some imbalance to eliminate that

43:21

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Bitcoin today. Does it also kind

44:31

of break the whole idea of

44:33

like the boom and bus cycle?

44:35

And I mean that in like

44:37

the healthier sense of the boom

44:39

and bus cycle. Because if the

44:41

supply could change when we had

44:43

things like FDX and Celsius and

44:45

Block Phi, like, I think we

44:47

all agree that it's a good

44:49

thing those were washed out of

44:51

the market. But if the supply

44:53

of Bitcoin could have changed at

44:55

that point, who knows if any

44:57

of those or something similar could

44:59

have survived? Right. Or what happened

45:01

in 2008 was all the banks

45:03

that created this problem, they got

45:05

bailed out. So then the problem

45:07

persists for a long longer. In

45:10

the Bitcoin world, that was Bitcoin

45:12

working. Those entities, they functionally ran

45:14

out of Bitcoin. The bank run

45:16

was over. And those Bitcoin were

45:18

in somebody else's pocket. The bad

45:20

apples. they're out of business, they

45:22

don't get bailed out. And even

45:24

though it's harsh, like for a

45:26

price perspective at the time, like

45:28

we're in a much healthier spot

45:30

now. Yes, imbalance was eliminated rather

45:32

than allowed to persist into the

45:34

future. Yeah. Yeah, so the other

45:36

point that Jeff made, last thing

45:38

on Jeff, I know I said

45:40

that before, but on the show

45:42

that I did within this week,

45:44

this is the thing that surprised

45:46

me most. This is probably like,

45:48

like, quote unquote digital currency asset

45:50

whatever will be the future but

45:52

he thinks it'll be many competing

45:54

ones rather than the world converging

45:56

on one currency and I know

45:58

that's something you would definitely disagree

46:00

with. Definitely disagree.

46:03

So one of the things

46:05

I write about in Grashton

46:07

suddenly is that economic systems

46:10

converge on one form

46:12

of money and they do

46:14

so for reasons fundamental

46:17

to actually solving the

46:20

problem which is trade. That

46:22

trade is an intersubjective problem

46:24

if we, you know, the way

46:26

I would describe it. need to

46:29

trade, we have to have, before

46:31

we can trade, we previously have to have

46:33

arrived at a consensus of money. Yeah.

46:35

You have to accept the form of money

46:38

I have and I have to have the money

46:40

that you're willing to accept. We evaluate

46:42

all the different things that could be

46:44

money in the market on very objective

46:46

relative properties. Part of our evaluation

46:49

is what other people will value,

46:51

what other people consider to be money,

46:53

what other people, what other people, what

46:56

other people, what other people, what other

46:58

people, other properties people value in

47:00

money. And if I have to

47:02

have the form of money that

47:04

you're willing to accept and you

47:07

vice versa, but part of your

47:09

evaluation is the next

47:11

person, it's not a

47:13

one-to-one problem. It's functionally a

47:16

one-to-one to everybody in

47:18

the world problem. And

47:20

that's the core problem and

47:22

that forming the consensus. Like

47:25

opting into the foreign

47:27

money that has the

47:29

widest acceptance allows you

47:31

the greatest future

47:33

optionality and That if you

47:36

accept that the reason

47:38

why that it's this

47:40

this intersubjective problem that

47:42

it's your decision of

47:44

money is dependent on

47:46

the next That then you look

47:48

at the real world And

47:52

the real world says the world previously

47:54

converged on one standard of money that

47:56

was gold. So that's the macro. Why

47:59

and was it by? coincidence. Did people just

48:01

coincidentally over thousands of years act

48:03

irrationally to solve this very important

48:05

rational problem, which is how do

48:07

you trade? Yeah, of course not.

48:09

Of course not. Then 99.9% of

48:11

all people in the world only

48:13

interact with one form of money

48:15

on a daily basis. There might

48:17

be a few large multinational corporations

48:19

that deal in multiple currencies every

48:21

day, but 99.9% of individuals and

48:23

businesses only interact with one. And

48:25

then the question is, why, like,

48:27

is everyone, is everyone just hallucinating

48:29

into this thing that's very rational?

48:31

No, of course not. And so

48:33

because money is an intersubjective problem,

48:35

because it solves a problem of

48:37

trade, and also this recognition that

48:39

the only way that you get

48:41

a price system, some people like

48:43

to think about this world of

48:45

many currencies and the reason why

48:47

they think that is because there's

48:49

many fiat currencies, but all those

48:51

fiat currencies derived functionally off of

48:53

the gold standard, there might be

48:55

one or two exceptions, but. but

48:57

it was some other commodity money,

48:59

if not gold. And that, like

49:01

everyone takes prices for granted, the

49:03

price of beef, the price of

49:05

gas at the gasoline station, the

49:07

prices of going to see the

49:09

doctor, the price of rent, that

49:11

the only reason, the only way

49:13

that prices exist is by very

49:15

large group of people converging on

49:17

one form of money to begin

49:19

to price it. price their goods

49:21

and services in a denomination of

49:23

the currency that they all accept.

49:25

And that then allows the money

49:27

system to work. So, and then

49:29

coming back to this heuristic of

49:31

wealth, there's a form of money

49:33

that can't be printed and that

49:35

no one controls, everyone has an

49:37

ability to opt into that. And

49:39

then the alternative is some form

49:42

of money that can be printed.

49:44

Everyone has the incentive to opt

49:46

into the... money that is hardest

49:48

to produce and that will also

49:50

then be the money that is

49:52

most widely adopted for the reason

49:54

that it's global, it's permissionless, and

49:56

nobody can print it and no

49:58

one controls it. And the only

50:00

reason we can trust it is

50:02

because it's trustless. And therefore it

50:04

has the best information signal. Yeah.

50:06

So all of the all of

50:08

the fundamental economic things say, no,

50:10

like create a basis, like if

50:12

you have, if there's a form

50:14

of money, Bitcoin, that can't be

50:16

printed. And this is what Jeff's

50:18

dilemma is as a, as a

50:20

macro person. Where's the other form

50:22

of money that can't be printed?

50:24

And then how does that come

50:26

to exist when everyone can opt

50:28

into Bitcoin? Because they're always choosing

50:30

between A or B. So here's

50:32

this thing. Bitcoin has this credibly

50:34

enforced fix supply. It's been around

50:36

for a long time. It's adopted,

50:38

you know, whatever, you know, somewhere

50:40

between five and tenth largest currency

50:42

system in the world. The best

50:44

that any other currency could do

50:46

would be to match Bitcoin. But

50:48

everyone has the opportunity to choose

50:50

Bitcoin today versus something that's so

50:52

much more speculative. I could create

50:54

a form of money that can't

50:56

be printed or I could even

50:58

create the form of money that

51:00

Jeff envisions that could have some

51:02

mechanism to go against the market

51:04

to work in opposition to the

51:06

market for so they're trying to

51:08

reprice money. Everyone still has the

51:10

chance to opt into Bitcoin. So

51:12

the question is, hey, if I

51:14

create this currency that has this

51:16

flexible fixed supply. And someone's looking

51:18

at to say, well, I'd just

51:20

rather the money that can't be

51:22

printed. Yeah. And so six, you

51:24

know, six ways from Sunday, whatever

51:26

that's saying is, they'll all just

51:28

adopt the form of money that

51:30

can be printed, but adopting that

51:32

form of money and everyone converging

51:34

and forming consensus is a necessity

51:36

to solving the problem that money

51:38

works to solve, which is trade.

51:40

So there will not be. Tens

51:42

of currencies or hundreds of currencies

51:44

the other thing people think is

51:46

oh well the machines will do

51:48

the calculations. It's like no it's

51:50

the Humans have to adopt the

51:52

money and then they write software

51:54

and money doesn't work if there's

51:56

not convergence and if there's one,

51:58

if there is a best money

52:00

which there is and the only

52:02

reason why there have been these

52:04

hundred of currencies is because there's

52:06

been this jurisdictional friction by force,

52:08

by fiat and Bitcoin is this

52:10

perfected money that can't be printed

52:13

that no one controls and water

52:15

moves downhill so everyone has, it's

52:17

realistically the first time that anybody

52:19

could opt into a farm money.

52:21

that literally can't be printed at

52:23

all. Yeah, that's why that that

52:25

statement confused me so much. I

52:27

was surprised to hear him say

52:29

it because all you have to

52:31

do is look at history and

52:33

see like the world did converge

52:35

among currency and to think it

52:37

won't do that again seems crazy

52:39

to me. Yeah. But anyway, this

52:41

has been like a very long

52:43

intro into your recent paper that

52:45

you've written, which is Bitcoin is

52:47

money and currency. Yeah. You've obviously

52:49

talked a lot about Bitcoin as

52:51

money here, but there's let's talk

52:53

about Michael Sayloraler for a minute.

52:55

I have a huge amount of

52:57

respect for Microsoft. He's done incredible

52:59

things with Bitcoin. But he is

53:01

kind of pushing this narrative that

53:03

Bitcoin is not necessarily money and

53:05

instead it's like more a kin's

53:07

digital goal as an asset. And

53:09

I'm not 100% sure why that

53:11

is. It could be just to

53:13

kind of get the foot in

53:15

the door at DC and he

53:17

may not believe that or he

53:19

may. But that narrative is growing

53:21

either way. Is that kind of

53:23

why you wrote this piece? a

53:25

lot of respect for Michael Saylor

53:27

and both for his contributions to

53:29

Bitcoin and everything that he does

53:31

to help educate Bitcoin and further

53:33

Bitcoin. I would say that his,

53:35

if I would describe his position,

53:37

it's not that it's not money.

53:39

He'll say it's not currency. It's

53:41

not competing against the dollar. It's

53:43

money, but it's not currency. And

53:45

I think that the... analogy

53:48

or parallel would be that gold

53:51

was money but the dollar was

53:53

currency? So maybe you should explain

53:55

that because before I read your

53:58

piece I think I would have

54:00

thought money and currency were of

54:03

like just an interchangeable term. I,

54:05

and I did, I did as

54:07

well. The first time I was

54:10

asked about the distinction a year

54:12

or two ago on Daniel Prince's

54:14

podcast, but then the more that

54:17

I listened to people talk, because

54:19

Michael so I was not the

54:21

only one that draw this distinction,

54:24

the questions like, are they being

54:26

pedantic? That currency has been a

54:29

subset of money, but that, There's

54:31

been an issue of currency that

54:33

is either coining gold, right? And

54:36

that if you coin gold into

54:38

a, I would screw it up,

54:40

is it like the South African

54:43

Cougar Inn or? I don't know.

54:45

Okay. You can say that because

54:47

I don't know. Well, what's the

54:50

Australian currency? Dollar. Australian dollar. Okay.

54:52

Yeah. That that process of coinage

54:55

is part of something that takes

54:57

a raw. material turns

54:59

it into a more functional

55:01

currency. You're setting a standard

55:04

weight measure. And so there

55:06

is a, prior to Bitcoin,

55:08

there was a real distinction

55:10

between money and currency historically.

55:12

Even under like gold standard.

55:15

Yeah. So that's the part.

55:17

My, my, my, because think

55:19

about this distinction of imagine,

55:21

have you ever, have you

55:23

ever held a gold bar?

55:26

I've held a gold coin,

55:28

I'm not held a gold

55:30

bar. Okay, well, but if

55:32

you could picture a gold

55:34

bar that is just gold.

55:37

There's nothing that... Just pure

55:39

gold. Just pure gold. Something

55:41

that's a coin that puts

55:43

the crown on it that

55:45

says this was issued by

55:48

the crown. This is the

55:50

actual unit, this is the

55:52

actual unit, this is one

55:54

else. that that process

55:56

of refinement from the raw

55:59

gold to that coin improves

56:01

the utility of the money. And

56:03

that would be the distinction that

56:05

people would make. Like if it

56:07

was just the raw material, you

56:09

wouldn't know how much its weight was. You

56:12

wouldn't necessarily know that

56:14

it was gold, because you'd have

56:16

to validate that against something that

56:18

you know to be gold, and

56:21

that if you see this mark of the

56:23

of the crown, and that if anybody

56:25

counterfeited it, then the crown

56:27

would... So that's where I had

56:29

a misunderstanding when I read the

56:31

piece, because I thought you were

56:34

talking about like the denominator. So

56:36

whether it was like a grammar

56:38

or an ounce, but you mean

56:40

it's like the stamp of

56:42

approval? It's both. It's recognizable,

56:44

but it's like that the

56:46

issuer, which historically was the

56:49

crown of the state, they would refine

56:51

the gold into a standard

56:53

unit, which was also important,

56:55

but... It was the standard unit

56:58

as well as the stamping

57:00

of it so that somebody, when

57:02

they saw it, they could trust,

57:04

oh, okay, this actually is an

57:06

ounce of gold, and that if

57:08

this person that's giving to me

57:10

is counterfeiting it, there's also

57:13

someone going around ensuring

57:15

that the money is not counterfeit.

57:17

So I'm making the point that

57:19

that process of refinement of gold into

57:21

a currency is not counterfeit. was part

57:23

of what made what made the money

57:26

work. Otherwise, if you're the person receiving

57:28

gold for goods or services, you have

57:30

to then go and validate it if

57:32

it doesn't have that stamp. Right. If

57:34

to validate it, you have to weigh

57:36

it. You got to, you have to

57:38

weigh it. You got to assay, like

57:40

the process is called assaying. You

57:42

have to assay gold to make sure that

57:44

it's actually gold. It's a highly technical

57:47

process to do and not something that

57:49

you could do if you're sitting at

57:51

a counterabout. make a transaction. Right.

57:53

And in the Bitcoin parlance, the way

57:55

to think about that is when a

57:58

Bitcoin is accepted to a node. It's

58:01

validated. It's functionally acid.

58:03

And the distinction that I

58:05

draw on my piece is

58:07

that Bitcoin is the first

58:09

money that is also functional

58:12

as a currency, and that that's

58:14

never been true of any other

58:17

money before. That with gold,

58:19

you know, and this point might

58:21

have been lost on some

58:23

people, even if you've read

58:25

it, but Bitcoin does a few

58:28

things that make it. on its

58:30

own, capable of being both great

58:32

money and a great currency system.

58:34

So whereas gold needed

58:36

some refinement either into coin,

58:38

like physical coin, or to become

58:40

convertible to a paper note in

58:43

order to solve this problem of

58:45

standard weights of measure, the trust

58:47

in the currency, that the currency

58:49

was actually the currency, to essentially

58:51

make it easier to not have

58:54

to assay a bar of gold every

58:56

time that it's being transferred.

58:58

That process of refinement

59:01

always required there to be

59:03

an issuer and that the

59:05

issuer was playing a part

59:07

to make the raw material

59:10

the money more functional

59:12

as a utility in

59:14

trade and that Bitcoin

59:16

eliminates the issuer from

59:18

all parts of the currency

59:21

function in the sense that

59:23

any role an issuer of currency

59:25

previously played in the refinement

59:28

of money to make the money

59:30

a utility and trade is not technically

59:33

needed in the Bitcoin world

59:35

because Bitcoin can do all of

59:37

those things. So what I would

59:39

describe it as there's several different

59:42

functions that Bitcoin's able

59:44

to do itself within the network.

59:46

It's able to issue the 21

59:48

million fixed supply. It's able

59:50

to enforce that that supply can't

59:52

be. Broken it big the Bitcoin

59:55

network controls the rate of

59:57

issuance that every 10 minutes on

1:00:00

average and it resets but

1:00:02

it targets that. It is able

1:00:04

to the Bitcoin network to transmit

1:00:06

currency. It's able to validate currency.

1:00:09

Very easily for basically no cost.

1:00:11

Yeah and importantly it has this

1:00:14

standard unit inherent to the system.

1:00:16

You can't just have one gold.

1:00:18

You have to have like an

1:00:21

ounce of gold or a 10

1:00:23

kilogram bar. Those were set by

1:00:25

issuers now a standard may have

1:00:28

emerged on the markets. I'm sure

1:00:30

people tried different standards and then

1:00:33

settled on one ounce or settled

1:00:35

on a 10 kilogram bar 1

1:00:37

kilogram bar But But you can't

1:00:40

you can have one Bitcoin or

1:00:42

you can have one satoshi You

1:00:44

can't just have one gold. You

1:00:47

need some one ounce you need

1:00:49

someone to convert the raw material

1:00:52

into that. And so because Bitcoin

1:00:54

has the standard unit, because currency

1:00:56

can be transmitted, because currency can

1:00:59

be validated, and because the supply

1:01:01

is both issued and enforced all

1:01:04

in one closed loop system, there's

1:01:06

no other function that Bitcoin can't

1:01:08

do on its own, which also

1:01:11

isn't true of any thing that

1:01:13

had previously been money or at

1:01:15

least any. commodity money and commodity

1:01:18

money has emerged as the most

1:01:20

functional forms of money that has

1:01:23

ever existed. So when this piece

1:01:25

was at least partially directed like

1:01:27

policy makes in DC. Yeah, and

1:01:30

I'm not, you know, I mentioned

1:01:32

Michael Saylor and the piece saying

1:01:34

like, hey, he's someone that disagrees

1:01:37

with this, I'm going to explain

1:01:39

the logic as to why this

1:01:42

is the case that the Bitcoin

1:01:44

operates as a currency system, it's

1:01:46

the first type of money and

1:01:49

this is why that is able

1:01:51

to do this and that If

1:01:53

these certain facts are true, that

1:01:56

Bitcoin does have a credibly enforced

1:01:58

fix supply and that that is

1:02:01

why people adopted as money, that

1:02:03

It's just a matter of time

1:02:05

before everyone figures it out. And

1:02:08

there might be a world today

1:02:10

where people can save Bitcoin and

1:02:12

spend their dollars. But once everyone

1:02:15

figures out that Bitcoin is the

1:02:17

better form of money, then because

1:02:20

Bitcoin is able to also facilitate

1:02:22

the transfer directly. And what I

1:02:24

mean by that is you don't

1:02:27

need, like if Bitcoin wasn't capable

1:02:29

of being sent, but somehow all

1:02:31

these other properties happen to be

1:02:34

true, which realistically... They all have

1:02:36

to be true or none of

1:02:39

them are true. But let's just

1:02:41

say theoretically, say it wasn't possible,

1:02:43

all the other things were true,

1:02:46

but it wasn't possible to send

1:02:48

Bitcoin between peers and the network.

1:02:50

Then maybe you need some outside

1:02:53

currency system to affect that. But

1:02:55

that's not the case. People can

1:02:58

actually because if you couldn't transmit

1:03:00

it between people then. Okay, maybe

1:03:02

I need to go to this

1:03:05

other system and then use that

1:03:07

system for the transmission, but Bitcoin

1:03:09

is capable of being sent. So

1:03:12

as the market learns, it has

1:03:14

this fixed supply and that that's

1:03:17

better than any other form of

1:03:19

money, everyone adopts it, and once

1:03:21

everyone's adopted it, there's no need

1:03:24

to go back out into this

1:03:26

other currency system. So was part

1:03:28

of this because you're worried about

1:03:31

stable coin regulation? Because that's obviously

1:03:33

like another growing thing in DC

1:03:36

and like... in charge. Is that

1:03:38

one of your fears with this?

1:03:40

What I would say is that

1:03:43

the, there's no sense, there's no

1:03:45

good that comes in my mind

1:03:48

from defining Bitcoin expressly as not

1:03:50

being something that it is. Because

1:03:52

two things end up happening. Either

1:03:56

people figure it out on

1:03:58

their own. and neither of

1:04:00

those are good outcomes. Yep.

1:04:02

And that when they do

1:04:04

figure it out, that you

1:04:06

were, I don't say a

1:04:09

lot, that you were either

1:04:11

being untruthful or that you

1:04:13

were ignorant. You didn't know.

1:04:15

And neither of those are

1:04:17

good outcomes. Yep. And that

1:04:19

when they do figure it

1:04:21

out, that they're more likely

1:04:23

to. Overregulate and so if

1:04:25

you've put something in a

1:04:27

box today that says Bitcoin

1:04:29

is expressly not currency Then

1:04:32

And that something else is

1:04:34

a stable stable coin is

1:04:36

currency and that Bitcoin is

1:04:38

not what what is that

1:04:40

it is not? Like what

1:04:42

purpose does it serve if

1:04:44

Bitcoin is currency in my

1:04:46

view and I don't believe

1:04:48

that this is at all

1:04:50

Michael's intention But if you

1:04:52

put it into that box,

1:04:54

it then makes it, you've

1:04:57

created the framework to then

1:04:59

say, oh, and you can't

1:05:01

use it for transactional purposes.

1:05:03

It's not currency. This is

1:05:05

currency. The person that's framing

1:05:07

the policy might not have

1:05:09

that intention, but that's how

1:05:11

it becomes, you've essentially created

1:05:13

the framework to then affect

1:05:15

a policy like that at

1:05:17

least legally. And it is

1:05:20

problematic. when Bitcoin is currency,

1:05:22

you're essentially putting Bitcoin in

1:05:24

a box, like a square

1:05:26

peg round hole situation, because

1:05:28

people are using it as

1:05:30

currency every day. And then

1:05:32

this is the other thing

1:05:34

is, functionally, if you were

1:05:36

to say that, that it's

1:05:38

not currency and that it

1:05:40

shouldn't be used as currency,

1:05:43

you're also then saying, because

1:05:45

this is what happens every

1:05:47

day, is that Bitcoin is

1:05:49

traded for dollars. That you're

1:05:51

then, you're steering toward a

1:05:53

path where... It's

1:05:56

okay to transact Bitcoin for dollars, but

1:05:58

not anything else. Yeah. And why would

1:06:00

you do that? And I think that

1:06:02

the root of it is that you

1:06:04

don't want to be seen as

1:06:07

competing with a dollar. Yeah, I was

1:06:09

going to say, is there an

1:06:11

argument to be made that as

1:06:13

like a Trojan horse mechanism, just

1:06:16

pretend it doesn't compete with a

1:06:18

dollar, get Bitcoin in office as

1:06:20

much as possible, and then people

1:06:23

figure out later. I can't. Can

1:06:25

a speed run the policy side of

1:06:27

that? That's one side of

1:06:29

the logic. I think that's short-sided.

1:06:32

I don't know if that's

1:06:34

the side of it that is dictating

1:06:36

this but Or in terms of

1:06:38

the any anybody like Michael

1:06:40

sailor again is somebody that

1:06:42

I have a lot of respect for

1:06:44

I can't say I can't I can't speak

1:06:47

for for him. I do think that

1:06:49

it is inconsistent with

1:06:51

the economic gravity is

1:06:53

inconsistent with the economic

1:06:56

reality and that It is

1:06:58

problematic for anybody that's working

1:07:00

on, like I'm working on Bitcoin

1:07:03

payment. So part of it

1:07:05

is a policy perspective and saying,

1:07:07

hey, this actually is the economic

1:07:10

reality. This is why it

1:07:12

is currency from a fundamental perspective,

1:07:14

just in terms of what the actual

1:07:17

distinction between money and

1:07:19

currency is and why Bitcoin is

1:07:21

unique and it's able to affect

1:07:23

all of these currency functions there

1:07:26

thereby. or therefore its currency.

1:07:28

But when you're actually

1:07:30

working on helping businesses

1:07:33

right here in the US or you

1:07:35

know around the world, except Bitcoin

1:07:37

is payment, it is problematic

1:07:41

when there's a active movement

1:07:43

in DC to try to

1:07:45

say this is expressly not

1:07:47

that thing. Yeah. And so because like

1:07:49

on that same thread, it. Do you see

1:07:51

the stable coin side of things and the

1:07:53

stable coin regulation they're trying to put in

1:07:55

at the moment as kind of like a misnomer

1:07:57

and if everyone converged on one currency that?

1:08:00

it's kind of irrelevant anyway.

1:08:02

Yes. Yeah. That it's kind of, you

1:08:04

know. It's like a short-term thing.

1:08:06

It's not going to be here

1:08:08

for the long time. Yeah, and I

1:08:10

think it's so funny because I

1:08:12

think it's not to go down

1:08:15

another tangent, but it's like

1:08:17

calling solar energy and wind

1:08:19

energy, and clean when it's only

1:08:22

quote, quote, renewable if

1:08:24

it's economically sustainable.

1:08:26

Yeah. But you put this word

1:08:28

on it that is a pejorative.

1:08:30

It's like, oh, it's renewable. Therefore,

1:08:33

it's good. It's renewable. And you're

1:08:35

like, what do you mean? It's

1:08:37

renewable. You still have to

1:08:39

refine it. They put this term stable

1:08:41

coin on it. It's like, well, it's

1:08:44

only as stable as the

1:08:46

underlying fiat currency is not

1:08:48

stable. The fiat currency is losing

1:08:51

its value. So you're just

1:08:53

putting this word on it. And

1:08:55

in reality, what it is, is

1:08:57

it's more akin to a

1:08:59

credit card. It is more a different

1:09:02

method of payment of

1:09:04

a existing currency. We

1:09:07

don't consider Visa MasterCard

1:09:09

as being a different

1:09:11

money. We didn't have to create

1:09:14

a new coin. So in my

1:09:16

mind, it's kind of crazy

1:09:19

that one is not a

1:09:21

stable coin. It's not a

1:09:23

stable coin. A dollar token.

1:09:25

It's a different way to

1:09:28

transact dollars. It's more of

1:09:30

a method of payment than

1:09:32

it is a currency. So you

1:09:35

don't need to define this

1:09:37

expressly as currency.

1:09:39

No one needed to

1:09:41

define what happened when

1:09:43

Venmo are selling, you know,

1:09:45

transacting dollar claims

1:09:48

as Venmo coin. Right. And

1:09:50

so the basis of it is

1:09:52

a logical. The thing that it the

1:09:55

only thing that would be problematic in

1:09:57

the context of Bitcoin is if you

1:09:59

say this thing. is expressly currency and

1:10:01

this thing Bitcoin is expressly not

1:10:03

currency. Yeah. I don't care if

1:10:05

people spend their time monking around

1:10:07

with, you know, public-private key encryption

1:10:09

as a way to move claims

1:10:11

on dollars. I haven't, whatever, do

1:10:13

it. But don't try to put

1:10:15

Bitcoin in a box, contra it,

1:10:17

because you think that instantiates and

1:10:19

it's like, you know, what you're

1:10:22

working on over. Yeah, no, I

1:10:24

totally agree with that. And so

1:10:26

is this really like the edge

1:10:28

you see at Zapright that people

1:10:30

aren't appreciating that Bitcoin is also

1:10:32

a currency? No, I think that

1:10:34

the single thing that is holding

1:10:36

back Bitcoin payments, or there's a

1:10:38

number of things, but... The greatest

1:10:40

thing holding it back is just

1:10:42

adoption of Bitcoin. That you have

1:10:44

to understand why that coin will

1:10:46

store value over time before you

1:10:49

want to be paid in it.

1:10:51

If you accept that still very

1:10:53

few number of people in the

1:10:55

world understand the basis of Bitcoin

1:10:57

is money, then it's also logical

1:10:59

that not many people are accepting

1:11:01

it. At the same time, what

1:11:03

is true is that going down

1:11:05

the money rabbit hole is something

1:11:07

that's very esoteric. It's very difficult

1:11:09

to understand money is in tan,

1:11:11

in the concept of money. So

1:11:13

I always want to say intangible,

1:11:16

but it's just not tangible. And

1:11:18

that one of the biggest, Elena

1:11:20

Medevia was here over the weekend,

1:11:22

and she got a question, I

1:11:24

can't remember where the question was,

1:11:26

but she mentioned that some of

1:11:28

the biggest pushbacks, she gets to

1:11:30

Bitcoin, well, you can't spend it

1:11:32

anywhere. And so it appears to

1:11:34

be this chicken and egg problem,

1:11:36

which I don't really think is,

1:11:38

it's more so. People first have

1:11:40

to understand why the coin stores

1:11:42

value. It stores value because of

1:11:45

its fixed supply. But if you're

1:11:47

not yet there, then it very

1:11:49

much feels like this chicken egg

1:11:51

problem of, well, no one accepts

1:11:53

it, so therefore it's unintuitive to

1:11:55

me as money, and that part

1:11:57

of what will help people understand

1:11:59

Bitcoin as money, it's like the

1:12:01

first people that go down that

1:12:03

rabbit will have to think about

1:12:05

these economic concepts, but when someone

1:12:07

sees Bitcoin being accepted at the

1:12:09

gas station. it's going to become

1:12:12

much more intuitive as money and

1:12:14

that the vast majority of people

1:12:16

are going to begin to understand

1:12:18

Bitcoin is money because it's able

1:12:20

to be used as money. So

1:12:22

tax policy can hold Bitcoin payments

1:12:24

back. But it's not the principal

1:12:26

thing. It's Bitcoin adoption. You know,

1:12:28

that when we go from a

1:12:30

world where one in a hundred

1:12:32

people understand Bitcoin to two and

1:12:34

a hundred to three and a

1:12:36

hundred to four and a hundred

1:12:38

to five and a hundred. to

1:12:41

one out of 10. As the

1:12:43

density of Bitcoin holders increases, the

1:12:45

opportunities for trade increase. We have

1:12:47

to, you know, the way we

1:12:49

think about it as Zapright is

1:12:51

we have to put the tools

1:12:53

out into the world that the

1:12:55

people that already understand Bitcoin that

1:12:57

run businesses will make it easy

1:12:59

for them to make that option

1:13:01

available. As we do that, Bitcoin

1:13:03

becomes better money. It becomes... a

1:13:05

greater utility. You can't, you don't

1:13:08

have to just convert it to

1:13:10

dollars. You can actually just take

1:13:12

it as money and then go

1:13:14

onto the next person. But that

1:13:16

through that process, the next wave

1:13:18

of people, they'll start to be

1:13:20

seeing it used as they have

1:13:22

no money to be, but then

1:13:24

they also won't be able to

1:13:26

say, well, it's not accepted. Yeah,

1:13:28

it just takes time. So are

1:13:30

you seeing Bitcoin payments grow because

1:13:32

I use that right? And every

1:13:35

time I send an invoice I

1:13:37

have the option for them to

1:13:39

pay in dollars or in Bitcoin.

1:13:41

And I'm sending these to Bitcoin

1:13:43

companies. and the vast majority, like

1:13:45

almost all of them are still

1:13:47

choosing to pay in dollars. Do

1:13:49

you put a premium on dollars?

1:13:51

I don't yet. Because it's not

1:13:53

in the contract for me to

1:13:55

do that. Okay, but then put

1:13:57

a discount. So we actually, so

1:13:59

I was the big, or I

1:14:01

don't say that, I don't take,

1:14:04

okay, like for me personally, I

1:14:06

charge a 10% premium when I

1:14:08

sell my books. Okay. When you

1:14:10

put a premium on Fiat. People

1:14:12

respond to that. incentive more so

1:14:14

than when you put a discount

1:14:16

on Bitcoin. The way the BTC

1:14:18

session, I've seen him describe it

1:14:20

is that, so say like the

1:14:22

book costs, when I sell the

1:14:24

book, it's $30 if you pay

1:14:26

in Bitcoin, but if you want

1:14:28

to pay in fee, I'll take

1:14:31

it, but it's 33, there's a

1:14:33

10% premium. Yeah. And when you

1:14:35

put a premium on it, not

1:14:37

only does it communicate to the

1:14:39

buyer without having to have a

1:14:41

conversation. This is part of what

1:14:43

we think about it. The way

1:14:45

that we deliver value is not

1:14:47

just by making the option available

1:14:49

to pay in Bitcoin, but to

1:14:51

actually drive the Bitcoin payments. Because

1:14:53

what that allows you to do

1:14:55

is it dollar for dollar or

1:14:58

sat for sat allows you to

1:15:00

get more sets. Like if you're

1:15:02

going to get the dollars and

1:15:04

then convert them to sat so

1:15:06

you're going to end up with

1:15:08

fewer sets. That are us as

1:15:10

app right. The way we deliver

1:15:12

value to you, the podcast, Danny,

1:15:14

is not simply by making that

1:15:16

option available. It's by actually driving

1:15:18

the customer to follow through and

1:15:20

pay it so that you can

1:15:22

get more saps, right? So that

1:15:24

you can get more money. Well,

1:15:27

when I give people for my

1:15:29

book, the tradeoff, when they're paying

1:15:31

the premium, it feels like something's

1:15:33

being taken from them. Yeah, it's

1:15:35

just a reframing. It's a reframing,

1:15:37

but it causes them to change

1:15:39

their actual behavior. Yeah, well, what's

1:15:41

the difference? It's like, well, no,

1:15:43

because... when they feel like, I'm

1:15:45

actually paying more than I otherwise

1:15:47

would. they're more likely too. Like

1:15:49

it's just statistical, I can prove

1:15:51

it to you, if I could

1:15:54

show you all my statistics, it's

1:15:56

provable. Now, we also give the

1:15:58

opportunity to put discounts for a

1:16:00

lot of people that use the

1:16:02

invoices because of what you just

1:16:04

said. I've got a contract, such

1:16:06

that it will feel like I'm

1:16:08

breaking my contract if I said,

1:16:10

well, it costs X to advertise

1:16:12

with me, but it's actually X

1:16:14

plus 10% if you pay me

1:16:16

in the currency that you want

1:16:18

to pay me in. So you

1:16:20

can put the discount on it.

1:16:23

Right? Because it's still, you're, you're,

1:16:25

you're providing a discount to whatever

1:16:27

your contract was. Now, the reality

1:16:29

is that even though I said

1:16:31

that adoption is the greatest barrier

1:16:33

to Bitcoin payments, that it's, you

1:16:35

need more density of Bitcoin holders.

1:16:37

The, the tax is still an

1:16:39

impediment. I just recently wrote a

1:16:41

piece explaining why, you know, you

1:16:43

know, when you're spending your Bitcoin,

1:16:45

if you have a, if you

1:16:47

have a gain on it, it.

1:16:50

It's only because you're, Fiat didn't

1:16:52

lose value. You saved in a

1:16:54

form of money. So it's more

1:16:56

of a, it's not a spending

1:16:58

Bitcoin dilemma, it's more spending versus

1:17:00

savings. But the tax is still,

1:17:02

it is a friction. Yeah. You

1:17:04

know, if there weren't taxes on

1:17:06

it, that would be a fresh,

1:17:08

removed. It's not the greatest friction.

1:17:10

The greatest friction is adoption. But

1:17:12

they say they were saying to

1:17:14

Odell in Nashville. Yeah. But in

1:17:17

your case, like there might be

1:17:19

companies with Bitcoin companies don't yet.

1:17:21

accept Bitcoin for transactional purposes and

1:17:23

their accounting is the friction. Yeah,

1:17:25

I spoke to one in particular,

1:17:27

that's the reason they can't do

1:17:29

it. Like they would like to

1:17:31

do it as well, but it's

1:17:33

an accounting issue. Yeah, and realistically

1:17:35

that's a human issue. They have

1:17:37

someone in the accounting department that's

1:17:39

saying no. Yeah. And that if

1:17:41

the CEO of that business said

1:17:43

yes, they'd have to just go

1:17:46

to their CFO or their account

1:17:48

and say like it's important for

1:17:50

us to do this. Figure it

1:17:52

out. Yeah, because it's a it's

1:17:54

a solvable problem other other companies

1:17:56

are doing it. You know, so

1:17:58

what I would say is that

1:18:00

using Bitcoin as a currency, it's

1:18:02

like, because the article I wrote

1:18:04

just the other day was explaining

1:18:07

why like the logic of spending

1:18:09

Bitcoin of like, you're not worried

1:18:11

about foregoing future appreciation because if

1:18:14

you're spending dollars, it's the same

1:18:16

foregoing because you could convert those

1:18:18

dollars to Bitcoin. The next one

1:18:20

I'm gonna write is the efficiency

1:18:23

of Bitcoin transactions that if you

1:18:25

have two Bitcoin holders on either

1:18:27

side, and. somebody wants to

1:18:29

receive Bitcoin and someone has

1:18:32

Bitcoin that's technically capable of

1:18:34

sent regardless of the friction that

1:18:36

those two economic parties are going to

1:18:39

save about 5% if they don't have

1:18:41

to interface with the Fiat system.

1:18:43

So that makes sense. It's funny. So

1:18:45

like two years ago, let's say, I

1:18:47

was living on as close to a

1:18:50

Bitcoin as possible. Like I was spending

1:18:52

everything on my credit card throughout the

1:18:54

month. paying the office once I got

1:18:56

paid and everything else I went to

1:18:59

Bitcoin. So I never had a single

1:19:01

dollar in the bank account. Now with

1:19:03

the business that I've now got, I

1:19:05

have to have some form of dollars

1:19:07

there. And also just personally, like I've

1:19:09

had a kid since then and I

1:19:12

feel like it's, I need something in

1:19:14

reserve. Do you think that's the wrong way

1:19:16

of looking at it? No, I think it's,

1:19:18

I think it's the right way to look

1:19:20

at it. I mean, everybody has to

1:19:22

volatility is real. And even

1:19:25

though Bitcoin is functional

1:19:27

as a currency system,

1:19:30

it's in the process

1:19:32

of being improved such

1:19:35

that we're going to get

1:19:37

to a world in the

1:19:39

future where everyone accepts

1:19:41

it. Yeah. The reality

1:19:44

is still that that future

1:19:46

is not yet here. So,

1:19:48

you know, having some

1:19:50

dollar reserves. is

1:19:54

perfectly logical. It kills me every time

1:19:56

I look at it like when the price

1:19:58

crashes. I know, but, but. But if

1:20:00

you think about that over time,

1:20:03

you know, it's like, go back

1:20:05

to when Bitcoin was $10,000 or

1:20:07

$15,000, you know, that functionally over

1:20:09

time, you're, what you're going to

1:20:12

optimize for is how you can

1:20:14

most comfortably hold the most amount

1:20:16

of stats. Yeah. And that, you

1:20:18

know, the economic energy that you

1:20:21

would spend trying to time things.

1:20:23

is an actual cost to you.

1:20:25

So, you know, that's one of

1:20:27

the arguments to having some dollars,

1:20:30

which is like, you know, for

1:20:32

a month or two months, I

1:20:34

don't want to have to worry

1:20:36

about, do I have, you know,

1:20:39

do any, and have dollars in

1:20:41

the bank to cover expenses for

1:20:43

the month, right? Well, I don't

1:20:45

know, though, is if, like, in

1:20:48

the scenario where I would need

1:20:50

to dip into, like, the Bitcoin

1:20:52

stack, if I'd have still been

1:20:54

better to have held Bitcoin in

1:20:57

the Bitcoin in the interim. Remember

1:20:59

the guy who defined, or the

1:21:01

hottle thing? He's like, yeah, if

1:21:03

I knew exactly when the next

1:21:06

guy was gonna sell and then

1:21:08

be able to perfectly time buys,

1:21:10

yeah, I would do that. But

1:21:12

if holding for the long term

1:21:15

is the best thing, then if

1:21:17

you need to dip into that,

1:21:19

like say, if you needed to

1:21:21

dip into 5,000 pounds or dollars,

1:21:24

whatever. Yeah, if you had been

1:21:26

able to sell it at when

1:21:28

Bitcoin was $100,000 or $100,000, you'd

1:21:30

have more stats left. Yeah. But

1:21:33

life doesn't work that way. I

1:21:35

mean, life doesn't work that way,

1:21:37

but also zoom out. If you

1:21:39

had chosen not to save that

1:21:42

$5,000 in Bitcoin when it was

1:21:44

$10,000, you'd be in a much

1:21:46

worse. Yeah. So as long as

1:21:48

your... This is the thing. As

1:21:51

long as you're consistently delivering value

1:21:53

says that you can build up

1:21:55

savings, you're going to get more

1:21:57

Bitcoin in the future. And... Volatility

1:22:00

is real, so there's some distribution of Bitcoin

1:22:02

versus dollars or Bitcoin versus pounds. However, you

1:22:04

can comfortably hold the largest amount in Bitcoin,

1:22:06

you're going to be better off. But you

1:22:08

don't want to constantly be sitting there thinking,

1:22:10

you know, do I have enough to add

1:22:12

not? Yeah, this is the, what Bitcoin does

1:22:14

to you though, you're always thinking. But one

1:22:16

of the points that I make about like,

1:22:18

because people are well, people don't want to

1:22:20

spend their Bitcoin. Imagine someone that has, you

1:22:22

know, like myself, I almost have, I almost

1:22:24

have 100% such that if someone did, you

1:22:26

know, allow me to pay in Bitcoin, I'll

1:22:28

pay in Bitcoin because it just makes my

1:22:30

life easier. Yeah. Because the alternative would be

1:22:32

I would sell those for dollars and then

1:22:34

dollars that one of the one of people's

1:22:36

hang ups, whether they're a merchant or a

1:22:38

consumer, is I don't want to part with

1:22:40

my Bitcoin. because it's going to go up

1:22:42

in the future. And that is the incorrect

1:22:44

frame because what your real dilemma is, is

1:22:47

whether you should spend it all. Yeah, it's

1:22:49

all opportunity cost. It's all opportunity costs. And

1:22:51

because you have this expectation of Bitcoin going

1:22:53

up in the future, you're spending for savings

1:22:55

decision is necessarily sharpened. Say imagine I had

1:22:57

a thousand dollars and $500 of it was

1:22:59

in Bitcoin and it was in Fiat and

1:23:01

I went out and got a steak for

1:23:03

$50 and just spent the dollars. Makes no

1:23:05

difference because that could have been Bitcoin. I

1:23:07

could have spent the $50 on Bitcoin. Now

1:23:09

say if I... Have a thousand dollars, and

1:23:11

it's all in Bitcoin, and I'm evaluating whether

1:23:13

or not to go buy that fifty dollar

1:23:15

steak I'm sitting there thinking And this money

1:23:17

money is going to

1:23:19

appreciate versus in the

1:23:21

other one, I was

1:23:23

thinking, I my fiat

1:23:25

is going to depreciate.

1:23:27

I might as well

1:23:29

go to depreciate, I might as well

1:23:31

It is the same

1:23:33

dilemma. same if you're hungry,

1:23:35

you're going to go

1:23:37

and do it. Right.

1:23:39

hungry, And that we

1:23:41

all have needs and

1:23:43

wants and both are

1:23:45

valid. that we all have needs and wants

1:23:47

them really should you

1:23:49

save or spend, not

1:23:51

whether you should save

1:23:53

or spend the on whether you

1:23:55

And then or I

1:23:57

mentioned before, And the tax

1:23:59

I you know, you

1:24:01

only have a quoted

1:24:03

gain only have a quote gain if. It's

1:24:05

gone gone down, your

1:24:07

fiat's gone down and

1:24:09

you've made a good

1:24:11

savings decision. decision. Yeah, so. Amazing. Thank

1:24:13

you for Thank you for

1:24:15

this, It's It's been

1:24:17

a great week. week. appreciate

1:24:19

you coming back on

1:24:21

the podcast. on the I

1:24:23

appreciate I appreciate you coming and

1:24:25

out during the the and

1:24:27

being a part of

1:24:29

it. a part of it. You know,

1:24:31

appreciate you. M you of the takeover

1:24:33

a portion of the

1:24:35

the live then doing the

1:24:37

live Marty. It Marty. the

1:24:39

It made the event more

1:24:41

much more special. of fun.

1:24:43

was a lot of

1:24:45

fun. Appreciate you being

1:24:47

a part of it.

1:24:49

Thank you, Parker. Parker.