Bitcoin Regulation in Europe with Thomas Jeegers | Bitcoin Infinity Show #217

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Thomas, welcome to the Too Many Pints of Guinness edition of the Bitcoin Infinity Show.

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Yeah, thank you for having me, Knut.

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Yeah, nice to have you here.

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You haven't been on the show before, so why don't you tell our listeners a bit about who you are and what you do?

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Yeah, gladly.

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So I'm Thomas Siegers.

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I'm currently the CFO and COO of Relay, which is the biggest Bitcoin-only broker in Europe.

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Yeah, that's the TLDR, I guess.

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Could you be?

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So when did you find Bitcoin?

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Where did you grow up?

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Like, what's your journey?

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Sure.

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So I always like to say that I was a Bitcoiner

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before even knowing that Bitcoin existed.

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So in 2011 already,

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I was already holding speeches

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on the potential of complementary currencies in economies.

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So how having multiple currencies running in parallel

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can actually stabilize economies

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by smoothing out the ebbs and flows.

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So I was already challenging the main monetary system, how it works, fractional reserve banking.

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And I had literally never heard of Bitcoin by that time.

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Then the first time I heard about it, like a traditional economist and finance person that I was, I completely discarded it.

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Thought, yeah, there's nothing backing it.

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That's not something that I would be interested in.

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Then it kept popping up again and again.

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And eventually I started to get very interested.

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and at the time 2014 I believe I was working in risk management at ING in Germany and I became

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the local expert on blockchain technology so that's when I really dived in and I still remember

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standing in front of the full board of ING in Germany and telling them that 400 and something

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dollars per bitcoin was grossly overpriced so I wish I had said something different even though

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You meant to underpriced, yeah.

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No, no, no.

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I meant to overpriced clearly because the level of risk that this new instrument was facing at the time was not justifying even the few billion of capitalization that it had.

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And I would probably still stand by that statement in the sense that at the time it was an extremely risky instrument.

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so i think that for example today it is much more interesting to invest in bitcoin today than it was

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let's say 10 12 years ago because at the time the likelihood that it would collapse was very

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significant while today it is a much more you know uh accepted and developed and safer instrument

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so what do you think is the biggest contributing contributing factor to it being more secure now

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than it was back then?

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Like, what changed?

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The major shift was probably happening in 2017,

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around that date with the protocol war,

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you know, with the block size war.

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When people basically didn't know

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what was Bitcoin before.

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Is it a medium of exchange?

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Is it a store of value?

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Is it a time chain?

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You know, it was just a cool technology,

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but it hadn't been made clear

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what is it actually.

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Then came this block size war

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for a couple of years

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and uh and bitcoin came out much stronger in the sense that the community had after fighting for

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for a couple of years had finally aligned this is what is bitcoin and they were then all fighting

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in the same direction something that we didn't have before no and yeah i remember that and this

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is sort of what made my belief in bitcoin ironclad because uh to me it was sort of proof that the

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users were in charge and not the big companies so i i view the the big blockers as the the big

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blocker narrative as a takeover attempt where they wanted to centralize it and wanted to control it

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but the the network resisted that hostile takeover is that how you view it too absolutely the thing

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is it was really the event that proved that bitcoin that bitcoin was properly decentralized

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you had the key influencer in the space that were trying to push a certain narrative and to hard

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fork in one direction and people just said no and despite the key influencers being you know

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trying with all their efforts to do one thing the people said no that's not what we want we will do

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a different way and that's when bitcoin proved that it was effectively decentralized and now

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becoming the first digital decentralized asset that changed everything yeah yeah that's similar

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to how i view it no not only the biggest influencers but the biggest companies like

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bitpay and all the big miners everyone was on board with this new york agreement where they

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wanted to hard fork into seg with 2x which never happened um so yeah that's a very important part

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of bitcoin's history i think uh and just because we won that battle doesn't mean that we will win

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the war though like bitcoiners will need to stay vigilant whenever new threats uh arise

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Correct. And there were other battles that came after. I mean, even entering the, let's say, the more traditional space was also an uphill struggle. You know, Bitcoin had to fight regulators and had to find other things like concentration of miners.

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You know, if you remember back in mid-2021, the main weakness of Bitcoin in my eyes was that you had something like 70% of miners based in China, which is extremely high national concentration of something essential for the network.

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and then the chinese government in their attempt to break bitcoin they did actually the the the

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the one thing they could do to strengthen it uh was that they banned mining like they properly

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banned mining that was not the first time they tried but that time they really went very hard

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on buying banning mining in china what happened is that the miners spread around the globe and

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created more decentralization and therefore strengthened the network and within three months

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the hash rate was back to a new all-time high. Yeah, and this is a subject we talk a lot about

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here, and we shouldn't get into the whole BIP-110 debate too hard, but I think we're seeing a great

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strengthening of mining now, or a potential great strengthening of it, because yes, that fixed the

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geographical problem of centralization of mining, but not necessarily. The pools are still kind of

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centralized, and that comes with its own negative side effects, such as filters not working properly

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and stuff is sort of a side effect of mining being sent to centralized but now you can rent hash and

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so so and create your own block templates and mine through ocean or or similar things like that and

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thereby helping decentralize mining again to an even larger extent and i think this is this is the

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real battle we have to fight that's the biggest problem we have in bitcoin in my opinion what's

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What's your thoughts?

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Yeah, let me add some colors to that.

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So indeed, the top seven mining pools now control about 75% of the hash power currently.

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However, the thing is with Bitcoin mining that pretty much with the click of a button,

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you can choose to move from one mining pool to another as a private solo miner.

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A hasher.

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Sorry, a hasher.

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Thank you.

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So as a hasher, you can choose to move elsewhere.

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And therefore, if there were ever one mining pool or a consortium of mining pools that were doing stuff that are not in line with what the hashers agree with, it would be fairly simple and fast for the people behind it to actually move.

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And it makes the whole system more resilient by itself by enabling this ultra fast change of jurisdiction in some sense.

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so if i compare to a country it's as if if your politician does not do what you want then just by

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the click of a button you could say oh well i was in france now i'm in germany you know and i follow

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a different set of rules you know if that was possible i'm sure that the politician will think

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twice about what they are doing because their voters would move elsewhere very easily and this

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is exactly what we have with um with these mining pools that they're voters in some sense the people

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who contribute to their revenue can move away if they do stuff that are not in line with the social contract.

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Yes, some would argue that this is true in theory, but that in reality, Antpool and Friends already have most of the network

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because it very hard to prove that a consortium or a cabal does not exist And this sort of requires every hash salesman to really follow the money and see who actually owning the pool and that can be trickier than

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you think so what are your thoughts on that like is antpool and friends uh antpool is bitmain's

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mining company right the the biggest manufacturer of minor hardware so are they effectively like

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monopoly is there is there effectively a monopoly there or do you think we're already

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there's no risk there like what's your view i don't think that anything is without risk i would

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like to take a step back and try to believe in the network the incentives that are on the network

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are so far effective and are suggesting that there are the right checks in place to prevent

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too strong so a monopoly to to take over for the reason that we have just mentioned

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um so in that sense while i'm not too in the too much in the nitty-gritty details of and pool

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and their um you know workings i i trust that the the network is actually uh built on the right

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incentives um yeah yeah and uh i i we're seeing more and more of that with with this hash renting

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movement i really like that that you can now rent rent hash and be your own mining pool so to speak

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instead of just letting the pools be there and decide what blocks to mine on so there are things

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being done anyway what's happening at relay like well first of all what is relay and can you describe

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what what separates you from other similar companies gladly so we are an exchange in the

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sense you send us euros or Swiss francs and we send you Bitcoin or the other way around of course

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and we are taking a small fee on the transaction so very simple business model and actually

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simplicity is at the core of everything we're doing we are really striving to be the simplest

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place to buy Bitcoin in self-custody so of course Bitcoin only and of course self-custody only so

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we are genuinely trying to you know live by the principles of uh of bitcoin create more awareness

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of the of the benefits of self-custody and making it simple so that we want to put as much bitcoin

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as possible in the pockets of europeans so i'm saying europeans because that's where we are

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focused now so we come from swiss origins therefore of course licensed in switzerland

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and now for a few months licensed in France under the MICA regime

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and therefore having access to the entire EU market under the strictest regulation.

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And still we managed to do this as cleanly as possible.

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So provide the best service possible to users while at the same time respecting the tough regulations that we are facing.

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yeah and those regulations like uh they require you to kyc quite hard right yeah

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yep that was something that um really uh tried to delay as much as possible uh to the extent that

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it was possible in switzerland uh in the early days at some point it was no longer the case so

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of course we need to uh to comply if we wanted to continue providing bitcoin to um to europeans

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So we did that. And now with Mika regulation, there are even a few more additional things that we need to comply with in terms of KYC.

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But obviously, we are limiting ourselves to know the strict minimum that is necessary to comply with the regulation.

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I mean, to be fully compliant with the regulation.

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We know what we need to know, but we do not care about anything more than that, obviously, because we also try to respect the privacy of customers to the maximum extent acceptable by the law.

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And has any authority from any specific jurisdiction ever asked you for customer information or like how does that work?

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How authoritarian is this stuff?

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Like how intrusive is it?

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So on the one hand, we need to keep all of this information impeccably documented and stored for multiple years.

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In Switzerland, in order for us to provide data about a specific customer, we need to have a request coming directly from the police or directly from the authorities from Switzerland.

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so let's say if we have somebody from let's say an exchange somewhere in the EU asking for

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information about a Swiss customer if they are asking us directly we are not even allowed by law

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to provide it to them we need to tell them guys that would be illegal for us to provide you with

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anything so if you want to have that information you need to go through your authorities that

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reaches out to the authorities of Switzerland and then they come to us to get to get this

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information that happens but to be honest only when there is a fair suspicion when there is really

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something suggesting that there might be um you know potentially illegal activities going on

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so it is not a daily occurrence but it happens uh every once in a while so so what's what's your

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personal opinion on mic i i i don't know how how much of this you're like willing or even able to

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disclose but do you appreciate that there's a clear regulation now or do you think it's bullshit

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all right i'll try to to have the diplomatic answer the diplomatic well it's two-sided on the

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one hand we are living in a world where financial services are regulated and being a fully regulated

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financial service it provides some sense of security and assurance uh to the capital markets

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but also to users that we are doing everything by the rules.

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So on that sense, it might create some goodwill for users

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because they know that we are, you know,

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legitimacy.

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Yeah, exactly.

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Fully legitimate doing things by the book.

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At the same time,

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Mika claims to exist to protect the customer.

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And in that sense, this regression is an utter failure.

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It is actually not only not reaching that goal,

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I think it is doing the exact opposite of what it's claiming to do.

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For example, well, obviously, since Mika is so broad

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and requires so much additional workload from our side,

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I mean, in order to stay profitable,

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since we have additional cost, we need to make additional revenue,

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and that cost goes to the user ultimately,

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not only for us, for all exchanges.

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I mean, the compliance cost is very real.

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Like all interventionism, like all state interventionism, the customer always pays for it.

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Exactly. So customers will pay a higher price for the service that he's willing to get.

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In addition, he will need to renounce on quite a lot of privacy.

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You know, we will need to know, you know, a scan of your face, have a scan of your ID.

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As from a certain threshold, we will need to have a proof of address.

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if you go into high net worth individuals or businesses we need to have you know even more

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documentation proof of wealth source of funds and you know even more stuff that you know we do not

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require that level of due diligence to ensure that the client is actually a fair you know a fair

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doing a fair deal in respect of the law but mica requires so much more than what is strictly needed

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so the customer has technical hurdles by need to provide all of this information we he needs to

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renounce his privacy he has a worse service and if all of that was preventing fraud from happening

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then maybe we could justify uh maybe we could justify having that kind of regulation the thing

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is mika is not preventing any fraud from happening at all anybody willing to do fraud will do

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fraud. There are plenty of other ways to do it. And by the way, anybody willing to do fraud is not

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going to use Bitcoin to do it. That would be the stupidest idea in the world to use Bitcoin to

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commit any type of crime If you want to commit a crime would you really want to have the proof of all of your transactions recorded on a public ledger that can never be modified accessible by anybody in the entire world forever I mean this is ridiculous So

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criminals are not using Bitcoin to commit fraud. They are using the traditional means and mainly

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the US dollar and other fiat currencies. So it is a bit of a weird thing that it probably comes

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a good intention but it was badly implemented and the outcome of it is the exact opposite

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of what it was meant to achieve. Like so many other government interventionist things like it.

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Yeah it's sad and do you think Meika is damaging Europe in this sense that Europe will fall behind

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because the hurdles are now bigger here than on other continents or is that of no importance?

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Yes, and we are seeing that firsthand.

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We have some customers coming to us and willing to do some trades,

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and we have done our due diligence.

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We know they are legit.

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We know they are all fine.

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However, we require so much additional documents for Mika

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that they are like, you know what,

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let me just use this offshore other exchange

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that offers similar rates

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and just does not require me to send all the documents

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that you guys are requesting,

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which by the way again

213
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what we are requesting is a strict minimum

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that Mika requires

215
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but it's already too much

216
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compared to offshore exchanges

217
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I know what you mean

218
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like the whole

219
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when I go to Salvador for instance

220
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the way I'm treated there

221
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as opposed to how I'm treated in Europe

222
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if you tell any normie in Europe

223
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that you work in Bitcoin

224
00:19:08,228 --> 00:19:09,208
they look at you like

225
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what planet are you from

226
00:19:10,748 --> 00:19:12,128
and are you a criminal

227
00:19:12,128 --> 00:19:18,248
all this it's always met with some level of suspicion and and i think that's so sad because

228
00:19:18,248 --> 00:19:26,228
it's what we're doing is like the best thing for the world ever so why yeah but to be honest not

229
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only with bitcoin and now in europe if you even try to use your bank account for anything let's

230
00:19:33,088 --> 00:19:39,288
say for any transaction that is beyond the strict you know the the low amount they they are treating

231
00:19:39,288 --> 00:19:44,488
you by default like a criminal like oh explain to us where you have these these funds coming from

232
00:19:44,488 --> 00:19:49,448
like well from my other bank account at you know your neighboring bank you know and you need to

233
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explain yourself and if you're trying to make a payment that is above uh the the minimal level

234
00:19:54,688 --> 00:20:01,088
that the the minimal threshold that they set the you need to explain why you make that and that um

235
00:20:01,088 --> 00:20:07,168
that payment where it's going to um you know where you have the funds from just you are treated like

236
00:20:07,168 --> 00:20:14,568
a criminal for basic banking services shouldn't we do the exact opposite treat people as normal

237
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human beings until until you have actually a fair suspicion that they are doing something bad

238
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which in most cases here is not the case no it's the opposite of innocent until proven guilty it's

239
00:20:26,748 --> 00:20:33,768
like guilty until you prove yourself innocent exactly so it's pretty vile so so given all that

240
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Are you hopeful for Europe?

241
00:20:35,408 --> 00:20:38,768
Or like, what are your predictions for Europe in the future?

242
00:20:38,868 --> 00:20:39,988
And specifically for the EU?

243
00:20:40,168 --> 00:20:41,468
Like, do you see it falling apart?

244
00:20:41,748 --> 00:20:44,148
And is there no hope until that happens?

245
00:20:44,148 --> 00:20:47,368
Or what's your view on European politics?

246
00:20:49,168 --> 00:20:50,408
I'm an optimist.

247
00:20:50,668 --> 00:20:53,568
So I would like to be hopeful for Europe.

248
00:20:53,828 --> 00:20:59,868
Unfortunately, the evidence is stacking against that view.

249
00:20:59,868 --> 00:21:07,908
we are we really are seeing vibes of the end of an empire you know like it always reminds me of the

250
00:21:07,908 --> 00:21:13,028
the end of the roman empire how everything collapsed and how we regressed like a thousand

251
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years maybe afterwards it feels like we are going in that direction unfortunately and while you have

252
00:21:20,868 --> 00:21:27,948
other places in the world that are booming and doing more with less so proving that it is possible

253
00:21:27,948 --> 00:21:45,728
So Europe, with all this over-regulation that makes absolutely no sense, is reshooting itself in the foot. It is killing itself. It is a suicide, really. It is business suicide. It is cultural suicide that Europe is going through.

254
00:21:45,728 --> 00:21:54,148
however Europeans have proved that they can achieve a lot of stuff I'm sure that together

255
00:21:54,148 --> 00:22:01,088
we can find ways to improve the system and that's also why I'm working in Bitcoin because I do

256
00:22:01,088 --> 00:22:08,328
have hope that we can make something better for the future and the Europe that I want to leave

257
00:22:08,328 --> 00:22:14,828
to my kids is better than what the Europe that we are seeing now.

258
00:22:15,628 --> 00:22:19,648
Yeah, so in your opinion, what will that require?

259
00:22:19,888 --> 00:22:22,028
Like, what do you think needs to change?

260
00:22:22,108 --> 00:22:26,988
How do we make Europeans more aware of the problems at hand?

261
00:22:26,988 --> 00:22:31,528
Because right now it feels like people are walking like zombies into their own destruction.

262
00:22:32,568 --> 00:22:37,348
For some stuff, unfortunately, people need to hit the wall before realizing that they

263
00:22:37,348 --> 00:22:45,388
were walking the wrong direction so i'm afraid that this is actually needed uh in some sense that

264
00:22:45,388 --> 00:22:53,108
people things need to get bad enough before people wake up like what you what people had with communism

265
00:22:53,108 --> 00:22:58,828
you know things went to really really bad before people understood oh yeah that's absolutely not

266
00:22:58,828 --> 00:23:02,928
what we want and now people that came out of it they are trying to spread the word on how

267
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you know all the bad things of actually of socialist environment like like the USSR at the

268
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time I do hope that we are not that we do not need to go there so that's why education on you know

269
00:23:17,028 --> 00:23:25,428
what is money on on incentives for politicians for businesses for individuals is so important

270
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so I do have great hope that education can help solve the issue but even my natural optimism tends

271
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to be shaken these days the the starship troopers memes meme come to mind like uh the i'm doing my

272
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part like we're doing our part here trying the best we can oh it's it is what it is and if you

273
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travel around a bit in europe uh you you can see that like the way my experience is that eastern

274
00:23:53,748 --> 00:23:58,288
europe is way more freedom-minded than western europe at this point because they know what

275
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happens like they know what the path the western europe is on right now leads to in the end so

276
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because their parents had to experience that horrible thing precisely i remember this map of

277
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germany after the last elections where you had all western germany who votes mostly socialist and

278
00:24:15,728 --> 00:24:21,808
eastern germany who didn't because they are the ones who two generations ago knew what it was to

279
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live under a socialist government.

280
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So maybe people need to learn the hard way,

281
00:24:28,128 --> 00:24:29,008
which is unfortunate.

282
00:24:30,788 --> 00:24:35,948
I have an older German friend

283
00:24:35,948 --> 00:24:38,908
who told me about a side of the story

284
00:24:38,908 --> 00:24:40,288
of the fall of the Berlin Wall

285
00:24:40,288 --> 00:24:41,548
that I hadn't heard before.

286
00:24:42,068 --> 00:24:44,588
And that is like the official narrative

287
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is that what happened when the wall fell

288
00:24:47,528 --> 00:24:54,088
is that Eastern Germans were now liberated and adopted Western values

289
00:24:54,088 --> 00:24:59,488
and all of Germany became more freedom-minded

290
00:24:59,488 --> 00:25:01,988
because this was a great win for freedom and everything.

291
00:25:02,448 --> 00:25:05,188
But what they left out of the story is that

292
00:25:05,188 --> 00:25:10,648
East Germans started questioning the system of West Germany.

293
00:25:10,648 --> 00:25:13,588
So, oh, you have to pay for kindergarten here.

294
00:25:13,708 --> 00:25:15,168
We never had to pay in East Germany.

295
00:25:15,328 --> 00:25:16,928
Or like, oh, you have to pay for healthcare.

296
00:25:16,928 --> 00:25:21,648
We never had to do that in East Germany. And then the West Germans got yellows and started voting for

297
00:25:21,648 --> 00:25:30,288
more and more socialism there. So the effect is, sadly, it goes both ways. And I think unfortunately,

298
00:25:31,728 --> 00:25:40,528
the longer the democratic process with socialism baked in is allowed to continue, the more and more

299
00:25:40,528 --> 00:25:47,348
left-leaning it becomes because more and more people get dependent on the redistribution

300
00:25:47,348 --> 00:25:52,488
of wealth and the public sector grows like a cancer and then people are not going to

301
00:25:52,488 --> 00:25:54,128
vote against their own bread and butter.

302
00:25:54,408 --> 00:26:13,132
So if you in the public sector you more likely to vote more left and then you get a bigger public sector and on and on it goes So very hard to to resist on a collective level on a political level and that a very good point it reminds me of this uh cycle with the fourth turning yeah so precisely along those lines that

303
00:26:13,132 --> 00:26:21,072
nations will rise to new heights but then at some point will become corrupt and decline and

304
00:26:21,072 --> 00:26:26,972
ultimately collapse before having a chance to rise from the ashes again yeah and let's hope that we're

305
00:26:26,972 --> 00:26:35,072
not in a fourth turning now even though it looks like that in many ways. So how does Bitcoin fix

306
00:26:35,072 --> 00:26:44,152
this for Europe? Well Bitcoin fixes the incentives. One of the most important things about Bitcoin is

307
00:26:44,152 --> 00:26:51,912
not only the financial freedom that it provides but how it puts in perspective time. You know when

308
00:26:51,912 --> 00:26:58,372
we are living in an inflationary time where inflation is baked into the monetary policy by

309
00:26:58,372 --> 00:27:07,132
design and the in there you know in the in the speech of people in charge of monetary politics

310
00:27:07,132 --> 00:27:13,272
deflation is the worst thing that could happen you know and they are fighting against it which is

311
00:27:13,272 --> 00:27:19,972
obviously absolute nonsense you know people would prefer to live in a world where things are getting

312
00:27:19,972 --> 00:27:28,012
less expensive over time so that you also do not need to spend your wealth you know you are not

313
00:27:28,012 --> 00:27:34,892
forced to forced to either spend your wealth or lose it you know if i earn 100 euros i would like

314
00:27:34,892 --> 00:27:40,752
to be able to for example set it aside for my kids in 30 years well nowadays i cannot do that

315
00:27:40,752 --> 00:27:47,712
because in one generation i know that it at best it will be worth maybe only 50 euros by that time

316
00:27:47,712 --> 00:28:03,952
So an inflationary system is creating an abnormally bad incentives for spending immediately for a society of immediate consumption.

317
00:28:03,952 --> 00:28:10,292
while a system that has natural deflation baked into it like Bitcoin

318
00:28:10,292 --> 00:28:14,912
pushes the narrative towards more long-term consumption.

319
00:28:14,912 --> 00:28:20,712
You think long-term, you think about saving for rainy days,

320
00:28:21,012 --> 00:28:23,452
you think about children and the next generations.

321
00:28:24,172 --> 00:28:26,832
And therefore you build also stuff that are more meaningful,

322
00:28:27,492 --> 00:28:30,112
stuff that are not just meant for the next quarter earnings,

323
00:28:30,452 --> 00:28:33,312
but for the next 10, 20, 100 years.

324
00:28:33,952 --> 00:28:46,212
Equality over quantity. In a way, quality is not the opposite of quantity, but the opposite of equality. So if everyone's equal, everyone has less.

325
00:28:46,212 --> 00:28:47,172
in that sense.

326
00:28:54,452 --> 00:28:55,992
I view deflation,

327
00:28:56,592 --> 00:28:59,032
the scaremongering around deflation

328
00:28:59,032 --> 00:29:00,532
as the biggest lie ever told,

329
00:29:00,712 --> 00:29:01,992
like that we need inflation

330
00:29:01,992 --> 00:29:04,032
for the economy to thrive

331
00:29:04,032 --> 00:29:05,992
because it's so easily debunked.

332
00:29:06,172 --> 00:29:08,852
Like if things go down in price over time,

333
00:29:09,132 --> 00:29:11,092
if you need something,

334
00:29:11,172 --> 00:29:11,912
you will buy it.

335
00:29:11,912 --> 00:29:12,992
Like if you want it,

336
00:29:12,992 --> 00:29:22,952
those things have fallen in price like orders of magnitude faster than anything else that falls in

337
00:29:22,952 --> 00:29:29,512
price even in the fiat world and it's not like people are buying fewer phones or computers like

338
00:29:29,512 --> 00:29:38,752
so so it's it's so how why why do you think it is that that people are falling for this lie on

339
00:29:38,752 --> 00:29:43,912
on such absurd scales that prices ought to go up.

340
00:29:44,452 --> 00:29:47,552
Because when you really think about it, it's so easy.

341
00:29:47,812 --> 00:29:50,492
If human beings practice doing things,

342
00:29:50,632 --> 00:29:53,192
do they get better or worse at the things they're doing?

343
00:29:53,392 --> 00:29:54,172
They get better.

344
00:29:54,392 --> 00:29:57,032
So why aren't all prices falling forever?

345
00:29:57,172 --> 00:29:58,952
That's a natural follow-up question.

346
00:29:59,552 --> 00:30:01,272
And why don't more people see that?

347
00:30:01,272 --> 00:30:04,652
To me, it seems like only Bitcoiners

348
00:30:04,652 --> 00:30:08,132
and maybe some anarcho-capitalists see it,

349
00:30:08,132 --> 00:30:14,552
but no one else so actually i'm coming from a traditional background in economics so two

350
00:30:14,552 --> 00:30:20,832
masters in economics and mba cfa certification and other advanced sorry to hear that yeah i know

351
00:30:20,832 --> 00:30:26,192
i'm trying to recover from that but my point here is i went through all of the traditional

352
00:30:26,192 --> 00:30:34,252
learning about it and never in any of these traditional teachings and lessons they challenge

353
00:30:34,252 --> 00:30:40,612
the concept of money or they never start from base principles they just assume that you know

354
00:30:40,612 --> 00:30:49,092
a world with inflation is the base and that's that's somehow desirable but they never justify

355
00:30:49,092 --> 00:30:55,512
that properly and when you have you know when all the people working in finance in economics

356
00:30:55,512 --> 00:31:02,032
have gone through these traditional teachings when they have never challenged it it's difficult to

357
00:31:02,032 --> 00:31:08,052
suddenly suggest to them something so drastically different from everything they are used to

358
00:31:08,052 --> 00:31:13,312
you know it's very difficult to to admit that you were wrong in your assumptions all along

359
00:31:13,312 --> 00:31:21,332
it's an incredibly humbling um experience to go through it's very difficult that's why it took me

360
00:31:21,332 --> 00:31:27,152
way longer than i dare to admit to get into bitcoin because it didn't make sense with

361
00:31:27,152 --> 00:31:32,092
everything I had learned and it's only when you know when you start challenging everything and

362
00:31:32,092 --> 00:31:39,892
starting from these principles that you realize oh actually you know is a fixed money supply not

363
00:31:39,892 --> 00:31:45,912
better you know and then you look at history and you realize that in the Bretton Woods era you know

364
00:31:45,912 --> 00:31:54,172
that's the fastest pace of increase in wealth and standards of living so after the world war

365
00:31:54,172 --> 00:31:59,032
the Second World War, but also before that in the late 1800s when we were under a gold standard,

366
00:31:59,412 --> 00:32:04,192
that were periods of history. Yeah, exactly. That were periods in history where things were

367
00:32:04,192 --> 00:32:11,392
going incredibly well because you did not have the core of the economy. So the monetary system

368
00:32:11,392 --> 00:32:18,112
systematically stealing energy from the system. So the system was not bleeding out its energy

369
00:32:18,112 --> 00:32:26,072
permanently and therefore creating bad incentives now if you are a government which theory do you

370
00:32:26,072 --> 00:32:31,892
prefer the theory that says big government is good or the theory that says small government is good

371
00:32:31,892 --> 00:32:39,092
you know obviously they will be tempted towards the ones that is built on lies the keynesians

372
00:32:39,092 --> 00:32:45,552
economics that that do not make sense from a from a traditional from a austrian economics perspective

373
00:32:45,552 --> 00:32:47,352
because it's in their interest.

374
00:32:47,872 --> 00:32:49,732
And then that's a narrative that they will push.

375
00:32:50,272 --> 00:32:52,312
And therefore, everything is built around this.

376
00:32:52,752 --> 00:32:52,832
Yeah.

377
00:32:52,952 --> 00:32:56,212
And if they're funding all the universities

378
00:32:56,212 --> 00:32:57,992
and funding all the media outlets

379
00:32:57,992 --> 00:33:01,512
and subsidizing media that agrees with them,

380
00:33:02,012 --> 00:33:03,292
then that's what you're going to get.

381
00:33:03,352 --> 00:33:06,712
You're going to get indoctrination of every single citizen

382
00:33:06,712 --> 00:33:08,972
that this is the way things are supposed to be.

383
00:33:08,972 --> 00:33:12,692
And yeah, it requires these experts

384
00:33:12,692 --> 00:33:17,732
to drop a lot of their egos, I think, because they have so much invested in.

385
00:33:17,732 --> 00:33:21,192
It's the sunken cost fallacy is the name of it, right?

386
00:33:22,572 --> 00:33:25,992
Maybe I'm mixing it up with some other fallacy or bias,

387
00:33:26,132 --> 00:33:33,092
but you're so invested in this thing that you've made yourself an expert in

388
00:33:33,092 --> 00:33:37,552
for so many years of your life that you're not willing to give it up,

389
00:33:37,632 --> 00:33:39,052
even though it's obviously wrong.

390
00:33:39,052 --> 00:33:43,392
And that requires self-reflection and self-examination.

391
00:33:43,712 --> 00:33:48,292
And sadly enough, most people never do that to the extent required, at least.

392
00:33:48,952 --> 00:33:51,912
Exactly. So ego is a very important thing.

393
00:33:52,072 --> 00:33:54,852
But let's look at it from a positive perspective.

394
00:33:55,132 --> 00:33:57,112
So, front of me, we have the truth on our side.

395
00:33:57,792 --> 00:34:05,892
And Bitcoin has proved it over the years that, you know, in Bitcoin world, things are getting cheaper over time.

396
00:34:06,292 --> 00:34:08,332
It has proved that adoption is growing.

397
00:34:08,332 --> 00:34:13,012
So it has proven a lot of things that Bitcoiners have claimed from the very beginning.

398
00:34:13,552 --> 00:34:16,792
And we are getting more numerous by the day.

399
00:34:17,492 --> 00:34:20,352
So fortunately, we have truth on our side.

400
00:34:20,612 --> 00:34:28,012
And I stay optimistic that this is really the way out of the sad fourth turning that we are facing.

401
00:34:28,532 --> 00:34:30,032
Hashtag the Maxis were right.

402
00:34:30,472 --> 00:34:35,532
That's such a good meme because we were always.

403
00:34:35,532 --> 00:34:42,872
It all becomes so predictable when you see it from this lens.

404
00:34:43,056 --> 00:34:47,016
I view Bitcoin in a way as a lens to view the world through.

405
00:34:47,216 --> 00:34:54,096
If you denominate in SAT, you can see what's actually going on with the economy and how your house loses value every year and so on and so forth.

406
00:34:54,216 --> 00:34:56,676
And it solves so many problems.

407
00:34:56,856 --> 00:35:06,776
Like property is one, because right now you have all the fiat rich people buying up property to use it as a store of value and not as housing for human beings.

408
00:35:06,776 --> 00:35:11,776
So it's true. And that comes downstream from what we were saying on the inflationary world.

409
00:35:12,096 --> 00:35:12,256
Absolutely.

410
00:35:12,256 --> 00:35:22,096
All the very rich people have understood the key trick, the cheat code of the game is short the currency along the asset.

411
00:35:22,396 --> 00:35:27,116
So you buy real asset stocks, real estate, Bitcoin, and you short the currency.

412
00:35:27,356 --> 00:35:38,116
You take a loan against your asset, you take a mortgage and so on, so that your mortgage becomes less valuable over time, while your asset becomes more valuable over time.

413
00:35:38,116 --> 00:35:44,276
so that's a cheat code that unfortunately is only accessible to people who have accumulated

414
00:35:44,276 --> 00:35:49,736
more wealth and that is precisely causing the rich to get richer the poor to get poorer

415
00:35:49,736 --> 00:35:56,556
not because not because one is better than the other but simply because they have access to

416
00:35:56,556 --> 00:36:03,256
assets that grew in value while the people that are most in need of this asset do not have this

417
00:36:03,256 --> 00:36:09,956
access and that's precisely where bitcoin is changing the game anybody can buy for one euro

418
00:36:09,956 --> 00:36:15,256
of bitcoin at virtually no cost can receive bitcoin you know you can trade anything you own

419
00:36:15,256 --> 00:36:21,156
you can trade your time you can trade your energy for bitcoin so you can have access to the best

420
00:36:21,156 --> 00:36:28,156
asset that also has all the other properties that are desirable such as censorship resistance such

421
00:36:28,156 --> 00:36:32,976
as it's very difficult to take it from you without your consent and all the other things

422
00:36:33,256 --> 00:36:48,516
Yeah, and this is very important because if you accept Bitcoin for your goods and services, instead of buying them off a relay, which you should also do, by the way, but then you don't have to go to any KYC process unless you want to.

423
00:36:49,616 --> 00:36:53,816
Some would call that a black market and call it an orange market.

424
00:36:53,816 --> 00:37:00,336
At least it's way more difficult for governments to do anything about that.

425
00:37:00,616 --> 00:37:01,196
That's correct.

426
00:37:01,196 --> 00:37:04,136
And in reality, it's just communication.

427
00:37:04,536 --> 00:37:06,616
I'm giving you a number by sending you Bitcoin.

428
00:37:06,916 --> 00:37:08,376
I'm not giving you anything physical.

429
00:37:08,556 --> 00:37:10,236
I'm just communicating with you.

430
00:37:10,696 --> 00:37:14,096
So if you think about what is the ethics and morals of that,

431
00:37:14,196 --> 00:37:15,736
like how can that be a crime?

432
00:37:16,896 --> 00:37:19,476
And I think it's absurd.

433
00:37:19,996 --> 00:37:22,276
In the US, they have the First Amendment to defend this

434
00:37:22,276 --> 00:37:25,716
because indeed Bitcoin is nothing else than information.

435
00:37:26,196 --> 00:37:27,456
So it's purely communication

436
00:37:27,456 --> 00:37:30,196
and therefore should be defended by the First Amendment

437
00:37:30,196 --> 00:37:31,316
on freedom of speech.

438
00:37:32,116 --> 00:37:33,656
We do not have that in Europe,

439
00:37:34,216 --> 00:37:53,601
but the logic and the ethics behind it still remains It is nothing else than information and the value that we attribute to it is something and something that just depends on us yeah value is subjective and uh the thing you

440
00:37:53,601 --> 00:38:00,121
said about uh how to win the fiat game is to take mortgages and and buy assets the saddest part about

441
00:38:00,121 --> 00:38:06,441
that is that uh the more people do that the the the greater the pace of the decline because

442
00:38:06,441 --> 00:38:12,621
the mortgages themselves taking out a huge loan is what creates the money printing

443
00:38:12,621 --> 00:38:18,021
and banks print money when people take out a loan like they just pretend that the money exists now

444
00:38:18,021 --> 00:38:24,281
and then you have to pay it back with interest so so creating credit so taking a loan is creating

445
00:38:24,281 --> 00:38:30,701
a credit and therefore increases the m2 money supply so m2 is a it's a measure of the total

446
00:38:30,701 --> 00:38:36,101
money supply yes yeah and that increases the money that has to be paid back that also will

447
00:38:36,101 --> 00:38:41,621
have to be created by loans because it's not circulation in circulation yet which means

448
00:38:41,621 --> 00:38:48,121
all fiat currencies are hyper inflating it's just that they haven't like they're on different

449
00:38:48,121 --> 00:38:54,801
points on that curve but they'd all die that way yes i mean it's mathematically

450
00:38:54,801 --> 00:39:03,961
provable that you know the only way for the system to eventually resolve and unravel is to to um

451
00:39:03,961 --> 00:39:10,961
print and always so to print more money at an increasing pace so that's the only way that it

452
00:39:10,961 --> 00:39:18,541
will work so in some sense bitcoin has already won just by the design of the game yeah now we just

453
00:39:18,541 --> 00:39:24,981
need to wait to see it happen and hopefully you know prevent uh the bad stuff that will try to

454
00:39:24,981 --> 00:39:32,781
come in the way because uh the people that are deeply in this old legacy system will obviously

455
00:39:32,781 --> 00:39:39,581
fight it there was the phase first they ignore you then they mock you then they fight you i think

456
00:39:39,581 --> 00:39:41,941
we are really getting now in the phase, then they fight you.

457
00:39:42,321 --> 00:39:44,181
And then will come the phase, then you win.

458
00:39:44,441 --> 00:39:48,381
Because these people will realize that at some point you cannot ban Bitcoin.

459
00:39:48,901 --> 00:39:51,061
You cannot prevent people from doing it.

460
00:39:51,261 --> 00:39:54,141
Even if you turn off the internet, there are other ways to share Bitcoin.

461
00:39:54,321 --> 00:39:55,161
It's just information.

462
00:39:55,521 --> 00:39:56,881
It is not bannable.

463
00:39:57,621 --> 00:40:00,101
No, and also they're shooting themselves in the foot.

464
00:40:00,101 --> 00:40:03,701
It's just like just before the Soviet Union fell.

465
00:40:04,321 --> 00:40:09,421
Like all the higher ups in the Soviet Union, they would all have been better off.

466
00:40:09,581 --> 00:40:15,401
in a different system uh even even those that benefit the most from the fiat system

467
00:40:15,401 --> 00:40:20,021
would be better off on a bitcoin standard and this is the saddest part about it they fight you

468
00:40:20,021 --> 00:40:26,961
even though it's bad for them yeah yeah but like the addict the drug addict you know stopping the

469
00:40:26,961 --> 00:40:31,901
drug immediately is a lot of pain immediately and you prefer to kick the can down the road

470
00:40:31,901 --> 00:40:44,986
and leave that pain for the next administration while you know keeping stuff as they are for now But then it makes the entire process last much longer than it has to It makes everybody worse off Yeah absolutely

471
00:40:45,806 --> 00:40:50,166
So hope in a bleak outlook on the future is the medicine.

472
00:40:50,346 --> 00:40:51,446
I think the hope is the remedy.

473
00:40:51,586 --> 00:40:55,946
Bitcoin is hope in this sense, because it allows you to just bypass all of this

474
00:40:55,946 --> 00:41:00,626
and survive through the chaos that will ensue at some point.

475
00:41:00,626 --> 00:41:07,886
The hard thing to predict is when the real decline where civil unrest and stuff like that happens.

476
00:41:08,226 --> 00:41:12,026
But everything is pointing in that direction in the fiat world.

477
00:41:12,386 --> 00:41:15,486
And everything is pointing in the other direction in the Bitcoin world.

478
00:41:16,646 --> 00:41:21,006
Precisely. So timing is impossible, but the direction of travel seems to be pretty clear.

479
00:41:21,826 --> 00:41:25,106
All right. What else is going on in your life?

480
00:41:25,106 --> 00:41:32,026
and what else are you is there any anything else on the road the roadmap for relay uh what what

481
00:41:32,026 --> 00:41:38,706
else can you tell me about that so ultimately um relay is striving to be the simplest way to

482
00:41:38,706 --> 00:41:46,646
um get bitcoin in self-custody so that's currently but uh we want to go also beyond that so basically

483
00:41:46,646 --> 00:41:53,086
what we want is enable people to take control of their future so we want to be the bitcoin app in

484
00:41:53,086 --> 00:41:59,206
Europe and we will build whatever is necessary to make that happen. If you

485
00:41:59,206 --> 00:42:04,786
think about the internet, let's say a generation ago, actually there was also

486
00:42:04,786 --> 00:42:09,046
stuff that are very similar to Bitcoin today. Did you know that there were also

487
00:42:09,046 --> 00:42:14,626
protocol wars on the internet? TCPIP and stuff. Yeah exactly TCPIP was not obvious.

488
00:42:14,626 --> 00:42:19,706
There were alternatives that were fighting for getting their share and then

489
00:42:19,706 --> 00:42:26,986
there were layer two solutions built on top of the base layer so that sounds awfully a lot like

490
00:42:26,986 --> 00:42:34,066
like bitcoin has been through in the last decade but ultimately today when you send an email you

491
00:42:34,066 --> 00:42:41,046
do not care whether it's built on smpp that is itself built on tcpip and you know and everything

492
00:42:41,046 --> 00:42:46,846
in between you do not care about that all you care about is that in the two field you write mama

493
00:42:46,846 --> 00:42:51,986
and the subject you write I love you and then you click send and she receives it and that's it

494
00:42:51,986 --> 00:42:58,706
and nobody needs to know what SMTP is or TCP IP or anything else and I think this is the direction

495
00:42:58,706 --> 00:43:06,446
that Bitcoin is also taking you know eventually what you will have is your savings app and you

496
00:43:06,446 --> 00:43:15,126
have your Bitcoin and you will send your Bitcoin to not to you know a BC1Q address on chain or to

497
00:43:15,126 --> 00:43:20,306
a lightning address or you know and you will not need to manage your node and channels and all

498
00:43:20,306 --> 00:43:24,966
this stuff all of that will be done in the background what the users will know is that

499
00:43:24,966 --> 00:43:33,206
i send money from thomas to knut and that's it and that will work systematically and that's all

500
00:43:33,206 --> 00:43:56,551
they will need to know so the same way the email went from very complicated to very simple i think that what Bitcoin is going through And that the revolution we want to be part in Simplifying Bitcoin so that we can reach the entirety of the population and not just the OG Bitcoiners and hardcore libertarians and all the Maxis the freedom maximalists out there

501
00:43:57,151 --> 00:44:02,171
But everybody, because everybody needs Bitcoin and everybody will benefit from Bitcoin.

502
00:44:02,171 --> 00:44:15,471
I mean, to play the devil's advocate there, I mean, the centralization of Gmail, for instance, and emails in general that people are using these centralized platforms, it's all a tradeoff.

503
00:44:15,591 --> 00:44:17,511
Like convenience is always a tradeoff.

504
00:44:18,271 --> 00:44:22,851
So don't you see risks with Bitcoin becoming more convenient for the average user?

505
00:44:22,851 --> 00:44:32,031
I mean, it's still dependent on people actually doing their homework and running their nodes and verifying and even participating in what rules they think the network should have.

506
00:44:32,171 --> 00:44:40,531
So like for every development, we need to be careful to do it the right way and indeed always enable people to go one way or the other.

507
00:44:40,531 --> 00:44:44,531
That comes back to the topic of incentives that I was sharing at the beginning.

508
00:44:44,531 --> 00:44:50,951
we want to build something that users can use with convenience while at the same time they have the

509
00:44:50,951 --> 00:44:57,611
possibility to hard fork to uh to go in the nitty-gritty details to use other services and to

510
00:44:57,611 --> 00:45:05,631
have um to have a system where they are not locked in one app but where they can use other stuff i

511
00:45:05,631 --> 00:45:11,571
wouldn't want even relay to be the only app out there that wouldn't be good for the for the market

512
00:45:11,571 --> 00:45:18,191
because that would be too easily to grab from regulatory perspective or from other perspectives.

513
00:45:18,731 --> 00:45:25,291
You know, we want to have a system where there are multiple players that are each providing a great service,

514
00:45:25,411 --> 00:45:35,331
maybe services to different audiences, a bit different so that users have the choice of how they want to get their Bitcoin,

515
00:45:35,331 --> 00:45:37,891
to transact their Bitcoin or to do anything else.

516
00:45:37,891 --> 00:45:41,191
all the ideas we think about today about Bitcoin

517
00:45:41,191 --> 00:45:44,751
and also all the other ideas that we cannot even fathom nowadays

518
00:45:44,751 --> 00:45:46,711
and that will come up in the coming years.

519
00:45:47,811 --> 00:45:50,211
Yeah, looking forward to the future.

520
00:45:50,851 --> 00:45:53,211
Unfortunately, I think we're running out of time here.

521
00:45:53,951 --> 00:45:55,291
I'm getting the signs.

522
00:45:55,951 --> 00:45:58,291
So thank you very much, Thomas, for coming on.

523
00:45:58,431 --> 00:46:00,531
Where can people find you on the internet?

524
00:46:00,911 --> 00:46:04,531
And I guess Relay.Swiss is still the address?

525
00:46:04,971 --> 00:46:05,771
Relay.App.

526
00:46:06,191 --> 00:46:06,971
Relay.App.

527
00:46:06,971 --> 00:46:07,411
Okay.

528
00:46:07,891 --> 00:46:13,291
is the website and for me personally, mostly on X, LinkedIn and Noster.

529
00:46:14,191 --> 00:46:14,831
All right.

530
00:46:15,291 --> 00:46:16,371
Thank you very much.

531
00:46:16,891 --> 00:46:17,331
It was a pleasure.

532
00:46:17,471 --> 00:46:18,151
Thank you for having me.

533
00:46:18,491 --> 00:46:18,791
Yes.

534
00:46:18,991 --> 00:46:20,571
This has been the Bitcoin Infinity Show.

535
00:46:20,811 --> 00:46:21,331
Brush your teeth.

536
00:46:21,491 --> 00:46:21,711
Goodbye.