The Future of Bitcoin with Preston Pysh: MicroStrategy, ETFs, and More - FFS #94

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there's 21 million Bitcoin.

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Okay.

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Think of each one of those Bitcoin as a vote, , Let's just say million of

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them, or whatever the number is, are being held by deeply convicted people

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that actually understand what they own.

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how many votes do you think Michael Saylor has?

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just with MicroStrategy alone.

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1 percent of the vote of not putting those coins back into

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the market to drive the price.

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, what's going to drive a hyperbitcoinization scenario, it's going

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to be once a majority of these coins are in people with deep conviction.

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where we get to that tipping point, we, we, Hey, we might be there.

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I don't know.

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This is the Freedom Footprint Show, a Bitcoin philosophy show with Knut

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Svanholm and me, Luke de Wolf and we love to expand our freedom footprint.

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We hope you do too.

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The best way to do that is of course to emit as much freedom dioxide as possible.

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So thanks for tuning in to the show, and we hope you enjoyed today's episode.

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Preston, welcome to the Freedom Footprint Show.

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Hey, thrilled to be here,

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Welcome.

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Look at this place, huh?

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Yeah,

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welcome to Madeira.

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I mean, it's phenomenal.

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Absolutely, yeah.

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You can't, I've been taking pictures and sending them back and it's

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like, you know that this picture, like, Does no justice to what this

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actually looks like in real life.

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It's crazy.

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Yeah.

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And this was your first time, right?

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Oh yeah.

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That's my, but it won't be my last.

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And I bet, uh, Greg and Jeff told you about the thing, uh,

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about the island before you came?

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No.

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What's that?

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no, no, like Greg

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Voss and Jeff Booth

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and

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these people that they told

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you about

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they said it was gorgeous and I was like, yeah, yeah.

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Okay.

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Of course it is.

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And I looked at the pictures online and I was like, Oh, this is pretty cool.

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Come in here.

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And then I landed and it was like, Wow.

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This is, this is breathtaking.

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No, we were talking about that just before here, how awesome it is when

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Bitcoiners move to a certain place.

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The way I view it, like you get, you get sort of a Metcalfe's law effect,

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so that

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the value of the network, just locally on the island as well, is equal to the

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square of the number of participants.

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Because the more Bitcoiners you have, the more The problems go away.

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True.

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True.

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Yes.

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all the monetary problems just disappear because someone has fiat, someone

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has bitcoins, another place starts accepting just easier and easier.

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The thing that I can tell you is so much contrast in my,

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in my personal life, right?

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So people know I had, I went into the military right out of college.

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And it was like, when I was working for the, deeply working for the Fiat

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machine through military service, right.

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I was ending up in just the worst locations.

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Like the geography was matching my contributions to society, I guess.

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Right.

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And like, here I am in a war torn, like just literally a combat

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zone, like fending for my life.

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And then I become a bitcoiner and like I am constantly being whisked away to

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places like this where it's just like absolute paradise and everything's

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safe and like you walk the streets and everybody's friendly and saying

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hi to you and it's just like the contrast It's almost like the, the,

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the geographic, you know, backdrop of where I find myself is like shifting.

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It's crazy.

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I don't even know how to describe it, but

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That's such an interesting perspective.

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It reminds me of like, uh, An official government building we went into in Spain,

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that looked

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like the, straight out of Orwell.

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So it's a grey

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concrete building, and every, and there are desks scattered around with piles

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of paper on them, and people who look like they want to kill themselves,

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sitting there just, Churning away in some bureaucracy bullshit, you know,

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doing, doing

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unnecessary things that no one asked for.

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yeah,

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so that's where you end up if you lean into that,

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and

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if you lean into the Bitcoin of life, you, you end up in some beautiful place

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instead.

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And I don't want to say that because I mean, a lot of people

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are just so ingrained into what it is that they're doing.

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So the person sitting there, you know, performing that job, it's

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like, well, what skill set do I have to step away from this?

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And I've got kids in school and they have like all these anchors that have

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like pulled them into that position.

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And just saying, Oh, yep, I'm done.

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I'm changing all this on a dime.

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It's so hard.

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And like, I, I know you and I mean, we have a deep respect for that

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person and what that choice, how difficult that choice is, but yeah.

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I, I think that, like, the way, the way to do the transition for most

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people, I think, if you're a normie and you're, you know, You're stacking, you

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understand Bitcoin, so you're stacking,

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and you're

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hodling, you'll probably need to wait for at least five, probably ten years before

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you can actually

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jump off the cliff and see if your wings,

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you know, will,

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that transition if you continue to do it long

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yeah,

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yeah, but you probably

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need the hodl phase before you can just,

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unless you

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have, unless you're extremely talented and you have something to offer

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the world that you're

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able to sell.

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This actually gets into a topic that we discussed with Erik Weiss

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when, uh, uh, yesterday here and, and the, the the mindset of

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never sell your Bitcoin, period.

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Right?

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But,

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got, I've got opinions on that.

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well,

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please go ahead

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then.

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Yeah.

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I, I mean, I will sell my Bitcoin.

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But it's going to be to own some type of operational asset that

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is providing productive value to society at the right math, right?

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And that's where a lot of people get confused because they're just like, Oh,

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well, Bitcoin's going to go up forever.

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And this is what they don't say in fiat terms.

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Okay, but what they're not saying is Bitcoin won't always go up when

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measured against real productive equity that adds value to society.

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So like this football stadium here, there's probably still

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going to be football on the other side of this Bitcoinization.

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And I think Michael was very right yesterday when he said we

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got about a 10 year window of a Bitcoin gold rush that just started.

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That is really going to accelerate into the next 10 years.

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So he's saying, he thinks that a lot of that transition is going

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to happen in the coming 10 years.

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And then after that, we're in a very Bitcoinized society

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where Bitcoin's dominating.

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So let's just say that that's, that's true, right?

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And you know, everybody's got an opinion on what that timeline is,

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but let's just say it's 10 years.

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So this is a business.

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People still want to come here.

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They're being, they're paying for entertainment, right?

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If this club is only accepting Bitcoin, by the way, I paid for

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a coffee coming into the stadium today with Bitcoin on my Primal app.

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It just went straight through and I was like, this, this

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future's coming pretty dang fast.

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Um, but these, let's say the, the stadium gets filled up,

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people are paying with Bitcoin.

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So this business is denominating all of its top line, clear down to the

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bottom line in Bitcoin, and let's just say that it's a pretty steady flow of

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free cash, they're making money, and let's just say it's 10 percent of their

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top line, so, you know, let's say, and these numbers are just made up, let's

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say it's 100 Bitcoin a year, Right?

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I don't know what the numbers are.

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I would have to go do some math and figure out what these numbers are.

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They bring in a hundred Bitcoin a year.

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If they're netting 10%, they're netting 10 Bitcoin a year.

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These numbers are probably high in a Hyperbitcoinized world, but let's just

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use them because they're nice and round.

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Very high.

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So if, if the net income is 10 Bitcoin per year for this stadium, what

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are you willing to, to pay to own a free cashflow of 10 Bitcoin a year?

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Right?

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And the answer I think is going to be a multiple early on.

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I think the multiple will be a five or a 10.

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It's somewhere in that range.

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And, and when the, when the flip really happens, I think it could get

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as low as a five on, on the net income.

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So like this club could be valued at, call it 50 Bitcoin.

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Okay.

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The risk is it takes you five years to get that free cashflow back.

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Right?

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So Bitcoiners will spend their Bitcoin to own productive assets that have

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the A competitive moat, you're on an island, where else are you going

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to go watch a tier, now they're tier 2, but it used to be tier 1 team,

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so that's not going away, right?

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So it comes down to the valuations, now, if you were looking at the value

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of this stadium today, through free cash flows and what it brings in and

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all that kind of stuff, like, you're using multiples that aren't a 5.

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So we were saying 10, it brings in 10 Bitcoin a year, and I valued it at

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50 Bitcoin because it was a PE of 5.

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The way things are valued today, it's, it's valued at a PE of 35, right?

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So instead of it being 50 350 Bitcoin.

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Yeah,

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Things are not going to be valued because think about your return,

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how, it takes you 35 years.

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To get your, your investment back.

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If I paid 350 Bitcoin for this team, right.

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And they only make 10 a year.

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It takes me 35 years to get those Bitcoin back.

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There's too much risk in Bitcoin is too good of a store of value to

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pay such a high multiple for it.

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Okay.

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Here's, uh, there's so much to unpack here.

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Uh, Yeah.

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first of all, you, you can only watch tier two football here probably, but

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you can watch tier one Bitcoiners.

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They're all here.

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So, and the other thing is like, I love to do this thought experiment

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and extrapolate as far into the, off into the future as I can.

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Yeah.

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So,

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if we fast forward to the year 2140,

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mhm, yeah,

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all the bitcoins have been mined, it is everywhere, we are hyperbitcoinized,

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so it's the

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preferred, like that's what people use, or that's what people measure their lives by.

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yeah,

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That means that most businesses cannot, cannot have black numbers.

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In Bitcoin terms, they will need to have red numbers.

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Like every hodler will need to have red numbers because you

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have to live like, and if a

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Bitcoin is everything, the only thing everyone accepts, that means most

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stacks go down in Bitcoin terms,

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but not

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in purchasing power terms.

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And this is where the real mind bend

250
00:11:26,938 --> 00:11:27,178
is,

251
00:11:27,463 --> 00:11:32,873
Because that means you could actually start, uh, a business not to change the

252
00:11:32,873 --> 00:11:38,073
actual income curve, but to change the, the, the, the curvature of the curve.

253
00:11:38,223 --> 00:11:42,393
Like you could start a business to, in order for your numbers

254
00:11:42,393 --> 00:11:44,793
to be a little less red

255
00:11:45,633 --> 00:11:46,203
you know, and

256
00:11:46,203 --> 00:11:48,063
the stack to diminish slower.

257
00:11:48,663 --> 00:11:48,903
And,

258
00:11:48,903 --> 00:11:52,085
and, and this is such a different world to what we live in now, and it's.

259
00:11:52,313 --> 00:11:53,973
It's so hard to wrap your head around.

260
00:11:54,243 --> 00:11:59,123
So like, but, but I see, like, of course you get this gold rush period of 10 years.

261
00:11:59,638 --> 00:12:04,168
But after that, if everyone on earth is on a Bitcoin standard, Bitcoins

262
00:12:04,198 --> 00:12:06,358
are going to get lost a lot faster.

263
00:12:06,388 --> 00:12:06,828
So, so

264
00:12:06,838 --> 00:12:07,148
like,

265
00:12:07,328 --> 00:12:08,798
people are going to lose their SAT.

266
00:12:09,168 --> 00:12:09,558
yes,

267
00:12:09,568 --> 00:12:09,696
So

268
00:12:09,748 --> 00:12:14,538
this, the finite supply thing, it's getting even harsher on people.

269
00:12:15,248 --> 00:12:18,818
And at the same time, you have like 8 billion people of demand and all

270
00:12:18,818 --> 00:12:19,278
the money in

271
00:12:19,278 --> 00:12:20,238
the world of demand.

272
00:12:20,648 --> 00:12:25,793
So Uh, and you have a global free market sound money economy that is very well

273
00:12:25,803 --> 00:12:27,473
oiled compared to what we got now.

274
00:12:27,923 --> 00:12:33,443
So, so the productivity of the human race can still be, if it's 5 percent per year

275
00:12:33,443 --> 00:12:37,083
in average GDP or whatever you measure by.

276
00:12:37,700 --> 00:12:42,060
number will be way higher post hyperbitcoinization.

277
00:12:42,060 --> 00:12:47,483
So the gold rush will end, but still the productivity after the gold rush is over

278
00:12:47,763 --> 00:12:49,703
is still higher than what it is now.

279
00:12:49,723 --> 00:12:55,353
Like, so the, the purchasing power per, or the, the, the, growth rate of the

280
00:12:55,353 --> 00:12:57,238
total global economy is pretty high.

281
00:12:57,498 --> 00:13:00,508
It's faster than, than it is now.

282
00:13:00,938 --> 00:13:02,108
So what's your thought on that?

283
00:13:02,108 --> 00:13:02,668
That's a lot to

284
00:13:02,878 --> 00:13:08,608
Well, so, so I, first thing I want to kind of address is this idea of,

285
00:13:08,758 --> 00:13:13,728
of you have a deflationary scenario instead of an inflationary scenario

286
00:13:13,728 --> 00:13:15,078
that everybody's been accustomed to.

287
00:13:15,078 --> 00:13:19,818
So let's say that, that the Bitcoin itself is deflationary because of lost coins.

288
00:13:20,648 --> 00:13:25,938
So you'd have to kind of watch the prices of everyday items to kind

289
00:13:25,938 --> 00:13:29,128
of, just like we do right now with all these inflation gauges, right?

290
00:13:29,128 --> 00:13:31,738
But it would be this global thing where everybody's dealing with the

291
00:13:31,738 --> 00:13:33,812
same, deflationary rate together.

292
00:13:33,842 --> 00:13:37,702
And I think it would be a little bit easier to, to kind of use a

293
00:13:37,712 --> 00:13:40,882
gauge to figure out what that is like, Oh, the price of a steak just

294
00:13:40,882 --> 00:13:43,482
got this much cheaper than it was.

295
00:13:44,217 --> 00:13:45,567
Last year, right?

296
00:13:46,173 --> 00:13:47,873
and so there's those metrics.

297
00:13:47,913 --> 00:13:50,723
Let's just say that that metric is, and I'm going to use round numbers

298
00:13:50,753 --> 00:13:51,833
because it just makes it easier.

299
00:13:51,873 --> 00:13:54,013
Let's say it's aggressive and let's say it's 5%.

300
00:13:54,923 --> 00:13:55,163
Okay.

301
00:13:55,203 --> 00:13:57,763
I don't think it's going to be, well, maybe it would be that high.

302
00:13:57,773 --> 00:13:58,253
I don't know.

303
00:13:58,745 --> 00:14:01,493
but let's just say it's 5 percent or 3 percent or 1%.

304
00:14:03,038 --> 00:14:05,018
Those are your rates.

305
00:14:05,268 --> 00:14:10,438
Those go into your economic calculation of owning operational businesses, right?

306
00:14:10,548 --> 00:14:14,718
So if my money's becoming more valuable by 5%, I know that if I

307
00:14:14,718 --> 00:14:20,498
invest in a football club that at a PE of 5 is giving me 20%, right?

308
00:14:20,858 --> 00:14:26,788
That I'm outperforming that, that deflationary rate by 15%.

309
00:14:27,598 --> 00:14:29,198
Or no, would it be the other way?

310
00:14:29,218 --> 00:14:33,608
It would be, um, yeah, because my club is becoming more valuable too.

311
00:14:33,608 --> 00:14:37,408
So it's actually additive to, that's so weird by the way.

312
00:14:37,758 --> 00:14:38,508
That is really weird.

313
00:14:38,968 --> 00:14:43,508
Um, so it'd be a 25 percent return, which is a kicker, is

314
00:14:43,758 --> 00:14:46,588
actually a kicker to the PE.

315
00:14:46,688 --> 00:14:51,948
So the five might actually, maybe it is a little bit higher because of that kicker.

316
00:14:52,048 --> 00:14:52,438
Yeah.

317
00:14:52,540 --> 00:14:55,440
This is really, this is really interesting because I never, I never

318
00:14:55,440 --> 00:14:57,590
even thought about that being additive.

319
00:14:57,590 --> 00:15:00,300
I would have just immediately thought it was subtractive because

320
00:15:00,300 --> 00:15:04,600
of how, yeah, but that would be a 25 percent return if you include it.

321
00:15:04,600 --> 00:15:04,940
Yeah.

322
00:15:05,020 --> 00:15:08,690
Uh, that's why I think, like, it's, it's, it's like phenomena like that,

323
00:15:08,720 --> 00:15:13,170
and when you really think them through, it's like, this is changing the world

324
00:15:13,490 --> 00:15:15,610
so much more than we can even imagine.

325
00:15:15,670 --> 00:15:15,940
Like,

326
00:15:15,950 --> 00:15:16,440
it's, it's

327
00:15:16,450 --> 00:15:17,410
so weird.

328
00:15:17,530 --> 00:15:19,460
But people with math are going to figure it out really

329
00:15:19,680 --> 00:15:19,900
Well,

330
00:15:20,090 --> 00:15:20,270
it's

331
00:15:20,270 --> 00:15:20,890
not math,

332
00:15:20,920 --> 00:15:24,580
because, uh, uh, an economy, it's never math, it's human action, right?

333
00:15:24,580 --> 00:15:26,910
So you, so you're thinking that it's, is it linear?

334
00:15:27,070 --> 00:15:27,170
Is it

335
00:15:27,170 --> 00:15:27,820
exponential?

336
00:15:27,870 --> 00:15:28,180
No,

337
00:15:28,180 --> 00:15:28,820
it's even

338
00:15:29,080 --> 00:15:30,230
well, I would disagree with that.

339
00:15:30,230 --> 00:15:33,980
I would say that, uh, from, from a standpoint of really savvy

340
00:15:33,980 --> 00:15:37,290
investors and people that are capital allocators, it's, it's.

341
00:15:37,425 --> 00:15:39,355
I mean, this is how I think of the world.

342
00:15:39,355 --> 00:15:41,175
I think of it very mathematical.

343
00:15:41,765 --> 00:15:44,585
Like if you want me to depart with my Bitcoin, sure, I'll do it.

344
00:15:44,635 --> 00:15:50,045
If, if I can look at a club and I can say, if I can get my return back in four

345
00:15:50,045 --> 00:15:53,585
years, cause that's what the numbers would have been on those valuations that we

346
00:15:53,585 --> 00:15:57,235
were just talking about, assuming the 5 percent deflationary rate and all that.

347
00:15:57,660 --> 00:16:01,370
I would get my money back, um, my Bitcoin money back in four

348
00:16:01,370 --> 00:16:02,570
years by owning this club.

349
00:16:02,620 --> 00:16:08,730
That my risk would be that if this club would catch on fire in year three, then

350
00:16:08,740 --> 00:16:10,610
it was a bad investment and I lost money.

351
00:16:11,010 --> 00:16:14,960
But if I was able to hold it for four years, I got all the Bitcoin that I

352
00:16:14,960 --> 00:16:19,150
invested back, and then every year after that, I'm making Bitcoin on that

353
00:16:19,400 --> 00:16:19,535
Yeah.

354
00:16:19,570 --> 00:16:19,830
Yeah.

355
00:16:19,830 --> 00:16:20,730
Yeah.

356
00:16:20,815 --> 00:16:25,165
So you're going to have really savvy economic thinkers, people that

357
00:16:25,165 --> 00:16:28,575
can perform economic calculations despite a deflationary rate.

358
00:16:28,625 --> 00:16:30,725
And, um, what happens is, is.

359
00:16:31,225 --> 00:16:36,355
Is the market sorts out what is truly value added activities.

360
00:16:36,365 --> 00:16:37,395
And that's the difference.

361
00:16:37,525 --> 00:16:42,415
That's the big difference because when I'm, when I look at this thing that

362
00:16:42,415 --> 00:16:48,175
just keeps going up in value and I'm not, I'm not politically maneuvering

363
00:16:48,175 --> 00:16:52,815
myself to have access to it, it's just everybody equally is getting this

364
00:16:52,875 --> 00:16:56,645
deflationary rate, which you have is this.

365
00:16:57,520 --> 00:17:02,100
This battle, because if this would only give me, let's say that after I did the

366
00:17:02,100 --> 00:17:06,180
math, this would give me, cause we were saying 25%, let's just say it was 5%.

367
00:17:06,980 --> 00:17:07,340
Okay.

368
00:17:07,840 --> 00:17:12,290
I could own this and it's giving me a 5 percent return, which would have

369
00:17:12,290 --> 00:17:13,680
just been the deflationary rate.

370
00:17:13,700 --> 00:17:15,730
I would just keep the money and I wouldn't have bought the club.

371
00:17:16,305 --> 00:17:19,265
Versus a business, let's say the hospital down there was giving

372
00:17:19,265 --> 00:17:21,245
me the 25 as a capital allocator.

373
00:17:21,275 --> 00:17:23,485
I'm going to the hospital, I'm investing in that, and I'm not,

374
00:17:23,845 --> 00:17:24,805
I'm not going to own this thing.

375
00:17:24,805 --> 00:17:25,445
It's just math.

376
00:17:26,015 --> 00:17:26,395
Yeah, yeah.

377
00:17:26,535 --> 00:17:29,125
Cause I'm just looking at it from a return, relative return

378
00:17:29,135 --> 00:17:32,885
basis of everything that's happening on this island, right?

379
00:17:33,075 --> 00:17:35,485
From what's the, what's my return profile?

380
00:17:35,485 --> 00:17:36,695
What am I expecting to get back?

381
00:17:37,065 --> 00:17:39,565
So, so here's another, uh, slightly different angle.

382
00:17:40,055 --> 00:17:44,335
So, uh, if you make an investment instead of just hodling your Bitcoin

383
00:17:44,465 --> 00:17:50,635
and you expect it to, like, you expect an equal amount of Bitcoin and over

384
00:17:50,825 --> 00:17:54,705
infinity, like say, say, say, So it doesn't really matter if you hodl the

385
00:17:54,705 --> 00:17:56,545
bitcoin or if you make the investment.

386
00:17:57,135 --> 00:18:00,555
The investment might still be sounder from another perspective because

387
00:18:00,655 --> 00:18:03,245
hodling bitcoin, there is a risk there.

388
00:18:03,325 --> 00:18:05,905
Like, you could get dementia, you could,

389
00:18:05,945 --> 00:18:06,655
you know, bump

390
00:18:06,655 --> 00:18:08,995
your head into something, forget the location of your seed phrase

391
00:18:09,015 --> 00:18:09,515
I love where

392
00:18:09,615 --> 00:18:11,115
The business is still there.

393
00:18:11,345 --> 00:18:11,595
So,

394
00:18:11,635 --> 00:18:12,085
so it's,

395
00:18:12,290 --> 00:18:13,010
don't have custody

396
00:18:13,175 --> 00:18:13,587
no, no,

397
00:18:13,605 --> 00:18:14,095
exactly.

398
00:18:14,095 --> 00:18:14,605
So how

399
00:18:14,605 --> 00:18:18,830
much of my, Uh, total net worth, would I want to be abstract and

400
00:18:18,830 --> 00:18:20,420
intangible and how much would I be

401
00:18:20,420 --> 00:18:20,960
tangible?

402
00:18:21,010 --> 00:18:21,140
I

403
00:18:21,140 --> 00:18:25,330
think that's the real trade off you're making in the future when you're deciding

404
00:18:25,330 --> 00:18:27,630
whether to hodl or whether to invest.

405
00:18:27,850 --> 00:18:31,070
that totally gets built into the math, right?

406
00:18:31,230 --> 00:18:32,750
What's the custody risk?

407
00:18:32,750 --> 00:18:33,020
Okay.

408
00:18:33,020 --> 00:18:34,320
Well, it's deflationary.

409
00:18:34,350 --> 00:18:35,930
Let's use the round numbers.

410
00:18:35,930 --> 00:18:37,720
It's deflationary at 5%.

411
00:18:38,070 --> 00:18:41,700
The custody risk, I'll put 20 bips on that, right?

412
00:18:41,720 --> 00:18:42,100
Cause

413
00:18:42,220 --> 00:18:42,540
Hard to

414
00:18:42,770 --> 00:18:45,970
because of that, well, if you were an insurance agent, you

415
00:18:45,970 --> 00:18:47,365
would know exactly what that is.

416
00:18:47,365 --> 00:18:53,885
Um, we'd say, you know, and that's why I'm saying 20 bips or whatever, the insurance

417
00:18:53,915 --> 00:18:57,715
person would have the stats on a macro level of what that might be, and you would

418
00:18:57,715 --> 00:19:03,715
assign that and then you would take that off of your, you know, um, so, but you

419
00:19:03,715 --> 00:19:08,735
bring up a great point and some people, they could care less that they're making

420
00:19:08,735 --> 00:19:13,385
1 percent more by owning this or that I'm super passionate about soccer and I

421
00:19:13,600 --> 00:19:13,810
like

422
00:19:13,810 --> 00:19:14,050
Peter

423
00:19:14,315 --> 00:19:15,415
it'd be like Peter, right?

424
00:19:15,435 --> 00:19:17,255
I'm super passionate about soccer.

425
00:19:17,610 --> 00:19:18,810
Yeah, I get it, Preston.

426
00:19:18,810 --> 00:19:21,060
The return isn't, this is exactly what he would say to me.

427
00:19:21,060 --> 00:19:22,050
It's like, I get it.

428
00:19:22,050 --> 00:19:25,670
The return might be better to go own this thing, but I love soccer and that's

429
00:19:25,670 --> 00:19:27,330
what I want to spend my time doing.

430
00:19:27,990 --> 00:19:30,330
And so that you're going to have that taking place.

431
00:19:30,330 --> 00:19:34,320
Quince, coincidence of wants really from a ownership of equity standpoint.

432
00:19:34,395 --> 00:19:37,390
I, I have a very personal, uh, example of exact

433
00:19:37,900 --> 00:19:38,350
exactly.

434
00:19:38,355 --> 00:19:41,230
This experience, and it's the wine I made this, uh, this fall.

435
00:19:41,235 --> 00:19:41,830
So they made

436
00:19:41,830 --> 00:19:43,480
six, 600 bottles of wine,

437
00:19:43,840 --> 00:19:44,260
like, and.

438
00:19:44,830 --> 00:19:47,000
Selling them like an exclusive thing.

439
00:19:47,350 --> 00:19:50,020
Um, but I had to sell some Bitcoin to pay for the wine.

440
00:19:50,400 --> 00:19:52,920
Uh, and that's, this was at the end of the summer.

441
00:19:52,950 --> 00:19:57,160
So Bitcoin is around 20, 25, 000 something, and I'm probably

442
00:19:57,160 --> 00:19:58,520
never getting the money back.

443
00:19:58,580 --> 00:19:58,820
Like,

444
00:19:59,620 --> 00:20:01,220
but, but it doesn't matter

445
00:20:01,520 --> 00:20:02,310
because I wanted

446
00:20:02,320 --> 00:20:03,210
to do the thing.

447
00:20:03,410 --> 00:20:03,840
And,

448
00:20:03,850 --> 00:20:06,050
uh, I, this is a fun little project.

449
00:20:06,050 --> 00:20:08,560
I think the wine is fantastically tasty.

450
00:20:08,610 --> 00:20:09,190
So like, I

451
00:20:09,190 --> 00:20:10,300
want people to try it.

452
00:20:10,630 --> 00:20:11,620
And, uh, you know.

453
00:20:12,130 --> 00:20:15,610
But, but you should know whenever, every time you make an investment

454
00:20:15,650 --> 00:20:19,330
using your Bitcoin that you're probably not getting them back.

455
00:20:19,360 --> 00:20:19,590
Like

456
00:20:19,590 --> 00:20:20,390
the, the likelihood

457
00:20:20,390 --> 00:20:24,060
of you not getting them back is way higher than they would be in the fiat world.

458
00:20:24,505 --> 00:20:30,515
The thing that I think's lost on most that are really locked into the fiat world

459
00:20:30,515 --> 00:20:37,099
right now is this idea that capital is not being allocated efficiently at all.

460
00:20:37,479 --> 00:20:41,859
Like deeply, disturbingly inefficient.

461
00:20:42,624 --> 00:20:47,604
And it comes down to just, if, if you are politically tied to the, to the printer,

462
00:20:47,684 --> 00:20:51,564
you get first access and then you can just apply it wherever the hell you want.

463
00:20:52,054 --> 00:20:54,954
I mean, they're still doing, they're still performing economic calculation.

464
00:20:54,974 --> 00:20:59,064
I'm not, I'm not saying that, but I am saying that there's so many

465
00:20:59,064 --> 00:21:02,804
zombie companies around the world that if you had sound money that

466
00:21:02,804 --> 00:21:04,594
was equally distributed to all.

467
00:21:04,964 --> 00:21:07,944
You would, these, these zombies would just get annihilated,

468
00:21:08,254 --> 00:21:10,744
annihilated, like really fast.

469
00:21:11,204 --> 00:21:13,784
And so what that, what that does is it clears out, it's

470
00:21:13,784 --> 00:21:15,364
a, it's a brush fire, right?

471
00:21:15,364 --> 00:21:21,554
It's a forest fire, makes way for the productive and really high quality

472
00:21:21,554 --> 00:21:28,524
gene, uh, you know, plants to, to build and to make it more efficient, more

473
00:21:28,524 --> 00:21:32,774
efficiently run, more energy efficient, the way that it's reconstructed.

474
00:21:33,454 --> 00:21:33,834
Yes.

475
00:21:33,884 --> 00:21:38,034
Speaking of that, like I think that people don't understand the trade offs.

476
00:21:38,094 --> 00:21:42,164
The, the example I love to use is, uh, an apple tree farmer.

477
00:21:42,341 --> 00:21:44,521
So he has one apple tree, sells the apples.

478
00:21:45,001 --> 00:21:48,901
Uh, for, and the profit is enough for him to buy a second apple tree.

479
00:21:48,911 --> 00:21:51,121
So the second year he can sell the double amount,

480
00:21:51,361 --> 00:21:54,251
therefore satisfying the double amount of customers.

481
00:21:54,561 --> 00:22:00,041
Third year, he can buy four apple trees, fourth year, eight apple trees and so on.

482
00:22:00,441 --> 00:22:04,081
So what you're missing out on, if you're taxing him 50 percent per year

483
00:22:04,381 --> 00:22:05,011
in inflation

484
00:22:05,011 --> 00:22:07,401
and taxes, is that he never gets to the second tree.

485
00:22:07,721 --> 00:22:08,371
So you're missing

486
00:22:08,371 --> 00:22:09,541
the second order effects.

487
00:22:09,541 --> 00:22:12,521
You're missing the exponential growth that could have been there.

488
00:22:13,066 --> 00:22:13,406
So I think

489
00:22:13,406 --> 00:22:18,456
the resource misallocation that Fiat, uh, mixes into the system

490
00:22:18,746 --> 00:22:18,956
is,

491
00:22:18,976 --> 00:22:22,716
it's so underrated how much damage it's actually doing

492
00:22:22,936 --> 00:22:23,816
just because of this

493
00:22:23,826 --> 00:22:26,426
loss of this exponential effects that could have been there.

494
00:22:26,576 --> 00:22:32,426
So if you pull it, if you, if you pull the thread really hard and you say, Hey,

495
00:22:32,426 --> 00:22:38,396
so Bitcoin's got a lot of whales in it today, and let's say they, they don't

496
00:22:38,406 --> 00:22:40,656
distribute these coins and whatnot.

497
00:22:40,676 --> 00:22:44,816
And this, this deflationary rate, and I'm not saying this is, this

498
00:22:44,816 --> 00:22:46,136
is what would happen longterm.

499
00:22:46,136 --> 00:22:49,416
I'm just, I guess, throwing it out as a thought experiment

500
00:22:49,426 --> 00:22:50,346
to hear your point of view.

501
00:22:51,476 --> 00:22:57,646
Let's say, uh, let's say that deflationary rate maybe slowly ticks up and picks up

502
00:22:57,646 --> 00:23:01,526
steam and actually becomes accelerative just because coins are being lost.

503
00:23:02,576 --> 00:23:09,216
What would you be incentivizing within the economy if the deflationary rate picked

504
00:23:09,216 --> 00:23:12,396
up to 10 or 15 percent or whatever, right?

505
00:23:13,066 --> 00:23:18,149
It would get really interesting because you would only be working

506
00:23:18,149 --> 00:23:21,989
on vital things because everybody would be incentivized to, to kind

507
00:23:21,989 --> 00:23:24,159
of sit on their hands, I think,

508
00:23:24,606 --> 00:23:25,216
Or you get

509
00:23:25,216 --> 00:23:31,372
this effect of people, and this is, this is sort of controversial thing to say

510
00:23:31,412 --> 00:23:35,262
among other bitcoiners, but it might actually be a good thing that people

511
00:23:35,262 --> 00:23:39,982
start using other things than bitcoin as a medium of exchange, and you have

512
00:23:39,982 --> 00:23:44,242
the bitcoin as your store of value, And that is, and you have it as, as capital

513
00:23:44,242 --> 00:23:45,942
and that is what enables all the other

514
00:23:46,007 --> 00:23:46,847
The bartering

515
00:23:46,952 --> 00:23:47,202
but,

516
00:23:47,212 --> 00:23:50,372
but borrowing and, and just using your reputational capital,

517
00:23:50,372 --> 00:23:50,802
this is

518
00:23:51,032 --> 00:23:54,692
one of the effects I see is like, and it's already happening now,

519
00:23:54,712 --> 00:23:55,722
like I trust

520
00:23:55,812 --> 00:23:59,532
you more than I trust the, a lot of other people

521
00:23:59,862 --> 00:24:02,622
because I know your history in Bitcoin, I know your history

522
00:24:02,672 --> 00:24:03,212
online.

523
00:24:03,637 --> 00:24:06,207
Like, I know that other Bitcoiners are trustworthy,

524
00:24:06,697 --> 00:24:07,047
uh,

525
00:24:07,097 --> 00:24:12,457
and that's your reputational capital is one of these currencies that might be

526
00:24:12,457 --> 00:24:14,097
used instead of your capital.

527
00:24:14,317 --> 00:24:19,207
So I see a very weird, like, and and this is a metric I'm trying to wrap around

528
00:24:19,207 --> 00:24:20,887
my head if it's actually true or not.

529
00:24:20,927 --> 00:24:27,012
And that's, uh, will the total number of transactions In society

530
00:24:27,062 --> 00:24:28,672
go down on a Bitcoin standard

531
00:24:28,672 --> 00:24:29,292
because we,

532
00:24:29,312 --> 00:24:30,902
we get rid of consumerism,

533
00:24:31,372 --> 00:24:31,882
like these

534
00:24:31,882 --> 00:24:32,932
micropayments,

535
00:24:33,402 --> 00:24:33,812
uh,

536
00:24:33,912 --> 00:24:38,342
um, you know, like paying a Euro to go to the toilet in the central station or

537
00:24:38,417 --> 00:24:38,897
yeah, yeah,

538
00:24:39,302 --> 00:24:43,417
they are very fiaty to me, like just paying for everything and nothing, just,

539
00:24:43,417 --> 00:24:49,217
you know, Like, when you had a bet on a gold standard, like you didn't have to

540
00:24:49,257 --> 00:24:52,687
pay for your tapas in Spain, they just came when you ordered a drink, like,

541
00:24:53,437 --> 00:24:53,897
I think there

542
00:24:53,897 --> 00:24:56,607
are fewer transactions in a sounder economy.

543
00:24:56,707 --> 00:24:57,157
Yeah.

544
00:24:57,677 --> 00:24:59,017
But I don't know, what do you think

545
00:24:59,037 --> 00:25:02,217
Well, yeah, I, I don't have a real strong take on it.

546
00:25:02,217 --> 00:25:05,127
I think that it's a fun thought experiment, right?

547
00:25:05,157 --> 00:25:08,757
But definitely not something we need to be worrying about today.

548
00:25:08,877 --> 00:25:09,527
I'm not

549
00:25:09,537 --> 00:25:10,087
worried,

550
00:25:10,087 --> 00:25:10,647
I

551
00:25:10,647 --> 00:25:11,347
think it's a good

552
00:25:11,547 --> 00:25:11,757
Yeah.

553
00:25:11,757 --> 00:25:14,217
Maybe, and, and maybe, maybe it's a good thing.

554
00:25:14,757 --> 00:25:20,485
I don't really know, but I, I guess it would be, it would be the opposite pole of

555
00:25:20,485 --> 00:25:22,345
what we're experiencing with fiat today.

556
00:25:22,345 --> 00:25:26,125
And since what we're experiencing today is just horrific.

557
00:25:26,680 --> 00:25:30,740
I don't know if, if, I guess I don't really know what to

558
00:25:30,740 --> 00:25:31,240
think of that.

559
00:25:31,540 --> 00:25:34,570
everything because this idea of velocity of money,

560
00:25:34,960 --> 00:25:35,130
it

561
00:25:35,130 --> 00:25:36,150
comes from Keynes.

562
00:25:36,660 --> 00:25:37,140
And like

563
00:25:37,140 --> 00:25:41,480
that, that you add value every time a bill is exchanged between two people,

564
00:25:41,480 --> 00:25:43,570
then you add that much value to society.

565
00:25:43,610 --> 00:25:43,900
But it's

566
00:25:43,900 --> 00:25:44,350
not really

567
00:25:44,350 --> 00:25:48,020
true if the thing is inflationary because the valuable thing

568
00:25:48,040 --> 00:25:52,000
is, is miscalculated to a

569
00:25:52,000 --> 00:25:52,680
certain percent.

570
00:25:52,690 --> 00:25:58,220
Yeah, the inflation rate is the percentage of miscalculation in the transaction, so

571
00:25:58,250 --> 00:25:58,380
it's

572
00:25:58,885 --> 00:25:59,365
If there's

573
00:25:59,490 --> 00:26:01,700
Deep in, yeah, it's deep today.

574
00:26:01,700 --> 00:26:06,340
It's deeply inefficient and incentivizes deep consumerism.

575
00:26:06,350 --> 00:26:08,140
So the opposite pole of that is.

576
00:26:08,775 --> 00:26:11,595
Is, yeah, deep efficiency and

577
00:26:11,955 --> 00:26:12,125
If

578
00:26:12,125 --> 00:26:12,995
you have 10 percent

579
00:26:12,995 --> 00:26:14,005
inflation, that's

580
00:26:14,255 --> 00:26:15,035
10 percent

581
00:26:15,075 --> 00:26:16,185
miscalculation,

582
00:26:16,775 --> 00:26:17,215
so that

583
00:26:17,245 --> 00:26:18,685
you buy 10 percent more shit,

584
00:26:19,515 --> 00:26:20,355
or, like,

585
00:26:20,385 --> 00:26:22,875
plastic stuff out of a container from China that

586
00:26:22,905 --> 00:26:23,645
no one needs,

587
00:26:24,265 --> 00:26:26,965
instead of just doing the sound things and,

588
00:26:27,375 --> 00:26:27,735
well,

589
00:26:28,655 --> 00:26:31,165
will we all be Buddhist monks who are shit rich

590
00:26:31,255 --> 00:26:32,045
Yeah, that's

591
00:26:32,255 --> 00:26:33,390
crave anything, like

592
00:26:33,415 --> 00:26:35,270
You

593
00:26:35,730 --> 00:26:38,790
Well, and actually this is, this is sort of another angle because you

594
00:26:38,790 --> 00:26:42,120
mentioned time a little bit, like the, the time that people will save.

595
00:26:42,140 --> 00:26:44,190
And this is another angle right now.

596
00:26:44,190 --> 00:26:47,360
And this might be one of these phenomena that actually is only

597
00:26:47,360 --> 00:26:50,010
applicable to this, this bull rush time.

598
00:26:50,390 --> 00:26:52,780
And in the future after hyperbitcoinization, this might

599
00:26:52,780 --> 00:26:56,310
not necessarily be the thing, but people are escaping the fiat

600
00:26:56,310 --> 00:27:00,110
system because their stacks go up in value so much that eventually

601
00:27:00,110 --> 00:27:02,810
they can stop doing the fiat thing.

602
00:27:02,830 --> 00:27:03,040
But

603
00:27:03,040 --> 00:27:03,520
then they

604
00:27:03,520 --> 00:27:04,620
have to take the risk.

605
00:27:05,055 --> 00:27:08,025
And spend from their stacks until they find some other

606
00:27:08,095 --> 00:27:13,465
method of, of, uh, replacing that capital, something like that.

607
00:27:13,465 --> 00:27:14,115
But, but

608
00:27:14,115 --> 00:27:14,505
this is a,

609
00:27:14,535 --> 00:27:14,725
this

610
00:27:14,767 --> 00:27:18,967
is a, but I think, a lot of them, uh, I think a lot of people, once their stack

611
00:27:18,977 --> 00:27:23,777
is big enough, they can say, this is what I really want to work on, because you

612
00:27:23,777 --> 00:27:28,727
have to do something, you can't just like sit there, like, at least I can't sit

613
00:27:28,727 --> 00:27:31,967
there like a Buddhist monk and I don't, I don't even know what a Buddhist monk

614
00:27:31,967 --> 00:27:35,302
does, but, um, um, have my suspicions.

615
00:27:35,937 --> 00:27:39,517
that was funny.

616
00:27:39,717 --> 00:27:45,347
Um, I think for a lot of people, they'd say my whole life, this is, this is thing

617
00:27:45,347 --> 00:27:47,137
over here is what I've dreamt of doing.

618
00:27:47,527 --> 00:27:51,037
And so now they have that opportunity to go educate themself on whatever

619
00:27:51,037 --> 00:27:52,647
that specialization is, and then.

620
00:27:53,407 --> 00:27:53,577
They

621
00:27:53,577 --> 00:27:56,557
might be an amateur at it and they might be midlife, right?

622
00:27:56,597 --> 00:27:58,047
And that's, and that's fine.

623
00:27:58,227 --> 00:28:01,107
They, they can go do what they finally want to go do.

624
00:28:01,127 --> 00:28:03,717
And then they're going to actually start generating, if they're adding

625
00:28:03,717 --> 00:28:07,007
productive value to society, doing that thing, which they most likely

626
00:28:07,007 --> 00:28:08,467
will, they'll find a way to do it.

627
00:28:08,987 --> 00:28:13,057
They're then going to be able to earn an income and not even have

628
00:28:13,057 --> 00:28:14,557
to pull from their stack, I guess.

629
00:28:14,967 --> 00:28:15,307
Right?

630
00:28:15,557 --> 00:28:19,177
is, this is exactly what's happening, to me personally,

631
00:28:19,537 --> 00:28:23,657
like we bought a new house recently, and there's all these decisions

632
00:28:23,657 --> 00:28:27,807
that need to be made, like are we re renovating the kitchen for instance?

633
00:28:27,807 --> 00:28:28,497
Ah!

634
00:28:29,302 --> 00:28:30,092
I can wait,

635
00:28:30,187 --> 00:28:30,627
I know.

636
00:28:30,627 --> 00:28:31,097
Yes.

637
00:28:31,512 --> 00:28:31,762
let's

638
00:28:31,762 --> 00:28:33,572
just keep the stack, go to these

639
00:28:33,572 --> 00:28:35,232
conferences, do The stuff, like yeah,

640
00:28:35,232 --> 00:28:39,372
yeah, so, so, and even my wife has started to think this way, which,

641
00:28:39,482 --> 00:28:43,212
which is something that, like, it took longer for her than for me,

642
00:28:43,487 --> 00:28:43,927
Yeah.

643
00:28:44,272 --> 00:28:46,342
but she's thinking in these terms,

644
00:28:46,442 --> 00:28:47,452
and it's beautiful

645
00:28:47,452 --> 00:28:50,632
to see, like, maybe we don't need to, you know,

646
00:28:50,642 --> 00:28:51,882
be, be in this rat

647
00:28:51,882 --> 00:28:54,399
race with the neighbors that we were in, in,

648
00:28:54,452 --> 00:28:55,752
during our Fiat days, like,

649
00:28:55,762 --> 00:28:56,322
why are we

650
00:28:56,322 --> 00:28:56,802
doing this?

651
00:28:56,872 --> 00:28:57,182
Yeah.

652
00:28:58,127 --> 00:28:58,947
It's madness.

653
00:28:58,977 --> 00:29:01,877
And it's so liberating because you're just kind of like, Oh

654
00:29:01,877 --> 00:29:03,527
yeah, like I don't need a new car.

655
00:29:04,237 --> 00:29:04,477
Like.

656
00:29:05,397 --> 00:29:08,967
I have a, I have a F 150 of 2017, right?

657
00:29:08,977 --> 00:29:11,757
Like, I could easily go out and buy a brand new car.

658
00:29:11,997 --> 00:29:13,287
I don't need a new car.

659
00:29:13,397 --> 00:29:14,197
I love the truck.

660
00:29:14,197 --> 00:29:14,377
It's

661
00:29:14,717 --> 00:29:15,257
This is the

662
00:29:15,257 --> 00:29:21,077
irony, because we will actually be, uh, own nothing and be happy.

663
00:29:21,517 --> 00:29:23,037
yeah, yeah, yeah,

664
00:29:23,177 --> 00:29:24,887
from a totally different perspective.

665
00:29:25,067 --> 00:29:27,327
It's like that dog in hell, you know, this is fine.

666
00:29:27,367 --> 00:29:27,707
And we

667
00:29:28,387 --> 00:29:29,347
It's very Buddhist.

668
00:29:29,517 --> 00:29:29,657
yeah,

669
00:29:29,822 --> 00:29:30,027
yeah.

670
00:29:30,707 --> 00:29:31,257
Nothing would be

671
00:29:31,482 --> 00:29:31,644
But,

672
00:29:31,732 --> 00:29:34,972
but it isn't own nothing and be happy, it's own just, just enough.

673
00:29:34,972 --> 00:29:37,352
Oh, it's owe nothing and be happy, and

674
00:29:37,387 --> 00:29:38,217
There you go.

675
00:29:38,392 --> 00:29:39,352
that's the difference.

676
00:29:39,562 --> 00:29:39,959
You just

677
00:29:39,972 --> 00:29:42,812
change one letter, you will owe nothing and be happy.

678
00:29:43,542 --> 00:29:48,152
Well, unless you're doing the, the fun credit stuff to, to get more bitcoin.

679
00:29:48,182 --> 00:29:48,932
Oh yeah, yeah, the

680
00:29:49,412 --> 00:29:49,852
Weimar

681
00:29:49,882 --> 00:29:52,482
Republic slash sailor stuff, like it just.

682
00:29:52,722 --> 00:29:54,732
Is that probably just best left to Michael or what?

683
00:29:55,562 --> 00:30:01,092
well, I think, I think people deeply understand, deeply misunderstand what

684
00:30:01,112 --> 00:30:06,982
Michael's doing from, uh, you know, from a financial engineering standpoint,

685
00:30:07,022 --> 00:30:10,952
he's probably the most brilliant person on, on the planet with what he's doing.

686
00:30:10,972 --> 00:30:15,312
And so people will look at, look at it and it was so funny this last cycle,

687
00:30:16,282 --> 00:30:19,612
you have people that are looking at his company as if it's a hedge fund.

688
00:30:20,712 --> 00:30:23,742
And like thinking that, Oh, he's going to be, he's going

689
00:30:23,742 --> 00:30:24,992
to be liquidated this and that.

690
00:30:24,992 --> 00:30:28,402
And it's like, you don't understand, like, this is a, this is a business.

691
00:30:28,442 --> 00:30:32,062
This is an operational business that makes 75 to a hundred million a year.

692
00:30:32,927 --> 00:30:38,245
Uh, in fiat terms, obviously, and when you do that, you can, you can do things

693
00:30:38,245 --> 00:30:41,225
that are way different than a hedge fund.

694
00:30:41,655 --> 00:30:46,775
In fact, Buffett, okay, going to Warren Buffett, the reason he shut

695
00:30:46,785 --> 00:30:51,735
down his hedge fund is because he could not take advantage of the system

696
00:30:51,955 --> 00:30:54,225
like he could as a business owner.

697
00:30:54,685 --> 00:30:58,955
And that's why he plowed all of his efforts into saving Berkshire,

698
00:30:58,955 --> 00:31:01,935
which was, he'll he'll tell you was one of the biggest mistakes of his

699
00:31:01,935 --> 00:31:05,135
life was Berkshire Hathaway, buying Berkshire Hathaway when he bought

700
00:31:05,135 --> 00:31:07,175
it, which is a whole nother topic.

701
00:31:07,175 --> 00:31:14,025
But once he, once he was controlling the, his investments as non

702
00:31:14,025 --> 00:31:17,135
operational subsidiaries on the balance sheet of Berkshire Hathaway.

703
00:31:18,010 --> 00:31:22,940
He was able to take advantage of market behavior as opposed to being a victim of

704
00:31:22,940 --> 00:31:27,910
market behavior, which is what you have as in a hedge fund because people will

705
00:31:27,910 --> 00:31:30,170
give you money at the exact wrong time.

706
00:31:30,510 --> 00:31:34,120
And then when you're trying to buy stuff at discounted prices, they all

707
00:31:34,120 --> 00:31:39,080
want to take the money away from you, which is literally the, it's, uh, it's

708
00:31:39,090 --> 00:31:41,190
incongruent with the cycle, right?

709
00:31:41,200 --> 00:31:44,830
But when you're a business owner and you can, you're like, Oh,

710
00:31:44,850 --> 00:31:46,680
I'm deeply overvalued right now.

711
00:31:47,245 --> 00:31:51,265
And the market is giving, is valuing me in excess.

712
00:31:51,585 --> 00:31:55,155
You can take advantage of that because it's all being the non

713
00:31:55,155 --> 00:31:58,575
operational subsidiaries sit inside of the public entity.

714
00:31:58,855 --> 00:32:02,675
So when you look at Michael, the thing you would say is, well,

715
00:32:02,685 --> 00:32:04,215
like, what's his debt to equity?

716
00:32:04,245 --> 00:32:05,645
Like today, what's his debt to equity?

717
00:32:05,645 --> 00:32:05,835
I.

718
00:32:06,295 --> 00:32:09,445
I don't know what the number is, but I would guess it's like 0.

719
00:32:09,505 --> 00:32:10,075
2.

720
00:32:10,585 --> 00:32:14,755
And if you look at the S& P 500, like what's normal for debt to equity on

721
00:32:14,755 --> 00:32:18,875
a, and we're talking about leverage ratios, like how levered is he?

722
00:32:18,955 --> 00:32:20,675
I would say on average, you're 0.

723
00:32:20,675 --> 00:32:26,345
5, which the average is twice as high as what he is, twice as levered as

724
00:32:26,355 --> 00:32:28,905
he is, and twice as dangerous as,

725
00:32:29,340 --> 00:32:30,140
Like, like like meaning,

726
00:32:30,330 --> 00:32:33,450
uh, the, they have 50% of their, their equity

727
00:32:33,450 --> 00:32:34,290
is, is then in

728
00:32:34,295 --> 00:32:34,560
debt.

729
00:32:34,590 --> 00:32:38,290
the, the total debt of the company versus the total equity value, the,

730
00:32:38,320 --> 00:32:41,110
you know, you take the assets minus the liabilities, you get the equity.

731
00:32:41,570 --> 00:32:44,830
So you take that debt load and you compare it to the equity, the

732
00:32:44,830 --> 00:32:47,110
re the retainings of the company.

733
00:32:47,710 --> 00:32:51,130
And I, I would guess, I don't know, and I should know the number,

734
00:32:51,160 --> 00:32:54,400
but, uh, if I'm saying this, but I would guess it's like 0.

735
00:32:54,400 --> 00:32:55,240
2 or something.

736
00:32:55,910 --> 00:33:00,380
So 20 percent of the debt versus, you know, his entire equity load.

737
00:33:00,607 --> 00:33:00,757
Yeah.

738
00:33:00,757 --> 00:33:05,647
So, so on a, in a hyperized world or a, on a hyper, on a Bitcoin standard

739
00:33:05,647 --> 00:33:10,677
or whatever term you may choose to use, uh, I guess interest levels will

740
00:33:10,677 --> 00:33:15,177
come to their natural, like what they should be, which is probably way higher.

741
00:33:15,627 --> 00:33:17,107
Then, then what it is now.

742
00:33:17,397 --> 00:33:19,847
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743
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752
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755
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756
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757
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758
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761
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762
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764
00:34:19,092 --> 00:34:19,872
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765
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Oh!

766
00:34:21,970 --> 00:34:25,260
the question in here somewhere that's a bit far fetched, but is

767
00:34:25,260 --> 00:34:29,250
there such a thing as a hedge fund on a Bitcoin Bitcoin standard?

768
00:34:30,060 --> 00:34:34,640
I think you'll, I think you'll always have people that are viewed as just

769
00:34:34,650 --> 00:34:42,080
being financial geniuses or financial gurus and people just want to, you

770
00:34:42,080 --> 00:34:46,540
know, provide capital for them to, to place into the market because they

771
00:34:46,540 --> 00:34:47,910
just don't want to be bothered with it.

772
00:34:47,980 --> 00:34:50,810
I think you're, I suspect you always have that.

773
00:34:51,009 --> 00:34:52,929
Aren't those old fiat phenomena though,

774
00:34:53,072 --> 00:34:57,849
that like that, that you can get, uh, yeah, uh, lower interest rates, the bigger

775
00:34:57,849 --> 00:34:59,539
your company is and stuff like this.

776
00:34:59,539 --> 00:35:03,649
And the more politically connected you are and ESG scores and whatnot.

777
00:35:03,659 --> 00:35:04,069
Like,

778
00:35:04,197 --> 00:35:04,669
isn't that,

779
00:35:04,914 --> 00:35:06,264
yeah, that last one for sure.

780
00:35:06,439 --> 00:35:08,889
things or screwing things up and

781
00:35:08,889 --> 00:35:09,569
not giving us

782
00:35:09,649 --> 00:35:10,469
a clear signal?

783
00:35:10,719 --> 00:35:15,069
I think what I'm, what I'm confident in saying is I think the trend is

784
00:35:15,069 --> 00:35:20,399
going to drastically shift to everybody doesn't have, I'm a, I've got my hedge

785
00:35:20,399 --> 00:35:22,059
fund, I've got this or whatever, right?

786
00:35:22,059 --> 00:35:26,039
I think that that pole is, is swinging as hard as it can right now.

787
00:35:26,039 --> 00:35:28,899
And it's about to start swinging the opposite direction.

788
00:35:29,259 --> 00:35:32,529
And I think the trend is going to be way less of what you see today.

789
00:35:32,529 --> 00:35:35,869
But as far as you like nominally, where does that end up?

790
00:35:35,899 --> 00:35:36,649
I don't know.

791
00:35:37,264 --> 00:35:41,504
But, um, I would say, I think they'll, they'll always be some people that

792
00:35:41,504 --> 00:35:44,654
are viewed as, as being just really great capital allocators and people

793
00:35:44,654 --> 00:35:46,984
are going to want to give them money to, to place it in the market,

794
00:35:47,694 --> 00:35:49,154
but at what level, I don't know.

795
00:35:50,312 --> 00:35:54,062
I love this, uh, I think it was Seyfedine who framed like what a government bond

796
00:35:54,102 --> 00:36:00,012
is as, uh, a promise from the government to steal even more from your children

797
00:36:00,012 --> 00:36:02,202
than they stole from you, that they,

798
00:36:02,712 --> 00:36:03,322
and, and

799
00:36:03,442 --> 00:36:04,202
it's well phrased.

800
00:36:04,252 --> 00:36:09,012
exchange that for the privilege to print money even faster and devaluate your

801
00:36:09,012 --> 00:36:11,602
currency so it would be even harder for your children to pay it back.

802
00:36:12,072 --> 00:36:12,332
And a

803
00:36:12,332 --> 00:36:16,502
government bond is viewed as like the most risk free thing in the world,

804
00:36:16,582 --> 00:36:17,002
when it's

805
00:36:17,012 --> 00:36:20,342
really just a, a guarantee

806
00:36:20,592 --> 00:36:20,952
that there

807
00:36:20,952 --> 00:36:22,442
will be more risk in the future.

808
00:36:22,852 --> 00:36:23,642
And Bitcoin

809
00:36:23,752 --> 00:36:24,912
is like the opposite of that.

810
00:36:24,922 --> 00:36:29,812
It's, it's the actual risk free thing that, that ensures that there will be

811
00:36:29,842 --> 00:36:32,162
a free market system in the future,

812
00:36:32,522 --> 00:36:32,782
as

813
00:36:32,782 --> 00:36:35,042
a counterpoint to these government things,

814
00:36:35,422 --> 00:36:35,812
like,

815
00:36:36,222 --> 00:36:39,022
So, uh, and I think this, this is the shift we're seeing the

816
00:36:39,022 --> 00:36:40,622
next 10 years is just from

817
00:36:40,622 --> 00:36:41,172
viewing

818
00:36:41,252 --> 00:36:46,252
Bitcoin as the risky asset to viewing it as the least risky asset.

819
00:36:46,752 --> 00:36:46,982
So

820
00:36:47,102 --> 00:36:47,752
what do you think?

821
00:36:48,087 --> 00:36:48,707
I agree with you.

822
00:36:48,707 --> 00:36:56,777
I think, uh, debt loads, um, I think are going to be, uh, you know, if I was

823
00:36:56,777 --> 00:37:01,697
going to guess a number, 10 percent of what you see today in debt around the

824
00:37:01,697 --> 00:37:06,337
world, it might be 10 or 5 percent of that in, in a, um, Bitcoinized world,

825
00:37:06,917 --> 00:37:13,707
um, where I think that would still serve a purpose is mostly on, uh, on the

826
00:37:13,707 --> 00:37:17,437
venture capital side, uh, or startups.

827
00:37:17,577 --> 00:37:21,447
So if you have a business that is just, you, you invented something,

828
00:37:21,447 --> 00:37:25,417
you, you created something that the market is just going wild over, it's

829
00:37:25,477 --> 00:37:27,097
going global, whatever it is, right.

830
00:37:28,902 --> 00:37:34,732
That, that revenue that's just exploding up and they're, they're becoming

831
00:37:34,732 --> 00:37:40,152
profitable, a business like that does not have to debase their shares and

832
00:37:40,402 --> 00:37:45,192
create more equity and the market is like, I want to own that, right?

833
00:37:45,222 --> 00:37:47,552
And so what they might do is convertible debt.

834
00:37:48,362 --> 00:37:50,872
That's where the purpose of debt would still be used.

835
00:37:50,872 --> 00:37:51,172
It would be.

836
00:37:51,792 --> 00:37:52,262
Okay.

837
00:37:52,342 --> 00:37:56,652
Uh, because as the, as the V or as the entrepreneur of that business that you

838
00:37:56,672 --> 00:37:59,792
created, that's just going parabolic, you would, you would go to the market

839
00:37:59,832 --> 00:38:03,022
and you'd be like, I need some money because I need money to scale the

840
00:38:03,032 --> 00:38:06,662
production of this thing or just to scale the servers or whatever it might be.

841
00:38:07,422 --> 00:38:12,402
And, um, but I don't want to debase my common stock and I know I'm profitable,

842
00:38:12,402 --> 00:38:17,202
but these, the profits that I've retained so far won't put my production line on.

843
00:38:17,202 --> 00:38:20,182
So I have to borrow some money to do that, borrow some Bitcoin.

844
00:38:20,702 --> 00:38:22,382
So that person would go out into the market.

845
00:38:22,402 --> 00:38:24,102
They'd say, this is a debt offering.

846
00:38:24,112 --> 00:38:26,122
I don't want to debase my shares.

847
00:38:26,652 --> 00:38:30,382
It may be convertible with this, if certain criteria are met, which

848
00:38:30,382 --> 00:38:32,002
would benefit you to lend me this.

849
00:38:32,082 --> 00:38:34,792
If, if I'm wrong, but if I'm not, then it's just, I'm going to

850
00:38:34,802 --> 00:38:37,252
settle the debt and pay you back.

851
00:38:37,832 --> 00:38:39,372
I got my production stood up.

852
00:38:39,622 --> 00:38:42,362
And so that it's going to be like a combination of.

853
00:38:43,737 --> 00:38:47,777
Option to convert into the common stock, but it's a debt instrument

854
00:38:47,807 --> 00:38:52,207
because the, in that scenario that I'm describing, the entrepreneur has

855
00:38:52,207 --> 00:38:56,047
the upper hand because of the growth rate and the projections, right?

856
00:38:56,737 --> 00:39:00,657
And so because they have that upper hand, they would, they would be incentivized

857
00:39:00,697 --> 00:39:05,247
to make it a debt issuance with, uh, you know, the optionality to convert it.

858
00:39:06,667 --> 00:39:11,187
But that's, that's one of the only rare scenarios that I can see.

859
00:39:11,587 --> 00:39:17,937
Why you would want to use debt in this future world, the, the treasury bond,

860
00:39:17,937 --> 00:39:22,537
like all that kind of stuff, like that really melts away and that gets like way

861
00:39:22,537 --> 00:39:28,327
lower than, I mean, today the numbers are so massive and just unimaginable, like

862
00:39:28,337 --> 00:39:31,047
all that gets just, it becomes toast.

863
00:39:31,377 --> 00:39:34,297
is that in relation to what MicroStrategy is doing?

864
00:39:34,587 --> 00:39:38,117
Because by accumulating, taking on more debt and accumulating

865
00:39:38,117 --> 00:39:43,037
more bitcoin, they are increasing the number of sats per share,

866
00:39:43,867 --> 00:39:44,167
Yeah,

867
00:39:44,287 --> 00:39:46,807
well, so he was doing this early on.

868
00:39:46,817 --> 00:39:49,237
He was doing convertible debt issuance.

869
00:39:49,237 --> 00:39:51,417
I think his first one was at 75 bips.

870
00:39:51,417 --> 00:39:53,327
He did the next one, I think at 25.

871
00:39:55,472 --> 00:40:00,112
And then, what he started doing is just issuing common stock and then converting

872
00:40:00,112 --> 00:40:04,212
it into Bitcoin because there was this, there was this shareholder premium above

873
00:40:04,212 --> 00:40:06,702
his treasury value in a per share basis.

874
00:40:07,182 --> 00:40:09,492
And that, that adds more Bitcoin to the balance sheet.

875
00:40:09,522 --> 00:40:13,222
So a lot of the, the moves that you've seen recently where he's

876
00:40:13,222 --> 00:40:16,992
like, I bought another 10, 000 or I bought another, however many Bitcoin.

877
00:40:17,277 --> 00:40:18,937
He's not issuing debt with this.

878
00:40:19,357 --> 00:40:21,347
And I think there's people he did initially.

879
00:40:21,347 --> 00:40:23,707
And I think people are confusing what he was doing initially with

880
00:40:23,707 --> 00:40:25,687
what he's been doing more recently.

881
00:40:26,618 --> 00:40:31,098
and if, if I was going to say something else that I think is somewhat mind blowing

882
00:40:31,638 --> 00:40:37,808
because he did these convertible debt issuances early on, it created this,

883
00:40:38,438 --> 00:40:43,438
Enormous amount of liquidity because there was all these derivatives that were

884
00:40:43,638 --> 00:40:46,168
stood up on, which is out of his control.

885
00:40:46,168 --> 00:40:47,938
This is just wall street being wall street.

886
00:40:48,318 --> 00:40:52,298
They stood up all these derivatives over those debt instruments, which made the

887
00:40:52,298 --> 00:40:55,078
volume of shares for micro strategy.

888
00:40:55,468 --> 00:40:58,958
The very deeply traded, like the volume on micro strategy.

889
00:40:58,958 --> 00:41:04,128
If you look it up is Like absurdly high compared to any

890
00:41:04,128 --> 00:41:06,358
other stock out in the market.

891
00:41:06,358 --> 00:41:10,778
Like I would argue maybe is, and this might sound crazy and people

892
00:41:10,778 --> 00:41:11,648
need to look up the numbers.

893
00:41:11,648 --> 00:41:16,558
I would say is as high as maybe like Exxon Mobil or like large companies, like, like

894
00:41:16,688 --> 00:41:21,318
really like top of the S& P companies, he has the same volume of trade.

895
00:41:21,913 --> 00:41:24,903
On a daily basis is some of the, some of these companies.

896
00:41:24,903 --> 00:41:27,953
And when you look at his market cap size, which I think they're like 10

897
00:41:27,953 --> 00:41:32,323
billion or something, which is really low compared to the companies that he's

898
00:41:32,703 --> 00:41:38,383
matching their trading volume, that deep liquidity on micro strategy is

899
00:41:38,773 --> 00:41:44,163
enhancing his ability to capture the spread between what the market's value

900
00:41:44,163 --> 00:41:49,943
and his common stock at versus the, uh, the, the treasury value of the Bitcoin.

901
00:41:50,513 --> 00:41:51,493
He can put the, he.

902
00:41:51,898 --> 00:41:59,018
In short, he can put that trade on even harder because he has so much volume and

903
00:41:59,258 --> 00:42:04,898
so much liquidity on his common stock, which was a function of, now I don't know

904
00:42:04,898 --> 00:42:10,488
if this speaks to his genius of financial, financial genius of Michael Saylor, right?

905
00:42:11,458 --> 00:42:14,478
I don't know that his common stock, like whether he did that on purpose

906
00:42:14,478 --> 00:42:20,918
or whether it was by accident, but holy hell, it's, it's crazy.

907
00:42:21,798 --> 00:42:22,388
It's crazy.

908
00:42:22,693 --> 00:42:24,283
Yeah, and like, the thing about

909
00:42:24,283 --> 00:42:29,383
this is, the, with the price action these days, I mean, literally when

910
00:42:29,383 --> 00:42:32,643
we're just coming into, into Madeira here, we're, we're seeing one of the

911
00:42:32,713 --> 00:42:35,803
craziest It pumps pre halving ever.

912
00:42:35,823 --> 00:42:39,283
I think in nominal terms, it's, it's the highest, uh, basically.

913
00:42:39,593 --> 00:42:42,563
And MicroStrategy riding this all the way up, right?

914
00:42:42,903 --> 00:42:46,483
Like one day MicroStrategy is going to be the most valuable company

915
00:42:46,683 --> 00:42:50,203
on the planet, just from being the largest holder of Bitcoin

916
00:42:50,303 --> 00:42:51,343
on the planet, basically.

917
00:42:51,773 --> 00:42:52,053
Right.

918
00:42:52,093 --> 00:42:52,333
And,

919
00:42:52,563 --> 00:42:54,773
and then, and then, and then the wonder is like, what, what

920
00:42:54,773 --> 00:42:56,363
are they going to do with that?

921
00:42:56,383 --> 00:42:59,803
And I think, I think Michael has talked about a few things that he, that he wants

922
00:42:59,803 --> 00:43:01,293
to do initiatives and things like that.

923
00:43:01,293 --> 00:43:01,493
But

924
00:43:02,213 --> 00:43:05,413
maybe taking this out of the micro strategy realm a little bit though, like

925
00:43:05,863 --> 00:43:10,323
the, the dynamics that we're seeing right now, completely different, a supply shock

926
00:43:10,353 --> 00:43:14,483
and everything is, is completely riding it up because of these, these ETFs.

927
00:43:14,823 --> 00:43:18,573
How are you seeing, uh, maybe the, the short term, the next year or

928
00:43:18,573 --> 00:43:21,258
two, the, Uh, the next phase of this

929
00:43:21,318 --> 00:43:22,008
cycle.

930
00:43:22,668 --> 00:43:26,608
But on the first point with, uh, micro strategy and what, what he's going to

931
00:43:26,608 --> 00:43:30,488
do with the treasury, I don't know what he's going to do with the treasury.

932
00:43:30,488 --> 00:43:33,028
I think he would probably tell you that he doesn't know what he's

933
00:43:33,028 --> 00:43:34,208
going to do with the treasury.

934
00:43:34,208 --> 00:43:39,303
I suspect, But this is, this is one thing that I've just like as

935
00:43:39,303 --> 00:43:45,763
an observer of him, he is insanely efficient in the way he thinks, in

936
00:43:45,763 --> 00:43:47,983
the way that he allocates capital.

937
00:43:48,353 --> 00:43:51,983
And so whatever businesses on the other side of all of this are still

938
00:43:51,983 --> 00:43:55,523
adding productive value, you better believe he's going to come in

939
00:43:55,573 --> 00:43:57,553
and snatch it up and purchase it.

940
00:43:57,883 --> 00:44:02,293
Holy or non operationally and stick it on his balance sheet at micro strategy,

941
00:44:02,303 --> 00:44:03,783
similar to Berkshire Hathaway, right?

942
00:44:03,783 --> 00:44:10,103
He, he has, um, you know, Buffett has 75 businesses or so that are

943
00:44:10,103 --> 00:44:13,313
fully owned operational subsidiaries inside of Berkshire Hathaway.

944
00:44:13,313 --> 00:44:16,363
I would imagine that micro strategy is going to be a very similar

945
00:44:16,363 --> 00:44:17,948
situation on the other side of.

946
00:44:18,308 --> 00:44:23,168
10 years from now, he will own just gobs of equity, whether it's

947
00:44:23,298 --> 00:44:27,808
operationally fully owned or, or, you know, uh, a subsidiary,

948
00:44:27,828 --> 00:44:30,758
but, um, non operationally owned.

949
00:44:31,218 --> 00:44:34,568
So that's the answer to that, um, because he's just going to perform

950
00:44:34,568 --> 00:44:37,138
economic calculation like we were talking about at the beginning of the show.

951
00:44:37,683 --> 00:44:41,413
When I think about the coming year, I think that dude,

952
00:44:41,423 --> 00:44:42,983
this is going to get wild.

953
00:44:43,013 --> 00:44:49,243
Um, I think, I think the thing that I think the volatility is going to get wild.

954
00:44:50,703 --> 00:44:56,043
Um, if, if micro strategy is a, is a, any indicator.

955
00:44:56,463 --> 00:45:00,163
Of what's going to happen with these ETFs and what's going to occur,

956
00:45:00,203 --> 00:45:03,193
because they haven't even stood up derivatives on top of these things yet.

957
00:45:03,773 --> 00:45:10,273
And let me tell you, once they do, like, we know how relentless Bitcoin can do for

958
00:45:10,273 --> 00:45:14,023
anybody that's trying to speculate on it.

959
00:45:14,303 --> 00:45:17,123
When you put derivatives on top of that, and let me tell you, Wall

960
00:45:17,123 --> 00:45:19,963
Street is, that is their forte.

961
00:45:20,523 --> 00:45:23,973
Is trading quick money, like all that type of stuff, right?

962
00:45:24,263 --> 00:45:25,553
They're going to slap derivatives.

963
00:45:25,553 --> 00:45:28,003
It's probably going to take about a year, but they're going to put

964
00:45:28,013 --> 00:45:29,433
derivatives on top of this thing.

965
00:45:29,983 --> 00:45:34,893
And if, if there's any foul play, holy hell, watch out if you're from

966
00:45:34,893 --> 00:45:40,373
wall street and you think you can, you can manipulate this thing, Good luck.

967
00:45:41,993 --> 00:45:47,563
You're going to die, but they're going to be, the quick money on wall street

968
00:45:47,563 --> 00:45:50,553
is going to look at this thing and they are going to lose their minds over it.

969
00:45:50,553 --> 00:45:53,393
They're going to, they're going to be wanting to play in this space harder than

970
00:45:53,403 --> 00:45:55,973
anybody and Bitcoin will welcome them.

971
00:45:56,243 --> 00:45:57,223
Come on, come on in.

972
00:45:57,273 --> 00:45:59,483
Let's see how, let's see how well you can play, right?

973
00:45:59,963 --> 00:46:04,233
But what that's going to do for the price and the, and the volatility, especially

974
00:46:04,233 --> 00:46:08,438
if you're looking at it in terms of today's value, You're going to see swings.

975
00:46:08,438 --> 00:46:11,088
You're going to see candles that you think are unimaginable.

976
00:46:11,568 --> 00:46:15,558
And all it's doing is accelerating Bitcoin's ability to find its true value.

977
00:46:16,328 --> 00:46:16,688
Right.

978
00:46:16,718 --> 00:46:18,228
So it's, it's an accelerative.

979
00:46:18,643 --> 00:46:18,843
So

980
00:46:18,843 --> 00:46:22,923
you are getting at though, that there's going to be some big drops as well as the

981
00:46:23,040 --> 00:46:24,203
big increases most likely.

982
00:46:24,243 --> 00:46:24,483
yeah.

983
00:46:24,583 --> 00:46:24,935
Yes.

984
00:46:24,983 --> 00:46:31,803
So, so I, I remember this, um, when when we were speaking, like the same way we're

985
00:46:31,803 --> 00:46:36,433
talking about Omega candles or God candles today, where it's like the definition

986
00:46:36,433 --> 00:46:38,633
is like 10 K in a day or something.

987
00:46:39,023 --> 00:46:39,173
And

988
00:46:39,173 --> 00:46:42,603
we had 10 K over two days now, which is like the closest we've got.

989
00:46:42,613 --> 00:46:42,633
Yeah.

990
00:46:43,353 --> 00:46:47,543
We were talking in the same terms about 100 moves,

991
00:46:47,603 --> 00:46:53,223
like, imagine, or 10 moves even, but since I've been in this, like, imagine

992
00:46:53,223 --> 00:46:55,883
if Bitcoin goes up by 100 in one day,

993
00:46:56,343 --> 00:46:56,823
and it was the

994
00:46:56,823 --> 00:46:58,163
same thing at 1,

995
00:46:58,163 --> 00:46:59,003
000, and it's gonna

996
00:46:59,013 --> 00:47:00,813
be the same at 10, 000, and the same at

997
00:47:00,813 --> 00:47:02,213
100, 000, and the same at

998
00:47:02,223 --> 00:47:02,463
1,

999
00:47:02,898 --> 00:47:03,318
Like, it's

1000
00:47:03,398 --> 00:47:04,078
just gonna keep

1001
00:47:04,098 --> 00:47:04,238
on

1002
00:47:04,448 --> 00:47:06,728
think you're joking right now and, and you are not.

1003
00:47:06,738 --> 00:47:10,578
And I am not those numbers that you're saying are because it's a fractal.

1004
00:47:10,908 --> 00:47:14,428
It is just a fractal that's playing out until it literally takes over.

1005
00:47:14,468 --> 00:47:18,688
And, and any number you say in fiat terms literally becomes meaningless.

1006
00:47:19,488 --> 00:47:19,848
Right?

1007
00:47:19,888 --> 00:47:20,958
That's where this is going.

1008
00:47:20,998 --> 00:47:23,428
So, buckle up, Wall Street.

1009
00:47:23,468 --> 00:47:24,768
Uh, play ball.

1010
00:47:25,038 --> 00:47:27,348
Welcome to the team.

1011
00:47:28,338 --> 00:47:31,368
Have you seen that curve, like, when you see the fractal patterns, there's

1012
00:47:31,378 --> 00:47:34,688
still like, if you do exponentials, you'll see this, uh, that the curve

1013
00:47:34,688 --> 00:47:37,638
is like, bending off, like this.

1014
00:47:38,048 --> 00:47:38,228
But

1015
00:47:38,228 --> 00:47:41,068
there are some people that have the theory that it'll be inverse,

1016
00:47:41,118 --> 00:47:43,688
That's exactly how I think it's going to, the stock to

1017
00:47:43,978 --> 00:47:45,178
yes, and some of the smartest

1018
00:47:45,308 --> 00:47:46,998
people I know in the space think that, the

1019
00:47:47,043 --> 00:47:47,958
stock to former thing.

1020
00:47:48,913 --> 00:47:52,103
Because at some point fiat is just meaningless

1021
00:47:52,923 --> 00:47:53,913
and that's where it goes.

1022
00:47:54,998 --> 00:47:57,323
I've always said stock to flow is going to fail to the upside.

1023
00:47:57,883 --> 00:47:58,583
Yeah, exactly.

1024
00:47:58,723 --> 00:48:01,433
It's not going to fail to the downside and it, and once it starts

1025
00:48:01,433 --> 00:48:05,633
to run and all trust is locked, cause that, what that is symbolizing

1026
00:48:05,633 --> 00:48:07,543
is all trust has been lost in fiat

1027
00:48:08,093 --> 00:48:08,473
yeah.

1028
00:48:08,633 --> 00:48:08,843
and

1029
00:48:08,863 --> 00:48:09,163
we

1030
00:48:09,203 --> 00:48:09,553
have to

1031
00:48:09,553 --> 00:48:10,163
remember that

1032
00:48:10,173 --> 00:48:12,403
these things, we have seen them before.

1033
00:48:12,613 --> 00:48:13,223
People told

1034
00:48:13,733 --> 00:48:17,783
us we were crazy when we talked about 10 Bitcoin moves to 100 Bitcoin

1035
00:48:17,803 --> 00:48:19,528
moves and 1, 000 Bitcoin moves.

1036
00:48:19,528 --> 00:48:24,958
And right now Bitcoin is not any longer at 0.05 million per Bitcoin,

1037
00:48:25,228 --> 00:48:25,588
it's at

1038
00:48:25,593 --> 00:48:26,698
0.06

1039
00:48:27,033 --> 00:48:27,423
Yeah.

1040
00:48:27,603 --> 00:48:28,133
Yeah.

1041
00:48:28,423 --> 00:48:28,753
Yeah.

1042
00:48:28,778 --> 00:48:29,918
that's the reality of it.

1043
00:48:29,953 --> 00:48:31,643
everybody's got to participate in this meme.

1044
00:48:31,653 --> 00:48:32,893
That's the only way to list it.

1045
00:48:33,243 --> 00:48:35,923
Then somebody was saying, just call them American pesos.

1046
00:48:35,923 --> 00:48:37,823
Don't say in dollars, just say American pesos.

1047
00:48:39,508 --> 00:48:39,808
Then, and then

1048
00:48:40,018 --> 00:48:43,348
you have like the other fun terms, uh, the, the, the, the Moose

1049
00:48:43,348 --> 00:48:45,808
shackle for the, for the Canadian dollar and things like that.

1050
00:48:45,808 --> 00:48:46,198
Just, I don't

1051
00:48:46,220 --> 00:48:46,668
know, making,

1052
00:48:46,713 --> 00:48:49,018
making fun of the fiat currencies is so much

1053
00:48:49,018 --> 00:48:49,228
fun.

1054
00:48:49,438 --> 00:48:49,528
They're

1055
00:48:49,528 --> 00:48:49,978
shit coins.

1056
00:48:50,688 --> 00:48:51,278
They're shitcoins.

1057
00:48:51,438 --> 00:48:55,458
Right now you see the same thing with the dollar versus every other currency.

1058
00:48:55,458 --> 00:48:57,548
It looks like bitcoin versus all the cryptos.

1059
00:48:57,598 --> 00:48:57,908
Like,

1060
00:48:58,138 --> 00:48:58,358
all

1061
00:48:58,358 --> 00:49:01,858
the others are going down in terms of the dollar, but the dollar in terms of

1062
00:49:01,858 --> 00:49:03,608
bitcoin is doing the same fucking thing.

1063
00:49:03,788 --> 00:49:03,818
It's

1064
00:49:03,860 --> 00:49:04,698
just dropping.

1065
00:49:05,243 --> 00:49:05,583
Yeah.

1066
00:49:05,668 --> 00:49:05,928
And

1067
00:49:06,248 --> 00:49:09,708
the question is, is it this cycle necessarily that things

1068
00:49:09,708 --> 00:49:10,738
are going to go to the upside?

1069
00:49:10,738 --> 00:49:12,438
That probably is a bit too soon, right?

1070
00:49:13,098 --> 00:49:13,418
Or

1071
00:49:13,868 --> 00:49:14,238
do we have any

1072
00:49:14,323 --> 00:49:18,728
wouldn't bet against it, but, uh, Yeah, I don't know.

1073
00:49:18,758 --> 00:49:23,788
It's the thing that I tell myself is all these other fractals had the same,

1074
00:49:24,198 --> 00:49:26,338
same speculators that stepped in.

1075
00:49:26,778 --> 00:49:28,428
They don't even understand what they own.

1076
00:49:28,438 --> 00:49:30,868
They just know that it went up a whole bunch and they're going to try to

1077
00:49:31,028 --> 00:49:35,038
clog profits away because they haven't matched their intellectual knowledge of

1078
00:49:35,038 --> 00:49:36,888
what they own with the position size.

1079
00:49:36,888 --> 00:49:40,548
And so they sell, and then it creates this reinforcement wave.

1080
00:49:40,588 --> 00:49:44,758
Like when I think of physical reality, Everything's a wave, right?

1081
00:49:44,778 --> 00:49:46,008
Everything's moving in a wave.

1082
00:49:46,008 --> 00:49:51,008
And so like, why would this fractal be any different than the previous ones?

1083
00:49:51,008 --> 00:49:54,478
Am I, am I assuming that these people actually understand what they own?

1084
00:49:54,548 --> 00:49:56,318
That would be my argument for why it wouldn't.

1085
00:49:56,948 --> 00:50:04,348
Um, with that said, I'm looking at the inbounds coming from these

1086
00:50:04,348 --> 00:50:09,448
ETFs and I'm looking at the supply scarcity, and this is really important.

1087
00:50:10,493 --> 00:50:14,983
I am looking at the people who hold the majority of the coins.

1088
00:50:16,373 --> 00:50:20,353
They are the ones that are truly determining some of this.

1089
00:50:20,503 --> 00:50:20,923
Okay.

1090
00:50:21,233 --> 00:50:26,103
And, and what I mean by that is people might think, oh, well now we

1091
00:50:26,103 --> 00:50:31,373
have this many millions of people that are using Bitcoin, right?

1092
00:50:31,473 --> 00:50:34,733
And each one of those people have a vote and they don't.

1093
00:50:35,393 --> 00:50:35,713
Okay.

1094
00:50:36,693 --> 00:50:39,913
Think of there's 20, there's going to be 21 million Bitcoin.

1095
00:50:39,913 --> 00:50:39,933
Okay.

1096
00:50:40,393 --> 00:50:44,013
Think of each one of those Bitcoin as a vote, okay?

1097
00:50:44,433 --> 00:50:48,433
19 million of them have, have, are already out there, okay?

1098
00:50:49,393 --> 00:50:53,503
Let's just say 15 million of them, or 14 million of them, or whatever

1099
00:50:53,503 --> 00:50:59,603
the number is, are being held by deeply convicted people that actually

1100
00:50:59,603 --> 00:51:01,923
understand what they, what they own.

1101
00:51:02,303 --> 00:51:04,873
And so, how many votes do you think Michael Saylor has?

1102
00:51:05,248 --> 00:51:09,528
He has a 193, 000 votes just with MicroStrategy alone.

1103
00:51:10,278 --> 00:51:15,148
Okay, he's got one, that, that person with that conviction has 1 percent of

1104
00:51:15,148 --> 00:51:20,068
the vote of not putting those coins back into the market to, to drive the price.

1105
00:51:20,568 --> 00:51:23,278
So when you're thinking of like, well, what's going to drive a

1106
00:51:23,278 --> 00:51:27,598
hyperbitcoinization scenario, it's going to be once a majority of these coins

1107
00:51:27,598 --> 00:51:29,718
are in people with deep conviction.

1108
00:51:30,233 --> 00:51:33,743
And that's, that's not number of participants on the network.

1109
00:51:33,803 --> 00:51:38,623
It's, it could be just a few people on the network that are controlling

1110
00:51:38,623 --> 00:51:43,323
a lot of the vote of, of how much gets put back into the market.

1111
00:51:43,583 --> 00:51:44,723
That's what's going to drive it.

1112
00:51:44,733 --> 00:51:48,633
So where, where we get to that tipping point, we, we, Hey, we might be there.

1113
00:51:48,633 --> 00:51:49,223
I don't know.

1114
00:51:49,233 --> 00:51:51,143
We could be there this cycle, next cycle.

1115
00:51:51,143 --> 00:51:51,913
I don't know, but it's.

1116
00:51:52,323 --> 00:51:53,143
It's coming.

1117
00:51:53,273 --> 00:51:54,373
It's definitely coming.

1118
00:51:54,913 --> 00:51:55,073
Yeah.

1119
00:51:55,073 --> 00:51:58,043
So we don't know if we're, uh, in the last cycle or

1120
00:51:58,043 --> 00:51:58,503
if it's

1121
00:51:58,503 --> 00:52:03,283
a couple of cycles left, but the, the, the, the way I like to frame

1122
00:52:03,283 --> 00:52:09,663
the last cycle is when NGU technology converts into NGAB technology, which

1123
00:52:09,663 --> 00:52:11,403
is number go absolutely bonkers

1124
00:52:11,453 --> 00:52:11,953
hmm.

1125
00:52:11,953 --> 00:52:12,013
Mm.

1126
00:52:12,013 --> 00:52:12,443
Yeah.

1127
00:52:12,993 --> 00:52:13,463
and just

1128
00:52:14,083 --> 00:52:15,043
changes everything.

1129
00:53:31,904 --> 00:53:34,884
one thing I wanted to pick your brain about before, before we wrap

1130
00:53:34,884 --> 00:53:41,334
this up is, um, This whole thing, um, Schrodinger's JPEGs, like these,

1131
00:53:41,364 --> 00:53:45,194
these things that you can only own until someone else looks at them.

1132
00:53:45,704 --> 00:53:46,334
Uh, the, the

1133
00:53:47,014 --> 00:53:48,884
clogging of the, of the chain and

1134
00:53:48,884 --> 00:53:50,504
the centralization

1135
00:53:50,504 --> 00:53:55,444
of, of, uh, mining pools and how miners are not really miners, but hashers.

1136
00:53:55,854 --> 00:53:56,074
And

1137
00:53:56,074 --> 00:53:59,114
how ocean mining is coming in and trying to fix this problem.

1138
00:53:59,454 --> 00:53:59,654
Like

1139
00:53:59,654 --> 00:54:04,254
how big of a problem do you think these, uh, shitty things are?

1140
00:54:04,807 --> 00:54:09,487
on the, on the mining side of the house, the thing that really excites me is, is

1141
00:54:09,527 --> 00:54:16,042
somebody is trying to, with Ocean, um, The pools were getting pretty centralized

1142
00:54:16,082 --> 00:54:20,362
and people that were providing hash rate really didn't know like how much was being

1143
00:54:20,362 --> 00:54:23,572
mined versus what they were being paid and talk to anybody in mining, they'll,

1144
00:54:23,602 --> 00:54:29,402
they'll all tell you that, uh, where ocean is, it's, it's, it's so upfront.

1145
00:54:30,117 --> 00:54:32,897
What was actually captured, what was actually paid out.

1146
00:54:32,897 --> 00:54:34,807
It's like all there to see open kimono.

1147
00:54:34,837 --> 00:54:38,307
You can agree or disagree with Luke on some of the filtering stuff, but

1148
00:54:38,307 --> 00:54:43,627
I think that that's a distraction from, and I think it's a purpose, just

1149
00:54:43,777 --> 00:54:48,527
purposely distractive for people to kind of focus on that as opposed to.

1150
00:54:48,877 --> 00:54:52,237
It's very clear for me as a person providing hash rate that this is what

1151
00:54:52,237 --> 00:54:55,077
was actually earned in the pool, and this is what was paid out in the pool.

1152
00:54:55,447 --> 00:55:01,007
And hopefully, that is something that, uh, the larger miners can maybe lean

1153
00:55:01,007 --> 00:55:05,317
into, and, um, even if there's more pools beyond ocean that are trying

1154
00:55:05,317 --> 00:55:06,707
to implement something similar,

1155
00:55:06,777 --> 00:55:07,267
there are.

1156
00:55:07,717 --> 00:55:10,177
they need to, and I think that that's a good thing.

1157
00:55:10,177 --> 00:55:14,837
And as long as we have some doing that, I think that things are fairly healthy.

1158
00:55:15,152 --> 00:55:19,342
If we had nobody doing it, I would be much more concerned with respect

1159
00:55:19,352 --> 00:55:24,392
to the, um, people mining or, uh, the, the JPEGs and stuff like that.

1160
00:55:25,222 --> 00:55:30,442
So, um, I think that you're going to find people that are trying to put

1161
00:55:31,072 --> 00:55:37,822
data into the blockchain that could be used for productive ways as far as, uh,

1162
00:55:38,262 --> 00:55:40,882
identity or something like that, maybe.

1163
00:55:41,817 --> 00:55:45,797
I think that nothing that I've seen has been built that

1164
00:55:45,807 --> 00:55:47,887
looks like it's got utility.

1165
00:55:47,887 --> 00:55:48,137
Like

1166
00:55:48,507 --> 00:55:49,467
It's a big maybe.

1167
00:55:49,717 --> 00:55:50,567
it's a big maybe.

1168
00:55:50,567 --> 00:55:54,127
I know MicroStrategy has said that they're working on something in that particular

1169
00:55:54,127 --> 00:55:56,187
area, which I think is really exciting.

1170
00:55:56,855 --> 00:56:02,015
but let's, let's just look at it from a, from what most of it is.

1171
00:56:02,355 --> 00:56:03,675
It is, it is noise.

1172
00:56:03,785 --> 00:56:04,905
It's a distraction.

1173
00:56:04,925 --> 00:56:06,085
It's a rug pull.

1174
00:56:06,415 --> 00:56:09,235
Um, because what's the product or service?

1175
00:56:10,315 --> 00:56:17,185
Some, some monkey picture that literally, literally you could have an AI generate

1176
00:56:17,235 --> 00:56:21,715
and then like it has 40 different hats and then it has 50 different

1177
00:56:21,715 --> 00:56:26,855
eyes and it's, and then you're, you're selling these things because you handed

1178
00:56:26,855 --> 00:56:28,415
them out to a bunch of celebrities.

1179
00:56:28,680 --> 00:56:29,040
Right?

1180
00:56:29,110 --> 00:56:32,870
Then it's getting a bunch of noise, and then that celebrity that had

1181
00:56:33,250 --> 00:56:37,170
it given to them for zero then sells it, it's valuable, right?

1182
00:56:38,492 --> 00:56:42,282
I'm, I never look at it and say, shame on you, you can't do that.

1183
00:56:42,282 --> 00:56:44,452
This is a free and open market, you can do whatever the hell you want.

1184
00:56:45,447 --> 00:56:49,697
If we're real Bitcoiners, we want a free and open market to exist, but that

1185
00:56:49,697 --> 00:56:54,587
doesn't mean that I can personally, like, I'm looking at you and I'm saying you're

1186
00:56:54,597 --> 00:57:01,657
a freaking scammer and, uh, and I, I think that you are parasitic to society.

1187
00:57:02,172 --> 00:57:02,312
Right?

1188
00:57:02,322 --> 00:57:05,562
Like I can have that opinion about you, but I, but I can also hold the

1189
00:57:05,562 --> 00:57:08,592
same opinion that I think you should have the right to do whatever you want.

1190
00:57:09,202 --> 00:57:09,602
Right?

1191
00:57:09,692 --> 00:57:10,772
That doesn't mean I like it.

1192
00:57:11,497 --> 00:57:17,037
it's the, um, paraphrasing that Giacomo did of, uh, uh, this Voltaire thing.

1193
00:57:17,097 --> 00:57:20,057
Like, I don't care what you pay, what, but I will fight to the

1194
00:57:20,057 --> 00:57:21,337
death for your right to pay it.

1195
00:57:21,514 --> 00:57:23,017
Yeah.

1196
00:57:23,577 --> 00:57:25,397
Now there is another angle to this though, is that

1197
00:57:25,397 --> 00:57:28,767
some of the, the ways that the data is being inscribed are, are using

1198
00:57:28,907 --> 00:57:32,737
what can pretty reasonably be termed as bugs, uh, things that are in the

1199
00:57:32,737 --> 00:57:34,537
protocol that they didn't foresee.

1200
00:57:34,822 --> 00:57:38,182
That someone will be able to figure out how to, for example, put data into

1201
00:57:38,192 --> 00:57:44,302
the UTXO set in a way that increases the resources needed to run a node.

1202
00:57:45,112 --> 00:57:46,442
Costlier to run a node.

1203
00:57:46,557 --> 00:57:47,517
Costlier,

1204
00:57:47,662 --> 00:57:48,682
exactly.

1205
00:57:48,772 --> 00:57:52,212
And the other dynamic that goes along with it is something like, if there

1206
00:57:52,222 --> 00:57:56,772
wasn't this data being put into the chain, some percentage of each block.

1207
00:57:56,772 --> 00:58:00,332
I mean, you can look at this right now on mempool, they've got a filter that

1208
00:58:00,332 --> 00:58:03,077
shows Which transactions have data.

1209
00:58:03,692 --> 00:58:04,252
Yes.

1210
00:58:04,287 --> 00:58:04,759
you can, you

1211
00:58:04,777 --> 00:58:08,547
can just see that it's, it's, it's sometimes it's 10 percent of a block.

1212
00:58:08,547 --> 00:58:10,107
Sometimes it's 90 percent of the block.

1213
00:58:10,107 --> 00:58:13,417
Sometimes you get marathon that puts an entire block and gives it to, uh,

1214
00:58:13,737 --> 00:58:18,157
uh, a coin project, uh, to be nice.

1215
00:58:18,548 --> 00:58:22,068
and so in those cases, that is block space that isn't able

1216
00:58:22,068 --> 00:58:24,258
to go to this adoption wave.

1217
00:58:24,278 --> 00:58:27,798
So I wonder, is there an element of that that's actually

1218
00:58:27,798 --> 00:58:29,538
suppressing the ability for.

1219
00:58:29,903 --> 00:58:33,273
This thing to actually do what we're hoping it will, which is

1220
00:58:33,293 --> 00:58:34,223
get adoption.

1221
00:58:34,973 --> 00:58:40,033
So when I'm looking at the size of each block that comes through every 10

1222
00:58:40,033 --> 00:58:42,863
minutes, it's about two megabytes, right?

1223
00:58:42,993 --> 00:58:48,568
Um, that's, that is not going to, um, That's not going to

1224
00:58:48,568 --> 00:58:50,668
inhibit my ability to run a node.

1225
00:58:50,668 --> 00:58:54,058
And I think that you're still going to have a ton of people, especially

1226
00:58:54,058 --> 00:58:57,368
as this price continues to run and you're getting more people into it,

1227
00:58:57,998 --> 00:58:59,398
more people are going to run nodes.

1228
00:58:59,668 --> 00:59:03,448
I find it amazing these recent Satoshi release where he was

1229
00:59:03,448 --> 00:59:06,718
thinking it'd be maybe a hundred, wasn't it a hundred thousand nodes?

1230
00:59:06,728 --> 00:59:10,698
Like the, he said that like at the beginning was mind blowing to me

1231
00:59:10,698 --> 00:59:14,138
that, that he would have that much foresight because That looks like

1232
00:59:14,158 --> 00:59:16,228
maybe where the number would be, right?

1233
00:59:16,918 --> 00:59:23,698
Um, so the resource constraining argument, I think that, uh, I think it's an

1234
00:59:23,698 --> 00:59:27,318
interesting argument for somebody to say, but it's not something that concerns me.

1235
00:59:27,988 --> 00:59:30,648
Um, I look, I would look at it like this.

1236
00:59:31,576 --> 00:59:36,006
let's say a person could just figure out a hack to physical reality and like

1237
00:59:36,286 --> 00:59:40,356
they could just fly around instead of walking, but they, they wouldn't tell

1238
00:59:40,356 --> 00:59:44,306
you like what it is that they figured out to enable themselves to do this.

1239
00:59:46,301 --> 00:59:49,891
Everybody might look at that person and just be like, That's wrong.

1240
00:59:49,901 --> 00:59:51,171
You got to stop flying around.

1241
00:59:51,181 --> 00:59:52,241
You got to walk on the ground.

1242
00:59:52,251 --> 00:59:55,791
Like all of us, he's like, I'm just, I'm just obeying the

1243
00:59:55,791 --> 00:59:57,501
rules of the physical universe.

1244
00:59:57,501 --> 00:59:59,941
I figured out something that you haven't figured out and I'm not going to tell you

1245
00:59:59,941 --> 01:00:01,491
what it is, but I'm, I'm going to do it.

1246
01:00:02,211 --> 01:00:05,811
Is that person wrong for being able to just fly around and

1247
01:00:05,821 --> 01:00:07,191
the rest of us have to walk?

1248
01:00:08,361 --> 01:00:11,696
My answer is, No, they're just, they're harnessing their

1249
01:00:11,696 --> 01:00:13,256
environment better than I can do it.

1250
01:00:13,946 --> 01:00:17,576
And I'm, and, and that's an example where the person is flying, right?

1251
01:00:17,626 --> 01:00:21,126
And, and what we're talking about is something that is detriment to the.

1252
01:00:21,241 --> 01:00:24,401
No, we're, we're talking about someone taking advantage

1253
01:00:24,471 --> 01:00:25,063
of a floor.

1254
01:00:25,291 --> 01:00:25,921
Yeah.

1255
01:00:26,186 --> 01:00:29,866
so let's say that person is flying around and because they're able

1256
01:00:29,866 --> 01:00:34,356
to fly around, they're making life worse for everybody else, right?

1257
01:00:35,506 --> 01:00:37,196
By some, you know, mechanic.

1258
01:00:38,026 --> 01:00:42,326
And so you almost have a situation that we're dealing with is they are,

1259
01:00:42,366 --> 01:00:46,576
they are, they are obeying the rules.

1260
01:00:47,151 --> 01:00:49,011
That all of us have agreed to.

1261
01:00:49,581 --> 01:00:49,991
Okay.

1262
01:00:50,651 --> 01:00:52,921
Just like the person who's flying around in physical reality

1263
01:00:52,921 --> 01:00:56,241
and we can't understand why or how or what they're doing.

1264
01:00:56,781 --> 01:01:01,291
And so where I go is what lever do you actually control?

1265
01:01:02,421 --> 01:01:06,001
If you don't like that, so if there was a button that we could, that

1266
01:01:06,001 --> 01:01:09,091
we could push that would stop that person from flying around and harming

1267
01:01:09,091 --> 01:01:14,501
everybody, should we collectively push that button and more importantly,

1268
01:01:15,071 --> 01:01:17,501
can we push that button is the

1269
01:01:17,876 --> 01:01:18,116
Yeah.

1270
01:01:18,591 --> 01:01:23,171
And I just don't know that I don't know that we can get consensus.

1271
01:01:24,091 --> 01:01:27,721
And here's, here's another little thought experiment on that, that kind of, I

1272
01:01:27,741 --> 01:01:29,121
think, plays to what we're talking about.

1273
01:01:29,731 --> 01:01:38,116
If we push that button, do we destroy or maybe break this, the, this, System

1274
01:01:38,116 --> 01:01:41,646
that we have, because we're trying to stop this person that's flying around.

1275
01:01:41,856 --> 01:01:42,246
Okay.

1276
01:01:42,276 --> 01:01:44,806
So, so this is the analogy here.

1277
01:01:44,826 --> 01:01:48,226
If you look at the mixer board that Luke, uh, Luke has over here,

1278
01:01:48,226 --> 01:01:49,756
there, there are mute buttons on

1279
01:01:49,756 --> 01:01:50,916
it, but we could

1280
01:01:50,916 --> 01:01:55,466
also use the lever and just try to lower the amount of noise.

1281
01:01:56,016 --> 01:01:56,206
And

1282
01:01:56,206 --> 01:01:59,726
I think that is way preferable to pressing the mute button, which is

1283
01:01:59,826 --> 01:02:00,476
the button.

1284
01:02:01,016 --> 01:02:04,126
So, so the way, the way we see it and the ways we see what we.

1285
01:02:04,456 --> 01:02:11,556
can do to help this thing is to just bully those people who call themselves miners

1286
01:02:11,596 --> 01:02:13,516
when they're actually just hash salesmen.

1287
01:02:14,106 --> 01:02:14,556
Yeah.

1288
01:02:14,811 --> 01:02:16,221
because, are you a miner?

1289
01:02:16,861 --> 01:02:20,891
Well, mining is not just connecting to a pool and selling your hash rate.

1290
01:02:21,251 --> 01:02:21,791
Mining

1291
01:02:21,831 --> 01:02:24,981
requires you to actually know what kind of a block you're mining.

1292
01:02:25,019 --> 01:02:28,269
You're in, in that scenario, you're controlling a lever that's going to

1293
01:02:28,289 --> 01:02:31,539
impact some, but not the whole thing.

1294
01:02:31,544 --> 01:02:35,314
No, but it's, it's, it's the extent to which we can help.

1295
01:02:35,719 --> 01:02:36,849
Oh, I agree with that.

1296
01:02:36,849 --> 01:02:42,199
And so the last thing I'm trying to say is I want more of that type of activity.

1297
01:02:42,219 --> 01:02:43,839
Cause it's, that's not what I want.

1298
01:02:44,479 --> 01:02:48,769
I guess I just look at, I look at every situation as it's like,

1299
01:02:48,779 --> 01:02:50,689
what do I actually control?

1300
01:02:50,959 --> 01:02:53,579
To be able to holistically solve that problem.

1301
01:02:53,579 --> 01:02:58,009
And I don't think that you, I don't know that you necessarily can without everybody

1302
01:02:58,009 --> 01:03:02,059
coming to some type of consensus that this is truly an attack and it's, and

1303
01:03:02,059 --> 01:03:03,529
it's actually going to be effective.

1304
01:03:03,539 --> 01:03:06,589
The attack is going to be effective, so we've got to do something.

1305
01:03:06,889 --> 01:03:09,589
And I would say right now, is it an attack?

1306
01:03:09,619 --> 01:03:13,409
Maybe, um, do I, do I like what they're doing?

1307
01:03:13,519 --> 01:03:14,449
Absolutely not.

1308
01:03:15,079 --> 01:03:19,409
but, uh, when I'm looking at it, I'm saying, I don't think that this is

1309
01:03:19,409 --> 01:03:24,139
going to destroy Bitcoin or slow down Bitcoin, but it's something that needs

1310
01:03:24,139 --> 01:03:27,459
to be discussed that needs, it needs to be, people need to think about

1311
01:03:27,459 --> 01:03:29,409
what could we come to a consensus on.

1312
01:03:29,929 --> 01:03:30,489
I don't know.

1313
01:03:31,069 --> 01:03:32,239
I don't have the solution.

1314
01:03:32,239 --> 01:03:33,449
That's for dang sure.

1315
01:03:33,889 --> 01:03:38,309
Uh, but hopefully smart engineers and people, we continue to talk about it.

1316
01:03:38,419 --> 01:03:39,909
I think it needs to be discussed.

1317
01:03:40,419 --> 01:03:43,189
Unfortunately, I don't have any creative solutions, right?

1318
01:03:43,189 --> 01:03:45,159
So I'm kind of useless in the, in the whole thing.

1319
01:03:45,284 --> 01:03:45,704
No, just,

1320
01:03:46,224 --> 01:03:47,194
just the discussion.

1321
01:03:47,529 --> 01:03:48,589
I guess, is yeah.

1322
01:03:48,799 --> 01:03:52,319
No, and I think part of it is just getting your, your take on the situation.

1323
01:03:52,319 --> 01:03:52,569
So

1324
01:03:52,649 --> 01:03:52,899
Yeah.

1325
01:03:52,929 --> 01:03:53,879
nice to hear your views.

1326
01:03:53,879 --> 01:03:57,709
And, and I think, uh, I wasn't totally clear in, in my original question.

1327
01:03:57,709 --> 01:03:59,689
It's, it's, it's less about the resource constraints.

1328
01:03:59,699 --> 01:04:05,289
It's that it creates a price floor basically by, by having this competition,

1329
01:04:05,459 --> 01:04:09,629
because the way some of these things work is they, they do these open mints where

1330
01:04:09,749 --> 01:04:14,529
everyone has to compete to get into the next block so that they get their part of

1331
01:04:14,529 --> 01:04:16,109
their token or their JPEG or something.

1332
01:04:16,109 --> 01:04:16,949
And so it.

1333
01:04:17,459 --> 01:04:20,609
First of all, in the short term, it creates this massive fee spiking, right?

1334
01:04:20,879 --> 01:04:21,219
And if

1335
01:04:21,219 --> 01:04:25,799
you have a person wanting to randomly just make a Bitcoin transaction for any

1336
01:04:25,799 --> 01:04:30,119
reason at that time, they might have to pay way more to get into the next

1337
01:04:30,119 --> 01:04:31,089
block or the next

1338
01:04:31,149 --> 01:04:32,759
hour's worth of blocks, something like that.

1339
01:04:32,759 --> 01:04:32,999
Right.

1340
01:04:33,184 --> 01:04:37,464
which is frustrating because we want people that don't have a real high

1341
01:04:37,464 --> 01:04:39,274
net worth to be able to be operating.

1342
01:04:39,514 --> 01:04:40,344
I get it.

1343
01:04:40,394 --> 01:04:43,384
Well, and, and will big institutions actually be happy

1344
01:04:43,444 --> 01:04:48,754
paying some higher percentage just because of the dynamics on the

1345
01:04:48,754 --> 01:04:49,064
chain?

1346
01:04:49,064 --> 01:04:49,404
I don't know.

1347
01:04:49,404 --> 01:04:52,454
And, and, and now there's nothing to say that the competition isn't,

1348
01:04:52,474 --> 01:04:53,954
isn't the, the thing, right?

1349
01:04:54,354 --> 01:04:59,144
But it is one of those cases where by enabling these dynamics

1350
01:04:59,164 --> 01:05:01,254
that the fees, that's the

1351
01:05:01,254 --> 01:05:02,074
real issue

1352
01:05:02,074 --> 01:05:02,564
I'm looking at.

1353
01:05:02,564 --> 01:05:05,914
So I don't know if you have any further thoughts, but I do like that, uh,

1354
01:05:06,004 --> 01:05:09,504
maybe you've, uh, your approach at the moment, it sounds like it's something

1355
01:05:09,504 --> 01:05:14,204
like nothing we can really do, but we will, uh, see all this other stuff

1356
01:05:14,204 --> 01:05:15,514
happening as the money keeps flowing in,

1357
01:05:15,531 --> 01:05:15,654
right?

1358
01:05:15,654 --> 01:05:15,914
Is that

1359
01:05:15,989 --> 01:05:17,519
the conversation around it.

1360
01:05:18,179 --> 01:05:20,849
I, I just don't have solutions to offer.

1361
01:05:20,849 --> 01:05:23,909
I'm, I'm literally useless in that department.

1362
01:05:23,909 --> 01:05:26,129
So I've got to state that up front.

1363
01:05:26,689 --> 01:05:34,829
Um, the second thing that I would just say is, um, I, I I'm very cautious and

1364
01:05:34,839 --> 01:05:37,669
more concerned of doing a hasty fix.

1365
01:05:38,459 --> 01:05:43,129
Then to let's sit here and if it takes us four years to figure it out or,

1366
01:05:43,379 --> 01:05:46,589
you know, whatever, then it takes us that amount of time to figure it out.

1367
01:05:46,589 --> 01:05:51,239
If, if at all, um, I think if we didn't even address it, I think

1368
01:05:51,239 --> 01:05:54,679
that Bitcoin is going to continue to do some miraculous things.

1369
01:05:55,904 --> 01:05:58,814
Am I saying that we just harden right here and never do anything?

1370
01:05:58,854 --> 01:06:01,304
I'm not saying that either, right?

1371
01:06:01,824 --> 01:06:05,434
I'm, I'm just not the technical expert that can, that can say, here's, here's

1372
01:06:05,434 --> 01:06:11,134
what I think the best path is to solve this, you know, other, other leaders

1373
01:06:11,134 --> 01:06:14,774
in the space, I'm sure have some, some really thoughtful takes on that.

1374
01:06:14,804 --> 01:06:15,064
Yeah.

1375
01:06:15,489 --> 01:06:20,769
I mean, we're not technical experts by any means either, but we're,

1376
01:06:20,769 --> 01:06:26,659
um, what this reminds me of is like the, uh, the fork wars in 2017.

1377
01:06:27,559 --> 01:06:28,019
it does.

1378
01:06:28,019 --> 01:06:28,849
because it's the same

1379
01:06:28,849 --> 01:06:29,489
dynamic.

1380
01:06:29,489 --> 01:06:29,639
You

1381
01:06:29,639 --> 01:06:32,559
have like this long discussion and Bitcoin does this.

1382
01:06:32,579 --> 01:06:33,079
It takes.

1383
01:06:33,654 --> 01:06:36,914
You know, no, the rules without the rulers means it takes a

1384
01:06:36,914 --> 01:06:38,364
long time for people to agree

1385
01:06:38,364 --> 01:06:38,864
on something.

1386
01:06:39,354 --> 01:06:40,924
But when we finally do agree,

1387
01:06:41,484 --> 01:06:41,794
then

1388
01:06:41,854 --> 01:06:45,234
we define what a good idea is by what happened in Bitcoin,

1389
01:06:45,234 --> 01:06:45,474
right?

1390
01:06:45,494 --> 01:06:45,834
If you

1391
01:06:45,834 --> 01:06:49,464
need total consensus, that means that Bitcoin can only get better.

1392
01:06:49,604 --> 01:06:50,214
It cannot

1393
01:06:50,244 --> 01:06:53,174
get worse by the very definition of how we define better.

1394
01:06:53,734 --> 01:06:56,934
So, so I'm not worried in that sense, like not in the long run.

1395
01:06:56,934 --> 01:06:57,324
I just

1396
01:06:57,344 --> 01:06:57,874
think it's

1397
01:06:57,874 --> 01:07:00,544
important we take this fight and we talk about this stuff.

1398
01:07:00,614 --> 01:07:06,604
one of the things in, in very early when I was buying it 2015, 2016 timeframe,

1399
01:07:06,634 --> 01:07:09,914
I was really deathly scared of a fork.

1400
01:07:10,304 --> 01:07:13,864
And then I realized in 2017, there's absolutely nothing to be scared of

1401
01:07:13,884 --> 01:07:18,364
when it comes to a fork and the, the reason why, or at least for me in, in

1402
01:07:18,374 --> 01:07:20,684
that scenario was I got both coins.

1403
01:07:21,504 --> 01:07:21,824
yeah.

1404
01:07:22,249 --> 01:07:28,259
The fork occurred, whatever position size you have prior to the, the, the fork

1405
01:07:28,259 --> 01:07:34,079
happening, fork happens, you get both coins and let's just say, let's say you

1406
01:07:34,079 --> 01:07:38,159
were split 50 50 in your brain and you're like, I just don't know which one's going

1407
01:07:38,169 --> 01:07:40,079
to be the one that becomes dominant.

1408
01:07:40,169 --> 01:07:40,519
Right.

1409
01:07:40,929 --> 01:07:43,339
Well then just sit there and don't do anything.

1410
01:07:43,954 --> 01:07:47,814
And one's going to peter off and like go to nothing, and the other one's

1411
01:07:47,814 --> 01:07:50,704
going to, and you're going to be right where you were before the fork.

1412
01:07:50,724 --> 01:07:51,664
Yeah, and this

1413
01:07:51,664 --> 01:07:52,124
is So,

1414
01:07:52,234 --> 01:07:58,564
so good, because like, the narratives were the same, like, the wrong side to be on in

1415
01:07:58,564 --> 01:08:03,534
any of these wars is the side that wants Bitcoin to be more than just sound money,

1416
01:08:03,894 --> 01:08:08,094
like, and that's what the Bitcoin Cash people wanted back then, and that's what

1417
01:08:08,359 --> 01:08:14,329
Like the, whatever, JPEG people, it's wrong to call them that, they're worse

1418
01:08:14,339 --> 01:08:25,039
than that, but, uh, so, but still it's the same dynamic, and with, I remember vividly

1419
01:08:25,039 --> 01:08:29,799
where I was when this fork happened, I had the two coins, I had to figure out

1420
01:08:30,239 --> 01:08:35,259
Okay, in order to actually sell one for the other, I need to hold my own keys.

1421
01:08:35,289 --> 01:08:35,469
And

1422
01:08:35,469 --> 01:08:36,209
That's the stage

1423
01:08:36,209 --> 01:08:36,289
I

1424
01:08:36,289 --> 01:08:37,506
was at, like, how do

1425
01:08:37,509 --> 01:08:38,089
you really do

1426
01:08:38,089 --> 01:08:38,309
this?

1427
01:08:38,579 --> 01:08:39,169
And so,

1428
01:08:39,209 --> 01:08:42,959
in doing that, I wrote an article about how to take control of your own keys.

1429
01:08:43,399 --> 01:08:43,639
Just

1430
01:08:43,639 --> 01:08:46,969
to make it easy for people to do that, because it's slightly complicated.

1431
01:08:47,359 --> 01:08:49,729
And that's the first article of mine that sort of

1432
01:08:49,729 --> 01:08:50,369
took off.

1433
01:08:50,599 --> 01:08:50,829
So,

1434
01:08:51,059 --> 01:08:51,369
I

1435
01:08:51,939 --> 01:08:55,409
did sell my Bitcoin Cash at, I think, 0.

1436
01:08:55,459 --> 01:08:56,419
2 Bitcoin per

1437
01:08:57,059 --> 01:08:57,429
So,

1438
01:08:57,599 --> 01:08:58,559
really, the first

1439
01:08:58,559 --> 01:08:59,529
day or something.

1440
01:09:00,034 --> 01:09:03,014
And, and I got the article that took off and

1441
01:09:03,024 --> 01:09:03,384
like,

1442
01:09:04,084 --> 01:09:05,654
so it was a very good day.

1443
01:09:05,654 --> 01:09:08,834
I told my wife, you have to leave me alone now for a couple of hours.

1444
01:09:08,834 --> 01:09:11,394
And I did all this stuff and yeah, it was good.

1445
01:09:11,719 --> 01:09:12,159
Yeah.

1446
01:09:12,689 --> 01:09:12,909
Yeah.

1447
01:09:12,909 --> 01:09:16,439
The, the bigger blocks never, never made any sense to me.

1448
01:09:16,459 --> 01:09:17,469
So yeah.

1449
01:09:17,939 --> 01:09:18,249
Yeah.

1450
01:09:18,724 --> 01:09:19,524
At least we're not in

1451
01:09:19,524 --> 01:09:24,174
a, having that discussion exactly again, but hey, maybe to, to

1452
01:09:24,174 --> 01:09:25,574
just, uh, yeah, wrap this up.

1453
01:09:25,584 --> 01:09:27,534
Cause it's already been a good, a good hour here.

1454
01:09:27,534 --> 01:09:32,964
Uh, any last thoughts and feelings about this incredible conference and, uh,

1455
01:09:32,974 --> 01:09:33,774
everything awesome

1456
01:09:33,774 --> 01:09:34,734
that's going on right now?

1457
01:09:35,879 --> 01:09:38,869
If you can come here, if you have the financial means and the time to

1458
01:09:38,869 --> 01:09:42,819
get away and come to this conference, this was, this was amazing.

1459
01:09:42,949 --> 01:09:45,529
One of my favorite conferences I've ever been to.

1460
01:09:46,049 --> 01:09:50,839
Um, Madeira is very, I mean, from a Bitcoin standpoint, I think this place

1461
01:09:50,839 --> 01:09:55,259
is going to attract a lot of Bitcoiners to this island and, uh, for good reason.

1462
01:09:55,259 --> 01:09:55,489
But.

1463
01:09:56,189 --> 01:09:59,319
Yeah, huge shout out to the people that organized this because they

1464
01:09:59,319 --> 01:10:01,259
did a tremendous job with it.

1465
01:10:01,369 --> 01:10:01,719
Yeah,

1466
01:10:02,207 --> 01:10:02,527
Yeah.

1467
01:10:03,087 --> 01:10:04,807
Preston, this has been a wonderful

1468
01:10:04,827 --> 01:10:05,467
thank you,

1469
01:10:05,877 --> 01:10:06,987
Thank you so much.

1470
01:10:07,127 --> 01:10:08,817
Finally, long overdue.

1471
01:10:09,237 --> 01:10:11,167
and enjoy the rest of the conference.

1472
01:10:11,197 --> 01:10:12,097
Enjoy Madeira.

1473
01:10:12,507 --> 01:10:14,117
Uh, where can we find you online?

1474
01:10:14,667 --> 01:10:19,137
Uh, I'm active on Twitter or X or whatever you want to call it these days.

1475
01:10:19,287 --> 01:10:21,797
Um, I'm active on Nostr.

1476
01:10:22,294 --> 01:10:22,784
Primal.

1477
01:10:22,784 --> 01:10:24,174
I use Primal all the time.

1478
01:10:25,354 --> 01:10:25,624
Yeah.

1479
01:10:25,624 --> 01:10:26,614
And then I have a show.

1480
01:10:26,614 --> 01:10:31,094
If you go on the podcast and type in, we study billionaires, it needs to

1481
01:10:31,104 --> 01:10:34,974
be, uh, Satoshi denominated in Satoshi is obviously we're not talking about

1482
01:10:34,974 --> 01:10:41,764
dollars anymore, but, uh, Satoshi billionaires, uh, 10, 10 Bitcoin.

1483
01:10:41,774 --> 01:10:45,924
You're there.

1484
01:10:48,779 --> 01:10:49,829
Preston, thank you so

1485
01:10:49,829 --> 01:10:50,476
much for joining

1486
01:10:50,479 --> 01:10:50,729
us.

1487
01:10:50,739 --> 01:10:52,289
This has been the Freedom Footprint Show.

1488
01:10:52,329 --> 01:10:54,189
Don't forget to like, subscribe, and brush your teeth.

1489
01:10:54,529 --> 01:10:55,259
Thank you again, Preston.

1490
01:10:55,794 --> 01:10:56,634
Thank you guys.