Welcome to the Free Cities podcast. My name is Timothy Allen and this is the official podcast
of the Free Cities Foundation.
Hello and welcome to this episode number 144 of the Free Cities podcast.
Brought to you as always by Veritas Villages.
Veritas Villages are off-grid, energy-self-sufficient, luxury communities in Latin America
designed especially for freedom lovers just like you.
Bitcoin is accepted at all villages, including for the purchase of property.
But you already know that, don't you?
Because I say that every week.
you probably know where to find more info as well www.ecovillages.life forward slash free cities
patrick hebert the creator of veritas villages will be speaking this year at the wonderful free
cities conference yes only about two months away now for our conference and to be honest
how can i put this if you are listening to this podcast which you obviously are
and you're someone who's mobile, then according to me at least, you owe it to yourself to come
to this conference. It is the year's best gathering of Free Cities people. If you're involved
in the scene or just curious or if you're pitching an idea, whatever, you should come
to Prague for this. This is the meat space epicenter for all this stuff that we talk about
on the pod and the great news is that in my experience at least the community is still small
enough that you can mix with everyone at the conference you can talk to whoever you want
i've never had anyone that didn't have the time of day to speak and you get to interact with the
people who are actually working on all these projects i'll be there of course i look forward
to this one every year not least because it's the time that I get to see all the great friends
and colleagues that I have acquired so fortunately since becoming involved in this movement and of
course I normally record 21 interviews in seven days three a day for seven days it's amazing
my brain is exploding by the end of it obviously and in the event the hope and the positivity
is palpable see you there anyway there's a web address if you want tickets freecitiesconference.com
or one word freecitiesconference.com right today's guest leon vancom is a veteran real estate
developer who has somewhat seen the light on property and the state of the world in particular
its financial system and he's very candid with his beliefs about the future of the real estate
markets. Now I know many of you own real estate. If you own property or your business is in property
I would say that this could be an important episode for you to ponder over. Here's what AI
I made of it. Leon shares his journey from growing up in his family's real estate and construction
business to discovering Austrian economics and Bitcoin, framing his disillusionment with property
management and the distortions caused by monetary expansion. He critiques the widespread belief that
real estate is a safe investment, arguing that its monetary premium is misplaced in a digital economy.
he warns that a shift towards utility-based pricing threatens the global financial system
and insists property developers must adapt now he outlines how the real estate industry will be
turned into a service-oriented industry while enabling innovations like bitcoin-based reserves
and proof-of-work architecture i'm a big fan of that the conversation concludes with optimism
about Bitcoin's role in strengthening resilience, transforming property markets,
and even enabling competitive governance models through free cities. And Leon's a veteran of the
property business. So he's someone to listen to. I certainly did. Coincidentally, he also studied
and still studies, sometimes Austrian economics, under Rahim Tarzadegan, who was the former CEO
of the Free Cities Foundation before Peter Young joined. I only actually discovered that when
he arrived at the studio. Anyway, he's got a phenomenal take on the property industry and
one that should be listened to as far as I'm concerned. Quick addendum to the conversation,
something i need to clarify i was slightly wrong in our discussion it's not actually the law
in japan that houses must be rebuilt every 30 years but it kind of looks that way because of
how the system works so i was wrong about the law but i was right about the way it plays out
basically for tax and mortgage purposes japanese homes especially the wooden ones are assumed
to lose almost all their value in about 30 years after which the land still has value but the
building is considered worthless now the reasons are strict building codes earthquake safety energy
efficiency etc buyers prefer new builds rather than refitting old ones and social preference to
newness is valued more highly than preservation the result is as i said many houses are demolished
and rebuilt after 20 to 30 years even if structurally sound so it's not mandated by law
but it's driven by tax policy market preference and safety codes there you go look into that one
if you want to know more right thanks to all our wonderful subscribers and please if you are a value
for value listener you can pledge just six bucks a month for the subscriber benefits that we offer
speaking of which a new bonus episode will be out next week so look out for that one and many thanks
to everyone that supports this show i fully appreciate you right time to challenge your
attitude towards your property portfolio or lack of in my case make sure you're comfortable this
one might sting a little but as always just sit back relax and enjoy my conversation with
Leon Vancombe
and it turns out you you actually studied under Raheem is that right yes right that's that's
an incredible start because he used to be the CEO of the Free Cities Foundation. You know that,
don't you? Wow. So did he introduce you to any of that stuff or was it more Austrian economics?
Because that's what he's originally best known for, right?
Both. So I learned about Rahim through a friend and then I started studying with him at the point,
which is I think a year and a half ago or so. So I've been studying with him for a year and a half.
I've already been familiar with the concept of free cities but obviously through his teaching
I've been able to grasp the concept of of freedom generally speaking also also the Austrian school
of thought and the effect that the Bitcoin will most likely have on the way that we we live and
and build and work so that helped me okay right this is this is good it's probably the best thing
might be then to just set the scene a little bit with who you are and what what i know you through
the bitcoin scene because you've been talking a lot about real estate and bitcoin you're a real
estate guy yes yes right through and through like maybe you could introduce yourself then for
everyone else yeah sure sure sure so i got introduced into real estate because that's
the family business so i grew up on construction sites we've been in the business of of construction
and then with 19 I went to the UK and I studied philosophy and business management
and that's where I learned about Austrian economics, the Austrian school of thought
and Bitcoin as well.
In London?
In Bau.
It's not a hotbed of Austrian economics.
I'm always surprised when anyone learns about Austrian economics at university or college
because...
Yeah, it wasn't at university, sorry.
It was while being at university.
So you met someone cool who said hey look have you heard about this And you like wow yeah mind blown right okay reddit oh reddit yeah yeah they were not even in person oh shoot well it is and it
very rare like often sometimes you hear of people that grew up in eastern europe sometimes you hear
that they knew about austrian economics but it's one of those things that's um it's like hidden
from people almost really yeah so you were lucky then but that well it was reddit reddit was the
reason but yeah the internet to be honest with you i'm very thankful for the internet for sure i
learned about bitcoin because people were using it it was a topic at university at the time i mean
also wikileaks was a big topic at the time so people were talking about it not just at university
but also in the media and i just tried to pay attention to what's going on around me and i
picked up on bitcoin and at the same time i picked on up on ludwig von mises and then i just started
going down the rabbit hole.
And what about the property side of your life then?
You're still a property developer?
I mean by trade, yes.
Right now, if you'd ask me what do I do day to day, Bitcoin has become, I think, 50% of
my focus.
I'm still active in property development and once you start the development, as you know,
it takes a lot of time.
So some of the developments have been ongoing for three to five years.
And sometimes it can take up to 10 years to complete a project from the idea to fully letting it out and then potentially also selling it.
We usually manage the property.
So I'm also in property management, which is a headache and which makes me appreciate Bitcoin even more.
Because on a day-to-day basis, I am very much aware of what you have to deal with, with being in property development and property management.
and the negative effects of the monetary expansion on the property sector is it's wild i mean you're
you're very aware of it i know and it's not just a tenant that's negatively affected it's also the
property developer well let's let's go there then let's give i know that property is one of those
investments that people really trust. At a certain age, let's say, probably around my age especially,
still to date, if you asked one of my friends, the non-Bitcoiners, if you asked one of them,
you've just inherited some money from somebody, what do you do with it? They were like, I'll buy
a property. For me, that's complete nonsense. I wouldn't. You're a property developer,
a that's that's a separate thing but for me i would never do that now not not not understanding
that you could park it in bitcoin very simply and easily with a good rate of return i suppose you
would call it a rate of return but also with no hassle and that's one of the things i see about
property that i'll tell you an interesting story this is a slightly different angle on this whole
thing but i've um i don't i only own one property which is our our house and i've done the classic
thing of i bought i borrowed money once after the first time i never borrowed again i managed to pay
off my mortgage and then we renovated properties it got bigger and bigger and bigger and we've ended
up now we two years ago we bought what i considered to be the last one you know but it does need
doing up but an interesting things happen to me um since i've been in this house for the first time
i've started noticing it's a liability not to me and and i'm not saying necessarily from a financial
standpoint i think about some kind of uh wealth tax that might appear soon are they going to wealth
tax my property? Am I going to suddenly have to start paying a few 10,000 pounds to the government
each year because the value of my property is going up even though I'm living in it? Something
like that. And I've noticed I've changed. My mindset has changed. I no longer trust property.
And obviously there's a much better place for me to part my capital. If I did, it would be Bitcoin,
for example. But it's a slightly different take on yours, I think. I think yours is more,
you're not you're not worried when you when you analyze the property market and
and compare it to bitcoin you're not thinking about the state
taxing properties are you're more thinking about just the simple fact
that if you look on paper um putting your money into bitcoin is just a
better bet than buying a property is that right
no i mean i share the same thought process i think the same i mean i go
through the same thoughts i've i mean i'll go to various stages
But I have the same line of thinking.
So I don't believe that putting money into real estate is a good investment.
I do not think that there's any societal benefit of us investing into property.
And that's something I did not understand 10 years ago, of course.
10 years ago, being in my early 20s, I was just aware of the fact that real estate is a way to hedge against inflation.
and I was of the opinion that inflation is the natural state of the economy, right?
But learning about Bitcoin, experiencing Bitcoin, holding Bitcoin over time,
learning about the Austrian School of Economics,
I started to understand what land really is valued on, which is the utility value.
There's a difference, of course, when we talk about land,
because there's agricultural capacity, so farmland, and then there's property.
And property serves both as shelter, as a place of, you know, you can use it to produce,
you can use it as an event space, for concerts or whatever,
but there's very little use for real estate as money.
So the monetary premium that sits in real estate is completely senseless.
And if you would take a bird's eye view and you would look at the world and the stage we are in, we are a species that is living in a digital economy, but we have a physical good that's used as a monetary substitute by default, not by design.
and that creates a lot of problems.
So our line of thinking is very, very similar.
But what I'm sharing mostly with the public is,
number one, it's my thought process
because I think it can help other property developers
understand why Bitcoin is the better store of value.
And then I also think that,
let's assume 100 years from now,
the monetary premium that sits in real estate
has flown into Bitcoin.
There are two questions that arise.
How are we going to manage that change?
because I do not think the state should be in charge of providing living spaces.
I think that should be done from the private sector.
So incorporating Bitcoin into property development, property management,
knowing that it is a superior store value,
I think gives the ability to continuously be productive
and produce adequate living spaces
and also provide businesses with office spaces, so to say.
So that's kind of how I'm thinking about it.
And then secondly, sorry, just the last thought is,
if that happens, what is going to happen afterwards?
Let's say real estate is based and priced on its utility value
on a Bitcoin standard.
How do you then deal with property?
That's just like an interesting thought to have, right?
Yeah, that was just about to ask you, actually.
But before I do, I just recount another experience of mine, because I know people who still remember the time when property was utility value.
I'll give you an example.
I bought an old derelict farm in the middle of Wales once, many years ago, and I paid £70,000 for it.
And the local farmers were laughing at me because a few years before it was worth £3,000 because it was the value of the acre of land.
It came with a number of acres, but I could have bought that house for the price of the land.
The house had absolutely no value.
I think now it's probably worth about £750,000.
So from £3,000 to £750,000 is ridiculous.
I don't own it anymore.
I sold it many years ago.
I think it more than trebled in price after I sold it.
And I didn't do anything to it.
I didn't even do it up.
It was still derelict.
I never got around to fixing it up.
But that's a really astonishingly ridiculous increase in value, $3,000 to $750.
Almost like Bitcoin.
Well, yeah, of course.
So my question anyway about if this is true, and I think it is, that the price of real estate
that we see around us is because people are using it as money when people stop using it as money so if the thesis plays out which I think it already is and will continue which is people are realizing okay using houses as money is a bad idea because here is real digital money that I can use and it much better for storing my value
What happens to property developers?
What happens to the state of the market?
Obviously, everything would trend back to utility value.
But what about people like yourself?
Would people pursue property developments anymore if it didn't make them enough money?
I mean, I hope not.
Because to be very honest with you, at the moment, the market is oversaturated.
And to be very honest with you, it's not just...
I'll explain my line of thinking in a second, but I just want to also raise the point that real estate as a monetary substitute, it's not just a store of value.
people also use it as collateral, right?
People lend against their real estate.
This is true for households, wealthy individuals,
even nation states, insurance companies, and so forth.
So the existing system has no interest
in real estate being priced on its utility value
because that would mean that the bedrock
of the global financial system,
because next to the 10-year US treasury
and other treasuries,
real estate really is the bedrock
of the global financial system.
If it would go down in value,
the system would collapse. So I think that what we're talking about is going to happen in parallel.
So the rise of Bitcoin is going to happen in parallel with chaos in the existing system,
right? This makes Bitcoin thrive. Bitcoin was built for chaos. Real estate was not.
So I can't really say what is going to happen in real estate. But if you are in property
development and you do not understand what is happening, you're going out of business.
that's that's that's what it is it's the same uh as operating a retail store let's say on a
on a london high street in the 90s not being aware of the internet or operating shopping centers not
being aware of e-commerce right we're living in a digitalized world and people want to store their
their productivity digitally and not in a house and you and that's a good thing because at the
moment, yes, working in property development means you are benefiting from what we just described.
But if you really think about humanity as a whole, there's nothing positive in houses going up in
value constantly because it increases the cost of living. That's just if we talk about the
socio-economical effects of what we are talking about, right? But also from a business aspect,
If you ask me as a Bitcoiner, as an investor as well, Bitcoin is saving, real estate is investing.
And now that Bitcoin exists, you don't need to invest anymore.
You can just save in Bitcoin.
But if you do want to invest for whatever reason, you need to do it based on using Bitcoin as a unit of account.
because if you work in property development and your property rises in nominal value,
meaning it rises in the value that the fiat currency that you operate in, it's based on.
So let's say you work in the UK and you own land or you own a property and over time it goes up in pound.
You live in Germany, the property you own over time goes up in euro with monetary debasement, right?
It's not actually the property goes up in value, it's that the currency it is measured in is being debased.
But once you switch your line of thinking, you understand that Bitcoin is not just relatively scarce, it's absolutely scarce and relatively scarce because the demand for Bitcoin exists because it's near perfect money.
You do understand that you need to expose yourself to Bitcoin if you want to be a successful investor.
If you do not engage with Bitcoin as an entrepreneur, you're almost failing, in my opinion.
What about people that do offer a legitimate service in property development?
You know, I'm thinking people that do, let's say, take an old building, renovate it, turn it into something that's usable again.
This is a good thing.
Yeah, it's a great service.
Same with, you could say, commercial real estate in many senses.
I know the price of commercial real estate is all over.
Well, I had a conversation with someone recently about what was happening to commercial real estate in the US.
It's ridiculous.
He said exactly the same thing as you.
He said, no one's going to let it crash.
Because when it crashes, that's the end of this paradigm as we know it.
But what happens to those people that do want to renovate property?
If they're not making as good a return as parking their money in Bitcoin, would they still choose to do the renovation?
do you think i suppose because they're they're imagining they're going to be generating income
continuously i mean would you as a property developer would will you carry on in the future
yes and no so you i obviously understand that it's better if you own real estate in germany
holding it for 10 years means you can sell it tax-free if you live in a property you can sell
it tax-free after two years and if you don't live in a property but you operate it as a as a manager
or as a developer, you can sell the property tax-free after 10 years.
So if you have a portfolio, there's two options for you now.
First option is you sell the properties after 10 years.
You put the money into Bitcoin because holding Bitcoin after 12 months
also then becomes tax-free in Germany.
So if you hold Bitcoin after 12 months, you do want to sell it,
it would be tax-free, right?
So you could sell the properties that you own for over 10 years, buy Bitcoin, wait 12
months, you'll never have to pay taxes, you don't even feed the bees.
The second option is, and that's what some companies are doing now, if you want to stay
active in real estate development because you like it, because you think you have a competitive
edge or knowledge that allows you to outperform other market actors, you could obviously group
the properties that you own, take the company public, that's what MetaPlanet has done in
Japan become a so-called Bitcoin Treasury company, right?
But my root, because I come from, let's say, my roots are within the cypherpunk ethos,
I do very much find interest in what the Bitcoin Treasury companies are doing.
I recently wrote a long report on MetaPlanet.
I also wrote a long report on strategy, because what they're doing is they're leveraging their
balance sheet.
That is the play that I personally know being a real estate developer.
insurance companies and real estate developers are actually leveraging their balance sheet.
That's what they're doing. So that's the same thing that strategy is doing now and meta planet
is doing. But saying you want to take a private road, right? Let's say you want to stay true to
the cypherpunk ethos because you choose to. You can just sell off the properties, buy Bitcoin with
it. And if you do want to stay in real estate development and the real estate business,
offer a service to the market.
You can consult people.
And if you are good at constructing buildings
and somebody gives you capital,
you could become the partner
that brings in zero money.
But maybe you have contacts to a bank.
You organize the loan.
You have a capital partner
that provides the equity.
And then you start with the project.
So now you're being paid for your knowledge.
You're being paid for your service.
and I think that structure overall is the structure that I could very much also imagine on a Bitcoin
standard because what is a Bitcoin standard right it means different things for different people
today there are people that don't use the internet there are people that don't use mobile phones
so we can assume that also in the future people maybe some people won't use Bitcoin so not
everybody will use Bitcoin but Bitcoin will be I think what treasuries and real estate are today
the bedrock of the global financial system, collateral people lend against,
and potentially it's used as currency itself, or there are other currencies and other types of money,
e-cash tokens, for example, like Cashew or Feddy that are being issued with Bitcoin as the base, right?
And then society operates on that.
And real estate then becomes a service because the service that you provide to the market is housing,
shelter or a place to produce a place to think a place to record a podcast things like that
so the service of uh of providing uh housing to the market i think that's what ludwig von mises
called originary interest as an entrepreneur you take risk you build something then you rent it out
and the surplus that's the originary interest that's what you receive for for doing that right
That would be the same on a Bitcoin standard.
But the business model of buying as much real estate as you can,
leveraging that with a low interest,
because that also is dependent on the interest rate.
With interest rates above 3%,
the real estate business model that existed since 2008 fails.
Is that right?
Yeah.
Above 3%?
Yes.
So at the moment both in the States and in Europe And these are the dominant markets I mean China is different because China and Japan have been operating under 1 interest rates for a long time
The Japanese central bank raised interest rates now.
But in China and Japan, the housing market has been inflated to levels that we haven't seen in Europe yet.
The Japanese housing market was inflated in the 80s to an extent it was not able to recover.
till today and the Chinese real estate market is going through a similar phase
right now because they have been pushing interest rates down whereas in Europe
and in the US even though historically speaking interest rates as you know are
actually still very low because historically interest rates around 10 to
15 percent were actually the average so right now we have interest rates for
construction loans sitting between three to five percent and that margin does not
allowed to make money because the think about it like that if you build a
property let's say you have a 5% yield on an annual basis but the cost of
capital is also 5% what's the point of doing it right so it needs to be
worthwhile taken on that and then building a property because if I take on
money for 5% so the cost of capital is 5% I build a property and it has a 5%
Now excluding leverage, right?
We can also talk about the leverage effect, but there's no money to be made.
Whereas Strategy, for example, or MetaPlanet, they are also operating on a balance sheet,
right?
But they can take money for 10% interest and buy Bitcoin, which grows in purchasing power
on average 50% a year.
So that arbitrage effect is huge, it's 40%.
But in the real estate market, if interest rates don't go below 3% and you make, let's
say, 3% annualized in growth, there's no arbitrage to be made.
You could argue though that the Bitcoin arbitrage that MetaPlanet are doing, for example,
won't last.
And that's a huge amount at the moment.
But I would say that's because we're at a certain point in the adoption curve of Bitcoin
that means that you can do that.
Yeah, yeah, so so.
I don't know what it'll settle out at eventually.
It might be interesting to see
because it would hopefully be the free market rate.
One would expect it
because Bitcoin really is a free market at the moment.
Yeah, yeah.
And it would be a good,
we'll be able to use it as a lesson
for what really happens
when a large group of people all decide
on how much it should cost to borrow money
or how much they should get to lend it.
But I've never heard that before.
So the play you're talking about is,
what about when people use their property as collateral
to then buy more property?
Is that 3% borrowing rates?
That applies there as well.
Yeah, it would still count
because what MetaPlanet and Strategy are doing right now,
that's what real estate investors have been doing since 1971.
won. And the positive effect of these companies doing it on Bitcoin is you can think of it whatever
you want. You can think it's gambling. You can think it's degenerate, but it doesn't drive up
the cost of housing. That's good, right? So Bitcoin is the most speculative asset. It's
more speculative than the housing market, but that's fine because there's no negative effects
on the housing market. For example, because people can save and speculate on Bitcoin. They
don't have to invest into housing to outperform inflation no negative secondary order effects for
the housing market but this can go on i think the treasury play if it's done well i mean can go on
for the next 50 to 60 years if the if the collateral basis managed properly but then the question is
what does this mean for housing what does this mean for property development because it's in my
blood it's in my soul i grew up on construction site so yes the asset class has gone through a
process of financialization and right now we're seeing it being drained of its monetary premium
right and actually it's happening in real time and the bitcoin treasury companies are actually
accelerating it because people now can think okay right so for the past 15 years people had the
option to invest into bitcoin instead of putting their money into real estate but some people do
not understand that an asset that does not generate cash flow by itself will outperform
an investment they can make that has cash flow because people have been drilled into thinking
they need to outperform the rate of monetary inflation by with cash flow. But if there's an
asset class like Bitcoin where the rate of inflation is decreasing over time, it's inflationary,
you don't have to generate cash flow, you just have to hodl it because the money that's being
produced in the fiat system and the productivity of humanity will cause it to go up in value more
than any cash flow based business can generate cash flow right but people want cash flow it's
just a line of thinking so now you have these companies that provide cash flow which is
apparently a good thing for people that have a fiat type of of mindset so i've talked with many
of my friends that work in real estate and they did not buy bitcoin but now they are they want to
buy MicroStrategy stock, they're buying MetaPlanet stock, they're buying their fixed income products.
And I'm thinking to myself, guys, are you crazy? I've been telling you for Bitcoin for 10 years.
But I came to understand this, that it very much is an arbitrage because there's an information
asymmetry existing between you and me and the rest of the world. And the rest of the world is
willing to receive 10% distribution on a year-by-year basis and giving their money to someone
who can buy an asset that appreciates in value 50% of time.
It's crazy, right?
But that's the way it is.
And then, so this also means that the demonetization of real estate and land, that includes farmland,
is happening right now with these treasury companies absorbing the speculative, I think,
capital that would otherwise be directed towards fixed income, yes, but also real estate.
because a large portion of the capital that's being allocated to real estate is being allocated
to real estate to generate cash flow.
I'd say maybe from my personal experience, maybe 20, 30 percent, even more of the people
that I talk to that buy real estate, they do it to generate cash flow.
And now they can do it without that.
And all of these things have positive effects on the housing market because it eases the
pressure, less people have to invest into real estate, but it increases the pressure
if you work in property development.
And if you don't want to take your company public,
if you don't want to become a Bitcoin treasury company,
if you don't want to sell all the assets off that you hold,
you need to incorporate Bitcoin.
And that's what I'm sharing right now with a lot of people
because for me, it's very easy to say,
sell the property by Bitcoin.
If you'll ask me, I happily own Bitcoin, nothing else, right?
But I have to deal with other people
that I run a business with.
And I'm also aware of the fact that other people
understand things at different times whenever they need to understand it, right?
So it's a process.
And Bitcoin can be integrated into real estate gradually over time
in order to help everybody that is involved in the capital structure
that is real estate, from the bank to the tenant to the landlord
to the capital partner to understand what is happening and benefit from it.
Isn't it true, though, that people who want to buy a treasury,
like MicroStrategy for example, they're paying for the peace of mind. They're paying 30% for the peace of mind or 20 whatever, it is about 30%. What's the return on Bitcoin currently? You're saying they're getting a 10% return from MicroStrategy and MicroStrategy are making 40%.
So yeah, they're paying a very large premium for the peace of mind of not understanding Bitcoin, really.
Like you say, it's an asymmetry of understanding.
That's worth, that asymmetry is worth, it just shows how much it's worth.
It just shows that you should go out and learn about Bitcoin.
Really, you should.
It's worth a huge amount of money for you, even if you're in a financial brain and you're used to investing and parking your money here and making it work for you.
You really do need to study it because it's worth a lot of money to you.
It is worth a lot of money.
And the opportunity cost is increasing over time because Bitcoin kind of changed the time value of money.
And I'll tell you what I mean by that.
Because I'm very well aware of the negative effects of leverage in real estate.
I've seen projects go bust.
I've seen companies go from zero to 100 back to zero in a very short time frame, right?
And so in the fiat world, money loses value over time.
There's a negative time value of money.
With Bitcoin, it's the opposite.
There's a positive time value of money because over time,
time Bitcoin increases in purchasing power.
And once you understand that money has a lot of functions and people talk about money being
a medium of exchange and a store of value in a unit of account a lot.
But I think it's also important to understand that money is collateral and it always has
been.
So let's say we're living on a gold standard 1871 in Germany, let's say.
Prussia just won the war against France.
Bismarck unified the Holy German Empire
he created a central bank
highly centralized Prussian government
but they did have a gold standard at the time
and
so even at that time
if you would own gold
and you're a young family father
you want to start a business
you wouldn't spend all your savings
because the savings that you have
also guarantee that you can deal with
the uncertainty of the future
you can take care of your children and so forth so you would most likely go to an investor
you'll ask for money and for that money maybe he receives equity in your business right so the
dynamic of using money as collateral is a dynamic that exists always on a fiat standard and on a
bitcoin standard on a fiat standard though the money that you receive loses value over time so
there's an urge to consistently outperform the rate of monetary inflation. Whereas on a Bitcoin
standard, if you start a business and then with the money that you receive, let's assume you buy
Bitcoin immediately, you start the business, you, I must take out a random number here, $10,000,
right? So you have $10,000, you start a business and you immediately buy Bitcoin worth $2,000 in
your business. So in theory, you could do nothing for five years. And just because Bitcoin year on
year grows in purchasing power, you would already outperform all your competition. And then you
could start thinking properly and strategize of how to run your business. And that's why Bitcoin
as collateral, Bitcoin as capital, Bitcoin as an anchor in a business, generally speaking,
is how you should, in my opinion, run any business.
And the Bitcoin treasury companies now just arbitrage the information asymmetry
because they're publicly listed, but also on a personal level
and in the private sector, any business should operate like that.
So when I'm saying like that, I'm not saying any business should take on excessive leverage.
I'm saying any business should anchor its decision-making around Bitcoin.
I think detractors would say that's all very well, but on year two, you may be in the red.
Yeah, sure.
Year three, maybe year five, sure.
And it's difficult to make business decisions if you're a forced seller of Bitcoin at a loss, say, for example.
But why would you need to sell?
That's why I'm saying don't over excessively engage in leverage.
Don't put all your money to Bitcoin.
Just anchor your doing.
whatever you do anchored in Bitcoin in a way where you never have to sell the Bitcoin that you anchor your idea in.
And then you provide a service at the same time.
So with real estate, that's how-
I see what you mean.
It's like literally buying an apartment block or something.
It would be the equivalent.
Not for $2,000, obviously.
But if you scaled it up, it would be like buying an apartment block and then continuously using it as collateral.
You can use it as collateral.
You don't even need to.
You can just have it in the back of your mind that I'm not stressed.
I don't need to do anything.
I could just do nothing and sit here and I'd still outperform my competition.
With that 20% though?
Yeah, with that 20% on average.
But then now the next question comes, how do you generate income?
So you offer a service to the market.
So we are still productive individuals.
We're still productive members of society.
I'm not saying just buy Bitcoin and sit on it.
But if you'll ask me how should a real estate company operate
or how should anybody operate that wants to an entrepreneur that has an idea within the real
estate sector now that bitcoin exists and you need to start by buying bitcoin like don't start by
doing your project and then thinking in the future you'll buy bitcoin that's like the the wrong type
of thinking because bitcoin changed the time value of money you have to accept it you have to buy
bitcoin first and then act don't act and then i buy bitcoin that that's how you how you acted in
the fiat world but in bitcoin you'll you act the other way something that's just occurred to me
as you were saying that i'm thinking about how real estate not even commercial real estate
private real estate people will add value in the future and i'm thinking about architecture and the
the way houses are built the the the quality of the house is that is that what's going to happen
Are we going to trend back to a time where, because if you look at houses now, they're not only too expensive, but they're also very inferior quality, I think.
Certainly houses that you see getting built, you know, where I live, they go up in a month.
It's amazing.
And the walls are often just like they've made a paper.
They're literally, you know, my house was built in originally in 15 something, where I live now.
And the walls are solid stone.
Well, there's a little gap in the middle, but they're at least a meter thick.
Yeah.
You know, and back then also, that house wasn't an expensive house.
It was a rural farmhouse.
It was probably one of the cheaper houses, which is something else I find very strange about the housing market now.
You see this in London.
People buy houses.
Rich people buy houses that poor people used to live in for exorbitant amounts of money.
It's a bizarre concept. You know, a three bedroom terraced house would have been sort of nice, you know, wouldn't be an expensive house. It would be and they are one and a half million in certain parts of London, two million more for these really, you know, bizarre, bizarre things.
But are you saying then that that's going to be one of the ways in the future, if people follow this trajectory and the system goes the way we think it's going, is that how you add value?
You have to increase the quality of what you're building.
So you're competing against badly built houses, essentially.
Yes, exactly.
Now you almost compete on interest rates.
It's like if I can get a cheaper loan, I'll make more money.
or if I save money on construction, I make more profit.
So people almost compete on providing the worst service possible
with the cheapest money they can find.
It's actually very perverse if you do think about it.
And maybe we can say the following.
Real estate investing doesn't make sense anymore.
Real estate development, though, is a business line.
It will always make sense.
And then you have to just adopt to the circumstances,
integrate Bitcoin, anchor your business around Bitcoin,
I use Bitcoin to build maintenance reserves, use Bitcoin mining to save costs on heating.
So not just the capital structure real estate.
When I talk about capital structure, I maybe explain what I mean and then I go into architecture
because that's something that interests me a lot as well.
And it kind of frustrates me at the same time.
When I say real estate is a capital structure, I say, of course, real estate should be priced
on its utility value, but it's been priced away from its utility value.
Now it's a capital structure with different players like the developer, potentially an investor, the bank that gives the loan, the architect and the tenant.
And everybody is worse off on a fiat standard over time.
Everybody, even the developers, worse off over time because eventually the system collapses.
And what's the point in building a system that will eventually collapse?
There's no point, right?
So within that capital structure, the architect, I think, and also from my personal experience, loses out the most next to the tenant.
The tenant loses out because as the landlord with inflation, meaning the maintenance costs go up, construction costs go up, you have to raise rents.
It's a very, I'd say, negative dynamic, but that's the way it goes because you have to look at profits.
And then the architect has no time.
I'm sometimes sitting in meetings.
I'm not taking part in S meetings as I used to because I'm really focused right now on the Bitcoin strategies within our existing business, also on restructuring the business and making Bitcoin a focus.
So I'm spending a lot of my time at home in front of my computer as we do.
But I used to attend a lot of construction meetings.
And you have phase one to four, which is planning, and then you have phase four to nine.
within a construction phase and 4 to 9 is the building phase.
If you are an architect that's in charge of the construction phase,
I feel very sorry for you because I've never seen
that architects were able to really bring their vision into reality.
Because after year 2 or 3 of the construction process every meeting is about saving cost Because after three years usually because of a shortage and a certain commodity because of a geopolitical
conflict or because of monetary debasement, construction costs have gone up and whatever
was planned two or three years ago is not possible anymore.
So maybe the architect wanted to build beautiful doors.
He's like, no, we need simple doors.
It's too expensive.
Maybe the architect wanted to incorporate certain elements in the windows.
Now we need to take these elements off.
It's too expensive.
That's literally the dynamic on the construction side between the investor and the architect.
And they start to fight always.
The investor and the architect, from my personal experience, being in real estate for almost 30 years, they always fight.
They always end up fighting.
And it doesn't need to be like that.
It doesn't need to be like that.
Because if we would live in the natural state of the market, like Jeff Booth so well explains,
things over time would fall to the marginal cost of production because we are becoming better at producing things.
And we are also, due to the technological process, actually we experience deflation.
The problem is our monetary system is inflationary.
So if we would live on a Bitcoin standard or if we would live in a world where money would be scarce,
it would actually become cheaper to maintain buildings over time. And you would benefit
largely from building maintenance reserves in Bitcoin. So the rental income would allow you
to accumulate Bitcoin. That would allow you to then grow your business by just hoarding Bitcoin,
and you wouldn't have to raise rents as well. So when this would go down over time, it would become
cheaper to maintain buildings. And the whole dynamic in the real estate market will be flipped
on his head and buildings will become more beautiful buildings will become a beautiful
sorry exactly i took a photo yesterday i i you know i i like the architecture around here it's
not too bad i've got to show you this because it's just ridiculous i walked down the street here
there's a there's a supermarket down there and i was walking down there and there was a corner
that was empty and they they were you know they were going to build something there so there was
a placard there with what they're going to do and it just i just looked at it and i thought jesus
christ look at this yeah exactly i mean look what the hell is that i mean this is the state of fear
this is the state of the world i don't know whether i'll put i'll pop it on the thing but
it's basically here's this corner and you think great they're going to develop it yeah and they're
putting what looks like i don't know what it even looks like a box it looks like a cheap knockoff
bauhaus yeah with windows like that many windows down the middle it's just so ridiculous number
one that people even think like that i i don't mind people having strange ideas about architecture
that's their prerogative right but that is a sociopathic building that building makes you feel
bad feelings no i don't know who looks at that compared to looking at if you go in you know even
this building here from the outside it's pretty beautiful and you look at it and you you see this
avenue of of beautiful buildings and all right they're they're pretty derelict this is a
former sort of communist air you know place so a lot of it's in bad repair but it will get better
I used to live in Berlin, you know, in Potsdamburg.
When I first went there, some of the buildings were still covered in bullet holes.
Now it's like walking down the poshest streets in Germany.
It's beautiful, you know.
But the fact that that kind of building gets built is all down to everything you're talking about,
which is build it as cheaply as you can with as little interest.
because I think what was fall and foul of the fiat system is beauty. Very much so. Beauty costs,
we know that. There's a cost to beauty. And in buildings, it's considered an excessive cost
over utility, right? But I don't see that at all. I've renovated houses. I've built a house
in my own house, the past one. And building a beautiful house was an important utility to me.
It actually gives me utility. I used to come home to my own house and go, nice one, good. And for years and years and years, I got that same feeling until I sold it to someone else. And then I was happy for them.
you know so but but the average sort of the way the system works now utility the beauty is not
included as a utility in any shape or form and that style of that kind of brutalist minimalist
anti beauty style is just used because it fits into the system quite well it's cheap basically
And I hate that. I really dislike that. I think a lot of people, a lot of architects, have been convinced that it's a good thing. You know, the kind of the post-modernist idea that let's reject everything after the war. We should reject everything. All ideas, all beauty, all everything. And people go, yeah, cool, man, let's do that.
and then you end up with like ridiculous looking buildings but people are still looking at them
as things of beauty and i will never i will never see that building as a thing of beauty i see it as a
as a an infringement on on on on you know you walk past this thing and you're like jesus what
the hell is that and why is it doing that to me it feels it feels alienated right yeah i do think
that and a friend of mine, Kelly Lane, and who also talks about Bitcoin urbanism a lot.
So he talks about how cities will maybe change because right now cities are mostly car centric.
They should be pedestrian centric.
And that also has to do with the age of standardization, I think.
And if we look at the 1920s in Vienna, when, you know, Eugen Böhm von Barmwerk and Friedrich
von Wieser, Karl Menger, and then Ludwig von Mises and all the other Austrian economists
were strolling around Vienna, sitting in cafes.
There was an architect also called Alfred Loos.
And he came up with the idea of, you know, modernity has to do with standardizing everything
and take everything away from the past.
And you had art deco, art niveau before.
So you had a development.
So architecture was going through this development in the early 1900s of going through a standard
of standardization.
and similar to money and to production facilities.
And I think people underestimate the effect the war had on architects.
And some of the architecture that we are talking about right now,
I think it feels so alienated because the people back then felt alienated
due to the war, the First World War and the Second World War as well.
So I can definitely say that some of the early Bauhaus architecture
has something to it that, like you said, I can enjoy because it's interesting and you see somebody
deeply thought about whatever they were doing. But it has reached a point where standardizing
architecture, standardizing money, standardizing this has taken away the soul from buildings.
And it's been a process that has been working and moving in parallel with the fiat system.
and at this point it's being sold as culture because the state has a monopoly on culture
and if you look at also most of the totalitarian authoritarian socialist dictatorships the
intellectuals were mostly working with the state they were actually not working against the state
so there is an intellectual class today that would argue against what you just said and they
would argue why this building for example carries beauty and beauty is subjective as well but we do
understand that there are some things that when you show them to children 90 of the children say
that's beautiful 90 of the children say that's not beautiful so there is some some some objectivism
in form and the human experience and i think why we like this building is because it's built with
clay with wood and there are round forms this is more like nature whereas the building that you
showed me maybe you show a picture so people see it's literally straight lines and there are no
straight lines in nature so if you build with like something with straight lines and if also people
spend too much time inside and don't absorb sunlight they'll get depressed over time and so
So socialist architecture is also, by the way, a way to capture people's minds.
If you force people to stay indoors all the time and they are not exposed to sunlight,
it also has a negative effect on their conscious and spiritual development.
So architecture, money, spirituality, all these things, they are also intertwined.
I agree with you on that socialist kind of The socialist world was anti in many ways certainly in its latter stages
And as a reflection of seeing the individual as a cog in a mechanism.
It's the same thing.
I'm slightly different to you.
I think what gives architecture value is actually a proof of work, just like with Bitcoin.
so i would value a hand created facade like walk around prague and you look at the buildings you're
like oh my god in fact there's a building just there outside of here with intricate wooden
carvings all over the building i mean it's totally unnecessary if you're a utilitarian it's really
really and it's not even this isn't a posh building in any shape or form this is a sort of
simple building but it's covered in this stuff and for me i look at that and i think yeah that's
worth something because of the proof of work the building that i showed you earlier is the proof of
work is is trending to nothing it's a computer and in fact it will absolutely trend to nothing
in the end because a robot will build that kind of building and the robot won't cost much the robot
will build other robots that won't cost much and the raw material will be the main cost of it
I mean, on the other hand, though, they will also, those same robots will probably create beautiful facades as well, if you require them, at also a very small cost, really.
So, I mean, I'm hopeful for the future.
I think everyone, what I don't like about the intellectual class that enjoys brutalist architecture or whatever, that's not even brutalist, that's just, I don't know what you call that, utilitarian architecture or something.
Yeah.
is they always say, look, everyone in the past, during this period, people said the same thing
about buildings. The most modern buildings, a lot of people think are uglier because they're used to
the previous iteration of architecture. Except when I look back at the past, I think I like every
single other type of architecture, everything. And if you go back far enough, think about
period properties in London, for example, which have pillars. Pillars were in Greece
a very long time ago, and they looked beautiful then. They looked beautiful in the 1800s as well.
So I think this whole period we're going through is an absolute blip in the history of humans.
We've rejected beauty in so many ways.
And I think fiat is rejecting beauty.
Fiat is rejecting value.
It's taking away value from things.
And meaning.
Yes, which is the same thing as what beautiful buildings are.
There's value and meaning in them, which it's hard to put a price on.
I mean, you can see it in the real estate market, certainly in the UK,
because an old building sells for more than a new building.
I don't know whether that's the same in Germany.
It depends how old.
So if it's a real old building, there might be a premium on it.
But if it's something built in the 60s or 70s…
Sorry, I meant old as in European old, not US old.
No, anything with what we call period features.
Like from the Victorian age.
Or even 1920s.
Arts and crafts, we call those kind of buildings you get in London
are at an absolute premium.
Do you know what arts and crafts?
Yes.
1930s looking buildings, whatever.
What distinguishes them in my mind
is that they were built well.
You know, the walls were thick
and made with, you know, bricks.
They were built to last.
Exactly.
But that wasn't even probably...
The thought that a building wasn't built to last
probably didn't even exist, did it?
I mean, who thought that I should build a building
with the idea that in 30 years
I'll tear it down and build another one. Actually, they do in Japan, right?
I was just thinking that.
But that's very specific.
That's very specific.
Maybe you could explain it.
Yeah, I mean, I can try to explain it. But I also want to say one thing that's important.
Back then, they had slaves. Let's talk about the Greeks, for example, right?
Culture, generally speaking, develops in times of high leisure. So when we are stressed,
we don't have time to think about poetry, maths, art. So you can generally say that societies like
the Sumerians, the Greeks, societies that came up with things that we still value today, they had a
lot of time. Back in the day, people were also making use of slaves. I just have to say that
because it's true. But today we have a technology where we can actually build cheap due to the 3D
printing and we have a disinflationary money like Bitcoin.
So labor over time can become cheaper, not because we force people to work for nothing,
but because we have a money that grows in value and we have technology that we can use
to construct and we need less human labor.
But I have to say that it's an important point that sometimes people don't mention that also
So labor was so cheap back in the day because people were sometimes forced to do things, right?
But just before you go on, but even in the 1960s and 70s, though, labor was much cheaper.
Yes, yes, yes, yes, for sure.
But what's that then?
Why is labor, like the price of a builder now has trended up to, you know, like I've talked about this before on this pod.
If you look back to the past, what you would have called white collar and blue collar jobs, you know, blue collar jobs, as in the kind of working with your hands, building this plumber, you know, electrician, they were quite, the wages weren't great.
But white collar jobs were.
Now, as a blue collar worker, if you're working on an app, if you talk about working for a wage, you can command a very good premium on your hands that you didn't used to before.
If you compare it to your contemporaries who work in something else that isn't working with your hands.
So why has that happened?
I think we value human labor again because there's so much automation that human labor becomes valuable again.
If I understand your question correctly, that's how I think about it.
Yeah.
I would quite happily use a robot to build my house.
You would, but it's not possible yet.
It doesn't exist.
It's not possible yet.
So maybe in 20 years' time, that's the status quo.
But due to regulation in Europe, it will take a long time.
So there's already self-driving cars in some states in the US,
but it will take time for that to happen in Europe due to regulation.
But if you think about it, this is almost certainly going to happen. This gives me hope. The cost of chipping a stone facade by hand is quite a lot. The cost of an AI robot doing it will trend to almost nothing. So why wouldn't we have beautiful looking buildings in the future?
I think I would agree with you. If we'll take a step back, like things can seem quite challenging because they are because the existing systems are failing. And the elites that are in power are trying to cling on to existing power structures. Of course, that's always what happened. That's been happening for five to six thousand years. But the difference now is number one, Bitcoin, number two, technological progress.
and I agree with you
this conversation so far has been
I think a lot about criticizing
the state of the world
which is important in order to understand
what problems we have and what the solution will be
which is Bitcoin but once you understand
there's Bitcoin, there's 3D
printing, robotics, AI
things will
get better from here
so I generally am very
optimistic about the future
and that's also why I think if you work
in real estate
development. If you work in real estate investment, put your money into Bitcoin.
But if you work in real estate development, maybe take the pressure off a little bit.
Try to give yourself a bit more time. Don't grow by growing your business. Grow your business,
growing your Bitcoin stack. I think that's important. And you don't have to leverage
every property that you own, you even can take out leverage, selling some of the properties,
putting some of that money into Bitcoin, because Bitcoin will outperform any dollar or any euro
or pound invested into real estate, including leverage, over five years.
Currently.
And I think for the next decade, for sure, that because if you think about the
the compound annual growth rate of Bitcoin,
it's around 70% for the past four years.
If you asked me two years ago it was 50 Now it 70 If we take the last four years I thought it was going down over time i thought it was trending down it is going down over time it used to be 250 percent
but you but i'm saying it's still around 50 to 70 percent depending on the year we're talking about
so if we talk about so today it's uh right and we talk about uh december or november october
of 2025 and you'll go back four years,
you'll have a different pricing
than if you take December, October, November,
September of 2024
because there's different phases in Bitcoin.
But obviously right now looking back
is a good time
because we've just come from a bear mark.
I'm very much aware of that,
but we could even say
if it comes down to 20, 30%.
Let's say the compound annual growth rate
of Bitcoin comes down to 20, 30%.
That's a modest compound annual growth rate
giving what it has done over the past decade that will still outperform the money you put into real
estate including leverage including the tax advantages so just i think that that fact by
itself also helps to just because i don't know how you feel about it i'd like to know actually
how you feel about it also with the free cities movement the regulation right now makes it very
very difficult to really put concepts into reality and real estate, right? How do you feel about it?
Oh, yeah, 100%. I mean, I spoke last year to Patrick Schumacher. He works for Zaha Hadid
Architects. He's their chief architect. And pretty much they work out in the Middle East now,
for all intents and purposes. He said it can take... In the time that you could build design,
get it passed and build a building in London you could have built a whole city out in the Middle
East literally and for a fraction of the cost because that the amount of money you now have to
park for legislation and lawyers fees and passing all the rules is astonishing it's something like
40% or something you probably know this better than me but the amount of money that you have to
basically spend, before you've even started constructing your house, just to pass all
the rules and regulations is astronomical. Well, that puts a lot of people off. But then
the actual regulations themselves, and some of them are completely idiotic, you can't
service a whole country with one rule about the size, you know, like, I don't know, in
In England, it's like windows have to be XYZ to do with climate change.
Windows have to be a certain size now.
Or even they have to be smaller, I think, because they let too much heat out if they're too big.
Or ridiculous things like this.
This happens a lot where I live.
Because all the houses where I live, they're all old, very old.
I live in an old valley full of ancient farms, basically.
and um one of my neighbors decided she wanted to extend her house but it's it's um because they're
so old a lot of the houses are protected so you can do things to them but you have to go through
a lot of regulation to do so and um in the end this is just how ridiculous it is in order to
build an extension on her house which basically looks like a almost looks like a small castle
It's beautiful. It's like the only thing that they could agree upon was a glass cube attached to the side of the house because the regulations said that any new construction had to, because it was such a beautiful building, had to be in isolation.
It had to exist separate to the building so that you knew it was an addition.
Imagine that, a glass cube on the side of a beautiful old house.
People do it. People do it all around the country now because there is ridiculous planning rules say you can't fake a 15th century facade. That's not cool. No, no, no. You have to create something that is distinctly different from the thing so that everyone knows it's not the real building. I mean, how ridiculous. And you've got to pay someone a lot of money for the privilege of that.
you know really and i've had this in building my own houses i i i previously i renovated house and
i built a sort of office next to it and out in the countryside and stupid things like you have
to get so many things side are signed off by building regulations you must know this you've
hundreds of hours talking to these guys and if you accidentally lose a piece of paper or
you can't prove that this has been signed off oh god help you yeah they'll literally say take it
down and do it again almost like oh no you have to you have to really take care of of being in line
with with the regulators well check this one out so for example i was told to put up a banister on
a staircase because but then i could just take it straight down again so i could take it away but
when they did the thing i should put this banister up because i didn't you know um i was told that
my electricity needed my electricity wires needed to be checked because i'd forgotten and i said
don't worry the electrician's here at the moment and he said oh no no we have to commission our own
electrician sorry it's it's it's rules and he commissioned the same guy for about five times
the price you know it was just like every time i had dealings with the people i was just enraged
and now we have a rule in this was in wales at the time i was living just over the border in wales
if you build a building now you have to put a sprinkler system in it you know like uh you know
just to stop a fire any any building any new build any anything like imagine putting a sprinkler
system in your house i mean number one how many houses burned down like not many right not many
if you think about it but but how many people are going to accidentally trigger that that system
now that every single new house has to have a complete sprinkler system in it
to rain water down if there's a naked flame there.
It's going to cause so much damage because people are accidentally going to do it.
It might not even save any lives.
I think if you also, what you've been telling me,
if you do work in real estate, I think it really helps to understand
most of the issues that we have in the existing monetary, financial, and political system.
Because everything that you've been describing actually shows that it's a politically protected
asset class because of its use as collateral in an inflationary system.
And people can exert their power and their will onto it.
and whether it's about the climate, immigration, monetary policy,
all of these different aspects somehow intertwine with the real estate.
That's why I think it's such an interesting asset class to talk about,
to also understand the way that our monetary system works
and also the way our political system works.
I think that's quite interesting.
Do you think that's by design?
Is that an age-old thing?
like can you go back deep into history and realize that real estate was at the heart of a lot of this
stuff or not i mean in a way yes if you think about it the senators in rome had to own land
so if and also in in greece most of the citizens i think people please check this i think owned land
i don't know but i know in rome for sure if you were a senator you had to own land and the more
land you own the more agricultural capacity the the welfare you wear so land and political power
was always tied to each other but that is actually now dwindling because now you can own bitcoin so
you don't need to own land to um and and also what we understand as power is changing so
what power is for me is the ability to live a self-sovereign life and in case i need to change
jurisdiction i can do that without being maybe negatively affected by a totalitarian government
that's power i don't want to exert power over other people i just want to be able to live my
life as i want to which bitcoin allows me to do because land and real estate always means you also
need to somehow get involved into the political process because it's a political politicized
asset class and i think this is something that has been the case for thousands of years also
So in Japan, the shugunat system was based on people owning land.
And also, you could go through different, also in the Inca Empire, as far as I know,
it was also political power was also tied to owning land.
So owning land itself, due to the ability of land to generate income, has been tied to politics.
But what is an abnormality is that land by itself has become a commodity,
not because of the soil that maybe is able to produce,
but because it is scarce
and we live in an inflationary fiat-based system.
And that is...
is a historical abnormality.
So what we've seen since 1971,
where real estate has become this monetary substitute,
that is definitely historical abnormality.
And I looked into, as we Bitcoiners like to do,
obviously I'm very much interested in Rome.
I also had Latin in school.
So I've always been interested in Latin,
in Latin, the language, and also in Roman culture.
And then also, you know, that until 1871,
Germany was called Holy Roman Empire of German Nations.
So there's a direct lineage between Rome, Karl the Great and then Germany and then also Prussia.
So that part of history has always really interested me.
And the Romans used a currency called the Aureus, which was a gold-backed currency.
And towards the 2nd and 3rd century Antedius, so in the year 200 to 300,
they started to merge other metals into the currency like silver and copper and so forth.
they were basically debasing the currency and as a result of that land rose in value.
So that dynamic of land going up in value as currency debasement occurs has been happening
also for thousands of years but we reached a tipping point where it hasn't come down
back to its utility value and there's something called maybe you are aware of it.
A friend of mine last year actually here at the Honey Badger conference told me about
the 18 year property cycle.
So within Lend, like in Bitcoin, we have four-year cycles because Bitcoin is scarce, meaning if more people want Bitcoin, yes, we'll go to speculative frenzies, we'll go through bubbles, but at some point we find a higher low and then the price starts moving up from there again, which is a four-year cycle.
In land, you have a similar cycle, but it's 18 years.
And that cycle has also existed before the advent of fiat money.
So because land is scarce, it goes up in value, and then it goes through a speculative frenzy,
and it goes back in value.
And you can go throughout history, throughout different jurisdictions.
The book that I was reading went through the United States in particular, and it showed
how the 18-year property cycle pretty much fits in into the last 400 years of the American
real estate market, both in the East and in the West.
But now Bitcoin breaks through that 18-year property cycle because the monetary premium that's locked in land can go away now because it can flow into Bitcoin.
That's fascinating.
I wonder what drove the 18 years.
It's obviously something to do with how long people lived and how long it took to have almost a generation.
It's true.
That is like a generation.
Yeah, that's like a generation, actually.
And it must be that something to do with I'm passing my land onto my, or now my son or daughter is old enough to be a business person.
So they're going to buy land at this point.
It's going to pump, you know, it's going to pump from that point.
I don't know.
That's absolutely fascinating.
Just a couple of things.
We didn't mention why Japan has an interesting.
Oh, sorry.
I mean, you can do it real quick because it is a quick answer.
But you please step in as well.
Well, no, I just think because of the nature of the land and earthquakes, by law, you have to rebuild houses in Japan every certain number of years.
Is it 35 or 60 or something like that?
I'm not aware how fast you have to do it.
what I'm aware of and maybe that also works in the the fact that there you have earthquakes is
that basically real estate does not serve as a store of value in Japan and because of that
there's little value in the buildings and people must see it as as it being
good with utility values so that's what I've been told when somebody moves in
they usually deconstruct the building because it's pretty cheap to build
and that that's like the dynamic that i was told causes that but i don't know if i learned this
because there's been a number of people on social media buying properties in japan recently and
they're like a hundred like it was a four thousand dollars five thousand dollars for a very beautiful
looking three-bedroom house and when i then i looked into it because i and i'm pretty sure
that by law you have to rebuild a house every certain amount of time so they're literally built
to take down okay which is obviously part of the reason why they have very little you know asset
value as well because they're a liability they are liable and you have the demographic change
in japan like in any western or industrialized nation over time as automation increases people
have less children and if there's also wealth increases people are less inclined to have to
have children right so in japan you have a decreasing population meaning you have an
over surplus of housing. That's why I was in, I think it was in November, 2023. I went to Japan
for the Nostra conference and I met the Bitcoiner down there as well. And he told me the same thing.
So he bought a property in Japan with his family. He moved from the, from the U S I think. And the
Japanese government basically sells you the property for very little with the obligation of
you may having to maintain a building because there's no one else that would take it because
of a declining population.
In the Japanese, they're very,
they want to protect their culture.
They don't like immigration.
So in the UK and in Germany,
we have the same issue,
but people say, okay,
instead of housing coming back down
to its utility value,
we let people from somewhere else
move into the buildings.
Then we produce the money.
We say it's social housing
and we pay the rent
and that's a way to drive up
the cost of housing.
It's actually kind of a scheme
to drive up the cost of housing.
In the Japanese, they don't do that.
because they are very...
The Japanese like their culture.
I'm not an expert on Japanese.
It's a very unique culture as well.
Assimilating into Japanese culture is relatively difficult,
I think, compared to a lot of Western cultures anyway.
It's very specific and very, very, very specific.
Yeah, it's almost like German used to be
until, let's say, the First World War under the Prussians, right?
Because the Prussians, who were until 1871,
the Austrians and the Prussians were always fighting who is the strongest German nation
state, right? Because there were various German nation states at the time. By winning the war
against France in 1871 under Bismarck, the Russians, sorry, the Russians, the Prussians
took control of Germany. And in Japan, the emperor, even when they lost the Second World War,
the emperor was still respected by the people. Whereas Wilhelm, for example, was not respected
by the Germans anymore until today.
Germans have very little respect for their heritage,
but the Japanese have always stayed within their heritage,
and they've done mistakes culturally as well,
just like the Germans,
because being proud of your heritage
sometimes can lead to thinking of being,
like a supremacy type of thinking,
which both of these nation states,
both of these cultures went through.
But the Japanese, they still respect their ways.
The Germans do not,
so they don't care about preserving their culture.
So then immigration is used as a way to drive up property prices.
And in Japan, that doesn't work.
So property prices are declining,
except in areas like Tokyo and other metropolitan areas
where you have demand.
But generally speaking, in Japan,
housing is not used as a store of value since the late 80s.
When Japan went to this real estate bubble,
they went to rampant rates of inflation.
but housing collapsed and it never came back up and that's something that we can also expect in
the western world now because the western world has been able to elevate property prices until now
but now the western societies have reached a tipping point where the local population
is so negatively affected by the rising cost of housing because of that that i think the political
class will not be able to maintain that system there will be change in politics
and that change in politics also if you're a property investor will lead to properties losing
value which is but that's not a good political look either i think excuse me most political parties
um are trying their hardest not to let property prices go down because we've built a whole culture
around property being a store of value. And I think there's still a lot more they can do
to print money and fund housing. I don't know. I mean, we should probably talk about that,
but just about the future and whether or not you envisage some kind of a collapse or whatever.
But I just want to ask another couple of questions. The way you've described it,
and it's really helped me actually, is you've basically described Bitcoin as digital real estate.
Okay. And as a result, I know many people who are doing the real estate play with Bitcoin,
which is you own some collateral. Previously, it would have been a big building,
and you borrow against it and the price of the building rises through inflation So you just keep refinancing it And you keep generating an income from it over time And people are now doing that with Bitcoin
And even now, companies are rising to service individuals rather than industries and corporations.
We see that now. Let's say you're a Bitcoiner from 2015 or something. You might well be sitting
on a big enough stack to actually make that play and live off it. Are you into that idea
or do you think that has a future or is that the way to go? It's not a very cypherpunk
way of living if you think about it. It's leveraging your pristine asset to just get
the shitcoin and spend it. But what do you think about that as a method to use Bitcoin,
as a utility of it?
First of all, it's a rational, economically sound decision.
If you want to do it or not, that's your subjective decision.
If you'll ask me, coming from the real estate sector,
of course, understanding Bitcoin has come from a place of what I've known.
What I personally have known is outperform the rate of monetary inflation,
hedge against it, build a collateral base, and then leverage the balance sheet.
That's how I was taught.
And so within that mindset, Bitcoin as digital real estate, meaning being near perfect money,
which means you can spend it because people will accept it because they know it keeps its purchasing power
and it grows in purchasing power.
So it's a great store of value, which makes it good collateral.
How you want to deal with it is up to you.
But I believe that, and I very much agree with the fact that somebody's saying that if you start using Bitcoin as real estate within the existing parameters of both the fiat system and Bitcoin, you do kind of feed the fiat beast because you are participating in the Cantillon effect, which means whoever's closest to the money printer benefits and whoever's the furthest away loses because the savings are being devalued.
But then the question is, and I've been thought about this a lot, and I respect everybody's opinion.
I really do.
I respect people who say, no, that's not for me.
I respect people that say, I'm going to build a treasury company and I'm going to do it the right way.
Because I've been thinking, you said it's not within the cypherpunk ethos.
And then the question is, what is the cypherpunk ethos?
It's not me to tell anybody what the cypherpunk ethos is.
so um i think as an entrepreneur the question becomes if you if you spend a dollar what are
you spending that right because every dollar is that our whole system is based on that and then
you just have have to ask yourself how much do i want to go into debt how much is the system into
debt and how much is me going into debt going to affect the overall system probably very little
and if we all do it at the same time what what is that going to to to bring well i don't know
that's a speculative attack that pure shard described in 2014 it took the world 11 years
to figure it out but i've been sitting for quite some time and also before sharing my thoughts
publicly and i've been thinking like that all the time because obviously in 2020 i think michael
say like a burst onto the stage and he was started talking about bitcoin as collateral and no no
and i thought wow he's talking about bitcoin like i've been talking about real estate uh
right he did even call it digital real estate at one point i think i he sure he calls it digital
property i think but it's the same thing i think he also surely called it digital real estate i
know that surfer jim for example wrote a great article called bitcoin is digital real estate
that helped me because i read that article i started uh to listen to sailor and then i was
sitting there and I was sitting in my office. I was like, wow, this is like a digital real estate
place. So I started to move like that immediately. I started to incorporate Bitcoin with our company
structure. We had actually like some financial difficulties over the past two to three years,
not like extensively, but any real estate business have. If somebody tells you that didn't,
they rely on my opinion, right? So what we did and the way I was able to maneuver is that I used
Bitcoin as a capital base to lend against because interest rates went up. So then the question is,
are you able to refinance a building that you finance at 1% at 5%?
No, because you're going to go bust.
But you want to keep the business alive because you're feeding yourself,
you're feeding your family, you're feeding other people.
So I started using Bitcoin as collateral to lend against
and keep the business alive and survive and feed my family.
So then I actually kind of think, you know, I want to feed my family.
So I do it in a way where it's most beneficial for the world.
that's why I also think okay if you use bitcoin as collateral you might as well share that idea
with other people by also alluding to the risks because right now we're sitting here bitcoin is
above it's 15 to 20 000 bottom it had in the bear market so at that point of time
I would have maybe suggested to think about the opportunity of using bitcoin as collateral
at this point of time I'd be way more cautious because bitcoin will drop again and then you have
to be able to sustain that job and i also want to say that if you are someone who does not believe
in paying taxes because this is i think also a fundamental question if you run a business that
pays taxes you are feeding the fiat beast you are if you have to do it because you have been
building a business while building the business you have become consciously aware of the negative
effects of the fiat system you can't just stop doing the business so you still have to work with
that and if you work in real estate and you've reached a certain scale so we have built around
100 000 square meters over the past 10 years and if you operate on that scale it's basically a debt
balance sheet play and i i wasn't aware of that so in order for this business to survive you must
incorporate bitcoin as collateral and if you don't you basically you basically die so for me
if you ask me it has become a question of survival and then the ethical question is something that i
think about in the back of my mind and i'm very careful about what i share because i agree with
what you're saying in an ideal world you can just save in bitcoin and focus on your craft
especially as an individual you can imagine as a as a company or as a corporation
and with a lot of other people at stake um it's a difficult decision to make yeah and
like you say what else are you going to do you you you let your business go bust or you leverage
what you've got in the form of that yeah i mean it was just a thought because i've just noticed
I think the reason why all these companies that are allowing you to borrow against your Bitcoin are kind of starting to appear, there's lots of them, is because of where we are.
If you look back, if you think about it, the average person who's, if you've been DCAing into Bitcoin, just the average person, if you can track back and say you go back to 2016, you've probably got quite a lot of money by now.
you're probably at that point where you could potentially leverage some of it to give yourself
an income but if you go back yeah if you go back to 2020 that's not true someone like sailor sure
if you're bunging in 10 million dollars at a time fine but if you're a normal person and you were
stacking you know a few thousand you know a few thousand every now and then or 10 000 a year or
something if you go back far enough you can see that right now when there was quite an influx of
people in 2016 2017 those people are probably in the point where they may have more than a million
quite realistically even 10 million and that's at 10 million dollars worth of bitcoin that play
makes a lot more sense because you can you can you can just use a very small amount of it basically
you don't whereas if you own a hundred thousand dollars worth of bitcoin it's probably not a good
idea to to borrow 50 grand yeah you're not going to last very long and you're not going to be able
do it for very many years but but but i see that that's kind of that's why now all that stuff is
becoming much more popular because there's more demand for it basically one i mean 100 percent
three years ago i did it was a german uh podcast but i did the german podcast called a bitcoin
digital real estate 2.0 and i laid out a whole plan but bitcoin at the point was at 20 000 so
i'm not going to repeat what i said there but i laid out a whole plan of how to buy bitcoin
lent against it tax-free never having to work again and you use bitcoin as digital real estate
to create a place for yourself where you can become independent of the the fiat system and i do
find it very interesting that all these companies are now coming into existence and they're following
um sailors playbook right but at the moment i a bit cautious because we at a different point in the cycle I know a lot of new people usually comment at this point in the cycle and i would suggest to stack wait till the next bear market
and then start to operate strategies like that if you want if you don't want to don't do it right but
it's the natural progression of bitcoin as near perfect money or this is the last cycle
I was thinking about it.
You might find yourself in a dodgy situation as you, it gets to a million dollars and you're
still waiting for a bear market.
I mean, I know every, every four years people say, this is the super cycle or this is it
now.
It's just going to go up.
But I, I have limited understanding, let's say of markets, but I have been watching the
Bitcoin market for a very long time.
And I can say that according to me, there's been a change in attitude to the price. And you can see that now. And it obviously corresponds to larger chunks of capital coming in.
the last sort of year or so, the price, the way the price has been rising has been different
to the previous cycles. It's more of a, I think I heard someone describe it. It's very similar to
the way ETFs go up in price. Obviously, we have an ETF now, a very large one indeed, you know.
So there is a little bit more credence to the idea that maybe the traditional structure of the
Bitcoin market and its cycles might have changed this time. And it might be that it just stair steps
up forever now because there's so much capital coming in. I don't know. You could argue it.
Yeah, I think actually it's very, I mean, a lot of people that I really respect and that are much
much smarter than me and much more successful argue that as well.
Do they?
Yeah, a lot of people.
Oh, right. I didn't know that.
But I, to be honest with you, you know, two things.
First of all, I try to operate my life and my business in a way where I never have to sell anything to be able to withstand an 80% drawdown.
So that's because I've been thinking about this a lot over the past couple of days.
And I came to the conclusion, Leon, you are wasting your thoughts.
You have 24 hours a day.
Think about your business.
Think about your family.
thinking about buying more Bitcoin rather than what is the market going to do? Because if you
understand Bitcoin and you understand that, yes, it can go down 80%, but over time it goes up,
it actually doesn't matter what the price is doing as long as you just keep accumulating,
keep accumulating, keep accumulating and protect yourself from an 80% drawdown.
And then I was talking with a friend of mine yesterday, Scala, who was also very much within
the, I'd say, Austrian scene.
I mean, with Austrian, I mean the Austrian School of Economics.
And he was also saying, and I agree that from a praxeological viewpoint, so if you start
to analyze human behavior and human action, the only reason why Bitcoin can go up is because
it goes down.
Any system that does not wash out leverage has to collapse.
And the Bitcoin price is not objective.
It's subjective and it's based on different subjective preferences and perception.
And somebody might think Bitcoin will go to 500,000 and somebody is shorting Bitcoin.
And the truth is somewhere in the middle.
And that is the reason why Bitcoin has to come down a priori based on the experience
that people always misprice and misjudge both the past, the present and the future.
And they'll always do that.
And because of that, there will be a point, an infliction point, where enough people within the market will have misjudged both the price and their personal position, either in the market or within the company they operate in.
And that misjudgment will then be penalized by the market by a drawdown.
And only the people that value Bitcoin for more than it is worth will stay.
And then they will drive up the price higher.
So for this asset to go up in price, it needs to go down.
Yeah, unless everyone understands it.
Yeah, but they don't.
Yeah, but it is something that you understand to a degree in the end.
No matter who you are, you understand that it's a way –
the more you get in contact with the effects of the fiat system,
like particularly inflation, the more you notice what things are good to have and what things aren't
good to have. No matter whether you don't have to be an economist to know that, you know, if you
own a painting or a bit of antique furniture in your house, it's going up in price. The price of
it's going up. You think, great, you know. So you're more likely when you're out shopping,
you're more likely if you've got, oh yeah, let's get that, because there's this added advantage that
not only can i sit on this chair but i know that it's actually when i come to sell it when my
children don't want it anymore it's actually worth some money so there's there will be this
general understanding i think because there already is the general understanding that
inflation is an increase in the money supply for example that general understanding is seeping into
into common conversations i don't know if you've noticed this it's it's talked about in those terms
more. It used to be people said, oh, prices are going up, therefore we've got inflation.
You know, it's like no one understood anything about this. But now youngsters get it. You know,
your average 18 year old has heard that on Robin Hood doing a bit of trading or whatever, they kind
of started to understand a few economic principles that really were hidden from the world for a very
long time. Even like the, you know, the leverage, the asset play that real estate people have done,
it's been like a hidden secret, hasn't it, really, for many, many years. And now, thanks to the
internet and TikTok and all kinds of stuff, people understand, wow, that's how a lot of rich people
stayed rich. And I was the idiot putting my money in the bank or buying something we have in the UK
called premium bonds or buying you know buying you know what i mean or buying shares in british
telecom that go up hardly anything and you know that what the public were told about investing and
doing things with your money and what people who were who knew what they were doing who all sort of
like kept it a little secret in a way between them because there wasn't so much of a free
transfer of information around you know but i so first of all i don't know i have no idea right i
we don't know about the future but i think it's an interesting conversation because i was sitting
with a few youngsters so to say who are studying right now in their early 20s i think they were
from 19 till 21 and what you said was true because none of them started to argue with me about bitcoin
everyone's like oh yeah bitcoin is the stove value 100 but they were all leveraging their
bitcoin to trade solana meme coins so that's a fiat thought though yeah that's a short but that's
that's how they all think that's how they think okay so so so so like it's like very few people
think like you and me but but over time presumably as the culture change the culture will change
what you only if they are penalized like if these boys for they will be won't they yeah
through the bear market right okay so okay but in the end i suppose yeah i i i agree with you i think
that the the bitcoin's a really fascinating thing in its entirety because it's a forcing function
in cultural change which is bizarre when you think about it because when most people enter
first hear about bitcoin well if you were lucky it was because of cypherpunks if you weren't as
lucky it was because the price was going up um but very few people really probably started
adopting Bitcoin because they thought it was going to change the cultural fabric of the whole world,
which is basically it, I think. That's what it is. It's going to, you could argue, I mean,
it sounds a bit stupid when I say it, but it's going to usher in a new, a kind of like new
Renaissance architecture buildings by taking away the sort of the premium on things being used as
money. That's all it is. It's like taking this one thing and saying, right, now this is money,
everything else, let's see what the value of that is. Let's see how humans value that,
as the Austrians would say. How much do we really value these things now that
they're being used in a real way? They're not being used in this distorted way, which is like
buying it because I think it's going to store my value. But you could easily argue that that's the
place we're going.
You know, I mean, it does sound a bit like, oh yeah, listen to this guy, there's a new
renaissance coming or whatever, but I don't know, prove me wrong.
Yes.
No, I agree with you.
Maybe we could say two things.
Maybe we've been in a bull market for 15 years.
True.
And we be in a bull market for the next 15 years but we just have to manage the way we operate within that market And we just have to expect drawdowns that are important to build resilience Because the difference between Bitcoin and the fiat system is nobody controls arbitrarily speaking nobody controls the supply of Bitcoin
So if Bitcoin goes down, it goes down and then has the positive effect of penalizing, for example, the boys that I really like that I just talked about.
that were margining their Bitcoin to trade Zolana meme coins.
Yes, they do understand Bitcoin is a better store of value
than anything that exists in the physical world,
but there are still young kids that just want to speculate,
and they do it on Zolana, and almost every 20-year-old that I talk to
that is into Bitcoin is also into Zolana meme coins,
except the hardcore Bitcoinos, of course.
Are they all losing money?
Most of them are losing money, but it's an addiction, right?
It's a very small percentage of people that can make money trading, right?
Yes, yes.
Especially on meme coins.
I mean, it's basically like a gamble, really.
It's not, I mean, you're either inside a trade or you're just 100% gambling, you know, which is a bit of a buzz, I'm sure.
It's like releasing a shoe.
If you are Nike and you're releasing a shoe, you're making a lot of money.
If you're a reseller of the shoe and you're getting it for a cheap price, you're also making a lot of money.
If you're the collector who buys the shoe, you're not making any money.
A meme coin is almost like that, just in a digital form, right?
So if you create it and if you are part of the early crowd, you'll make money with it similar to a shoe.
But there's no monetary use case within it.
But what I do want to say is, and I think you describe it like beautifully because Bitcoin pushes us to the next level by penalizing bad behavior.
And also talking about myself, if Bitcoin would have gone from zero to 100 from the moment I got in, I probably would be like a very bad person.
because the bear markets really taught me a lot of lessons.
Don't go into, like in the early days,
don't go into other coins,
don't leave your coins on exchanges,
don't over leverage.
Like all these lessons I learned through bear markets.
Oh, and then that's what the cycle is.
It's people learning those lessons.
Part of the cycle, yeah.
But it is the cycle.
It is the cycle, yeah.
Because you losing on leverage
is what's causing the stair-stepping price.
Yes.
Yeah.
So it's almost like Bitcoin doesn't,
a bull market does not exist without a bear market.
There is no bull market without a bear market.
It's a very, that's fiat.
Because in fiat, as soon as that happens,
and people should learn,
the government, because they want to protect their interests,
create money to protect certain institutions,
individuals, SF classes, so forth.
So the market never learns.
So it's not resilient.
That's why we have the boom and bust cycles.
Right.
So if taking that into the future then, in the distant future, that is a renaissance.
Yes.
Because people no longer leverage at that point.
Everyone in the market has learned the lesson through pain, basically.
Because no one, and even the government has learned the lesson, because they're now defunded themselves.
Pretty much, when you think about it.
That's what they're doing right now, actually.
kind of funny to watch well they are but but it's i mean i've i thought i think about this a lot
and i'm not sure how the government ever lets go of it's this power that it has to to basically
well create money ask someone to buy its debt you know here's a bond and if you won't buy it
and your company won't buy it well the central bank will so let's you know that's that's the
biggest power on the planet really, especially if you're the US or some, you know, you can do
anything. You can literally do anything. You can invade Iraq for 10 years and it costs trillions
of dollars. And actually you don't even really notice, well, you don't notice anything. People
that use dollars obviously notice an inflationary pressure and all this kind of stuff. But really
it's the final boss. I mean, who's going to give that power up? I know theoretically,
they don't even give it up. There's a forcing function. The forcing function of Bitcoin,
one of them, is to join the network. You either join it or you don't. There's no alternative.
And if you join it, you follow the rules. So you either join it or you don't. When you're in the
network, you either follow the rules or you don't. If you don't follow the rules,
you're not using bitcoin follow the rules you're not using bitcoin so it's very primordial you know
and and once you're following the rules you can't print your own money you have to add value and
everybody knows governments don't create their own don't don't create value i mean other i mean they
they they create money but they don't actually create a value like they have to demand it from
you in the form of tax, or they have to persuade you to lend them money, which is obviously what
they'll have to do under a Bitcoin standard. And who's going to lend the government Bitcoin? I
don't know. That's a really interesting conversation as well, how that dynamic is
going to change. Yeah. Anyway, look, we've been talking for a long time. Can I ask you one more
question? Because we didn't even talk about free cities. And I know you actually know something
about free cities but i think talking about i mean i talk a lot about free cities on this podcast
obviously but real estate's a great um topic of conversation because so many people are involved
in it especially people who you know like and i don't even mean people who use it as a business
just everyone owning your own house is a big deal so we've done that but tell me what you know about
free cities and and and see if you can link it to the real estate play yes sure i mean what do i
know about free cities i know about i mean i like say private cities yeah that's a better one free
cities is a bit more of an umbrella term now for a lot of things but you you've basically studied
with somebody who was the former um ceo of the free cities foundation which i didn't know until
now yes so you but that back then it was more the private city model that a free private city which
is titus gable's idea of um i mean everyone should know this but i better quickly say it
you create a place which has independence.
If you want to join it, you have to sign a contract to be there.
So you don't have a political system.
You don't have voting.
You have a contract.
And that contract says this is what you can and can't do.
If you follow it, you stay.
If you don't, you might be reprimanded or even asked to leave.
And if you don't like it, you go to another free city, which is –
But the world should be, kind of.
Well, I mean, and you're German.
you know there was a the hansiatic league i'm from hamburg by the way right okay so you know the
the history of those kind of ideas yeah no i really like it i also growing up uh i am very
much aware of the hansiatic um league hansiatic league and and the idea of free cities and uh
i mean if you'll ask me what's the ideal model like that's the ideal model basically it's the it's
the city, the government, the municipality, or the jurisdiction, whatever it is, will be,
being a service provider and providing a service to you. And I think that if they can't extort money
from you, that's what they have to do. And I do like the idea and I do follow people, Rahim especially.
I mean, I have a lot of respect for Rahim. He's very knowledgeable. I personally, if you ask me,
Maybe at this point in time, what is more important to me, living in a private city or accumulating Bitcoin, I'd rather accumulate Bitcoin now and then decide where I want to move.
So the mobility that Bitcoin gives, I think, is good for the individual to then decide where to live, because that's actually one of the main questions that I'm asking myself.
I think that a lot of my friends are asking themselves, where do I want to live?
this question was not as important before the internet and before bitcoin with the internet
we've been able to travel more and with bitcoin we've been able to also have our wealth mobile
and if we go back into the sovereign individual thesis just the fact that we can say like f you
i don't agree with your rules and regulations i'm moving on should create competition amongst
nation states but also cities to provide the best service possible to their citizens so if you ask me
like what is the free city movement like i would expect them to like kind of bring that into reality
to create um habitus and places for individuals and families to live to prosper to thrive
to freely live out their their dreams and create their own sort of reality like that's kind of like
the take I'm having on it.
You're making me really bullish on Free Cities actually, just talking about it.
Because when you add it to what we've all just been talking about,
It does work. I mean, everything we've just spoken about and even the fact that
the current age is the age in which we're most mobile. I mean, when you think about
the competitive nature of governance, it works with that. It works with mobility. Without mobility,
it doesn't work at all. And that's kind of the system we've come from, you know,
traveling to moving from one country to another, even say a hundred years ago,
hardly anyone did it yeah no and and in fact in 100 years ago moving from where i live to london
which is i can drive it in four hours that was a big deal that was like but now people commute that
and people go to dubai for the weekend so so we we really do live in that time the the the signals
are there that we live in this time where we can move around so yeah of course we
competitive governance should now rise because the market being created for it You know I mean and when you add that to Bitcoin and everything you just said about it demonetizing you know I known the theory that
Bitcoin demonetizes various assets for a long time, but you're describing it actually in reality,
and you are the guy who works in an industry in which it's happening. Right. So it's really
happening and when you piece all these pieces the jigsaw together it's very bullish for the whole
free cities movement it's bullish for individuals it's bullish for everyone who's who's thinking
about these kind of things and i agree with you that in the last say four or five years i know so
many people i mean since covid probably so many people thinking about where do i want to live
And there no doubt that the states around the world are now trying they going to try and squash this exit taxes movement licenses you name it You can see that that all going to come because they never want to compete The state never instinctively competes It tries to legislate
That's the system. It needs you so much now to fund it or lend it money, give it taxes or lend
it money it needs you it's going to put a wall up to stop you going not stop you coming in
and um yeah i mean it's true we're in that age it's great yeah i mean it's going to be it's going
to be pretty crazy though um because it's all very well i mean i've got uh i'm going to talk
about this later with i've got another three guests today but i want to talk about property
rights um because that's the final boss property rights in the digital world now we understand it's
It's very simple.
Property rights in the real world,
that's a whole different thing.
Yeah you need a legal system to enforce it Even that you know who got the biggest gun You know I don know that for another conversation yeah leon it been a great conversation i i really appreciate you speaking
and i love hearing i love a good expert i think you're an expert on property because you've
actually been living it for how long 30 years consciously i mean like 28 years yeah but that's
that's that's you've done you've put the 10 000 hours in and it's interesting to hear you say that
your see your choices at this particular point in history because um and you say a lot of other
people have started to make these same choices because the thesis is another the thesis is being
proven again the bitcoin thesis is being proven in another realm so thanks for coming in and
thanks for sharing all your wisdom mate thanks for having me really i enjoyed the conversation as well
.