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Welcome to the Free Cities podcast. My name is Timothy Allen and this is the official podcast

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of the Free Cities Foundation.

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Hello and welcome to this episode number 144 of the Free Cities podcast.

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Brought to you as always by Veritas Villages.

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Veritas Villages are off-grid, energy-self-sufficient, luxury communities in Latin America

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designed especially for freedom lovers just like you.

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Bitcoin is accepted at all villages, including for the purchase of property.

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But you already know that, don't you?

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Because I say that every week.

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you probably know where to find more info as well www.ecovillages.life forward slash free cities

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patrick hebert the creator of veritas villages will be speaking this year at the wonderful free

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cities conference yes only about two months away now for our conference and to be honest

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how can i put this if you are listening to this podcast which you obviously are

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and you're someone who's mobile, then according to me at least, you owe it to yourself to come

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to this conference. It is the year's best gathering of Free Cities people. If you're involved

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in the scene or just curious or if you're pitching an idea, whatever, you should come

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to Prague for this. This is the meat space epicenter for all this stuff that we talk about

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on the pod and the great news is that in my experience at least the community is still small

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enough that you can mix with everyone at the conference you can talk to whoever you want

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i've never had anyone that didn't have the time of day to speak and you get to interact with the

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people who are actually working on all these projects i'll be there of course i look forward

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to this one every year not least because it's the time that I get to see all the great friends

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and colleagues that I have acquired so fortunately since becoming involved in this movement and of

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course I normally record 21 interviews in seven days three a day for seven days it's amazing

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my brain is exploding by the end of it obviously and in the event the hope and the positivity

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is palpable see you there anyway there's a web address if you want tickets freecitiesconference.com

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or one word freecitiesconference.com right today's guest leon vancom is a veteran real estate

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developer who has somewhat seen the light on property and the state of the world in particular

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its financial system and he's very candid with his beliefs about the future of the real estate

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markets. Now I know many of you own real estate. If you own property or your business is in property

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I would say that this could be an important episode for you to ponder over. Here's what AI

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I made of it. Leon shares his journey from growing up in his family's real estate and construction

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business to discovering Austrian economics and Bitcoin, framing his disillusionment with property

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management and the distortions caused by monetary expansion. He critiques the widespread belief that

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real estate is a safe investment, arguing that its monetary premium is misplaced in a digital economy.

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he warns that a shift towards utility-based pricing threatens the global financial system

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and insists property developers must adapt now he outlines how the real estate industry will be

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turned into a service-oriented industry while enabling innovations like bitcoin-based reserves

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and proof-of-work architecture i'm a big fan of that the conversation concludes with optimism

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about Bitcoin's role in strengthening resilience, transforming property markets,

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and even enabling competitive governance models through free cities. And Leon's a veteran of the

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property business. So he's someone to listen to. I certainly did. Coincidentally, he also studied

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and still studies, sometimes Austrian economics, under Rahim Tarzadegan, who was the former CEO

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of the Free Cities Foundation before Peter Young joined. I only actually discovered that when

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he arrived at the studio. Anyway, he's got a phenomenal take on the property industry and

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one that should be listened to as far as I'm concerned. Quick addendum to the conversation,

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something i need to clarify i was slightly wrong in our discussion it's not actually the law

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in japan that houses must be rebuilt every 30 years but it kind of looks that way because of

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how the system works so i was wrong about the law but i was right about the way it plays out

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basically for tax and mortgage purposes japanese homes especially the wooden ones are assumed

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to lose almost all their value in about 30 years after which the land still has value but the

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building is considered worthless now the reasons are strict building codes earthquake safety energy

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efficiency etc buyers prefer new builds rather than refitting old ones and social preference to

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newness is valued more highly than preservation the result is as i said many houses are demolished

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and rebuilt after 20 to 30 years even if structurally sound so it's not mandated by law

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but it's driven by tax policy market preference and safety codes there you go look into that one

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if you want to know more right thanks to all our wonderful subscribers and please if you are a value

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for value listener you can pledge just six bucks a month for the subscriber benefits that we offer

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speaking of which a new bonus episode will be out next week so look out for that one and many thanks

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to everyone that supports this show i fully appreciate you right time to challenge your

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attitude towards your property portfolio or lack of in my case make sure you're comfortable this

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one might sting a little but as always just sit back relax and enjoy my conversation with

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Leon Vancombe

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and it turns out you you actually studied under Raheem is that right yes right that's that's

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an incredible start because he used to be the CEO of the Free Cities Foundation. You know that,

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don't you? Wow. So did he introduce you to any of that stuff or was it more Austrian economics?

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Because that's what he's originally best known for, right?

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Both. So I learned about Rahim through a friend and then I started studying with him at the point,

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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.

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I've already been familiar with the concept of free cities but obviously through his teaching

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I've been able to grasp the concept of of freedom generally speaking also also the Austrian school

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of thought and the effect that the Bitcoin will most likely have on the way that we we live and

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and build and work so that helped me okay right this is this is good it's probably the best thing

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might be then to just set the scene a little bit with who you are and what what i know you through

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the bitcoin scene because you've been talking a lot about real estate and bitcoin you're a real

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estate guy yes yes right through and through like maybe you could introduce yourself then for

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everyone else yeah sure sure sure so i got introduced into real estate because that's

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the family business so i grew up on construction sites we've been in the business of of construction

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and then with 19 I went to the UK and I studied philosophy and business management

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and that's where I learned about Austrian economics, the Austrian school of thought

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and Bitcoin as well.

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In London?

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In Bau.

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It's not a hotbed of Austrian economics.

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I'm always surprised when anyone learns about Austrian economics at university or college

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because...

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Yeah, it wasn't at university, sorry.

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It was while being at university.

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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

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very rare like often sometimes you hear of people that grew up in eastern europe sometimes you hear

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that they knew about austrian economics but it's one of those things that's um it's like hidden

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from people almost really yeah so you were lucky then but that well it was reddit reddit was the

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reason but yeah the internet to be honest with you i'm very thankful for the internet for sure i

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learned about bitcoin because people were using it it was a topic at university at the time i mean

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also wikileaks was a big topic at the time so people were talking about it not just at university

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but also in the media and i just tried to pay attention to what's going on around me and i

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picked up on bitcoin and at the same time i picked on up on ludwig von mises and then i just started

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going down the rabbit hole.

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And what about the property side of your life then?

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You're still a property developer?

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I mean by trade, yes.

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Right now, if you'd ask me what do I do day to day, Bitcoin has become, I think, 50% of

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my focus.

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I'm still active in property development and once you start the development, as you know,

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it takes a lot of time.

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So some of the developments have been ongoing for three to five years.

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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.

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We usually manage the property.

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So I'm also in property management, which is a headache and which makes me appreciate Bitcoin even more.

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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.

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and the negative effects of the monetary expansion on the property sector is it's wild i mean you're

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you're very aware of it i know and it's not just a tenant that's negatively affected it's also the

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property developer well let's let's go there then let's give i know that property is one of those

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investments that people really trust. At a certain age, let's say, probably around my age especially,

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still to date, if you asked one of my friends, the non-Bitcoiners, if you asked one of them,

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you've just inherited some money from somebody, what do you do with it? They were like, I'll buy

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a property. For me, that's complete nonsense. I wouldn't. You're a property developer,

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a that's that's a separate thing but for me i would never do that now not not not understanding

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that you could park it in bitcoin very simply and easily with a good rate of return i suppose you

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would call it a rate of return but also with no hassle and that's one of the things i see about

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property that i'll tell you an interesting story this is a slightly different angle on this whole

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thing but i've um i don't i only own one property which is our our house and i've done the classic

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thing of i bought i borrowed money once after the first time i never borrowed again i managed to pay

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off my mortgage and then we renovated properties it got bigger and bigger and bigger and we've ended

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up now we two years ago we bought what i considered to be the last one you know but it does need

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doing up but an interesting things happen to me um since i've been in this house for the first time

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i've started noticing it's a liability not to me and and i'm not saying necessarily from a financial

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standpoint i think about some kind of uh wealth tax that might appear soon are they going to wealth

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tax my property? Am I going to suddenly have to start paying a few 10,000 pounds to the government

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each year because the value of my property is going up even though I'm living in it? Something

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like that. And I've noticed I've changed. My mindset has changed. I no longer trust property.

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And obviously there's a much better place for me to part my capital. If I did, it would be Bitcoin,

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for example. But it's a slightly different take on yours, I think. I think yours is more,

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you're not you're not worried when you when you analyze the property market and

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and compare it to bitcoin you're not thinking about the state

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taxing properties are you're more thinking about just the simple fact

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that if you look on paper um putting your money into bitcoin is just a

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better bet than buying a property is that right

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no i mean i share the same thought process i think the same i mean i go

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through the same thoughts i've i mean i'll go to various stages

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But I have the same line of thinking.

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So I don't believe that putting money into real estate is a good investment.

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I do not think that there's any societal benefit of us investing into property.

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And that's something I did not understand 10 years ago, of course.

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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.

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and I was of the opinion that inflation is the natural state of the economy, right?

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But learning about Bitcoin, experiencing Bitcoin, holding Bitcoin over time,

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learning about the Austrian School of Economics,

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I started to understand what land really is valued on, which is the utility value.

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There's a difference, of course, when we talk about land,

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because there's agricultural capacity, so farmland, and then there's property.

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And property serves both as shelter, as a place of, you know, you can use it to produce,

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you can use it as an event space, for concerts or whatever,

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but there's very little use for real estate as money.

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So the monetary premium that sits in real estate is completely senseless.

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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.

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and that creates a lot of problems.

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So our line of thinking is very, very similar.

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But what I'm sharing mostly with the public is,

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number one, it's my thought process

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because I think it can help other property developers

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understand why Bitcoin is the better store of value.

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And then I also think that,

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let's assume 100 years from now,

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the monetary premium that sits in real estate

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has flown into Bitcoin.

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There are two questions that arise.

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How are we going to manage that change?

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because I do not think the state should be in charge of providing living spaces.

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I think that should be done from the private sector.

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So incorporating Bitcoin into property development, property management,

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knowing that it is a superior store value,

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I think gives the ability to continuously be productive

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and produce adequate living spaces

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and also provide businesses with office spaces, so to say.

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So that's kind of how I'm thinking about it.

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And then secondly, sorry, just the last thought is,

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if that happens, what is going to happen afterwards?

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Let's say real estate is based and priced on its utility value

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on a Bitcoin standard.

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How do you then deal with property?

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That's just like an interesting thought to have, right?

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Yeah, that was just about to ask you, actually.

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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.

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I'll give you an example.

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I bought an old derelict farm in the middle of Wales once, many years ago, and I paid £70,000 for it.

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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.

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It came with a number of acres, but I could have bought that house for the price of the land.

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The house had absolutely no value.

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I think now it's probably worth about £750,000.

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So from £3,000 to £750,000 is ridiculous.

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I don't own it anymore.

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I sold it many years ago.

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I think it more than trebled in price after I sold it.

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And I didn't do anything to it.

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I didn't even do it up.

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It was still derelict.

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I never got around to fixing it up.

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But that's a really astonishingly ridiculous increase in value, $3,000 to $750.

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Almost like Bitcoin.

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Well, yeah, of course.

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So my question anyway about if this is true, and I think it is, that the price of real estate

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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

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What happens to property developers?

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What happens to the state of the market?

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Obviously, everything would trend back to utility value.

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But what about people like yourself?

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Would people pursue property developments anymore if it didn't make them enough money?

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I mean, I hope not.

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Because to be very honest with you, at the moment, the market is oversaturated.

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And to be very honest with you, it's not just...

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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.

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people also use it as collateral, right?

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People lend against their real estate.

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This is true for households, wealthy individuals,

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even nation states, insurance companies, and so forth.

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So the existing system has no interest

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in real estate being priced on its utility value

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because that would mean that the bedrock

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of the global financial system,

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because next to the 10-year US treasury

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and other treasuries,

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real estate really is the bedrock

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of the global financial system.

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If it would go down in value,

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the system would collapse. So I think that what we're talking about is going to happen in parallel.

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So the rise of Bitcoin is going to happen in parallel with chaos in the existing system,

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right? This makes Bitcoin thrive. Bitcoin was built for chaos. Real estate was not.

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So I can't really say what is going to happen in real estate. But if you are in property

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development and you do not understand what is happening, you're going out of business.

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that's that's that's what it is it's the same uh as operating a retail store let's say on a

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on a london high street in the 90s not being aware of the internet or operating shopping centers not

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being aware of e-commerce right we're living in a digitalized world and people want to store their

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their productivity digitally and not in a house and you and that's a good thing because at the

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moment, yes, working in property development means you are benefiting from what we just described.

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But if you really think about humanity as a whole, there's nothing positive in houses going up in

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value constantly because it increases the cost of living. That's just if we talk about the

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socio-economical effects of what we are talking about, right? But also from a business aspect,

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If you ask me as a Bitcoiner, as an investor as well, Bitcoin is saving, real estate is investing.

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And now that Bitcoin exists, you don't need to invest anymore.

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You can just save in Bitcoin.

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But if you do want to invest for whatever reason, you need to do it based on using Bitcoin as a unit of account.

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because if you work in property development and your property rises in nominal value,

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meaning it rises in the value that the fiat currency that you operate in, it's based on.

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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.

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You live in Germany, the property you own over time goes up in euro with monetary debasement, right?

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It's not actually the property goes up in value, it's that the currency it is measured in is being debased.

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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.

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You do understand that you need to expose yourself to Bitcoin if you want to be a successful investor.

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If you do not engage with Bitcoin as an entrepreneur, you're almost failing, in my opinion.

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What about people that do offer a legitimate service in property development?

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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.

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This is a good thing.

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Yeah, it's a great service.

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Same with, you could say, commercial real estate in many senses.

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I know the price of commercial real estate is all over.

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Well, I had a conversation with someone recently about what was happening to commercial real estate in the US.

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It's ridiculous.

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He said exactly the same thing as you.

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He said, no one's going to let it crash.

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Because when it crashes, that's the end of this paradigm as we know it.

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But what happens to those people that do want to renovate property?

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If they're not making as good a return as parking their money in Bitcoin, would they still choose to do the renovation?

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do you think i suppose because they're they're imagining they're going to be generating income

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continuously i mean would you as a property developer would will you carry on in the future

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yes and no so you i obviously understand that it's better if you own real estate in germany

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holding it for 10 years means you can sell it tax-free if you live in a property you can sell

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it tax-free after two years and if you don't live in a property but you operate it as a as a manager

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or as a developer, you can sell the property tax-free after 10 years.

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So if you have a portfolio, there's two options for you now.

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First option is you sell the properties after 10 years.

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You put the money into Bitcoin because holding Bitcoin after 12 months

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also then becomes tax-free in Germany.

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So if you hold Bitcoin after 12 months, you do want to sell it,

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it would be tax-free, right?

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So you could sell the properties that you own for over 10 years, buy Bitcoin, wait 12

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months, you'll never have to pay taxes, you don't even feed the bees.

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The second option is, and that's what some companies are doing now, if you want to stay

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active in real estate development because you like it, because you think you have a competitive

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edge or knowledge that allows you to outperform other market actors, you could obviously group

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the properties that you own, take the company public, that's what MetaPlanet has done in

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Japan become a so-called Bitcoin Treasury company, right?

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But my root, because I come from, let's say, my roots are within the cypherpunk ethos,

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I do very much find interest in what the Bitcoin Treasury companies are doing.

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I recently wrote a long report on MetaPlanet.

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I also wrote a long report on strategy, because what they're doing is they're leveraging their

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balance sheet.

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That is the play that I personally know being a real estate developer.

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insurance companies and real estate developers are actually leveraging their balance sheet.

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That's what they're doing. So that's the same thing that strategy is doing now and meta planet

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is doing. But saying you want to take a private road, right? Let's say you want to stay true to

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the cypherpunk ethos because you choose to. You can just sell off the properties, buy Bitcoin with

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it. And if you do want to stay in real estate development and the real estate business,

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offer a service to the market.

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You can consult people.

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And if you are good at constructing buildings

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and somebody gives you capital,

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you could become the partner

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that brings in zero money.

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But maybe you have contacts to a bank.

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You organize the loan.

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You have a capital partner

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that provides the equity.

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And then you start with the project.

305
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So now you're being paid for your knowledge.

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You're being paid for your service.

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and I think that structure overall is the structure that I could very much also imagine on a Bitcoin

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standard because what is a Bitcoin standard right it means different things for different people

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today there are people that don't use the internet there are people that don't use mobile phones

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so we can assume that also in the future people maybe some people won't use Bitcoin so not

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everybody will use Bitcoin but Bitcoin will be I think what treasuries and real estate are today

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the bedrock of the global financial system, collateral people lend against,

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and potentially it's used as currency itself, or there are other currencies and other types of money,

314
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e-cash tokens, for example, like Cashew or Feddy that are being issued with Bitcoin as the base, right?

315
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And then society operates on that.

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And real estate then becomes a service because the service that you provide to the market is housing,

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shelter or a place to produce a place to think a place to record a podcast things like that

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so the service of uh of providing uh housing to the market i think that's what ludwig von mises

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called originary interest as an entrepreneur you take risk you build something then you rent it out

320
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and the surplus that's the originary interest that's what you receive for for doing that right

321
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That would be the same on a Bitcoin standard.

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But the business model of buying as much real estate as you can,

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leveraging that with a low interest,

324
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because that also is dependent on the interest rate.

325
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With interest rates above 3%,

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the real estate business model that existed since 2008 fails.

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Is that right?

328
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Yeah.

329
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Above 3%?

330
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Yes.

331
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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

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The Japanese central bank raised interest rates now.

333
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But in China and Japan, the housing market has been inflated to levels that we haven't seen in Europe yet.

334
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The Japanese housing market was inflated in the 80s to an extent it was not able to recover.

335
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till today and the Chinese real estate market is going through a similar phase

336
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right now because they have been pushing interest rates down whereas in Europe

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and in the US even though historically speaking interest rates as you know are

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actually still very low because historically interest rates around 10 to

339
00:28:50,860 --> 00:28:55,600
15 percent were actually the average so right now we have interest rates for

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construction loans sitting between three to five percent and that margin does not

341
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allowed to make money because the think about it like that if you build a

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property let's say you have a 5% yield on an annual basis but the cost of

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capital is also 5% what's the point of doing it right so it needs to be

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worthwhile taken on that and then building a property because if I take on

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money for 5% so the cost of capital is 5% I build a property and it has a 5%

346
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Now excluding leverage, right?

347
00:29:33,240 --> 00:29:36,940
We can also talk about the leverage effect, but there's no money to be made.

348
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Whereas Strategy, for example, or MetaPlanet, they are also operating on a balance sheet,

349
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right?

350
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But they can take money for 10% interest and buy Bitcoin, which grows in purchasing power

351
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on average 50% a year.

352
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So that arbitrage effect is huge, it's 40%.

353
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But in the real estate market, if interest rates don't go below 3% and you make, let's

354
00:30:03,120 --> 00:30:10,180
say, 3% annualized in growth, there's no arbitrage to be made.

355
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You could argue though that the Bitcoin arbitrage that MetaPlanet are doing, for example,

356
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won't last.

357
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And that's a huge amount at the moment.

358
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But I would say that's because we're at a certain point in the adoption curve of Bitcoin

359
00:30:25,020 --> 00:30:26,920
that means that you can do that.

360
00:30:27,040 --> 00:30:27,600
Yeah, yeah, so so.

361
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I don't know what it'll settle out at eventually.

362
00:30:31,800 --> 00:30:33,020
It might be interesting to see

363
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because it would hopefully be the free market rate.

364
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One would expect it

365
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because Bitcoin really is a free market at the moment.

366
00:30:41,940 --> 00:30:42,080
Yeah, yeah.

367
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And it would be a good,

368
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we'll be able to use it as a lesson

369
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for what really happens

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when a large group of people all decide

371
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on how much it should cost to borrow money

372
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or how much they should get to lend it.

373
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But I've never heard that before.

374
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So the play you're talking about is,

375
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what about when people use their property as collateral

376
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to then buy more property?

377
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Is that 3% borrowing rates?

378
00:31:13,560 --> 00:31:14,620
That applies there as well.

379
00:31:14,660 --> 00:31:15,740
Yeah, it would still count

380
00:31:15,740 --> 00:31:19,140
because what MetaPlanet and Strategy are doing right now,

381
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that's what real estate investors have been doing since 1971.

382
00:31:22,160 --> 00:31:30,280
won. And the positive effect of these companies doing it on Bitcoin is you can think of it whatever

383
00:31:30,280 --> 00:31:34,240
you want. You can think it's gambling. You can think it's degenerate, but it doesn't drive up

384
00:31:34,240 --> 00:31:38,540
the cost of housing. That's good, right? So Bitcoin is the most speculative asset. It's

385
00:31:38,540 --> 00:31:43,500
more speculative than the housing market, but that's fine because there's no negative effects

386
00:31:43,500 --> 00:31:47,840
on the housing market. For example, because people can save and speculate on Bitcoin. They

387
00:31:47,840 --> 00:31:52,780
don't have to invest into housing to outperform inflation no negative secondary order effects for

388
00:31:52,780 --> 00:31:59,060
the housing market but this can go on i think the treasury play if it's done well i mean can go on

389
00:31:59,060 --> 00:32:05,200
for the next 50 to 60 years if the if the collateral basis managed properly but then the question is

390
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what does this mean for housing what does this mean for property development because it's in my

391
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blood it's in my soul i grew up on construction site so yes the asset class has gone through a

392
00:32:15,820 --> 00:32:22,240
process of financialization and right now we're seeing it being drained of its monetary premium

393
00:32:22,240 --> 00:32:26,580
right and actually it's happening in real time and the bitcoin treasury companies are actually

394
00:32:26,580 --> 00:32:33,460
accelerating it because people now can think okay right so for the past 15 years people had the

395
00:32:33,460 --> 00:32:38,700
option to invest into bitcoin instead of putting their money into real estate but some people do

396
00:32:38,700 --> 00:32:46,460
not understand that an asset that does not generate cash flow by itself will outperform

397
00:32:46,460 --> 00:32:51,220
an investment they can make that has cash flow because people have been drilled into thinking

398
00:32:51,220 --> 00:32:55,760
they need to outperform the rate of monetary inflation by with cash flow. But if there's an

399
00:32:55,760 --> 00:33:00,320
asset class like Bitcoin where the rate of inflation is decreasing over time, it's inflationary,

400
00:33:00,740 --> 00:33:06,040
you don't have to generate cash flow, you just have to hodl it because the money that's being

401
00:33:06,040 --> 00:33:11,700
produced in the fiat system and the productivity of humanity will cause it to go up in value more

402
00:33:11,700 --> 00:33:16,420
than any cash flow based business can generate cash flow right but people want cash flow it's

403
00:33:16,420 --> 00:33:21,660
just a line of thinking so now you have these companies that provide cash flow which is

404
00:33:21,660 --> 00:33:29,120
apparently a good thing for people that have a fiat type of of mindset so i've talked with many

405
00:33:29,120 --> 00:33:35,380
of my friends that work in real estate and they did not buy bitcoin but now they are they want to

406
00:33:35,380 --> 00:33:40,480
buy MicroStrategy stock, they're buying MetaPlanet stock, they're buying their fixed income products.

407
00:33:41,020 --> 00:33:45,120
And I'm thinking to myself, guys, are you crazy? I've been telling you for Bitcoin for 10 years.

408
00:33:45,520 --> 00:33:51,920
But I came to understand this, that it very much is an arbitrage because there's an information

409
00:33:51,920 --> 00:33:56,720
asymmetry existing between you and me and the rest of the world. And the rest of the world is

410
00:33:56,720 --> 00:34:03,580
willing to receive 10% distribution on a year-by-year basis and giving their money to someone

411
00:34:03,580 --> 00:34:06,340
who can buy an asset that appreciates in value 50% of time.

412
00:34:06,760 --> 00:34:07,840
It's crazy, right?

413
00:34:07,900 --> 00:34:08,980
But that's the way it is.

414
00:34:09,880 --> 00:34:16,960
And then, so this also means that the demonetization of real estate and land, that includes farmland,

415
00:34:16,960 --> 00:34:25,340
is happening right now with these treasury companies absorbing the speculative, I think,

416
00:34:26,580 --> 00:34:32,880
capital that would otherwise be directed towards fixed income, yes, but also real estate.

417
00:34:32,880 --> 00:34:38,540
because a large portion of the capital that's being allocated to real estate is being allocated

418
00:34:38,540 --> 00:34:40,040
to real estate to generate cash flow.

419
00:34:40,480 --> 00:34:45,340
I'd say maybe from my personal experience, maybe 20, 30 percent, even more of the people

420
00:34:45,340 --> 00:34:49,040
that I talk to that buy real estate, they do it to generate cash flow.

421
00:34:50,080 --> 00:34:51,580
And now they can do it without that.

422
00:34:52,120 --> 00:34:57,020
And all of these things have positive effects on the housing market because it eases the

423
00:34:57,020 --> 00:35:01,620
pressure, less people have to invest into real estate, but it increases the pressure

424
00:35:01,620 --> 00:35:03,340
if you work in property development.

425
00:35:04,000 --> 00:35:05,920
And if you don't want to take your company public,

426
00:35:06,040 --> 00:35:07,960
if you don't want to become a Bitcoin treasury company,

427
00:35:08,440 --> 00:35:11,180
if you don't want to sell all the assets off that you hold,

428
00:35:11,700 --> 00:35:13,080
you need to incorporate Bitcoin.

429
00:35:13,200 --> 00:35:15,380
And that's what I'm sharing right now with a lot of people

430
00:35:15,380 --> 00:35:17,460
because for me, it's very easy to say,

431
00:35:17,660 --> 00:35:18,820
sell the property by Bitcoin.

432
00:35:18,920 --> 00:35:23,340
If you'll ask me, I happily own Bitcoin, nothing else, right?

433
00:35:23,560 --> 00:35:26,180
But I have to deal with other people

434
00:35:26,180 --> 00:35:28,140
that I run a business with.

435
00:35:28,700 --> 00:35:31,380
And I'm also aware of the fact that other people

436
00:35:31,380 --> 00:35:36,240
understand things at different times whenever they need to understand it, right?

437
00:35:36,540 --> 00:35:37,840
So it's a process.

438
00:35:38,400 --> 00:35:42,480
And Bitcoin can be integrated into real estate gradually over time

439
00:35:42,480 --> 00:35:47,020
in order to help everybody that is involved in the capital structure

440
00:35:47,020 --> 00:35:49,780
that is real estate, from the bank to the tenant to the landlord

441
00:35:49,780 --> 00:35:54,920
to the capital partner to understand what is happening and benefit from it.

442
00:35:55,720 --> 00:36:00,280
Isn't it true, though, that people who want to buy a treasury,

443
00:36:00,280 --> 00:36:22,220
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%.

444
00:36:22,220 --> 00:36:29,880
So yeah, they're paying a very large premium for the peace of mind of not understanding Bitcoin, really.

445
00:36:30,000 --> 00:36:32,960
Like you say, it's an asymmetry of understanding.

446
00:36:33,700 --> 00:36:37,800
That's worth, that asymmetry is worth, it just shows how much it's worth.

447
00:36:38,040 --> 00:36:40,480
It just shows that you should go out and learn about Bitcoin.

448
00:36:40,700 --> 00:36:41,740
Really, you should.

449
00:36:42,180 --> 00:36:51,260
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.

450
00:36:51,260 --> 00:36:55,400
You really do need to study it because it's worth a lot of money to you.

451
00:36:55,400 --> 00:36:56,940
It is worth a lot of money.

452
00:36:57,100 --> 00:37:02,460
And the opportunity cost is increasing over time because Bitcoin kind of changed the time value of money.

453
00:37:03,080 --> 00:37:04,320
And I'll tell you what I mean by that.

454
00:37:04,360 --> 00:37:07,640
Because I'm very well aware of the negative effects of leverage in real estate.

455
00:37:07,760 --> 00:37:09,080
I've seen projects go bust.

456
00:37:09,600 --> 00:37:15,420
I've seen companies go from zero to 100 back to zero in a very short time frame, right?

457
00:37:15,420 --> 00:37:23,760
And so in the fiat world, money loses value over time.

458
00:37:23,760 --> 00:37:26,100
There's a negative time value of money.

459
00:37:26,100 --> 00:37:27,740
With Bitcoin, it's the opposite.

460
00:37:27,740 --> 00:37:29,940
There's a positive time value of money because over time,

461
00:37:30,000 --> 00:37:32,620
time Bitcoin increases in purchasing power.

462
00:37:33,320 --> 00:37:39,240
And once you understand that money has a lot of functions and people talk about money being

463
00:37:39,240 --> 00:37:42,580
a medium of exchange and a store of value in a unit of account a lot.

464
00:37:43,360 --> 00:37:48,400
But I think it's also important to understand that money is collateral and it always has

465
00:37:48,400 --> 00:37:48,620
been.

466
00:37:48,620 --> 00:37:56,020
So let's say we're living on a gold standard 1871 in Germany, let's say.

467
00:37:56,800 --> 00:37:58,960
Prussia just won the war against France.

468
00:37:58,960 --> 00:38:02,040
Bismarck unified the Holy German Empire

469
00:38:02,040 --> 00:38:03,900
he created a central bank

470
00:38:03,900 --> 00:38:06,800
highly centralized Prussian government

471
00:38:06,800 --> 00:38:09,220
but they did have a gold standard at the time

472
00:38:09,220 --> 00:38:10,520
and

473
00:38:10,520 --> 00:38:14,500
so even at that time

474
00:38:14,500 --> 00:38:16,800
if you would own gold

475
00:38:16,800 --> 00:38:19,000
and you're a young family father

476
00:38:19,000 --> 00:38:20,320
you want to start a business

477
00:38:20,320 --> 00:38:22,040
you wouldn't spend all your savings

478
00:38:22,040 --> 00:38:23,860
because the savings that you have

479
00:38:23,860 --> 00:38:26,000
also guarantee that you can deal with

480
00:38:26,000 --> 00:38:27,400
the uncertainty of the future

481
00:38:27,400 --> 00:38:32,120
you can take care of your children and so forth so you would most likely go to an investor

482
00:38:32,120 --> 00:38:39,600
you'll ask for money and for that money maybe he receives equity in your business right so the

483
00:38:39,600 --> 00:38:46,640
dynamic of using money as collateral is a dynamic that exists always on a fiat standard and on a

484
00:38:46,640 --> 00:38:53,140
bitcoin standard on a fiat standard though the money that you receive loses value over time so

485
00:38:53,140 --> 00:38:58,560
there's an urge to consistently outperform the rate of monetary inflation. Whereas on a Bitcoin

486
00:38:58,560 --> 00:39:04,660
standard, if you start a business and then with the money that you receive, let's assume you buy

487
00:39:04,660 --> 00:39:10,700
Bitcoin immediately, you start the business, you, I must take out a random number here, $10,000,

488
00:39:11,200 --> 00:39:17,120
right? So you have $10,000, you start a business and you immediately buy Bitcoin worth $2,000 in

489
00:39:17,120 --> 00:39:23,600
your business. So in theory, you could do nothing for five years. And just because Bitcoin year on

490
00:39:23,600 --> 00:39:29,080
year grows in purchasing power, you would already outperform all your competition. And then you

491
00:39:29,080 --> 00:39:35,320
could start thinking properly and strategize of how to run your business. And that's why Bitcoin

492
00:39:35,320 --> 00:39:41,300
as collateral, Bitcoin as capital, Bitcoin as an anchor in a business, generally speaking,

493
00:39:41,300 --> 00:39:45,520
is how you should, in my opinion, run any business.

494
00:39:46,060 --> 00:39:50,000
And the Bitcoin treasury companies now just arbitrage the information asymmetry

495
00:39:50,000 --> 00:39:54,020
because they're publicly listed, but also on a personal level

496
00:39:54,020 --> 00:39:59,120
and in the private sector, any business should operate like that.

497
00:39:59,280 --> 00:40:03,680
So when I'm saying like that, I'm not saying any business should take on excessive leverage.

498
00:40:03,680 --> 00:40:09,100
I'm saying any business should anchor its decision-making around Bitcoin.

499
00:40:09,100 --> 00:40:15,940
I think detractors would say that's all very well, but on year two, you may be in the red.

500
00:40:16,540 --> 00:40:16,980
Yeah, sure.

501
00:40:16,980 --> 00:40:19,000
Year three, maybe year five, sure.

502
00:40:19,980 --> 00:40:28,440
And it's difficult to make business decisions if you're a forced seller of Bitcoin at a loss, say, for example.

503
00:40:28,440 --> 00:40:29,520
But why would you need to sell?

504
00:40:29,600 --> 00:40:33,180
That's why I'm saying don't over excessively engage in leverage.

505
00:40:33,380 --> 00:40:35,160
Don't put all your money to Bitcoin.

506
00:40:35,160 --> 00:40:37,260
Just anchor your doing.

507
00:40:37,260 --> 00:40:44,900
whatever you do anchored in Bitcoin in a way where you never have to sell the Bitcoin that you anchor your idea in.

508
00:40:45,400 --> 00:40:47,560
And then you provide a service at the same time.

509
00:40:47,740 --> 00:40:49,380
So with real estate, that's how-

510
00:40:49,380 --> 00:40:49,560
I see what you mean.

511
00:40:49,620 --> 00:40:49,940
I see what you mean.

512
00:40:50,200 --> 00:40:52,800
It's like literally buying an apartment block or something.

513
00:40:52,920 --> 00:40:53,860
It would be the equivalent.

514
00:40:54,080 --> 00:40:55,920
Not for $2,000, obviously.

515
00:40:56,120 --> 00:41:02,600
But if you scaled it up, it would be like buying an apartment block and then continuously using it as collateral.

516
00:41:03,020 --> 00:41:04,360
You can use it as collateral.

517
00:41:04,520 --> 00:41:05,320
You don't even need to.

518
00:41:05,320 --> 00:41:08,380
You can just have it in the back of your mind that I'm not stressed.

519
00:41:08,480 --> 00:41:09,460
I don't need to do anything.

520
00:41:09,580 --> 00:41:13,760
I could just do nothing and sit here and I'd still outperform my competition.

521
00:41:13,760 --> 00:41:15,000
With that 20% though?

522
00:41:15,080 --> 00:41:16,660
Yeah, with that 20% on average.

523
00:41:16,860 --> 00:41:19,860
But then now the next question comes, how do you generate income?

524
00:41:20,080 --> 00:41:21,500
So you offer a service to the market.

525
00:41:21,620 --> 00:41:23,800
So we are still productive individuals.

526
00:41:23,800 --> 00:41:25,740
We're still productive members of society.

527
00:41:25,740 --> 00:41:27,920
I'm not saying just buy Bitcoin and sit on it.

528
00:41:28,320 --> 00:41:32,020
But if you'll ask me how should a real estate company operate

529
00:41:32,020 --> 00:41:38,140
or how should anybody operate that wants to an entrepreneur that has an idea within the real

530
00:41:38,140 --> 00:41:44,360
estate sector now that bitcoin exists and you need to start by buying bitcoin like don't start by

531
00:41:44,360 --> 00:41:49,020
doing your project and then thinking in the future you'll buy bitcoin that's like the the wrong type

532
00:41:49,020 --> 00:41:54,160
of thinking because bitcoin changed the time value of money you have to accept it you have to buy

533
00:41:54,160 --> 00:42:00,540
bitcoin first and then act don't act and then i buy bitcoin that that's how you how you acted in

534
00:42:00,540 --> 00:42:05,240
the fiat world but in bitcoin you'll you act the other way something that's just occurred to me

535
00:42:05,240 --> 00:42:11,900
as you were saying that i'm thinking about how real estate not even commercial real estate

536
00:42:11,900 --> 00:42:19,300
private real estate people will add value in the future and i'm thinking about architecture and the

537
00:42:19,300 --> 00:42:27,000
the way houses are built the the the quality of the house is that is that what's going to happen

538
00:42:27,000 --> 00:42:37,300
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.

539
00:42:37,560 --> 00:42:43,880
Certainly houses that you see getting built, you know, where I live, they go up in a month.

540
00:42:44,140 --> 00:42:44,720
It's amazing.

541
00:42:44,880 --> 00:42:48,100
And the walls are often just like they've made a paper.

542
00:42:48,400 --> 00:42:55,480
They're literally, you know, my house was built in originally in 15 something, where I live now.

543
00:42:55,480 --> 00:42:57,620
And the walls are solid stone.

544
00:42:57,820 --> 00:43:01,060
Well, there's a little gap in the middle, but they're at least a meter thick.

545
00:43:01,060 --> 00:43:01,300
Yeah.

546
00:43:01,640 --> 00:43:06,100
You know, and back then also, that house wasn't an expensive house.

547
00:43:06,220 --> 00:43:08,540
It was a rural farmhouse.

548
00:43:08,660 --> 00:43:14,700
It was probably one of the cheaper houses, which is something else I find very strange about the housing market now.

549
00:43:15,100 --> 00:43:16,640
You see this in London.

550
00:43:16,820 --> 00:43:18,860
People buy houses.

551
00:43:19,940 --> 00:43:24,960
Rich people buy houses that poor people used to live in for exorbitant amounts of money.

552
00:43:24,960 --> 00:43:43,740
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.

553
00:43:43,740 --> 00:43:55,660
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?

554
00:43:55,760 --> 00:43:59,120
You have to increase the quality of what you're building.

555
00:43:59,280 --> 00:44:02,820
So you're competing against badly built houses, essentially.

556
00:44:03,100 --> 00:44:03,700
Yes, exactly.

557
00:44:03,820 --> 00:44:06,660
Now you almost compete on interest rates.

558
00:44:06,740 --> 00:44:11,080
It's like if I can get a cheaper loan, I'll make more money.

559
00:44:11,080 --> 00:44:14,600
or if I save money on construction, I make more profit.

560
00:44:14,720 --> 00:44:19,560
So people almost compete on providing the worst service possible

561
00:44:19,560 --> 00:44:21,900
with the cheapest money they can find.

562
00:44:22,140 --> 00:44:25,000
It's actually very perverse if you do think about it.

563
00:44:25,560 --> 00:44:27,040
And maybe we can say the following.

564
00:44:27,180 --> 00:44:29,580
Real estate investing doesn't make sense anymore.

565
00:44:29,780 --> 00:44:31,960
Real estate development, though, is a business line.

566
00:44:31,980 --> 00:44:33,060
It will always make sense.

567
00:44:33,060 --> 00:44:35,260
And then you have to just adopt to the circumstances,

568
00:44:35,900 --> 00:44:39,140
integrate Bitcoin, anchor your business around Bitcoin,

569
00:44:39,140 --> 00:44:45,260
I use Bitcoin to build maintenance reserves, use Bitcoin mining to save costs on heating.

570
00:44:45,660 --> 00:44:48,700
So not just the capital structure real estate.

571
00:44:48,820 --> 00:44:53,280
When I talk about capital structure, I maybe explain what I mean and then I go into architecture

572
00:44:53,280 --> 00:44:55,600
because that's something that interests me a lot as well.

573
00:44:55,960 --> 00:44:58,800
And it kind of frustrates me at the same time.

574
00:44:59,440 --> 00:45:05,000
When I say real estate is a capital structure, I say, of course, real estate should be priced

575
00:45:05,000 --> 00:45:08,180
on its utility value, but it's been priced away from its utility value.

576
00:45:08,180 --> 00:45:19,600
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.

577
00:45:19,780 --> 00:45:23,060
And everybody is worse off on a fiat standard over time.

578
00:45:23,160 --> 00:45:26,960
Everybody, even the developers, worse off over time because eventually the system collapses.

579
00:45:27,760 --> 00:45:31,000
And what's the point in building a system that will eventually collapse?

580
00:45:31,080 --> 00:45:31,840
There's no point, right?

581
00:45:31,840 --> 00:45:42,260
So within that capital structure, the architect, I think, and also from my personal experience, loses out the most next to the tenant.

582
00:45:42,740 --> 00:45:52,580
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.

583
00:45:52,660 --> 00:45:59,360
It's a very, I'd say, negative dynamic, but that's the way it goes because you have to look at profits.

584
00:45:59,360 --> 00:46:01,780
And then the architect has no time.

585
00:46:01,960 --> 00:46:03,860
I'm sometimes sitting in meetings.

586
00:46:04,540 --> 00:46:15,860
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.

587
00:46:16,060 --> 00:46:19,740
So I'm spending a lot of my time at home in front of my computer as we do.

588
00:46:20,160 --> 00:46:24,140
But I used to attend a lot of construction meetings.

589
00:46:24,140 --> 00:46:29,140
And you have phase one to four, which is planning, and then you have phase four to nine.

590
00:46:29,360 --> 00:46:33,460
within a construction phase and 4 to 9 is the building phase.

591
00:46:33,460 --> 00:46:37,600
If you are an architect that's in charge of the construction phase,

592
00:46:37,600 --> 00:46:40,800
I feel very sorry for you because I've never seen

593
00:46:40,800 --> 00:46:45,760
that architects were able to really bring their vision into reality.

594
00:46:45,760 --> 00:46:58,280
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

595
00:46:58,280 --> 00:47:03,780
conflict or because of monetary debasement, construction costs have gone up and whatever

596
00:47:03,780 --> 00:47:06,840
was planned two or three years ago is not possible anymore.

597
00:47:06,840 --> 00:47:11,840
So maybe the architect wanted to build beautiful doors.

598
00:47:11,840 --> 00:47:13,180
He's like, no, we need simple doors.

599
00:47:13,180 --> 00:47:14,180
It's too expensive.

600
00:47:14,180 --> 00:47:17,740
Maybe the architect wanted to incorporate certain elements in the windows.

601
00:47:17,860 --> 00:47:19,240
Now we need to take these elements off.

602
00:47:19,300 --> 00:47:19,920
It's too expensive.

603
00:47:20,120 --> 00:47:24,780
That's literally the dynamic on the construction side between the investor and the architect.

604
00:47:24,960 --> 00:47:26,480
And they start to fight always.

605
00:47:26,640 --> 00:47:33,420
The investor and the architect, from my personal experience, being in real estate for almost 30 years, they always fight.

606
00:47:33,500 --> 00:47:34,620
They always end up fighting.

607
00:47:35,160 --> 00:47:36,700
And it doesn't need to be like that.

608
00:47:36,700 --> 00:47:38,080
It doesn't need to be like that.

609
00:47:38,080 --> 00:47:44,500
Because if we would live in the natural state of the market, like Jeff Booth so well explains,

610
00:47:44,860 --> 00:47:52,140
things over time would fall to the marginal cost of production because we are becoming better at producing things.

611
00:47:52,780 --> 00:47:58,140
And we are also, due to the technological process, actually we experience deflation.

612
00:47:58,300 --> 00:48:01,080
The problem is our monetary system is inflationary.

613
00:48:01,520 --> 00:48:06,900
So if we would live on a Bitcoin standard or if we would live in a world where money would be scarce,

614
00:48:06,900 --> 00:48:11,960
it would actually become cheaper to maintain buildings over time. And you would benefit

615
00:48:11,960 --> 00:48:18,760
largely from building maintenance reserves in Bitcoin. So the rental income would allow you

616
00:48:18,760 --> 00:48:23,940
to accumulate Bitcoin. That would allow you to then grow your business by just hoarding Bitcoin,

617
00:48:24,140 --> 00:48:28,340
and you wouldn't have to raise rents as well. So when this would go down over time, it would become

618
00:48:28,340 --> 00:48:32,880
cheaper to maintain buildings. And the whole dynamic in the real estate market will be flipped

619
00:48:32,880 --> 00:48:37,700
on his head and buildings will become more beautiful buildings will become a beautiful

620
00:48:37,700 --> 00:48:46,060
sorry exactly i took a photo yesterday i i you know i i like the architecture around here it's

621
00:48:46,060 --> 00:48:50,660
not too bad i've got to show you this because it's just ridiculous i walked down the street here

622
00:48:50,660 --> 00:48:55,520
there's a there's a supermarket down there and i was walking down there and there was a corner

623
00:48:55,520 --> 00:48:59,900
that was empty and they they were you know they were going to build something there so there was

624
00:48:59,900 --> 00:49:06,180
a placard there with what they're going to do and it just i just looked at it and i thought jesus

625
00:49:06,180 --> 00:49:16,700
christ look at this yeah exactly i mean look what the hell is that i mean this is the state of fear

626
00:49:16,700 --> 00:49:21,560
this is the state of the world i don't know whether i'll put i'll pop it on the thing but

627
00:49:21,560 --> 00:49:26,780
it's basically here's this corner and you think great they're going to develop it yeah and they're

628
00:49:26,780 --> 00:49:32,720
putting what looks like i don't know what it even looks like a box it looks like a cheap knockoff

629
00:49:32,720 --> 00:49:41,140
bauhaus yeah with windows like that many windows down the middle it's just so ridiculous number

630
00:49:41,140 --> 00:49:46,940
one that people even think like that i i don't mind people having strange ideas about architecture

631
00:49:46,940 --> 00:49:52,700
that's their prerogative right but that is a sociopathic building that building makes you feel

632
00:49:52,700 --> 00:50:00,240
bad feelings no i don't know who looks at that compared to looking at if you go in you know even

633
00:50:00,240 --> 00:50:05,480
this building here from the outside it's pretty beautiful and you look at it and you you see this

634
00:50:05,480 --> 00:50:11,060
avenue of of beautiful buildings and all right they're they're pretty derelict this is a

635
00:50:11,060 --> 00:50:17,280
former sort of communist air you know place so a lot of it's in bad repair but it will get better

636
00:50:17,280 --> 00:50:20,780
I used to live in Berlin, you know, in Potsdamburg.

637
00:50:21,280 --> 00:50:24,440
When I first went there, some of the buildings were still covered in bullet holes.

638
00:50:25,240 --> 00:50:30,620
Now it's like walking down the poshest streets in Germany.

639
00:50:30,720 --> 00:50:31,960
It's beautiful, you know.

640
00:50:32,500 --> 00:50:40,600
But the fact that that kind of building gets built is all down to everything you're talking about,

641
00:50:40,680 --> 00:50:45,380
which is build it as cheaply as you can with as little interest.

642
00:50:45,380 --> 00:50:53,300
because I think what was fall and foul of the fiat system is beauty. Very much so. Beauty costs,

643
00:50:53,480 --> 00:50:59,740
we know that. There's a cost to beauty. And in buildings, it's considered an excessive cost

644
00:50:59,740 --> 00:51:06,880
over utility, right? But I don't see that at all. I've renovated houses. I've built a house

645
00:51:06,880 --> 00:51:14,820
in my own house, the past one. And building a beautiful house was an important utility to me.

646
00:51:14,820 --> 00:51:26,740
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.

647
00:51:26,740 --> 00:51:34,360
you know so but but the average sort of the way the system works now utility the beauty is not

648
00:51:34,360 --> 00:51:42,420
included as a utility in any shape or form and that style of that kind of brutalist minimalist

649
00:51:42,420 --> 00:51:51,780
anti beauty style is just used because it fits into the system quite well it's cheap basically

650
00:51:51,780 --> 00:52:12,920
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.

651
00:52:12,920 --> 00:52:19,360
and then you end up with like ridiculous looking buildings but people are still looking at them

652
00:52:19,360 --> 00:52:26,660
as things of beauty and i will never i will never see that building as a thing of beauty i see it as a

653
00:52:26,660 --> 00:52:34,680
as a an infringement on on on on you know you walk past this thing and you're like jesus what

654
00:52:34,680 --> 00:52:41,580
the hell is that and why is it doing that to me it feels it feels alienated right yeah i do think

655
00:52:41,580 --> 00:52:47,540
that and a friend of mine, Kelly Lane, and who also talks about Bitcoin urbanism a lot.

656
00:52:47,540 --> 00:52:52,940
So he talks about how cities will maybe change because right now cities are mostly car centric.

657
00:52:52,940 --> 00:52:54,940
They should be pedestrian centric.

658
00:52:54,940 --> 00:52:58,980
And that also has to do with the age of standardization, I think.

659
00:52:58,980 --> 00:53:06,820
And if we look at the 1920s in Vienna, when, you know, Eugen Böhm von Barmwerk and Friedrich

660
00:53:06,820 --> 00:53:11,320
von Wieser, Karl Menger, and then Ludwig von Mises and all the other Austrian economists

661
00:53:11,320 --> 00:53:13,900
were strolling around Vienna, sitting in cafes.

662
00:53:14,320 --> 00:53:17,200
There was an architect also called Alfred Loos.

663
00:53:17,720 --> 00:53:22,700
And he came up with the idea of, you know, modernity has to do with standardizing everything

664
00:53:22,700 --> 00:53:26,000
and take everything away from the past.

665
00:53:26,100 --> 00:53:28,420
And you had art deco, art niveau before.

666
00:53:28,640 --> 00:53:29,640
So you had a development.

667
00:53:29,900 --> 00:53:34,460
So architecture was going through this development in the early 1900s of going through a standard

668
00:53:34,460 --> 00:53:35,620
of standardization.

669
00:53:35,620 --> 00:53:39,640
and similar to money and to production facilities.

670
00:53:39,880 --> 00:53:43,600
And I think people underestimate the effect the war had on architects.

671
00:53:44,300 --> 00:53:47,660
And some of the architecture that we are talking about right now,

672
00:53:47,660 --> 00:53:51,580
I think it feels so alienated because the people back then felt alienated

673
00:53:51,580 --> 00:53:56,420
due to the war, the First World War and the Second World War as well.

674
00:53:57,040 --> 00:54:01,540
So I can definitely say that some of the early Bauhaus architecture

675
00:54:01,540 --> 00:54:08,740
has something to it that, like you said, I can enjoy because it's interesting and you see somebody

676
00:54:08,740 --> 00:54:15,700
deeply thought about whatever they were doing. But it has reached a point where standardizing

677
00:54:15,700 --> 00:54:20,920
architecture, standardizing money, standardizing this has taken away the soul from buildings.

678
00:54:20,920 --> 00:54:28,000
And it's been a process that has been working and moving in parallel with the fiat system.

679
00:54:28,000 --> 00:54:35,700
and at this point it's being sold as culture because the state has a monopoly on culture

680
00:54:35,700 --> 00:54:43,580
and if you look at also most of the totalitarian authoritarian socialist dictatorships the

681
00:54:43,580 --> 00:54:49,100
intellectuals were mostly working with the state they were actually not working against the state

682
00:54:49,100 --> 00:54:56,660
so there is an intellectual class today that would argue against what you just said and they

683
00:54:56,660 --> 00:55:03,360
would argue why this building for example carries beauty and beauty is subjective as well but we do

684
00:55:03,360 --> 00:55:09,260
understand that there are some things that when you show them to children 90 of the children say

685
00:55:09,260 --> 00:55:16,460
that's beautiful 90 of the children say that's not beautiful so there is some some some objectivism

686
00:55:16,460 --> 00:55:22,140
in form and the human experience and i think why we like this building is because it's built with

687
00:55:22,140 --> 00:55:28,860
clay with wood and there are round forms this is more like nature whereas the building that you

688
00:55:28,860 --> 00:55:34,000
showed me maybe you show a picture so people see it's literally straight lines and there are no

689
00:55:34,000 --> 00:55:39,940
straight lines in nature so if you build with like something with straight lines and if also people

690
00:55:39,940 --> 00:55:46,080
spend too much time inside and don't absorb sunlight they'll get depressed over time and so

691
00:55:46,080 --> 00:55:52,320
So socialist architecture is also, by the way, a way to capture people's minds.

692
00:55:52,320 --> 00:55:59,320
If you force people to stay indoors all the time and they are not exposed to sunlight,

693
00:56:00,040 --> 00:56:04,660
it also has a negative effect on their conscious and spiritual development.

694
00:56:04,920 --> 00:56:09,780
So architecture, money, spirituality, all these things, they are also intertwined.

695
00:56:10,000 --> 00:56:19,540
I agree with you on that socialist kind of The socialist world was anti in many ways certainly in its latter stages

696
00:56:20,180 --> 00:56:26,040
And as a reflection of seeing the individual as a cog in a mechanism.

697
00:56:26,040 --> 00:56:27,140
It's the same thing.

698
00:56:28,720 --> 00:56:29,960
I'm slightly different to you.

699
00:56:30,020 --> 00:56:34,920
I think what gives architecture value is actually a proof of work, just like with Bitcoin.

700
00:56:34,920 --> 00:56:44,800
so i would value a hand created facade like walk around prague and you look at the buildings you're

701
00:56:44,800 --> 00:56:49,860
like oh my god in fact there's a building just there outside of here with intricate wooden

702
00:56:49,860 --> 00:56:56,820
carvings all over the building i mean it's totally unnecessary if you're a utilitarian it's really

703
00:56:56,820 --> 00:57:01,860
really and it's not even this isn't a posh building in any shape or form this is a sort of

704
00:57:01,860 --> 00:57:06,280
simple building but it's covered in this stuff and for me i look at that and i think yeah that's

705
00:57:06,280 --> 00:57:12,560
worth something because of the proof of work the building that i showed you earlier is the proof of

706
00:57:12,560 --> 00:57:19,200
work is is trending to nothing it's a computer and in fact it will absolutely trend to nothing

707
00:57:19,200 --> 00:57:25,960
in the end because a robot will build that kind of building and the robot won't cost much the robot

708
00:57:25,960 --> 00:57:31,440
will build other robots that won't cost much and the raw material will be the main cost of it

709
00:57:31,440 --> 00:57:43,120
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.

710
00:57:43,360 --> 00:57:45,440
So, I mean, I'm hopeful for the future.

711
00:57:45,620 --> 00:57:59,080
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.

712
00:57:59,080 --> 00:57:59,380
Yeah.

713
00:57:59,380 --> 00:58:08,260
is they always say, look, everyone in the past, during this period, people said the same thing

714
00:58:08,260 --> 00:58:14,260
about buildings. The most modern buildings, a lot of people think are uglier because they're used to

715
00:58:14,260 --> 00:58:22,260
the previous iteration of architecture. Except when I look back at the past, I think I like every

716
00:58:22,260 --> 00:58:28,980
single other type of architecture, everything. And if you go back far enough, think about

717
00:58:28,980 --> 00:58:36,020
period properties in London, for example, which have pillars. Pillars were in Greece

718
00:58:36,020 --> 00:58:43,420
a very long time ago, and they looked beautiful then. They looked beautiful in the 1800s as well.

719
00:58:43,980 --> 00:58:54,420
So I think this whole period we're going through is an absolute blip in the history of humans.

720
00:58:54,420 --> 00:58:59,260
We've rejected beauty in so many ways.

721
00:58:59,460 --> 00:59:01,780
And I think fiat is rejecting beauty.

722
00:59:01,960 --> 00:59:03,700
Fiat is rejecting value.

723
00:59:04,160 --> 00:59:06,660
It's taking away value from things.

724
00:59:07,720 --> 00:59:08,440
And meaning.

725
00:59:08,900 --> 00:59:12,020
Yes, which is the same thing as what beautiful buildings are.

726
00:59:12,080 --> 00:59:16,640
There's value and meaning in them, which it's hard to put a price on.

727
00:59:17,060 --> 00:59:20,340
I mean, you can see it in the real estate market, certainly in the UK,

728
00:59:20,520 --> 00:59:23,520
because an old building sells for more than a new building.

729
00:59:23,520 --> 00:59:25,040
I don't know whether that's the same in Germany.

730
00:59:25,420 --> 00:59:26,520
It depends how old.

731
00:59:26,760 --> 00:59:27,600
It depends how old.

732
00:59:27,680 --> 00:59:31,940
So if it's a real old building, there might be a premium on it.

733
00:59:32,040 --> 00:59:34,660
But if it's something built in the 60s or 70s…

734
00:59:34,660 --> 00:59:38,320
Sorry, I meant old as in European old, not US old.

735
00:59:39,640 --> 00:59:42,820
No, anything with what we call period features.

736
00:59:43,340 --> 00:59:44,640
Like from the Victorian age.

737
00:59:44,640 --> 00:59:46,300
Or even 1920s.

738
00:59:47,840 --> 00:59:52,220
Arts and crafts, we call those kind of buildings you get in London

739
00:59:52,220 --> 00:59:54,140
are at an absolute premium.

740
00:59:54,580 --> 00:59:55,600
Do you know what arts and crafts?

741
00:59:55,900 --> 00:59:56,200
Yes.

742
00:59:56,960 --> 00:59:58,560
1930s looking buildings, whatever.

743
00:59:59,160 --> 01:00:01,280
What distinguishes them in my mind

744
01:00:01,280 --> 01:00:02,700
is that they were built well.

745
01:00:03,420 --> 01:00:05,080
You know, the walls were thick

746
01:00:05,080 --> 01:00:07,180
and made with, you know, bricks.

747
01:00:07,640 --> 01:00:08,080
They were built to last.

748
01:00:08,260 --> 01:00:08,600
Exactly.

749
01:00:09,160 --> 01:00:12,120
But that wasn't even probably...

750
01:00:12,120 --> 01:00:14,600
The thought that a building wasn't built to last

751
01:00:14,600 --> 01:00:16,360
probably didn't even exist, did it?

752
01:00:16,360 --> 01:00:19,300
I mean, who thought that I should build a building

753
01:00:19,300 --> 01:00:21,340
with the idea that in 30 years

754
01:00:21,340 --> 01:00:24,300
I'll tear it down and build another one. Actually, they do in Japan, right?

755
01:00:24,500 --> 01:00:25,480
I was just thinking that.

756
01:00:25,720 --> 01:00:27,160
But that's very specific.

757
01:00:27,320 --> 01:00:28,140
That's very specific.

758
01:00:28,560 --> 01:00:29,860
Maybe you could explain it.

759
01:00:29,980 --> 01:00:34,780
Yeah, I mean, I can try to explain it. But I also want to say one thing that's important.

760
01:00:35,040 --> 01:00:38,900
Back then, they had slaves. Let's talk about the Greeks, for example, right?

761
01:00:41,260 --> 01:00:47,020
Culture, generally speaking, develops in times of high leisure. So when we are stressed,

762
01:00:47,020 --> 01:00:53,440
we don't have time to think about poetry, maths, art. So you can generally say that societies like

763
01:00:53,440 --> 01:01:00,720
the Sumerians, the Greeks, societies that came up with things that we still value today, they had a

764
01:01:00,720 --> 01:01:06,020
lot of time. Back in the day, people were also making use of slaves. I just have to say that

765
01:01:06,020 --> 01:01:14,100
because it's true. But today we have a technology where we can actually build cheap due to the 3D

766
01:01:14,100 --> 01:01:17,820
printing and we have a disinflationary money like Bitcoin.

767
01:01:17,820 --> 01:01:25,420
So labor over time can become cheaper, not because we force people to work for nothing,

768
01:01:25,420 --> 01:01:31,160
but because we have a money that grows in value and we have technology that we can use

769
01:01:31,160 --> 01:01:34,680
to construct and we need less human labor.

770
01:01:34,680 --> 01:01:38,920
But I have to say that it's an important point that sometimes people don't mention that also

771
01:01:38,920 --> 01:01:44,460
So labor was so cheap back in the day because people were sometimes forced to do things, right?

772
01:01:44,720 --> 01:01:51,640
But just before you go on, but even in the 1960s and 70s, though, labor was much cheaper.

773
01:01:51,900 --> 01:01:53,060
Yes, yes, yes, yes, for sure.

774
01:01:53,060 --> 01:01:54,800
But what's that then?

775
01:01:54,900 --> 01:02:04,700
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.

776
01:02:04,700 --> 01:02:23,740
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.

777
01:02:23,740 --> 01:02:25,580
But white collar jobs were.

778
01:02:26,220 --> 01:02:36,740
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.

779
01:02:36,840 --> 01:02:44,780
If you compare it to your contemporaries who work in something else that isn't working with your hands.

780
01:02:45,080 --> 01:02:46,080
So why has that happened?

781
01:02:46,560 --> 01:02:51,800
I think we value human labor again because there's so much automation that human labor becomes valuable again.

782
01:02:51,800 --> 01:02:55,200
If I understand your question correctly, that's how I think about it.

783
01:02:56,460 --> 01:02:56,800
Yeah.

784
01:02:57,460 --> 01:03:01,020
I would quite happily use a robot to build my house.

785
01:03:01,340 --> 01:03:02,960
You would, but it's not possible yet.

786
01:03:02,960 --> 01:03:03,620
It doesn't exist.

787
01:03:03,620 --> 01:03:04,680
It's not possible yet.

788
01:03:04,760 --> 01:03:08,320
So maybe in 20 years' time, that's the status quo.

789
01:03:08,420 --> 01:03:11,600
But due to regulation in Europe, it will take a long time.

790
01:03:11,720 --> 01:03:15,900
So there's already self-driving cars in some states in the US,

791
01:03:16,420 --> 01:03:18,940
but it will take time for that to happen in Europe due to regulation.

792
01:03:18,940 --> 01:03:39,080
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?

793
01:03:39,080 --> 01:04:04,560
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.

794
01:04:04,560 --> 01:04:06,460
and I agree with you

795
01:04:06,460 --> 01:04:08,900
this conversation so far has been

796
01:04:08,900 --> 01:04:10,880
I think a lot about criticizing

797
01:04:10,880 --> 01:04:12,380
the state of the world

798
01:04:12,380 --> 01:04:14,700
which is important in order to understand

799
01:04:14,700 --> 01:04:16,920
what problems we have and what the solution will be

800
01:04:16,920 --> 01:04:19,060
which is Bitcoin but once you understand

801
01:04:19,060 --> 01:04:21,140
there's Bitcoin, there's 3D

802
01:04:21,140 --> 01:04:23,340
printing, robotics, AI

803
01:04:23,340 --> 01:04:24,840
things will

804
01:04:24,840 --> 01:04:27,100
get better from here

805
01:04:27,100 --> 01:04:29,200
so I generally am very

806
01:04:29,200 --> 01:04:30,440
optimistic about the future

807
01:04:30,440 --> 01:04:33,140
and that's also why I think if you work

808
01:04:33,140 --> 01:04:33,820
in real estate

809
01:04:33,820 --> 01:04:40,060
development. If you work in real estate investment, put your money into Bitcoin.

810
01:04:40,640 --> 01:04:46,640
But if you work in real estate development, maybe take the pressure off a little bit.

811
01:04:47,420 --> 01:04:53,960
Try to give yourself a bit more time. Don't grow by growing your business. Grow your business,

812
01:04:53,960 --> 01:04:59,620
growing your Bitcoin stack. I think that's important. And you don't have to leverage

813
01:04:59,620 --> 01:05:05,160
every property that you own, you even can take out leverage, selling some of the properties,

814
01:05:05,740 --> 01:05:11,940
putting some of that money into Bitcoin, because Bitcoin will outperform any dollar or any euro

815
01:05:11,940 --> 01:05:17,000
or pound invested into real estate, including leverage, over five years.

816
01:05:18,180 --> 01:05:18,740
Currently.

817
01:05:19,140 --> 01:05:19,500
Currently.

818
01:05:19,800 --> 01:05:23,960
And I think for the next decade, for sure, that because if you think about the

819
01:05:23,960 --> 01:05:27,460
the compound annual growth rate of Bitcoin,

820
01:05:27,460 --> 01:05:30,400
it's around 70% for the past four years.

821
01:05:30,400 --> 01:05:42,720
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

822
01:05:42,720 --> 01:05:47,960
but you but i'm saying it's still around 50 to 70 percent depending on the year we're talking about

823
01:05:47,960 --> 01:05:58,700
so if we talk about so today it's uh right and we talk about uh december or november october

824
01:05:58,700 --> 01:06:03,720
of 2025 and you'll go back four years,

825
01:06:03,800 --> 01:06:05,100
you'll have a different pricing

826
01:06:05,100 --> 01:06:07,760
than if you take December, October, November,

827
01:06:07,900 --> 01:06:08,900
September of 2024

828
01:06:08,900 --> 01:06:11,420
because there's different phases in Bitcoin.

829
01:06:11,760 --> 01:06:13,500
But obviously right now looking back

830
01:06:13,500 --> 01:06:14,220
is a good time

831
01:06:14,220 --> 01:06:15,700
because we've just come from a bear mark.

832
01:06:16,180 --> 01:06:18,000
I'm very much aware of that,

833
01:06:18,040 --> 01:06:18,880
but we could even say

834
01:06:18,880 --> 01:06:20,500
if it comes down to 20, 30%.

835
01:06:20,500 --> 01:06:22,340
Let's say the compound annual growth rate

836
01:06:22,340 --> 01:06:24,300
of Bitcoin comes down to 20, 30%.

837
01:06:24,300 --> 01:06:26,500
That's a modest compound annual growth rate

838
01:06:26,500 --> 01:06:34,200
giving what it has done over the past decade that will still outperform the money you put into real

839
01:06:34,200 --> 01:06:41,660
estate including leverage including the tax advantages so just i think that that fact by

840
01:06:41,660 --> 01:06:46,460
itself also helps to just because i don't know how you feel about it i'd like to know actually

841
01:06:46,460 --> 01:06:51,460
how you feel about it also with the free cities movement the regulation right now makes it very

842
01:06:51,460 --> 01:06:58,280
very difficult to really put concepts into reality and real estate, right? How do you feel about it?

843
01:06:58,700 --> 01:07:05,060
Oh, yeah, 100%. I mean, I spoke last year to Patrick Schumacher. He works for Zaha Hadid

844
01:07:05,060 --> 01:07:11,640
Architects. He's their chief architect. And pretty much they work out in the Middle East now,

845
01:07:11,800 --> 01:07:18,280
for all intents and purposes. He said it can take... In the time that you could build design,

846
01:07:18,280 --> 01:07:24,200
get it passed and build a building in London you could have built a whole city out in the Middle

847
01:07:24,200 --> 01:07:30,680
East literally and for a fraction of the cost because that the amount of money you now have to

848
01:07:30,680 --> 01:07:40,100
park for legislation and lawyers fees and passing all the rules is astonishing it's something like

849
01:07:40,100 --> 01:07:44,800
40% or something you probably know this better than me but the amount of money that you have to

850
01:07:44,800 --> 01:07:48,840
basically spend, before you've even started constructing your house, just to pass all

851
01:07:48,840 --> 01:07:55,160
the rules and regulations is astronomical. Well, that puts a lot of people off. But then

852
01:07:55,160 --> 01:08:00,860
the actual regulations themselves, and some of them are completely idiotic, you can't

853
01:08:00,860 --> 01:08:07,480
service a whole country with one rule about the size, you know, like, I don't know, in

854
01:08:07,480 --> 01:08:14,080
In England, it's like windows have to be XYZ to do with climate change.

855
01:08:14,540 --> 01:08:16,500
Windows have to be a certain size now.

856
01:08:17,000 --> 01:08:22,960
Or even they have to be smaller, I think, because they let too much heat out if they're too big.

857
01:08:24,360 --> 01:08:26,140
Or ridiculous things like this.

858
01:08:26,140 --> 01:08:27,440
This happens a lot where I live.

859
01:08:29,100 --> 01:08:31,740
Because all the houses where I live, they're all old, very old.

860
01:08:31,800 --> 01:08:35,420
I live in an old valley full of ancient farms, basically.

861
01:08:35,420 --> 01:08:43,700
and um one of my neighbors decided she wanted to extend her house but it's it's um because they're

862
01:08:43,700 --> 01:08:49,000
so old a lot of the houses are protected so you can do things to them but you have to go through

863
01:08:49,000 --> 01:08:56,540
a lot of regulation to do so and um in the end this is just how ridiculous it is in order to

864
01:08:56,540 --> 01:09:02,160
build an extension on her house which basically looks like a almost looks like a small castle

865
01:09:02,160 --> 01:09:20,140
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.

866
01:09:20,360 --> 01:09:26,100
It had to exist separate to the building so that you knew it was an addition.

867
01:09:26,940 --> 01:09:30,320
Imagine that, a glass cube on the side of a beautiful old house.

868
01:09:30,320 --> 01:09:55,300
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.

869
01:09:55,300 --> 01:10:03,640
you know really and i've had this in building my own houses i i i previously i renovated house and

870
01:10:03,640 --> 01:10:10,280
i built a sort of office next to it and out in the countryside and stupid things like you have

871
01:10:10,280 --> 01:10:14,580
to get so many things side are signed off by building regulations you must know this you've

872
01:10:14,580 --> 01:10:20,900
hundreds of hours talking to these guys and if you accidentally lose a piece of paper or

873
01:10:20,900 --> 01:10:26,700
you can't prove that this has been signed off oh god help you yeah they'll literally say take it

874
01:10:26,700 --> 01:10:31,500
down and do it again almost like oh no you have to you have to really take care of of being in line

875
01:10:31,500 --> 01:10:38,020
with with the regulators well check this one out so for example i was told to put up a banister on

876
01:10:38,020 --> 01:10:43,580
a staircase because but then i could just take it straight down again so i could take it away but

877
01:10:43,580 --> 01:10:48,520
when they did the thing i should put this banister up because i didn't you know um i was told that

878
01:10:48,520 --> 01:10:55,480
my electricity needed my electricity wires needed to be checked because i'd forgotten and i said

879
01:10:55,480 --> 01:11:00,980
don't worry the electrician's here at the moment and he said oh no no we have to commission our own

880
01:11:00,980 --> 01:11:07,320
electrician sorry it's it's it's rules and he commissioned the same guy for about five times

881
01:11:07,320 --> 01:11:13,460
the price you know it was just like every time i had dealings with the people i was just enraged

882
01:11:13,460 --> 01:11:19,020
and now we have a rule in this was in wales at the time i was living just over the border in wales

883
01:11:19,020 --> 01:11:24,560
if you build a building now you have to put a sprinkler system in it you know like uh you know

884
01:11:24,560 --> 01:11:32,560
just to stop a fire any any building any new build any anything like imagine putting a sprinkler

885
01:11:32,560 --> 01:11:37,880
system in your house i mean number one how many houses burned down like not many right not many

886
01:11:37,880 --> 01:11:43,440
if you think about it but but how many people are going to accidentally trigger that that system

887
01:11:43,440 --> 01:11:47,960
now that every single new house has to have a complete sprinkler system in it

888
01:11:47,960 --> 01:11:51,660
to rain water down if there's a naked flame there.

889
01:11:52,240 --> 01:11:56,960
It's going to cause so much damage because people are accidentally going to do it.

890
01:11:57,260 --> 01:11:59,480
It might not even save any lives.

891
01:12:01,480 --> 01:12:06,260
I think if you also, what you've been telling me,

892
01:12:06,320 --> 01:12:09,320
if you do work in real estate, I think it really helps to understand

893
01:12:09,320 --> 01:12:15,420
most of the issues that we have in the existing monetary, financial, and political system.

894
01:12:15,420 --> 01:12:22,720
Because everything that you've been describing actually shows that it's a politically protected

895
01:12:22,720 --> 01:12:27,920
asset class because of its use as collateral in an inflationary system.

896
01:12:28,880 --> 01:12:31,880
And people can exert their power and their will onto it.

897
01:12:31,880 --> 01:12:38,180
and whether it's about the climate, immigration, monetary policy,

898
01:12:38,360 --> 01:12:42,960
all of these different aspects somehow intertwine with the real estate.

899
01:12:43,080 --> 01:12:46,180
That's why I think it's such an interesting asset class to talk about,

900
01:12:46,500 --> 01:12:49,560
to also understand the way that our monetary system works

901
01:12:49,560 --> 01:12:51,760
and also the way our political system works.

902
01:12:51,820 --> 01:12:52,780
I think that's quite interesting.

903
01:12:52,780 --> 01:12:54,360
Do you think that's by design?

904
01:12:56,620 --> 01:12:58,940
Is that an age-old thing?

905
01:12:58,940 --> 01:13:05,080
like can you go back deep into history and realize that real estate was at the heart of a lot of this

906
01:13:05,080 --> 01:13:10,440
stuff or not i mean in a way yes if you think about it the senators in rome had to own land

907
01:13:10,440 --> 01:13:17,700
so if and also in in greece most of the citizens i think people please check this i think owned land

908
01:13:17,700 --> 01:13:23,160
i don't know but i know in rome for sure if you were a senator you had to own land and the more

909
01:13:23,160 --> 01:13:29,160
land you own the more agricultural capacity the the welfare you wear so land and political power

910
01:13:29,160 --> 01:13:35,280
was always tied to each other but that is actually now dwindling because now you can own bitcoin so

911
01:13:35,280 --> 01:13:45,020
you don't need to own land to um and and also what we understand as power is changing so

912
01:13:45,020 --> 01:13:52,520
what power is for me is the ability to live a self-sovereign life and in case i need to change

913
01:13:52,520 --> 01:14:00,720
jurisdiction i can do that without being maybe negatively affected by a totalitarian government

914
01:14:00,720 --> 01:14:06,280
that's power i don't want to exert power over other people i just want to be able to live my

915
01:14:06,280 --> 01:14:11,460
life as i want to which bitcoin allows me to do because land and real estate always means you also

916
01:14:11,460 --> 01:14:16,580
need to somehow get involved into the political process because it's a political politicized

917
01:14:16,580 --> 01:14:20,800
asset class and i think this is something that has been the case for thousands of years also

918
01:14:20,800 --> 01:14:25,860
So in Japan, the shugunat system was based on people owning land.

919
01:14:26,660 --> 01:14:32,800
And also, you could go through different, also in the Inca Empire, as far as I know,

920
01:14:33,580 --> 01:14:36,580
it was also political power was also tied to owning land.

921
01:14:36,580 --> 01:14:42,480
So owning land itself, due to the ability of land to generate income, has been tied to politics.

922
01:14:42,640 --> 01:14:48,100
But what is an abnormality is that land by itself has become a commodity,

923
01:14:48,100 --> 01:14:52,420
not because of the soil that maybe is able to produce,

924
01:14:52,740 --> 01:14:55,060
but because it is scarce

925
01:14:55,060 --> 01:14:58,720
and we live in an inflationary fiat-based system.

926
01:14:58,860 --> 01:14:59,980
And that is...

927
01:15:00,000 --> 01:15:01,380
is a historical abnormality.

928
01:15:01,560 --> 01:15:03,960
So what we've seen since 1971,

929
01:15:04,680 --> 01:15:07,340
where real estate has become this monetary substitute,

930
01:15:07,660 --> 01:15:09,760
that is definitely historical abnormality.

931
01:15:10,480 --> 01:15:14,740
And I looked into, as we Bitcoiners like to do,

932
01:15:15,180 --> 01:15:17,160
obviously I'm very much interested in Rome.

933
01:15:17,280 --> 01:15:18,380
I also had Latin in school.

934
01:15:18,380 --> 01:15:20,380
So I've always been interested in Latin,

935
01:15:20,720 --> 01:15:23,340
in Latin, the language, and also in Roman culture.

936
01:15:23,540 --> 01:15:26,260
And then also, you know, that until 1871,

937
01:15:26,480 --> 01:15:29,380
Germany was called Holy Roman Empire of German Nations.

938
01:15:30,000 --> 01:15:36,520
So there's a direct lineage between Rome, Karl the Great and then Germany and then also Prussia.

939
01:15:37,240 --> 01:15:40,520
So that part of history has always really interested me.

940
01:15:40,740 --> 01:15:45,220
And the Romans used a currency called the Aureus, which was a gold-backed currency.

941
01:15:45,400 --> 01:15:52,340
And towards the 2nd and 3rd century Antedius, so in the year 200 to 300,

942
01:15:52,900 --> 01:15:57,960
they started to merge other metals into the currency like silver and copper and so forth.

943
01:15:57,960 --> 01:16:02,580
they were basically debasing the currency and as a result of that land rose in value.

944
01:16:03,140 --> 01:16:08,160
So that dynamic of land going up in value as currency debasement occurs has been happening

945
01:16:08,160 --> 01:16:12,920
also for thousands of years but we reached a tipping point where it hasn't come down

946
01:16:12,920 --> 01:16:17,260
back to its utility value and there's something called maybe you are aware of it.

947
01:16:17,640 --> 01:16:21,320
A friend of mine last year actually here at the Honey Badger conference told me about

948
01:16:21,320 --> 01:16:22,820
the 18 year property cycle.

949
01:16:22,820 --> 01:16:42,360
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.

950
01:16:42,960 --> 01:16:45,840
In land, you have a similar cycle, but it's 18 years.

951
01:16:46,200 --> 01:16:49,520
And that cycle has also existed before the advent of fiat money.

952
01:16:50,120 --> 01:16:55,320
So because land is scarce, it goes up in value, and then it goes through a speculative frenzy,

953
01:16:55,380 --> 01:16:56,400
and it goes back in value.

954
01:16:56,460 --> 01:16:59,380
And you can go throughout history, throughout different jurisdictions.

955
01:16:59,380 --> 01:17:05,080
The book that I was reading went through the United States in particular, and it showed

956
01:17:05,080 --> 01:17:09,860
how the 18-year property cycle pretty much fits in into the last 400 years of the American

957
01:17:09,860 --> 01:17:11,920
real estate market, both in the East and in the West.

958
01:17:12,360 --> 01:17:20,560
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.

959
01:17:20,940 --> 01:17:21,540
That's fascinating.

960
01:17:21,700 --> 01:17:25,300
I wonder what drove the 18 years.

961
01:17:25,380 --> 01:17:31,820
It's obviously something to do with how long people lived and how long it took to have almost a generation.

962
01:17:32,060 --> 01:17:32,320
It's true.

963
01:17:32,500 --> 01:17:33,400
That is like a generation.

964
01:17:33,400 --> 01:17:34,700
Yeah, that's like a generation, actually.

965
01:17:34,700 --> 01:17:42,800
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.

966
01:17:43,080 --> 01:17:45,300
So they're going to buy land at this point.

967
01:17:45,360 --> 01:17:48,700
It's going to pump, you know, it's going to pump from that point.

968
01:17:48,800 --> 01:17:49,040
I don't know.

969
01:17:49,080 --> 01:17:50,700
That's absolutely fascinating.

970
01:17:51,700 --> 01:17:52,980
Just a couple of things.

971
01:17:53,280 --> 01:17:55,460
We didn't mention why Japan has an interesting.

972
01:17:55,460 --> 01:17:55,840
Oh, sorry.

973
01:17:55,980 --> 01:17:59,460
I mean, you can do it real quick because it is a quick answer.

974
01:17:59,820 --> 01:18:03,140
But you please step in as well.

975
01:18:03,140 --> 01:18:17,020
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.

976
01:18:17,060 --> 01:18:19,620
Is it 35 or 60 or something like that?

977
01:18:19,620 --> 01:18:21,520
I'm not aware how fast you have to do it.

978
01:18:21,520 --> 01:18:29,140
what I'm aware of and maybe that also works in the the fact that there you have earthquakes is

979
01:18:29,140 --> 01:18:35,240
that basically real estate does not serve as a store of value in Japan and because of that

980
01:18:35,240 --> 01:18:40,040
there's little value in the buildings and people must see it as as it being

981
01:18:40,040 --> 01:18:45,620
good with utility values so that's what I've been told when somebody moves in

982
01:18:45,620 --> 01:18:49,540
they usually deconstruct the building because it's pretty cheap to build

983
01:18:49,540 --> 01:18:54,920
and that that's like the dynamic that i was told causes that but i don't know if i learned this

984
01:18:54,920 --> 01:19:01,040
because there's been a number of people on social media buying properties in japan recently and

985
01:19:01,040 --> 01:19:07,420
they're like a hundred like it was a four thousand dollars five thousand dollars for a very beautiful

986
01:19:07,420 --> 01:19:12,460
looking three-bedroom house and when i then i looked into it because i and i'm pretty sure

987
01:19:12,460 --> 01:19:17,560
that by law you have to rebuild a house every certain amount of time so they're literally built

988
01:19:17,560 --> 01:19:23,280
to take down okay which is obviously part of the reason why they have very little you know asset

989
01:19:23,280 --> 01:19:28,360
value as well because they're a liability they are liable and you have the demographic change

990
01:19:28,360 --> 01:19:35,000
in japan like in any western or industrialized nation over time as automation increases people

991
01:19:35,000 --> 01:19:41,540
have less children and if there's also wealth increases people are less inclined to have to

992
01:19:41,540 --> 01:19:45,500
have children right so in japan you have a decreasing population meaning you have an

993
01:19:45,500 --> 01:19:53,280
over surplus of housing. That's why I was in, I think it was in November, 2023. I went to Japan

994
01:19:53,280 --> 01:19:57,900
for the Nostra conference and I met the Bitcoiner down there as well. And he told me the same thing.

995
01:19:57,980 --> 01:20:03,220
So he bought a property in Japan with his family. He moved from the, from the U S I think. And the

996
01:20:03,220 --> 01:20:09,020
Japanese government basically sells you the property for very little with the obligation of

997
01:20:09,020 --> 01:20:13,080
you may having to maintain a building because there's no one else that would take it because

998
01:20:13,080 --> 01:20:14,660
of a declining population.

999
01:20:14,800 --> 01:20:16,240
In the Japanese, they're very,

1000
01:20:18,020 --> 01:20:19,240
they want to protect their culture.

1001
01:20:19,420 --> 01:20:20,420
They don't like immigration.

1002
01:20:20,780 --> 01:20:22,440
So in the UK and in Germany,

1003
01:20:22,440 --> 01:20:23,500
we have the same issue,

1004
01:20:23,600 --> 01:20:24,360
but people say, okay,

1005
01:20:24,400 --> 01:20:25,960
instead of housing coming back down

1006
01:20:25,960 --> 01:20:27,080
to its utility value,

1007
01:20:27,540 --> 01:20:29,540
we let people from somewhere else

1008
01:20:29,540 --> 01:20:30,780
move into the buildings.

1009
01:20:30,980 --> 01:20:32,700
Then we produce the money.

1010
01:20:32,920 --> 01:20:34,460
We say it's social housing

1011
01:20:34,460 --> 01:20:35,600
and we pay the rent

1012
01:20:35,600 --> 01:20:37,420
and that's a way to drive up

1013
01:20:37,420 --> 01:20:38,280
the cost of housing.

1014
01:20:38,740 --> 01:20:39,900
It's actually kind of a scheme

1015
01:20:39,900 --> 01:20:41,220
to drive up the cost of housing.

1016
01:20:41,320 --> 01:20:42,660
In the Japanese, they don't do that.

1017
01:20:43,080 --> 01:20:45,480
because they are very...

1018
01:20:45,480 --> 01:20:46,860
The Japanese like their culture.

1019
01:20:47,420 --> 01:20:49,140
I'm not an expert on Japanese.

1020
01:20:49,140 --> 01:20:50,440
It's a very unique culture as well.

1021
01:20:51,720 --> 01:20:54,780
Assimilating into Japanese culture is relatively difficult,

1022
01:20:54,860 --> 01:20:58,160
I think, compared to a lot of Western cultures anyway.

1023
01:20:58,380 --> 01:21:01,920
It's very specific and very, very, very specific.

1024
01:21:02,140 --> 01:21:03,960
Yeah, it's almost like German used to be

1025
01:21:03,960 --> 01:21:06,840
until, let's say, the First World War under the Prussians, right?

1026
01:21:06,840 --> 01:21:11,160
Because the Prussians, who were until 1871,

1027
01:21:11,160 --> 01:21:18,320
the Austrians and the Prussians were always fighting who is the strongest German nation

1028
01:21:18,320 --> 01:21:24,180
state, right? Because there were various German nation states at the time. By winning the war

1029
01:21:24,180 --> 01:21:28,700
against France in 1871 under Bismarck, the Russians, sorry, the Russians, the Prussians

1030
01:21:28,700 --> 01:21:35,240
took control of Germany. And in Japan, the emperor, even when they lost the Second World War,

1031
01:21:35,560 --> 01:21:40,740
the emperor was still respected by the people. Whereas Wilhelm, for example, was not respected

1032
01:21:40,740 --> 01:21:42,700
by the Germans anymore until today.

1033
01:21:43,300 --> 01:21:45,220
Germans have very little respect for their heritage,

1034
01:21:45,220 --> 01:21:49,740
but the Japanese have always stayed within their heritage,

1035
01:21:50,240 --> 01:21:52,800
and they've done mistakes culturally as well,

1036
01:21:52,900 --> 01:21:53,820
just like the Germans,

1037
01:21:53,940 --> 01:21:55,900
because being proud of your heritage

1038
01:21:55,900 --> 01:21:58,600
sometimes can lead to thinking of being,

1039
01:21:59,020 --> 01:22:00,720
like a supremacy type of thinking,

1040
01:22:01,180 --> 01:22:03,000
which both of these nation states,

1041
01:22:03,120 --> 01:22:04,400
both of these cultures went through.

1042
01:22:04,820 --> 01:22:07,500
But the Japanese, they still respect their ways.

1043
01:22:08,040 --> 01:22:09,000
The Germans do not,

1044
01:22:09,000 --> 01:22:11,540
so they don't care about preserving their culture.

1045
01:22:11,740 --> 01:22:15,680
So then immigration is used as a way to drive up property prices.

1046
01:22:16,320 --> 01:22:17,560
And in Japan, that doesn't work.

1047
01:22:17,640 --> 01:22:19,380
So property prices are declining,

1048
01:22:19,500 --> 01:22:23,660
except in areas like Tokyo and other metropolitan areas

1049
01:22:23,660 --> 01:22:24,640
where you have demand.

1050
01:22:25,080 --> 01:22:27,000
But generally speaking, in Japan,

1051
01:22:27,620 --> 01:22:30,980
housing is not used as a store of value since the late 80s.

1052
01:22:31,380 --> 01:22:33,580
When Japan went to this real estate bubble,

1053
01:22:33,580 --> 01:22:37,100
they went to rampant rates of inflation.

1054
01:22:37,100 --> 01:22:43,100
but housing collapsed and it never came back up and that's something that we can also expect in

1055
01:22:43,100 --> 01:22:50,260
the western world now because the western world has been able to elevate property prices until now

1056
01:22:50,260 --> 01:22:56,000
but now the western societies have reached a tipping point where the local population

1057
01:22:56,000 --> 01:23:02,780
is so negatively affected by the rising cost of housing because of that that i think the political

1058
01:23:02,780 --> 01:23:07,160
class will not be able to maintain that system there will be change in politics

1059
01:23:07,160 --> 01:23:13,420
and that change in politics also if you're a property investor will lead to properties losing

1060
01:23:13,420 --> 01:23:21,780
value which is but that's not a good political look either i think excuse me most political parties

1061
01:23:21,780 --> 01:23:28,220
um are trying their hardest not to let property prices go down because we've built a whole culture

1062
01:23:28,220 --> 01:23:36,480
around property being a store of value. And I think there's still a lot more they can do

1063
01:23:36,480 --> 01:23:43,720
to print money and fund housing. I don't know. I mean, we should probably talk about that,

1064
01:23:43,780 --> 01:23:48,720
but just about the future and whether or not you envisage some kind of a collapse or whatever.

1065
01:23:48,840 --> 01:23:54,280
But I just want to ask another couple of questions. The way you've described it,

1066
01:23:54,280 --> 01:24:01,120
and it's really helped me actually, is you've basically described Bitcoin as digital real estate.

1067
01:24:01,120 --> 01:24:10,060
Okay. And as a result, I know many people who are doing the real estate play with Bitcoin,

1068
01:24:10,220 --> 01:24:14,860
which is you own some collateral. Previously, it would have been a big building,

1069
01:24:15,080 --> 01:24:29,794
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

1070
01:24:29,794 --> 01:24:37,914
And even now, companies are rising to service individuals rather than industries and corporations.

1071
01:24:38,254 --> 01:24:44,414
We see that now. Let's say you're a Bitcoiner from 2015 or something. You might well be sitting

1072
01:24:44,414 --> 01:24:51,074
on a big enough stack to actually make that play and live off it. Are you into that idea

1073
01:24:51,074 --> 01:24:57,494
or do you think that has a future or is that the way to go? It's not a very cypherpunk

1074
01:24:57,494 --> 01:25:02,594
way of living if you think about it. It's leveraging your pristine asset to just get

1075
01:25:02,594 --> 01:25:10,174
the shitcoin and spend it. But what do you think about that as a method to use Bitcoin,

1076
01:25:10,174 --> 01:25:13,014
as a utility of it?

1077
01:25:13,354 --> 01:25:17,694
First of all, it's a rational, economically sound decision.

1078
01:25:18,194 --> 01:25:21,314
If you want to do it or not, that's your subjective decision.

1079
01:25:21,914 --> 01:25:25,094
If you'll ask me, coming from the real estate sector,

1080
01:25:26,214 --> 01:25:32,634
of course, understanding Bitcoin has come from a place of what I've known.

1081
01:25:33,154 --> 01:25:37,554
What I personally have known is outperform the rate of monetary inflation,

1082
01:25:37,554 --> 01:25:41,854
hedge against it, build a collateral base, and then leverage the balance sheet.

1083
01:25:42,154 --> 01:25:43,214
That's how I was taught.

1084
01:25:44,354 --> 01:25:52,994
And so within that mindset, Bitcoin as digital real estate, meaning being near perfect money,

1085
01:25:53,234 --> 01:25:59,434
which means you can spend it because people will accept it because they know it keeps its purchasing power

1086
01:25:59,434 --> 01:26:00,854
and it grows in purchasing power.

1087
01:26:00,994 --> 01:26:04,114
So it's a great store of value, which makes it good collateral.

1088
01:26:04,614 --> 01:26:07,274
How you want to deal with it is up to you.

1089
01:26:07,274 --> 01:26:35,274
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.

1090
01:26:35,274 --> 01:26:40,754
But then the question is, and I've been thought about this a lot, and I respect everybody's opinion.

1091
01:26:40,914 --> 01:26:41,494
I really do.

1092
01:26:41,674 --> 01:26:44,114
I respect people who say, no, that's not for me.

1093
01:26:44,194 --> 01:26:48,314
I respect people that say, I'm going to build a treasury company and I'm going to do it the right way.

1094
01:26:48,954 --> 01:26:53,394
Because I've been thinking, you said it's not within the cypherpunk ethos.

1095
01:26:53,774 --> 01:26:56,374
And then the question is, what is the cypherpunk ethos?

1096
01:26:56,414 --> 01:27:01,714
It's not me to tell anybody what the cypherpunk ethos is.

1097
01:27:01,714 --> 01:27:10,434
so um i think as an entrepreneur the question becomes if you if you spend a dollar what are

1098
01:27:10,434 --> 01:27:18,814
you spending that right because every dollar is that our whole system is based on that and then

1099
01:27:18,814 --> 01:27:25,034
you just have have to ask yourself how much do i want to go into debt how much is the system into

1100
01:27:25,034 --> 01:27:31,354
debt and how much is me going into debt going to affect the overall system probably very little

1101
01:27:31,354 --> 01:27:39,314
and if we all do it at the same time what what is that going to to to bring well i don't know

1102
01:27:39,314 --> 01:27:45,814
that's a speculative attack that pure shard described in 2014 it took the world 11 years

1103
01:27:45,814 --> 01:27:51,294
to figure it out but i've been sitting for quite some time and also before sharing my thoughts

1104
01:27:51,294 --> 01:27:57,634
publicly and i've been thinking like that all the time because obviously in 2020 i think michael

1105
01:27:57,634 --> 01:28:01,834
say like a burst onto the stage and he was started talking about bitcoin as collateral and no no

1106
01:28:01,834 --> 01:28:06,174
and i thought wow he's talking about bitcoin like i've been talking about real estate uh

1107
01:28:06,174 --> 01:28:11,614
right he did even call it digital real estate at one point i think i he sure he calls it digital

1108
01:28:11,614 --> 01:28:15,994
property i think but it's the same thing i think he also surely called it digital real estate i

1109
01:28:15,994 --> 01:28:20,074
know that surfer jim for example wrote a great article called bitcoin is digital real estate

1110
01:28:20,074 --> 01:28:24,954
that helped me because i read that article i started uh to listen to sailor and then i was

1111
01:28:24,954 --> 01:28:28,254
sitting there and I was sitting in my office. I was like, wow, this is like a digital real estate

1112
01:28:28,254 --> 01:28:33,074
place. So I started to move like that immediately. I started to incorporate Bitcoin with our company

1113
01:28:33,074 --> 01:28:36,874
structure. We had actually like some financial difficulties over the past two to three years,

1114
01:28:37,294 --> 01:28:40,974
not like extensively, but any real estate business have. If somebody tells you that didn't,

1115
01:28:40,974 --> 01:28:45,674
they rely on my opinion, right? So what we did and the way I was able to maneuver is that I used

1116
01:28:45,674 --> 01:28:50,734
Bitcoin as a capital base to lend against because interest rates went up. So then the question is,

1117
01:28:50,734 --> 01:28:55,854
are you able to refinance a building that you finance at 1% at 5%?

1118
01:28:56,094 --> 01:28:57,514
No, because you're going to go bust.

1119
01:28:57,794 --> 01:29:00,834
But you want to keep the business alive because you're feeding yourself,

1120
01:29:00,954 --> 01:29:02,694
you're feeding your family, you're feeding other people.

1121
01:29:02,994 --> 01:29:06,114
So I started using Bitcoin as collateral to lend against

1122
01:29:06,114 --> 01:29:10,894
and keep the business alive and survive and feed my family.

1123
01:29:11,054 --> 01:29:14,394
So then I actually kind of think, you know, I want to feed my family.

1124
01:29:14,394 --> 01:29:17,434
So I do it in a way where it's most beneficial for the world.

1125
01:29:17,434 --> 01:29:23,634
that's why I also think okay if you use bitcoin as collateral you might as well share that idea

1126
01:29:23,634 --> 01:29:29,794
with other people by also alluding to the risks because right now we're sitting here bitcoin is

1127
01:29:29,794 --> 01:29:35,794
above it's 15 to 20 000 bottom it had in the bear market so at that point of time

1128
01:29:35,794 --> 01:29:41,414
I would have maybe suggested to think about the opportunity of using bitcoin as collateral

1129
01:29:41,414 --> 01:29:46,934
at this point of time I'd be way more cautious because bitcoin will drop again and then you have

1130
01:29:46,934 --> 01:29:53,194
to be able to sustain that job and i also want to say that if you are someone who does not believe

1131
01:29:53,194 --> 01:30:00,194
in paying taxes because this is i think also a fundamental question if you run a business that

1132
01:30:00,194 --> 01:30:07,174
pays taxes you are feeding the fiat beast you are if you have to do it because you have been

1133
01:30:07,174 --> 01:30:12,894
building a business while building the business you have become consciously aware of the negative

1134
01:30:12,894 --> 01:30:17,114
effects of the fiat system you can't just stop doing the business so you still have to work with

1135
01:30:17,114 --> 01:30:21,874
that and if you work in real estate and you've reached a certain scale so we have built around

1136
01:30:21,874 --> 01:30:28,074
100 000 square meters over the past 10 years and if you operate on that scale it's basically a debt

1137
01:30:28,074 --> 01:30:36,274
balance sheet play and i i wasn't aware of that so in order for this business to survive you must

1138
01:30:36,274 --> 01:30:42,654
incorporate bitcoin as collateral and if you don't you basically you basically die so for me

1139
01:30:42,654 --> 01:30:48,754
if you ask me it has become a question of survival and then the ethical question is something that i

1140
01:30:48,754 --> 01:30:54,734
think about in the back of my mind and i'm very careful about what i share because i agree with

1141
01:30:54,734 --> 01:31:00,194
what you're saying in an ideal world you can just save in bitcoin and focus on your craft

1142
01:31:00,194 --> 01:31:05,534
especially as an individual you can imagine as a as a company or as a corporation

1143
01:31:05,534 --> 01:31:12,074
and with a lot of other people at stake um it's a difficult decision to make yeah and

1144
01:31:12,074 --> 01:31:18,054
like you say what else are you going to do you you you let your business go bust or you leverage

1145
01:31:18,054 --> 01:31:24,234
what you've got in the form of that yeah i mean it was just a thought because i've just noticed

1146
01:31:24,234 --> 01:31:36,594
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.

1147
01:31:36,694 --> 01:31:50,954
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.

1148
01:31:50,954 --> 01:31:57,334
you're probably at that point where you could potentially leverage some of it to give yourself

1149
01:31:57,334 --> 01:32:02,734
an income but if you go back yeah if you go back to 2020 that's not true someone like sailor sure

1150
01:32:02,734 --> 01:32:08,214
if you're bunging in 10 million dollars at a time fine but if you're a normal person and you were

1151
01:32:08,214 --> 01:32:13,614
stacking you know a few thousand you know a few thousand every now and then or 10 000 a year or

1152
01:32:13,614 --> 01:32:19,734
something if you go back far enough you can see that right now when there was quite an influx of

1153
01:32:19,734 --> 01:32:26,714
people in 2016 2017 those people are probably in the point where they may have more than a million

1154
01:32:26,714 --> 01:32:34,174
quite realistically even 10 million and that's at 10 million dollars worth of bitcoin that play

1155
01:32:34,174 --> 01:32:40,534
makes a lot more sense because you can you can you can just use a very small amount of it basically

1156
01:32:40,534 --> 01:32:44,734
you don't whereas if you own a hundred thousand dollars worth of bitcoin it's probably not a good

1157
01:32:44,734 --> 01:32:49,194
idea to to borrow 50 grand yeah you're not going to last very long and you're not going to be able

1158
01:32:49,194 --> 01:32:55,014
do it for very many years but but but i see that that's kind of that's why now all that stuff is

1159
01:32:55,014 --> 01:32:59,594
becoming much more popular because there's more demand for it basically one i mean 100 percent

1160
01:32:59,594 --> 01:33:05,634
three years ago i did it was a german uh podcast but i did the german podcast called a bitcoin

1161
01:33:05,634 --> 01:33:12,434
digital real estate 2.0 and i laid out a whole plan but bitcoin at the point was at 20 000 so

1162
01:33:12,434 --> 01:33:16,614
i'm not going to repeat what i said there but i laid out a whole plan of how to buy bitcoin

1163
01:33:16,614 --> 01:33:23,674
lent against it tax-free never having to work again and you use bitcoin as digital real estate

1164
01:33:23,674 --> 01:33:31,174
to create a place for yourself where you can become independent of the the fiat system and i do

1165
01:33:31,174 --> 01:33:36,114
find it very interesting that all these companies are now coming into existence and they're following

1166
01:33:36,114 --> 01:33:52,008
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

1167
01:33:52,008 --> 01:33:57,428
and then start to operate strategies like that if you want if you don't want to don't do it right but

1168
01:33:57,428 --> 01:34:05,628
it's the natural progression of bitcoin as near perfect money or this is the last cycle

1169
01:34:05,628 --> 01:34:08,308
I was thinking about it.

1170
01:34:08,548 --> 01:34:13,148
You might find yourself in a dodgy situation as you, it gets to a million dollars and you're

1171
01:34:13,148 --> 01:34:14,588
still waiting for a bear market.

1172
01:34:14,708 --> 01:34:20,448
I mean, I know every, every four years people say, this is the super cycle or this is it

1173
01:34:20,448 --> 01:34:20,868
now.

1174
01:34:20,988 --> 01:34:22,328
It's just going to go up.

1175
01:34:22,448 --> 01:34:28,548
But I, I have limited understanding, let's say of markets, but I have been watching the

1176
01:34:28,548 --> 01:34:30,008
Bitcoin market for a very long time.

1177
01:34:30,008 --> 01:34:44,388
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.

1178
01:34:44,388 --> 01:34:50,888
the last sort of year or so, the price, the way the price has been rising has been different

1179
01:34:50,888 --> 01:34:57,868
to the previous cycles. It's more of a, I think I heard someone describe it. It's very similar to

1180
01:34:57,868 --> 01:35:04,108
the way ETFs go up in price. Obviously, we have an ETF now, a very large one indeed, you know.

1181
01:35:04,568 --> 01:35:11,408
So there is a little bit more credence to the idea that maybe the traditional structure of the

1182
01:35:11,408 --> 01:35:18,288
Bitcoin market and its cycles might have changed this time. And it might be that it just stair steps

1183
01:35:18,288 --> 01:35:23,248
up forever now because there's so much capital coming in. I don't know. You could argue it.

1184
01:35:23,248 --> 01:35:27,888
Yeah, I think actually it's very, I mean, a lot of people that I really respect and that are much

1185
01:35:27,888 --> 01:35:31,248
much smarter than me and much more successful argue that as well.

1186
01:35:31,248 --> 01:35:32,448
Do they?

1187
01:35:32,448 --> 01:35:33,248
Yeah, a lot of people.

1188
01:35:33,248 --> 01:35:34,208
Oh, right. I didn't know that.

1189
01:35:34,208 --> 01:35:38,248
But I, to be honest with you, you know, two things.

1190
01:35:38,828 --> 01:35:51,008
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.

1191
01:35:51,348 --> 01:35:55,268
So that's because I've been thinking about this a lot over the past couple of days.

1192
01:35:55,488 --> 01:35:59,308
And I came to the conclusion, Leon, you are wasting your thoughts.

1193
01:35:59,588 --> 01:36:00,788
You have 24 hours a day.

1194
01:36:01,288 --> 01:36:02,968
Think about your business.

1195
01:36:03,128 --> 01:36:03,808
Think about your family.

1196
01:36:03,808 --> 01:36:08,708
thinking about buying more Bitcoin rather than what is the market going to do? Because if you

1197
01:36:08,708 --> 01:36:14,968
understand Bitcoin and you understand that, yes, it can go down 80%, but over time it goes up,

1198
01:36:15,028 --> 01:36:19,128
it actually doesn't matter what the price is doing as long as you just keep accumulating,

1199
01:36:19,268 --> 01:36:23,648
keep accumulating, keep accumulating and protect yourself from an 80% drawdown.

1200
01:36:23,648 --> 01:36:27,908
And then I was talking with a friend of mine yesterday, Scala, who was also very much within

1201
01:36:27,908 --> 01:36:32,408
the, I'd say, Austrian scene.

1202
01:36:32,548 --> 01:36:34,588
I mean, with Austrian, I mean the Austrian School of Economics.

1203
01:36:34,828 --> 01:36:40,588
And he was also saying, and I agree that from a praxeological viewpoint, so if you start

1204
01:36:40,588 --> 01:36:46,368
to analyze human behavior and human action, the only reason why Bitcoin can go up is because

1205
01:36:46,368 --> 01:36:47,068
it goes down.

1206
01:36:47,868 --> 01:36:53,328
Any system that does not wash out leverage has to collapse.

1207
01:36:53,328 --> 01:36:55,488
And the Bitcoin price is not objective.

1208
01:36:55,488 --> 01:37:01,928
It's subjective and it's based on different subjective preferences and perception.

1209
01:37:02,608 --> 01:37:06,648
And somebody might think Bitcoin will go to 500,000 and somebody is shorting Bitcoin.

1210
01:37:06,768 --> 01:37:08,008
And the truth is somewhere in the middle.

1211
01:37:08,688 --> 01:37:16,148
And that is the reason why Bitcoin has to come down a priori based on the experience

1212
01:37:16,148 --> 01:37:21,608
that people always misprice and misjudge both the past, the present and the future.

1213
01:37:21,688 --> 01:37:22,788
And they'll always do that.

1214
01:37:22,788 --> 01:37:38,368
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.

1215
01:37:38,928 --> 01:37:43,328
And that misjudgment will then be penalized by the market by a drawdown.

1216
01:37:43,888 --> 01:37:49,348
And only the people that value Bitcoin for more than it is worth will stay.

1217
01:37:50,008 --> 01:37:51,868
And then they will drive up the price higher.

1218
01:37:51,868 --> 01:37:55,988
So for this asset to go up in price, it needs to go down.

1219
01:37:59,268 --> 01:38:03,348
Yeah, unless everyone understands it.

1220
01:38:03,528 --> 01:38:04,148
Yeah, but they don't.

1221
01:38:04,288 --> 01:38:09,588
Yeah, but it is something that you understand to a degree in the end.

1222
01:38:10,288 --> 01:38:16,028
No matter who you are, you understand that it's a way –

1223
01:38:16,028 --> 01:38:19,788
the more you get in contact with the effects of the fiat system,

1224
01:38:19,788 --> 01:38:26,768
like particularly inflation, the more you notice what things are good to have and what things aren't

1225
01:38:26,768 --> 01:38:32,768
good to have. No matter whether you don't have to be an economist to know that, you know, if you

1226
01:38:32,768 --> 01:38:39,408
own a painting or a bit of antique furniture in your house, it's going up in price. The price of

1227
01:38:39,408 --> 01:38:44,268
it's going up. You think, great, you know. So you're more likely when you're out shopping,

1228
01:38:44,368 --> 01:38:48,448
you're more likely if you've got, oh yeah, let's get that, because there's this added advantage that

1229
01:38:48,448 --> 01:38:53,148
not only can i sit on this chair but i know that it's actually when i come to sell it when my

1230
01:38:53,148 --> 01:38:57,588
children don't want it anymore it's actually worth some money so there's there will be this

1231
01:38:57,588 --> 01:39:02,828
general understanding i think because there already is the general understanding that

1232
01:39:02,828 --> 01:39:08,628
inflation is an increase in the money supply for example that general understanding is seeping into

1233
01:39:08,628 --> 01:39:15,168
into common conversations i don't know if you've noticed this it's it's talked about in those terms

1234
01:39:15,168 --> 01:39:19,728
more. It used to be people said, oh, prices are going up, therefore we've got inflation.

1235
01:39:20,148 --> 01:39:26,828
You know, it's like no one understood anything about this. But now youngsters get it. You know,

1236
01:39:26,888 --> 01:39:32,288
your average 18 year old has heard that on Robin Hood doing a bit of trading or whatever, they kind

1237
01:39:32,288 --> 01:39:39,828
of started to understand a few economic principles that really were hidden from the world for a very

1238
01:39:39,828 --> 01:39:47,168
long time. Even like the, you know, the leverage, the asset play that real estate people have done,

1239
01:39:47,548 --> 01:39:52,728
it's been like a hidden secret, hasn't it, really, for many, many years. And now, thanks to the

1240
01:39:52,728 --> 01:39:58,148
internet and TikTok and all kinds of stuff, people understand, wow, that's how a lot of rich people

1241
01:39:58,148 --> 01:40:06,648
stayed rich. And I was the idiot putting my money in the bank or buying something we have in the UK

1242
01:40:06,648 --> 01:40:12,868
called premium bonds or buying you know buying you know what i mean or buying shares in british

1243
01:40:12,868 --> 01:40:19,488
telecom that go up hardly anything and you know that what the public were told about investing and

1244
01:40:19,488 --> 01:40:25,388
doing things with your money and what people who were who knew what they were doing who all sort of

1245
01:40:25,388 --> 01:40:29,328
like kept it a little secret in a way between them because there wasn't so much of a free

1246
01:40:29,328 --> 01:40:35,548
transfer of information around you know but i so first of all i don't know i have no idea right i

1247
01:40:35,548 --> 01:40:39,388
we don't know about the future but i think it's an interesting conversation because i was sitting

1248
01:40:39,388 --> 01:40:43,868
with a few youngsters so to say who are studying right now in their early 20s i think they were

1249
01:40:43,868 --> 01:40:50,028
from 19 till 21 and what you said was true because none of them started to argue with me about bitcoin

1250
01:40:50,028 --> 01:40:54,748
everyone's like oh yeah bitcoin is the stove value 100 but they were all leveraging their

1251
01:40:54,748 --> 01:41:01,068
bitcoin to trade solana meme coins so that's a fiat thought though yeah that's a short but that's

1252
01:41:01,068 --> 01:41:05,488
that's how they all think that's how they think okay so so so so like it's like very few people

1253
01:41:05,488 --> 01:41:12,048
think like you and me but but over time presumably as the culture change the culture will change

1254
01:41:12,048 --> 01:41:16,308
what you only if they are penalized like if these boys for they will be won't they yeah

1255
01:41:16,308 --> 01:41:23,568
through the bear market right okay so okay but in the end i suppose yeah i i i agree with you i think

1256
01:41:23,568 --> 01:41:31,668
that the the bitcoin's a really fascinating thing in its entirety because it's a forcing function

1257
01:41:31,668 --> 01:41:38,008
in cultural change which is bizarre when you think about it because when most people enter

1258
01:41:38,008 --> 01:41:43,888
first hear about bitcoin well if you were lucky it was because of cypherpunks if you weren't as

1259
01:41:43,888 --> 01:41:50,068
lucky it was because the price was going up um but very few people really probably started

1260
01:41:50,068 --> 01:41:55,128
adopting Bitcoin because they thought it was going to change the cultural fabric of the whole world,

1261
01:41:55,228 --> 01:42:00,128
which is basically it, I think. That's what it is. It's going to, you could argue, I mean,

1262
01:42:00,148 --> 01:42:05,248
it sounds a bit stupid when I say it, but it's going to usher in a new, a kind of like new

1263
01:42:05,248 --> 01:42:15,988
Renaissance architecture buildings by taking away the sort of the premium on things being used as

1264
01:42:15,988 --> 01:42:20,908
money. That's all it is. It's like taking this one thing and saying, right, now this is money,

1265
01:42:21,308 --> 01:42:25,088
everything else, let's see what the value of that is. Let's see how humans value that,

1266
01:42:25,088 --> 01:42:30,088
as the Austrians would say. How much do we really value these things now that

1267
01:42:30,088 --> 01:42:36,668
they're being used in a real way? They're not being used in this distorted way, which is like

1268
01:42:36,668 --> 01:42:42,668
buying it because I think it's going to store my value. But you could easily argue that that's the

1269
01:42:42,668 --> 01:42:43,668
place we're going.

1270
01:42:43,668 --> 01:42:49,288
You know, I mean, it does sound a bit like, oh yeah, listen to this guy, there's a new

1271
01:42:49,288 --> 01:42:52,908
renaissance coming or whatever, but I don't know, prove me wrong.

1272
01:42:52,908 --> 01:42:53,908
Yes.

1273
01:42:53,908 --> 01:42:54,908
No, I agree with you.

1274
01:42:54,908 --> 01:42:56,488
Maybe we could say two things.

1275
01:42:56,488 --> 01:42:58,908
Maybe we've been in a bull market for 15 years.

1276
01:42:58,908 --> 01:42:59,908
True.

1277
01:42:59,908 --> 01:43:24,042
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

1278
01:43:24,722 --> 01:43:32,102
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.

1279
01:43:32,102 --> 01:43:35,782
that were margining their Bitcoin to trade Zolana meme coins.

1280
01:43:35,782 --> 01:43:38,242
Yes, they do understand Bitcoin is a better store of value

1281
01:43:38,242 --> 01:43:40,362
than anything that exists in the physical world,

1282
01:43:40,962 --> 01:43:43,262
but there are still young kids that just want to speculate,

1283
01:43:43,442 --> 01:43:48,022
and they do it on Zolana, and almost every 20-year-old that I talk to

1284
01:43:48,022 --> 01:43:50,742
that is into Bitcoin is also into Zolana meme coins,

1285
01:43:50,842 --> 01:43:52,162
except the hardcore Bitcoinos, of course.

1286
01:43:52,162 --> 01:43:53,262
Are they all losing money?

1287
01:43:54,422 --> 01:43:58,822
Most of them are losing money, but it's an addiction, right?

1288
01:43:58,822 --> 01:44:01,482
It's a very small percentage of people that can make money trading, right?

1289
01:44:01,482 --> 01:44:02,122
Yes, yes.

1290
01:44:02,262 --> 01:44:03,482
Especially on meme coins.

1291
01:44:03,642 --> 01:44:07,382
I mean, it's basically like a gamble, really.

1292
01:44:07,522 --> 01:44:15,602
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.

1293
01:44:15,802 --> 01:44:16,762
It's like releasing a shoe.

1294
01:44:16,882 --> 01:44:19,662
If you are Nike and you're releasing a shoe, you're making a lot of money.

1295
01:44:19,762 --> 01:44:23,722
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.

1296
01:44:23,802 --> 01:44:26,722
If you're the collector who buys the shoe, you're not making any money.

1297
01:44:27,022 --> 01:44:29,482
A meme coin is almost like that, just in a digital form, right?

1298
01:44:29,482 --> 01:44:35,702
So if you create it and if you are part of the early crowd, you'll make money with it similar to a shoe.

1299
01:44:35,782 --> 01:44:37,702
But there's no monetary use case within it.

1300
01:44:38,642 --> 01:44:49,682
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.

1301
01:44:49,682 --> 01:44:58,942
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.

1302
01:44:58,942 --> 01:45:03,162
because the bear markets really taught me a lot of lessons.

1303
01:45:04,862 --> 01:45:07,702
Don't go into, like in the early days,

1304
01:45:07,842 --> 01:45:09,302
don't go into other coins,

1305
01:45:09,782 --> 01:45:11,262
don't leave your coins on exchanges,

1306
01:45:11,562 --> 01:45:12,362
don't over leverage.

1307
01:45:12,542 --> 01:45:15,322
Like all these lessons I learned through bear markets.

1308
01:45:15,722 --> 01:45:17,702
Oh, and then that's what the cycle is.

1309
01:45:17,762 --> 01:45:19,002
It's people learning those lessons.

1310
01:45:19,642 --> 01:45:20,482
Part of the cycle, yeah.

1311
01:45:20,542 --> 01:45:21,782
But it is the cycle.

1312
01:45:21,802 --> 01:45:22,562
It is the cycle, yeah.

1313
01:45:22,582 --> 01:45:26,682
Because you losing on leverage

1314
01:45:26,682 --> 01:45:31,742
is what's causing the stair-stepping price.

1315
01:45:31,882 --> 01:45:32,102
Yes.

1316
01:45:32,362 --> 01:45:32,782
Yeah.

1317
01:45:33,022 --> 01:45:35,242
So it's almost like Bitcoin doesn't,

1318
01:45:35,362 --> 01:45:37,222
a bull market does not exist without a bear market.

1319
01:45:37,342 --> 01:45:39,182
There is no bull market without a bear market.

1320
01:45:39,182 --> 01:45:41,182
It's a very, that's fiat.

1321
01:45:41,362 --> 01:45:46,442
Because in fiat, as soon as that happens,

1322
01:45:46,802 --> 01:45:48,182
and people should learn,

1323
01:45:48,542 --> 01:45:51,582
the government, because they want to protect their interests,

1324
01:45:51,982 --> 01:45:54,222
create money to protect certain institutions,

1325
01:45:54,442 --> 01:45:56,482
individuals, SF classes, so forth.

1326
01:45:56,682 --> 01:45:57,902
So the market never learns.

1327
01:45:58,142 --> 01:45:59,222
So it's not resilient.

1328
01:45:59,362 --> 01:46:01,222
That's why we have the boom and bust cycles.

1329
01:46:01,222 --> 01:46:01,402
Right.

1330
01:46:01,502 --> 01:46:07,502
So if taking that into the future then, in the distant future, that is a renaissance.

1331
01:46:07,822 --> 01:46:08,022
Yes.

1332
01:46:08,062 --> 01:46:09,842
Because people no longer leverage at that point.

1333
01:46:10,902 --> 01:46:15,342
Everyone in the market has learned the lesson through pain, basically.

1334
01:46:15,822 --> 01:46:21,282
Because no one, and even the government has learned the lesson, because they're now defunded themselves.

1335
01:46:22,402 --> 01:46:24,102
Pretty much, when you think about it.

1336
01:46:24,462 --> 01:46:25,762
That's what they're doing right now, actually.

1337
01:46:25,762 --> 01:46:32,002
kind of funny to watch well they are but but it's i mean i've i thought i think about this a lot

1338
01:46:32,002 --> 01:46:39,622
and i'm not sure how the government ever lets go of it's this power that it has to to basically

1339
01:46:39,622 --> 01:46:47,542
well create money ask someone to buy its debt you know here's a bond and if you won't buy it

1340
01:46:47,542 --> 01:46:53,142
and your company won't buy it well the central bank will so let's you know that's that's the

1341
01:46:53,142 --> 01:46:58,502
biggest power on the planet really, especially if you're the US or some, you know, you can do

1342
01:46:58,502 --> 01:47:04,742
anything. You can literally do anything. You can invade Iraq for 10 years and it costs trillions

1343
01:47:04,742 --> 01:47:10,182
of dollars. And actually you don't even really notice, well, you don't notice anything. People

1344
01:47:10,182 --> 01:47:16,662
that use dollars obviously notice an inflationary pressure and all this kind of stuff. But really

1345
01:47:16,662 --> 01:47:23,362
it's the final boss. I mean, who's going to give that power up? I know theoretically,

1346
01:47:24,362 --> 01:47:29,782
they don't even give it up. There's a forcing function. The forcing function of Bitcoin,

1347
01:47:29,922 --> 01:47:35,342
one of them, is to join the network. You either join it or you don't. There's no alternative.

1348
01:47:35,982 --> 01:47:40,702
And if you join it, you follow the rules. So you either join it or you don't. When you're in the

1349
01:47:40,702 --> 01:47:44,882
network, you either follow the rules or you don't. If you don't follow the rules,

1350
01:47:44,882 --> 01:47:51,302
you're not using bitcoin follow the rules you're not using bitcoin so it's very primordial you know

1351
01:47:51,302 --> 01:47:57,682
and and once you're following the rules you can't print your own money you have to add value and

1352
01:47:57,682 --> 01:48:05,022
everybody knows governments don't create their own don't don't create value i mean other i mean they

1353
01:48:05,022 --> 01:48:11,542
they they create money but they don't actually create a value like they have to demand it from

1354
01:48:11,542 --> 01:48:18,602
you in the form of tax, or they have to persuade you to lend them money, which is obviously what

1355
01:48:18,602 --> 01:48:23,602
they'll have to do under a Bitcoin standard. And who's going to lend the government Bitcoin? I

1356
01:48:23,602 --> 01:48:29,782
don't know. That's a really interesting conversation as well, how that dynamic is

1357
01:48:29,782 --> 01:48:33,702
going to change. Yeah. Anyway, look, we've been talking for a long time. Can I ask you one more

1358
01:48:33,702 --> 01:48:37,502
question? Because we didn't even talk about free cities. And I know you actually know something

1359
01:48:37,502 --> 01:48:42,202
about free cities but i think talking about i mean i talk a lot about free cities on this podcast

1360
01:48:42,202 --> 01:48:47,962
obviously but real estate's a great um topic of conversation because so many people are involved

1361
01:48:47,962 --> 01:48:53,862
in it especially people who you know like and i don't even mean people who use it as a business

1362
01:48:53,862 --> 01:48:59,102
just everyone owning your own house is a big deal so we've done that but tell me what you know about

1363
01:48:59,102 --> 01:49:05,122
free cities and and and see if you can link it to the real estate play yes sure i mean what do i

1364
01:49:05,122 --> 01:49:10,742
know about free cities i know about i mean i like say private cities yeah that's a better one free

1365
01:49:10,742 --> 01:49:16,542
cities is a bit more of an umbrella term now for a lot of things but you you've basically studied

1366
01:49:16,542 --> 01:49:22,402
with somebody who was the former um ceo of the free cities foundation which i didn't know until

1367
01:49:22,402 --> 01:49:28,622
now yes so you but that back then it was more the private city model that a free private city which

1368
01:49:28,622 --> 01:49:34,202
is titus gable's idea of um i mean everyone should know this but i better quickly say it

1369
01:49:34,202 --> 01:49:40,002
you create a place which has independence.

1370
01:49:40,002 --> 01:49:43,462
If you want to join it, you have to sign a contract to be there.

1371
01:49:43,662 --> 01:49:45,062
So you don't have a political system.

1372
01:49:45,342 --> 01:49:46,622
You don't have voting.

1373
01:49:46,862 --> 01:49:47,882
You have a contract.

1374
01:49:48,482 --> 01:49:50,722
And that contract says this is what you can and can't do.

1375
01:49:50,802 --> 01:49:51,842
If you follow it, you stay.

1376
01:49:51,922 --> 01:49:56,222
If you don't, you might be reprimanded or even asked to leave.

1377
01:49:56,342 --> 01:50:00,102
And if you don't like it, you go to another free city, which is –

1378
01:50:00,102 --> 01:50:01,562
But the world should be, kind of.

1379
01:50:01,762 --> 01:50:03,262
Well, I mean, and you're German.

1380
01:50:03,262 --> 01:50:08,842
you know there was a the hansiatic league i'm from hamburg by the way right okay so you know the

1381
01:50:08,842 --> 01:50:14,922
the history of those kind of ideas yeah no i really like it i also growing up uh i am very

1382
01:50:14,922 --> 01:50:22,322
much aware of the hansiatic um league hansiatic league and and the idea of free cities and uh

1383
01:50:22,322 --> 01:50:28,702
i mean if you'll ask me what's the ideal model like that's the ideal model basically it's the it's

1384
01:50:28,702 --> 01:50:35,122
the city, the government, the municipality, or the jurisdiction, whatever it is, will be,

1385
01:50:35,562 --> 01:50:41,682
being a service provider and providing a service to you. And I think that if they can't extort money

1386
01:50:41,682 --> 01:50:48,462
from you, that's what they have to do. And I do like the idea and I do follow people, Rahim especially.

1387
01:50:48,462 --> 01:50:57,802
I mean, I have a lot of respect for Rahim. He's very knowledgeable. I personally, if you ask me,

1388
01:50:58,702 --> 01:51:14,742
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.

1389
01:51:14,742 --> 01:51:23,482
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.

1390
01:51:23,582 --> 01:51:26,602
I think that a lot of my friends are asking themselves, where do I want to live?

1391
01:51:26,602 --> 01:51:33,722
this question was not as important before the internet and before bitcoin with the internet

1392
01:51:33,722 --> 01:51:39,642
we've been able to travel more and with bitcoin we've been able to also have our wealth mobile

1393
01:51:39,642 --> 01:51:46,142
and if we go back into the sovereign individual thesis just the fact that we can say like f you

1394
01:51:46,142 --> 01:51:53,002
i don't agree with your rules and regulations i'm moving on should create competition amongst

1395
01:51:53,002 --> 01:52:00,222
nation states but also cities to provide the best service possible to their citizens so if you ask me

1396
01:52:00,222 --> 01:52:05,542
like what is the free city movement like i would expect them to like kind of bring that into reality

1397
01:52:05,542 --> 01:52:13,502
to create um habitus and places for individuals and families to live to prosper to thrive

1398
01:52:13,502 --> 01:52:20,062
to freely live out their their dreams and create their own sort of reality like that's kind of like

1399
01:52:20,062 --> 01:52:21,622
the take I'm having on it.

1400
01:52:21,622 --> 01:52:25,742
You're making me really bullish on Free Cities actually, just talking about it.

1401
01:52:25,742 --> 01:52:29,942
Because when you add it to what we've all just been talking about,

1402
01:52:29,976 --> 01:52:35,196
It does work. I mean, everything we've just spoken about and even the fact that

1403
01:52:35,196 --> 01:52:41,496
the current age is the age in which we're most mobile. I mean, when you think about

1404
01:52:41,496 --> 01:52:49,436
the competitive nature of governance, it works with that. It works with mobility. Without mobility,

1405
01:52:49,536 --> 01:52:53,016
it doesn't work at all. And that's kind of the system we've come from, you know,

1406
01:52:53,336 --> 01:52:57,356
traveling to moving from one country to another, even say a hundred years ago,

1407
01:52:57,356 --> 01:53:03,576
hardly anyone did it yeah no and and in fact in 100 years ago moving from where i live to london

1408
01:53:03,576 --> 01:53:09,796
which is i can drive it in four hours that was a big deal that was like but now people commute that

1409
01:53:09,796 --> 01:53:16,756
and people go to dubai for the weekend so so we we really do live in that time the the the signals

1410
01:53:16,756 --> 01:53:22,016
are there that we live in this time where we can move around so yeah of course we

1411
01:53:22,016 --> 01:53:38,836
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

1412
01:53:38,836 --> 01:53:46,576
Bitcoin demonetizes various assets for a long time, but you're describing it actually in reality,

1413
01:53:46,576 --> 01:53:52,316
and you are the guy who works in an industry in which it's happening. Right. So it's really

1414
01:53:52,316 --> 01:53:59,176
happening and when you piece all these pieces the jigsaw together it's very bullish for the whole

1415
01:53:59,176 --> 01:54:04,736
free cities movement it's bullish for individuals it's bullish for everyone who's who's thinking

1416
01:54:04,736 --> 01:54:11,676
about these kind of things and i agree with you that in the last say four or five years i know so

1417
01:54:11,676 --> 01:54:16,996
many people i mean since covid probably so many people thinking about where do i want to live

1418
01:54:16,996 --> 01:54:41,156
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

1419
01:54:42,436 --> 01:54:51,376
That's the system. It needs you so much now to fund it or lend it money, give it taxes or lend

1420
01:54:51,376 --> 01:54:56,296
it money it needs you it's going to put a wall up to stop you going not stop you coming in

1421
01:54:56,296 --> 01:55:02,536
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

1422
01:55:02,536 --> 01:55:08,976
to be pretty crazy though um because it's all very well i mean i've got uh i'm going to talk

1423
01:55:08,976 --> 01:55:13,736
about this later with i've got another three guests today but i want to talk about property

1424
01:55:13,736 --> 01:55:20,936
rights um because that's the final boss property rights in the digital world now we understand it's

1425
01:55:20,936 --> 01:55:22,176
It's very simple.

1426
01:55:22,176 --> 01:55:24,976
Property rights in the real world,

1427
01:55:24,976 --> 01:55:26,136
that's a whole different thing.

1428
01:55:26,136 --> 01:55:38,996
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

1429
01:55:38,996 --> 01:55:43,956
and i love hearing i love a good expert i think you're an expert on property because you've

1430
01:55:43,956 --> 01:55:50,416
actually been living it for how long 30 years consciously i mean like 28 years yeah but that's

1431
01:55:50,416 --> 01:55:54,956
that's that's you've done you've put the 10 000 hours in and it's interesting to hear you say that

1432
01:55:54,956 --> 01:56:01,456
your see your choices at this particular point in history because um and you say a lot of other

1433
01:56:01,456 --> 01:56:05,956
people have started to make these same choices because the thesis is another the thesis is being

1434
01:56:05,956 --> 01:56:10,696
proven again the bitcoin thesis is being proven in another realm so thanks for coming in and

1435
01:56:10,696 --> 01:56:14,656
thanks for sharing all your wisdom mate thanks for having me really i enjoyed the conversation as well

1436
01:56:24,956 --> 01:56:27,156
.