Welcome in to This Week in Bitcoin, episode 114.
My name is Chris, chrislas.com, jupiterbroadcasting.com.
Summer has officially started for me.
I know I'm a bit of a late bloomer, but I am in the Pacific Northwest after all.
When this episode comes out, I'm going to be deep into the Cascade Mountains, many, many
miles out of range of any kind of data service.
So I won't exactly know what's going on, but I know one thing.
I was expecting this to be sort of a one topic episode in and out pretty quick.
But it seems nature has provided and we have a lot to get into, starting with the macro
news.
Bloomberg ran a piece that seems to have spooked the AI bulls.
Another week, another thing freaking them out.
Peter Elstrom, he's, I guess he's been following the Moonshot Kimmy K3 stuff.
If you have not been following it out there, the group over at Moonshot,
the folks over there at Chinese AI Development Lab have released Kimmy K3.
And it is cheaper. I mean, it's a lot cheaper. Like, for example, chat GPT 5.6 is, I think, something like $5 million per million input tokens. And I think right now, Kimi K3 on Open Router is somewhere around $3 for a million input tokens.
So it's not dramatically cheaper, but it is cheaper, and that does add up, and it does seem to be very capable.
Maybe not as capable, but capable enough for a lot of people.
And the thing is, is it's open-weight.
It's an open-source model that's actually competitive with the weights.
Now, who could have possibly seen this development coming?
Certainly not Wall Street.
For that, we're joined by Bloomberg Executive Editor for Global Technology, Peter Elstrom.
So, Peter, how do you read this moment? Do you think that it's a DeepSeek version, too? Or do you think it's something different? Because now a lot of the tech companies kind of had an idea of what DeepSeek could do. But this is moonshot. Maybe it's something new altogether.
Yeah, I think the tech companies in the U.S. in particular thought they knew where the competition was coming from in China.
And this was a bit of a surprise.
We had seen the DeepSeek moment last year, as you had talked about.
There were some other players that were kind of prominent, including Alibaba, the e-commerce company that has a strong model in Gwen in particular.
But then over the weekend, we got this news from Moonshot that they had introduced Kimi K3, which is a very powerful model.
It outstrips most of the frontier models on many parameters, except for the two leading ones from Anthropic and OpenAI.
So it's a very strong performer.
It has 2.8 trillion parameters, which is sort of like equivalent to brain synapses.
It's a very powerful model.
And I think that surprised people.
You can hear some of the hype in there.
And I don't want to dwell on this, but we should just spend a moment.
all of these super smart traders that are going to Mars that have been telling us that this AI,
you know, get out of Bitcoin, sell your Bitcoin, buy Nvidia stock. Okay, now, no, don't buy Nvidia
stock, buy Micron stock. Okay, now, don't buy Micron stock, buy SpaceX. And now they're all
just shocked and surprised that the free models are coming up behind the frontier models and
they're competitive. They didn't see that in their analysis before they spent trillions of dollars.
It's remarkable.
I think this is a teaching moment for those of us who sit on the sidelines and watch this clown show.
Again, who could have seen this coming, right?
And of course, SpaceX, which was probably the only AI IPO that's actually going to IPO this year, is now down nearly an entire Bitcoin market cap.
SpaceX shares down for a six straight day, now trading 45% off the record high, hitting the days after its IPO.
The stock got a bit of a pop midday after The Wall Street Journal reported on its talks to provide computing power to the Pentagon, but closed the day near its highs.
The company, which allotted 30 percent of its shares in its debut to retail traders, has now wiped out about one trillion dollars in market cap from the peak.
Yikes. Now, I mean, they're back down to around the initial public offering price.
But, you know, there's no talk of has SpaceX failed?
Are there too many stocks? Is the problem that there's basically unlimited stocks?
You know, none of that.
But if Bitcoin goes down 2%, it's the morning state analysis.
It's like, well, look at Bitcoin.
The problem is there's so many cryptos, there's no value there.
But you can make the same argument for stocks, yet they don't.
Here we are.
Anyways, that's the AI situation.
We don't need to dwell on it because the Chinese models, we know, if you're in the tech field,
you'd known they're not a rounding error.
You knew that this bill was going to come due.
And what we've also been figuring is if the AI CapEx slows, then the bid under the entire
ecosystem gets a bit thinner. The build outs, the hardware, all of that. I'm not such a big believer
in that. I believe the truth will lie somewhere in the middle. I know myself, I'm not likely going
to decrease the amount of tokens I use anytime soon. I'm probably going to continue for the rest
of my life to consume more and more tokens. And that's probably true for a lot of us out there.
And so there is a viable business here. The question is, is what is the sustainable burn
rate? What is the actual profit rate? Those things need to be sorted out. So I'm not a believer that
we're going to have some sort of massive crater like an asteroid hitting the earth that destroys
the economy. But I do think we're going to need to have some sort of reversion to the mean while
the market figures out the actual value here. And I think the actual value is going to be substantial.
Just looking at the influence of the people that I know and the influence that
AI-assisted development is having, if it were to only stop at AI-assisted development,
I think it has a lot more value to run just at its current capabilities.
And it's likely you could bet that it's going to continue to get better.
So I'm not a big believer that things are going to blow up, but I do think it means people
might start shopping for something a little harder.
You see where I'm going with this?
They've got the liquidity.
So would it be unreasonable after this thing starts to stabilize from some bit of unwinding
and a bit of a reversion to the mean,
that you might find liquidity
sort of making its way back into Bitcoin,
looking for a whole hard alternative.
And would it be that crazy to expect
maybe it's already happening?
And would it maybe explain why the US Bitcoin ETF
for the last two weeks have begun seeing inflows again,
totaling $75.7 million as I record right now?
could the market be trying to get ahead of this a little bit and moving back into something that's
a little harder a little scarcer that if is true if that's true i don't know but if it is true it
does seem to be helping bitcoin short-term price because we've nearly sold 80 million dollars in
bitcoin spot etf in the last two weeks so this is looking pretty good this could be a good setup
where the market recognizes an opportunity here and i'll help bitcoin short-term price
that is, of course, unless we have a massive energy crunch and it messes it all up for us,
because, yes, as you know, Brent has pushed to $90 this week,
and there have been new strikes on energy infrastructure in particular, not just tankers.
How are these latest escalations then affecting the flow of energy through the Strait of Hornets?
I mean, we've seen another day, you know, it's been over a week of this, basically,
of essentially no traffic, at least none with their transponders on going through Hormuz.
Of course, there is some dark traffic, but overall, anecdotally, and what we've heard from traders,
seafarers, and captains themselves, is that there is a caution around going through the strait.
And there's good reason to.
Iran says that they basically turned back four vessels out going through the Omani route,
one of which might have been struck and maybe was damaged, according to some reports.
and that means that there is still a live danger there in the strait and ships, exporters and
captains will really have to think whether or not to go through that waterway, which is why you've
seen that reduction in flows and that creating some anxiety in the market Uh the market doesn like anxiety They don like uncertainty You know you know I feel like we all becoming old veterans of this because you know what happens next
Once oil starts acting up, the energy prices start getting kind of nasty.
And then that becomes a big short term bear on Bitcoin, because if the energy prices go up, inflation follows.
And if inflation goes up, the market panics that Kevin Warsh and friends might increase rates and not cut rates.
And so then they go straight to lettuce hands and start selling their Bitcoin.
So that is a short-term headwind that we need to be concerned about.
Now, here's Goldman Sachs with the receipts.
They are showing that Persian Gulf exports have dropped from about 80% of normal to now
under 50% of normal.
So we had kind of crept our way back up during the memorandum to around 80% of normal.
And now we're dipping back to 50% from what they can track more on that in a moment.
the direction of travel seems to be a tightening of supply, not loosening.
But listen to this clip for the toll idea that's getting floated, that there seems to
be almost a level of comfort with the idea of Iran charging per barrel, accepting payment
in Bitcoin over the lightning network.
And apparently most of the clients that Goldman Sachs has talked to would actually welcome
this.
They say a toll charged by Iran would be a small price to pay to avoid war.
We did see a pretty significant drop in the visible exports from the Persian Gulf.
I mean, to be clear, it's not always transparent.
There are crossings that we don't necessarily see.
But based on what we can see of exports from the region, and here I'm including not just the crossings through Hormuz, but also the reroutes via pipeline.
We were before this latest escalation.
We had reached about 80% of normal.
and now we have dropped slightly below 50% of normal.
So the direction of travel is one of tightening.
So yes, absolutely, this increase in prices can continue while this lasts.
Yeah, it's kind of amazing that we've got back up to 80% of normal levels, really, isn't it?
With so few visible transits of the Strait of Hormuz.
I mean, how much of that was, you know, vessels with no transponder
And how much of that was pipelines or even carrying things by truck regionally?
What are the ways around Hormuz that have been developed that have made the most difference?
Oh, absolutely.
We saw, so from the Saudi side, the east-west pipeline played a big role in that.
But also the UAE, where the pipeline flows to Fujairah.
And then we also saw some additional loadings in the Gulf of Oman that we think are also Hormuz crossings that we cannot see.
So if you add up what you can see through the strait, it's not consistent, doesn't quite match the loadings that you see.
So we think those are crossings that are dark, we can't necessarily see.
But when they are then delivered somewhere else, we can track the delivery.
So we know that the total volume is a little bit higher than what we can actually see crossing.
Iran is continuing to try and exert control over the whole Strait of Hormuz and suggesting it needs to coordinate the traffic and perhaps toll it at some point.
Is the industry thinking that there will be a toll in the future, that the way things were in the Strait of Hormuz will never go back to that?
What is the commodity industry thinking about here?
Yeah, when we talk to clients, yes, this is debated as a pretty real possibility.
And frankly, when we think about, at least based on the reported tolls initially, when we think about, let's say, $1 per barrel added to the price of crude associated with a toll, most clients we talk to will talk about that as a small price to pay to avoid war.
But it's still very unclear where this is going.
I think you're right, though. And also the way that this escalation restarted seems to be very much tied to the control of this trade.
OK, so now on to the long game. So why does any of this really matter for Bitcoin 10 years out?
Let's talk about that for a moment. Two people, I think, have the strongest versions on this.
You got Luke Groman. He's on the gold side. And then you have Lynn Alden on the treasury side.
New information on that. But first, let's go with Luke. So let's talk about Luke here. He thinks gold will work as a reserve asset.
He thinks it's sort of inevitable, I suspect. And his whole pitch is that gold is useful.
Because it's useless. Yes, really. You know, he says if you take corn to a thousand bucks a bushel, six billion people starve.
If you take oil to a thousand a barrel, the world economy collapses.
And if gold goes to 5,000 and then 10,000, nothing really breaks in the real world.
So in a recent interview, which I'll have linked in the show notes,
Luke Groman, with his gold analyst hat on, he lays out the case for Bitcoin without even realizing he's doing it.
If you listen to what Luke says here and you replace the word gold with Bitcoin, he's got a great point.
gold. The other two months, it was the second biggest after pharmaceutical preparations and oil
last month. You can see what the Chinese are doing. You can see what they've been doing. You
can see what central banks are doing. You can see the price rising. I mean, if you and I were
sitting down doing this interview, even four or five years ago, you can go ask any of your contacts
in gold, four or five years ago, if I would have gone to you and said, gold's at 5,500, what's going
on outside? They would be, oh, there's zombies walking the street, economic collapse. And that's
been part of it too, where gold went to 5,500 and the sun came up and the lights came on and the
market still worked. And the beauty of gold, there's a lot of things that are beautiful about
it, but the beauty of gold is it's not used for anything. It's ironic. The very thing that most
people detract from gold, it's not used for anything, are why it's so useful as a monetary
asset, as a reserve asset. Because look, gold could go to a million and what's going to get
hurt. Now, take corn. Take corn to $1,000 a bushel as a reserve asset. What's going to happen?
Six billion people are going to starve. Take oil to $1,000 a barrel to make it the reserve asset to
back the dollar like we did in the 70s, right? What's going to happen? The world economy collapses
at 150 as a rate surge and what have you. So gold can go up and up and up and it's not hardly used
for anything. And so that's why I think whether you look at, you know, when I talked about the
trends we're seeing, gold to oil ratio has gone from 13 to 60. Gold to treasury, searching,
stock prices down in gold 30% since 2022. You can see over and over and over. So gold went to 5,000,
nothing happened. Gold goes to 10,000, nothing happened. It's nothing that's going to happen.
go to 15 000 and ultimately but what will happen is you're going to rebalance and reorder global
trade in a way what does everybody say they want both the chinese and the americans americans want
the chinese to consume more and produce less the chinese want the ability to trade in their own
currency what what gold going to 10 000 does both of those things um nothing is as useless so close
He just he just just misses the mark.
And clearly, Luke knows these things apply to Bitcoin, if not even more so.
I mean, Luke's not dumb, right?
Luke's a smart guy.
He knows that.
I think Luke is betting that the world is just not ready for Bitcoin.
I think when when gold started ripping, something changed for Luke.
And I think his worldview at that same time also changed a bit.
And what I'm talking about is Luke seems to be under the assumption that something's going to break and break quick and hard.
And when it does, the world will have to shift to gold fast.
And the banks have been stacking it and China's been stacking and the U.S. has been stacking in Russia and Iran and et cetera, et cetera, et cetera.
And he keeps expecting some big crash.
And, you know, I've played those clips last year when the tariffs were announced.
Luke was convinced that we were going to come to a massive, painful explosion.
I don't see it that way.
See, this is where Luke and I kind of differ in our worldview.
I foresee a long painful slide where the central management kicks the can for as long as possible I foresee a slide where the quality of life just continues to get worse and worse and worse The boil the frog scenario And of course there going to be moments of acceleration like your COVIDs or certain world events that will accelerate it
And everybody will notice it like we just had a flash of inflation in the last five years.
But it's been slowly boiling us for the last 40 years.
We just really noticed it when it hit hard.
And those moments will happen, but otherwise it's a slow boil. And that buys the world time. That buys the world time to learn, to feel the pain, to understand that they need something that their enemies are not stacking from the perspective of the West.
The problem with gold, and he almost gets there, is that China has a bunch of it.
Russia has a bunch of it.
Everybody has a bunch of gold.
And if we were to use gold as the gold trading standard, if you will, the gold trading standard,
so all international trade is settled with gold, right?
Or, you know, even the reserve currency, if you will.
You then require countries that don't necessarily trust each other to start trusting each other.
And you have to wonder if that hasn't played a role in the U.S. failing to revalue its gold supply since the 70s.
What's that about?
And lastly, what's always led to gold's biggest issue is third party risk.
Paper gold games when this stuff happens, the IOUs that build up around gold, the fact that gold sucks to transport at scale.
It's slow. It's expensive. It's hard to track, especially compared to any modern currency like Bitcoin.
and when the interviewer brings us up to luke i don't think he has a great answer i think he has
to kind of dance around the issue he kind of waves his hand about it gold is a great unit of account
tells the truth and it's a great store of value but it's not a good medium of exchange
and if you and then you always get the argument yeah you can have a payment system built on gold
and you have the you have the gold in a vault and ownership of the gold changes hands in the vault
And I'm like, fine. But then that requires a trusted third party, at which point it's no longer,
it's promissory money. It's not money with no liability. And we saw, I don't know if you saw
this, but some hackers exposed this story three or four years ago where Russia had been buying
drones from Iran and paying for them in gold. And it flew three tons of gold down to Iran.
I mean, it's just so impractical. So I don't see gold as a settlement money or maybe a medium of
exchange. I don't see it having a role as a medium of exchange unless everything falls apart and we
go back to some kind of gold standard. In fact, that's one of the reasons why the 20th century
gold standards fell apart because we weren't actually using gold in transactions anymore.
It was all promissory. Yeah, I think that for me, I think the transactional use, I agree with you.
in the day-to-day role. I think where we are and increasingly where we're going is at the
supranational level or the intranational level, international level, that shipment of gold from
Iran to Russia. I think there's an element of where that's going to, at that level,
that will happen more, partly because trust is eroding, but partly because it'll be,
it's probably politically incorrect, but as my grandfather used to say, it's a system I work
to no tiki noashi if yeah right you're we're closely the same age you don't get your you don't
get your you can't pick up your clothes at the dry cleaner unless you've got your claim ticket and i
back in either the 50s or 60s the united states used to send a plain load of gold to riad every
month every quarter um to settle oil deficits and i think some version of that is how gold
it may have already begun being used in that way but essentially um every quarter perhaps every
month you'll you'll tally them up and you'll load it up uh you know and if for certain goods like
over the six of the last eight months the number one export of the united states of america has
been gold yeah but that hasn't been for trade right that's been for central banks stacking
And here's the cognitive disconnect, I guess, for me, for Luke.
He seems to think two things at the same time that are in conflict with each other.
Luke seems to hold the belief, based on interviews, that AI is going to be a boom for productivity.
The pro-AI scenario, he's got two scenarios.
One is that it's going to bust and blow up the economy and destroy everything.
And the other is that if it's successful, and I think I've played these clips on the show,
So if AI is successful, the downside will be that it is so successful that it'll have second order effects of mass unemployment, which will then have third order effects of civil unrest and all kinds of things. Right. And the result would be that the economy is just supercharged by automation, but the people don't have work.
And so he believes you'd have this weird thing where all the corporations and, you know, the governments are making tax revenues and the corporations are making incredible revenues, but the people are all unemployed. I don't know where the revenues come from. But anyways, he does believe that AI, there's a possibility that AI could be a massive accelerationist technology.
But then at the same time, he somehow thinks that economies that have been supercharged by this AI productivity boom could somehow handle finalizing transactions with shipping containers that are shipped weeks over the ocean.
where a nation could risk losing its trade settlement to a bad storm?
In 2026 or 2027 or 2028, when we are all AI supercharged
and everything's moving at the speed of intelligence,
nations are just going to wait a month to settle a trade?
I mean, it's certainly possible, but just think of the logistics
filling containers full of gold.
If you actually went to the scale, like it's already happening now at a small, tiny scale.
And it's ridiculous.
And it's massively expensive.
Not to mention you're just expending an incredible amount of diesel to just move a rock across the ocean.
I mean, it's preposterous in the future.
It just seems bonkers to me.
It's like caveman stuff.
And to think that you could have this massive AI accelerist revolution at the same time you would go back to a practice from the 1800s and the early 1900s.
just seems so like it's in logical conflict to me that it's impossible.
And you cannot underwrite the fact or I guess underplay the fact, whatever,
that these countries don't trust each other.
And there's no CLI to check the supply.
How does one even audit the supply of gold?
How does China trust the U.S.'s supply of gold?
Because right now I know how you do it.
Right now, I guess, at least for the United States,
You tune in to Jesse Waters' primetime on Fox News
while he takes a little stroll with the Treasury Secretary
and just casually brings it up.
What are we looking at here?
These look exquisite.
Yeah, so these are the displays of our currency over the years.
Some of it, like, we used to have silver certificates.
We used to be backed by silver, sometimes gold.
And then in the 70s, we just went to what was called fiat currency,
where you didn't have to keep gold or silver in the vault.
If any of these are still outstanding, though,
the silver or gold for them is at Fort Knox
waiting for them to be claimed if so needed.
Have you visited Fort Knox?
I haven't.
People on my staff has.
We're going to the treasurer's office.
The treasurer has been to Fort Knox.
I am happy to say all gold is present and accounted for.
the U.S. has the largest pile of gold in the world,
over a trillion dollars at current market value.
Yeah, it's all there.
Just trust us.
I just said it on Jesse Waters.
Yeah, my guy looked.
He came back, said it's there,
so we're good, Jesse.
We've got the greatest stockpile in the world,
the biggest.
I don't even believe that.
Do you think Russia believes that
or China believes that
or even the EU is going to buy that,
the trust me bro standard?
Really?
I just don't know how Luke can be so smart, but yet explain that away.
And isn't this what Larry Rock, Larry Rock, that's funny.
Isn this what Larry Fink of BlackRock Larry Rock has been saying since they launched the ETF Oh I was wrong about Bitcoin Bitcoin is for people that think they need a hedge against sovereign risk Hasn he been saying that Haven I played like six clips of Larry Fink saying that
So what does Larry see that Luke doesn't? Larry was on CNBC this week. He thinks it's a bright
future now that the DGENs have been washed out of Bitcoin. There is no question, as I said in
earlier times than I was here. I was always worried about the leverage in Bitcoin and crypto.
There was too much leverage players in it. That's why we had to wash out. And I think there's more
stability at these levels here. But no, we don't see that much implicit leverage. For the scale of
the capital markets today, the leverage is not as large. I mean, that doesn't mean there's not
pockets. But no, I, as I said in my prepared remarks this morning, I'm very bullish on the
markets over the next 12 months. I think the technological revolution is going to power
better margins for more companies. I mean, think about BlackRock. We've raised our margins
increased by 260 base points over the last 12 months. A lot of it is using more and more
technology. Oh, OK. Well, someone else is feeling the vibes in the market going back to Lynn Alden.
She's got a new take on the Bitcoin treasury idea.
Don't call it a strategy clone.
Call it a strategy adjacent.
But in your June newsletter, you introduce Orange Juice, which is a company combining cash flowing businesses with a Bitcoin treasury position as the anti-strategy.
Can you tell us more about that?
Should treasury companies have been like that from the beginning?
Well, it's a good question.
I wouldn't call it an anti-strategy.
It's just a different model of the strategy.
It's not a pure play or closer pure play like the pure Bitcoin treasuries are.
We have a view that cash flow combined with a treasury strategy, a Bitcoin treasury strategy, creates that more permanent capital.
Instead of having to constantly issue securities, you have more optional security issuance on top of that more operational foundation.
So what is she talking about? Well, it sounds like, and I could be getting this wrong, but what from my understanding is, is that Orange Juice, Lynn's company, is going to acquire medium to small family businesses that are earning somewhere between one and three million dollars a year in revenue or profit.
I'm not quite sure which one and probably have some more runway to grow.
But the people running the business have just kind of run out of steam.
Right. Or maybe it's been handed down a generation or two in that generation maybe is looking to sell the business.
So they're going to acquire they're going to it's like a little bit of the Buffett strat.
They're going to acquire value based businesses that produce revenue on an ongoing basis and then use some of the surplus revenue from those businesses to build a Bitcoin treasury.
Seems to be the strategy.
So it'll be a Bitcoin treasury with revenue producing businesses owned underneath it.
That does seem like a clever idea.
And I think it's something the market would feel a little bit better about.
Plus, Lynn's extremely well respected.
So if she's got her name on it, that's going to help a lot.
She's a smart cookie.
And I'll keep an eye on this one because that is an interesting quote unquote strategy.
But speaking of smart cookies, you can say a lot about Palmer Lucky, but you can't call
him stupid and you can call him a Bitcoin, Bitcoiner, it turns out.
Bitcoin, how much do you love it? Do you own it? What are your thoughts on it?
I'm a big time Bitcoin guy. I have been from the beginning. I have been mining my own Bitcoin
since before. People have often asked you, when did you buy in? I didn't buy in. I mined in.
And I've been doing that since before there were any exchanges. I was on the BitcoinTalk.org forums.
I sold a banner ad on one of my websites for 700 Bitcoin. I remember very vividly in my website was
like a little crappy internet forums. And I still did that. I remember very vividly going to an
online Bitcoin slot machine and betting 60 Bitcoin on one poll. Nice. Didn't work. And, you know,
I was part of the Mt. Gox hack. I lost all of my coins that were in Mt. Gox. And then 10 years
later, I got like 13% of them back, you know, through the recovery process. So, I mean, I've
been in Bitcoin since the very, very beginning. Of course you are. I'm a huge fan of Bitcoin
relative to other cryptocurrencies. I've often said there's two kinds of crypto. There's Bitcoin
and shitcoin. And it's a long discussion as to why I believe that. But I'm a big fan. And
I actually originally became interested in cryptocurrency because of an essay by Jim Bell
on his website, The Outpost of Freedom, called Assassination Politics. And it was about how
believed cryptocurrency would reshape world politics, the insurance industry, the military,
governments across the world. Jim Bell was arrested and sent to prison for being a terrorist
later and also didn't pay his taxes. So a very interesting guy. I'm not saying he's my hero,
but I am saying he did predict Bitcoin in many of the impacts back in 1996. He wrote
assassination politics in 1996. I highly recommend it to anyone who wants to read what someone who
is very ahead of his time, though on the fringes of society, was thinking about crypto before
anyone else was. Fascinating. I think one of the harder aspects for people that got into Bitcoin
in just the last few years to wrap their head around is how many Bitcoin the OGs threw around
back in the day.
I don't know the exact number,
but over the process of experimentation back in the day,
I probably easily lost more than 150 Bitcoin.
It's a lot.
It's a lot of it.
I don't like thinking about it.
I don't like talking about it.
Same with like Palmer,
like it wouldn't be unusual to just go spend 30 Bitcoin
on Newegg for something.
We didn't really think of it.
Well, some of us, some people were very smart,
but some of us thought,
oh, we were just creating a PayPal alternative.
We weren't really thinking about the store of value aspect.
We were thinking about an alternative payment system
that didn't require a company like PayPal, a middleman.
A native internet payment system is a lot of what the initial,
which is how the block size wars came about and all of that.
And after the block size wars, we kind of settled this.
But initially, a lot of us considered it to be a payment system.
I was never really a big blocker,
but I did think it was going to replace PayPal.
And the reason that seemed reasonable is,
believe it or not, early on, a lot of websites had a pay with Bitcoin button, way more than we have
now. Even with things like Lightning and Albi extension, it's just on chain. Some of them would
wait a block, some two blocks. It was the craziest setup. It was just sort of however you wanted to
do it. They'd have different implementations. There were a few companies that also made payment
rails later on for companies like Newegg to use. There were legitimately more ways to spend Bitcoin
online back then. And so it was not that unusual to throw 30, 50 Bitcoin at Newegg to get, you know,
a GPU or something like that. Thinking, well, the next block or two I mine, I'll make that back.
Maybe you would, maybe you wouldn't. So here's my question to you out there.
I want to know how you got into Bitcoin. I've heard it occasionally from some of you.
Let's, I think since next week, it's going to be another summer episode. This could be a lot of fun.
what got you into Bitcoin and around when and did you poop around and find out with the altcoins for
a little bit and then just go straight Bitcoin are you still pooping around and finding out a
little bit you can tell your buddy Chris sometimes it happens boosting and tell me your story I think
that could be a lot of fun next week and uh I uh well I mean you know mine a little bit but there's
a lot actually you know what I've been thinking is I should go back and listen to plan b there's
You know, we documented a lot back then.
There's been a lot that's changed, but yeah.
Yeah.
I, you know, one thing I haven't really talked about much is my actual mining setup, which
was pretty cool.
I'm pretty proud of that.
Anyways, Boostin, tell me your Bitcoin story.
What got you into it?
If you still poop around and find out, if you used to poop around and find out, Boostin
and share your story.
Boost.jupiterbroadcasting.com.
Well, you can support the show just by doing what you do.
If you want to buy sats on River, one of the best ways to stack sats in the US, use my
link in the show notes.
If you like self-custody, you like that?
You like your self-custody?
You should probably check out the Bitcoin well.
They don't even host a wallet for you.
It's all about self-custody.
And they support lightning, too.
Link in the show notes.
Now, if it comes time to spend your Bitcoin,
happens to all of us,
and you want to go from sats to gift card
in just seconds over lightning,
it's pretty sweet.
The Bitcoin Company, link in the show notes.
Fold card!
Stack sats as you pay your bills,
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And now, also, strike in the show notes, too.
You're going to buy sats through Strike, use our loan product, use my affiliate link.
None of these things cost you money, no official relationship with the companies,
but it is a nice way to support the show by doing what you might already be doing.
Links in the show notes or in your podcast app.
And we do have some boosts to get to.
Four score and seven boosts to go.
Upfront warning, this is an early record by a few days.
So if you think your boost should be in here and I missed it, it's just because I'm recording early and I will catch it in the next episode.
But we'll start with Mac Jollers, who is our baller booster this week with 69,256 satoshis.
Hey, rich lobster.
Episode suggestion, AI versus Bitcoin.
Who pays for the next grid?
So does AI push Bitcoin off grid or does the buyer of last resort save Bitcoin?
Does Bitcoin build the infrastructure AI needs or does AI build the infrastructure Bitcoin needs?
Mac, I have been chewing on this very question myself for, well, really the last year.
And I think it's a little bit from column A and a little bit from column B.
I suspect you're going to see AI for a while continue to eat away at Bitcoin compute.
especially for some of the larger publicly traded companies they just have incredible power deals
they were early to that that these ai compute companies need however there's also a lot of
types of energy that do not make sense for ai compute the stranded energies the ones that are
in remote locations bitcoin mining does not need the level of connectivity that an ai data center
needs right ai data center needs top grade fiber optic as fast as you can get it you could run a
whole gosh darn series of miners off of an LTE connection and you could run a crate full of miners
or two off of a Starlink connection. I mean, you know, they just don't need a lot there.
It's not comparatively, it's not a lot of data transfer. So stranded energy, Bitcoin still has
a massive lead there. I suspect AI will pay for a lot of this. They'll create a lot of contracts
and then there will be a pullback in some areas as that industry, even if it's massively successful
and there is an insensatable demand for compute,
if that happens,
there will then be a consolidation in that industry.
And when that happens,
there will be these contracts that open up,
these windows that open up.
Then the Bitcoin miners can come in and swoop for cheap.
Then there's the other scenario.
If there is a massive pullback in AI spend
because of the free models or whatever it might be,
well, then you have the same scenario.
So either way, I think long-term,
Bitcoin mining probably benefits.
Secondarily, I think Bitcoin mining maybe benefits because AI is taking all of the environmentalism bullets right now.
So all of the stuff we were going to have to debate about energy use or cooling use or noise, which you know, I was playing those clips.
It was already building.
Almost 90% of that attention now was focused on AI data centers.
And they're not really talking about Bitcoin miners.
Bitcoin mining is a lot easier for the local population in comparison.
So they're going to take those arrows for a while.
And they're going to, and because of the money behind it, I mean, the massive institutional money, right?
They're going to influence that discussion in a way that is positive for the data centers.
You know, and you're going to hear more and more about China, China, China, right?
There's going to be all this like kind of propaganda stuff thrown at us to make the public kind of change their tune, I suspect, because the economy needs it, baby.
The economy needs it.
So it's got to happen.
So it's going to take those arrows.
And then again, as either this industry normalizes or as this industry fades, Bitcoin is going to benefit from that, Mac.
That's my, I think the, so in other words, short term, I think Bitcoin is probably you're going to maybe, you're going to see the hash rate go up and down.
We've actually seen a lot of hash rate come online comparatively in the last couple of weeks.
But, you know, that's going to ebb and flow, I think, for a little while and ultimately end up where I got to.
Thank you for the boost.
Appreciate hearing from you and appreciate you being our baller booster this week.
J-Cube's here with 50,000 sats.
I don't often get physical mail, but today I got a black envelope addressed to me.
Inside was another unmarked black envelope with a wax seal on it,
with the river logo pressed into it.
Inside was a card containing 50 million Zimbabwe dollar bill.
Invest in Bitcoin with confidence.
J-Cube, this is one of the more clever,
I don't want to call it viral, but I'll call it grassroots marketing that River does.
I have seen multiple people send this to me.
It's so clever.
It's such a, because not only is it cool as hell to get like something kind of custom wax
stamped like that, but it just really says everything.
Here is $50 million in Zimbabwe currency.
Enough said, right?
I mean, it just says it's so smart.
Thank you, JQ.
Appreciate that.
OB's here with 21,000 Satoshis.
21 gigawatts!
We are social creatures.
An election cycle makes a ton of sense.
Vibes.
I hope not, OB.
I just threw it out there last week.
I'm like, what if the four-year cycle is because of the election cycle in the U.S.?
I don't want it to be that.
I don't want it to be that, J-Cube.
Moving on.
But thank you for the boost.
Bitcoin Lizard's also here with 21,000 Satz.
21 gigawatts!
Brad Sherman was talking about the Fed bailout of Silicon Valley back in 2023.
Circle had a $3.3 billion in SVB, that's Silicon Valley Bank, during the bank run.
And if SVB had failed, the stablecoin USDC would have been in Sullivan.
The SVB bailout indirectly saved USDC.
Sherman forgets many other fiat companies were saved as well.
Very true.
Yeah, you don't really save one without the other these days, especially when it comes
to stablecoins.
That's a spicy meatball.
Great one, Bitcoin Lizard.
Thank you.
Cardboard Warrior is here with 2,000 sats.
Just says yes.
Yes.
Yes, I agree.
Yes, hi.
Kronkadonk the Doggo is here with 2,113 satoshis.
No message, just value, though.
Thank you very much.
And Ace Ackerman is here with a row of ducks.
That's 2,222 satoshis.
I'd like more focus on the Clarity Act for the show topic.
You know what, Ace?
just for you, I will do a clarity update
in the update section
coming up next. So,
stand by, sir, and thank you for the boost.
Chew Toy is here with 2,114
Satoshis. I like
you. You're a hot ticket.
The hash rate's going up because my nerd axe
is heating up my desk. I don't think
it's worth a whole episode, but I would like to know
how potential chain split would affect plebs like
me, who DCA and huddle.
Well, you're not going to have to worry about it. I got an update
on that for you, too.
Well, I mean, I can't say it with 100% certainty.
But you toys, stand by.
I got an update for you.
Hey, Gene Bean's here with a row of ducks.
The heater you described sounds nice.
Look forward to your review this fall.
Very excited about it, Gene.
I went and looked it up again.
Of course, I forgot the name again.
I probably shouldn't mention it
until I actually make sure it works too
and that they're not stealing sats
or anything like that.
I'm sure they're not,
but I should probably double check, right?
But it's a guy who heats his place
on electric heat for the most part.
Also diesel, also propane.
I'm really looking forward to it
because I do run a lot.
adversaries 17 is here with 12 000 thank you gene 12 288 satoshis let's go for it oh my god this
drawer is filled with fruit loops adversaries writes i think the four-year cycle still exists
because our political system the united states is also a four-year cycle oh no
we get at least uh we get at least lately a different president every four years and it just goes back and forth between two major parties and the cycles in the camp of the market during those policy changes and the different parties make the ethos of how to run the country
But it's a global currency.
It's a global currency.
Would the BIP-110 situation be somewhat solved by having additional node implementations?
It really would depend.
I mean, if everybody runs NOTS, then no, but I think it would be good.
and honestly I wonder
if that wouldn't be more
of the discussion
if we hadn't gone down
this route of BIP-110
and spam and all of this
and if instead
we had focused on the issues
with Core that upset people
in the first place
perhaps we would be seeing
additional implementations.
Now there are implementations
out there
beyond knots
that are being worked on
but they just
they don't get any air.
They don't get any attention.
I keep an eye on them
and I'm looking for news coverage.
I'm not really making
any news though
but I do think it would help
to have more out there.
It's a good question.
Thank you for the boost adversaries.
Hope you're doing well.
Kiwi Bitcoin Guide is here with 4,567 satushers.
Well, I'll be dipped.
I'd like to hear more of your story, Chris.
I've heard a bit over the years on the shows,
but I'd love to hear more about how you found Bitcoin,
what you learned from it,
what surprised or disappointed you in the Bitcoin world.
Oh.
Hmm.
Okay, those last two points are good ones.
Tell you what, if I get enough people to boost in their story,
I'll share mine along with the group.
That'll be the plan, I think, for the boost section next week
if people do it.
He's a good guy.
Thank you, Kiwi.
Real good guy.
No, he's a great guy.
Appreciate you.
Techassins here with 2,113 sats.
I have a couple of Avalon Nano S3s I put on Brains Pool for daily payout just for fun
and also as a solo miner going for the block.
They work great.
Pretty decent hash rate and wattage ratio too.
Heats my small office.
Any update on the guy working to set up mining pool?
I'd be happy to point mine at that.
Yeah, I think we don't have an update since the last time, right, adversaries?
there was a critical flaw with the project we wanted to use.
I am interested in still doing that, though.
Maybe after the summer at this point,
but I am very much so interested myself.
So I hope you guys are, too.
And if there is an update, I'll let you know.
Thank you, Tech.
And we got a free member boost from King Arthur.
Because I'm the win!
Here's an episode topic.
Sats? Stats.
What you can buy with sats.
What's worth trying out and how.
is almost a most of the bitcoin hangups are coming from people not seeing that it's a it's a best
fluid currency to use every day yeah i think one of the things that people miss king arthur is that
bitcoin is uniquely easy compared to other you know non-digital currencies to move between currencies
right like it's pretty neat that you can go in with u.s dollars to bitcoin and come out with
euros or come out with whatever a peso or whatever you might need that's pretty that's pretty handy
right but then we have all of these new ways to access liquidity like bitcoin lines of credit
that are coming online
that also give you access to fiat
without having to sell your Bitcoin.
It's just awesome.
It's something you usually have to own real estate
or lots of stock or gold to get access to.
And now you can do it just, you know,
with a handful of sats.
That kind of stuff to me, King Arthur,
is the big story for the plebs going out there.
Thank you, sir.
Appreciate that boost.
Thank you for being a member.
Thank you, everybody who supported this episode.
This was a short window.
We still had some good showing though.
26 of you stream sats
and collectively is a nice boost.
All together, you sat streamers stacked 59,584 sats.
Why you got to put numbers and letters together?
Why can't you just go f*** yourself?
And when you bring that all together, it was all sats this week, plus the free member boost.
And our total, really, I mean, not too bad for a short episode, is 255,054 satoshis.
Thank you, everybody.
This is a value for value podcast.
That means I put it out there for free.
There's no sponsor.
and if you find value in it,
you can boost the show at boost.jupiterbroadcasting.com
or you can become a member either through Fountain
or at jupiter.party.
The idea really is to make a show you can trust.
You are my biggest customer.
You know where my loyalties lie.
It's with you.
And the incentive creates a flywheel of improvement.
My job is to make you happy.
Your job is to keep me going.
Thank you, everybody.
And with that, we do have a few updates I would like to get to.
So let's start there.
All right.
You asked.
I shall deliver.
The Clarity Act is up against the clock.
And the scheme to stoke the largest treasury market in history could be about to die a year.
A year, you guys.
after the House has passed it, if you can believe it.
Senate leadership, they really want to have a vote
on this rules of the road crypto bill
in the next few weeks before they break
for their August recess.
Big question right now,
whether they're going to be able to get
enough Democratic support to pass.
And that is increasingly hinging
on whether the bill is going to put in place
some strict limits on the president's ability
to profit from crypto.
Now, Democrats, they've been pushing
for this ethics language for months,
but it's become even more pressing
just in the last few weeks
when President Trump's financial disclosures showed him making roughly $1.2 billion
from crypto-related ventures alone during his first year in office.
He spoke yesterday with Senator Mark Warner.
He supports the goals of the broader bill,
but he said that it is critical for lawmakers to limit the ability
for elected officials, including the president, to profit from crypto.
The president has made billions and his family off of this.
We're going to suddenly go forward and say,
you know, elected officials can take advantage of that situation going forward,
I think that would be pretty outrageous.
Senator Bernie Moreno, who met with Trump yesterday on the bill,
said it would prevent any elected official, including the president,
from issuing or promoting a digital asset,
although it would not apply that restriction to other members of the family,
including, of course, Trump's family.
The lawmakers are still negotiating over the language of the bill.
An updated draft was expected this week, but has yet to be made public.
And of course, guys, as we know, the devil's always in the details.
So we're keeping a close eye out for that to see how Democrats and industry respond and exactly what kind of vote we might expect later this month or in early August.
Like I said, the timing of Trump's finances coming out, just incredible.
But, you know, thinking about it, when you look at his finances from this year, he's not going to make anywhere close to that kind of money on this.
He took advantage of an arbitrage.
there was a regulatory arbitrage.
He took advantage of it,
like tactical strike right before he entered office.
So he technically wasn't president yet.
There technically wasn't any clarity around these rules.
And what he's going to end up with if they do get this
will be something that perhaps allows his family.
We'll see.
Charles Schwab, though, the analyst over there at the Schwabs,
they think there's bigger problems
because not only is there just still a massive amount of process
for this thing to get through.
The Republicans, which are the side
that's really pushing for this,
they are down two votes.
Here in 2026 are down at about 36%
after being up over 80% in February.
Earlier in the week,
President Trump called on the Senate
to pass the act.
However, the path to 60 votes
is becoming increasingly more difficult
after the passing of Senator Lindsey Graham
over the weekend
and the continued absence
of Senator Mitch McConnell.
The latest right now is that Senate Democrats are essentially trying to block the act unless it addresses what they've described as ongoing conflicts of interest related to President Trump's personal crypto ventures.
His disclosure, his financial disclosure in 2025 showed roughly $1.4 billion in cryptocurrency-related income.
And the Democrats are arguing that passing this market structure framework without an ethics guardrail essentially would legitimize the president's crypto business rather than regulate it.
We're at the crunch time, though.
We've got basically between now and the Senate recess in August to see whether or not the
Senate Republicans can essentially produce a compromise bill that satisfies at least
seven, eight, nine Democrats by that recess.
I've been worrying you for about six months that this well, for longer than that, that
this ethics issue was going to be the sticky thing And ironically if they don handle it right even if they pass this in some way that the Democrats can live with it and they get a few Democrat votes on board they can send it to Trump desk and he could still refuse to sign it The Clarity Act and these conflict of
interest provisions are critical here and they need to be acceptable to President Trump. The
The problem is the Senate Democrats want to put in ethics rules that would ensure that the president and his family and people attached to him can't benefit from any crypto business.
And if that's the case, the president's just going to veto it.
I mean, it's incredible that we're just saying this out loud.
It's just, you know, the sitting president of the United States, if he can't financially benefit from the passing of this law, he's going to veto it.
And that's just obvious.
I mean, I know it's true.
I realize that.
Still, it's shocking to hear them say it.
Or that the president and his family and people attached to him can't benefit from any crypto business.
And if that's the case, the president's just going to veto it.
Right. We need to have something that is workable for the president.
And you have to remember the beauty of the way that they're doing this is the rules apply not just to the president, but also to the Congress.
And so this is something that everyone, regardless of who's in power, are going to have to live by.
And so it's important they get them done right.
I think it is an important issue, though, for the Democrats and one that we do need to see addressed.
But I do think they can get there.
I mean, we have come so far with this legislation.
For a year they've been working on this.
And by the way, the Genius Act has just passed its deadline.
And I don't think a single federal agency met the deadline.
And a lot of you have been asking me, well, if clarity does pass, how does it benefit the average person?
Well, Coinbase, they still are extremely bullish, and their representative went on CNBC, and he kind of tries to make the case for why the average person cares about clarity.
You tell me if this makes you care about clarity passing.
But the true measure of a bipartisan bill is not whether everyone gets what they want.
It's whether ultimately Americans will be better protected compared to the status quo.
And there's actually no meaningful debate in that space.
This is going to create, for the first time, a comprehensive federal framework and oversight over the crypto space.
And Joe, I think it's important to remember it's not about no regulation.
This is about imposing regulation on the industry for the first time.
And so you have.
When I look at what type of regulation that is available for us to look at, we don't really have all the language.
But what I have seen from some of the drafts is it's surveillance.
Right. I think when he says consumer protection, what he actually means is surveillance of transactions so they can find fraud. So that's their version of consumer protection.
A unique opportunity for the trifecta win, win, win. American investors, American innovators and American standards get to prevail if we get this bill passed.
What will be in the Senate bill that that was not in the House bill that Democrats want?
But interestingly, in the last few weeks and months, we've seen the Democrats obtain meaningful concessions to strengthen the consumer protection provisions of this bill.
So I think this is the line.
Well, you know, some Democrats came on board because there's been meaningful concessions.
I doubt it.
I think the meaningful concessions are going to be mostly table stakes, dressing type.
What am I trying to say?
They're going to be like performative.
That's the word.
You know, stuff that's not going to really move the needle.
But they can say that they got concessions.
They just need to get five or so Democrats on board so that way they can start selling treasuries to these stable coin makers like crazy.
Right. They need a boom.
Right. If the Fed can't lower rates because we keep having issue after issue that keeps inflation sticky.
And I don't know if you are aware of this, but I looked it up.
Actually, you should look it up.
Go look this up after the show.
tell me when and for how long the federal reserve has ever achieved the two percent inflation target
just a little school a little homework for you for you tell me go to school and tell me when the
last time and for how long the federal reserve has held the two percent inflation target right
but we got warsh out there he's talking tough he's got to prove that he is not a trump drone
and they're keeping the rates at least for a while especially with another energy shock around the
corner. They're going to have to at least keep rates and sort of maybe hint at hiking to just
try to change the inflation expectation direction. So he, Warsh and friends, can't lower rates easily,
not without losing credibility, at least not for a while. But that's not the only lever.
There are ways to essentially have the same effect of lowering rates, which will cause mortgage rates
and the actual pricing of some of these things to come down
without the Federal Reserve having to adjust rates.
And part of that strategy is selling treasuries to stablecoin makers.
It's not about clarity.
It's not about safety for consumers.
It has nothing for Bitcoin in there.
And apparently it's not even going to be protecting developers from what I can tell.
What it is, it's about adding surveillance and mandatory regulations
so that way the big money can play with stablecoins
and have their government safety net
and become massive buyers of treasuries.
That means they can issue more debt.
It just, it creates this whole cycle
that allows the can to be kicked for longer
and longer and longer.
But if they don't get a thriving stablecoin market,
and I mean a thriving worldwide stablecoin market,
they don't have that additional lever.
That lever doesn't get created.
So they have got to get enough Senate members
on board on the Democrat side to understand that.
And now they can use this window dressing.
I think that was the word I was looking for.
They can use this sort of performative compromise
as cover for voting for what is kind of looked at
as a Trump bill.
But then they're going to point to these consumer protections,
which are actually consumer surveillance.
So that's, all right, I'll let them continue,
but that's kind of how I see this going.
You have an illicit finance framework that's been created.
You have an FTX loophole that's being closed to prevent things like FTX from happening.
Oh, yeah.
You have insider trading safeguards and more disclosures.
So really across the board, the Democrats have obtained meaningful concessions to make
what was already a strong consumer protection bill.
The idea.
OK, so the Democrats have closed the FTX loophole.
Was Maxine Waters involved with that?
The one that was blowing kisses at Sam Bankman fraud?
This is the irony of it.
Is the original version of this back during the Biden regime when Gensler was still in and Maxine Waters was running these committees.
It was written by FTX.
They were literally buddies with Sam.
They hugged Sam.
Maxine's staff hugged Sam.
Maxine Waters, you can find a video of it, blows a kiss to Sam and waves at him.
She read Talking Points composed by FTX.
I mean, it goes on and on and on.
So the irony, right?
now, a couple of years later, the Democrats get to play defender of the people by working in these
provisions that close the FTX loophole that they were the ones that are going to enable and make
FTX a de facto monopoly in the United States and crown Sam Bankman fraud the king of U.S. crypto?
Those very same people now get to claim that they're protecting consumers and closing the
FTX loophole. Do you not appreciate what a masterful stroke of politics this is? Can we just take a
moment and just appreciate this as just a brilliant stroke of twisting the narrative back around to
benefit you? I'm just I'm getting all hot thinking about it. I'm so impressed.
And meaningful concessions to make what was already a strong consumer protection bill that
much stronger. Will it be, will there be a change to how crypto is, is classified in terms of
commodities, securities? Not, not fundamentally. I mean, first and foremost, just still going to have
the registration examination and surveillance infrastructure that was part of the house bill,
but the Democrats, what they have done in these additional negotiations is make sure that you have
more teeth to make sure that customers are ultimately better protected. Cause at the end
of the day this is about customer protections The status quo lacks this infrastructure lacks these protections and the Democrats use this opportunity wisely to make sure that customers were first and foremost
in getting this bill. I mean, banks aren't going away. Crypto's not going away. How are you,
how's that going to reconcile itself with people like Jamie Dimon? How can we all get along?
It actually is reconciling itself because if you look below the headlines, what you are seeing
institutionally is a wide array of investments and partnerships with companies like Coinbase.
Not a week goes by, Joe, even on your show where someone isn't announcing some new project or
investment into crypto. And we're having an inevitable convergence where a few years from now,
we're not talking about traditional finance and crypto. We're simply just talking about
modern financial institutions because it appears every modern financial institution
recognizes what Coinbase did nearly 15 years ago.
They're going to tokenize, baby.
They're going to tokenize.
So if they can get enough Democrats on board with this new narrative,
and this does seem like a bit of a winner if they can get a few convinced.
This thing has a shot.
I would say Clarity has a higher chance of passing than BIP-110,
but I wouldn't write any one of them off necessarily.
If you're feeling a bit worn out about all of this,
I think this might be part of the strategy as well,
because some of the senators out there, besides just Lummis,
are clearly getting worn out at this process.
Here is Senator Mark Warner.
I just, because I do want you to hear this.
You know, is Swanee, the bipartisan group,
still trying to get a Clarity Act done?
We touched on this briefly.
You would not want a Clarity Act that increased the ability
of illicit finance to take place suddenly with the blessings of law, would you?
um well thank you senator i mean it's vital that the clarity act provide tools you speak a little
closer it's vital that the um that the clarity act provide rules and tools for the treasury
department um and the administration to be able to counter illicit so what you would be concerned
if the trump department of justice with technical assistance said that the the standard proposed
by industry and some of my republican colleagues would actually make it easier for illicit
finance to take place. This just happened the last couple of days. That would concern you,
wouldn't it? It would be concerning. Yes, Senator. Good. I tend to work with you. And
the secretary, I want this done. And I am tired of being in crypto hell. But we got to do it in a
way that doesn't make this circumstance worse. I want America to lead in digital assets.
Did we get it wrong? The downside ramifications could be huge as well.
Oh, your crypto hell is just beginning, Senator Warner.
All right, so let's shift gears and talk a bit about BIP-110.
There's just only a couple of minor updates.
There has been some discussion around technical concerns that emerged on July 18th.
There's been a flaw that has been nicknamed block slop in Bitcoin knots.
It was highlighted by Dath and Pone.
it involves a potential issue with BIP-110 enforcing nodes,
retaining and not properly revalidating older blocks under the new rules,
which could risk a divergent chain history.
Prominent developer James Lopp described it as a consensus bug.
However, not supporters have called it, well, unlikely or probably fixable,
so they've kind of waved it away,
but it does seem to be a bug that is in the BIP-110 enforcing rules.
what was actually more interesting to me was just the amount of high-profile opposition that seems to
intensified over the last few days between july 19th and 20th sailor has just been
swinging he posted a long detailed critique on x titled 110 reasons bip 110 is a bad idea
he argues the proposal threatens bitcoin's neutrality it sets a dangerous precedent for
censorship-like changes and risk a network split due to the user-activated soft fork mechanism
and low miner support and could invalidate certain existing transactions styles or scripts
saylor also emphasized that bitcoin should remain usable quote no matter for what reason
and warned against turning it into something controlled by subjective judgments signaling
support for bit 110 remains pretty low minor signaling has stayed near zero percent um
well below the 55% threshold. However, with Ocean now defaulting to BIP-110 and a large miner asking
their, I guess, users if they would like to signal, we could see a change there. But as we get closer
to the August 8th deadline, it does seem to be not working out. And perhaps we are seeing a new
narrative build for the BIP-110 camp. Many have argued from the start that if this thing fails,
the BIP 110 crowd will inevitably end up with their own chain and their own altcoin.
You could call it not coin.
You call it not Bitcoin.
That'd be cute.
You know, K-N-O-T Bitcoin.
Or I like loot coin.
I think that, you know, puts a finer point on it.
But I think whatever the influencers in that community push, the users will be fine with.
The obvious problem is going to be the hash rate, right?
They're just not going to have the power.
So you're going to have a block time that just goes out longer and longer.
I find that to be a particularly interesting problem.
and there's already talk about making some changes to the proof of work mechanism
to help keep block times down.
And in my opinion, once you're talking about making changes to something like proof of work,
there's really no going back from that.
And here is Bitcoin Mechanic talking about just that.
I will never run a Bitcoin core node ever again.
There's no need for me to do it.
If that means I'm on some dead isolated chain with no one around
where people are talking about proof of work changes,
okay i'll go along with that i'm not here for any other purpose guys and everyone else running
bit.10 feels exactly the same as me that's who you're up against really everyone else uh supports
bit.10 supports making changes to proof of work that's radical i mean where's the where do you
draw the line why not why not also uh change the issuance schedule while you're at it you know you
Maybe you could make it less even, right?
Make it more valuable.
Maybe there's only 15 million coins.
You could go the other direction and surprise everybody.
It just, to me, is bonkers.
For our final clip this week, let's zoom out and focus on something that really matters.
Bitcoin is a technology the world has not even begun to wrap their noodle around.
We know it.
We see it.
I know it's cliche to say that we're early, but we really are early.
Even smart guys like Luke.
Groman, he gets tripped up.
I talked about the third party risk and trust issues with gold earlier in the show.
And I also talked about how difficult and expensive it is to transport, especially at scale.
But I think there's a bigger idea here we should talk about.
Set the network aside for Bitcoin, which I know is crazy, but stick with me.
Even with the network aside, Bitcoin is still a harder money than gold.
And that's the point that Ross Stevens made when he sat down with Saylor years ago now,
And they get into Bitcoin as an emerging monetary network that will eventually absorb, absorb from weaker stores of value all into Bitcoin.
You know, everything kind of, you know, goes to Bitcoin over time.
And the reason for that is because money goes to where it's treated best.
And Bitcoin is the hardest money, even when compared to gold, even when you think about it without the network.
Well, I think that's for everybody to make up their own mind.
I'll tell you how I think about it, though.
there's really two primary dimensions that I think money should be evaluated on,
sellability across time and sellability across space. So sellability across time just means,
will a money keep its value through time or will it depreciate? The oldest fiat money that's in
existence today is the British pound. And 371 years ago, when kind of the modern British pound
started, it was equal to one pound of silver.
One British pound bought you one pound of silver.
Today, do you know what one pound of silver buys you
in terms of British pounds?
I'm guessing that it buys you more than one British.
More than one?
A little bit, 174.
So you used to buy one for one, now a pound of silver
buys you 174 British pounds.
And the key here is to understand
what changed and what did not change. Okay. The silver itself did not change.
371 years ago, it weighed a pound. Today it weighs a pound. 371 years ago, the silver had
certain chemical properties. It's got the same chemical properties today. The silver did not
change. The fiat changed. It depreciated more than 99%. So silver crushed fiat.
I hate the 99% number. I just hate that one.
Yeah. I just didn't want to take it out to that many decimals, but it's 99, what's 7, 6, 3, 8,
1, 2, and I don't know. It's a lot. It's basically worthless relative to silver.
But people talk about gold. What about silver versus gold? And the reality is gold has been
far better and far more reliable. It's much better store of value than silver because it's scarcer
and it's got a much lower supply growth. Gold grows at about 2% a year. Silver grows about 20,
30% a year. So gold is a much better money than silver, but let's compare it to Bitcoin. I mean,
gold still does grow. You print through mining, you print gold at about 2% a year and Bitcoin's
on an asymptotic journey to 0% inflation per year. So 2% a year, roughly times 50 years,
and gold essentially depreciates completely versus Bitcoin. So Bitcoin will be worth far
more than gold. In the future, once it clicks for people, that gold is printed at a much higher rate
and that compounds, much higher, 1% or 2% a year, but that compounds over 10, 20, 30, 40, 50 years.
But there's another property of gold that makes it weak relative to Bitcoin. And in fact, this is a
property of Bitcoin that makes Bitcoin truly unique among any money in history, which is that
Bitcoin is the first store of value ever in which its supply is entirely unaffected by its demand.
If we take the example of gold to prove this point, if gold went to, I don't know,
100,000 bucks an ounce, it's up 50X overnight, you and I know what's going to happen tomorrow
morning. The miners can get to work very early. I'd be mining it.
You and I would drop the phone and start mining, right?
We're going to start mining.
We're going to look around our house for gold.
We're going to melt it down.
We're going to drive up the supply.
We can't skyrocket supply, but we're going to drive up the supply.
We going to drive up drive down the price of gold If during the course of this conversation people really feel like bullish on Bitcoin and Bitcoin goes to a million I saying that with a smile what going to happen in supply of Bitcoin
Nothing. Nothing. Nothing. That's incredible. That's incredible. Bitcoin is the first store
of value in human history where its supply is never, can never, will never be affected by
any amount of its increased demand. So the conclusion is that Bitcoin is better
at being gold than gold because it's more sellable across time.
Let's check in on the state of the network. I am wrapping up at Blockhite 958,926.
Going right now.
This is great.
Bitcoin and U.S. dollars.
Love to see it back at $65,100.
Probably won't stay long, but God, I love to see it.
$65,000 never looks so good.
That puts our sats per dollar at $1,536 to $1.
We are still down 48.4%, y'all.
But I don't know, man.
$65,000 feeling good.
It's feeling good.
We are 287 days out from our all-time high.
It is a bear market, my friends.
The estimated difficulty adjustment is an upwards adjustment of 2.5%.
That's still sort of settling out.
Don't be too surprised if that changes just a wee bit.
Our seven-day price change is up 4.6%.
We are up.
And we are 690 blocks away from our retarget.
So I guess, actually, it may come in.
It may come in right around at 2.5% difficulty.
It looks like as I'm recording, the price is sliding a little bit right now.
But I'm looking at the overall stats.
I don't care.
State of the network?
Yep, it's strong.
If you made it this far, I got links for what I talked about at This Week in Bitcoin.show or in your podcast app.
Hey, you know, my goal here is to create a show that focuses on the signal and doesn't get distracted by emotions or politics.
It really tries to create something you can use to plan for yourself your friends your family your business your future whatever it might be So you can always let me know how I do with the Boost at boost You can also tell me how you got started in Bitcoin and if you pooped around and found out or if you still pooping around Those are all things you can send my way
You can also boost from a podcasting 2.0 app.
They just built it in, and I just absolutely love that.
Also, if I miss something or I'm still taking single-episode topics
because I have another summer episode coming up,
so you can send those in as well.
Now, I am going to wrap it up with a value-for-value track,
and if you boost in 95% of the sats during the song will go to the artist.
And this one, it just felt right.
I'm going on a summer road trip,
so I am playing Cool Summer by Tony Salamone.
See you next week.
We'll see you next time.
I'm ready for a cool summer
No baby to call my own
Nobody to soothe my feet
So only thing gonna chill my bones
I'm ready for a cool summer day
Cool summer days
Old places left behind
But some ghost is in my mind
My mist haste is sweet bitter
The old faces follow me
The hotter places I can't see
My light is getting dimmer
Oh, winter ain't got no shade
I burning up in the flames Got a fever won let me be I ready for a cool summer No baby to calm my lungs
Nobody to soothe my face.
Only thing gonna chill my bones.
I'm ready for a cool summer day.
I'm ready for a cool summer day
We'll be right back.
I'll break my nose
I'm ready for this day.
Oh