Lyn, welcome to the Freedom Footprint Show, thank you for joining us.
Thanks for having me.
Yeah.
Good to see you, Lyn.
Uh, first, first question.
How did you like Madeira?
it's beautiful.
I definitely recommend people go if they can.
Uh, beautiful place.
And it's like, uh, not really like anything else I've been to.
and I, I tend, I mean, obviously the, the ocean view, basically the,
the combination of mountains and the ocean, of course, is, is gorgeous.
Um, the, you know, kind of walking around, it's just like the, it's gorgeous.
But I, I tend to really appreciate trees wherever I go.
and I'm not in any way an expert on trees, um, but I do notice them a lot,
so I like different types of trees.
I don't really like the trees where I'm from, but whenever I go places, I
often just, I, I spend a lot of time focusing on the trees, and the trees
in Madeira look like Jurassic Park.
It's amazing.
huge fan.
So, yeah, basically, uh, definitely one of my favorite trips.
Yeah.
Did you manage to, to travel around the island?
Anything, anything or like, uh, didn't you, I guess you
didn't have time for that.
Not as much as I would have liked to.
There were some hikes I wanted to go on, but I ended up having to do
a client report before I flew out.
So I had to miss that.
But I did, when I was going between different places, I did do a good amount
of walking around the main city there.
So I definitely, there's enough space that I could go back and see new things.
Let's put it like that.
Yeah.
The, the, the reason I ask is because there's so many different
types of trees around the island.
Like if you go to the, to the Westmost part, there's like this, uh, middle earth
looking or very old foresty setting, uh, which is very different from.
From the, the stuff around Funchal, which is more jungly, I guess.
Very cool.
All right.
So, um, yeah, for, for our listeners who don't know you, I, I don't know who
those listeners would be, but, uh, for them, could you give us the TLDR on, on L
Uh, sure.
So, um, my initial background is electrical engineering, uh, and then
I shifted more toward engineering management systems engineering, uh,
which is basically the, um, the approach of, uh, if you're trying to build a
complex system that involves, say, electrical, mechanical, software, and
aerospace engineers, how do you bring them together to actually build a system?
make something.
Um, so that was, that was my initial background.
in parallel to that, I've always been interested in, in finance and investing.
it was something I studied in, in, in high school, kind of, you know, classic
value style investing, for example.
and in my career, uh, I eventually shifted more and more from tech to finance,
even within the, um, Engineering field.
Um, and eventually I left it all together just to focus on, macro
research, investment research in general.
I take a systems engineering approach to how the, the global money system works
because it's, it's ultimately a system at the end of the day, there's inputs,
there's outputs, there's governing logic.
It's, it's quite centralized the way it works.
and so this is the system that I analyze like any other system.
and, uh, over the past four years or so I've been working Pretty
active in the Bitcoin space.
one of the kind of the earlier kind of traditional finance analysts to
start covering it, um, on a regular basis with a pretty large audience.
Um, and then also I'm involved in Bitcoin ventures.
So I'm a, I'm a general partner at Egodeath Capital.
and so, uh, I've kind of in numerous areas kind of watched the venture
side, uh, which has been very instructive, uh, for the space.
Yeah, I know you've also written a book called Broken Money, uh, which
I'm halfway through at the moment.
Uh, and, uh, yeah, could we, could we talk about the book a bit?
Uh, I mean, it's a book about money and, uh, why it doesn't work, right?
Yeah, it's called Broken Money.
Uh, and so what I did basically is I, the last five years of my research or
so, is kind of condensed into that book.
Uh, it came out last year.
Uh, definitely one of the most rewarding projects that I've done.
and basically, Kind of the history of my financial research was I used, I
was initially interested in equities.
So actually when I was a kid, I mean, the first investment I
made was gold and silver coins.
then I gravitated toward equities.
but in 2017 or so, I started to get more into the macro because
I noticed something that had not happened in decades, which was the U.
S.
deficit as a percentage of GDP began rising even when, uh,
unemployment was still shrinking and we were not in a recession.
Uh, normally for decades, the deficit rises during recessions, but it was very
usual to see it start to rise and kind of pivot in the middle of the 2010s there,
even when we weren't in a recession.
So I started to look up all these reasons, how does this, how is
this debt thing going to play out?
I came across, uh, kind of the long term debt cycle.
I kind of realized that going forward, this is going to be
a very macro heavy decade.
So that's what made me shift, uh, Let like less from equities.
I still research equities a lot because they can be very
informative on what's happening.
But I shifted from equities toward macro.
and I generally found for a while that mostly when I, when I'm writing
things, I'm describing all the things that are broken, why this is broken,
why it's going to lead to this, why This problem is going to emerge.
And what I like about Bitcoin is it's, it's, it's a solution for
a lot of those things, basically how things ideally should be.
and with broken money, what I do is I analyze the, the money system
through the lens of technology.
So the past, present, and future of money through the lens of technology,
because a lot of monetary history books, they'll focus on human decisions.
What did the central banker do?
What did this other banker do?
What did this government do?
What did this, you know, all these things that happen and those are all relevant.
But the way that I like to phrase it is things like politics affect
things temporarily and locally, whereas technology moves things
forward permanently and globally.
and so I, I focus on how emerging technologies shape kind of the incentive
structure around money and give us a certain era of this thing's dominant
and another era of this thing's dominant and, and how those switchovers happen.
So, yeah, broken money is basically, It's if you're interested in macro or Bitcoin,
it kind of blends a lot of that together.
And I think it's, you know, it's definitely the thing that I got the
most reward from, like the kind of the personal reward, the intellectual, um,
stimulation from, from writing that book compared to articles and reports.
Yeah.
And, uh, would you call yourself an Austrian economist or, uh,
would you say that you subscribe to any other school or like?
Uh,
So I, so I analyze, I try to view things through the lens of multiple schools.
But yeah, at the end of the day, um, uh, you know, I, I agree
most with the Austrian school.
Um, I don't start from the preference of, you know, here's what the Austrian
school says, therefore it's right.
It just tends to be the way I analyze things.
I end up coming to this, you know, kind of the same conclusions
as the Austrian school.
For example, when people ask, what is your, what, what, um, economics
textbook would you recommend?
I would recommend Principles of Economics by Safety, and I think that's, it's
a good textbook for the modern era.
and so, yeah, Austrian, I think, is, is my core baseline.
I think other schools can inform us because in, in the, in the fiat era,
other schools are good at analyzing what's happening in this era.
Right?
So if you look things through the lens of monetarism or MMT, you get some plumbing
details of what's happening in the way that the system is currently constructed.
but yeah, at the end of the day, I think the core principles I agree
with are on the Austrian side.
yeah, yeah, that's one of the reasons I ask because like, um, when you say
that you, you, you view this as a, uh, systems engineering thing and, and, uh,
as a system and from a macro perspective, that, that doesn't really square with
Austrian first principles thinking.
But as you say, I guess these tools are developed for this MMT era and, uh, and,
uh, yeah, as you say, the plumbing there.
And the way I phrase it is that I would not use that approach if I was
analyzing the economy of 200 years ago.
because it wasn't a system back then.
It was more, it was more, you know, there were other things happening.
There was little systems, but there was not one big overarching system.
Whereas in the, in the past, 150 years ago, and in Broken Money,
I kind of really focused on the post telegraph world because that
technology impacted this a lot.
But even stretching before that, to some extent, in, in this kind
of past century and a half, yeah.
Uh, we have a very centralized, structured global financial system, uh, right?
So we can, we can debate whether that should be the case.
but the fact is, it is the case that at least this era, right?
So system engineering is useful for analyzing the system that as exists
right now, which is not to say that that's ideally how it should exist.
but so that's why I like to have a foot in both camps in the sense that
I'm, for example, I would like to see a, for example, a Bitcoin world.
Um, and at that point, you wouldn't really need system engineering to analyze
the global flows of, of money and why things are working, but in the current
system as structured, it's a human, it's pretty much a human designed, fairly
centralized system with, uh, inputs, outputs, and governing logic in between.
So, you know, in my earlier electrical engineering days, I did control system
analysis, and that's basically the same thing I'm applying to the system.
And it's, it's about analyzing the centralized system
as it exists in this era.
So funny that you started in electrical engineering, because so did I, uh,
back in 1996, I studied for electrical engineering for a year before I dropped
out, so that's a funny parallel.
Yeah, uh, so what would you say is the biggest flaw with the current system?
Uh, that is centralized.
Um, basically the, the way that I describe it, and I, I showed
this chart in Broken Money.
There's this, there was this book written in 1875, called Money and the
Mechanism of Exchange by William Stanley Jevons, uh, of the Jevons Paradox fame.
Uh, and he, It was kind of like broken money back 150 years ago,
because he's analyzing the past of money kind of through the lens of
like technology and like the details of coinage and things like that.
And then he's getting into the modern era, modern being,
of course, 1870s at the time.
And he's analyzing all this new technology that's happening.
And he made the observation that basically, financial system with
the combination of the various paper instruments and then the telegraph, uh,
because his book came out, you know, about a decade after, uh, the cross Atlantic
telegraph cable, the first successful one.
Um, and he's kind of analyzing the system.
He's saying this has become so hyper efficient that all these claims for
gold can just move around super quickly.
You almost never actually have to move gold.
And on one hand, this is great, it's hyper efficient.
On the other hand, he's like, this is, this has enabled 20
to 1 leverage in the system.
That there's like 20 gold claims for every, gold ounce
that exists in the system.
And if 5 percent of people ask for their gold back on any given day,
the system is, doesn't have it.
And so it's like, on one hand, this has become super efficient, and then
the other hand, Uh, it's, you know, there's, there's like a problem ahead
and, uh, of course it all broke around World War I, uh, some decades later.
and so the way I would describe it is that, uh, for about, you know, really
for centuries, but really accelerated in the post telegraph era, for
centuries, almost every friction in finance was solved by centralization.
You add another layer of centralization below it, then you add another
layer of centralization below it.
Like if I want to send money to you, well, we can go to a third party, set
up accounts there and we can just say, okay, move, move my credits to you.
And if, if, if, if money goes the other way, tell, you know,
tell him, just update his ledger.
It goes back to me.
If we use different banks, then our banks will probably
consolidate towards some super bank.
Uh, just, you know, they have their accounts at the bank.
They just shuffle that around.
Sometimes they're mandated or obviously over time, they pretty much all
became mandated to use a central bank.
and then even central banks, if we're in different countries and we have different
banks that attach different central banks, if they want to send value to each other
quickly, they, they plug into the biggest central bank, which back in Jevin's
day was the UK and now it's the US.
So you have like four plus layers of centralization and all of that makes,
um, Things move around very efficiently, but it's, it's extremely centralized and
then it, it, it contributes to inflation.
It contributes to, freedom issues.
Like, you know, if everyone's plugged into the same financial system and
then that system has rules about who can use it, it's permissioned.
that's all sorts of issues.
And so basically this, this system is enabled debt accumulation, because
there's been no way for gold to kind of hold down money and debt creation
in a telecommunication speed world.
and so the way I put it is that pre telegraph, um, information and matter
moved at around the same speed, right?
So if you, even if you wanted to update someone's ledger, you had to
physically go there, um, somehow.
Um, and so that was, that was the pre telegraph world.
Then the post telegraph world, kind of the pre telegraph You know, between
Telegraph and Bitcoin, you have a world where, information now moves at the
speed of light, but matter doesn't, uh, and so that, that basically enhanced
the power of middlemen that are doing all the services to bridge that gap,
mostly with credit, and of course, games get played, things get centralized,
things break, defaults happen.
It's just, it's just been this kind of 150 year cycle.
and then now what Bitcoin is, is basically, finally, Settlements caught up.
So now there's a way to do final settlement with someone, not in
anyone's centralized ledger, you know, basically the speed of light.
So in Bitcoin, obviously the, the base layer minutes, and then
layers on top of it in seconds.
and this is now a, this basically closes a 150 year speed gap that existed
ever since the telegraph was created.
And so I think a lot of financial problems come back to that speed gap.
There's obviously before then there were problems.
Um, there's always going to be problems, but that particular,
period where transactions are fast, but settlements aren't has
been an issue that has basically, empowered middlemen to the extreme.
And I think now what Bitcoin represents is the first kind of shift in here
where you can have more efficiency without more centralization.
You can actually start decentralizing it and get more, efficiency out of it.
And so I think that, that's kind of, that's why the system's
been an issue for a while.
Okay, so if gold is bitcoin and the telegraph is the internet, does
custodial lightning, Post the same kind of problem as, uh, telegraphed,
um, paper gold did back in the day.
I mean, fractional reserve banking is sort of possible on custodial lightning.
Is that the same risk picture?
I view it as smaller because it's harder to fractionally reserve it.
So in gold, you can fractionally reserve it up to 10 to 1 or 20 to
1 because it takes a very long time for that system to get called out.
Right.
For example, even in Jevons day, even in the late 1800s, he's
sitting there looking at this thing.
It's 20 to one and it's literally in the book.
He's explaining why he's like, cause nobody wants to withdraw the gold.
It's too slow.
Um, they've all, you know, everyone just like, look, I
just want the bank to hold it.
Um, and then because no one really, no one really, Stop the music on
that system, at least for decades.
Um, it's it that the system's able to build up for decades.
And then when it finally breaks, it's catastrophic.
But it's a very long cycle of building up imbalances and then breakage.
That's because the efficiency of the base layer gold is so much slower
than the efficiency of all the banking apparatus built on top of it.
And so it's able to last for a long time.
On the other hand, in the pure fiat system, they closed the speed gap
between transactions and settlements, but then the base layer is so flexible
that whenever there's a problem, they just print a little bit more base money.
Um, and so again, that system is able to go on for very long periods of
time without some sort of, you know, Catastrophic breakdown because it just,
it just keeps erring to the upside.
and so those two systems last a really long time in a state of imbalance.
either because the transaction layer is so much faster than the settlement
layer, uh, and therefore the settlement layer doesn't have as much power as
it should over the transaction layer.
It doesn't, it doesn't call the transaction layers bluff enough or because
the settlement layer is flexible and therefore just keeps, you know, You know,
basically most issues just get solved through moderate inflation, and then you
just kind of go back for another decade and then do it again and again and again.
And so those systems are able to last for a while.
In Bitcoin, the settlement layer is fast, and it's It's inflexible.
It can't be debased.
And so it has a lot of power to call bluff on any sort of meaningful fractional
reserve that exists built on top of it.
I use the phrase wreck cycle.
So in gold, something, a problem can build up for decades before it gets wrecked.
And in fiat, things can build up for decades before it gets wrecked.
Whereas in Bitcoin, I think the wreck cycle is measured in years.
If you try to, you know, Do meaningful fractional reserve,
like multiples of the base layer.
That's going to get called out and it's going to break in a matter of
years, most likely, because it's so much easier to say, well, this,
this thing is fractional reserve.
It's unstable.
I'm going to pull my Bitcoin out.
You'll see a lot of players do that.
And then, and then it breaks.
so I don't really view that as, as the same risk.
I mean, obviously it's a risk for people that put too much of their money into it.
You know, Bitcoin net worth in, in custodians.
Um, you should be very careful with the custodians that you use.
Um, the more you have, the more you should consider self custody as a
meaningful part of your, reserves.
But in a more systemic way, I don't really you.
I don't really view it as the same risk that we've had.
I think that's one of the fundamental fixes that Bitcoin gives us, is that
there's, it narrows that speed gap again between transactions and settlements.
Yeah, that's about the same way I view it, like lightning may be flawed still,
but it's still vastly superior to banking and SWIFT and all this legacy
stuff.¤ Back to Jevin and his paradox.
If I remember correctly, that's something to do with the efficiency
as the cost of stuff drops.
Like you, you think that less energy will be used, but, but the opposite is true
because people start, buying more of that.
thing, and therefore the industry.
Is that a correct framing of it?
Yeah, basically, yeah, basically that our demand grows as
prices go down for something.
Instead of, if we get 10x more efficient and cheaper at making something, instead
of spending 10x less of our income on that thing, more often than not, We
instead consume more of that thing.
So, for example, when the cost of storage went down, you know, data storage
went down 10x or 100x or 1000x, we end up using 1000x more of it, instead
of spending 1000x less on storage.
Now, obviously, that doesn't apply to everything.
Like, that doesn't apply to food, because obviously there's
limits on how much we can eat.
So, if you make food, you know, 10x cheaper, we do, we do actually spend.
TedX, less of our income on food, but for the majority of things for which
there's no kind of firm limit to what we can consume, we, our consumption
tends to, um, offset price declines.
Okay, because I find that so interesting how that will play
out on a Bitcoin standard.
Like, I love this abstract thought experiments of how things would work
with a perfectly finite money supply.
Because if you have the incentive to save rather than spend, Uh, in
every transaction you make, will Jevons paradox still be a thing?
Because like, sure, stuff are dropping to their marginal cost of production
and everything gets cheaper, but still your cravings sort of go away
when you, when you know that your money will be worth more, the longer
you save it, but what's your take?
I don't think it's just about cravings.
Jevons even applies in the longer term.
I mean, basically, if you, if you lower the cost of energy, for example, you
find more things to do with energy.
Um, and so, for example, some of the hard money environments like the, um,
the Renaissance or the late 1800s United States, um, these, these, these Periods
of rapid real growth, technological innovation, cultural improvements,
um, on, on a fairly hard money.
you know, those were periods where Jevin's Paradox was still happening.
It just, you know, Jevin's Paradox doesn't just, it doesn't just mean
like, for example, you know, you got a little spare money, so you go
out and buy a, Sports car with, uh, you know, payments attached to it.
It's not just about that kind of like blind consumption.
It's basically even for that longer term, it's saying, well, you
know, energy used to be expensive and now it's less expensive.
So let's, let's figure out what we can do with energy to improve
human flourishing, for example.
Um, so it just, it, it's, it takes different roles over time,
but it's still ultimately, yeah.
Okay.
So, so in your mind, the, the crypto Lambo craving bros won't turn into
monks overnight just because they adopt a Bitcoin standard then.
Well, even that, well, I was going to say that's not really what I'm referring to.
I'm basically saying that eat, like Jevin's paradox applies both
for those like Lambo people and it applies to thoughtful savers, right?
It's not, it's not saying that your consumption fills
your income, for example.
It's not necessarily saying that.
It's basically saying that if we get much better at something, if we, if we make
something way cheaper, We use more of it.
So, for example, the fact that we make storage, data storage, way cheaper,
and we use more of it now, it's not because we're rabid consumers.
It's because we've found a productive use case of storage.
Um, and so, for example, I think going forward, for example, um, you
know, we, we, we found a new use for energy in the form of AI, right?
So we can, we can, you know, kind of like how we outsource some of our
physical manufacturing to machines.
Uh, we can outsource some of our, like, data crunching and things
like that to machines as well.
You can have your own kind of, like, AI assistant.
Makes you more productive.
Um, basically, as we, as, as the power of processing goes down, uh, we
find more use cases for processing.
and so this, this applies even in a non consumptive, productive sense as well.
Yeah, that's great to hear.
I mean, um, in, in the Austrian economics, I think you would refer to the
higher, higher order goods always like aiming for higher order goods, right?
Yeah.
So the, the big picture, the big macro picture that, that this comes into, that's
where, that's where my mind goes here.
So the, the thing that's broken is the, the centralization, right?
And now I think jumping to the end of sort of how Bitcoin fixes it, that,
that's, that's kind of the, the thesis, I guess, but I'm, I'm curious, how did
you figure it out that, that Bitcoin was going All that, all that it is, right?
Because, I mean, you've been, you've been in the space for, yeah, a long
time, uh, and, and, uh, yeah, I remember hearing kind of your, your
takes on the topic for, for a while.
So how did you, how did you get there originally that Bitcoin was it?
Mostly by seeing it not fail.
Um, I mean, I, I first heard about Bitcoin back in like 2010 or so.
And, uh, I was never one of those people that was like adversarial toward it.
I was never like, Oh, that's stupid.
Or, but I was kind of like, what's the chance that works?
Or, uh, that sounds neat.
I should probably put more time into it and then never get around to it.
Right.
So it's kind of like, Neutral toward it, or like, I'm rooting for those
guys, but what are the chances that this is the money that finally,
you know, is this Hayekian money?
and, uh, but when you watch it go through, like, three cycles of, you
know, it has a big adoption cycle, it goes down, 75 percent or more.
Uh, it recovers, goes up to another big cycle, goes down over, you
know, kind of every cycle I would go and like look at the ecosystem
and see the UX was getting better.
and so I finally like was like, okay, I have to put the
time in to understand this.
and sorry, I did that back in 2017.
And then I watched the block size war play out, uh, and all
of that was very informative.
Basically, it, it, it kind of showed things in practice.
Who, you know, who controls the network?
How immutable are the rules of the network?
How do network effects work in this, in this, um, industry?
Is, is the, You know, ultimately, I mean, Bitcoin is control logic.
It's a system.
Is the system stable?
And when you see it operate through multiple environments, the answer is yes.
And so, basically, once I saw Bitcoin reach a degree of critical mass and
prove itself as fairly anti fragile, I said, well, if no one can kill this
thing, and if it is, um, now kind of, uh, critical mass of network effects,
then that has macro implications.
Now, now there's a money that moves, faster than fiat while
being scarcer than gold, And that, that has macro implications.
So for example, there's 160 different fiat currencies in the world.
All of them are local monopolies of their own jurisdiction, and they control
that monopoly in a handful of ways.
One is they obviously, they tax everything other than their own
currency in their jurisdiction.
Um, but then two, they control the The inflows in and out of that country, right?
So if you want to bring value into a country, there's really two main
ways to do it in the pre Bitcoin era.
One is, ports of entry, which are obviously pretty easy to surveil.
Um, you know, some gets through, but it's, you know, it's pretty limited.
Um, and then two is, is wire transfers in and out, but they're
also surveilled and controlled.
whereas when you have internet money, you know, you can, you can, you
know, any, anyone in that country can just hold up a QR code on a
video call and I can send it to them.
Uh, they can send me a payment string.
They can, you know, so every person in that country that's internet
connected can get money from outside.
There's, the borders of that money are now way more porous.
Um, so they're less locked into their local monopoly.
More can go out and, and participate in the free market
of monies around the world.
So if they want, and the same thing applies to some extent with stablecoin,
which is that they can say, well, I will, instead of Egyptian pounds, I want U.
S.
stablecoins to hold for the next three months.
And they're centralized, but it's a, it's a market of money now.
So they're saying, well, instead of my local currency, I want
something that's reasonably stable.
That, that I want to hold.
And so, you know, they'll get stable coins.
If they want something longer term, they'll get Bitcoin.
And that, that has macro implications.
That breaks apart all those borders.
and then when you look at macro, like size matters, liquidity matters.
Just, just because something exists, if it's not being managed Um, and
so in the first 10 years of, of, of Bitcoin's history, it wasn't really
at a size that really impacted macro, whereas in the past five years
or so, it finally got big enough.
We're starting to have an impact, similar for stable coins.
These things matter on some sort of macro flow scale now.
And so they can, they can now change, you How currencies operate because now,
for example, um, various currencies are under more pressure, which I think is good
because their people have more options to escape those currencies, uh, and they
can hold whatever currency they want.
I think Bitcoin's the best one.
but, you know, if they want to hold dollar stable coins or gold back
stable coins or whatever, they, they, they have various kind of choice now.
And though the fact that Bitcoin, All those financial borders are super porous,
um, allows market forces to exist on money in a way that it's been stopped from doing
for the past many decades because of these kind of enforceable local monopolies.
So this is a, a real change now as, as you see it when, when you say impacting
macro to maybe to the lay person, that that means it's, it's impacting
outside of itself, something like that.
Like the, the larger economy.
Is that correct?
Enough?
Yeah.
Like if, if Bitcoin, if the market cap is 1 billion, it's impacting the
small number of people that use it.
you know, I mean, Bitcoin had impact as early as, you know, when WikiLeaks
turned to, to Bitcoin to get donations.
So around the margins, it began impacting people right away, but
in the, in the larger scale of actually being able to affect the
value of a currency, a fiat currency.
because people in that country now have more options.
that's, that's macro scale.
When, when, when, you know, when value moves around at size and at
speed at a scale that it can do now, that starts to be relevant.
Um, and that's why you see governments paying attention to it.
That's why you see institutions paying attention to it, because it has, you know,
It's shown one, it's shown staying power.
So it's not just a fad.
It's not just some technology that seems like it works for
five years and then breaks.
Um, it's shown resilience.
And then two, it's reached a scale that this actually matters for non techies,
non, you know, like it actually, like people that are just Looking for
pure utilitarian use case, there's a lot of people in that situation
that, that find value out of it.
like, this sounds like a death blow to the smaller currencies.
So do you think, like, we'll see smaller currencies at all,
um, like, a decade from now?
Are they all doomed?
The smaller currencies?
I think they're going to be increasingly pressured.
I don't know if they're all doomed, uh, in that, in that 10 year time
frame, but I think they're all severely impaired in that 10 year time frame.
I think, and it's not everywhere all at once.
So, for example, people in Nigeria, the adoption is very high there.
Whether it's Bitcoin, stablecoins, whatever their case may be,
it depends on the person.
They, their combination of tech savvy and their currency's broken means a
lot of them have got into the space.
Whereas in Egypt, for example, um, they're still very low adoption.
Uh, it's not widely understood yet.
and so it's not, it's not happening at the same pace.
but I think that over the next three, five, ten years, The knowledge that this
is now possible, and what this means is gonna become more and more ubiquitous.
And so every single person can, now they, they can, they can, they can go
outside the border, they can receive money, they can move infinite amount of
money around infinite value, density, even going through ports of entry.
You can memorize 12 words and bring capital with.
Uh, in a way that you couldn't really do before.
And so, as that kind of becomes more and more ubiquitous, yeah, I think the long
tail of currency start to run into issues.
So, this, you know, this is not going to Kill the dollar in 10
years, uh, in my opinion, it's not going to kill the dollar.
It's not going to kill the, the one in that, in that timeframe.
but the long tail of weaker currencies are under a lot more pressure because
the people in those countries either want Bitcoin or they want one of the stronger
currencies, they want dollars, right?
So the, the, the, the.
Starting from the back of the pact, it starts to condense toward
the biggest, and then even those bigger, biggest ones, ultimately,
I think, are going to be pressured.
Potentially,
Yeah, uh, I wonder what that will do to the movement of people around the
world, because if people Can, you know, uh, save and prosper where they are.
I guess they're less likely to move in such like volumes as the last
couple of years when You had all these immigrants come to, to, uh,
uh, Western Europe and, and the U.
S.
I mean, it's interesting.
One, it makes moving easier because you can bring your capital with you easier.
So maybe it, maybe it increases the mobility of wealthy people, for example.
Uh, but maybe, maybe for others, it'll also, at the same time, it's funny, it
increases your portability, but then it also gives you more options where you are.
So, I, I honestly, yeah, I don't really know how that shakes out in
terms of, of movement, but option, I, I view optionality is always better.
So, the fact that people have those options allows them to make choices
that, that make sense for them.
Yeah.
Because like, uh, de rooting yourself and moving somewhere
else is always costly somehow.
Like, uh, leaving your friends and family behind, it's, it's not, it's not
something that is, uh, most people don't prefer to do that if they don't have to.
So like, but, uh, yeah, as you say that, that's a very
interesting thing to think about.
Like this increased, ability to move both the contents of your brain and
your actual brain to other positions.
It's a very, yeah, there's something to think about there.
Yeah, I, I think, yeah, you can argue that especially for people
who don't want to move, it increases the options they have locally.
And so, Really, you kind of be tempted to move more of like,
there's no business opportunities there that you can't do remotely.
Um, that's where you, you might consider moving or if, or if the law there is so
oppressive in some way that it, it stops you from engaging in economic activities
or social activities that you want to.
But if you're, if you're, if you're relatively free to operate and the,
even if the local area is having issues, if you can work online, if
you know there, there's, there's so many options now for you to earn
a living no matter where you are.
Yeah, absolutely.
And this, like these video calls and social media and stuff
make it so much more easier.
So yeah, it's going to be interesting to see it play out for sure.
So what do you think, like what are these, um Um, what's going on right now
in terms of, of, of Bitcoin adoption with the ETFs and stuff like what's,
uh, what's the, what's the bigger picture there is, are things going
according to plan or, or what are the things we're not seeing or thinking
about that we should be thinking about?
Well, so one, I view that this period is fairly inevitable, and any asset
that becomes a trillion dollar liquid asset is going to get ETFs built on it
in some jurisdictions, and in the United States case, um, you know, we have some
degree of separation of powers, and so even though the SEC didn't particularly
want this, they lost in court, um, and so it becomes People want this.
Um, and so now more people can access it.
There are pools of capital that, you know, there's retirement accounts,
there's managed assets, um, and a lot of them have not been able to access it.
Um, and now they can't.
So, and there's, there's like imbalances build up.
So the fact that they could only access it with, with like
grayscale, uh, has been an issue.
And now there's kind of like this big release valve where a lot of capital can
finally get out of that big entrapment and move to other places that are, that are.
I think that's a process that's inevitable.
I think concerns around centralization are somewhat overblown.
not to say that they shouldn't be brought up, but basically I think
that there already was a pretty big chunk of Bitcoin sitting in grayscale.
Now it's rotating in the right direction.
Blackrock and Fidelity and a few others.
Um, the overall pie is growing moderately that's in those environments.
a lot of people in those environments, they prefer that.
whereas I think it's important to say make self custody reasonably easy for people.
to, to make sure people understand the risks.
Um, but I think, again, it's just people have more optionality now.
There, there are a lot of people that wanted to have Bitcoin
in their 401k and couldn't.
Now they have more options or, you know, they're, they're, they're, you
know, they have assets with an RIA and he or she is just unable or unwilling
to put some of that money into Bitcoin.
Now they can.
Um, and so I think that's overall, that's, yeah.
Inevitable, even if it's not good or bad, it's just inevitable, right?
So it's not like I see people saying, Oh, Bitcoin deviated from its mission
because ETFs exist for it now.
Well, it's like, well, Bitcoin didn't make the ETFs.
The fiat system made ETFs for Bitcoin.
and that's, that's basically the fiat system upgraded its APIs.
To plug Bitcoin in, in this method, ETFs are basically an
API into different asset classes.
They decided to plug into Bitcoin now.
and, you know, you watch out for, for big, big centralized honeypots,
whether it's ETFs, whether it's Binance, you know, whenever a lot of
Bitcoin are in one, Big custodian.
That is a risk.
So right now, a lot of them are in Coinbase.
I consider that not ideal.
Um, and but so I think people should be cautious about that.
If you're going to hold ETFs, you probably should diversify across custodians.
but I also think that, you know, it's good to take self custody.
Um, and so we'll, you know, we'll see what that shakeouts over time.
But I think that that's just an inevitable stage that Bitcoin was
always going to go through if it was ever going to get as big as it has now.
Yeah, uh, there's a, there's an interesting dichotomy or whatever, uh,
here, uh, with between Bitcoin becoming more recognized and more, more in the,
furnished rooms or whatever expression you use for that, um, and, and, uh, on
the other hand, purists wanting Bitcoin to be, what it was originally intended to be.
And I think like, uh, Bitcoin couldn't exist if it, if it, I
mean, it needs to be permissionless still at the end of the day, like
that's, that's the most important censorship resistant and all of that.
So, so, so we need like both, like sure, we don't really need the ETFs.
Of course, it makes number go up faster and that's everyone gets happy and Bitcoin
development gets more funding and stuff.
So I guess that's a positive side of it, uh, but is there a risk that, like more
mainstream and more, you know, stupid money being thrown at it, uh, like starts
chipping away from its core principles?
I mean, uh, not, not only the, I'm thinking not only of the ETFs,
but also, you know, stupid JPEGs and stuff on, on, uh, on Pokemon
games built on top of Bitcoin.
At the expense of, of, uh, node runner capacity, like,
well, what's your stance there?
I mean, I think there's a risk, but I view it as overblown because I
view Bitcoin as well designed as is.
Um, you know, it has a block size limit for a reason.
and, you know, I think that basically the market forces will play out.
I think, you know, basically, if you view what Bitcoin is,
Bitcoin is the most immutable and decentralized database we've ever made.
Uh, as humanity, I think the biggest killer use case for that is money.
If you have a really good decentralized open ledger, money is like by far the
biggest adjustment market for that.
That's like a hundred trillion dollar market in today's dollar terms.
That's like a, it's a massive market.
The total adjustment market for that is.
Uh, in theory is huge.
and the, you know, you can use that, you can like, you can, you
can timestamp other things to prove that they were not changed.
You can use it for speculative meme tokens.
I think most of, most of those fat, I mean, that's like, you know, at
most a few trillion dollar market.
Non monetary use cases for, for the most immutable database.
I think that over the long arc of time, uh, the monetary
use case is way more denser.
It's a way bigger market and it pushes that aside.
I think that while, while Bitcoin gets adopted, as it goes through, as more
people look at it and figure out things they can do with it, it goes through
these manias, it goes through fads.
Um, I think they burn themselves out over time.
We see when you look at the altcoin space, you go through this, this, this
boom for a period, and then we forget that narrative, you go through the next
big boom, and then we forget about that narrative, you go to the next big boom.
Now, kind of the current cycle is nothing particularly new, but taking some of that
other stuff and putting it on Bitcoin.
I think this is going to go through a big boom.
Boom.
And then, uh, you know, that, that kind of washes itself out.
And I'm sure someone will think of the next thing and it will
go through that, that fad.
And that can be disruptive while it happens.
but I think that ultimately that it's, it's not particularly economic.
If people want to, you know, if there's demand for meme coins, there's an endless
supply of meme coins that come to the market until they saturate that demand.
And then all those people that bought meme coins.
Basically, they get poor, and then the money flows to the miners,
and it's annoying for people that are trying to use Bitcoin
monetarily for that period of time.
At the end of the day, they still have their money.
All the people that bet on JPEGs and, you know, Mean Coins are
poorer now, unless they were the handful of sharks at the top.
They were basically chilling it and cashing out at the top and, you know,
those, those kind of sharks make money, but, um, Most people lose money, and
then it kind of goes back to stability.
So, I think that's kind of part of something that it has to go through.
Yeah, for the most part, I totally agree with you in that, uh, I do believe in,
in, uh, Bitcoin's incentives, incentive structure being set up in such a way that
these problems go away by themselves.
But I'm thinking of like second order effects.
So, like, if people believe that there's such a thing as a rare set.
Which is like in my mind as, as, uh, strange as believing there's
a rare centimeter somewhere.
Uh, the, the, uh, the, those coins, like the, the only, the only way you
can move them and still claim that they're part of a JPEG or something
is if you do the chain analysis thing.
So, so you, you give these, uh, analytics tools, companies, uh, a
further incentive to, to do more stuff and to make more money.
And, and in my mind, those companies are a real risk because they're, they're
trying to set the precedent, uh, in certain jurisdictions that, that, or
in all jurisdictions, really, they're, they're trying to set a precedent that
you can prove ownership of a Bitcoin, which in my mind is totally absurd because
like saying that, You can own 12 words.
It's, it's, it's sort of weird to begin with, like ownership is,
is a different thing on Bitcoin.
You can't really define ownership the way you can with tangible assets.
So, yeah, what are your thoughts on that?
So, yeah, I agree.
The way I would phrase it is that Bitcoin is really good money,
but it's not perfect money.
It has, there's certain limitations with, say, scaling, certain limitations
with fungibility, which impacts privacy, uh, to varying degrees.
and, you know, there's, there's tools that can overcome that on higher layers.
if, you know, If a lot of people buy into, say, ordinal theory and they say, okay,
this is the, this is the quote, unquote, ordering of sats that we agree with, um,
yeah, that, that does give chain analysis, companies a lot of tools and incentives.
I think, unfortunately, over the next decade, they're already going
to have a lot of tools and incentives because governments have a lot
of tools and incentives to, um, surveil all this as best they can.
and, you know, I, for people that follow my macro work, I, I'm focused a
lot on the topic of fiscal dominance, which is that a lot of debt is now
on the public ledger for governments.
Sovereign, sovereign debts.
and they get in a situation where, uh, you know, if they rate, if they keep interest
rates low, they, they risk inflation.
Um, and if they raise interest rates, they, they actually blow out
their deficits even more and, and fuel inflation in a different way.
and so historically what countries do, When they get to that situation
is they turn to capital controls.
They try to say, well, you know, banks are controlled now
and brokers are controlled now.
And you can't, you can't buy this type of security.
You can't buy this type of asset or gold's illegal to own or, you know,
foreign currency is legal to own.
And they turn to all those things.
And you can't.
Bitcoin is a, is a, you know, it's a release valve for that, right?
It's a, it's a, it's portable capital.
and they, you know, if you're trying to do capital controls, you don't
particularly like the fact that that exists, or if it does exist, you want
to surveil it as much as possible so that if, if some Billionaire or some
company starts, you know, putting a lot of capital there and then trying to
evade the fact that all the inflation is happening, they can go to that entity
and be like, well, we're going to tax you by 20 percent to recoup some of the
value that you escaped from the inflation with, or we're just going to confiscate
your coins, whatever the case may be.
Uh, and so governments have a lot of incentive to try to do that.
and so I think ordinal theory or not, just chain analysis is going to be a
thing, a problem for the next 5 10 years.
I've been saying that I think, I think privacy is the biggest
kind of battleground, uh, in this space going forward.
And I think that's, it's not something that's going to be
won a year or two from now.
I think that's going to be a long term issue.
That's also why I think public education is important.
Like propaganda works, right?
If you tell people, look, you know, like our currency is broken because
There's outside entities attacking it that a lot of emerging markets
will use that line or, Hey, like, you know, our currency is working,
but all these Bitcoiners are greedy.
And they're, you know, the fact that they're, you know, not buying into
our money is breaking our money now.
And like, we got to go and tax those, right?
Those, those narratives can work, uh, unfortunately.
And so that's actually why I think Bitcoin education is so important.
That you need, um, enough knowledge out there that as, as the government
tries to apply these different types of tools, that there's sufficient pushback
among the populace, uh, for them.
and, but I, I do think that, Tech aside, that, that's just an era that we're
going to go through now, and so I kind of take that for, that, that's an axiom
that I start with, that we are going through an era where Bitcoin does have
fungibility limitations, governments are going to try to exploit those in
any way they can, um, and therefore I, I think it's good to build privacy tech
on top of Bitcoin, uh, and also I think it's good to educate the public around
why privacy is good, why being able to own non debasable money is good, Why the
government should not have a right to do X, Y, and Z, because it helps, it helps,
there's a social defense then against, you know, large overreach in that area.
Yeah, I totally agree.
I mean, If there's one tip I want to give to other Bitcoiners, it's like keep your
non KYC stack and your KYC stack separate, or, and your non coin joint stack, because
there's, um, uh, I mean, right now, I think you're pretty safe as long as you
don't get a big lump sum of money into a bank account, then, then you're at risk.
But as long as you're just operating on Bitcoin and just sending Bitcoin
back and forth to other Bitcoiners.
No one's going to give a shit for the most part, unless it's humongous sums.
But still, as long as they trust what these chain analysis companies are saying,
they could pull a 6102 and just confiscate your stuff via threats of violence.
That is on the table.
So, uh, it's crucial to KYC stack somewhere, uh, if you, if you want to
really Utilize the power of Bitcoin as a freedom tool, which is first and
foremost, that's, that's what it's for.
Uh, so, so yeah, the education is crucial.
And as you say, I think there's a, there's a critical mass that we need
like of, um, People just thinking that these laws are ridiculous because they
really are if, if, uh, non KYC'd, uh, or, well, no, what, what's it called?
Uh, what, what are they calling it?
Um, uh, non custodial wallets.
That, that term in itself is, is just bizarre because not your keys,
not your coins, which means a non custodial wallet, a ban on those is
basically a ban on using your brain.
Because, uh, uh, the number zero and the number one in a certain
order is a non custodial wallet.
You can throw a dice 99 times or, or throw a coin, flip a coin 256
times, and you can, you can receive Bitcoin to that, to those coin flips.
So, so I think in my mind, what Bitcoin so blatantly, obviously like
pointed out to everyone was the money never was anything but information.
for your attention.
It doesn't need to be anything but information, and this should, like,
intelligent people are excited, of course, but it takes a while to
educate the masses on this, I guess.
Yeah, I agree.
And, and Corey, Corey Clipson from Swan, has a big theme about this.
It's the race to avoid the war.
It's basically, and, and it touches on the topic of, um, you know, the
intransient minority, which is that if you can get 3 percent of the population
to really, really care about something and like be single issue voters and.
Even if necessary protest is about that thing, then you can get
disproportionate impact because in any, on any given topic, half the people
don't even know what's going on, right?
So, or they don't care, right?
So, if some small percentage adamantly care, they can have
disproportionate impact because they're, they're very focused.
Um, in the United States, I mean, the NRA is an example, right?
There are a lot of people that are really focused on making sure that, that, You
know, kind of the second amendment's not infringed, and so, and they've
been very effective at pushing back on politicians, pushing back on this, and,
uh, even people that disagree with them are like, they're super effective, you
know, and, and so, um, there's kind of a similar approach with Bitcoin, which is
that, um, you want to have enough people that understand it and push, push back
on things because that makes it harder for the more draconian things to happen.
and so I think that's like, that's a key thing.
And another thing that's worth pointing out is that so in the fiat
currency system, things like, Monetary censorship and, and anti privacy things.
They're pretty easy to enforce because it all happens on the institutional level.
They just tell the banks, you can't send money to this, or this is what
you have to check your customers for.
And it just instantly complied with.
And it's because there's only a small number of enforcement points.
They all just immediately have to comply.
Whereas, um, whenever you're trying to enforce something on the banks, On
the, on the public level, the number of enforcement points is now a thousand
times higher or ten thousand times higher.
And so the cost of enforcement is so much higher.
So for example, even in the United States, when they did the gold ban, hardly
anybody was actually prosecuted for it.
it was very hard to enforce in practice because it was kind
of like the mask is off now.
They're just in your face on the individual level, um, doing it.
And it's, it's costly.
in Bitcoin, I think it'd be similar.
I think compared to gold.
The fact that Bitcoin on the base layer is more available is a little bit of an
issue, but at the same time, that's offset by how fast and portable Bitcoin is, and,
and, and, and how you can literally do multisig across jurisdictions and you
can, you know, there's, there's, it's much easier to move around and protect,
um, and so I, I think it's gonna be a similar thing that when you try to apply
these types of things on the individual level, It's way, way, way harder,
especially if there's some significant percent of the population that is
like, wait a second, that's, that's BS.
You can't do that.
Uh, it worked to some extent back in the, in the gold ban era, because so
many people were kind of like, they had subscribed to kind of a collectivist view.
In the United States, for example, you know, FDR had like 70%, like he
had a super majority in Congress.
He could, he could, That's where the pendulum swung at that time, socially,
but in a lot of places now, the pendulum swung in the other direction, so it's
harder to do those types of things, um, but that, again, that's where education
is important, so that there's a lot of people that, you know, are willing to
push back on things when they happen.
Yeah, and as you say, there's critical mass.
I think it's like, it's just a small, small percentage, because if
you take Madeira as an example, in Funchal now, as compared to when we
started the Freemadeira organization, there's like 40 places or something
that accept Bitcoin now, right?
And maybe there's a community of around 100 Bitcoiners on the island, But
that's it, there's no one else, and it's just us doing stuff among ourselves,
and of course there's a peak when the conference, when there's a conference.
But I know people who are living their lives on a Bitcoin standard on Madeira,
with that small, like, just a hundred people, because one of those hundred,
uh, Has fiat and like all the monetary problems go away when you have a Bitcoin
standard because you can just, you know, zap one another when you need to.
And, and, uh, so I think since Bitcoin is so powerful in itself, the, um,
the rest of the population, sooner or later, they'll see how much greener
the grass is on the other side.
Where, when we live among, among the normies, like, uh, they will see us.
live different lives and, and just be happier.
We'll owe nothing and be happier.
I agree.
I think there's always a balance between if, let's say the Bitcoiners do
very well, um, other people naturally want to know what they're doing
so they can start doing well also.
So that's how it catches on.
On the other hand, uh, you know, people can get envious and say, well, you
know, we're, we're all struggling, but why is this group not struggling?
Why are they flourishing?
Uh, and then it's like, well, let's blame them or let's take their stuff.
Right?
So that, that, that, and that's where, um, That's where education is super important.
You want to have it be the former.
You want to have people saying, what are you doing that's working
so that we can start doing it too?
Versus, why are you not suffering the way I am?
I want to, I want to take your stuff or I want to blame you for,
for why I'm suffering, right?
That's, that's, you know, that's the, that's the issue to navigate.
of course, of course.
And, and envy is the, the, the driving force of all collectivist ideologies that
like, they're all based on envy at some level, but I think there's something to
Bitcoiners like, When Bitcoiners, what we measure as success is not necessarily
what, what other people measure as success, because we don't go out and
buy a hundred golden Lambos instantly.
When we get wealthy, we, we want to live.
Uh, we, many of us at least crave more freedom above everything else.
So we're like more of the If we turn into billionaires, we'll be more of
the Dorsey or the Telegram guy, uh, type that doesn't own anything and,
and, and just values our freedom.
Uh, so, and I think that's, that's more resistant to envy than, than, uh,
building huge mansions and, and stuff.
I agree.
Yeah.
h
another, another aspect that, uh, I know you've been active in over the
last months or even longer is, is Nostr, uh, that I think you've been one
of the most actually effective users of Nostr in terms of having different
types of content on Nostr versus, versus Twitter, and so, um, What would
you say is the role of Nostr in this?
Because it's not Bitcoin exactly, but what's the role of Nostr in,
I guess, advocating for this more decentralization of communication?
Well, yeah, but the role of Nostr is decentralized communication.
And if you look at what commerce is, it's information and value.
You have to be able to transfer information and value.
Bitcoin is the value side, but you still need information.
If, you know, a lot, especially online, if a lot of commerce happens online, but
it all goes through centralized portals, it's very hard for ideas to spread.
It's very hard for You know, come to market products or services if they're
blocked out somehow from the centralized, you know, kind of information portals.
So the fact that people can communicate with each other, even when
centralized portals are permission censored is super important.
It gives that optionality.
I think optionality is a huge advantage.
Term that's important because people, you know, centralization can work.
It makes things efficient in many areas, uh, economies of scale
matter, network effects matter.
but, um, you always want to be able to turn away from that if
they, if they start to be an issue.
You want to have an option, especially because that, that, that other option
keeps that centralized thing more honest.
the fact that they always know that you can, you know, you can start
leaking out users and they go elsewhere makes, if you're a big centralized
operator, you're, you're kind of have an incentive to not mess up too bad.
and so I think that that's super important.
Um, you know, if you look at the Communist Manifesto, there's like, they
list 10 things on how to bring about communism, and one of them is centralized
banking and credit, and another one is centralized all the communication
channels in the hands of the state.
Uh, and so.
That's Bitcoin and Nostr are two of the, you know, the clear pushbacks
against that kind of thing.
It enables people to coordinate, um, through frictions, which
I think is super important.
And, you know, it's one of those things where not many people
realize they have that issue.
but as, you know, as you get blocked from a centralized thing, you
kind of go over to Nostr and you kind of, you know, you go there.
and I, I purposely seed it with content.
To have a reason for people to be there, even when they
could be on a centralized one.
Like, for example, I'm on Twitter too, that's centralized.
I'm not blocked.
I've not been blocked from saying things I want to say.
There's more readers there.
So I can ask myself, why would I go anywhere else?
It's like, well, because I don't know what's going to
happen in the future, right?
And so in the meantime, I want to have this alternative be as
strong and populated as possible.
And so that's why I think Nostr is super important.
Also, it kind of found the sweet, the sweet spot because, you
know, not most people are not going to run their own servers.
that's just something we found out with the internet over
time and email and everything.
If it's too hard for the user, they're just not, it's just not going
to, they're not going to happen.
Um, and So, Nostr is kind of that sweet spot where anyone can run a relay, but
running a relay is a non trivial thing to do, but the point is there's more
than one, and they're permissionless to do, um, and then, um, you know, people
can tie into what relays they want, the client side is pretty efficient to use,
so people don't have to run their own server, and I think that's the model
It has some degree of chance of really hitting critical mass because it makes
it easy enough for the user, but it's decentralized enough for the network.
And I think that's, that's important.
I think, like, view your Nostr post these days as, as, like, that's,
it's sort of like the, they're behind the secret paywall, which isn't the
paywall, but that's the juicy content.
You'll find the slightly juicier content on, on Nostr, and it's great.
That's how I try to, that's what I try to do on purpose.
Yeah.
So, so, uh, so how, how, how will Nostr not become centralized at some point?
Like what, will it not suffer the same fate as, as, uh, you know, email did
that all of, like give it 10 years and then everyone's on the same relay
and on the same client and whatnot.
So I think it partially will.
I think that's a risk, but I think that's where the, the term
optionality becomes important, right?
So, for example, in a world where, say, only Twitter exists or, it's, if you get
blocked, there's no alternative, really.
Right?
Um, whereas the cool thing about Nostr is if things centralize
toward a handful of relays, if those relays are working pretty well, it
doesn't, it's not really an issue.
If they're not actively censoring, if they're not, you know, uh, uh,
doing algorithms that are a problem, that's, that's, you know, people
are going to gravitate toward it.
But the point is, if, if things centralize toward those relays and then those relays
start acting problematically, there, it's pretty easy for a groundswell to
happen and go and like open another relay and start competing with that.
Basically, um, the Nostr users can route around problems while
still attaching to the network effect that is Nostr, um, which is
something you can't do in Twitter.
Like you can start your own social media company, um, or go use some other one,
but you're not plugged into Twitter at all, and therefore you're, you're
starting a network effect from scratch.
Whereas if there's an underlying protocol that you can kind of start
like a sub ecosystem around while still Plugging into those, um, you get a much
better shot of, of kind of rebuilding and routing around that problem.
It's the same thing, actually, for the Lightning Network, that
the way things tend to work.
You tend to gravitate toward hubs.
That's kind of just a model that that is economically efficient.
Um, but the point is that optionality, that if it's fine to have hubs, as long
as when those hubs act problematically, you can route around those hubs,
you can create new hubs while still being part of the network effect.
I think that's for both Lightning and Nostr, it's that optionality important.
That's, that's,
Yeah, great point.
okay.
So, uh, what's next for you, uh, Lyn?
Like what, what projects do you have?
Like, well, what's, what's going on in your life at the moment?
so I'm, you know, I, I had a big, um, when I wrote the book,
that was a, Very crowded year.
and so what I'm trying to do now is actually kind of this year.
My key focus is on work life balance.
Um, I already traveled a lot this this early this year.
I'm still gonna travel more.
and so I've actually I'm trying to do the work life balance this year.
but you know, going forward, what I'm focusing on one is, um, Bitcoin venture.
So Kind of providing capital to any anything that's trying to scale
Bitcoin or make Bitcoin more private or improve the UX of Bitcoin.
anything that kind of makes the network more usable.
and two, um, you know, I'm kind of focused on just ongoing
education around the space.
I think because privacy is a big deal, that's something I'm
probably gonna be focusing a lot is kind of defending privacy.
Um, and defending builders around privacy.
And, you know, I have a second book idea, but I'm not rushing to get into
it because, you know, 500 page book, uh, and it was, it, you know, it was
super rewarding, but it, you know, I got a little burned out from it.
so, you know, I have an outline for a second book.
I can see that on the horizon, uh, but there's no guarantees
that I'm not rushing to get there.
I know the feeling that's, uh, creativity is a weird beast to tame.
Uh, like, uh, you never know when, when it will hit you.
And, and when it does, you need to be, uh, In the, in the space, but you
also need to be disciplined and those are hard to, to square sometimes.
Absolutely.
Yeah.
Uh, so, so where will we see you in person next?
Like, uh, is there like the big conference?
You're, you're, you're not coming to Prague, are you, by any chance?
I'm not, but I'm coming to the Oslo Freedom Forum.
Uh, and then, and then I'll be going to probably Pacific Bitcoin.
Um, you know, we'll see if, we'll see if I get anything else along the
way, but those are the two that are kind of most on my horizon right now.
Great.
Uh, yeah, we're planning on, on going to Pacific too.
We'll, we'll see if we can make that happen.
Uh, Riga is another one we're looking forward to, like, uh, as
always, uh, where there's a big Nostr thing happening this year as well.
Uh, yeah, so, so anywhere you want to, uh, send our, our listeners or
viewers, uh, anywhere in particular.
I would say check out Broken Money, um, it covers things that is, is maybe
a little different than, than the typical Bitcoin book, um, and, and
so check that out, um, and linalden.
com if they want kind of macro research or Bitcoin research, you know, in the space.
Fantastic.
Luke, do you have any other further questions?
Yeah, um, I, I think, I think the, the last thing from me, uh, would be, uh,
yeah, I know we're, we're sort of pulling this, pulling this into an end here,
but it just, uh, um, kind of occurred to me, uh, the, the general state of the,
of the, um, community right now feels a little maybe Less than optimistic at this
point, but, but your, your, um, energy and everything that you've, you've talked
about here has, has been quite optimistic.
So I just, I just want to confirm what in the, in even the short term, how,
how are you feeling about, about things?
And not necessarily just price, but, uh, in, in general, the, the overall,
situation here, what's your feeling there?
Well, so price, I have no view in the next six months or so.
I'm optimistic on price for any multi, multi year period.
and I, I think it's important to remember that, you know, the, the quote unquote,
like Bitcoin community or Bitcoin Twitter or Bitcoin, like this is, this is like
kind of Western world Bitcoin users.
This is like, this is like a piece of the iceberg.
This is kind of the part that's visible to us.
We're participating in it.
There is, there's more, there's, globally, it's, it's, it's bigger than we realize.
and also, I mean, I've, I've focused a lot on response functions.
That goes back to my kind of system engineering background and kind of,
and I've generally found When I, for example, when I analyze macro systems,
whenever things start to tilt a certain direction, people start freaking
out and they don't realize that when it hits a certain point, there's,
there's gonna be a pushback mechanism.
It's gonna push back in the other direction.
And then they, and then when it goes back in the other direction,
they freak out about that direction.
They think that's, that's how it always is now.
And then there's a response function that tends to push it back.
And in Bitcoin, I mean, you know when, when it was in low fees.
There were critics saying, look, it's got low, low fees.
It's got a security problem.
Bitcoin's broken and X, Y, Z.
And then, you know, it's got, it's got people kind of spamming
it with JPEGs and beam coins.
And then there's high fees and people are like, look, it's, it's high fees.
This is broken.
The, the, the sky's falling.
Um, I, I think Bitcoin is valuable in large part because it's hard to change.
It's like the U.
S.
Constitution.
The U.
S.
Constitution is not perfect, but the fact that it, it, you require such major
super majorities to, to structurally change it, is why, despite being
imperfect, it's immeasurably valuable.
and Bitcoin is kind of like that in digital form.
It's this protocol that, you know, it's like any engineered
system, there's trade offs.
There's certain, you know, there's fees, there's, um, you know, there's
UX challenges, there's, you know, all sorts of limitations on it.
But the fact that it's really hard, it's not impossible to change, which
would also be bad, but the fact that it's really hard to change, is
important and it, it, it protects us against our own swings in emotion.
We go back from, you know, this is never going to work.
And then, oh, like, you know, fees are low.
Oh, now fees are super high.
This is all broken.
You know, in order to scale, like all these scaling things on
Bitcoin are really only going to come because of fee dislocations.
If it costs 50 cents to send something on chain, there's not a lot of reason
to build scaling technology on top of it because, you know, you know, you
can speed it up, you know, you can use lightning if you want a faster thing.
But if, if, if, if transfers cost 50 cents, uh, there's just not a lot of,
it's clear that there's not a lot, a lot, a lot of economic demand for scaling.
On the other hand.
When fees spike, either because there's a bull market and a lot of people are
kind of pulling into self custody at the same time and congesting the market, or
because people are, you know, temporarily spamming it with the fad, um, that says,
okay, well, we don't know when these fee spikes are going to happen in the future.
We want to have more optionality in the future to be prepared
for these fee spikes.
So let's build this solution or hey, we found out that this
tech approach was not working.
Let's shift to this tech approach that holds up to this better.
and so it goes through eras where people either use it wrong.
Like if you, if you put a lot of tiny UTXOs on the, on of videos You know,
self custody, you're going to run into issue if, if fees go up meaningfully,
you know, and too many people did that.
And this is like a response mechanism to teach them not to do that.
You have to kind of respect the base layer, um, and the limitations and
the complexities of the base layer, um, and use it in a way that kind of
corresponds to its economic incentives.
Um, same thing with lightning channel management, same thing
for other scaling solutions.
And so, yeah, like, because I analyze things through response mechanisms, I
think that this was another inevitable thing that Bitcoin would go through.
Um, and it doesn't mean that it's guaranteed to win, but it means
it's guaranteed to have had this challenge in the first place.
You can't freak out because it's having this challenge.
This challenge was inevitable.
Now that it's having this challenge, the only thing you can do is be constructive
and say, well, what's the, what's the, Most important things we can do
to ensure that Bitcoin succeeds and comes through and meets the challenge.
And I think that because Bitcoin is well designed and I think the incentive
structure is good, I think that the network is very robust to these types
of things and that, um, Over time, better scaling and privacy solutions
are being built, and part of the reason they're being built is because people
either experience these problems or because they anticipated these problems.
Um, you know, for example, back in 2022, um, you know, at EgoDeath, we were
making some investments in scaling and privacy solutions, even though fees were
low, because we're like, look, if this network is going to be successful, it's
going to have fees in the base layer.
Uh, we don't know the exact timing of when they come, we don't know what fads
are going to bring them in one year versus another year, but if it's going
to be successful, they're going to come, so this is something that needs to start
being built, and so, you know, those fees arrive now, and they might go away
for periods of time, But they're going to come back, I think, uh, either way.
And so this is now we have an incentive to build better scaling, better
privacy, more distributed privacy.
and, and so I think we have to rise to that occasion.
Absolutely, I mean, Luke, you asked for a final rant, and I'm gonna add
another one, because I think this is fantastic, I agree with all of that,
and like, people have such goldfish memory, because if you rewind the clock
to 2017, and when the Segwit, And when the block size wars, which were never
about, which was never about block size, but about control, one of the arguments
for, for the bigger block size was the high fees, or that was the argument and
the fees were around 20, but if in sats per vbyte, they were, uh, oh, I mean, way
higher back then because Bitcoin wasn't worth as much because lower adoption.
So the fees have gone down since, and that's like, uh,
2017 is a long time ago now.
Let's say that's seven, seven years ago and fees are still lower than they
were back then, uh, way lower even.
So, so the problems are being solved and things are being built that offloads.
pressure from the base chain.
So I, I, I, I'm insanely optimistic as well.
And I, I very much agree with the sentiment that Bitcoin is going
to be attacked and it always teaches us us something like we, it
changes us more than we change it.
And, um, yeah, the, the final point is about the consensus rules
and that it's hard to change.
One way of framing that is that Bitcoin can only change for the better because we
all need to agree that the change is good, which is like, how do you define better?
If everyone agrees that something is good, that is better.
So like in the long run, it, it, it will solve itself.
I'm sure.
I'm optimistic.
I think you have to be vigilant, but constructive.
and so, you know, you can't take for granted, like, you can't take for
granted that it's going to fix itself because part of it fixing itself is
everybody's, you know, they see a problem, they want to fix the problem.
So, basically, I think that there's enough people that are going to
figure out solutions, and they have been, and I think there's a lot of
visibility and type solutions that work.
Um, and so, yeah, I'm super optimistic.
And I think it's also important to remember, The existing systems, like,
for example, if you want to send an international wire transfer, it's often
going to cost like 30 and it's going to take, like, there's going to be this big
opaque period where you don't even know if it's working or if it gets blocked.
You're like, well, where did it get blocked?
And, you know, it's a, it's a messy system.
Um, if you, if you buy a gold coin, you're often going to
pay a 3 to 5 percent markup.
Uh, and that's basically the, the verification premium.
You're paying for the, the creating it into a coin, distributing it,
kind of verifying it, and that, that's like a hundred, like at,
at current prices, that's like a hundred dollar premium per coin.
and so the cost of monetary transfer.
And, you know, verification has a cost.
And bitcoins is lower than its prior competitors.
Uh, and, uh, unlike those other ones, it can improve exponentially.
It, because it's the open source nature, um, there's not just one entity that
can, that can find solutions for it.
So, for example, the banking system, if fees are high, They've got to
wait for like central banks and other kind of things to say, okay,
we're going to improve this thing and we're going to make this cheaper.
Um, and in gold, it's, it's physical.
So it's really, there's a constraint to how much you can
improve, what's happening there.
whereas with Bitcoin, it's open source.
And so While money transfer and verification has a cost, especially if
you want it to be very secure, there's plenty of ways to bring that cost down.
There's plenty of trade offs you can make.
There's a much bigger design space to give people more options.
And so, yeah, I'm super, super bullish on this space.
Yeah, here's to optimism, and since you're with EgoDeath, I guess you
talked to Jeff and Andy and Preston and those guys about this a lot, how
you Uh, the, the extent to which your focus and attention creates your reality
and that becomes what you live in.
So like focus on the good stuff and, uh, that will become your life.
That's, um,
Lyn, it, uh, it has been a, an absolute pleasure to have this conversation
with you and I'm very much looking forward to seeing you in person again.
And, um, yeah, all the best, good luck with everything and see you next time.
You as well.
Thank you.
Thanks so much, Lyn.
And yeah, this has been the Freedom Footprint show.
Thanks for listening.