coming all right here it is the halloween special edition of the city of bitcoin jam
i'm joined by my uh friend i think he came out of the canteen sequence from star wars
sight for peril baby let's just sign for peril that's just doggy how it is and then i think this
is like a minecraft but you actually stole max's natural hair right people probably think max is
sitting over here. Right. And that's Steve. I'm pretty sure
that I'm pretty sure that's Max right there. I'm actually Steve.
Steve from Minecraft. Yes. I don't know the Minecraft lore that
well. But the name of the main character and my god was Steve.
So I was like, Steve? But in the movie, Jeff Black plays Steve.
So that's why that's why you got the hair. My beard does not
didn't do it.
But it blends nicely with your mustache.
The only thing they need here
is the aholotel. Remember?
Any of our diehard listeners know the aholotel
from Minecraft.
Is that one of the animals?
Yeah.
It's a weird little Mexican.
You know a little animal that you told me about
with a weird name.
Axolotl.
Yeah, yeah. I think that's what he says.
Yeah.
But one
super serious question.
Why is it that the scariest one of us all
is, D.K.
What is this horrific mask you've got on?
And I've got to know,
where is the biddy suit?
I was promised this biddy suit.
This is my costume.
I got a biddy costume.
You misread our message list.
We have the full-blown
biddy costume.
You've not seen the movie yet.
You should see who is Bitcoin.
Look it up on YouTube.
That's viral produced.
And we thought you were going to wear that.
I thought you, in the group chat, you said you were going to dress me up as that.
And I showed up and my wardrobe was not ready.
Well, the episode is still live.
So if we want to get a big issue for Deepka, it sounds like he's running.
All right.
I'm saying he must have.
Mike's not on for PBJ.
Oh, is that right?
What happened?
Did we, people are upset?
Am I hearing the PBJ?
I don't know.
I didn't get any such messages.
Alex, does stuff sound all right for you?
Hey, if anybody's watching, if you could pop in the chat, can you hear us?
I bet they just can't hear Max because he's got his paper mache.
Is that it?
All right.
Now he says it's working.
All right.
Maybe a temporary glitch.
Maybe it's the costumes.
I don't know.
I may do a little wardrobe change myself at the moment.
Can you all hear me?
if anyone's listening to this chat, can you hear me in this mask or no?
We'll wait for someone to say, anyways.
Okay, somebody said better.
So, happy Halloween.
That's why we're dressed like this, right?
Is it a special day?
It's a special day in Bitcoin land.
Oh, why is that?
Well, it was on October 31st, 2008,
that the Bitcoin white paper was first presented to the public.
at 11.10 a.m. Pacific time.
So one hour ago.
Ooh, almost perfect time.
Well, 17 years and one hour ago.
Yeah.
And, you know, I think it's actually interesting
that it happened to such little fanfare.
Do you know how many people responded to it
in the first 24 hours?
How many?
Two.
And who were they?
The one guy, I don't remember his name,
but he was kind of like skeptical, but curious.
He was like open to learning more,
but he was kind of like skeptical.
and then the other was Hal Finney.
Was the other one Curious DK?
Did not make an appearance on the Cypherpunks mailing list.
Is Hal Finney Satoshi?
Was he just responding to himself?
But I think it's actually interesting
that it was so low-key
because nothing,
like all of the subsequent things
are not low-key at all.
All the subsequent things are big hype
and, you know, try to harvest out
hype from, you know, some sort of like Twitter audience or something. And Bitcoin, the OG,
the king, the only one that really matters, basically had no attention, no fanfare. It
launched to like two responses in the first 24 hours. Yeah. It was telling for almost anything
new you're building, like you don't necessarily need to think about how much hype am I building,
but how much substance am I building? Yeah, that's, I mean, that's a great point, right?
because up until that point there had been
several attempts at
digital cash. They'd failed.
They each had different
centralization points.
But it was a very niche
community at the time and there certainly
was no
investment or money
attached to it. So it didn't draw
on a much bigger crowd.
And
I think a lot of cypherpunks
on that list were just
they're skeptical by nature.
They were skeptical on this claim.
Completely reasonable to be skeptical, I think.
But here we are 17 years later.
Is it 17 years?
Wow.
Crazy.
I think that's a great broader point too.
I mean, just something I think about
investing in general is like,
whenever the crowds are rushing into anything,
I'm like, shit, I don't want to be.
I mean, it's nice if you've already
placed your bets very early.
But to your point,
it seems like everything that changes
the world almost always starts as like people just either don't see it at all or if they do
see it they think it's a joke so just uh i don't know but once something is in the mainstream hype
it's almost like not the right time to be pursuing it it's like yeah i want to do something else
you want to find the ideas from the edge right you want to find the things that are not yet
that was yes exactly pump it max's show pump it baby pump it um by the way should we point the
We have the white paper framed.
That's my costume.
Yeah.
Maybe we should make that a permanent picture.
I mean, we can keep it at the entrance of Presbyterian Bitcoin,
but when we record, maybe we bring this in every week.
Yeah.
Not just once a year.
All right.
That's pretty cool.
Yeah.
I like it.
It's nice looking.
Good to have our Bible.
Any other facts that you guys have dug up on the 2008 launch?
I actually learned one this morning. I don't know if this is true, but if it is, it would make a lot
of sense. I saw this briefly, briefly on a Nostra post that apparently almost 500 years prior,
I think it was 493, 492, I forget exactly, but apparently Martin Luther put up his theses on
October 31st. I have not verified that. I don't know if that's true. Maybe some people in the
audience or Steve, maybe you know. But if it is, that's really interesting to me because in the
same way that the sort of gist of this post was that, you know, Martin Luther found the corruption
in the church and published, you know, his doctrine to say, no, you can, you can just speak directly
to God. It's, it's all in you. In the same way, the white paper, that's our thesis. And Satoshi
is our sort of, uh, Martin Luther that says, no, there's a lot of corruption in this state
and you don't need these centralized parties to act like vampires sucking your life force.
So I'm curious, you called me out to know. So did you know, I, did you know that I grew up
Lutheran Max?
I did not know that, actually.
I had no idea.
But I actually did not know that.
Yeah.
So if anyone can verify that for us.
Oh, confirmed.
We got confirmed.
October 31st, 1517.
And this is one of those things where whoever Satoshi is, like, no coincidence.
You know what I'm saying?
There's no like, oh, it was just dropped on a random day.
No.
October 31st was for a reason.
Also, maybe he liked Halloween.
I found, I did not know this, but do you know that it was originally published?
We all know that it was originally published on Bitcoin.org, right?
Do you know that?
I don't know that.
I don't.
Okay, that's what we mean by originally published.
The white paper was published on Bitcoin.org.
That's where it was available?
Before October?
No.
Well.
I don't think Bitcoin.org existed until months or years later.
It says, this is, you know, maybe it's Grok is lying to me,
but it says, host on Bitcoin.org originally,
the white paper was uploaded to Bitcoin.org,
a domain registered anonymously on August 18, 2008.
So that was interesting.
Okay. I actually don't know the specifics.
That surprises me. I thought it came a little bit later.
I thought it was hosted on bitcoin.com, hosted by Roger Verbe.
But the .org was registered anonymously via anonymousspeech.com in Japan,
which is, I guess, a registrar that maybe doesn't take a lot of information
in order to register and host.
So another little piece I just learned today doing some research.
Yeah.
All right.
Anything else?
White paper?
Little facts?
114 words in the abstract.
There's a lot of numerology.
Well, I just think it's interesting.
There's so many things that are very important to a lot of people in Bitcoin today that are not in the white paper,
that were in the initial code drop, though,
like 21 million, for example.
And just the whole supply
and how it's distributed and minted,
that was sort of left to the code.
So there's no mention of it in the white paper.
So the first time anybody saw that was January 3rd or whatever?
When was the actual software to run
was published January 3rd, 2009 or something?
I think that's right.
I mean, January 3rd is when the Genesis block is dated.
I think that's when the code was dropped.
Although, I think the code was shared with others in 2008 privately.
But the final 1.0 version of the software, January 3rd sounds right.
Let's talk numerology for a minute.
DK, I didn't know you were a numerologist.
What are those words in the abstracts?
What does that mean to you?
It doesn't really mean anything particular to me, but there's a lot of people searching for potential meaning there.
114 words in the Bitcoin white paper's abstract has sparked curiosity and speculation.
So coincidence, most likely Satoshi didn't count the words, but the numerology and symbolism is 114 equals 1 plus 1 plus 4 equals 6.
some link this to six confirmations
a common Bitcoin security threshold.
No, no, no, no, no.
That is, this sounds like sort of a rock crop.
Highly speculative.
Do you know what Japanese Goroa Wase is?
No.
It's wordplay with numbers.
You thought it was something about waifu.
No, it's wordplay with numbers.
And 114 can be read as
two yo equals good or all right.
so max sorry to disappoint but i'm not a numerologist yeah those are pretty bad but but
if someone else has other numerology that they could share i'd be i'd be curious because i do
think that this is definitely whoever satoshi is was paying a lot of attention i can keep going
one other one that i think is interesting i forget the number but a number that would be
really wild is um the number of tokens um so i saw someone i was reading a someone's investment
letter where they mentioned the number of sort of like ai style tokens that the bitcoin white
paper is. I don't know if anyone has that number.
Maybe you want to throw that out. That would be interesting to look at too.
Psalm 114.
Ooh, what's that? It's short and about
liberation. A stretch, but some
draw parallels to financial freedom.
It wouldn't surprise me if there's
hidden gems in there, but
whatever. There's so much
kind of perfect planning and execution
of the thing. It's just a work of art.
It really feels like a
creative work of art. Just perfect
polished.
Well,
maybe this would be a good moment to,
you know,
someone asked is how funny Satoshi.
I'm just curious.
I mean,
I know that,
uh,
what's his name?
The conservative reporter do is like out of claimant CIA,
which maybe who's y'all's best take.
I know it doesn't necessarily matter,
but you know,
whatever,
have a little fun.
Who,
who do you guys speculate is Satoshi?
I don't,
I don't like to speculate.
Yeah.
I think it doesn't matter.
It doesn't matter for Bitcoin and Bitcoiners.
It puts people's personal safety at risk.
He obviously wanted to be forgotten. He gave us a gift. Let's let him have his wishes met.
Sorry to poo-poo your question there, Max.
But that is how, yeah, I think it's like, and actually it's kind of beautiful in its mystery.
Like, let's just keep the beautiful mystery.
Keep it as mystery, yeah.
I mean, for what it's worth, I don't downplay the idea that this could be a very long-term game
and perhaps some really smart powers that be saw demographic shifts happening in the world
and said, you know, the dollar dies, what comes next?
But regardless, even if that is the case, I don't think it changes anything.
The code's all public.
It's all open source.
Whether it's one person, whether it's a group.
I mean, it's fun to speculate, of course.
What's his name?
The early internet dude.
Oh, I'm forgetting his name.
Posiplex is his fabulous book.
He has a wild claim that it's an actual Japanese mathematician.
There's a lot of wild claims out there, but you can do your own research and go down your
own rabbit holes.
The only thing we know is it's not Craig, right?
we already said it was roger vera
we're all satosh
alright
with that should we
with that
now you look like me
I don't think I can handle this
although it's really driving me
you tell me
this beard the strap keeps coming off
it's really annoying
if it looks stupid let me know
it looks stupid
I mean, beyond...
No, if it looks crooked,
let me...
Okay.
And then I'll take it off.
You also look a little bit like Wences now.
I like it.
Wences or you?
I don't know.
I look like a combination...
A hybridized.
Love, shout out.
A combination of Wences.
Shout out.
Should we...
I don't know what all...
We want to talk about what order,
but there's a lot of stuff.
Yeah, what do we got?
Steak and Shake just announced this morning
some stuff.
Okay.
Start there, maybe?
Yeah.
We'll see what they announced.
Steak and Shake announced
a strategic Bitcoin reserve.
Oh, I didn't see that.
Awesome.
Yeah.
So.
Gotta check the group chat.
And it's, Max just rolls in at noon.
So, but it's what I'd call the square style of strategic Bitcoin reserve, not the sailor style.
It's not like a leverage thing.
It's just, I think what they committed to is any Bitcoin they receive from customers, they're going to retain as Bitcoin and put it in their strategic Bitcoin reserve.
which is pretty cool,
which will probably start relatively small,
but grow over time,
not only the accumulation,
but the percentage of customers paying in Bitcoin.
They also announced...
Is this crooked, David?
Your job is to tell me it's crooked.
The people on camera can't see this side,
so it's crooked.
I learned I can't smile.
If I smile, then it comes off.
All right.
Just be regular.
I have to be super serious.
Just be really pissed.
Yeah.
See, there I go.
I smiled and came off.
They also announced
integration with Fold.
I saw that.
You're the one that noted that.
What was it exactly?
You get $5.
If you pay with Fold, then you get $5.
Yes, I think Fold probably just as a marketing
expense, it's
helpful to get Bitcoin
topped up in people's wallets and a wallet
that you can use and spend at
stake and shake, right?
I think Fold is doing a partnership with them where
fold will fund the five dollars into your fold wallet that you can then use to pay steak and
shake so it kind of like pairs nicely and you know it's like a marketing expense for folds
otherwise i think probably making exchange fees on like fiat bitcoin on ramp so it's just a they
know that if they get more people in the door you know in on their app as a payment app then they
can make money at it. So it's really nice kind of ecosystem, I think, bootstrap that they're
willing to do that. Yeah, I agree. I think we're going to see more and more Bitcoin companies
partnering with point of sale providers or with merchants. Obviously, they have a vested interest
boost to their own business, but it'll be like a more than some of the parts type of partnership.
And in a lot of like a small, like a local business, I know Steak and Shake is more like
a national thing, but if you're like a local coffee shop or a farmer's market business,
you often don't have a lot of margin to play with.
You're kind of running it pretty tight.
Whereas a technology business
that has some sort of a Bitcoin fiat exchange thing
either has a lot of margin
or has a lot more potential to scale margins.
So they could be a marketing cost
that they could more easily support rationally.
And the third component of their stake and shakes announcement
was that they're going to support OpenSats
and OpenSource Bitcoin development.
I think it was 210 sats per Bitcoin meal they sell.
That's awesome.
I like that.
You got Steve Sands sats.
Oh, yeah.
Well, I'm a champion for the Bitcoin B symbol visually.
I agree with that.
And then people can say it however they like.
And so, you know, quick math there.
Actually, before I run through my math,
how many Bitcoin sales per day,
or how many steak and shake restaurants are there?
No idea.
I think it's like 5,000 or something.
It's on that.
Something like that.
3,000, 7,000.
If anyone wants to fact check us,
give us a check.
Something like that.
Let's just say 5,000.
Yeah, 5,000.
Call it easy.
Who is Steve?
Steve from Minecraft.
Steve is Steve.
Diana, you need to watch Minecraft.
Steve is Steve.
And Steve is playing the role of another person named Steve.
It's Metador.
Yeah.
So how many,
so let's say there's 5,000 stores.
How many Bitcoin meals per day do they sell?
How many meals per day do they sell?
I don't know.
We're interviewing you for a job, Max.
How would you go about estimating that?
Well, I mean,
I really don't know how many meals per day.
Yeah, maybe it's easier to say
how many Bitcoin meals per day
because it's very few.
I would say probably per store, like one.
Okay.
So 5,000 a day.
5,000 a day.
So,
and then at the,
so even with just that
average cost of a meal,
reasonable slash low estimate.
Yeah.
20 bucks.
Well,
it doesn't matter
because they're donating
the same amount
no matter what the purchase size is.
It's the number of meals per day.
So,
it would be like,
million sats?
Five,
two,
200 and,
wait,
one to three,
$425,000.
a year, I think,
in donations. In donations to
OpenSat. Yeah.
Which I think is, that's quite nice.
That's awesome.
I mean, Tether just donated
$250,000. Right, right, right.
So if Steak and Shake from
210 sat donations per meal
can do more than that right at
today's rate, that's amazing. Yeah.
And imagine if it grows by
10x. Exactly. Then it's millions of dollars.
Well, I love this in general,
this idea of instead of a fixed amount,
I think if there's one thing that really Bitcoin has taught me, it's always put the incentives in place.
And yeah, if it's like a scalable donation, that's the same with Bitwise, right?
With their ETF, which is, you know, if someone wants to use an ETF, I still recommend Bitwise because 10% of whatever goes through there, right?
So I would love to see more, I guess, donations to Bitcoin be sort of tied to the success of Bitcoin itself.
Yeah, that's great.
So I think that's really exciting.
So good stuff.
Good stuff from Steak and Shake.
I definitely wanted to follow up on
some of the ideas we talked about on the last show
and we talked about the night before at the Builder event
when we had Pink Owl Coffee come here
I went to Pink Owl yesterday
we've all done a lot of follow up
I was going to hang out with Bob
and I was like, let's just go meet at Pink Owl
he sort of suggested it because we were going to hang somewhere up there
so he was hanging out at Pinkall
he'd already sort of bought his
lunch and coffee
at the time I'd arrived
so I was like hey I'm gonna
go get a coffee or whatever
Cortado so I walk up there
and order the thing
and
I was like hey I heard I could pay him Bitcoin
is that right? And the person was like yes yes
you can of course and then they kind of already knew
about it they were already trained up on how to
get I think the square terminal to
show the QR code.
And I used Primal
as my wallet.
Shout out million.
When I paid it, it was great.
It was super easy. It worked right away.
It was all fast.
The slight nit that we discussed
is that it did
the presentation didn't
say SATS, but the wallet did say
SATS. What did the presentation say?
It has the Bitcoin B symbol, right?
Square shows the Bitcoin B symbol.
I thought that was the whole point.
So it's a little disconnected to be like, I'm paying this thing and I'm reading this Bitcoin B symbol, this thing, and then I'm seeing on my side it shows sats.
I understand why, but just a little inconsistency if somebody doesn't understand why.
I think more wallets and everybody kind of congregating on the same nomenclature and design and style would help new people who don't really understand all the nuance feel better and more certain than the thing they expected.
What do you think would be best there, just to add the B symbol on both?
Seems rational to me, but I haven't done the whole design exercise.
I don't know.
Steve or Matt or somebody else.
Of course.
Seems natural.
We actually had it almost a year ago.
Our episode in December, we talked all about the Bitcoin B symbol.
Cool.
I know you could, he likes to say sat still.
I didn't realize.
As long as the B symbol.
We've also talked about the show.
Sat, sat, sat.
No, no, no.
So the evolution in thinking here is, you know, focus on the display, not what people speak. Don't police how people speak about stuff. You can say corn, coin, Bitcoin, bits, sats, whatever you'd like. Whatever feels natural and comfortable. I say Bitcoin sometimes, I say sats sometimes, but the display should be the Bitcoin B symbol.
I agree with all that.
Much simpler, more beautiful.
And as we touched on in earlier episodes,
I like letting language evolve naturally.
I think Sats has kind of already evolved naturally,
but the bee symbol, I think, is spot on.
But I saw Joe.
He came by and took hands.
Who's Joe?
The owner of Pinkaw, yeah.
He missed Builder.
He doesn't know Joe like we know Joe.
Not yet, but you should watch Haley's 21 and 21 interview with Joe.
Oh, sick.
Yes, he sent me that.
So for anyone that wasn't here in person for Builder,
you can watch Haley's 21 and 21 episode.
So one question on this is we talked about, you know, I'm guessing Joe is a pretty hardcore Bitcoiner to be the early adopter, which is awesome for whatever his reasons are.
What I'm more curious about is we talked about how do you make sure your staff who may not have heard the good word yet, how they get into it.
Did, I don't know, did the staff, like, did he mention anything like now he's a Bitcoiner too?
Was he personally excited about it or just kind of like, oh yeah, my boss tells me to do this thing.
Like, I'll do this thing.
We didn't, I mean, we didn't talk.
I didn't talk to the cashier.
She didn't volunteer her like, you know, private keys or anything.
you know i'm a customer coming in to make a transaction and she
didn't you know she just made the transaction easy for me excited or not really she i mean i'd
say her face kind of like oh yeah like i know how to do that you know her face kind of lit up i'd
say or she was like very welcoming and you know is it was a great experience but we didn't nerd
out on bitcoin stuff if that's what you're asking okay it would be something to follow up with joe
about because I'm really curious about this question
like you may have the owners that are really
stoked but how to get
the staff excited
too is really interesting.
I've been talking
with folks on my
Spiral team who were
working on a project to
help
merchant adoption of Bitcoin
and ultimately customer adoption.
This will be independent
of Square.
Square will obviously be part of it, but there's merchants that use Toast and Clover and other point-of-sales solutions.
We want to be able to point them to ways to accept Bitcoin as well, which of course can include switching to Square.
But that shouldn't be a requirement.
Some people maybe like their current solution.
It's just a much bigger lift to switch.
so I actually tweeted out
early this morning
like
what are other solutions
for point of sale
I already know a bunch
I'm just curious
to crowdsource other ideas
because one thing
that
we'd like to create
from Spiral
is like a one page
leave behind
I forget if we talked about
this last week or not
but I'll talk about it again
but we want to arm
the Bitcoin army
with simple material
that can help them
sell their favorite merchants
their local merchants
globally.
And so
just a one-page leave behind
that makes the case.
We think it should focus on
saving 3% fees.
Like saving the fees. Like sell
the merchant on the biggest value proposition
to them.
And so we
produced that and we're thinking of ways to how to
get that in the hands of people.
Printed out, high-quality, consistent
way for people to hand
it out.
and
we have some other clever ideas
too that may or may not
be sitting on this table
to help I'll let you guys
figure it out and the audience figure it out
to maybe arm
someone by the way called you a bitcoin miner
which I thought was cool
alright nice I wonder if someone done that within Minecraft we talked to ago Yeah yeah yeah That was cool Because now they have an open source server
That'd be good.
But yeah, so we're thinking through ways.
Like one way, there's a lot of other Bitcoin spaces
in addition to Pristidia Bitcoin.
Like can we arm those locations
and then the people that go there and start there and grow?
So that's an initiative we're thinking about doing.
I like Matthew's suggestion,
force the staff to listen to PBJ Weekly.
That's clearly the answer.
They can have a TV on in the cafe or whatever
and just live stream us.
One other thought on that,
when you say you think the fees are what to focus on,
I think the fees is a really good one.
I'm curious, maybe it's worth testing or getting feedback.
I mean, the other thing that makes a lot of sense to me
just like save in Bitcoin.
I think more and more people are hearing like the dollar is
dying or my local currency is dying.
Have you, I mean, you guys, I don't know.
That's a good question. Yeah.
That's one reason I'm bringing it up on the show
is just to get other good ideas.
I think we should talk about that because I mean Square started
with that feature, the conversions feature.
And I
saw the numbers for, I mean, it's been in beta
for a long time, but now it's
live. And
because Bitcoin acceptance doesn't
go live until November 10th, but the
conversions is already live.
Convergence means your customers pay you with USD
and then you convert some fraction
of it into Bitcoin as a merchant.
Super simple UI. You just say
1% or 5% or 10%. I think you can go up
to 50% now.
I figured if Joe said it publicly.
Anyway, Joe's a good
saver. Let's just put it that way.
And so
yeah, I think
we should definitely consider that as well.
I think it's a super compelling argument
to merchant.
I mean, one difference was, well, yeah, it might be one of the best or the best tool to get the merchant to start, but it doesn't have the network effects of getting the engagement of customers.
So we need to think about it in that light as well.
Well, I just think from a human psychology perspective, it's a really big, like I think
if you, the number of merchants who would say I would be interested in saving in Bitcoin
if I'm paid in Bitcoin is going to be substantially higher than the number of merchants who are
so orange-pilled, they say convert the USD, I'm getting into Bitcoin.
I think it's just like a psychology thing.
Like most people are not orange-pilled enough.
They're like, oh, get rid of the dirty money and give me the good money.
I think for a lot of people, it's like, I'll give you an example with my honey dealer.
Like there's no chance in hell he would ever like turn on the convert to Bitcoin
conversion feature. But because I like pay him in Bitcoin, he thinks it's cool. He's like, I want to
save all or a portion of that in Bitcoin. And so I think it's just like a cool little thing. And it
also kind of like subtly encourages them to be like, oh, if I want more, like I should encourage.
Right. I think those are all good points. One thing we talked about is that
there's no single group or source that's going to come up with
the definitive sales pitch, right? The world's diverse, merchants are
diverse, locations are diverse, et cetera. And even Bitcoin, what
resonates with people very slow so yeah um i think we definitely agree there'll be multiple versions
of this leave behind and like let's create like let's start with like the best two or three that
we can think of publish that others and can contribute and then then uh the bitcoin advocate
who's gonna print them out and go go uh hand them out can choose their own yeah you know what what
fits their style best and what do they think will be the best sales pitch and they might learn they
might think option A is the best.
They go try it. It fails. They try option B.
And they're like, that was the right one.
So I think conversions are
saving two different ways, like you pointed
out. One is convert fiat to
Bitcoin, but the other psychology
is like, okay, whatever I receive in Bitcoin, I'll
just keep that Bitcoin. So I think that's super
cool. I'd like to follow up on
what I was really stoked from our conversation
last week about
a Bitcoin merchant association.
Not A, but many.
Many Bitcoin merchant associations.
like the Marin Bitcoin Merchant Association.
So I had a good conversation with some other folks on my team about that.
And I have some questions.
So maybe you guys or maybe someone in the audience has additional ideas.
One thing that resonated with me from last week's show
is the local component and sort of grassroots.
Like the Joes of the world from Pink Alla Coffee
who are big Bitcoin advocates.
They are a merchant.
probably have vested interest in,
or I mean, do have a vested interest,
whether they know it or not,
to get other merchants in the community
to accept Bitcoin,
which begets more customers having Bitcoin
in a spending wallet on their phone
and know how to do it and think about it.
And it's a habit.
So it just makes a lot of sense.
So it resonated with me to like,
how do we enable the Joes of the world to do that
and then do it at a local level?
That still resonates with me.
But that's going to take time to grow.
Months, years, etc.
Maybe we convince Joe to do it, and he'll do it in Marin,
and then others will sprout up.
But a year from now, a wild success would be hundreds or thousands,
but there's millions and millions and millions of merchants.
For this one-page leave-behind that we'd like to make available ASAP,
does it point to a website or a Facebook page
or some kind of resource?
And if so, it can't be,
we're not in a position yet
to like point to the local version.
Right.
Because there are zero
and even a year from now,
if there's like a thousand,
there's not millions.
So, I mean, there's not one
that's relevant to
if I'm an advocate in Iowa or something,
maybe there's not the local Iowa chapter.
So should there be
a global website
or resource page or whatever
for Bitcoin Merchant Association
and then
I mean, it almost seems like yes
for that reason.
And then if I want to create the local chapter
in the Presidio or wherever I live,
can I just go to that global
one and like either A, I can
just use it. But if I have ideas to
customize the experience for my
community, I can just like click a button
and it creates the website.
Yeah, clone the website basically.
And then have, you know, whether I'm
vibe coding or whatever tools I'm using,
I can, or like if there's this
global resource of ideas and options, and I can just select, I like these three ideas.
Right.
Click them, they show up on my, you know, the Presidio Merchant Association website.
What are your thoughts on these ideas?
Yeah, I mean, overall, I like the idea of having some, you know, the leave behind messaging
and then kind of having that available on a global or kind of at least national, but
hopefully global website.
it. I think one of the things that, and then obviously letting people customize it for their
own needs sounds great. One of the things that I think is, let's say, under discussed, like I think
it's the benefit of using Bitcoin in a kind of a merchant customer transaction is very, very
obvious to the merchant in terms of saving the 3% fees. It's not clear why the customer should
want to use it. So I think having some messaging around that, like what do we think is the best way
to explain to merchants why their customers should or help them design programs that might work
with their customers to encourage that spending. I think there's obviously, you know, things like
the Fold app that gives you $5. That's one reason. But if you just kind of get like, here's $5 free,
go spend it, that might not create the habit. So what are the ways to empower the merchants to
explain to the community why they should be using it.
Yeah, I think there's two marketing kits
that need to be created here.
One is for the Bitcoin advocate.
People like us,
people that are watching the show,
and we're not necessarily,
most of us would not be merchants.
So their marketing kit for that,
that would be the one-page leave-behind
and a few other things maybe.
Then the separate marketing kit is for merchants.
And these would be for the Joes of the world.
they'd be for the early adopters
they're probably going to be
Bitcoiners themselves because otherwise
why would they do this?
I mean, eventually they'll be
like, they don't start
as a Bitcoiner but they'll see the business
interest in becoming more of a vocal
advocate in their community but
to start with it'll be Bitcoiners but I think
there'll be a marketing kit for merchants
and then that would include what you're talking about
which is like, what are all the
things that I can do as a
merchant to like make
customers aware they can pay in Bitcoin,
why they should pay in Bitcoin,
ideas like offering 21% off
or very aggressive marketing tactics.
Even providing the numbers behind it,
maybe that's not as outrageous as it sounds.
You're not going to go bankrupt if you do that.
And maybe that varies by business category too.
I mean, different businesses have different margins
and different customer acquisition costs.
So for one business, 21% off can make complete sense.
for another, it would be, you know, idiotic.
So I can imagine like that all being
many variations there
for different types of businesses.
And so a couple ideas that come to mind,
I'll come back to the association,
but just on that, I mean, it'd be dope for Square
to actually also give people the tools
to be able to run their own rewards programs
and experiment.
And then also like highlight
what's worked for other people.
So it may be a services for your kind of business.
We've seen this kind of thing work.
And you can do that just like very like organic
at first as part of an association
with just a PDF or a website
and saying, here's some case studies of what worked, what didn't.
But eventually it'd be cool if I just, in the terminal,
it's like, hey, I'm going to accept Bitcoin,
click here to set up what we recommend
as the rewards program.
Real quick riff on that.
So agree. Also, we've got to keep in mind,
I mean, obviously, Square launching is amazing
and it's my own company,
so I hope they do really well.
But we, as Bitcoiners, we need to think about
other point-of-sale solutions too.
We're also investors in startups too, right?
So, like,
for all the startups and wallets
and point of sale solutions
that have been developed so far
and the ones to come,
these are great opportunities for them
to stand out, move faster than big companies.
So that, you know, different,
I'd love to see different experiments play out
from different startups.
I agree.
And I think for startups
and some startups I'm invested in,
I know are thinking a little bit about this,
but like, yeah,
like just start with like a rewards program.
So if you're going to accept Bitcoin,
like how do you give the tools to that merchant
to figure out what kind of rewards program to do
and to actually just like execute it,
just make it super easy.
You click here and you get whatever, 10% off,
and that's what we recommend.
And you should be able to use AI to see what's working, what's not,
and ship that up or down over time.
So I think that's a really good idea.
On the point with the Bitcoin associations,
I'm envisioning a couple things.
One, the GitHub type page where you can just open a pull request
and anyone can get their...
I don't know if you want to start,
maybe you want to be a little more selective at first,
or maybe you don't.
I have an idea on how you could do the latter.
But there's no reason there shouldn't be
as hyperlocal as you want it to be.
It could just be like on my street, you know, association or, you know, San Francisco or
Presidio and all the levels in between.
Maybe you start off a little bit more sort of like, you know, BitDev started off with
New York and then with San Francisco and then a few others.
But one thing that'd be really cool over time to grow into, or maybe you can start with
this from day one, is give people the ability to do it, to register their chapter.
And on the page that does it, either they choose it or the page does automatically give
them a Noster identity.
because what's really cool there is you could start saying,
okay, there's infinite number.
This is like the whole web of trust thing
we've been talking about for well over a year
is you could have filtering.
You could say like, all right, anyone can start an association.
But if I want to go and see which association
I want to be part of or whatever,
it'd be really cool to see kind of like little faces
of like here are the Nostra keys that are running this one
or that support this association.
And then somehow that should all feed back
into the BTC open map,
which eventually should use Nostra as well.
and every identity, every store that has a location on that map
should also have a Nostra identity.
So they can then publish out Nostra and everyone else openly
what their deals are, et cetera, et cetera.
But ideally what I'm envisioning is the open social graph
so you can just see who's part of what
and who's supporting which businesses.
I think there's a lot of opportunities for network effects
once you plug in Nostra.
Yeah, interesting.
We should definitely do more brainstorming around that.
Yeah, for sure.
So I remain super stoked about this.
Each day goes by, I hear new ideas, they all build upon each other,
and I'm just becoming more optimistic about Americans spending Bitcoin
at square point-of-sale systems,
and that'll create pressure on other point-of-sale solutions
to come up with Bitcoin solutions.
And just, I mean, I'm seeing also
more of my startups that are in other countries
are starting to think about this as well.
It's like, hey, is now the time
to start doing payment processing
in Mexico or Brazil or Philippines?
And, you know, historically it wasn't really working,
but maybe this is going to be the kick that,
and I will say, you know,
I was always a little bearish on this.
I always thought, and I still kind of do
that like something like AI agents
or something internet first
was going to be what really takes it off.
But who knows?
Maybe this is the kick.
I mean, the beautiful thing is
it doesn't really matter.
Everything is good for Bitcoin.
Some of everything, yeah.
Yeah.
I also have been relatively bearish for the reasons you said,
and especially for American buying coffee,
to me seems like the last use case.
Come on, it's the most important thing.
Because there are already good payment solutions.
But I think the key is the merchant is the one that has to get sold
because it makes sense for their business.
And then they'll be empowered,
or they'll be empowered, but also motivated
to sell their customers to spend in Bitcoin.
And now that we have really good user experience
for many spending wallet options,
there's still a first-time cost and hurdle
for a normal person to get Bitcoin in a wallet on their phone.
It's not that bad.
And then the experience, once they have it installed,
is quite good, actually.
Can we actually pause there?
I want to talk about something.
I was a little bit disappointed and shocked this week
for a number of reasons.
So, not to shift us all the way to the NBA, but on Monday...
Nice.
Great transition.
I'm curious to see how Draymond fits into...
We're getting there.
So, on Monday, I went to see the Grizzlies-Warriors game.
Very exciting.
I'm sorry.
Yeah.
I'm sorry about the outcome for you.
We lost, but I had a couple of takeaways.
You know, one takeaway, the Warriors looked good overall.
Very balanced scoring.
The Grizzlies, I mean, Ja's nice.
He's always nice.
but until we get a center
or until we get ED or BC back
we don't have any rebounding
it is what it is
we're still 3-2
but yeah
the Warriors look nice
my second takeaway is that
Draymond Green is a piece of absolute trash
like fuck that guy
like dude
I'd never like
I generally like the Warriors
I'd never like understood
why people didn't like Draymond
he went behind on one of our players
and like literally took his legs out
from under him while he was going out
like a dangerous play
like the kind of play that could end someone's career
and like okay
sometimes you hard foul
you didn't mean to
like if he had come over
and dap the dude up, whatever.
No, first of all, it was a flagrant one.
It should have been a flagrant two.
Like that dude shouldn't even be in the league.
So he comes over and then he starts showboating
and taunting and laughing about it.
I'm like, dude, you could have ended a guy's career
and you're laughing like trash, absolute trash.
So that's my thought on Draymond.
But number three is the guy that I went with,
you know, and if he's listening,
I'm not going to dox you and, you know,
shout out to you, you know who you are,
but someone that's been in Bitcoin a long time,
a long time.
and you know i grabbed the tickets and i was like you know just you can you can get send me max at
get albi.com and you know he comes back and yeah i certainly don't think this homie's trying to
stiff you but i'm like man man hey what's going on and he comes by and he's like look i'm trying
to get my albi to work it's really tricky it's like do i have to open a channel and it's like
okay and he's like but like i don't know if i really need a channel do i get my bitcoin back
if i close it i was like all right look if that's if you're not a power user for albi i get it i'll
use something simpler just go to cash app he's like well i haven't used cash app in a long time
I was like, okay, moon wall.
And then we had to get the, anyways, long story short,
like after like multiple back and forths,
like this person's not a noob.
I was just like, fuck it.
Here's like an on-chain address.
Just send me that.
It was disappointing.
And so I think that to me was,
it was a good realization of like,
we have a long ways to go of just like a normal person.
Like I totally forgot this
because I've been in Lightning for so long.
But yeah, it was disappointing to see.
Yeah, I mean, DK has also had problems in the past,
not you personally, but when you're trying to,
hey, I should just take this off.
I don't know.
What do you guys think?
We have a couple of funny comments, by the way.
We got one person saying for a second,
I thought we have two Maxes on the show.
And then Matthew says,
DK, if you need someone to talk to,
you know this segment.
Right.
Sports.
But you've had problems with similar experiences
where friends, colleagues, whatever,
you're trying to get them to make a payment to you
or you're trying to pay them or whatever,
and it falls apart.
I mean, we definitely haven't.
Yeah, I feel very uncomfortable today in this gear.
So please give me feedback.
I feel so uncomfortable, my gosh.
Yeah, all right.
Please give me feedback.
Grab it right there, TK.
What's going on?
Too much time on me.
No.
I mean, we have gone from there are no good user.
I couldn't, even if I know what I'm doing,
I can't demonstrate a good user experience.
So now we have multiple products that do deliver good user experiences.
That's a fact now.
But we're still not to the point where they all interoperate perfectly together.
And even the really good user experiences still have some orts.
But the progress has been phenomenal.
And the trajectory is really good.
So it's definitely, the timing is right to push for payments, get people doing payments.
And I do think normies can have a spending wallet on their phone.
I'm curious why you didn't recommend Phoenix as an option.
I've just never used Phoenix.
Yeah.
I mean, I'm not French.
I'm just kidding.
I like the French.
But yeah, I don't know.
Or, well, Lexi's not.
I think Lexi's still invite only.
But Lexi and Phoenix are both good user experiences as well.
Is Phoenix, don't you still have to pay to open a channel or no?
like you i mean basically you should just deposit like a few hundred bucks in your
wallet and then after that it's a breeze yeah it's like quite simple as long as the as long
as you're comfortable starting with like oh i want to put a couple hundred dollars spending
um do i have an issue no okay you're you're laughing at me i'm appreciating you've got it
kind of riding on your face just the right way i don't know anyway um if you so for the use case
of like you fund a spending wallet a couple
hundred bucks, I think Phoenix is great.
If it's like
oh, I received a
zap as a brand new user
then not too much. But to be clear for Phoenix,
you're talking about someone, and in this case this guy could
have been
a good example, but someone who's familiar
enough with Bitcoin, they already have some Bitcoin,
they are comfortable making an on-chain transaction to start.
This would be like, you know,
you have a couple hundred bucks, or I mean you have
maybe thousands on Coinbase or Cash App
and you want to put a couple hundred bucks
in a spending wallet,
then Lexi and Phoenix are good user experience.
Well, and that's the other thing.
I didn't even think to push on that.
If you have Coinbase or Kraken or whatever,
you should be able to also just do Lightning directly.
Yeah, if you have Coinbase app on your phone.
So there's almost two different user experiences
we need to solve for.
There's the person who understands Bitcoin.
And I, by the way, saw on Stacker News,
they did something really cool.
I did not go to BitConf this year.
I haven't actually ever been to TabConf,
but it sounds pretty good.
But anyways, they had a Stacker News booth there,
and apparently I think they were serving salsa,
and it sounded like a lot of fun.
But that was one of the, I read their takeaways,
and one of their biggest takeaways was there was,
even at TapComp, which is a fairly, I would say,
one of the more technically sophisticated conferences,
there were a huge number, maybe even a majority,
but if not a majority, a large percentage of users
who were super familiar with Bitcoin,
but still could not get a Lightning Wallet set up
to start with Stacker News.
So I just think, so there's two really interesting cases.
There's a lot of people that need that.
Like, I have some Bitcoin, how do I make an on-chain?
transaction. Maybe Phoenix is still the best. Hopefully Lexi soon. Albie's amazing, but you need
to be committed enough to open that channel. And I think there's some other opportunities. I know
folks we've been talking to, maybe this is their moment finally, just to get that note up really,
really quickly. But then I think, what about for the absolute noob who doesn't even have Bitcoin
yet? For me, I still, the only thing I really feel comfortable saying there is Cash App.
Do you guys agree or disagree with that? Well, again, I mean, for certain people,
that's a great choice. In others, it's not a great choice. If you're not American,
it's not a great choice.
Sure.
But for folks in the US
who don't have Bitcoin yet,
who you want to like,
like I...
There's still friction.
I mean, so it's a great choice
because it's a reputable brand,
has a long track record.
It works well.
It's got to, you know,
I mean, I can quibble in the UX,
but overall good UX.
It's a great, easy way to buy Bitcoin.
Yeah, exactly.
But you do have to KYC and onboard
and there's friction on onboarding,
but you pretty much have that
no matter what you do
if you want to buy Bitcoin.
So if you're truly new to Bitcoin
and you need to acquire Bitcoin
and your option that your choice to acquire is to buy,
then Cash App's a very good choice.
Yeah, cool.
But by the way, well, I had two thoughts on that.
One, I hope we get to the point
where you onboard into Lightning first.
I think that's going to be very powerful
for people that just want spending
and you don't even have to know what on-chain is.
The second thing is on Cash App,
I'm sure you guys have thought of this,
but what will be super, super dope is stage one, two, one,
when I just scan a QR code,
it didn't even ask me,
I'm going to have to buy Bitcoin first.
You can just click a box and it's like,
do you want to use the Bitcoin network?
and it does all that on the back end.
And then eventually what will be super cool
is when I have some Bitcoin in there
and eventually I can just do like,
I don't know,
like whatever the stable coin
or dollar solution is on Lightning Network.
I can just keep my Bitcoin,
do auto loans and that debate though.
But I mean, let's expand more
on what you're saying, the onboarding.
Like there's all kinds of different people.
Like how are you imagining people?
I mean, clearly the use case
that has been common is like,
I KYC and I take,
I connect my bank account
and put dollars in the exchange
and then I buy Bitcoin.
Yeah, so imagine...
But what are other cases?
So imagine, for example,
like right now when you go to a Square merchant,
they often will say Cash App pay as an option,
which I assume is no fees.
I mean, I know it's no fees for Square
since it's all internal.
And so I can just pay with Cash App.
What would be really cool is if they just say,
hey, I scan a QR code,
any Bitcoin QR code or any Square QR code,
and it just says,
do you want to save on or whatever?
Or like, I don't know what the UX would have to be
because the merchant,
well, if the merchant's already offering it to you
and it just says, hey, do you want to use Bitcoin
in the backend?
We can auto buy Bitcoin and just do that.
Or even just do it for you.
Like check a box and like we'll buy
and like send Bitcoin for you.
And then maybe then there's not like a learning opportunity
to suggest, oh, would you like to learn more about Bitcoin
and buy some or something?
I don't know.
Sorry, say that again.
I'm at a store.
Yeah, I'm at a store and there's a QR code
and I can just like scan it with Cash App
and like you can have the option.
Maybe I have to opt into the first time,
but it just buys and uses Bitcoin for me automatically.
I don't have to buy Bitcoin and then have that.
Oh, meaning I already have Cash App.
Yeah.
And I have dollars in my Cash App.
Yeah, you've already gone through KYC.
And I pay with dollars.
Yeah.
Okay.
And it's just all like,
I just scan any QR code
and just like the Bitcoin happens on the back end,
I don't even know about it.
Yeah.
I still want a great gifting flow.
Yeah, I agree.
Like that has not been solved, not even close.
I still,
and an example of that would be gift cards.
Like I still think it's crazy
that if I walk into like a CVS or Walgreens
or whatever store where there's a rack with Starbucks and Apple
and all these brands that people know with the gift cards,
why is there not a Bitcoin gift card there?
Well, there is, right?
Isn't that what Azteca does?
I don't think they do it in the U.S. as much.
They're not in the U.S.
No, they're not doing that.
You go to their website and you can pay to buy Bitcoin
and then you go to a local store like in Brazil or whatever
and then you show them the voucher.
Or actually, sorry, you paid that.
So I go to a website and I say,
I want to buy like $100 of Bitcoin.
Then I get, I print out a voucher.
I go to the local store with like a code.
I pay the local store.
Here's my cash, local cash.
And then that tells Azteco,
okay, give them the Bitcoin.
Do they not have the flow that you don't have to the website?
You can just take cash to the store and get,
I don't know, like they print off a voucher for you real time?
I think it's what I said.
So, I mean, I think that's also cool,
but they're not even gift cards in Iraq.
In fact, Million actually created gift cards in Iraq,
the founder of Primal.
And that was 2019.
It was right when I started at Block,
I tried that experience out,
and it was a brilliant onboarding experience.
It was fantastic.
It just worked great.
What happened to it?
Is it still around?
No.
he stopped working on that and then he started Primal
but the user experience was great
you had a gift card and then it gave you simple instructions
download this app from the app store
I think you entered a code or scanned a QR code or something like that
and then it deposited Bitcoin in your app
it was self-custody but it was dead simple
a normal person could do it
it's a hard business
as a startup though
because like
there's like
one or two distributors
they have all the power
they get all the money
they get all the margins
I see
it's like Blackhawk
yeah right
it's not a good
it's not a good business
to enter
certainly as a startup
and even as like
a larger company
but nonetheless
as a product
that I'd like to see
in stores
like that's missing
and it'd be fantastic
is it Blackhawk
I think you're right
has anybody talked to them
about Bitcoin
presumably a million
so
so he was using
one of the main distributors.
I don't know, but I mean,
I'm sure he's invested.
It was Canada only for his.
Okay.
And others may or may not
are doing that.
Millian, if you're listening,
maybe you can give us a little TLDR in the chat.
Right, yeah.
Speaking of Bitcoin businesses that I think maybe you or Steve may have proposed a Bitcoin savings bond as a new startup opportunity
Well, Haley was saying she had a bad experience.
With what?
With kind of U.S. savings bonds?
It was really frustrating.
I like those U.S. bonds.
She had a bad paper bond experience.
just traditional US
savings bond type things
with paper
but did you propose somebody should do this
with Bitcoin
yeah I mean why doesn't that exist
because it seems like
as a kid I recall
you go to your bank
a common gift to children or babies
or young children or whatever
you pay $500
you give the bank $500
you get back this piece of paper
that then
15 years later or whatever, you go back to the bank
and say, here's my piece of paper, and then you get $1,000.
So it has a built-in yield or interest rate
on the bond.
That was pretty compelling
in terms of, here's a gift I can give someone.
They're young. They can't screw it up.
They can't take this to Vegas.
They're time-locked, and then they get it in the future, and then they'll really
appreciate it in the future. That's like a nice gift
for like grandma or grandpa to give their
grandson or granddaughter.
Why isn't there a Bitcoin
equivalent of that? And especially because you can
take advantage of cool things with Bitcoin like
time and money. It's built into the protocol. You can
literally lock it up so no one in the world
can spend it until a certain date
or whatever.
A product wouldn't have to use that, but that type of
stuff is possible with programmable money.
I thought you were talking about
using the fact that the Bitcoin
forward CAGR is probably
20, 30, 40 percent, something much larger than people would expect as yield on a bond.
And so you could actually have a, you know, the headline number on the bond could be quite
high compared to how much money you're putting in.
Isn't that what we were talking about with like the bit bonds and the government was trying
to create their own little bit of a Bitcoin kicker to do that, blend Bitcoin in?
I remember that thing happening.
Was that about a year ago or so?
Yeah.
I do remember that being a topic of discussion.
I don't recall exactly what.
The thing that's always amusing to me,
and I get kind of why it works
because most people are not yet sold,
but it's always like, you know,
with MicroStrategy and BitBonds
and all of these things,
like the whole assumption is like,
to your point,
it's like you can get these really nice yields
just because like the Bitcoin CAGR is so damn high.
So it's always just kind of like,
hey, here's the product idea.
We take this incredible asset with incredible returns
and we water it down with some other crap.
And then we give you like the kicker on that.
And I get it because most people are used
to the old school stuff, but I don't know.
I mean, in a sense, it's,
I guess that's a very negative view.
I would recommend, yes, people first buy Bitcoin.
But if you aren't yet fully sold or you're still learning about it,
but you're like, look, I think SOFR this week dropped to four and a quarter.
So maybe spreads on SOFR in the range of five, six, seven percent.
What's SOFR?
The overnight lending rate.
The Fed just dropped a quarter point.
When was it?
Wednesday or Thursday or whatever.
I didn't see that.
So people are accustomed to like, you take SOFR plus a point or two or three.
So, you know, foreign change, you're talking 7% is what people see as like a reasonable interest rate, right?
And with Bitcoin, if you believe that it's going to be 20 or 30 or more percent per year,
you can actually build products that take advantage of that difference
and give people something much better than the maybe 6 or 7% they could otherwise.
No, I mean, I get it.
That's the other side.
That's the more positive charitable.
Also, I mean, there's just different use cases.
Like if I'm a grandpa and want to give my grandchild a gift that will bear fruit later,
I can't just like go to Coinbase or Cash App and buy Bitcoin.
That doesn't meet my needs.
Yeah.
So I'm happy if I'm getting, if I'm net net paying 10% fees or losing like the last 10%
gain over 10 years or whatever, so be it.
No, no, totally.
and I actually like that idea even more.
I get what you're saying.
It makes sense for the old world finance.
I was saying you had this idea
where they like take like 90% crap,
i.e. like dollars or treasuries,
mix that with a little bit of Bitcoin
so you get some of that sweet gagger.
I like this idea a lot.
I think this actually could flow
into your gifting idea too
of like a product
where it's just like one of the products
is just a time lock.
It's Bitcoin, but it's time locked
and like it's designed for grandparents.
I mean, it almost feels like
it could be part of the strategy suite
because they keep introducing new products
to new segments, right?
And obviously, this is a very different, grandma and grandpa are very different than trillion dollar institutional funds.
But they already are now introducing things that are intended for like, they're going after like high yield money market accounts for retail.
So this just seems like an extension of their strategy.
Did we ever, by the way, get the various specifics?
I know I shared a couple links and you're like, hey, it's already been known.
Do you feel like that's already well understood by everybody and it's just nonsense to revisit?
Which part?
The stretch, MicroStrategy's stretch product and the return on capital.
I don't think we've talked about the taxes on the show.
We talked about stretch, but we didn't talk about taxes.
So I don't know if, I don't think anything new has happened in this past week,
but I saw at least one or two threads that I think I shared at least one of them
where people were breaking down how the stretch product is much, much better than just the 10%
that you see as the headline number on the stretch yield. You could think of it as closer to 20%
because of the way taxes work on the specifics of how that product is structured, which I wouldn't
claim to be an expert or giving tax advice on this particular thing. But my understanding,
and I want to hear if this is your understanding too, my understanding is you take stretch and
stretch is nominally considered to be like a about a 10 percent yield it can be up or down it could be
10 and a quarter nine and three quarters but it's roughly you can think of it 10 percent for
simplification and let's say you put some amount you know call it 100k or a million bucks or whatever
into a stretch each year you get paid out that 10 percent so if you let's call it a million bucks
you get 100k of yield per year.
Because who doesn't have a spare million?
10k, whatever.
I was going to say, you toss a billion there.
It's cool.
You can scale up and down.
A spare 100 mil I get in yield.
It's cool.
Sweet.
Trillion.
Okay, sorry.
$10.
You put $10 into this.
I don't know if I got 10 bucks.
And at the end of the year, you've earned a $1 yield.
Every quarter you get 25 cents.
This is an example of making you feel more pleb.
It's all going to be a wash in the tax moment though.
The point I was making is this, let's call it $100.
$100.
Oh yeah.
If you get too small, the tax has kind of become a wash.
100K, 100K.
100K.
So your first year, you've earned $10,000 in yield, right?
But my understanding is I think that's return on capital.
That's not dividend income.
So it doesn't get taxed as income.
I don't know if it is taxed as something.
That's the claim.
I'd say since none of us are CPAs or lawyers.
Yeah, do your own research.
Do your own research.
But the claim is it's return on capital.
It would not be treated as income tax.
And as return on capital.
It's just cap gains.
No, it's not cap gains tax.
What is it?
It reduces your cost basis on the asset that you bought.
So if we spend $100,000 to buy it,
then the first year I get $10,000 out as my 10%.
And now my cost basis went from $100,000 to $90,000.
Wait a second.
What voodoo is this?
So at some point in the future, if I sell that,
I'm going to have to pay capital gains on the delta
between the $90,000 and the $100,000.
Right?
Right.
And this treatment is independent of stretch.
It just happens to be the stretch.
I'm not sure I understand this.
So, okay, let's go through this example.
I have 100K.
I get 10K out.
Now, when I sell it, I have 110K that I'm selling.
No, no, no.
You bought 100K.
If you sold it the day you bought it, you'd have no capital gains.
If you sold it six months after you bought it, you'd have basically no capital gains because it's basically like 100K.
It's supposed to stay at it.
In theory, it stays at 100K.
Yeah, okay, let's call it 100K.
I'll cut it down a little bit.
But basically, you have no cap gains, right?
Now you've taken your four distributions throughout the year, and now you have 10K that you've been given as yield, right?
Oh, and to be clear, that's separate. That's like cash.
That's cash that went to you, and you still own 100K in stretch.
But now your cost basis on stretch is no longer 100K.
It got reduced to 90K.
So if you ever sell it, you have to pay the cap gains difference between the 100K and the 90K.
Yeah.
And then the claim is that that can continue until the cost basis goes to zero, and then you can't keep doing it.
You can't create a negative cost basis.
So after that, but the claim then is still, so let's say after 10 years, I got 100K paid out to me.
My cost basis is zero.
Eleventh year, I got another 10K paid out to me.
the claim is that I only owe capital gains tax on that 10K,
not income tax.
So even in the 11th year,
it's more attractive than a typical bond or savings account.
So you're basically paying no tax the first 10 years,
assuming he pulled in the stretch.
Deferred tax.
Okay.
So you're not paying tax, but it's deferred.
The 11th year, you get another 10K payment,
and you pay that as cap gains on the 11th year.
And if I ever sell the stretch,
then I do have to pay cap gains.
On the difference between the zero and the value.
And the value or the cost basis.
Your cost basis has gone to zero.
If you've done it for 10 years,
your cost base has gone to zero.
Got it.
Now you have to pay capital gains on the whole thing.
I got you.
But remember, you had 10 years
where you weren't paying capital gains on that.
And so if you believe the dollar is going to hyperinflate,
it's just like,
oh, I'd much rather defer taxes to the future
and like paying like...
Differing tax is almost always a good idea.
A good thing, yeah.
Right?
You know, okay, so my high-level take on all this,
and I've said this many times,
not to be a broken record on the show, it's great.
I'm glad there are people out there that are,
you know, and like, hats off to Sailor.
He's a great financial engineer.
It's still, honestly, just going back to the,
kind of the purity of the white paper,
it makes me sad and frustrated that these,
I mean, I get it, and like, God bless, great job,
like, figure all the loopholes out.
But like, wouldn't it be wonderful to one day live in a world
where it's just like, just like the electronic,
there are no all these fancy taxes and loopholes.
It's like super simple.
Maybe there's no income tax.
Maybe it's just taxes on what you buy.
It's super simple.
I don't know.
It just, it frustrates me that you have to be an expert
to play these like tricky games.
And like, it's always a way to funnel money
from the poor to the poor.
We'll have to do an episode on taxes.
Yeah, no, I definitely don't.
Because I'll challenge you to come up
with a fair, simple, fair proposal.
Yeah.
Well, one simple, fair.
I don't think you'll be able to.
Yeah, what you're talking about is very regressive.
so if you pay tax on the things that you buy
you could also do a land tax right
that's like the one thing
it's like my whole thing is
I'm not an expert
I'm not saying I propose
I mean one idea is one day
imagine there's
we're all like disclaimers
imagine there's no heaven
imagine there's no country
like imagine there is no tax
that's where I think we could get to one day
and still there's better quality of life for everyone
because everything is so cheap in abundance
like that
that's a world that we could shoot for
but I also think
I think it's within reach
I don't think that's
I don't think that's purely fictional fantasy
I think it's possible
I certainly hope so, right? But then I think on the other hand...
Build what I want.
Yeah, just knocking into existence.
But I also think that without being a tax, whatever, I think you can look at kind of like our debate on IP.
It's like, I hate IP because it's artificial. It does not follow the flow of reality.
Information wants to be free. Trying to force information which wants to be free into IP makes absolutely no sense.
Similarly, I think with things like taxes, it's like, I'm not anti-taxes, but you should think about where does it actually naturally flow?
So for a state, right, like, and, you know, there are things that the state in theory for a while is probably the best thing to administer.
If you own land, property tax probably makes sense.
You can't run away from property tax.
And, like, if you are in a community, you should probably, whatever, pay for some of the basic services like the roads, which I know everyone's always curious who's going to build those, and the water systems and all that.
But, like, I don't know.
I just think the more we get away from fancy loopholes which end up just funneling money to the uber wealthy and, like, and people that are uber wealthy not because they actually did anything but just because they know all the tricks.
That's what's so frustrating.
That's when I come back.
People who have like a million dollars just experiment with stress.
Yeah.
Who are these people, Steve?
I don't even know.
But, you know, I come back to that.
That's what I love.
The simplicity of Martin Luther and his theses.
The simplicity of Satoshi and his theses, you know, is a world where, you know, yeah,
like you don't have to be on the inside to be able to thrive.
I'm not opposed to Texas.
I'm only opposed to government.
You heard it here first.
guys I know we're running short on time
I don't know what other topics you had but I wanted to make sure
we cover one thing
we had some very important things
well this is important on the Bitcoin Merchant Association
because we did not come back and follow up
on what I was most excited about last week
which is the advent calendar
so this idea of regardless our own community
and I had an idea of maybe a way for Square
to participate as well so I think it's cool
we do sort of the cash bomb every day we pick
a restaurant or whatever we all go
and spend our Bitcoin there together as a community
we get other people in the Bay Area to come out and do the same
maybe we also get them with the Nostra address
so people can just bomb the money for
every day of December
but I was also going to say we could do this for different communities
it could be cool, Square could get involved as well
as they're turning it on, they could do a matching program
or something, or whatever
hey we're going to cash bond $10,000 a day
for each of these merchants as well
or we match, whatever the community comes up with
and then you can really, I mean obviously
that's not going to scale forever
you need to bootstrap stuff
exactly, that's how you can kickstart
I mean, Square did a million-dollar giveaway today.
I didn't even know that.
I saw that in the chat, but I didn't read it.
What happened?
Well, it's the math.
The first 20,000 merchants that turn on,
I think it was the conversions feature,
gets $50 deposited over their account.
Yeah.
Cool.
Which is pretty cool.
So something like that, like to support the app account.
And then Cash App's done, like Cash App Fridays,
for many years.
So your proposal is definitely consistent
with what Cash App has done before.
Awesome.
I'll make sure the Square team
watches the segment
here's your idea
Spiral Sync doing
a project too I mentioned I'll make sure
that team hears about it
and then it also could be
you know a good idea for one of the
startups
that are targeting
merchants and spending
and maybe we could have like multiple companies come in
I just think if you can just like blow people out of the water
at these first you know whatever the first month
that's going to set a strong precedent
Can we talk about chain split stuff?
Because I'm aware that it exists.
I have not followed it closely, and I feel like Steve has followed this closely.
Can we talk about this?
Max?
Well, the drama continues.
But I think actually the framing, the current event is the BIP444 proposal,
which is a proposal to change consensus rules
and fork Bitcoin
and then it gets into the question of like
is it a soft fork or is it a hard fork
or is it a contentious fork
which I think is what you are interested in.
The reason why Max doesn't want to talk about this
is because it's just part of the continued
ocean drama, knots drama, core v30 drama
that this proposal is like
in BIP4444 is intended to
eliminate the spam and the bad stuff
and the things that people that care about Bitcoin as money
don't want in the blockchain.
All of us care about Bitcoin as money.
The things that that particular...
That's one thing that's lost.
The camp that is positioning themselves
as Bitcoin as money and anti-spam
think the other side doesn't care about Bitcoin as money,
but that's just wrong.
That's just false.
I would say the vast majority of people
in the core camp or the other camp
is that it's not possible to get rid of this.
Or the solution to get rid of it is the fees
that are already built into the white paper
and the original Bitcoin system.
That is the solution.
The problem right now with JPEGs getting the blockchain
is that people aren't spending their fucking Bitcoin.
We need more economic activity.
Everyone complaining should actually go out
and go to their steak and shakes
their square, you know,
merchants that use Square
and spend Bitcoin.
Go get them to get the merchants
to enable Bitcoin.
Yeah, and by the way,
I would take those guys
a lot more seriously
if they start posting receipts
of doing stuff like that.
Yeah, that's what all of us
can agree on.
Bitcoin uses money
and all of us should become advocates
and do that.
That's the healthiest thing
and like get off Twitter,
stop yelling at each other,
go in the real world
and spend Bitcoin.
All right.
I'm sorry, I'm not.
I've learned that.
I'm saying good things.
All right.
I'm not gin alpha.
But in any case,
the bit444,
the intention is to
prevent bad stuff getting in.
But it's a band-aid.
It has all kinds of holes.
I mean, immediately after it was proposed,
Peter Todd got a transaction mined
that is bit444 compliant
and it contains the entire text of bit444.
So it spams the chain
with a bit444 compliant transaction.
So we're not going to stop that, except with fees.
We need to use Bitcoin as money.
So that's that proposal.
But it raised the question of forks, which I think is what you specifically were interested in.
Long-time developer Waxwing had a post that gave his interpretation of these different forks.
I was just going to say, I think there's Bitcoiners who are interested in this topic of what happens in the case of a fork?
Do I need to make decisions?
Probably like being in self-custody means you can actually make decisions and being with the third party custodian means you have to follow along with whatever decisions they choose to present you at the time they choose to present you.
And that can have real economic impact.
Yep.
If you.
Okay.
You know, so I feel like it's like.
This isn't really.
Very personal.
Yeah.
People.
I agree.
And we don't have to get in the weeds either to answer this question.
And I agree this question should be relevant to anyone who owns Bitcoin should understand what we're about to talk about.
Yeah.
And we lived, some of us lived through this in 2017, 2018 era.
I think the three of us did and quite a few in our audience, but many people didn't.
And that's when Bitcoin Cash did fork off from Bitcoin.
And it did create two coins.
And what that meant, if you held your own Bitcoin in self-custody, then prior to the fork, then you actually got to, let's say you held, you know, 10 Bitcoin at the time.
you then had 10 BTC and 10 BCH.
At the time, that wasn't crazy.
10,000, you mean, right?
Yeah.
I didn't use like a million Bitcoin as my...
You just did, but okay.
21 million.
But you'd have 10 Bitcoin of each
and you can do whatever you want with them.
Now you have to be somewhat sophisticated.
First of all, you're already self-custodied.
You also have to run your own node.
And for Bitcoin Cash, you had to download Bitcoin Cash Bitcoin software.
You couldn't use Bitcoin Core's Bitcoin software because it only dealt with BTC.
So it required sophistication, but it really was empowering.
First of all, you're self-sovereign.
You're guaranteed that you got 10 of each.
You could immediately transact with each.
So if you were a believer in BTC and you thought BCH was a joke, you could immediately sell it on an exchange.
You could transfer it to an exchange and sell it.
And get more Bitcoin.
And buy BTC.
And buy more BTC or vice versa.
If you thought BCH was the right direction or whether as an investment or the right technology direction, vision for Bitcoin, you could sell, dump all your BTC and accumulate a lot of BCH.
But it's very empowering to do that.
Or you could just hold both and just like set it out.
Or you can hold both.
So the safe thing to do is hold both.
If you have conviction one way or the other,
then you can like dump some or all
and put it in the other coin.
And as we describe in the Bitcoin Consensus Analysis Project,
BCAP, which Lynn Alden and Crypto Ren and myself
worked on last year,
it's at the margin is what matters
for determining which coin sort of wins in the market.
And so it's those people who actually have the ability to sell
and, of course, the willingness to sell one fork
and then double up on the other fork.
That's an extremely powerful position to be in.
But if you're not willing to take that risk
or you don't have conviction, you just simply hold Bitcoin.
You just want to hope to keep holding whatever Bitcoin becomes.
You can just hold both.
Now, a lot of people hold Bitcoin with a custodian.
There you don't have this power.
You are not in control.
You can't split the coins.
You don't have access to both.
You can't immediately dump one of them at potentially premium prices.
And you're just beholden to that custodian's choices.
And what we saw in 2017-2018 is different custodians will make different choices.
Some acted quickly to make the other coin available to you to withdraw.
Others were slow.
Others never made it available.
Even like Coinbase.
Yeah, of course.
Because there was Bitcoin Cash,
Bitcoin Gold,
Bitcoin Diamond.
There were like...
ESV, wasn't that one?
Well, that came later,
but that came later off of a BCH fork.
But at the time,
forking off of BTC,
there were like 20 different versions
and it was a long tail, right?
So even Coinbase didn't make
most of those available.
So we all,
if we had any Bitcoin on Coinbase at the time,
we lost money.
We never got access to that.
We couldn't hold it, sell it.
And by the way, I actually think this is one of the great,
the more I hear you talking now,
one of the greatest risks to Bitcoin,
the more we're talking about this.
Whether or not you think this particular one
is an orchestrated attack against Bitcoin,
it's going to come at some point.
And I'm actually kind of concerned
because in those days,
there were a lot of whales that held in self-custody.
From what I've gathered,
it seems like a lot maybe have transferred to ETFs.
or something like that because for a variety of reasons.
They don't want to hold it themselves.
They don't want that risk.
But that becomes scary because as you have the ETFs
and the custodians like Coinbase control more and more,
maybe there were enough of the hardcore diehards
that really believe in the values in 2017.
Do we have enough in 2025?
Maybe. What about in 2030?
That's a very concerning trend.
I agree the trend's concerning,
but again, the analysis done in the BCAP project
I think is heartening
because even if the number of OG whales
that self-custody is reducing over time,
it's nowhere even remotely close to zero right now.
Yeah, that's true.
And those whales that self-custody have outsized power
in such a situation when there's a fork
because they can act quickly
and the Black Rocks and Coinbase of the world
are highly unlikely.
They have teams of lawyers.
like think about BlackRock
first of all they don't even hold the Bitcoin
so they aren't in control it's Coinbase
secondly it's not they don't own the Bitcoin
their customers do
they're highly regulated they have a gazillion
lawyers they're not going to like
on day one of a fork
dump fork B and double
down on fork A that would be suicide
what if they're wrong
the whole company
literally just disappear off the map
they're not going to do that they're going to move slowly
they're going to hold both
They're going to let things play out.
But you can imagine, right?
Like these guys are effective.
I'm sure like,
just imagine the state,
there was a big state attack.
I'm not saying they would do it overnight,
but like, fine,
they can't move for a year.
So be it.
If there aren't enough of the hardcore values,
self-custody whales left,
like it could be,
it wouldn't happen like on day one,
but that could.
So we need the self-custody whales
to still self-custody,
still be whales and still care.
Agreed.
Another concern though,
is like if there's an extreme state attack,
then first of all, the state can tell BlackRock
you have to choose ForkB, not ForkA.
Exactly, that's what I'm saying.
They can also, all the exchanges,
they can be like, you can't,
we don't allow you to have a free market.
Right, right.
And that's where tying this back into merchant adoption
and using Bitcoin as everyday money,
that becomes super important long-term,
even if all you hear about is number go up in investor
because that allows for price discovery
millions of times per day
throughout the world
in very decentralized ways.
You just go to Pink Owl Coffee,
you're discovering price.
And in that exchange,
you're determining what is Bitcoin.
Am I using fork A or fork B?
So two people.
Yeah, all right.
I'm winning today.
And so, you know,
of course that single exchange
between me and Pink Owl
isn't going to determine
the future of Bitcoin,
but the millions and millions
of instances of that.
That's the whole point.
Do matter.
Yeah.
So I think again anyone worried about spam anyone worried about BlackRock attacks or seed attacks we got to start spending money Do your part Get out there Convince merchants Spend Bitcoin for a long healthy outcome
I like that.
And further, you should be self-custodying.
And if you do self-custody, if you choose to hold both splits in a fork, both chains in a fork, it is a vote for both.
It is a vote of I don't know or a vote that either one is fine.
And I think you sort of made the comment like, oh, we'll wait and see.
If you don't have conviction, then you kind of have to take that position, I understand.
But if you can learn and build conviction about which one you think is the real Bitcoin, the one that matters, you actually can generate yield.
So you have more Bitcoin.
It's rare in the world that you can, in a fair way, generate yield on your Bitcoin ownership.
And this is one of the few.
Very good point.
And it is a sense of a vote.
I often hear people talking about voting and Bitcoin.
And they'll either apply, they misapply it, though.
They don't know it, though.
So hopefully they listen and learn here.
But one is miners, that miners have a vote somehow.
During the activation of a new consensus change,
there's this signaling process that's been done historically
through the Bitcoin Core software.
And it's when miners signal, yep, we're ready for this change.
Because to reduce safety risks in activating a new consensus rule
that has consensus,
you want miners to support it.
Because if it's split,
then you can get unintended forks
in a total disaster, right?
So there's this signaling process.
And so some people interpret that
as miners get to vote
whether we get that change.
And it's not a vote.
Because if they,
it's more like if they do signal,
first of all, the signal is just a,
trust me, bro.
It is.
They're signaling through the blocks they mine,
but they could be lying.
All they're saying is like,
we've upgraded the software
to support this activation of this change,
but they could be lying.
So it's total, trust me, bro.
But even if they're lying,
I mean, it's like,
by assuming they're telling the truth
and then doing it
and then reaching a certain threshold,
like 95%,
even though you're not assured that's true,
it's still safer
than not doing that process at all.
But that's all it is.
It's not a vote.
Because let's say that they don't reach a certain signal.
You can have economic nodes begin to adopt the fork
and basically campaign and say,
we're going to reject the blocks you're creating
that don't support this change you want.
So it's a very complex power struggle,
but it's not a vote by minors.
The other vote that's very common...
That's not a vote.
Thank you.
But often continues...
is this year with people, you know,
thinking that this spinning up running Bitcoin software
is a vote.
Like running a node is not a vote.
Running a node is not a vote.
And depending on what you're doing with that node,
it ranges from like inconsequential to very important.
And so like part of the knots drama,
people that are supporters of the knots side of this drama
love to tout the percentage of market share
that is running knots.
Now, I'll definitely acknowledge as like a social media campaign and like an activist campaign, it's like a compelling story to tell.
But it's meaningless across a number of dimensions.
One is that while it sounds good, we actually don't know how many people are actually running N.O.T.S.
because literally one individual could spin up tens of thousands of Bitcoin nodes in AWS.
and affect that metric.
I'm not saying that's what's happening.
It could very well be each individual is doing that.
But I'm just saying we don't know.
Yeah, we don't know.
And then secondly, even if there's like 500,000 individuals
who run Nodds and there's only like 70,000 people
continue to run Core or whatever,
if all they're doing is just spinning up and running
and not receiving Bitcoin,
then they're literally meaningless.
because like I think if someone was from the knots camp here,
they'd argue, oh, but we're relaying transactions.
We can set relay policy and stuff.
But with a sufficient sized Bitcoin core network,
transactions will be relayed.
It doesn't matter if there's 50,000, 500,000, 50 million knots nodes.
I'll still find paths through the network to get to miners
with a transaction that I want to mine.
I also just want to throw out because I mean,
you said people should be self-custaining.
I just want to say, I'm not sure I always agree with that.
We did that whole episode about diversifying.
I think self-custody can be a good option if you know what you're doing.
I think it can be a horrible option if you don't.
And even if you do, for security reasons and other, I think it does make sense.
That's why I think a lot of whales have moved into things like ETFs or custody.
And I get it.
It totally makes sense to have someone else take a lot of that burden for you.
But if you are going to do that, I think we've said this many times, and I just will keep
beating this horse forever.
Know who you're working with.
Know your business.
know who's running it and what their values are, right?
Like at the end of the day, you know,
people like Brian Armstrong and Coinbase
have shown their colors over and over again.
I know where they're going to go if there is a fork or,
you know, I mean, yes, they're probably going to give customers
the right to do what they want,
but like don't trust people, right?
Like I will say this over and over again,
look at a company like River or an Alex Leishman,
Block, people like Jack Dorsey and Alex
who may give you that option to make that choice.
I'm not saying they will for sure,
but I'm just saying all custody is not the same.
all exchanges are not created equal. Do your own research. Where you do your business,
where you bring your business, what those people's values are matters.
Did we cover what you wanted to cover in Forks? Yeah, I think that's a good,
you went a different direction than I was anticipating, but I think it's the right direction
for a broader audience. So thanks for doing that.
A few more things I wanted to talk about.
Matthew's asking. I got to answer this question.
So Matthew asked a very important question.
He says, before you end, Max, what is that mask?
What is it made from?
And how much DMT was used in the process?
I'll answer all three.
So this mask right here, for those of you who can't see it,
let me bring my friend up here.
This is one of the Demon Doggy Diners.
You'll notice I'm wearing the original Demon Doggy Diner
because there's been many versions of it on my shirt.
So for those of you who don't know...
This is an NFT.
this is definitely not a fucking
he's about to drop it
although I don't know I'm not anti-ordinals
necessarily maybe we should make one maybe
but so shout out to my dad
because he makes all of these so my dad
used to be known back in Memphis where I'm from
originally as we always say I do it for them
as the king of Halloween my mom and dad
were the king and queen of Halloween so my dad is an artist
that makes these incredible six
he used to make six foot tall giant monsters
and maybe one day we'll be able to
show them off in the Bay Area that'd be cool
but as of right now he doesn't really have
the yard to be able to do that. So instead he makes these masks and we probably got a dozen of
them and we go around him more than me. And when I, when I have time, um, the reasons I'm not
reading the group chat is my, my other priority is, is spending a lot of time walking around town
with these masks with my dad and we go around and, um, you know, uh, last one summit at all.
No, that too. There's a lot going on in life. I'm never going to be doing another summit. I did this
last year too, with my LP day right around Halloween. Like Halloween is too sacred of a
holiday to be doing all this other stuff. But whatever, lesson learned. We all learned.
And so we went to one of our Halloween, there's the kids out on the beach last week, and we went
and showed them off. Although it was raining and windy, so it was a rough day. But the kids love it.
I mean, adults too. It's really fun as you walk around town with these. You just see people
shocked. Most people are kind of absorbed in their phone reality or worried about some bullshit in
life. And then all of a sudden, you snap them back into reality when they just see you in one
of these it's great fun i recommend everyone do more things that snap yourself and others back
into reality um and particularly with the kids a lot of them love it but you know it's not
halloween unless you get at least one kid that starts screaming crying running to their mom
we got that last week they were absolutely terrified the mom had to run down the street
to catch this like three-year-old they were terrified and uh you know that's because of
halloween um and how much dmt was used well we're not one by one man we're gonna wait through
second question is what is it made from so this is where my dad shout out to my dad out here
he's a genius in what he can do because he does a lot
with a little which by the way I saw someone put that on there
and it was like a LinkedIn or something and it's like
what their skills were living well
on a little and I was like that's a skill we should all
aim for. This is made
of paper towels. It's paper mache. It's just like
this is like hood stuff from around the house.
Paper towels and paint. Nothing fancy.
Very cool. Yeah the best art. The best
ideas to your point. Bitcoin white paper.
Everything starts from the edge. Like if you get too close
to the center and too close to the money spigot
things get nasty but when you're on the edge
stuff looks good.
So just paper towels and paint.
And then the last question,
how much DMT?
I'll have to ask my dad.
I'm guessing...
Non-zero?
No comment.
But it's funny you mention that
because I was talking to some folks
about some of their experiences this week.
So it's, you know, it's possible.
You never know.
Beautiful.
All right.
Well, I want to rattle off a few things
before we wrap it.
Hit me.
What you got?
Well, we talked about prediction markets
a little bit.
I mean, Polymarket is one
that most people have probably heard of.
and maybe used a little bit.
They just recently announced accepting Bitcoin.
That's great.
But what led me to learn about that
was that there's a Bitcoin-focused one called,
I think it's pronounced Predicts.
P-R-E-D-Y-X.
I think Connor shared it with me,
and then I decided to just play.
I've seen it on Stacker News.
They post on Stacker News all the time.
Yeah, I decided to play with it.
You got to be on Stacker News more, Steve.
I missed it.
I don't know.
But anyway, super slick onboarding and user experience.
I just wanted to describe what that is
and then maybe compare it a little bit to Polymarket
and how can Predicts keep an edge.
So the user experience is great
because first of all, to register,
I could just use my Bitcoin private key.
It used LNURL off.
That's cool.
So I just like it presented, just like Stacker News, right?
It presented a QR code.
I scanned it with Phoenix Wallet.
That was me registering.
Nice. So super slick.
No email address, no KYC.
So there's the, you know, remain anonymous part,
but also just the onboarding UX.
It's so fast and simple.
Because at first I didn't see that option.
So I'm like, I got to fill out this form and who knows what else.
And it's less me being like, I mean, part of me is like,
certainly if a password, I don't want to do that, but just the time.
Yeah.
And I just like put it away and move on to something else.
So it was so simple.
And then I was able to quickly and easily deposit money into the system through lightning, right?
And it was instant.
So literally within seconds, I was able to register, get money into the system, and participate in a prediction.
So I did like the World Series.
I put a little bit of money on Toronto.
Is baseball happening?
I don't even know if I watch baseball.
Are you geriatric now?
It's the World Series.
that's happening now
I feel like DK for once
I'll sit in the corner here and talk baseball
that's bowling right
now there's some amazing
stories I mean Otani for the Dodgers
is like the most incredible player ever
with pitching and batting
I'm worried she can cricket
since we're late I'll skip
the baseball story but we'll pick up baseball next week
anyhow
and then the way
their UI works
or their system works, you buy like,
I figure if they call them,
I'm almost scared to say the word token
because it's not a token, the bad word.
You get cowboy credit.
Units, you get units.
Like shares, I think it was maybe called shares.
But I bought like 100 shares in the prediction
of the outcome of the World Series,
which costs something like a fraction of a sat
for a share.
So 100 was like three sat.
So my bet here, in case this is illegal,
I don't know, but it's three sats,
so we're not getting like sub-penny bet.
But just the user experience to do this
was like super fast, super simple.
Cool.
I thought it was awesome.
We should get them up here.
With Polymarket, my understanding,
I mean, I've gone to it just to see
like current estimates,
but I've never participated.
So my understanding with registering
is you do need to KYC.
So if that barrier remains,
then to me, Predicts is like far more compelling
than Polymarket.
and we'll just see
usually with a Bitcoin focused
product
you can just do more
go farther with the focus
than one that supports a zillion different coins
so hopefully Predicts does well
and then I don't
I don't know any of the regulatory side of things
so like is it
can it continue being no KYC
I have no idea
I think the regulatory
I think Kalshi is the big competitor to Polymark
I think Kalshi is fully regulated
and that enables them to be plugged in.
I think they got plugged into Robinhood.
I'm not a Robinhood or a Kalshi customer,
but my understanding is if you are a Robinhood customer,
you can participate in the Kalshi prediction markets
without additional KYC or signup or anything.
So I appreciate all the points you're making
around the simplicity of UX and Bitcoin-centric experience,
but I think also figuring out how to get liquidity
and distribution is an important challenge
that critics should still be thinking about
and figuring out how to solve.
and sometimes the regulated prediction markets
I think have advantages
because they can be plugged into places
where people already have value on store.
Two quick thoughts on that.
I would love to go deeper.
I mean, and you put this on my radar.
I don't know if the predicts guys
want to start a company
or kind of want to do it at the edges,
but it's interesting
because no KYC doesn't just have the obvious benefits.
And by the way, this feels a little bit,
it feels very Bitcoin.
Like it feels like one of those things
where like regardless of whether
they can go the traditional route or not,
you know, it feels like the kind of thing
that could get real traction regardless.
and like that's where Bitcoin has always thrived
is on the edges.
But I also, the thing I am most excited about
and the predicts founders,
if you're listening to this
and you are thinking this way,
definitely let me know
is when you have no KYC for prediction markets,
that allows bots to use it.
And so what I'm interested in
is you can start literally having bots
creating their own prediction markets
and working and betting with other bots.
That to me is something that could just go like thousand X
and it's early for that.
But I'm most interested that
if you don't have KYC or identity,
then you can literally have new life forms using it,
which is cool.
Yep, super cool.
What do you think about Brian Armstrong's earnings report?
Was that good or bad for prediction markets?
Because in case he didn't...
Oh, well, there's a prediction market
about which words he would say during earnings.
And so at the end of earnings...
Crypto!
At the end of...
Well, you know, Web3 was one.
This is funny, though.
Web3 was one.
But at the end of the earnings report,
he pulled up Polymarket and just read off every word.
Did he really?
Yeah, so it was like it made everyone a winner
that bet that he would say it.
Now...
Did he say Bitcoin?
Just curious.
Yeah.
I mean, I think that was one of the words, right?
But so, you know, I think that's kind of funny.
It's an interesting moment to do it.
But at the same time,
like insider knowledge here
could have completely...
I mean, I don't know how much money was actually...
But imagine a lot of money in volume here.
Like insider knowledge to him doing that
would like completely...
rig these markets.
I mean, that's what Coinbase is doing from day zero.
So anyway.
Not spread.
For me, it almost makes me question these markets more.
I think it's good to illustrate just how these things work.
I think it's illustrative of the broader point
of how prediction markets work
and how they can be influenced
and how you can bring information
or the market itself could cause a different outcome.
All of that is stuff that people should be aware of
instead of thinking of a prediction market
as this remote, isolated thing
that just like observes the world.
I think it was educational.
It plays with the world, right?
And people should understand that though.
There's different, like,
no one's going to do an earnings report
that affects the Toronto Blue Jays
winning the World Series.
But so you need to know
what you're putting money on.
Some can be rigged and some can't.
Like I think the, my understanding,
and I'm not an expert at prediction markets,
but as I'm about to say,
we just literally talked about
Chauncey Billups going to jail for this.
But I think one of the functions
of the platforms themselves,
like the PolyMarkets, the Kalshys,
is that they decide what markets get made.
Does that sound right to you?
I think that's, like, you can't just come
and make up your own and just launch it.
Really?
I think you have to...
I think you can on Predicts, at least.
Well, that's what I was going to point out,
is I think because Predicts is a very different thing,
I think instead of going after the same markets
that PolyMarket and Kalshys go after,
which are more like they're curating
which markets get made,
this is almost more like a tool
that you could use with your friends
to do like a sports betting thing
or you could take it,
maybe most of the markets end up being
kind of more private in nature
and they're not discoverable,
but it's more like a tool
that lets you construct these kinds of markets
for yourself,
which to me seems like
a very differentiated value prop.
I agree with Steve's point
that it's like a nice UX,
but ultimately a nice UX
can't beat volume and distribution,
but if it has a different feature in the world
that it can actually be used
in a very different way, in a private way.
And it's not meant to be a discovery hub,
but meant to be a tool.
That seems promising.
I love that.
And I love anything that enables the long tail.
So you guys are making me more bullish on Predix.
I definitely need to go do a little bit more research.
Well, I learned the founder is in Southern California too.
So thanks for talking to him.
Oh, great.
Yeah, you should come chill.
I'm interested in learning more if you listen.
Maybe he's listening to the show.
And another invitation to come visit us up here.
We'd love to chat with you.
But I just want to say really two quick things on that.
Number one, what you're saying though,
it's no different than traditional markets.
traditional markets are also popular, right?
Like, I don't know, like, if you look at, like,
insider trading as a thing, like, people know,
oh, like, whenever you see someone...
It's very different for two reasons.
One, I mean, there's the SEC and it's a regulated market.
I'm not saying...
Well, it is.
I mean, I'm not saying it's perfect,
but people do get put in prison.
There are investigations.
From time to time.
From time to time, exactly.
But it is a difference.
Like, there's...
It exists.
there's investigations, there's enforcement.
I didn't say it's perfect.
I didn't say it gets everything.
It's indisputable.
And then secondly,
is that the prediction markets
is way more wide open
than the stock market.
I mean, the stock market,
there's only a finite amount
that have gone through this SEC process
to be registered.
And it's just easier to watch that.
I mean, you guys are saying
that's hard to watch, right?
I agree, but it's impossible to regulate.
So where I think it's going to be very-
An open prediction market where anything can be predicted.
Anything can be predicted.
I think there's going to be good and bad from that.
And I think what's cool is I've always wondered
why our prediction market's taking off.
And maybe now is finally the moment.
They are.
We predict-
Well, they are now, right?
But I mean, I've been wondering this for like 15 years.
And I don't know what the kick was.
Maybe it was just more liquidity on these markets
or easier user experiences, whatever.
Maybe the sports betting going mainstream.
But I think what's really cool is we're going to have in real time the ability to solve some of these problems.
I think one of the great challenges for Bitcoiners is no one wants things like insider trading.
We just think that centralized institutions are often just too corrupt, too opaque to be able to do that well.
It'd be awesome if institutions were honest.
That would be really cool.
But I think what's going to be really interesting is how do you try and get some of that in a bottoms-up way?
So there's going to be a huge experimentation around oracles, reputation with oracles, markets
on which oracles are honest, things like that.
And I just think that's going to be super fun to watch.
And I just want to say this one more time because I think it's very important, whether
it's the Predicts guys or someone else, finding authenticity and truth in a world with AI
is going to be so, so, so important.
So figuring out how to run markets to find truth or closer to truth in a world where
there's a lot of fake stuff or spam on the internet is interesting.
and then really making this
like an agent first experience,
that's what I would be watching
for a company that could just
blow it out of the water.
So there's three more topics
I was hoping to talk about.
I got to pee.
You guys,
we can't,
but like this group
can't do rapid fire.
No, we're not going to talk about it.
I'm going to mention them though.
Maybe we tee it up for next week.
One is Substrate was announced,
which is a competitor to ASML.
ASML is a critical company
in process for semiconductor
and they're a monopoly.
No one else competes to them.
I understand it's a huge barrier to entry,
but I've always found it puzzling that no one tries.
So I can't speak anything to Substrate,
their technology, the odds of success or whatever.
It's a good name.
The team mined it,
but let's hope they create competition there.
Yeah.
That's one thing.
Two, the CoreWeave deal to buy Core Scientific fell apart.
So, you know, we can get into a huge mining topic,
but just FYI, we've talked about that before in the show.
and we talked about AI and mining.
Interesting that, you know,
I think they're being acquired for $9 billion.
The highest...
Couch change is what I'm bringing.
The peak market cap for Core Scientific
is its current price,
which I didn't look today,
but yesterday when I saw this news,
it was like $6.8 billion.
So the premium over their all-time high
is like almost 50%.
Shareholders rejected that.
So it really speaks to what shareholders are very bullish on the future of Core Scientific.
And then the last thing is SimpleX.
Did you guys ever try SimpleX?
You mean did?
Messaging apps.
Simplex?
Oh, sorry.
Simplex.
Oh.
Or be Simplex.
The worst name of all time.
I don't even know how to pronounce it.
Well, now we can.
Maybe I used to call it Simplex.
Now I'll call it Simplex.
I'm kind of trolling on it.
Yeah.
Because, so you guys use it.
But I mean, for the people who are not familiar with this.
Yeah.
Wow.
Well, I mean, it came, I think it was introduced two years ago or something.
But it was a new messaging app that was more decentralized and more private maybe than Signal.
It had a horrible user experience out of the box, but maybe it was promising.
But yesterday they announced NFTs and a token and a whole new blockchain.
Actually, I don't know if they're building their own blockchain or they're building it on Ethereum, but either way, it was an interesting move.
It was sad.
Unexpected move.
Unexpected.
Because also I think Jack led their seed round or something, which is like, I mean, I guess
I know he never really tells people what to do, but like, it's just disappointing.
Like why does everyone-
I didn't even know they'd raised money.
Yeah.
Jack was the lead investor.
In fact, they raised a little bit of money, I think, from Village Global early on, which
I thought was a good bet from them.
And then they raised more from Jack.
And so I was hopeful.
I was like, okay, this one I should be watching.
This is great.
I never would have dreamed him.
It's like, man, like why do all the good things just have to ship one?
So there's still a huge opportunity.
Maybe it'll be white noise or something coming out of Nostre.
If the Simplex guys are listening, it's not too late.
You can come back and do a real business model.
I didn't look at all the details.
They did respond to a lot of the,
I mean, I'm sure they anticipated
a lot of negative criticism on social media,
which they did get.
And they did respond to a lot.
I didn't go verify any of this,
but I think they were responding like,
there's no pre-mine.
Bitcoin doesn't solve their needs
because they need smarter, smart contracts.
so there might be
there might be
more to read here before immediately
dismissing them I remember
BISQ
they introduced a token
yeah but wasn't that that was more like a share of like
Bitcoin rep
it was to it was like sort of
the
the lubricant to make their peer-to-peer
trading work but they went
to great
I'm not sure I follow
but
well because they
want to be a
decentralized exchange
so how do you
like
how do you do
a decentralized exchange
I think you do it on Noster
but
well okay
no one's built that though
Noster didn't exist
when they did it
no one's built that
so
they wanted to stay
Bitcoin only
so that you couldn't
build Uniswap
so how are they
supposed to do it
so they came up
with a token
I'm just saying
that was an example of where
I think the people behind BISC are
tried and true Bitcoiners
but they introduced a token
and so maybe that's the case here with
SimpleX, I don't know
there might be more
to it. We should look into it
but there is an opportunity and maybe
something like the white noise protocol or whatever coming out
in Oster, like maybe there's something there
And speaking of, did you guys share? I thought I saw
something with the hurricanes in
Haiti and Jamaica that BitChad is kind of
blowing up to take over
first of all before we get too giddy like i having lived through left with a cat five storm in new
orleans back in you know petrina 2005 like um that's all the people in jamaica know that's just
gotta be freaking horrible and terrifying and like just getting welted by a storm but the interesting
part for bitcoiners is that i think i saw cali sharing that uh the chat is now number two delin
it out maybe it's number one by now so interesting case study which was like even though it's you
know, Bluetooth mesh origin, it's, I think, kind of adjacent to what Simplex was trying
to do. It's white noise based. It's, you know, kind of Nostra based. So it touches on thematically
things related to Simplex, but almost certainly is never going to introduce.
We should talk more about that one next week. I would love to learn and see how it functioned
for the people there. One question I didn't understand is even if they're all their internet
is down. So it's like Bluetooth peer to peer. I guess they don't need us coordinating among
themselves maybe. It might not be
to access the internet. I think I saw Dread
was doing a fundraiser. I didn't go look into it
deeply. I should check out more on Nostra.
It'd be cool to hear from Dread or other people
how that
did it work? What worked? What didn't?
Maybe we can cover that next week.
Awesome. Thanks for going through those
with me. Just two more hours and
happy Halloween.
Happy White Paper Day.
Bye-bye.