That's when hyperinflation really started.
The inflation was really bad.
Like right now, for example, Venezuela is running on average like 172 inflation year
over year.
That's normal for us.
Like we...
Insane.
We bathe in that.
And so that's normal.
Now, at that point, it went from like 175, 200% to thousands of percent, millions of
percent.
It was incalculable.
If you think like fiat is bad in America, boy, let me tell you about other fiat.
This idea of shorting the dollar with Bitcoin felt almost like a no brainer.
But at the same time, this concept of shorting the dollar as a foreigner, it's like, whoa,
like, are you really like, you know, but because you're like, oh, my God, but hold on.
That's the one that works.
Like, wait, wait, wait.
But then you start basically understanding more of it.
And you're like, wait a second, but it works just like all the others.
Like, it's not different at all.
It's just has these other privileges, but it actually breaks just as easy.
And then you see you see Bitcoin price the dollars.
You see the price that it's doing immediately.
The graph tells you, why am I selling this thing when I can borrow the dollars from it?
So I think in the context of how divisive everything is getting, I think we as Bitcoiners need to keep a sort of centrist approach to things and understand that Bitcoin is going to outlast this administration and the next administration and the next one and the next one and the next one.
And so we should try to build this as anti-fragile as a sort of administration proof as we possibly can.
Our view is that if Bitcoin does what we believe it's going to do, what else do you need?
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Without further ado, let's get into this Bitcoin talk.
Marisa, welcome.
We were just talking backstage, let's say, and it was getting far too interesting and
we needed to start recording.
So how are you?
Again, good to see you, man.
Stoked to have you on the show.
Thank you for having me, man.
I'm a big fan of you and Carla.
I've been following you guys for a long time, and I love your content.
I'm excited to be talking to Toximus Maximus and other characters.
But no, man, I love what you guys do for the space.
I think the mix of education and fun is very, very needed.
And I get a real kick out of your videos.
So congrats.
Much appreciated, man.
I mean, we need more fun in the Bitcoin space.
We can't start taking ourselves too seriously.
I think it would be a massive mistake.
You need to be able to laugh.
Laugh at the fiat world, but then also laugh at yourself in the Bitcoin world.
Like, that's one of the key things.
Laugh at yourself before anyone else can.
Take away their power.
I completely agree.
And that's why I'm actually a big fan of guys like you and Tatum, like people that do actual humor on Bitcoin.
I think that's a very – I wish there was more.
And, you know, hopefully you guys continue to grow and become the new Colbert's or the new, you know, the new smart slash funny people, the new Bill Maher's or whatever it is that we're going to have in our generation.
But yeah, this taking Colbert's without the vaccine propaganda.
Him and Stewart used to be actually really great until they went crazy.
But I remember in the early days, I was a Colbert fan and I was a Jon Stewart fan.
And I would listen to them.
I thought they were funny, clever.
Then all of a sudden they went real political.
And then it just started going off the rails.
It's funny when you're willing to pick on both sides equally.
It's not funny when all of a sudden it becomes clear that you're a political operative.
Maybe you were the whole time and you were just better at hiding it.
But I think there were some weird vibe shifts that happened.
And I feel like Trump really kind of broke a lot of people's brains in that, especially that first election where it was like people felt like, well, I just, I have to, you know, be on this side because I'm fighting for, you know, for democracy and everyone else is evil.
And like it, it really messed people up, man.
And then COVID just messed people up even more.
Like, I don't know.
A lot of people, I feel like we'll never recover from that.
You know, it's funny because I find so many parallels to what I'm seeing in the West versus what we experience in Venezuela.
Like in Venezuela, when Chavez won, it started out as incredibly divisive, right?
Like he basically took one side of the country and said, your neighbors are your enemies.
And basically the second you start pointing fingers at your neighbors and you start seeing them as the enemy or contenders rather than your partner, it basically creates, it breaks up society into two camps.
Like you're either, you know, you're red or you're blue or you're red or you're white or whatever the two colors are.
And then that starts priming so much more of your everyday.
And it ends up that we end up picking people that are even more and more polarized on either side because everybody wants to get revenge from the previous term.
And eventually that all goes well until the pendulum stops swinging at either end, right?
Because then as long as the pendulum is swinging, it can be divisive, it can be uniting, but the pendulum is swinging and you're giving everyone their shot.
Eventually, the pendulum stops swinging because the democratic entities get crippled by one or the other.
And then that's when the country just goes array because one group completely takes over and chases the other group out.
I mean, I'm not one that to be the end for everything or how everything plays out, but that's what I saw.
And so I'm starting to see a lot more of that them versus us type of rhetoric.
And it's not great.
For all the great that this administration is doing for Bitcoin, I wish it was not as pinned to one camp as it is today.
Because you know the other guys aren't sitting there saying, oh, this is so great.
They're probably keeping tabs.
And so that's not good for us.
That's not good for Bitcoin.
You know, we really want this to be, we don't want the next group to go take down the sandcastle, this group build, and then so on and so forth.
So I think in the context of how divisive everything is getting, I think we as Bitcoiners need to keep a sort of centrist approach to things and understand that Bitcoin is going to outlast this administration and the next administration and the next one and the next one and the next one.
And so we should try to build this as anti-fragile as a sort of administration proof as we possibly can.
And so I think it's important not to lose sight of that because it wasn't too long ago when we were under the foot of Chokepoint, right?
And a lot of us still remember what that felt like.
And being in this, it feels a bit of like a dream, right?
Like everything is sort of, you know, we have all these tailwinds, but we forget how quickly that changed.
And I don't want it to go back to where it was, right?
Like I want this to continue being the wind behind everyone's sails, regardless of your color.
So I think we have, you know, we have our work cut out for us to keep that balance.
The best part about Bitcoin is it doesn't care if you're Donald Trump, a humble pleb, a company or a country.
We all get the same rules.
And one of the rules is he who controls the private keys controls the coins.
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So thank you.
It's true.
And I think it's, my hope is that folks on,
like Bitcoin doesn't care about your politics, right?
Bitcoin's code, right?
It doesn't care.
You know, Bitcoin cannot keep you from using it.
You can only, you know,
you can only cut yourself off from Bitcoin
or your constituents.
If you're a politician who like Elizabeth Warren
has consistently been so anti-Bitcoin
that, you know, anybody who listens to her
and listens to her honestly
and thinks she's somehow actually a good faith actor,
she's hurting them.
She's hurting them by perhaps scaring people off of Bitcoin
that would otherwise be interested.
And I think it would be such a mistake for the Democrats
to make this into a Trump thing.
And that's, we were talking before this,
we were both in DC for the Bitcoin Policy Summit.
And that was one of the things that I heard.
I live in Illinois and basically Illinois is a very blue state.
It's a Pepsi-Cola state, not a Coca-Cola state, right?
in our little duopoly democracy.
And every staffer and even the senators
that we were lucky enough to talk to,
they basically, it's like Bitcoin is Trump coin,
is crypto, is Sam Bankman-Fried,
and even though they took money from Sam Bankman-Fried,
forget about that.
It's all lumped together.
And so it's like education is such an important piece here.
This is why we always need more Bitcoin podcasts, right?
I've got to saturate the market, get the education out there.
But it's sad to see.
It's sad because I've heard a similar story from my in-laws, for example, who were in communist Romania and say, look, we see some of the same markers here in the West that we saw in communism.
You're saying this like, look, I grew up in Venezuela.
I'm seeing some of the same writing on the wall that we saw there.
Like that's such a sad thing for me.
I was privileged enough to be born in the United States of America.
I still think America is the greatest country in the world because of the ideas and the foundation that we have here and the people that it attracts.
But, man, it's sad to see that like that pendulum swings back hard and it's kind of a constant thing.
I'm curious, too, you know, I would love to actually dig into a little bit because I think I told you this before we got on.
But you have, I think, one of the most interesting kind of Bitcoin origin stories that I've heard.
And it's really powerful.
You've spoken about this at conferences multiple times about how you found Bitcoin and what that really meant for you and your family, not just in some theoretical way, but in very real in terms of survival.
can you walk through that story a little bit because i i think it's really important for
people to hear stories like this no thanks man i appreciate it um i'll try to keep it concise
because i can wax poetic on this um it's um so as i mentioned i'm from venezuela that's where i was
born and raised and anyone that's kind of followed the venezuela story or the journey uh you know
25 years ago we were this beautiful country with amazing beaches most beautiful women in the world
statistically, not because I'm from there.
You're not biased, yeah.
No, I'm not.
But we had ample resources, the biggest oil reserves in the world.
Mind you, it's hard to refine crude, but on the numbers, just on the pure numbers, absolute
terms, Venezuela has the biggest reserves of oil out there.
And the country had the opportunity to become Latam's Dubai.
You know, growing up when my dad was sort of getting his start in his professional life, you know, in the 70s, etc.
Venezuela was a booming country in the 80s.
It was a booming country.
Now, the problem with commodity heavy countries like Venezuela, like Nigeria, like any other, is that you have this, your economy dances to the beat of that resource.
And so the success of your economy is very, in many ways, disconnected from your political actions.
And so it creates this noisy feedback loop where if a great administration was there, but it had a crappy time in the oil markets, that administration could have done a lot of great things.
But it wouldn't be reflected in the economy because the prices of oil were depressed.
And so Venezuela had these wild swings in the late 80s, mid to late 80s, and even throughout the 90s in oil prices.
Like oil would just boom and bust and boom and bust.
And that created a lot of, I would say, economic instability in the country.
People were frustrated.
People were upset every time it boomed and it busted.
And so there was some political discontent in Venezuela.
And Venezuela for many years was a very similar structure to the U.S. where there was like two parties, you know, blue and orange.
And they were both they were all predominantly, you know, European background white males that just kind of handed the baton to each other.
And that was all going well until the economy started.
There started being economic frustration around the country.
And then that started the first of a attempts of overthrowing the president.
So many people don't know this, but Chavez, the way Chavez became famous is because he used to be a member of the Venezuelan military.
And he was the guy that led the first coup attempt.
And he failed.
And he was jailed, then released.
Tried to overthrow the government again a second time.
Failed.
Got put back in jail.
But throughout this time, throughout these years, those two events were like two years from each other.
and then basically as he was in jail he was still getting a lot of support because the economy wasn't
humming along there was still a lot of discontent and people kept kept you know there was this this
um idea that we needed chavez to actually succeed right like we needed someone to overthrow the
government and so he struck a deal with the then president rafael caldera and basically said you
either, I'm either going to give the green light and fly the planes and try to overthrow
you again from in here, or you can release me and we can go toe to toe in the polls.
And Caldera basically said, I'll release you.
And so he released Chavez.
Chavez gets on a plane.
First thing he does is he goes to Cuba, goes to Havana to get his training from the Cuban
G2.
By the way, people don't really say this, but the Cuban intelligence service is actually
pretty sophisticated.
It's insanely sophisticated.
And so Chavez comes back, runs this sort of centrist campaign, saying all the right things, wins the election, and immediately starts his thing to rewrite the Constitution.
Many families that kind of saw what he was and who he really was basically saw the writing on the wall and said,
OK, we're going to go spend four years abroad while this wave passes because he's just not going to last.
We're just going to come back and it's going to be great.
And that was part of my family.
My family did that.
I spent two years in Florida.
And I remember when I got to Florida and I met Cubans who were in Florida.
And we told them what was happening in Venezuela.
We're like, oh, we're just here for a few years.
I'm going to come back.
And they would come and they would give me this hug, this very somber hug.
And they would say, yeah, we thought so too.
We thought we were going to go back.
But I don't think you guys know what just happened in your country.
It's like you better be comfortable here.
and uh and we remember laughing it off being like no you guys are an island come on like that's not
gonna happen to us we're mainland we got oil don't worry about it he's just gonna go away we're gonna
get it back and um very ominous actually their their view they they knew exactly what was happening
anyway long story short chavez uh basically rewrites the constitution gives himself
indefinite re-election powers, extends the presidential term to a year, changes the name
of the country, changes the flag, changes the coat of arms, changes the time zone, funny enough.
And so as if that wasn't enough of a tell that this is what was coming, you know, my family,
after a few years in Florida, we decided to go back because it was very difficult to spend
dollars and earn boliones, you know, right? Like it's, my dad's businesses were still running back
home and internet wasn't as great as it is there was no remote infrastructure he was just getting
hosed by the people he left and so we had to go back but after we went back my parents sole mission
was to get the kids back out of the country right like graduate get out graduate get out so i
graduated i went to do my university in canada my brother my middle brother did his university
in venezuela but he actually left right after to go to europe but my youngest brother didn't want
to leave and um and he graduated right after chavez died so chavez died in 2013 and that was
the time we thought okay many many venezuelans as as authoritarianism progresses you keep creating
these hopes that that this is what this is it's going to end in this time and no no that didn't
have nobody just gonna end when this happens it's for sure gonna end right so we had about six or
seven rigged elections you know under chavez and but everybody had this idea that when chavez died
you know the head of the monster was going to be taken off and there was just going to be disarray
within the ranks and along comes freedom again and we rebuild um so many people uh invested in
flying down in and basically moving preparing to move back to the country i did that i shipped the
container with all my belongings from Canada to Venezuela. I got on the plane and went to vote with
my wife. And, you know, the election was rigged. Obviously, the results came out late that night.
Maduro wins. No, you didn't. Let's do a recount. We're not going to do a recount. You know, do a
recount or what? And so they're basically and then, you know, that that triggered a series of
protests to basically put down the protests. The government responded with real bullets
and started actually shooting down protesters. And at that point, my family basically says,
listen, we didn't win. Get out. I don't care that you shipped all your stuff here. I don't care that
you have a house here. I don't care that you have things here. Just get out. And so I left,
and my middle brother left. But my youngest brother didn't want to leave, even with this
happening. And keep in mind, when Chavez dies, and this other guy steals the country, Maduro,
that's when hyperinflation really started. The inflation was really bad. Like right now,
for example, Venezuela is running on average, like 172 inflation year over year. That's
normal for us. Like we... Insane.
We bathe in that. And so that's normal. Now, at that point, it went from like 175, 200% to
thousands of percent, millions of percent.
It was incalculable because there was no official exchange.
There was the official exchange rate, and then there was the real exchange rate.
But every data aggregator that tried to show a history of the real exchange rate,
not the government fix, got taken down by the government.
So there was no clear history of how they –
because they just wanted to shut down your ability to see.
and by the way the venezuela central bank stopped issuing data i don't know five years ago six years
ago like there's no like this idea that america has where like your central bank comes out and
gives you these numbers and you're like oh great like that doesn't exist in in a lot of places
um so if you think like fiat is bad in america oh boy let me tell you about other fiat um
so um as this was happening my parents were like please mario my youngest person's like please
leave like please just just get out and he's like i don't i don't want to leave i refuse
and he pitches my dad on all these ideas to start a business and my family i've told this story a few
times like my family is very entrepreneurial my dad always wanted to support us out of school to
try something on our own and so my brother's turn came up and everything was just terrible ideas
because everything involved staying in venezuela and then eventually a few months after this process
started, he comes to my dad with an ultimatum. And he says, I'm doing this from leaving the house.
And my dad basically gets a little nervous. He's like, I think he's serious about this. He sends
me his pitch, forwards me the email. It's basically the white paper and a link to Bitmain.
He wanted to buy Bitcoin miners to mine in Venezuela. So that was the first time I read
the white paper and I've heard about Bitcoin. And all I understood from that pitch was that
he wanted to buy computers that took in energy and took in internet both were subsidized in
Venezuela to a large extent and the output was this asset that you could sell in an international
market at fair prices on you know untouchable and uncontrollable from the Venezuelan regime
so I was like oh this out of everything he's proposed this sounds like it'd be kind of
sheltered from this mess. And so he starts doing that. And this is 2015, early 2015. And so I went
down later that year, when all my friends were desperately leaving the country, selling their
houses, selling their cars, trying to figure out where they could go live with their passports,
where they'll be allowed to go live, get a work permit. And my brother greets me as I fly down.
He's the only guy noticeably with a smile.
Everyone else was just like faces were long.
My brother was like happy.
And he comes to me and he says I heard your friends are leaving And I like yes as are everyone else And he like if they have any industrial sites that they leaving behind that they would be
liking, that they would like to rent, I'm really looking for more space, right? And I'm like,
that was the first sort of what's, this isn't normal. And so he's like, come see my facility.
I go see his facility. He had about twice the machines he had initially proposed to my dad.
I didn't say anything.
And then I go to my dad.
I'm like, dad, I thought we said it was going to be five machines.
I saw more than 10.
He's like, oh, no, no, those are his.
He paid me back the initial five.
And I go back to my brother.
And I'm like, how are you doing this?
And he says, I'm mining Bitcoin.
And I said, show me.
So he's like, give me your bank account.
And he basically said, this is what the dollar costs in the real market.
This is what Bitcoin costs in dollars.
I'm going to sell this much Bitcoin, which is going to be $100.
and I'm going to get the fair market value of dollars to Bolivares
and I'm going to get your Bolivares into your bank account.
And I was like, okay, go ahead, buddy.
And so he does it.
He basically, it was like $100 worth of Bitcoin,
converted it to the real black market or real market Bolivares, right?
The true value of a dollar.
And then those dollars were sent to my bank account.
And at that point is when all the light bulbs came off
Because what came after this is in hyperinflation, the way what it feels like, like what hyperinflation really, the experience of hyperinflation for most humans is you get paid on Friday.
And that payment that you're getting is $100 at 4 p.m. the day you got it.
If you sell it at 5, you might get $80.
You might get $80.
If you sell it on Saturday, you might get 60.
If you sell it on Sunday, you get 40.
If you sell it on Monday, you probably get 20.
And what happens in these environments is that nobody wants to get rid of their dollars
or they don't want to get rid of their dollars in any way, shape, or form.
So it becomes really hard to convince somebody to trade you the dollars.
Now, let's just say you got there.
Let's just say you got the Bolivarist.
and now let's just say it's $150, like $150 worth, you have two options.
You can either go to somebody and try to trade cash for cash.
So you're giving them, Bolivar is in cash, they'll give you $150.
That cash, that U.S. cash that you get is a liability in the sense that if you get pulled over any checkpoint
and they see those dollars on you and they ask you for the official government receipt on how you got them
and you can't provide it, it's gone.
Your dollars are gone.
What happens is the wealthy who have been able to go to Florida
and open a Wells Fargo bank account or a Bank of America bank account,
they get to get dollars deposited into their Wells Fargo bank account
and they just wire dollars in a local bank account here.
So that excludes 99% of the population from that trade.
99% of the population are forced to hold cash,
which A, has the risk of getting confiscated,
but B has the risk of being fake.
And so in Venezuela,
many people would walk around
with their little pens
and even lamps.
Like people would whip out lamps
from their pockets
just to look at dollars
as they were making transactions.
Even stores,
anywhere you wanted to go pay with a dollar,
they would have like pens and the things.
And if you want,
God forbid you wanted to pay
with a $100 bill,
they would bring down the manager.
Like the manager would have to get involved
to basically assess the realness
of this $100 bill.
So what ends up, the way Bitcoin started going viral in Venezuela, beyond the mining,
mining was like the side of the house that I was most exposed to.
But on the other side of that mining activity was the demand from people trying to get rid of their bolivares.
And so the way this would happen would be you could pay it on a Friday,
and there's no bank that you can go trade those bolivares for dollars.
The bank has an order not to sell them to you, the central bank.
No regulated financial entity can sell you those dollars.
So what happens is you start going P2P.
So you start calling your buddy, Miguel, Maria, whoever you know is in the sort of dollar buying and selling brokerage business.
And so you say, Miguel, I need $150.
You got him?
And he goes, oh, I might have some on Wells Fargo.
Do you have Wells Fargo?
No, I don't have a Wells Fargo account.
Okay, sorry, man.
No dollars here.
and so you can keep going down the list okay i'll call maria maria would tell you the same thing no
no dollars sorry sorry miguel no dollars and so you would say and then by the fourth person you'd
be like i need to get rid of these bolivarists like by now i've already lost 20 of my week's work
and the guy the guy on the other side of the phone would tell you something like
okay so you don't have a wells fargo bank account and i don't have cash but there's this thing that
I can sell you. It's called Bitcoin. And you can hold it and trade it out for dollars in an exchange
outside of Venezuela. And people were saying, what is it? What do I need to do? It's online
money, man. You can buy it or you can not buy it. What do you want to do? And you would say,
what do I need? And they'll say, go to this website, give me an address, give me the money,
and I'll send you the Bitcoin. And people were nervous to the nth degree, but the risk of not
doing it is you lose your whole week's work. So you say, fine, I'll give you this thing. Okay,
I'll give you this address. I'll give you these dollars. Fine. Here's $150. Send me $150 to this
thing. So they would land in your exchange or whatever, or your wallet. And at some point,
it would show you how much Bitcoin and the dollar value of the Bitcoin. You did that on Friday.
Tuesday rolls around. And you're like, okay, now I'm going to go from Bitcoin to dollars,
which is what I wanted in the first place.
So you log into this thing
and you see that the $150 you bought
is now worth $160.
Instantly, you're like, what?
Venezuelans and many people outside of the OECD countries
have never seen an investment go up in dollar terms.
I know this sounds crazy to some people,
but to most of the world,
having a fixed dollar amount that just stays there,
it doesn't change, just sits there,
It's the panacea of their investment, right?
Because to them, to most people, the dollar doesn't devalue, right?
Like it devalues so slowly compared to their currency that they feel like they're, you know, a dollar is Fort Knox, okay?
And so they go into this exchange account and they see not 150, but 160.
That is a day's worth of work for them.
So they turn around and they go and they say, wait, wait a second.
I thought you sent me 150.
it's like no i did but it's 160 on my screen it's like yeah i know bitcoin goes up in price
in dollar price and then all of a sudden you realize that you don't just have a dollar
you have a thing that appreciates in dollars
mind-blowing just mind-blowing and so then you're like this thing made more money in one day by not
selling it than I did at my job. Why would I sell it? How can I get more of this? And they're like,
well, you can buy it. But did you know that so-and-so is mining it? Mining it. What do you
mean mining it? Yeah, just use an old computer, connect it into NiceHash. NiceHash will turn your
GPU proceeds into Bitcoin and off you go. Do it with every old computer you have. And so everybody
starts going wild in mining and buying Bitcoin and holding Bitcoin because they've never seen,
at this point, there's no stable coins, by the way. Stable coins do not exist. They're not popular.
No one talks about them. It's Bitcoin or dollars. And Bitcoin just surfaces as the absolute best
option. And so Bitcoin starts going viral. All along this time, this is 2015, 2016, early 2017,
right? Throughout this time, our family's minds are growing. People are coming to us,
asking us how do you do this we're helping basically dozens of people set up new mines
and import the things from bitmain and do the electrical upgrades this is like the venezuelan
golden age of bitcoin like i still get goosebumps when i think about it it was epic everybody was
like you found it like you found freedom show me mao show me it was like show me elio my dad is
elio and my dad was like the bitcoin guy okay in in the town and so anyway people like my family
starts mining my friends start mining everybody has basically got a rig and you know holds a
little bit of bitcoin then the shitcoin era starts emerging like ico boom and that gives rise to
eth and a bunch of other um new alternative assets and you know i could go on for another
half hour but to keep it to keep it super short i love it man um so then maduro um maduro like
after Chavez, Maduro is coming under a lot of heat because there's a lot of societal upheaval.
And to kind of keep this in check, he has to do some pretty nasty things. Like he has to actually
go shoot people. Like his people have to go like literally shoot people, jail innocent people,
prosecute, make examples out of people. And obviously these cronies demand their pound of
flesh, right? And so he has to keep them well paid. In the beginning, he was able to do that by,
it's going to be incendiary, but basically rerouting the drug routes or the drug trades,
like the Venezuelan army is in many cases, and don't take it from me, go read this, but it's
basically a drug distribution and production front, right?
And so that kept them at bay for a bit because, you know,
they were the kings of that domain.
But eventually, when 2017 rolled around, he needed something else to give them.
Like in 2015, he did the Dacaso.
So he needed to give people free things.
And most often, they happened around Christmas
because Christmas historically has been around.
Most of the social upheaval happens
because people want money for Christmas
and they want to spend time with their kids.
So anyway, Christmas 2017 rolls around.
And after two years of taking private businesses
and basically putting their inventory in a pinata
for the country to get for free,
most private businesses were very low on inventory
in December by design.
They knew what happened every December,
so they're like, we're not bringing anything this year.
And so he starts basically losing his mind because he's trying to get something to give to his cronies and to the people, but he can't, nobody's importing anything.
But right around December 2017 is when Bitcoin is like peak hype.
You know, it's like we're busting from 17 to 20.
And he basically realizes two things.
one that the only people that have been importing throughout 2017 into into the venezuela economy
inside is this company called bitmain uh imports from this company called bitmain he's like what
is that it's like these are these machines that you can use to my bitcoin and then they you know
this isn't a factual conversation but imagine this is basically how it went behind the scenes
it was like okay so these machines they produce bitcoin yes and if if somebody has them if you
take the machines can you just do they generate bitcoin for you after you take them they're like
yeah you just change the address they're like so we have these machines in this country that
generate this thing that no one can touch it's like yes sir it's like we need them like we need
to get them and so it's like how do we get them so he creates his idea idea number one is i'm going
to create a minor registry so he creates the venezuelan sort of uh crypto regulator suna creep
And he's like, the first task of this government entity is to make a list of everyone mining in the country, where they are, what machines they have, who runs them, who's responsible, all this stuff.
And I'll just say lists of people always turn out really well.
That's always great.
It's absolutely.
And then his second great idea is I'm going to take the miners, but I'm not going to stop there.
I'm going to also create this other coin called the Petro.
and I'm going to try to sell people this shit and trade it for Bitcoin.
Maybe people will be dumb enough that they will give me Bitcoin in exchange for this thing.
And so to create hype around the two things, he creates these roadshows,
the Petro Roadshows, he calls them.
And by the way, just for context, the Petro was a proof of stake coin.
It was never meant to be mine.
There were no ASICs to it.
There was no proof of work anywhere.
But then when he started these roadshows, which is like a series of events across the country,
he's parading ASICs in these shows.
So the shows are basically like ASICs everywhere.
And there's people that are telling you what they sound like,
how much they make, what the energy footprint is,
what the heat footprint is.
Basically like a blueprint on how to find these things
and basically why you should go and find these things
and basically how lucrative it can be if you just get one.
And so this happens throughout the country.
and then two things happened after that that was december around january um late late december
actually a lot of my friends start reporting these surprise visitors to their facilities
and at the beginning they were utility people municipality people then you know two days later
they would just come back with guns being like yeah we need the machines and so extortions like
the extortions uh start happening to the miners i have a few few friends call me freaking out like
what's happening? I got, you know, this guy took 25 machines. I had to give it to him.
You know, I'm going to shut down my rest of my facilities, blah, blah, blah. And we were like,
oh my God, what's going on? And then eventually the inevitable happened. They got to my brother's
facility. That was January 17th, I think, 2018. And my brother wasn't there luckily,
but they raid his facility. They take out his machines and they very quickly start getting in
touch with him to say, you either, you know, we're going to keep the machines. We need you to send
us $25,000, or we're going to make up some charges and throw you in jail. And my brother's like,
jail for what? He's like, we'll make it up, man. Don't worry about it. And my brother's like,
this, this isn't, this can't be happening. So this is like, this is like, I think three or 4 p.m.
And so we start calling our friends to see who can help us, like people we knew that were
connected to parts of, you know, had relatives in the government and such. And we're like, you know,
can you help us try to figure out where this is coming from? Like, why is this happening?
Everybody's like, can't help you, can't help you, can't help you. Meanwhile, the phone calls keep
coming, the threats and the extortion threats keep coming. And then one, and then I think it was
around 7 or 8 p.m. The conversation starts real considering like, like making a run for the border.
and um and so my brother had two kids uh and my wife he was alone in the country there was no fuel
in venezuela because venezuela had fuel shortages because of course it was it was free so everything
that's free disappears um there was no fuel in in the country at all and he had to try and drive
nine hours from our town to the border so we called up our family members that who lived along
the way, thankfully, and they set up these refueling stations for him along the way.
It's a nine-hour journey.
And then around, I think it was 9 p.m., he says, we got to go.
And so he puts his kids in the car, packs up his suitcases, takes his ledger.
And basically, you know, with the little Bitcoin we had, or not little, he had enough Bitcoin
to leave because they couldn't touch the Bitcoin.
They took the ASICs, but the Bitcoin was safe.
So he makes a run for the border.
he leaves at 8 or I think it was 8.30 or 9 and then at around 8 or 9 that time the extortionist
called my dad again and they say I know you're I know you're gonna make a run for it he's like
so we're gonna radio and make sure you don't get out and my brother very smart my dad very smartly
was like no no no we're not making a run for it don't worry just give me two more hours give me
two more hours we're gonna give you the money we're gonna give you the money and to give to buy
time basically and so my brother gets to the border early next early the morning of the next day
and then he calls me before he has to go through and he was like crying and and i said listen dude
you got this far you're gonna get through it's gonna be fine and you're gonna call me from the
other side and we're gonna be super happy and uh he hangs up about a half an hour goes by
fucking excruciating half an hour and um and then he calls me back on the other side
and so he made it out and largely the reason he was able to even consider leaving is because of
bitcoin and because if he had had his savings in a local bank account those assets would be gone
his businesses were a write-off his house was a write-off his cars were a write-off
the only thing that wasn't written off was was his bitcoin but he thankfully he had we had
transitioned enough of our of our businesses and wealth to bitcoin that he had enough of a base to
start from again and um and so by this by this point i was in canada and my my parents were
actually traveling on vacation so none of us went back after that event and um but thankfully you
know through that i was already a bitcoiner by then but that just made my conviction
just even stronger and so for me it was it was for me it was always obvious that this is what i
wanted to do for the rest of my life and once that happened to him i remember going to him
because at the beginning it was it was pretty nerve-wracking for my family to have gone through
all this and and we were you know we were a target back home and even something as me telling you
this story right like i'm only able to tell you these things now and so comfortably because all
my stuff in minnesota is gone and so uh but but a lot of people that are going through these
situations can't even speak speak out about it and uh and so that's why i um you know my family
you know i remember at the beginning i started writing a lot about bitcoin and this is before
this whole thing happened but i remember in the early days i would try to write blogs and stuff
I had no following.
I just wanted to be part of it.
And my parents, I remember after they read my first two blocks,
they were like, Maury, please take this down.
Because they were still back home.
They were getting the mining started.
I'm like, why?
He's like, well, it's not doing us any favors down here.
Things here aren't as you're up there where there's rule of law and stuff.
But down here, we're out.
We're just like sitting ducks.
And I remember it's always been a dance.
even after the story happened you know um my brother did a few like anonymous interviews and
stuff because he he didn't want like you know all that stuff out there in in a way that could
compromise people that were still there or his businesses or anything else but eventually it
came to a point where him and i both sat down and i was like are you cool if i if i just start
sharing this because i think people need to hear about this and he was like yeah let's do it and uh
and so this is his story by the way and thank you danny always for allowing me to to share this as
if it was ours.
But it's not, it sounds cool.
It is.
Listen, I'm very happy about where I am today.
But during that moment,
like the fear is very real.
And I don't fault anybody
that's going through that right now
and can't be as open about things
like as I can be today.
Because I think people don't
necessarily connect the dots
that even by speaking out against the regime,
you're taking a massive, massive risk.
And you don't have to say much.
You don't have to say much.
You know, I've seen people popped and done wrong for a lot less.
And so, yeah, man, that was my story.
It's such an incredible story, and thank you for sharing it.
Because, again, there's so many different things to talk about here.
One of the things that always jumps out at me is that people, I think most people, whether they want to admit it or not,
they get smart by force, not by choice.
This is what my father-in-law, who escaped communism, told me as well.
He's like, I'm a smart guy, but I got smart because I had to get smart,
because I had to figure it out, because this is what you have to do.
Same situation over there, couldn't hold any foreign currencies,
or the securitate would pay a visit to you.
And so, you know, you slice a soap bar in half and hollow it out and put some foreign currency inside and cover it back up and put your pubes all over it.
This is what he did to be able to keep some foreign currency for when he was eventually going to get out.
And hearing the story about your family and your brother, it's just incredible because it's kind of amazing.
Imagine if your dad would have funded one of his other business ideas.
We wouldn't be sitting here having this conversation today.
It's amazing.
But some anonymous developer creates a magic internet money that becomes a lifeline for, I mean, not just Venezuela, but so many people in so many different countries around the world that are living under these punishing authoritarian regimes that are living under hyperinflation.
It's just insane.
Does your brother, can I ask if you can say, does he still mine Bitcoin at all today?
Or did he kind of like leave it totally behind him?
No, they took him.
They took him.
No, but I mean like even now today,
like has he gotten back into it at all?
No, my brother is my right hand on sales.
Danny works with me at Ledin.
And so most people hearing this email,
like most people hearing the show,
if you have a Ledin account
and you've exchanged emails with Danny,
that's Danny.
That's the Daniel from this story.
And he comes with me to a lot of these conferences.
We, you know, a lot of my best clients,
I, you know, he's my right hand guy.
When Ledin was growing leaps and bounds
in the early days,
we needed someone we could trust i needed someone i could trust to help because i was dealing with
all the clients even the cs tickets the whole thing and i was like i need i need some help
and i the only person i could think of that i would trust to have a conversation with people
like bitcoiners and my clients that knew this stuff as well as we did was him because actually
kudos to him he was actually one of let his first power users so when let it came out he was one of
the biggest users of our product because he he had to rebuild his life with bitcoin and he didn't
want to sell it so he actually became one of my top things how how did how did you actually
transition from like what was that journey of starting leaden and then you're like you're i
mean that's gonna be kind of surreal your brother is one of your own like first customers like that's
kind of a beautiful thing like it it all full circle right no totally and uh so it is a very funny story so at the beginning all I knew what to do was mine Bitcoin because that what my family was doing back home But they had free energy
I didn't have free energy, right? And so when you have to start running the numbers at like
13 cents per kilowatt hour, you know, 20 cents per kilowatt hour, mining becomes a lot less
exciting. Nonetheless, it was what I knew what to do or how to do. And that was my sort of the
The thing I could feel like I could add value in that I had set up facilities before.
I knew how to order the rigs.
I knew how to set them up.
I knew how to set up the mining pools.
Like I was good at it.
And so I was like, I'm going to go try to do this in Canada because, you know, and now actually another funny story is when I was trying to help my brother relocate and myself kind of find space to do some mining in Canada, I reached out to the Canadian Bitcoin embassy.
And that was a Montreal-based shop.
and I got an email from none other than Francis Pouillot.
And Francis basically was the one that told me,
come to Quebec.
This is the best place to set up a mine.
We'll help you.
Open arms, man.
And I'm so grateful to him to this day.
And he was the one that basically gave me comfort
or planted the idea that I could mine in Canada,
that you could do something.
Canada wasn't priced out of this activity.
And I convinced my best friend from university, Adam,
who's co-founder of Ledin today, to set up a mine in Canada.
And I had already become very used to this concept of borrowing a weak currency
and holding a hard currency because in Venezuela, I did very well shorting the Bolivar.
It was actually my best trade before being long Bitcoin was going short the Bolivar via dollars.
And the way you do that is you take a Bolivar loan and you buy dollars with it.
It's really that simple.
And so this idea of holding the currency that is not getting debased or getting debased less aggressively and then borrowing the thing that is getting debased to the nth degree does very well financially.
So for me, this idea of shorting the dollar with Bitcoin felt almost like a no brainer.
But at the same time, this concept of shorting the dollar as a foreigner is like, whoa, like, are you really like, you know.
but because you're like oh my god but hold on that's the one that works like wait wait but then
you start basically understanding more of it and you're like wait a second but it works just like
all the others like it's it's not different at all it's just it's just has these other privileges
but it actually breaks just as easy and so and then you see you see bitcoin price the dollars
you see the price that it's doing immediately the graph tells you why am i selling this thing when i
can borrow the dollars from it so in Venezuela I was already used to and kind of curious to see if
anybody would lend dollars against Bitcoin or lend bolivras against Bitcoin but in Venezuela no one
did and I thought that was normal like of course no one would do that but I figured in Canada
somebody must have had this idea who am I to be the first guy to like I'm surely not the first
person to think about this but we set up the mine in Canada with Adam and then very quickly we had
the same issue that everyone else. We have Bitcoin revenues, fiat expenses, don't want to sell the
Bitcoin. And so we said, well, I'm like, hey, let's go try to get a loan. And so we went to a few
financial entities, got laughed out of the room. We got told Bitcoin's not an asset. That one,
that one we got told a lot. I remember that one. Who would do that? It's not an asset. It's not an
asset. And so I kind of looked at Adam and we were getting squeezed by the data center that we were
in they just kept wanting to raise our hydro and then the price of the rigs kept going up
and we're just sitting there in the middle like right like we don't we don't control the price
of the power we don't control the price of the rigs it's not really something where you can just
what can you do other than scale right like it's but then but then we realized that nobody was
servicing the demand for loans like nobody no one serious was actually considering to do these
Bitcoin back loans. And so I looked at them, we looked at each other and we said, we, why not?
Why not us? Like, why can't we be the ones that bring this product to life? Like, why don't we do
Canada's first Bitcoin back loan? And so we, we, we said, okay, like we started running some,
like, how would we do this? We would have to lend, not the full pop. It'd have to be at 50%.
So we started putting like the idea of what a Bitcoin back loan would look like. And right around
the time, there was these other companies that were trying to offer these types of loans, but
they had these tokens, you have to buy the token and the loans, you know, they took all sorts of
these new things as collateral. They issued their own token. They use that as collateral too. And we
just felt the whole thing was like, no, no, no, no. Like we want none of that. Like we want to be
able to like know where the Bitcoin is. I want nothing else around it. I want no other asset
around it. I want no token. I just want a very simple and understandable place or service where
I can just give you Bitcoin to keep it safe, you give me dollars.
Keep that Bitcoin in custody.
Like, I don't want you to do anything fancy with it.
I just want it to be safe.
And so we said, let's do Bitcoin.
No one's done Canada's first Bitcoin back loan.
This was the middle of early 2018.
Like, we're going to be the ones to do it.
And so we pitched this idea to a few angels or people that we knew from the past.
And one of them decided to basically fund us and give us our first $500,000 Canadian check to build a business and a million dollars to lend.
And so we basically got to work.
And we did Canada's first Bitcoin back loan in November 2018 to Francis, actually.
And so we did an event in Montreal.
We basically said, you know, let it's here now.
Canadians can borrow against their Bitcoin.
and then that started this journey of what now has become leaden.
And, I mean, there's obviously a lot of chapters in there
because we didn't start out as the biggest.
Today, I can say, thankfully, we are the biggest consumer Bitcoin-back lender
in the space today, which is still kind of surreal to say
and fills me with pride.
It's amazing.
But when we got started, we were the tiny, boring Canadians,
is what they called us.
And then, but we never chase the shiny light, right?
And we always just stay true to,
our view is that if Bitcoin does what we believe it's going to do,
what else do you need, right?
Like, just be the best at that.
Like, that's it.
If you're just the best at Bitcoin back loans
and Bitcoin becomes what we all think it's going to become,
we and our clients all stand to do very well.
and there's no real need to take you know to juice it up or put a turbocharger here or put
nos in there to make it go faster like the other guys tried to do that it broke uh and so i wanted
to talk to you about that too because you guys i think a lot of people we were talking about this
before we started recording but a lot of people have some like some ptsd from when whenever they
hear about, you know, like Bitcoin backed loans and yield and all of these things, because so many
of the, you know, BlockFi, Celsius, Voyager, like all of these things that blew up as a part of that
larger like SPF, Fioros Capital, you know, contagion, and all of that, all the shenanigans
that were happening there. Now, you guys obviously weathered that storm, you're now the biggest,
you know, provider of these consumer Bitcoin backed loans. What, what was it that allowed you
guys to make it through? What did these other guys do differently where they all just blew up
in such spectacular fashion and yet you guys were just unaffected by this? It's a great question
and it's a nuanced answer, but I'll try to put it in buckets and keep it as simple and concise as I
can. So the concept of collateralized loans is as old as time, right? Like in Babylonian times,
we were borrowing seeds backed by gold and gold backed by goats. And, you know, it's all types of
iterations of this asset backing this loan. This is a collateral, a security, a guarantee that
you're going to pay me back. It's a very natural part of commerce. So in Bitcoin and say gold-backed
loans or mortgages, property-backed loans, or even securities or equity-backed loans,
those things have been going on for hundreds of years. You know, we are... Secured collateralized
lending, by the way, makes up 80% of all loans in the U.S. are backed by something and backed by an
asset. An unsecured credit is actually only 20% of U.S. debt in aggregate. So in our view,
the activity of taking Bitcoin, keeping it safe in a custodian, and then lending you dollars
is a very simple business. If you do it responsibly and you do it correctly,
it's a very safe activity, right? It wasn't the Bitcoin back loans.
It wasn't collateralized lending that brought down these firms. It was a combination of things.
So number one was recklessness and just poor internal risk management decisions.
None of the companies that went under had proof of reserves.
Not one.
So that tells you already a lot, right?
Like not one of these firms ever bothered to do proof of reserves.
Attestation, report, nothing.
At Lennon, we were the first lender to ever do proof of reserves.
And we still do them.
But hey, we have the longest running proof of reserves program in the lending industry.
And that's something we take a lot of pride in. We were doing proof of reserves in 2020 when others were adding DeFi tokens and talking about NFTs, and we were adding proof of reserves.
funny enough today still some legacy companies and some of the newer lenders are coming to market
without proof of reserves which to me is i just i i i can't comprehend why you would do that
right like why would you it seems insane like how can you possibly build up any sort of confidence
i don't know but the truth is we we try not to look at what others are doing we try to look at
how our ship is doing and are we doing like are we doing where we going where we want to be going
so we pour proof reserves at the foundation level of leaden because one comment that i will make is
that the companies that aren't doing proof reserves today most of them is not because they don't want
to is because they cannot. It's because once you have operated a business for six years and you've
added God knows how many products and services and God knows how many assets, gathering your numbers
and getting a snapshot, a precise snapshot of all your assets and all your liabilities at any one
point in time becomes an insurmountable task. It becomes incredibly difficult for a company to then
have to retroactively build proof of reserves.
At Leten, we poured it into the foundation
because everything we built on top of it had to comply.
Whenever we're discussing a product,
an initiative, a feature, anything at Leten is,
how does it interact with proof of reserves?
That's like number one, right?
Can we show it?
And then if not, then it doesn't work.
It's not what we need.
So at Leten, everything is,
the backbone of it is transparency
and does it fit into our program?
Does it fit into the transparency that we have today?
Can we build our existing program?
Can we add it and keep doing it?
So number one was that, lack of proof of reserves.
I would say that's number one commonality among all of these other guys.
The second one I would say was just poor risk management at the underwriting level.
What do I mean by that?
A lot of these companies, the biggest risk that they were taking was there were two huge risks that they were taking.
Number one, they were rehypothecating the Bitcoin collateral or any other collateral asset that they were given as collateral.
They were taking that asset and trading it or relending it or taking additional risk with the collateral.
that in itself is an additional risk because the person who borrowed the dollars and posted that
collateral to you can do everything right can come back and repay you but you out of your own will
may not have that bitcoin because the person you lent it to may not be able to give it back to you
because many times those loans were issued unsecured like the collateral was lent unsecured
and it was done that way because the companies that were doing this many times also offered
yield in Bitcoin, in ETH, in all these other crazy coins that nobody wanted. So what they ended up
having to do was taking these like Dogecoin deposits, convert them into something people
wanted, so dollars or Bitcoin, and then earn the yield. But then you would have an asset liability
mismatch because you owe these people dogecoin you don't owe them dollars and so then if you
didn't hedge that properly you have a you have a gap between what you owe and what you have
and so a unsecured lending for yield was in many cases what brought down these guys because they
made loans to guys like three arrows they made loans to guys like genesis they made loans to
guys like Alameda, et cetera.
And in the context of finance, this isn't a new thing, right?
In finance, there are these concepts of unsecured loans and all these things.
But there's also very well time-tested risk management best practices.
One such of this, like one of the cardinal ones, is concentration risk.
you don't lend out to one person more than you could ever absorb if that person didn't return
the assets that's the concentration risk 101 you would be shocked to see how many companies
managed this like didn't exist so three arrows voyager had 67 of the book out to three arrows
when three arrows went under no there is no equity buffer that can absorb that that was just wildly
irresponsible. Then if you look at BlockFi, they ended up taking the deal with FTX, and that
required them to basically use Alameda for everything. And so when Alameda went down,
it was just impossible for them to recover from that. And so poor underwriting, unsecured loans
on the yield side, rehypothecation of the collateral, lack of proof of reserves, their own
token, like Celsius and others were caught playing games with their own token. So any platform that
has its own tokens massive red flag just shockingly they were playing games with their own shit coin
who could have seen that coming massive and so there was just a lot of the things a lot of there
was a cocktail of bad actors or not bad actors but bad things that were coming together and all
that needed was a little spark and we got that spark with terra luna that lit up three arrows
three arrows lit up celsius celsius lit up genesis genesis lit up sbf and alameda and so all the
dominoes just and the way we navigated that was we had a very simple business you know we had pretty
strong uh risk management like that's that's the moment that leden is built to withstand the
downside more so than it is to rip on the highs because we the highs will take care of themselves
Our job is to protect the ship and our clients on the way down.
The way up, Bitcoin will take us there.
We need to be the best at when things go south.
And that's the other thing I'll say to people is you've seen a lot of these new companies come out and offer Bitcoin-backed loans.
And they all sound exciting.
And there's a new one popping up like every two weeks, it seems, because things are going up and to the right.
Everyone can be a lender when the market's up and to the right.
Literally, everyone can be a lender when the market's up and to the right.
You don't define the quality of a lender by how they perform when things are up and to the right.
We're not here because of how we did when things were up and to the right.
People know us as the people who survived all the downturns.
That's Ledin's name.
And I'm hugely proud of that because all the Bitcoiners know that we are going to go where this thing takes us.
In the words of my dad, don't fuck it up.
That's what he told me.
when i called him actually i remember because he's like my mentor right and i remember i called him
when all these things were happening like all these companies were collapsing and i had clients
calling me you know some people were nervously withdrawing because they thought we were going
to get contained like we were going to be part of the contagion and i was just like listen don't
take it from me withdraw we'll be here when you're when you're ready like we're not going anywhere
take your bitcoin i would much rather you take it out if you if you're calling me to you know if you
if you feel if your gut's telling you something could be wrong take it out come back to us when
you're good like we i'm no rush and so i was calling my dad and i was kind of laying out what
was happening and he goes he goes so so wait a second the the five guys that were all bigger than
you are gone like they're gone and i'm like yeah yeah dad it was like it was like a nuclear bomb
it wiped out everyone he's like and you're the only one that's still standing and i was like
yeah i mean i think there's one or two more but like we're the only like yeah and he goes son
you've been given the biggest gift it's like get back on the horse and don't fuck this up
and um and i still remember that because at the time you know looking like how long i never thought
that we were going to be back here just three years after i thought it was going to be decades to
to rebuild the trust because it was really hard like for 2023 2022 were tough years because people
were coming to us and it's very hard trying to understand the same question you just asked me
how did you survive right because when you see there was a basket of 12 apples and 11 of them
were rotten and one of them was good you don't think oh that apple must have done something right
You think something's wrong with apples just in general.
Just stay away from apples, right?
And so we would explain like, no, like it wasn't actually that they were doing the same thing we were doing.
We were doing completely different things.
They were lending things without taking collateral.
They were underwriting.
They were taking tokens that had no market.
Like it was a very different – it just looked similar.
But we were very different.
We still are very different.
And, yes, it took time.
Like people – it took time to rebuild trust.
It took time for people to understand that people like Ledin did have a sound business model, that we are built to survive these types of volatile events and that we can help you and be there when the market goes up.
And so that trust has come slowly, gradually, then suddenly.
And the funny thing is, none of these new Bitcoin back lenders came in the gradually part.
They all showed up when we broke 100.
And so everybody came out trying to lend.
And I'm like, listen, this product isn't new, man.
Like if you wanted to lend back by Bitcoin, you know, you could have seen the light.
2019, 2020, 2021, 22, 23, 24.
You saw it here now, 2025.
Great.
But I would be cautious of companies that are launching products, trying to time the market and seem to be tinkering the product on the fly.
versus companies that are just not trying to time the market, right?
Like, you know, like I said, if you're coming to market today
with a Bitcoin-backed loan product that has no proof of reserves,
you're probably trying to rush that thing into the market.
And those things don't generally end well.
So, yeah, anyway, end of rant.
Let me ask you, too.
I mean, as we look, like, obviously, things are very different
in terms of where the conversation is at now in 2025 versus when you guys started.
Like Bitcoin is, you know, quote, mainstream now.
You've got a much friendlier regulatory regime than we had even, you know, a year ago,
as well, at least in the U.S.
And the vibe seems to have kind of shifted.
So I'm curious, too.
I mean, do you foresee, I mean, it seems that it's only a matter of time before a lot of the big banks,
now that, you know, SAB-121 has been repealed.
They're, you know, obviously like the SAB 122 will come out that will, you know, make clarify all of that nonsense.
But, I mean, do you think some of your biggest competitors going forward here are just going to be some of these like big existing fiat banks that kind of are wanting a piece of that pie?
I mean, are they going to like look to gobble you guys up?
Like, have you been thinking about that at all?
Where's your head at with that?
Yeah, I mean, listen, I think about our industry a lot and the possible paths of evolution.
I've always believed, at least speaking personally, that Ledin is going to be a close ally and a competitor of banks, of traditional banks.
We are a regulated lender.
And there's a reason why we chose to go the regulated route.
And it's because we believe that once Bitcoin gets fully ingrained into the system, you're going to want to, in the game of lending or in the business of lending, you need to have the lowest cost of capital.
Right. That that is one of the biggest drivers of how if you win or not is can you deliver the best product at the best price and to get the best cost of capital, you need to be able to talk to pensions, endowment funds, banks.
You know, these are the people that have trillions of dollars at net negative rates in treasury bonds. Right. And so you can get them over to the line. And that's big, big money, like big clips.
and that is what's going to give you the fuel to drop the cost of bitcoin mac loans which is going
to make them exponentially more accessible and usable because as the cost drops you can do more
things with it right it's it's almost like uh it's non-linear right like as the rates drop the
things you can do with them go exponentially higher and so i believe i i almost it's almost
for me a certainty it's an inevitability that banks are going to try to get into this and
i think today i'll say it you know some of our biggest and best partners are banks today and
that was not the case two years ago so banks are not coming they're here like they're already here
and so a couple of things there like will some of them try to bring these these products to market themselves Probably I think a few of them will If you look at the bank landscape in the US there thousands of banks right
And so there will be,
I think that the way I like to think of this
is the size of the opportunity
that is Bitcoin-backed loans.
And that, I think it's going to be
a multi-trillion dollar asset class in 10 years from now. And so how many banks can the US fiat
system support? Thousands of banks. How many banks offer mortgages? All of them, right? And so it's
going to become a ubiquitous product, right? And that said, it's a ubiquitous product that runs
on net new rails. Banks are not set up to be there on the weekend for you. Banks are not set up for
overnight transactions. Banks are not set up for international cross-border settlements and sending
things like they are in the fiat world, but not in the Bitcoin world. So my North Star is to continue
delivering the best Bitcoin-backed loan experience and the best Bitcoin financial services experience
that you can't get at a bank, right?
And the other thing to say is,
Leonard is a global company.
We service over 100 countries.
Banks are coming in the US.
That's not helping people in 97 or 99
of the other countries we operate in.
And so we see this as a game changer for the world
because Bitcoin is the first time.
The Americans, not the Americans, not the media.
It's like Americans are great.
You guys have all these financing options.
Like, do you guys, a Bitcoin-backed loan is like I put the 17th club in your golf pack, right?
Like, you're like, oh, sure, one more thing I can leverage.
Amazing, right?
But if you look at a place like, I'll just give you the landscape of asset-backed lending.
A person that wants to borrow money against their house in Medellin, Colombia,
is going to get hosed on terms relative to an American
trying to get a loan on a Manhattan property.
Asset-backed lending has been unfair and uneven
since the creation of fiat.
There hasn't been an asset up until today
that I can take from you, Walker, in America
and from Miguel in Medellin
and offer you the same terms and the same financing.
And to me, it's the same underwriting.
That didn't exist until Bitcoin.
So now I can give Miguel in Medellin the same terms I'm giving Carlos in Madrid,
and I'm giving Peter in Lisboa.
That, to me, is the game changer.
Because all those guys are going to be borrowing at the same rates as you, Walker.
And they could not say that.
None of those people could have ever said that if it wasn't for now they can use the same asset.
And now they can access the same company.
And so I'm excited about banks coming into the space.
I actually think to me the most exciting part is I'm going to take, hopefully, Leden is going to be a vehicle through which institutional OECD market money can go to fund Bitcoin-backed loans and entrepreneurial projects everywhere in the world at a fair cost of capital to everyone with the best collateral in between.
And so I see this as a game changer globally.
How this impacts the U.S. landscape and which banks become incrementally bigger or incrementally smaller, I don't think we're playing just for the U.S. market here.
um i think we're we're playing for the the mortgage vehicle equivalent of the world a safe asset that
you can use to get world-class financing for because let's face it like most of the value of
the u.s property is just how much leverage you can get for it and the terms you can get on that
leverage it's not just it's not the house um and so i think bitcoin will do something similar
Do you think that Bitcoin, I mean, it's like, again, we, you and I know, and many more people are waking up to the fact that Bitcoin is the best money, right? And obviously, that takes some time. So you mentioned the cost of capital and whatnot. Obviously, right now, I assume, it's still a little more expensive to get a Bitcoin backed loan than it is to get some other types of loans, right?
Like, do you see, to me, it seems logical that that would, the more adoption Bitcoin has, the more that paradigm will shift to where it's like, oh, you're putting up the most, you know, the hardest money that's ever existed is your collateral.
Well, you're going to get the best terms that have ever existed relative to any other collateral you would provide.
Is that where you think, and like, how long does that process take?
Yes, I agree with that.
The issue I have with that is that it's the goalpost.
It's not the thesis.
The thesis checks out.
Bitcoin will be the best, most efficient way to get the cheapest free market cost of capital.
Why do I qualify that as a free market cost of capital?
Because sometimes people like to compare the interest rate on a Bitcoin-backed loan to the interest rate on a mortgage.
And those are very different markets, and mortgages are not the free market.
I'll give you some examples.
michael saylor just offered his strc issuance it's a dollar denominated liquidity vehicle
almost like a u.s treasury how much did michael what's the coupon on that nine percent right
michael pays nine percent his cost of capital is nine percent okay the interest rates that i pay
on my usdc growth accounts today which is deposits that people deposit usdc stable coin deposits
people can make and you can tether and i pay them interest i pay eight and a half on the highest tier
on that why are those numbers so closely together and why are most private financing options outside
of mortgages in the nine to ten percent ballpark because the true break-even interest rate for the
U.S. dollar is not the Fed overnight funds, is the U.S. projected deficit over the U.S.'s
M2 money supply. And if you look at that projected number for 2025, that sits at around 8%,
8.5%. And if you look at the projected one for 2025, 2026, 8.5%. And so the truest,
cheapest cost of dollars today, non-subsidized and in the free market, should be between eight
and a half percent or nine plus a slight risk premium, right? And so that is where I think the
rubber meets the road. A follow-on from that would be to call out or rather mention that in some
places in decentralized finance where there is no kyc or no type of controls there seems to be
people happy to take four to five to six percent on stable coins and some of these defy protocols
are touting these rates of you know eight and seven and this so so they're the end user is
borrowing below the rate of debasement i don't think that that is an uh uh a completely free and
untainted market in the same way I don't think the mortgage rates are a completely free and
untainted market. So what I look at to compare are my rates fair, high or low, is look at the
debasement of the US dollar, the true debasement of the US dollar vis-a-vis your rate. And you
should be within a few points of that should be okay. If it's on the other side, you're picking
up, you know, a dollars for 80 cents, right? And who's paying the rest of the 20 and why?
I don't know, but someone is. And you better be sure someone is, because there's no free lunch.
Yeah. No, I think that's a really great explanation of that. And you mentioned the
mortgage market. And I think it's interesting, obviously, there's been a lot of,
we mentioned the regulatory changes and just kind of this vibe shift that we've seen around this,
at least in the U.S., and hopefully starting in some other places.
I don't know.
Europe seems to be maybe shifting in the opposite direction.
Who knows?
But, you know, Bitcoin now being acknowledged as like they've said,
okay, Pulte, Bill Pulte, right?
Yeah, yeah, yeah.
And this happened like as we were in D.C., I think.
I remember it was like, I forget who was that announced it on stage,
but it was kind of cool to see that.
But basically saying, okay, if any man, Freddie Mac need to consider
consider Bitcoin as an asset when it comes to, you know, these loans and like, how do you see this
like landscape shifting? Are there other are there other changes that you would like to see
at the regulatory level that like really make a difference to you? Do you think that there's
enough of a framework in place where you guys can do business comfortably? Or are you still
are there certain things that you're pushing for that you're advocating for that you want to see
from this administration or from subsequent administrations, assuming the pendulum doesn't,
you know, swing back and hit us in the face? No, great, great, great question. And so I'll break
that up into two. So number one, I can touch on what I think the real impact of the new guidance
is for Fannie and Freddie as it comes to mortgages. So the guidance, you know, for anyone's benefit is
that the Fannie and Freddie are basically being asked to consider Bitcoin or crypto as part of the
asset base of the applicant. And this is a very important distinction because a mortgage goes
through what's called traditional credit underwriting. So they will issue your loan
not based on the assets you own. They will issue your loan based on your after-tax income and your
capacity to service the debt. The amount you can borrow is not determined by how much Bitcoin you
have or how much stock you have, it's determined by how much after-tax income you can get predictably.
And any self-employed person or entrepreneur that's tried to get a mortgage will know exactly
what I'm saying. If you go to the bank and you say you have a business that generates this much,
they'll say, sorry, that's not income, man. I want your T4 fully muzzled up, paid every single cent
in taxes and I want to see a big tax bill, that means I can give you some of this sweet juice.
And it's not based on Bitcoin. So you can show up right now to Bank of America and tell them you
have a million dollars worth of Bitcoin that you're looking to buy a half a million dollar
house and you tell them that you retire and they'll laugh you out of the room. And so it's not
true asset-backed lending in the sense that it is income-based lending and then they just take an
asset to be super, super safe that they're going to get their money back. Bitcoin-backed loans are
entirely different in that it is only determined by the value of the collateral you're posting.
I do not look at your credit history. I do not go on your credit records or any of that stuff.
Your Bitcoin is your credit worthiness. I can lend you dollars based on the value of that Bitcoin.
It's two very different things. So while I think it's a good step forward, it doesn't solve this
pickle of somebody that is now you know bitcoin wealthy uh self-employed wants to start a business
they still can't get a mortgage yeah um so the other piece that you mentioned around regulation
so one of the ones that i'm actually uh one of the ones that i've kind of like peaked my eyes
and i was like well that's exciting was um atkins sec chair uh i think it was last week or the week
before did this big speech around uh you know it was the one where people all got got all excited
about tokenizing securities, tokenizing stocks and bringing the stock market on chain and all
this stuff. And most people got excited at that headline. But what caught my attention was he said
in his speech that he wants to put forward a framework or guidance so that there could be
these super apps. And the super app section of the guidance basically says, why are we forcing
a lending company? I'll give you the example of Leden. Lending is done state by state. So
So Latin has to go and look at every single state and figure out, do we need a license for this one?
If not, then what are the rules?
And then this state and that state and that state.
So we have to do that 50 some times.
And then we have to do that for any country.
Canada is similar.
Canada is province by province.
And then that's for lending.
But then if you want to do buy and sell, you have to get a money transmitter license.
And so it's this smorch board of licenses based on states and activities.
and it creates this unnecessary burden on a company.
If you're already following the rules in one state,
you have to like tweak it and fit the box of this other one
and then tweak it.
And they're all pretty similar, but not the same.
And so what I found super interesting is he said,
why are we making life so hard for these companies?
Let's make one framework fit into this
and you get the whole market
and you get more than one product.
So I think that if and when that comes through,
that's going to materially improve the speed at which companies can bring products to market
compliant products to market and i think that'll bode well for you know the u.s like if you go back
not too long ago it was it was this is available everywhere except the u.s everywhere except the
u.s u.s client is excluded so it was like completely went the other side when we were
under the previous administration and so probably the first time americans have ever like had that
Like usually we get, you know, like it was a real shock, you know.
It must have been so trivial for you guys.
It was really hard here in America.
And so I think that's going to make things move a lot faster.
And I think that actually is going to put a lot more pressure on the banks, right?
Because I think actually the banks are in this awkward spot because right now they're sort of like in the General Motors position when Tesla started coming up.
You know, there's this assumption they're just going to spin up your EV and it's going to be great and it's going to be better than Tesla.
But all of a sudden your EV goes out and nobody likes it and it's crappier and the mileage is not so good.
You don't get it. You can't really nail the messaging.
And so I think banks are in this quirky spot in that, like, people want Bitcoin native companies.
Bitcoiners want to work with other Bitcoiners.
They don't want to work with the sellouts or the guys that are coming in to be like, OK, great, great job here.
now we're here and uh you know we're gonna come take over i don't think none of the og like people
that have been in this space for years are gonna go and be like oh my god thank god wells fargo
got here i'm just gonna go drop all my stack to wells fargo like they might get some of their
legacy clients that have been with them for years but by and large i look at this almost like uh
um like an uber versus a taxi analogy where like a lot of the big taxi companies also launch apps
but no one really cared to use those apps right because one app is now global right so now i can
use let it anywhere i am i can recommend it to my friends i can recommend it to my partners like i
can i can relate to the content it's not like oh i work with bank of so-and-so here maybe you
uh steven maybe you can use this one i heard they're pretty good too it's it's i don't know
how this plays out i think that's a great analogy like it makes sense because you're absolutely
right like bitcoiners especially if they've been around for a while like and they've seen these
various cycles and seen the blow-ups that have happened it's like you know it's there's a don't
trust verify ethos obviously and you're you're not gonna want you know it's like oh you know
uh you know jp morgan comes out with it and it's like yeah okay well kind kindly fuck off you know
like no no thank you jamie diamond you know you can go suck one um like you've been anti-bitcoin
for years but here let me give you my bitcoin like no no absolutely not not in a million years
no i i saw a hundred percent and like you know how does that come at odds with like this idea
that most of us should have our own stuff in self-custody right like i'm only going to go to
these places if i need to use loan right i'll give you the bitcoin while i need my loan and
stuff like that but there's there's not this most a lot of people use banks as a sort of um
like offloading their self-sovereignty from a financial perspective they're like oh it's just
warm and fuzzy and it's insured and but we bitcoiners are built different we we build not
to trust the banks i joke that i grew up in venezuela it was every venezuelan the latem
banking system is like the world cup every four years a banking system collapses in latem and we
all look at it we're like oh what happened to you we're like oh well it was this guy and so we've
been we've been bred not to trust our banks and so for us this whole idea of fdic like okay
we've seen what happens when the money actually goes missing and you get the reprinted replacement
It's like, it's not that great.
And so for us, it's like, yeah, like me said, I'll keep your Bitcoin safe during a loan.
But even when you don't need a loan, I'll tell you, like, take it to sell custody.
That's the best thing you can do with it.
Like, why would you keep it here if you don't have to manage a loan?
And so I think that the role even that banks fulfill today is just slowly shifting because some of that accountability is not coming back to the individual.
and uh and now you're really using them almost like on demand as people would use something like
and which i think is the more sovereign individual way of of taking it there right because um there
is no safety net that covers everything from you like there is no there is no op there is no
alternative to having some accountability and the more you try to deny that the more in trouble you
can get so i actually i'm really excited a about the competition and about the banks because i think
it actually and one it just continues to beam the spotlight on this big on this idea that bitcoin
back loans are great right like it's amazing and so when it ends up happening we've actually seen
this in our numbers so like say a new lender comes out that has a big megaphone and they're like yay
no bitcoin back loan is now available and so and so and so people are like oh bitcoin back loans
I'm like, who are the best places to go get a big amount of food?
Boom, let in.
Like, be the number one because it's been there for seven years.
And so you're like, oh, oh, these guys have been doing amazing.
And so our numbers actually grow because we get a lot of the coattails
off of some of these announcements.
A little free marketing.
In some ways, yeah.
And so, you know, like I said, I think this is going to be a very big table
with a lot of food.
and as long as we have a really nice comfortable seat,
we're going to do very, very well.
And there is no world where Ledin does well
and our clients don't do well.
We do well because our clients do well.
And so I think that there's going to be enough abundance
so that more than one lender can do very well
and we can do this thing right.
What I don't want, frankly, is another 2022.
I would hate to see a bunch of these other people
make the same mistakes and then us have to go out again for another two three years telling people
no i wasn't lending it was just these people and uh and so hopefully we're you know that that's not
gonna happen it's gonna be much more contained um but man it's a fun ride like i i i enjoy the game
right like i i uh i get to you know before bitcoin started i was looking at all these
these podcasts and following people on twitter and i felt like i was following you know like
LeBron James and Dwayne Wade.
And, you know, every day they get up and their job is to talk about Bitcoin.
Now, this is my job.
And so every day I get to put it on, right?
I'm out for Team Bitcoin.
I'm out for Team Letton.
And, you know, for me, this is a huge privilege.
And so I just want to keep doing this for as long as I can.
I love it, man.
And Maritza, this was such, I'm so glad we finally got a chance to do this.
I'd love to do this in person with you at some point as well.
We're going to have to make it happen.
Maybe we have time in Lugano.
Who can say?
Hell yeah.
That could be really fun. But seriously, like love what you guys are building. Love just like your general vibe about these things and the way that you guys approach it. And I hope this was helpful for people in terms of kind of separating like these, you know, the others from the Bitcoin companies that are doing things correctly.
Because I think that is still, that's a, you know, I told you before this, like that was a lingering kind of worry that I had.
But it's like, these are products that you want to exist.
Like lending is not inherently a bad thing.
It's just bad when it's done really irresponsibly.
And when people get out of, like, you know, yeah, like that's, you know, that's when things get bad.
But I want to be conscious of your time here.
Where can people go if they want to find out more?
If they're like, I need a, I don't want a loan from Jamie, you know, or a Bitcoin backed loan from Jamie Dimon.
He's not touching my Bitcoin.
Where are you going to send people?
So you can go to Ledin.io and it's pretty easy.
Signing up takes a second.
KYC takes a second.
We're regulated.
So yes, we have to do KYC.
But it's a pretty smooth process.
The loan application takes two minutes.
You get the loan proceeds typically within the same day.
If it's fiat, if it's a weekend, we can push it out on a Saturday because of banks.
But basically, most people get their loans same day, assuming you apply during the weekday.
and yeah it's pretty simple to follow me it's at cryptonomist with an a at the end on x twitter
and primal i'm mauricio at primal.net and my dms are open in every of those so anybody has any
questions feel free to come to me and yeah we're always happy to help don't go to jamie oh yeah
perfect note to end on thanks so much for your time appreciate it look forward to seeing you in
the flesh in Lugano. Same brother. Great to do this. Thanks so much.
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