In 2020, the beginning of COVID, this was around the early part of the year, 2020.
If you recall, we were vaulting our gold in Switzerland, these private vaults in Switzerland.
The Swiss government grounded the airplanes.
They said no one can take off, no one can land.
So what this meant was, I woke up in the middle of the night and I realized,
if one of my clients called me, one of my investors called me and they said,
Alex, I want you to deliver $20 million in gold bars to this country over here
and this vault over here. I could not do that because the planes couldn't take
off. So this is what you call a failure to deliver
in the gold industry. This is bad. It's not good. It's not good for your reputation.
You could say it was because of COVID, but whatever. You still had a failure to deliver
in gold. To have final settlement, you have to move the gold from one
possession to another. Okay? This requires people.
The guys at the vaults, the guys in the trucks, security trucks, the ground crew, air crew, all these people.
The same thing on the other side.
And I realized, oh, any one of these people can mess this up.
And then I thought about Bitcoin because I was studying Bitcoin at the time.
And I'm like, wait a minute.
With Bitcoin, I can send any new value to the other side of the planet basically instantly
because it's going across the internet at the speed of light.
At almost no cost, no one can stop me, and with no one's permission,
and i was like
hello guys welcome once again to bitconner podcast uh today we have a very interesting episode
uh you'll find out why but first i just want to say that i hope that you have enjoyed the
two-part series of the episode 100 of Bitcoin,
of Bitcoin podcast.
But it's not just me.
As you can,
as you can see,
we also made this amazing episode with Bitcoin Film Fest,
where we exposed Hollywood.
But again,
we took so long to do this episode because we don't chase the news.
So it was the topic.
Even we talk about Warner Bros deal with Paramount and Netflix.
we wanted to digest why
Hollywood was broken
and to do that
also we needed to explore
the monetary system
so we deep dined
really into it a lot
so that's why we took a lot of time
doing it and
now we are providing the solution
how Bitcoin can help
especially independent creators
or even filmmakers
to resolve some issues
where the system is broken.
But as you can tell in the first part,
everything comes to the money,
but more than beyond that,
it comes to the system.
But anyways, I hope that you enjoyed
the second part this Friday.
But we will continue today
to something refreshing.
And I know you know that
I like to do both parts,
some episodes in English,
some episodes in Spanish,
This one, of course, is English.
And I was doing some research more about gold.
And more than that, keep digging why the system is broken.
Because a few weeks ago, we had Lawrence Leper, Larry.
And he provided a huge insight, as you know, about mostly the history of America and how we led to the present.
so today we want to explore more
and I know this person is also a friend of Larry
and I have been personally following him
from a couple months ago as well
because we provide a lot of insights also in gold and microeconomics
so we want to keep learning guys
I'm just like you, I'm learning every single episode
but again, I don't want to take more time
introducing this person
so I just want to welcome Alex Stansky
to Bitcoin Podcast. Welcome. Thank you. Thanks for having me. Thanks to you. So yeah, well,
normally I like to start a podcast. Sometimes I forget and people tell me, hey, but you don't
give enough time to introduce your guest. So if you can share a little bit about your background
before we start on this madness. Sure. Okay. So I've had a number of different careers coming
out of high school I went in the U.S. military and I was deployed in Operation Desert Storm for
that period of time in my life. When I got out of the military I went into IT. I started a little
IT company and did a bunch of IT consulting. Did some consulting for like Verizon and some other
companies. I ended up becoming a director of IT for the largest aerospace union in the United
States. And then at the same time, we kind of made this little company on the side that
we were creating. We were one of the first video over IP companies. Ours was decentralized
though. This was around the time that YouTube was in alpha. So they're just testing this
technology and still the pipes were not very big. So this was back when internet was like,
you know very small like 500 and uh 512k maybe something like that bandwidth like one megabyte
bandwidth i can remember when one megabyte wow that's crazy it's crazy right like today like my
my connection today is like a one gigabyte one gigabyte you can even you cannot even compare how
the technology it's unbelievable difference uh but back then you couldn't really do high fidelity
video because the pipes were so small, you know, there was no bandwidth to do it.
So we were actually doing decentralized video.
The idea was kind of like a Napster or something like that where the video was spread out across
like hundreds of computers.
And then if I want to watch it, I'm pulling video or pieces of data from all these different
computers.
And it took weeks, I remind you.
Yeah.
To them.
Yeah, it was crazy.
and we actually went to
Netflix at one point
I remember we went to one of their executives
and we showed them our demo of our technology
and we said hey
how old is Netflix?
I want to know that
I don't know
I'm not sure when they started
but when this was happening
I want to say this was around
2005, 2006
time frame
and
And maybe even a little, well, that time frame.
Okay.
And I can remember going in and showing it to them.
And this was at the time Netflix, when they started,
they were shipping DVDs in the mail of videos, right?
And we showed them our technology and we said,
look, we think that video eventually is going to go over the internet.
People are just going to use it over the internet.
They laughed at us.
They laughed at us right out of the office.
They're like, no way.
We ship videos in the mail.
We don't do that, right?
Funny.
We were just too early, basically.
So I sold my position in that company,
ended up moving down to Central America, Panama.
We were talking about this a little earlier.
Panama for almost a decade.
I started in the gold business,
and I met some very interesting people who were in that industry
and started learning from them, and I started a physical gold fund.
Two of them.
The first one was out of Luxembourg.
That was horrible.
Pro tip, never start a gold fund in Luxembourg.
The fees will kill you.
So we closed that.
We opened another one, and that one ran for a long time,
and our investors did pretty good.
Excuse me, but this was basically our physical operations
were out of Switzerland.
and it was during this period of time actually that I started researching Bitcoin more deeply
it was probably 2019 to 2020 time frame when I started researching more deeply
going down the rabbit hole as people say
talking to gold investors on the phone and then hanging up the phone
and I open up a book on Bitcoin and I'm reading books on Bitcoin
so at this point I'm starting to figure out
man, I'm spending all this time researching Bitcoin.
At one point I realized I need to switch.
So then after that, towards the end of 2020,
I talked to my partners in the gold fund.
I was like, I need to wrap this up because I'm going to go work in Bitcoin.
2021, I started shortlisting companies.
Well, I just knew.
I was like, and we can get into that story as to why I made that decision.
but I just knew that like, this is the future.
And so 2021, early 2021, I was shortlisting companies.
I was like, I really want to work in this space.
I think it was January of 2021, Corey Clipston,
who's the CEO of Swan Bitcoin.
I saw him tweet out one day.
He's like, hey, we're looking for high net worth relationship managers.
with people who can talk to high net worth people about Bitcoin.
I'm like, hey, I can help you with that.
I've got experience doing this kind of stuff.
Not with Bitcoin, but in gold.
And so we started a conversation.
I was like, I think I can help you.
And it turns out I talked to him for a couple of weeks.
We had a couple of interviews, so on and so forth.
And he's like, hey, I can't hire you because I hired Stefan Lavera instead.
Oh, wow.
I didn't know that.
And I was like, you know, if it was me and I had to choose between Alex and Stefan Levera, I probably would have bet Stefan Levera as well.
Just being honest.
He's an amazing guy. He's really smart.
Shout out to Stefan.
Anyway, I was persistent because I was like, you know, I want to work in the industry.
I just stayed in touch with Corey.
And by the way, this is a lesson to people who, if you're interested in working in Bitcoin, number one, do something, teach something, start a meetup, write a book, do pods, do something to help educate and push the mission forward.
right and if you do that and you create a footprint if you go talk to a bitcoin company
and you can point to your proof of work that is way better than having no proof of work
right it's true yeah so anyway i just stayed in touch with with
cory and eventually towards the end of the year um
um at one point you know i was just like hey man put me in coaching he was like okay cool
So I started in October of 2021 with Swan.
I worked with a private wealth group at Swan and stayed there for almost four years-ish.
And in that period of time, helped thousands and thousands of clients, taught them about Bitcoin, helped them buy Bitcoin, helped them do self-custody, helped them do multi-sig, whatever it was they were looking to do.
and probably 400 ish million dollars worth of bitcoin converted us dollars into bitcoin which
is today is worth probably close to a billion um and then so that's my that's my story
wow that's crazy you know that's something that i admire and at the same time i think like
because i was thinking as you had the same thing that i think about larry because you guys i mean
you have been working with gold so it's not like you're working with a few pennies let's be honest
so in order to in order to pivot to bitcoin you actually need to understand that because in the
least capital risk that you're doing that you need to understand what you're doing you want in the
end if you have a company uh you'll make sure that all your clients or even your your funds or
your savings will be uh safe so yeah just to pivot on bitcoin you need to do like a huge
research about this right so yeah it's crazy that the amount of time that people need to put to
understand this but once you understand the system just start like we were talking about at the
beginning just start opening a lot of rabbit holes and you start seeing that a lot of things are
broken uh so yeah and those are the things that we're going to discuss but also i want to ask you
like uh because i what i like to do in the podcast is like you know like a journey like the
the previous then the context and then the resolution so i want to ask you also uh about
in your first date like when do you personally first start buying like physical gold what is
your story with the gold so the story with the gold is is that um i grew up going i was going
to high school in the late 80s all right sort of dating myself a little bit but just to give context
at the time I was in school
like generally speaking
if a person could make a six figure income
that was like you were like rich
like you were doing really really well
back then that was a lot of money
so to put that in perspective
in today's dollars that would probably be
I'm going to say 500k and up annually
to have the same purchasing power
somewhere like that okay okay okay so um anyway when i started making that kind of money working
in it was low six figures but i breached that six figure threshold and i was so excited about that
i'm like i've made it right and i'm like i should be rich now but i wasn't and that was very confusing
to me i was like how come you know shouldn't i have just piles of cash and like mansions and
all the things right now not really right um and it wasn't until when i had moved to panama
and i had met these guys that were part that were in the gold industry and just late very late at
night at my house i remember we had this house it was uh it was in this area called betacruz
which is kind of i guess it would be west of panama city um into the interior a little bit we
we had a house overlooking the ocean and kind of in the jungle basically.
And,
um,
so very late at night,
it was like two o'clock in the morning.
We're drinking wine,
talking to these guys.
And,
uh,
this one guy explained to me what causes inflation.
It's basically the government of America can just print as much money as they
want.
And when you add money to the money supply,
it causes the purchasing power of the individual units of money to go down.
i had never heard this before and that was like a wait a minute
like we have to work for the money and they can just print it and they're like yeah
and i was like that's messed up
do you believe it because it's super shocking that it's like i believed it because it started
to make sense i was like well that explains why if you're now making 100 grand a year or whatever
you think you're going to be rich, but you're not because it buys less and less and less and less as time goes on.
So at a target rate of – I'll give you an example mathematically what that means for people who have not heard this before.
You've heard the Fed chairman say – I'm talking about the Federal Reserve of the United States – say that they target a 2% rate of inflation.
What that really means is that every 35 to 50 years, I'm going to give it a span because it goes up and down.
I'm just saying in that range, every 35 to 50 years, your purchasing power is cut in half.
So by the time you're retirement age, you can work your whole life.
All the money that you saved up has half the purchasing power.
They stole half your purchasing power through inflation.
and that started me down
this rabbit hole of understanding money
and just
for probably the next
I don't know, two, three years, four years straight
I just spent six to eight hours a day
just studying monetary history
monetary theory
so on and so forth
and this is really what got me into gold
I was like holy crap
I need to buy a bunch of gold
and that's what I did by the way
I bought a bunch of gold
and this was around 2008
you know the whole real estate crash was starting to happen in the United States of America
I was calling all my friends back in the States saying sell everything buy gold
all that real estate you got it's in deep trouble like I was really earlier we thought it was crazy
yeah but yeah that's that's how I got into the gold industry okay that's crazy I'm just thinking
two things right now one is that well first i'll give you actually one is a comment and then another
is a question uh that uh i start i start having some insights let's say about inflation
in the 2000s in el salvador because in 2000 i think 2001 uh we switched our currency we had
colones and and then we had dollars and and the reason that the government explained that we were
starting adopting dollars is because we're starting to high to have some inflation high inflation so
they say that eventually probably we will have the same path that argentina had with the corralito
you know and super high inflation so it was like a way to to avoid that and i remind that we went
when we adopted the dollars,
back then I was probably a teenager.
So I started knowing a little bit about how money works,
but of course not like now.
But I just remind that families that normally work well,
have their savings and whatever,
they start struggling because back then the dollar worth,
8.75 colones.
So it's the same thing that you say.
It's like, imagine one day they say,
hey, all your savings is going to be divided by nine.
So it was crazy.
And I saw that even more with my grandparents
or people from that generation
that worked their entire life
and now they're like, hey, but now their savings
is cut by nine.
So yeah, it was crazy.
And little by little, eventually, we just pivot to the dollars.
But the other thing that you mentioned is about the 2%.
That's something that I still quite don't understand
because I have been doing some research about it.
But when they do this calculation, they don't measure everything, right?
They put some things, or actually, I better say that,
they don't take into account so many things when they do these calculations.
and so in the end that's a very fictional percentage right yes it's absolutely made up
and they change it all the time so if you go back to the 80s they had a specific
formula that they would use to measure inflation in the United States of America
and certain rules around how this works and I'm trying to think of the name I don't know if this
there was a guy that used to run a website I think it was called shadow stats
I don't know if that's still a thing
or if he still runs it
but he tracked all of the changes in how they do the formula over time And they do It still running It still running Okay So you can see based upon the 1980s formula that they originally used
what the inflation would look like today.
And it's very different than what the government's telling you.
And here's the interesting thing.
When you have governments with runaway inflation,
they always lie about it.
And every, like, just look around every country this has ever happened in.
Just look at what the government is saying.
They always under-report how bad the inflation is.
And so in America, they just change the rules.
They're like, okay, one day inflation means these things,
and then, you know, X years later, it means something else completely.
And they just keep changing it and changing and changing it
to make the numbers seem lower than it actually is.
Now, why would they do this?
Some people would be like, oh, that just sounds crazy.
They have an incentive to do this.
Why?
Because there's this thing called cost of living increase.
There's a mathematical calculation that's used to determine how much they pay out in Social Security,
how much they pay soldiers, how much they pay government workers.
They have to pay based upon the rate of inflation.
But if the rate of inflation is lower, they pay less.
You see?
So they're incentivized to lie about it.
Either way, the point is, this is a mathematical concept called compounding, right?
If you compound it 2% every single year, the net effect is much greater than if it was 2% one time.
2% doesn't sound like a lot, but if it's 2% 35 times or 50 times, that becomes a lot because of the way the math works, right?
And that's the issue.
that's why people
historically it has happened
slow enough like if you look at the way compounding
works on a graph on a chart
it's very flat for a long
long time maybe 30
years and then it turns a corner
all compounding functions look like this by the way
you can do this on any
I mean compounding basically works where
it's going flat flat flat flat flat then
all of a sudden it turns and it
goes straight up
and we're on the straight up part
right now yeah actually well uh i want to ask of your opinion later about what's going on right now
because it's crazy uh but also one thing that now that you mentioned that yeah why don't they teach
this also it's funny that uh when i started reading books about bitcoin i realized that
Because even I studied engineering, and I know a lot of people in the audience here studied economy or, I don't know, something related to Bitcoin or money or whatever.
I never learned about Austrian economics.
It wasn't until Bitcoin that I learned that there was more type of school of economy.
I was like, what?
What the fuck?
Even in the university, I had a subject that it was economy.
and I never learned about
these things so
there's a reason
for that too like a lot of the
economics courses today are driven
from this sort of Keynesian
kind of
economic framework
and the Keynesian economic framework is
essentially that like yeah central bank
should print the money
and then all of the economists
like the ultimate
pinnacle of success if you're an
economist is to be the chairman of the federal reserve or somewhere in the hierarchy right so
what happens these guys design the curriculum which goes to the colleges and this is what you
get taught it doesn't mean it's right they have an incentive they have a reason to teach you what
they want to teach you right and um what people will find out if they if they study enough or
they find enough really intelligent people they will come to realize that a lot of the stuff you're
taught in school is taught to keep you trapped in a certain system without questioning it
versus actually understanding what's really happening it's very important it's like there's
the there's the set of education that the average people get and then there's the set of education
that the people who run the world get those are two different things they learn two different things
by the way I just looked it up
2% annual rate of inflation
the half life is 36 years
wow
if it's 3.5
20 years
wow
if it's 4.5
yeah of course
15 years
come on
15.75 years
so imagine if you're running 10% inflation
that's crazy
which is actually
it's probably
being honest probably closer to 10% inflation
wow
so this is why young people
the incomes don't keep up
right at least in the United States
I don't know how it is where you are or in Central America, but the incomes do not keep pace with the rate of inflation.
So what does that mean?
It means from the last four generations, this is why the youngest kids today are looking at the price of homes and things like that,
and they're going, there's no way I'm ever going to be able to afford that.
That's impossible.
Math doesn't work.
Well, it doesn't work because they have broken the money.
The money is broken.
And this is not new, by the way.
This idea of broken money, this has been occurring over and over.
There's thousands and thousands of examples of it.
Go study.
I encourage anybody who's listening to this, go study the history of money.
You'll see.
Every fiat currency has one thing in common, all of them.
You know what that thing is?
They all go to zero eventually.
Yeah, of course.
It's crazy.
So what does that mean?
It means that every now and then a country has to reset its currency.
If it's fiat, if they're just printing it from a central bank, they'll have to reset the currency because they're all based upon debt.
The whole system is based upon debt and fractional reserve banking.
What does that mean?
It means they have to keep adding money to the money supply.
If they stop adding it and it goes the other way, that becomes deflationary.
In a debt-based economy, you're now going to start imploding the whole capital structure.
And they don't want this, right?
So now it's at the point where, in the United States at least, it is a mathematical certainty, my opinion.
It's a mathematical certainty that this is now baked into the cake.
the U.S. dollar will continue to become worth less and less
in an accelerated pathway moving forward.
And so now more than ever,
it's very important for people to get their economic energy
out of the fiat currencies into something else.
Thank you.
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actually I just remind something
that I asked to Larry
and I want to know your opinion
so
in his books he has posed that
the gold
was manipulated by the government
so
my question is that
do you think at some point
Bitcoin can be also manipulated as the way the gold was manipulated back then.
Well, and still.
I think yes and no.
Yes in that maybe short-term manipulation, but not long-term.
By short-term, I mean very short time frame, kind of price swings in sentiment.
Sentiment can be manufactured.
What is sentiment?
Sentiment is general belief, right?
What does the population believe?
you're my puppy.
I'm sorry.
Yeah,
of course.
Don't worry.
We're human people.
We're with our family.
Yeah.
Sentiment is what the human population believes in general.
Right.
And it has been proven that we can create that.
Like if you,
if you look at like what they talk about at Davos,
I'm trying to remember the guy's name,
Harari, he's like the top kind of egghead
guy, talking about how you can basically
manufacture
belief systems
through the use of social media
and through the, this is not a secret
this has been going on for decades and decades
and decades in the United States of America
they're just now, the world is
just now changing because of social media
we can all talk to each other in real time
right?
Instead of you get all your information from
the newspaper or the
university or the television station, right?
We can now get it a completely different way.
Well, they've essentially lost control of that,
but they were still strong enough to manufacture a narrative.
Think of this.
What happened in 2020?
They get the whole world to believe that there's this global pandemic.
Yeah.
That was a created belief system.
They created that.
You follow?
So I think in the short term, yeah.
And here's another example, maybe more practical for what we're talking about.
In Wall Street, there are people, old veteran traders on Wall Street
who would tell you that they manufacture sentiment all the time.
If they're trying to get an equity to go up or down,
they'll throw a certain amount of money at influencing the market they'll start calling
all their friends and creating rumors though they intentionally create these kind of sentiments right
um in the short term it's really funny to me because i see sometimes and i don't it's been
a long time since i've been in the gold industry so i don't know if they're still doing this but
there are people who will say,
well, the idea that gold and silver is manipulated
is just crazy. You guys are a bunch of
conspiracy theorists. And it's like,
no, just look at the fines.
The banks have been fined billions and billions
of dollars for manipulating the price.
That's not imaginary.
It's not some guy making that up.
It's not a conspiracy.
There's fines.
Dozens of them, right?
So the real question is, can you do that?
Huh?
There's the data.
I mean, yeah, it's like proofing.
This is not a, you know, this is not someone just going, oh, we think they're bad.
No, they're doing this stuff.
Like, or they wouldn't be fined, right?
They wouldn't pay the fines, certainly if there wasn't anything there.
So, yeah, in the short term, they're definitely doing that kind of thing.
In the long term, can they do it?
I don't think so.
And the reason why I don't think so is there's a big difference between gold and Bitcoin.
With gold, you have to trust the people who are auditing everything, and you have to assume what they're saying is correct.
Okay, so for example, with GLD, this is the largest gold ETF.
They have a custodian, a primary custodian.
They have audits of the gold.
They have sub-custodians that can also hold the gold.
they don't have access to whether those audits are,
they have like a third party audit.
Does that make sense?
So everybody's just trusting the word of everybody else.
It may be there,
maybe,
maybe it is,
maybe it isn't.
You gotta trust that guy.
Does that make sense?
And then there's also,
um,
big centralized kind of depositories for gold where they do a lot of lease
lending and they do a lot of sort of,
uh,
rehypothecation of the assets
and create all kinds of financial
derivatives around these things.
So there's a way
that they can use that to
kind of play games. I think it's
much less likely with Bitcoin because
the whole supply of Bitcoin is
audited every 10 minutes.
And it's not like you have to
trust this auditor. These are humans,
right? With Bitcoin, that's
not the case. Any one of us can
go look at the blockchain and can see.
we know where all the Bitcoin is at any given moment of time.
We may not know who owns that particular Bitcoin in that address,
but we can count the address.
And we know exactly how much there is.
Does that make sense?
So I think it would be far more difficult to pull the kind of games that they play with gold
if they tried to do that with Bitcoin.
Absolutely.
I'm just thinking now that you say trust,
then I just reminded that.
In the end, what happened with Fort Knox?
Now that you're there in the US, what happened to that?
They didn't out it, right?
And I think they won't do it.
No, I think you're right.
I was just talking to someone else on another pod about this
just the other day where the issue with Fort Knox is,
so normally when you have vaults,
okay let's talk about the professional system of gold for just a minute
yeah go ahead in the institutional trade in gold there's this thing called the good delivery system
this consists of refineries it consists of security companies that are moving the gold around
vaults both private and bank vaults that store the gold and they all know each other and they're
all part of an accredited system, the good delivery system.
Okay, so the way it works is the gold goes
into the refinery. This is a good delivery certified or a good delivery accredited
refinery, right? They melt the gold down, they purify the gold, you get gold bars
out of it, they put a stamp on it with a serial number, the mark from the refiner,
the purity, all those things, right? Then, a
good delivery approved
security company picks the gold up from the refinery, takes it to a vault that is a good
delivery approved vault. This is what I call the good delivery chain of integrity. As long as it
never leaves the system, we have a record of a chain of custody. We know who handled the bars at
all the time, all the time. Because every time the bars move from the, for example, from the
refinery to the truck, they're signing off. They do an inventory. You have every bar, you have every
serial number, they sign it off.
We know these guys
are carrying this gold. If something happens
to the gold, we know those guys did it.
Does that make sense?
So it goes to the vault.
Same thing. It goes in the vault. They do an
audit. They check all the bars,
all the numbers. Everything is legit.
It goes in the vault. Sometimes what they'll do
is they'll put it in the vault and then they
seal the vault with a tamper-proof seal
so that they know
if that seal is
ever broken, somebody went in there.
so this is what they did in Fort Knox
they took all the bars from the refinery
put it in Fort Knox
they closed all the doors
each door has a seal
many of these seals have not been opened
since they put it in there
at least that's what it says on the seal
I haven't been in Fort Knox
but this is my understanding
so the issue that they're running into here
is that you can look at a gold bar
and say yeah I see a gold bar
It's right there.
I picked it up.
It feels heavy.
I can weigh it.
I know how many ounces it's supposed to be.
It has a serial number.
I can record that on a sheet of paper, all the thing.
But the thing is, you can't be totally sure because it looks like gold, feels like gold, weighs like gold.
The only way you actually know is if you put it back through the refinery and melt it.
Okay.
I mean, there's other ways.
You can drill it, so on and so forth.
But I mean, if you really want to know ounce for down to the point zero,
zero, whatever of a Troy ounce, you got to melt it. Right.
And so if you remember Elon and, and, um, and Trump were like, yeah, let's,
let's count the gold bars.
And then they started realizing what it would take to actually prove all of
that. And they're like, nah,
I'm guessing that's what happened I don't know for sure I wasn't in the conversation but I mean
at some point they realized this is not yeah if they didn't get a bus that's that's there's
the most VR reason yeah it's harder it's harder than it sounds like you know what I'm saying like
to actually do it like some people are like well just go look at all the bars like okay you can do
that but
is that really
going to tell you?
I don't know.
Someone's going to
make the argument
well how do you
know?
You don't really
know.
Now I just
reminded that there
was a video in the
internet like
probably I don't
know when was the
last time that it
was probably in the
80s around that
that they invited a
few newspapers
journalists and
they went with a
camera and they
showed but they
just showed one
bulb.
It wasn't a full
audit right?
It was a partial
audit.
Yeah.
That's the one that I'm reminding right now.
And it was funny because they just saw one book.
Yeah, exactly.
But that's a very...
Probably I'm going to add it somehow in this video, guys, so you can watch it.
Fort Knox Depository was built in 1936.
The last time a gold vault was opened for someone other than a Treasury Department official was in 1943,
when President Franklin Roosevelt visited.
Since then, many members of Congress have questioned whether there really is gold in Fort Knox.
Today's tour by a nine-member congressional team headed by Illinois Republican Philip Crane and Kentucky Senator Dean Huddleston proved it.
Crane originally suggested the trip.
It takes three men, each with a different part of a combination, to open the door at the main vault.
The door itself is three feet thick and weighs 20 tons.
Down another hallway, the individual bowl rooms are stacked with the bars, running in numerical sequence.
So nobody actually knows right So there was a partial inspection in 1974 the one you mentioned Okay The last comprehensive audit was apparently 1953 physical count and verification
So what they did at that point is they pulled out the bars, they looked at them, they counted them, they verified them.
Again, do you know, right?
I don't know.
yeah but now it's like 50 years difficulty yeah this is part of the difficulty when you're dealing
with uh when you're dealing with gold there's two main difficulties number one is verification
number two is settlement because settlement requires physical delivery you can settle on
the books like if i'm a let's say i'm a bullion bank in london and i'm sitting on i don't know
500 tons of gold or a thousand tons of gold or whatever it is i can say okay this gold belongs
to this client over here but juan's come to me and he says i want to buy this gold so we're going
to transfer it to him and i make a little entry in my book that says this gold now belongs to juan
but it's still in my vault you don't know if it's actually there you're just going by me going yeah
it's yours now.
Look,
I promise.
Yeah.
And with Bitcoin,
you cannot do that because everyone has a copy of this.
And you know,
without a doubt,
right?
Like if I send a Bitcoin to you,
you're going to see it show up in your wallet at a specific address.
And you will know without a doubt that you have custody or control of that
Bitcoin.
It's not a question.
You're not going to rely upon some other guy saying,
I promise it's yours.
Look right here.
I wrote it in my book.
It's just, we laugh, Kai, because it's so silly.
I mean, it's crazy.
But I mean, Gibbons did it for thousands of years.
Well, at least hundreds of years as far as the modern banking era.
But, you know, we were using gold way before that.
Yeah, it's crazy.
Okay, I have my question.
This is a very interesting conversation.
But I told you, and people know, we have a game in the podcast.
So let's do it now to have a small break.
So audience already know how it works.
My previous guest have a question from my next guest.
So yeah, I'm going to share it to you.
It was made in Spanish, but I put English subtitles.
So you will check it.
Pues mi pregunta es, ¿cuál es el mayor riesgo de Bitcoin? ¿Qué es lo que podría hacer que Bitcoin se destruya?
O al menos la mayor complicación o el mayor reto que tiene Bitcoin para seguir creciendo, no solo en precios, sino en adopción, en crecimiento de todo lo que supone una mejor situación para Bitcoin.
What could Bitcoin be in danger?
Or what could Bitcoin be in danger?
what if kind of thesis, right?
Like what if someday in the future this thing happens?
And it's kind of like you have to think about these kind of possibilities
for purposes of establishing if there's actually a risk or not,
but you also have to weigh the probability.
In other words, there's a non-zero risk that if I walk out of my door
that a plane will fall out of the sky and hit me right in the face.
That could happen.
Very, very small chance of occurring, right?
So the question is, do I operate my life based upon this tiny, tiny, tiny little risk?
Or do I operate my life on the probability that that's not going to occur?
Otherwise, I'm just going to stay in my house and hide every day.
Does that make sense?
So you have to look at things like this the same way.
What is the probability that quantum is a risk?
Today, zero.
10 years from now, maybe 5% or less.
I just think we have a long, long way to go.
And even if it starts to become a threat,
what people need to realize is Bitcoin is like the weakest target.
Why are you – look, there's $900 trillion of assets in the world.
If you have quantum that can break Bitcoin, you can break banking,
you can break SSL, you can break nuclear launch codes,
you can break government encryption,
you can book all kinds of stuff that's worth way more than Bitcoin.
If you're sitting here worried about Bitcoin,
you got much bigger problems, right?
But the last part of that is with Bitcoin,
you can just change it to say,
we're going to make quantum resistant addresses, for example.
And that's just an upgrade.
So I'm not super worried about that part.
I do worry sometimes that maybe developers get influenced by powerful people.
But at the end of the day, even that is not, if that is my biggest worry, I would say that even that is not that bad because Bitcoin is open source.
You can choose to use a version of it or you can choose not to.
right
how many
Linux is open source
this is the thing
that most people
are familiar with
this operating system
called Linux
right
yeah absolutely
how many versions
of that are there
if you have one
branch
that's going
a certain way
and everybody's like
I don't like that
we're going to go
with this one
that makes sense
that is protecting us
it's really that symbol
it's a matter of choice
so I don't worry
about those things
what is important
for adoption. What is important for adoption
at this point, I think, is that Bitcoiners
realize that
people who are sovereign money-minded
make up a very small percentage of the population.
Maybe less than 2%.
So, if that is the case, and we have
reached
adoption of somewhere like 1-2%,
we might be close to saturating that
addressable market.
The rest of humanity doesn't
necessarily think about Bitcoin that way. They don't worry about it necessarily, right?
Inflation is not the driver. If that was true, well, everybody in Argentina would be using Bitcoin
instead of Tether or whatever else they're using, right? So inflation is not necessarily the driver.
Ease of use has got to be the driver. It's got to be simple. People have to be like, okay,
just tell me this thing's going to work. When people get on an airplane, all they care about
is the plane takes off and flies from A to B.
They don't care how the engines work.
They don't care about aerodynamic lift.
They don't care about any of that stuff.
They want to go in, sit down, put their seatbelt on,
and they want to go to where they're trying to go.
That's all they care about.
Does that make sense?
It's very similar.
Human beings don't do things
because they want to know everything and how it works.
You get in your car and you drive.
Do you need to know how the engine was designed?
Do you care?
Most people don't care.
No, they don't care.
So we have to understand that.
We have to realize that where people are going to come,
we have to meet people where they are and accept their perspective.
And if they want to learn, teach them for sure.
But don't try to make them believe what you believe in order to use Bitcoin
because they're not going to be interested in that.
So this is the adoption question.
How do we reach this next segment as we need to make it easier?
and we need to show them how does this help you.
Because you can rant on about how the Federal Reserve is horrible all you like,
but they probably don't care.
Absolutely.
Yeah.
As you say, when you use a car or something,
you don't need to know how the engine works.
You just use it.
It's like you use the internet.
You don't need to know the protocol or HTTP.
You just use it.
Exactly.
and if you're using that as a comparison
when I got out of the military
I started a company
and this was at the time where the way you connect to the internet
was to use the dial-up modem
I don't know if you maybe are too young
I don't know if you remember this
but it used to be when your computer connected to the internet
it actually connected to a phone line
yeah
beep beep beep
and the computer and the other one would screech
it would make this screeching noise
sound like a fax machine
and then they would screech at each other for a minute
and then they would handshake
and now you have an internet connection, right?
Nobody knew how to do that.
So I had a company literally teaching people
how to connect their computer to the internet.
Do you know when the internet really took off?
When like Comcast and Verizon, everybody made it simple.
You just plug this thing in and turn it on.
Boom, the internet went.
Mass adoption, right?
Absolutely.
Just plug it in and turn it on.
True.
No configuring it, no like all the things, right?
It just works.
Absolutely, that's true.
Yeah.
There was no thing as Wi-Fi even.
Right, right.
And nowadays people just plug it in and it works.
Maybe you have a little setup, but it's very simple.
All of the technology, you're not configuring your DHCP servers,
you're not configuring your gateway or your subnet or any of that stuff.
That's all abstracted away.
people don't even see that most people don't even know that stuff exists they just use the internet
right we gotta get closer to that with bitcoin it's got to be simple yeah absolutely uh i also
kept thinking that when adrian made you the question about the risk and everything i want
to know what was the what was the risk that you took into account when you pivoted from gold to
bitcoin because probably you have needed to do like a huge analysis on it right yeah so the two
things that kept me away from bitcoin for the longest time um the first one was is that i
thought the government would shut it down i thought you know this is a potentially competing
currency to the u.s dollar the u.s government is going to shut it down i heard about bitcoin in 2011
and I didn't buy any of it because I thought the
government was going to shut it down.
I don't know where Max and Stacey
talking about this. I'm looking at it. It's like a dollar.
I'm like, yeah.
I know.
It's crazy. That's not real. This is not
real. The government's just going to shut it off.
That was the first one. The second one
was I thought there would just be
another Bitcoin that was better.
I hear this still. Even today, I hear this all the time.
These are the things that kept me away from it.
I started
studying Bitcoin at one point because I was confused as to why the government had not shut
it down yet. This is in 2019. And after a couple hundred hours of looking at it and realizing that
it's decentralized to the degree, it's on hundreds of, it's been downloaded hundreds of thousands of
times. It's on computers all around the world. It's on satellites, right? They're not stopping
this thing. That's when I realized they can't shut it down, right? That's the first part.
the second part is when I started
looking at like
well there's just going to be a better one
and when I realized that like A
in order to overcome the current network effects
of Bitcoin it would be like you and me
starting a company that
defeats Amazon
we would have to have the same
website the same billions
of products we'd have to have all their
data centers we'd have to have their warehouses
their trucks their planes
everything all their robots everything
and then we'll have to make it 10 times better
to get everybody to leave Amazon and come to us.
I mean, that's never going to happen.
I think that's the same with Bitcoin now.
But it doesn't fall people from trying.
People have made millions of altcoins, right?
Every single one of them has failed to unseat Bitcoin.
There's a reason for that.
Bitcoin is the only one with no issuer.
It's the only one that's truly neutral.
It's the only one that nobody can stop.
It's the only one that no one can control.
Yeah, and when I think about this, it's like we realize that we're still early.
I mean, there have been a few years here and also myself,
but even now it's too early.
It's that phase of time in the Internet where people have all heard about the Internet,
people have heard about email, they're just not using it yet.
Exactly.
I want to ask you a little bit about the current events.
Actually, last week we saw that I've been following some tweets about the Six Sigma.
We have seen that everything was falling.
Normally, one thing falls, but the other things try to compensate, right?
but in this case we saw that
the monetary system
I mean the
fiat money but also the stocks
the bonds, the commodities
went down so
I want to know your opinion
what's going on
I think this
might be part of what
Ray Dalio is talking about
and it's the very early days
of it I think where
Ray Dalio is basically saying that the global monetary order is changing.
And this happens from time to time.
There is a world reserve dominant currency usually for a certain period of time.
And then it's replaced.
This goes all the way back to the Roman Empire.
It was the Roman Empire and then it was the Byzantine Empire, so on and so forth.
eventually it was England
and it was the British pound
immediately prior to the United States
taking over as the world reserve currency
so
essentially it was 1944
at the Bretton Woods
this was right after World War II
World War II was wrapping up
and in 1944 all the world leaders got together
the United States at the time
had more gold than anyone
and everyone agreed we're going to use the dollar
as the trade currency and the reserve currency
but you have to agree that the dollar is backed up by gold
and that was the agreement.
You can turn the dollars in, we'll give you the gold.
And this held for a very long time
right up until the late 60s
but what happened was
that the United States was printing money
more money than was backed up by the gold.
And eventually the countries of the world started to figure out,
hey, you guys keep printing all these dollars.
Here's your dollars back.
We want the gold, right?
This led to the London gold pool.
And eventually it was essentially a run on the U.S. gold reserves.
So there were all these redemptions occurring.
the United States at one point was airlifting gold
to London to satisfy the demand
and then later as this continued with countries
asking for redemption, asking for redemption
it led to Nixon closing the gold window in 1971
and so if you think about that
that's 30 years, 50 years
the average lifespan of a world reserve currency is about 50 years
or 55 years now.
It's right about that time.
So it's a fiat currency
and fiat currencies have a lifespan, usually.
Like if they're managed well,
like the US dollar was managed well
for a really long time, I would argue.
But maybe not so much anymore.
You know, it took the United States of America
200 years to print the first trillion.
And now it's printing a trillion dollars
every 70 to 100 days.
This is how fast they're going right now.
That's crazy.
It is, right?
So, Ray Dalio basically says that this is, you know, there's one of these cycles where you have a major monetary reset of the global order.
And I think that's what's happening.
The countries of the world and the people of the world are starting to recognize that the United States dollar is caught in a debt trap.
It is mathematically impossible at this point to stop the continued debasement of the dollar.
Now, that doesn't mean the dollar is going to collapse.
It doesn't mean we're going to stop using the dollar.
What it means is they're going to keep printing and the printing will probably accelerate over time.
which means the inflation will continue to increase
and probably accelerate over time.
And eventually it starts to lead to these massive gyrations in the price.
Can I share something on a screen for a second?
Yeah, absolutely.
That will be helpful.
Let's see if I have this chart handy.
All right, so what you're looking at here is the price of gold in marks.
Okay.
Do you know what this is?
I saw that.
Yeah, if you can explain it from myself.
Yeah, I saw that.
Larry reposted it a few days ago.
But if you can give a context.
You're looking at a chart of the price of gold measured in Weimar marks.
And people who study monetary history are familiar with the Weimar hyperinflation.
This is where they had basically runaway hyperinflation.
And as you can see in this chart, the volatility of the chart in the gold price continues to increase in amplitude massively over time.
And the wild more hyperinflation, you know, this wasn't an instant phenomenon.
This took, well, in a nine-year period of time, the first seven years was accelerating inflation.
It wasn't hyperinflation.
It was high inflation, 10%, 12%, 15%, 18%, right, for like seven years.
And in the last two years, it went straight up.
And there was a lot of volatility as this was occurring.
And when I saw the price of gold, here, there's another chart that I would like to share.
You remember when gold was smoking, silver was smoking,
Silver went all the way up to like $120-ish in that neighborhood.
And then this last weekend it crashed.
It wiped out $10 trillion of market value in three days.
That's crazy.
And for perspective, that's like five times the entire global market value of all of the Bitcoin.
Gone.
Five times that amount.
Gone in three days.
so what does this look like
is this reminding you of anything
absolutely
yeah
so I'm not sitting here saying
that the US dollar is going to
into a hyperinflation I don't really know
what I know is
that
these things tend to recur
over history we're definitely in a
period of massive change
the world is looking at
the United States dollar going
we may not be able to rely upon this for the next 10 20 years So we better start looking at alternatives now China just came out and asked the world to start using the yuan as the world reserve currency I don know if people are going to do that
but this makes me very bullish on Bitcoin
because I think the US has some runway here with stablecoins.
They're starting to use stablecoins
and it's going to extend the life of the dollar
to some degree.
but eventually I think what will happen
and I don't know if this is 10 years out, 20 years out, whatever it is
but I think countries are going to start to realize
that there's only one currency globally that's completely neutral
has no issuer
no one can stop you from using it, nobody can prevent you from sending it across borders
they can't take it from you
and it's absolutely limited
and I think when central banks start to figure this out
this is going to sound crazy to some people
but I think they're going to start printing money
and buying Bitcoin
also I was reminding
I just remind about
I think there's a lot
and correct me if I'm mistaken
that about the government
was trying to
acquire
like XRP
I don't know, some shitcoins or taxes about it.
But the idea of getting that is to eventually,
with that capital gains, to pivot it,
sell it and buy more Bitcoin to have it in the treasury of the US.
Yeah, possibly.
Well, when President Trump signed the executive order
creating the Bitcoin Strategic Reserve,
they created rules around that.
And they basically said that the Bitcoin that's there,
you can't sell it.
if you acquire more bitcoin in a budget neutral way that's the language they used if it's a budget
neutral way you can acquire more bitcoin that's fine all of these other cryptocurrencies if we
have them sell them so that to me is a very clear signal like that tells you something about the way
they view this stuff and yeah no the other thing that i'm thinking is that now they say that probably
China says that
invite
nations to start using their
currency
as a reserve.
I want to ask you
because now I have
seen some strategies. For example, we started
Salvador buying Bitcoin.
Now the government is buying
Bitcoin every single day, but also is buying
gold when this
thing happens, when gold
is in sales.
so
my question
will be like
thinking more
in the global south
where there's
hyperinflation
what would be
the exit way
or the way
to fix
those hyperinflation
like is actually
acquiring
bitcoin
their treasuries
or gold
or both
perhaps both
yeah
I think in the interim
they'll acquire gold
more and then
eventually it starts to become
obvious if there's
peace globally
gold can work
okay because
if you need to move the gold from one country
or another no problem you just move it
right if there's not
peace this becomes a problem
this is actually the reason I
switched from gold to bitcoin
so I'll back up and explain
in 2020
the beginning of COVID
this was around the early part of the
the year 2020
if you recall
we were vaulting our gold in Switzerland
these private vaults in Switzerland
the Swiss government grounded
the airplanes they said no one can take off
no one can land
so what this meant was
I woke up in the middle of the night and I realized
if one of my clients called me
one of my investors called me and they said
Alex I want you to deliver 20 million dollars
in gold bars to this country over here
in this vault over here, I could not do that
because the planes couldn't take off.
So this is what you call a failure to deliver
in the gold industry.
This is bad. It's not good.
It's not good for your reputation.
You could say it's because of COVID, but whatever.
You still had a failure to deliver.
In gold, to have final settlement,
you have to move the gold from one possession to another.
Okay?
This requires people.
The guys at the vault, the guys on the trucks,
security trucks, the ground crew, air crew,
all these people. The same thing on the other side.
And I realized, oh,
any one of these people can mess this up.
And then I thought about Bitcoin because I was studying
Bitcoin at the time and I'm like, okay,
wait a minute. With Bitcoin, I can send
any amount of value to the other side
of the planet basically
instantly because it's going across the
internet at the speed of light
at almost no cost.
No one can stop me. I need no one's permission.
And I was like, I knew with
perfect clarity that Bitcoin was better money for moving massive amounts of value, right?
Let's go back to gold for a minute. Central banks trust gold because if you look at interviews with
central bankers after they get out of the central bank, they're no longer running the central bank,
they will tell you gold is this reset button. Gold is like endangered break glass, hit the button,
right that's how you reset the currency is you must have a bunch of gold
so I think what you're going to see in the interim is
they're going to keep buying gold to create basically a foundation
if they have to reset their money they'll have the gold
to do that but this works in peacetime it doesn't work in wartime
you remember World War II when all those ships were going across the
Atlantic what were they doing they were sinking them
yeah of course
to move gold you have to put it on a ship
or you have to put it on a plane
ships can get sunk planes can get shot down
so if there's war
that doesn't work
and so I think what will happen
is that eventually
central banks will start to figure out
bitcoin I can move any
amount of value
it's a neutral asset with no issuer
no one controls the network
no one can control the network
no one can stop me
it's instant settlement
I don't have to worry about my plane getting shot down full of gold
or my ship getting sunk.
It's just logical to me that eventually they'll start to figure this out.
Yeah.
And I'm just thinking, also I have a question because
you said that you pivot to Bitcoin, but also you have your clients
and I'm not asking specifically about your clients, but
I mean, who they are or whatever.
but the sense that they also need to understand Bitcoin
in order to accept that you pivot to this, right?
And so I'm just thinking like how right now that business works
because, for example, let's say Peter Schiff.
Well, I have my opinion.
He is, you know, like pure gold, but I think he has some Bitcoin
that somehow is a facade.
But he defends gold.
He dies in that hill, right?
And I think he's not the only one.
So, yeah, like in general, how does that work?
In order to say, hey, I cannot provide you,
as the test is just said, like if there's war,
probably I cannot deliver this in the case of COVID,
but there is this superior money.
so in order to understand that
I don't know if you follow me
yeah well you know funds wrap up all the time
and you don't need to actually explain why you're wrapping it up
you can just choose to wrap it up
you liquidate the assets or you deliver in kind
and you close the fund which is basically what we did
if for example a particular investor were to come to me
and say hey Alex what are you doing
Like, what are you interested in? I would explain to them. I think Bitcoin is a better asset. And these are the reasons why. Now, will every investor agree with me? No. I mean, there's this concept called sunk cost bias.
sunk cost bias what this means is if i have invested 30 years of my life or 40 years of my
life in this particular industry or this particular asset and i have all this money invested in it and
i have all this time invested in it and i now i have ego and professional my professional image
is invested in this thing right i can't easily give this up my ego prevents me from doing it
My bias prevents me from doing it.
But if you were to remove all the bias and simply say, look, from the perspective of what is just a better asset, what's a better form of money in every measurable way, aside from how long, right?
Gold's been around a long time.
I'll give it that.
But aside from that, Bitcoin performs better.
It's easier to move.
It can't be confiscated from you if you secure it properly.
You don't require permission.
It's instant.
And like the gold people like to say, okay, well, what if the internet goes away?
Or what if the power goes away?
And my answer to that is, well, it depends on what you're talking about.
Is it a couple of days?
Is it a week?
Or is it like a year?
Right?
If it's a couple of days, so what?
If you're really worried about it, get a generator and a Starlink, just like everybody else.
right
if it's a year and you have no power
you get bigger problems
than whether you have gold or silver or bitcoin
you better
there's other things you need to worry about
like how do you get fresh water
how do you grow food
how do you not freeze during the winter
like you need to figure that stuff out
and
it's going to get very
humans get very weird very quickly
when you turn the lights off for a long time.
So I would say,
don't worry about whether you have Bitcoin or gold.
You better be able to protect yourself
or you better have access to water and food.
And it's like this whole argument is like,
well, we're just going to be cavemen again.
I don't think so.
Humans don't go backwards in technology,
not unless you completely reset, right?
There have been situations where
we've studied civilizations
where their technology was lost.
They were completely wiped off the map, right?
Again, this is one of those
tiny little probability scenarios?
Am I going to model my life based upon
this tiny little probability?
Or is it
more realistic that humanity
just continues and our technology
continues and our
you understand what I'm saying?
I was just looking at this thing with Elon Musk
the other day.
SpaceX just acquired XAI.
What does that mean?
That means with Starship, people don't follow
this stuff. Starship is his new
spacecraft. He can launch
150 to 200 tons of payload into orbit.
He's looking at doing it a thousand times a year.
He's going to build a massive AI grid in space.
No atmosphere, no terrestrial limits.
Constant, continuous solar generation and compute.
What do big AI clusters do
when they're not using the compute for computing AI?
a lot of them are mining bitcoin
why wouldn't you
I don't know if that's what's going to happen
but
yeah
just some things
to think about
yeah
Alex we'll start
wrap it up because I think we can
go forever and it's so fascinating
what you're sharing
I just have a couple more questions for you
but one is like
well talking about
because I asked you the current scenario
so what do you think
that is going to happen in the short term
now that let's say
now that we are recording February 4th
so in the next weeks
you mean in the price
with the price of Bitcoin?
yeah in general
I mean in macro perspective
because we have seen that everything
is going falling apart
and also Bitcoin
Yeah, I'm not so sure on the short term to medium term.
I'm not very good at making these kind of outlooks.
I just, from a very zoomed out perspective,
I do believe the global monetary system is changing
and I don't think it's going to go backwards in terms of changing.
I think they may extend the life of the dollar,
but ultimately it's still going in the same direction
and I think it will accelerate over time.
So if that is the case, I mean, at the end of the day, there's a trillion, not a trillion, sorry.
There's like 900 trillion to a quadrillion US dollars worth of assets globally.
We're talking stocks, bonds, real estate, art, all the things, right?
Gold, silver, everything.
You get to ask the question, why are people buying these things?
and
I believe
the reason people buy these things
is so that they're going to increase their
purchasing power, their capital
over time
instead of keeping in the currency
like if you could just keep your
dollars or
in whatever country you're in
that currency, if that currency
increased in purchasing power by 10%
every single year
would you buy all these other assets?
A lot of people wouldn't.
They would just keep the currency.
It keeps going up in purchasing power.
It goes down in purchasing power.
That's why people buy all this other stuff.
So my argument is that's a manipulation.
Because the natural state of a free market is deflation.
If you listen to Jeff Booth, what does that mean?
As technology improves, as humans get better and more productive
and more efficient at doing things, the price of everything should fall.
if the amount of currency remained steady
was the same amount
like you're not adding currency
the prices of everything should fall over time
I'm not talking about
deflation of the money supply
and deflation of credit which would cause a deflationary
collapse I'm not talking about that
I'm talking about the prices of things should fall
we're not seeing that
because it's just continuously
inflating
so then the question becomes
what's the best thing to buy
gold, real estate, whatever.
And Bitcoin is the only one
that does not respond to human demand.
So every other thing,
whether it's gold, real estate, stocks, currency,
if we want more of it, we make more of it.
You want more houses, we build more houses.
The price of gold goes up,
we dig more gold out of the ground, right?
Gold production is a function of cost of extraction.
It costs money to extract the gold from the earth.
If the price of gold is $8,000 or $10,000,
maybe that justifies pulling the gold out of the ocean.
If it's $20,000, maybe that justifies us pulling it from asteroids.
You're never going to run out, though.
They're just going to keep adding more and more and more and more.
With Bitcoin, it doesn't respond to human demand.
It will never go higher than $21 million.
And if you start understanding the implications of that,
The math is basically everything in the world that's worth something divided by 21 million forever.
And that is the hardest thing I think about Bitcoin for people to really wrap their mind around.
Because what that truly means is the purchasing power of Bitcoin will go up probably faster than everything else forever.
As long as humanity exists as a species,
we will create more wealth.
And as we create more wealth,
the value of Bitcoin will increase.
Forever.
Yeah.
I remind that Jeff says when he came to the podcast,
it's fascinating.
He says that everything will be repriced on Bitcoin.
It already is being repriced.
Yeah, and everything is falling to zero.
Look at the price of homes.
Look at the price of cars.
Look at the price of gold. Look at the price of everything over the last 17 years in Bitcoin.
It is already being repriced. Everything is.
And in fact, the new incoming chairman of the Federal Reserve mentioned this in a recent interview.
He said, what Bitcoin forces us to do is to be realistic about what's really happening.
I'm paraphrasing his language. He didn't use those exact words.
But because Bitcoin is a fixed amount, you can't mess with it in terms of understanding what it's measuring.
If the price of everything is collapsing in Bitcoin, that is a clear signal.
For the first time in history, because it's the first time we've ever had something that was absolutely finite.
It's the first time we could actually measure everything with an absolute finite measuring stick.
we'll see if we go to do you believe that uh eventually we'll go to a bitcoin standard so
that we will bitcoin standard means that we'll measure everything in sats and we use it like
as we use dollars yes but it may be abstracted i think eventually the bitcoin will be the base
layer of the next monetary system gold was the base layer of the u.s dollar monetary system
until we separated the link.
Yeah.
I think you're going to have competing monetary systems in the interim,
but eventually Bitcoin will be base layer money,
and then there will be derivatives on top of it,
and you'll abstract it away.
So will everything be measured in sats?
Yes.
Will people think about it that way?
I don't know.
We'll see.
But at some point,
from a perspective of how the monetary system is constructed,
yes, everything will be measured in sats
because the system will measure it in sats.
Does that make sense?
Okay, I'll give you an analogy.
We're using the internet right now.
We're sending data over the internet right now.
We're downloading and we're uploading data simultaneously, right?
That can be measured.
There's a certain number of packets.
There's a certain amount of megabytes of bandwidth of data
that's flowing, right?
People don't think about that, though.
All they know is that this works.
Does that make sense?
So I think the same thing, you'll see the same thing in Bitcoin.
You're going to see, you'll still see fiat currencies.
You'll see derivatives of Bitcoin.
You're already starting to see it.
When you see companies, treasury companies,
that is a securitized wrapper around Bitcoin.
They're creating wrappers in the wrappers now.
You look at companies like Strategy now,
they're creating preferred stocks.
These are additional derivatives, right,
that are acting like yield bearing products.
BlackRock just launched another derivative.
So you're going to see layers and layers and layers
that will abstract away what's happening underneath the hood.
Like people won't know how the engine's running.
People have no idea about the bandwidth
and the packets that are flowing and all that.
They don't care.
All they know is they get on this thing
and they talk to each other.
That's all I care about.
In the future, it will be like that,
but the underlying system will be capitalized
by Bitcoin.
That's one thing that I always think of how everything will, I mean, how the world will
adapt to Bitcoin.
That's the better way to say it.
And by the way, I also think there will be plenty of people who use Bitcoin natively,
right?
Where that's just like sats over lightning or through Fetamins or something like that.
Will the entire population do it that way?
Probably not actually.
It'll be a percentage of the population that understands the technology.
that will do it that way.
Yeah.
And understands the benefits of doing it that way.
Like, for example, if I get hurt by the centralized system,
then I seek an alternative.
If I don't get hurt, I don't even know it's a bad thing necessarily.
Okay, my example, my case in point,
there was an interview with Eric Trump.
He's the son of Donald Trump.
He runs all of Trump's businesses today.
right? At one point
he was on a
television show. The interviewer
was asking him, why are you guys doing
all this Bitcoin stuff? Like, what's that all about?
He goes,
I'm going to paraphrase what he
said. Why don't you try running
a multinational business where you
have to do a wire for $100 million
and you find out your bank accounts,
you've been debanked.
Your bank accounts don't work anymore.
He goes, that's why we're doing Bitcoin.
Does that make sense?
He got hurt by the centralized system to the point where he was like,
oh, I don't want to let them have control of that.
I want control of that.
So people who understand this are going to look for a solution to that problem But if they don ever get hurt by that maybe they don know so there will be plenty of people that will use systems until they you know until they find a need
for for something else that's exactly the point i think that people will start using bitcoin
based on the that's a fascinating thing that based on the on the needs that you have because even uh
I just popped into my mind right now the thesis of Jason Lurie.
He doesn't see it as a currency, right?
He sees it as a way to protect that and to use it like,
what is the term he uses, like force power projection?
Force power projection, yeah, economic force power projection.
I mean, to put that into more simpler terms,
if I'm in the United States and I want to spend money
for an international transaction,
but all of my adversaries have cut me off.
I can't send gold because we're at war.
If I send a ship, they're going to sink it.
If I send a plane, they're going to shoot it down.
Does that make sense?
Or maybe we're being sanctioned.
I'm not saying the U.S. is ever going to be sanctioned.
Right now the U.S. is the one doing the sanctioning.
But do you understand what I'm saying?
Those kind of things work both ways, right?
So I think what Lowry is saying is,
what if there was this form of money that was neutral No one could stop you from using it Can you use that to project energy economic energy to a different place on the planet as needed without anybody stopping you
That's another rabbit hole.
This is another rabbit hole, but it actually becomes,
at some point that becomes a strategic imperative because there's only,
I think the number is 200 million blocks a year.
or two.
I'd have to get with Bob Burnett.
He's the CEO of Barefoot.
There's a specific number of transactions available per year.
And if you're not in one of those transactions,
you're not doing what you need to do.
So this is why I think it is probable
that at some point the nations of the world
will be mining Bitcoin.
Not necessarily because they're interested
in having the Bitcoin,
but more so so that they can make sure that they can conduct a transaction when they want to.
There's a lot of very smart people in this space who believe that certain countries are already doing this.
Our country is doing it in a small way, but it's doing it.
Also in the US of course it takes sense Yeah Russia Bhutan there lots of countries that are doing it now Alex we can continue forever but I don want to take much of your time
maybe we can do a second part
but I want to thank you a lot
for your time
it's so fascinating I love these topics
it was the same with Larry it was the same with Jeff
you open a lot of
rabbit holes and we learn
a lot so thank you for your time
I really appreciate it
thanks for having me
thanks to you
and just one thing
you also have a podcast right
so let's invite people to go also to your pod
sure so my pod is
my pod is the Bitcoin Crucible
you can follow me on Twitter
at Alex Stanzik
just like my name is spelled here on the screen
at Alex Stanzik
and I post when we drop those episodes on Twitter
alright I'm going to share it also
in the podcast notes
once again thank you
guys I hope that you have enjoyed this episode
surely we'll have a second discussion with Alex
but yeah
thank you and see you next week
ciao