1 00:00:00,000 --> 00:00:05,420 Hey, hey! Welcome to the Bitcoin Matrix. I'm your host, Cedric Youngelman. 2 00:00:05,740 --> 00:00:10,780 Two months ago, I officially partnered with MicroSeed, because this is the best damn seed 3 00:00:10,780 --> 00:00:13,680 storage hardware I've seen in eight plus years of being in the space. 4 00:00:14,000 --> 00:00:18,080 They supply titanium stainless steel and nylon washers in the kit. 5 00:00:18,460 --> 00:00:22,240 Imagine storing your seed phrase on nylon short term to get through body scanners, 6 00:00:22,420 --> 00:00:26,220 x-rays, and metal detectors. Imagine stamping the words so small, 7 00:00:26,520 --> 00:00:28,440 they are nearly invisible to the human eye. 8 00:00:28,440 --> 00:00:34,560 micro seed engraves your entire bitcoin seed phrase on a fireproof waterproof steel or titanium 9 00:00:34,560 --> 00:00:40,520 washer the size of a dime discreet resilient seed security made simple use the code matrix 10 00:00:40,520 --> 00:00:46,320 for a discount at micro seed.io and store your seed phrase for life if you haven't tried pinot 11 00:00:46,320 --> 00:00:52,100 lane wines yet what are you even doing with your life the pinot noir is my favorite but i also love 12 00:00:52,100 --> 00:00:57,800 the merlot thank you ben justman for creating your beautiful wines get yours now just in time 13 00:00:57,800 --> 00:01:03,080 for the holidays. In this episode, I chat with Parker Lewis, author of Gradually Then Suddenly 14 00:01:03,080 --> 00:01:07,800 and head of business development at ZapRate. We dive deep into Parker's Bitcoin journey 15 00:01:07,800 --> 00:01:11,760 from questioning the sustainability of the Federal Reserve's monetary policy 16 00:01:11,760 --> 00:01:17,140 to discovering the economic truths behind gold and Bitcoin. Parker lays out the logic behind 17 00:01:17,140 --> 00:01:21,980 Bitcoin as not just a hedge, but a permanent solution to inflation and why viewing Bitcoin 18 00:01:21,980 --> 00:01:27,340 as volatile but not risky is key to understanding its long-term value. We also dig into the 19 00:01:27,340 --> 00:01:32,660 transition from fiat to a Bitcoin-based economy, why Bitcoin must become a medium of exchange to 20 00:01:32,660 --> 00:01:38,380 succeed, and how ZapRite is helping pave that way, helping pave that path by enabling businesses 21 00:01:38,380 --> 00:01:44,280 to accept Bitcoin along fiat. If you're looking to understand Bitcoin on a deeper economic level, 22 00:01:44,660 --> 00:01:49,460 not just as an asset, but as the future of money, this conversation is for you. If you want to get 23 00:01:49,460 --> 00:01:55,580 in touch with me or buy some really cool Bitcoin Matrix merch, head over to thebitcoinmatrix.com. 24 00:01:55,580 --> 00:02:01,320 Also, please consider supporting the show directly by subscribing on the Fountain app to the Bitcoin Matrix. 25 00:02:01,780 --> 00:02:04,860 And now, let's enter the Bitcoin Matrix with Parker Lewis. 26 00:02:25,580 --> 00:02:27,360 Parker Lewis, welcome to the Bitcoin Matrix. 27 00:02:27,580 --> 00:02:28,120 How are you? 28 00:02:28,360 --> 00:02:29,420 Cedric, good to be here. 29 00:02:29,840 --> 00:02:33,380 As I was just mentioning to you, I'm sorry it's taken this long, but I look forward to 30 00:02:33,380 --> 00:02:33,940 the discussion. 31 00:02:34,260 --> 00:02:35,000 Yeah, me too. 32 00:02:35,300 --> 00:02:39,600 You know, your works are seminal and they've been part of my journey. 33 00:02:39,600 --> 00:02:45,260 But also, I got to see you live at BitBlockBoom probably more than once. 34 00:02:45,340 --> 00:02:49,880 But once in particular, I don't know if you remember your Mike Tyson knockout punch out. 35 00:02:50,320 --> 00:02:51,240 Yeah, yeah. 36 00:02:52,000 --> 00:02:54,380 Body blows, not knockout punches. 37 00:02:55,260 --> 00:02:55,500 Yeah. 38 00:02:55,640 --> 00:02:57,260 So I hope we get to that in a little bit. 39 00:02:57,540 --> 00:03:02,720 But first, I'd love to hear your rabbit hole story, how you came to Bitcoin, how Bitcoin 40 00:03:02,720 --> 00:03:04,780 maybe found you or what happened there. 41 00:03:05,000 --> 00:03:05,400 Sure. 42 00:03:05,400 --> 00:03:09,140 Yeah, Bitcoin found me in 2016. 43 00:03:10,220 --> 00:03:11,360 Yeah, 2016. 44 00:03:11,880 --> 00:03:14,640 I was working for a hedge fund in Dallas, Texas. 45 00:03:15,920 --> 00:03:22,080 And I was on one hand doing research as to what would happen when the Federal Reserve 46 00:03:22,080 --> 00:03:28,280 began to unwind post-great financial crisis quantitative easing. 47 00:03:28,500 --> 00:03:36,260 The $3.6 trillion that it introduced into the financial system from 2009 to 2014, 48 00:03:36,800 --> 00:03:42,240 in the 2016 timeframe, it had signaled plans in the near future 49 00:03:42,240 --> 00:03:45,360 that it would begin to take that money out of the system. 50 00:03:45,360 --> 00:03:52,980 and I was doing research and trying to develop my own view of what would happen to a broad range of 51 00:03:52,980 --> 00:03:57,900 financial markets. At the same time that I was going down that rabbit hole and ultimately when 52 00:03:57,900 --> 00:04:02,540 I did that I came to the conclusion that the Federal Reserve was never going to be able to 53 00:04:02,540 --> 00:04:07,680 permanently take the money back out of the system, that they were always going to have to print more 54 00:04:07,680 --> 00:04:12,780 money and that it was a function of leverage, the amount of dollar debt that existed in the world 55 00:04:12,780 --> 00:04:17,280 relative to the actual number of dollars that could service that debt, 56 00:04:17,460 --> 00:04:23,020 and that the only way that quantitative easing or the introduction of money is designed to work 57 00:04:23,020 --> 00:04:27,760 is to actually expand the credit system, so it always functionally needs more money to support it. 58 00:04:29,300 --> 00:04:32,480 At the same time that I was going down that research path, 59 00:04:32,640 --> 00:04:35,260 I was asked to go do diligence on a gold company. 60 00:04:35,960 --> 00:04:42,080 That serendipitously led a good friend of mine to introduce me to Safety in a Moose. 61 00:04:42,080 --> 00:04:46,580 It was before Safe Dean had written the Bitcoin standard, but formed a friendship with Safe. 62 00:04:46,720 --> 00:04:52,580 Safe helped me understand why gold was money as part of the diligence process. 63 00:04:53,140 --> 00:04:56,400 And it was around the same time that he was becoming interested in Bitcoin. 64 00:04:56,800 --> 00:05:04,880 And I'd like to think that I went from zero to gold to Bitcoin very quickly, but it took me a little while to get to gold first. 65 00:05:04,880 --> 00:05:11,240 But as soon as gold started to click, then I started to understand why Bitcoin existed, why it had a fundamental value. 66 00:05:11,240 --> 00:05:14,740 that I'm solving the same problem, but in a perfected form. 67 00:05:15,080 --> 00:05:17,660 And that my two paths of research really converged. 68 00:05:17,700 --> 00:05:19,840 It was like, okay, they're always going to have to print dollars. 69 00:05:20,520 --> 00:05:26,960 And now I have some anchoring as to why Bitcoin was created to solve that problem, 70 00:05:26,960 --> 00:05:29,900 not just the printing of dollars, but the printing of euros and yen 71 00:05:29,900 --> 00:05:31,720 and fiat money all over the world. 72 00:05:31,720 --> 00:05:38,140 So that was mid-2016, mid to late 2016. 73 00:05:38,140 --> 00:05:45,040 So, yeah, then, you know, everything fit into place and continue to go deeper down the rabbit hole. 74 00:05:45,600 --> 00:05:56,120 Sure. When you mentioned like gold is money, what kind of maybe do you remember maybe your own reaction to this journey of like almost like maybe I'm a fish in water? 75 00:05:56,400 --> 00:05:59,780 I've never really thought about what money is, what that question is. 76 00:05:59,820 --> 00:06:02,440 And here I am. I think gold is money now. 77 00:06:03,000 --> 00:06:04,800 Do you remember sort of that journey and that journey? 78 00:06:04,800 --> 00:06:10,920 me sure yeah i remember well i remember thinking before figuring out why gold was money that i had 79 00:06:10,920 --> 00:06:18,340 this express thought that you know gold is a shiny rock it's a relic if you know i ever wanted needed 80 00:06:18,340 --> 00:06:28,080 gold i'd rather have guns and ammo and and cattle you know like be be out on a on a ranch sovereign 81 00:06:28,080 --> 00:06:34,600 but but i hadn't really ever questioned that root principle of what money is and i think that that 82 00:06:34,600 --> 00:06:40,740 is the principal question that someone has to be interested in to want to go down the Bitcoin 83 00:06:40,740 --> 00:06:46,060 rabbit hole, but also to be interested in order to understand Bitcoin. And so, you know, I have an 84 00:06:46,060 --> 00:06:52,960 economics degree from college, but one of the things I also recognized was that economics as a 85 00:06:52,960 --> 00:06:59,960 field of study, it assumes money exists and then it builds assumptions on top of it, but it never 86 00:06:59,960 --> 00:07:06,500 questions the foundation. And it's one of the reasons why I think Bitcoin is so hard to 87 00:07:06,500 --> 00:07:14,300 understand. And so that is one aspect of Bitcoin that requires humility. And it's perfectly natural 88 00:07:14,300 --> 00:07:20,880 because it's just very few people, you know, not like certain people have, you know, like, 89 00:07:20,980 --> 00:07:26,800 but not everyone, but very few people have, you know, questioned, you know, why the dollar has 90 00:07:26,800 --> 00:07:33,260 value in the first place, whether it's a collective hallucination. And if you just accept that reality 91 00:07:33,260 --> 00:07:38,780 that no one has had to evaluate actual money, like one money versus another, what makes something 92 00:07:38,780 --> 00:07:45,760 money, that it's easier to have humility and to be like, okay, yeah, let's go down the rabbit hole. 93 00:07:46,240 --> 00:07:52,100 Yeah, I remember taking Economics 350 in college and it's money and banking. You talk a lot about 94 00:07:52,100 --> 00:07:59,780 money supply m2 m3 but really nothing about what is money or right yeah like my courses that i would 95 00:07:59,780 --> 00:08:04,560 take whether it was corporate finance or economics course they would talk about a central bank and 96 00:08:04,560 --> 00:08:08,020 active management of the money supply so what it's not that they wouldn't talk about money but 97 00:08:08,020 --> 00:08:13,780 they wouldn't they wouldn't question what like why the dollar was money or how something emerges on 98 00:08:13,780 --> 00:08:20,100 the market as money and i do think that that will be something that you know going forward you know 99 00:08:20,100 --> 00:08:26,140 Obviously, people are currently going down that journey themselves as they become interested in Bitcoin. 100 00:08:26,140 --> 00:08:35,860 I think on the other side of the horizon, when it's very clear that Bitcoin is the new money and it's the money that everyone is using day to day, that it will be a core part of the education. 101 00:08:36,000 --> 00:08:38,140 People will realize that the curriculum missed. 102 00:08:38,140 --> 00:08:43,680 if they're going to teach economics well we have to teach what what makes a form of money better or 103 00:08:43,680 --> 00:08:49,240 worse and what has you know the history of money which a lot of safety in the bitcoin standard 104 00:08:49,240 --> 00:08:55,220 uh helped elucidate for me and for you know millions of other people who have either read 105 00:08:55,220 --> 00:09:00,380 the book or listened to the audio or read snippets online or listened to his podcast 106 00:09:00,380 --> 00:09:03,840 What inspired you to write Gradually Then Suddenly? 107 00:09:03,840 --> 00:09:24,620 Well, what inspired me to write? Well, the non-intellectual answer was that I was working for Unchained at the time, which is a Bitcoin custody and financial services platform that helps people self-custody. 108 00:09:24,620 --> 00:09:31,720 But I needed a way to reach an audience and writing felt like a good way to do that. 109 00:09:31,720 --> 00:09:44,660 But the more fundamental side of it was I had gone, like, after, I'd say, discussions with SAFE about gold and, you know, kind of getting into the Austrian economic rabbit hole. 110 00:09:44,840 --> 00:09:56,960 And even after Bitcoin clicked for me, after reading an early draft of the Bitcoin Standard before it came out and reading Mastering Bitcoin by Andreas Antonopoulos and figuring out how Bitcoin as a network actually works, kind of the glue. 111 00:09:56,960 --> 00:10:04,780 there were still logical questions that almost I had figured out as conclusions through a number 112 00:10:04,780 --> 00:10:11,080 of different data points but I had to consistently like question the logic to test the assumption 113 00:10:11,080 --> 00:10:15,980 because a lot of times people look at Bitcoiners and they think they were crazy the reality is that 114 00:10:15,980 --> 00:10:23,080 that no one wants to store their value in something that will lose purchasing power over time 115 00:10:23,080 --> 00:10:28,820 and if you've gotten to the position of Bitcoin being money and you have a hardened view as to 116 00:10:28,820 --> 00:10:36,960 why that is, most people, to be highly convicted in that view, have had to challenge their own 117 00:10:36,960 --> 00:10:42,600 thinking. I have every incentive to, if I'm wrong, I want to know it. And so even after the idea of 118 00:10:42,600 --> 00:10:48,320 Bitcoin had clicked for me, there were logical questions that I had to test about, like, well, 119 00:10:48,320 --> 00:10:55,020 you know bitcoin being too volatile or you know why can't somebody just out compete it you know 120 00:10:55,020 --> 00:11:00,800 why why doesn't something else come along with a better feature set um you know what about the 121 00:11:00,800 --> 00:11:05,620 transaction throughput you know and so i i had to i had those i i had already worked those through 122 00:11:05,620 --> 00:11:12,880 in my head but i was like well i think that other people would benefit from seeing or reading a very 123 00:11:12,880 --> 00:11:21,260 logically ordered explanation for what are the most common and natural questions about Bitcoin. 124 00:11:21,260 --> 00:11:27,060 And so I thought that that would be additive to the body of work that might accelerate 125 00:11:27,060 --> 00:11:33,420 a certain audience down the path of the Bitcoin rabbit hole and kind of walk them, you know, 126 00:11:33,540 --> 00:11:38,240 leading the horse to water of like, hey, these are all logical things that even if, 127 00:11:38,240 --> 00:11:54,480 Even once Bitcoin starts to click, there are these residual questions that the faster or in a more accelerated basis that you can get to them as a real strong kind of bottoms up view, then you won't be relying on anybody's opinion. 128 00:11:55,240 --> 00:11:58,340 And so I thought it was complementary to what else was out there. 129 00:11:58,420 --> 00:12:06,640 And it was what I personally had to think through and reason through even after Bitcoin kind of in its more holistic view started to click for me. 130 00:12:06,640 --> 00:12:11,200 Wow. What were you trying to get across with the title, Gradually Then Suddenly? 131 00:12:11,500 --> 00:12:18,480 Well, the funny thing was, there was another title that I was originally thinking about, 132 00:12:18,580 --> 00:12:22,480 and I was right on the fringe. It was something called The Intolerant Minority. 133 00:12:22,480 --> 00:12:31,040 But I gave a presentation, and one of the presentations at BitBlockBoom, where the saying 134 00:12:31,040 --> 00:12:38,940 gradually then suddenly is a is a common adaptation of how Hemingway described the process of going 135 00:12:38,940 --> 00:12:45,200 bankrupt in the sun also rises and so it was one character talking to another and one character 136 00:12:45,200 --> 00:12:52,220 asked the other how did you go bankrupt and the other character said two ways first gradually and 137 00:12:52,220 --> 00:12:59,980 then suddenly and my the way I I saw that translate to Bitcoin is that like functionally when a 138 00:12:59,980 --> 00:13:05,560 currency collapses it collapses gradually and then suddenly and the product like when a currency 139 00:13:05,560 --> 00:13:11,840 collapses it's functioning like the the either the country or the government being insolvent 140 00:13:11,840 --> 00:13:19,040 um in in the fiat world and so it applies to how an individual goes bankrupt it's how a country 141 00:13:19,040 --> 00:13:23,980 basically becomes insolvent or at least its government because it happens over a period of 142 00:13:23,980 --> 00:13:29,680 time and then at some sudden moment you you actually realize that that you're insolvent 143 00:13:29,680 --> 00:13:35,140 it's also how people come to understand bitcoin and bitcoin is the other side of the same coin of 144 00:13:35,140 --> 00:13:41,040 the fiat currency collapse and so it you know it's starting to make sense it's starting to make sense 145 00:13:41,040 --> 00:13:45,180 starting to make sense slowly and then some idea will happen or you'll have some life experience 146 00:13:45,180 --> 00:14:10,166 that connects a bunch of dots all at once and at that point but i would describe it as like when you see Bitcoin for the first time or when the picture starts to become into focus it still not crystal clear But everything is kind of at one moment coming to come together in a way where you can not just see that Bitcoin is possible probabilistically but that you could start to order things and explain to yourself why 147 00:14:10,166 --> 00:14:17,766 And so for a lot of reasons, the similarity between the original – it's not even a framework. 148 00:14:17,906 --> 00:14:22,606 The original dialogue in his book that Hemingway described it was the way that people go bankrupt, 149 00:14:22,766 --> 00:14:27,046 the way that currencies hyperinflate, and how people come to understand Bitcoin. 150 00:14:27,526 --> 00:14:33,826 Yeah, which is interesting because, I mean, gradually then suddenly it's become kind of a meme on its own. 151 00:14:34,706 --> 00:14:38,706 Yeah, it was a meme before. 152 00:14:38,706 --> 00:14:42,726 but I'd say the book and the series popularized it in the Bitcoin world. 153 00:14:43,126 --> 00:14:45,906 Yeah. And I think there's different interpretations maybe of the meme. 154 00:14:46,026 --> 00:14:48,546 I think a lot of people, or I shouldn't speak for other people. 155 00:14:48,666 --> 00:14:52,786 I think of it a lot now as sort of like the notion of a price explosion 156 00:14:52,786 --> 00:14:54,766 gradually, then suddenly. 157 00:14:55,306 --> 00:14:55,826 Well, right. 158 00:14:56,926 --> 00:15:00,466 When you can think about price explosion of Bitcoin, 159 00:15:00,586 --> 00:15:06,146 or like the final price explosion of Bitcoin will be the hyperinflation 160 00:15:06,146 --> 00:15:06,826 of all fiat. 161 00:15:06,826 --> 00:15:13,126 and so the other side of bitcoin's price explosion is you know it's like i like to say that 162 00:15:13,126 --> 00:15:18,866 fiat is not collapsing because of bitcoin fiat is collapsing because you can print money out of thin 163 00:15:18,866 --> 00:15:26,026 air but bitcoin is a solution to it and so i think that you know they're i certainly you know 164 00:15:26,026 --> 00:15:31,846 everyone has room to interpret their for themselves it's like in my view there's an individual side of 165 00:15:31,846 --> 00:15:33,566 where it's like when Bitcoin clicks for you. 166 00:15:34,226 --> 00:15:37,066 But then there's also, like you can see on a chart 167 00:15:37,066 --> 00:15:39,386 when a fiat currency hyperinflates. 168 00:15:39,466 --> 00:15:42,966 Like you can see when the Venezuelan boulevard hyperinflated. 169 00:15:43,046 --> 00:15:46,486 You can see when the Argentine peso hyperinflated relative to the US dollar. 170 00:15:46,706 --> 00:15:48,666 Like there's a, you can look at a chart, 171 00:15:48,746 --> 00:15:49,666 and if you're looking at the chart, 172 00:15:50,086 --> 00:15:52,886 all the fundamentals that went into that currency collapse 173 00:15:52,886 --> 00:15:55,106 were those bones were buried, 174 00:15:55,186 --> 00:15:58,486 or the bodies were buried in the years or decades before, 175 00:15:59,166 --> 00:16:00,946 but in a moment you can see when it breaks 176 00:16:00,946 --> 00:16:02,406 and it never comes back. 177 00:16:03,126 --> 00:16:06,626 And I would think of like these more interim moves 178 00:16:06,626 --> 00:16:09,406 is like these interim moves of Bitcoin 179 00:16:09,406 --> 00:16:12,646 going from 10,000 to 20,000 to 30,000 to 100,000. 180 00:16:13,046 --> 00:16:15,526 There are still very few number of people in the world 181 00:16:15,526 --> 00:16:17,406 who really understand what's happening. 182 00:16:17,846 --> 00:16:21,626 Once we reach some critical mass of 3% to 5% of the world, 183 00:16:23,206 --> 00:16:24,866 we're never going back to fiat. 184 00:16:25,326 --> 00:16:28,546 And so in my own view, I think of the suddenly moment 185 00:16:28,546 --> 00:16:31,906 is when like the world figures it out and Bitcoin rapidly monetizes. 186 00:16:32,466 --> 00:16:35,846 But I also think about it on an individual level of like when Bitcoin clicks for people. 187 00:16:36,186 --> 00:16:41,526 Like that is a sudden moment and it happens to each person on their own timeline. 188 00:16:41,906 --> 00:16:44,866 When it comes to Bitcoin, the rules are simple. 189 00:16:45,466 --> 00:16:49,826 Run your own node, hold your own keys and protect your seed phrase. 190 00:16:50,466 --> 00:16:52,246 That's where MicroSeed comes in. 191 00:16:52,926 --> 00:16:57,486 Unlike bulky backups, MicroSeed is stamped onto a tiny steel washer. 192 00:16:58,206 --> 00:17:03,786 Fireproof, waterproof, and so small you can carry it anywhere or hide it in plain sight. 193 00:17:04,326 --> 00:17:09,446 Go to microc.io and use the code MATRIX for a discount on your order. 194 00:17:11,026 --> 00:17:12,866 Yeah, I mean, I really like both. 195 00:17:12,866 --> 00:17:16,826 I think being grounded in sort of the individual one is more grounding. 196 00:17:17,486 --> 00:17:19,606 But for me personally, right now. 197 00:17:19,806 --> 00:17:22,786 But why is Bitcoin's fixed supply so important? 198 00:17:22,786 --> 00:17:33,306 Bitcoin's fixed supply is so important because it substantively represents a form of money that can't be printed. 199 00:17:33,306 --> 00:17:39,606 And that, as history has shown, the forms of money that are hardest to produce win. 200 00:17:40,386 --> 00:17:45,726 And in the end, it won't be possible to produce any incremental Bitcoin at all. 201 00:17:46,346 --> 00:17:52,386 And that is the fundamental reason why Bitcoin stores purchasing power. 202 00:17:52,786 --> 00:17:54,586 And why people adopt Bitcoin. 203 00:17:55,106 --> 00:18:05,166 Bitcoin's fixed supply is inherently intertwined with the network's ability to be resistant to all forms of censorship and to remain permissionless. 204 00:18:05,266 --> 00:18:12,266 If Bitcoin were not permissionless and were not resistant to censorship, then its fixed supply would not be credibly enforced without trust. 205 00:18:12,386 --> 00:18:13,726 So they all go together. 206 00:18:13,726 --> 00:18:26,146 But the shelling point of Bitcoin is the reason why Bitcoin might be volatile, the reason why Bitcoin stores value and why people adopt it is because more of it can't be produced. 207 00:18:26,246 --> 00:18:33,786 And if more of it could be produced, the evidence of that would be in its price and would be in the lack of adoption. 208 00:18:35,246 --> 00:18:43,386 The single greatest data point of Bitcoin being able to enforce its fixed supply is its price going up over time. 209 00:18:43,726 --> 00:18:57,506 In present world, that is typically compared against fiat currencies like the dollar, the euro, the yen. At a more fundamental economic level, it is purchasing power relative to real goods and services. 210 00:18:57,506 --> 00:19:17,166 And that's really what really matters. And that Bitcoin's fixed supply at a fundamental level from an economic foundation perspective or from the foundation of money is that it will allow for the coordination of trade far more efficiently and far more effectively than money that can be printed out of thin air. 211 00:19:17,166 --> 00:19:25,946 And money as a tool is what helps coordinate economic activity at scale. 212 00:19:26,566 --> 00:19:33,686 And so, yeah, it's the showing point that you can focus in on and say, you know, why is this form of money better than the next form of money? 213 00:19:34,426 --> 00:19:38,126 Well, because every other form of money is based on trust. 214 00:19:38,646 --> 00:19:39,466 Bitcoin is not. 215 00:19:39,666 --> 00:19:47,506 And the evidence of it is that it has a fixed supply that can't be altered or that a central bank or a government or any third party cannot manipulate. 216 00:19:48,066 --> 00:19:51,686 And so it's really the foundation around everything about Bitcoin's value. 217 00:19:51,686 --> 00:20:07,046 And then the other side of it is that, and I talk about this in the book, which is that money, for very fundamental reasons, due to the nature of the problem that it solves, converges to one common medium or that economic systems converge on one form of money. 218 00:20:07,046 --> 00:20:11,506 because in order for you and I to trade, we have to have a consensus of money. 219 00:20:11,626 --> 00:20:13,306 I have to have the form of money you're willing to accept 220 00:20:13,306 --> 00:20:15,566 and you have to accept the form of money that I have. 221 00:20:16,286 --> 00:20:20,226 And that if we're all out in the market looking for what would make a good form of money, 222 00:20:20,306 --> 00:20:23,986 well, the money that can't be printed or the money that can't be produced easily 223 00:20:23,986 --> 00:20:29,246 becomes what we both look at objectively and say, 224 00:20:29,246 --> 00:20:32,266 hey, we'd rather have that one than any other. 225 00:20:32,666 --> 00:20:35,266 Right. And you go on to explain in the piece reasons. 226 00:20:35,266 --> 00:20:41,166 you know, being Bitcoin can't be faked or copied. And, you know, the incentives are so strong to 227 00:20:41,166 --> 00:20:47,766 cooperate more than the opportunity cost, which is too high to defect. Why is Bitcoin's monetary 228 00:20:47,766 --> 00:20:54,446 policy so credible and resilient? In short, it's because the system is designed so that nobody 229 00:20:54,446 --> 00:21:00,286 has to trust anybody else. And so like when you think about Bitcoin as a system, you could think 230 00:21:00,286 --> 00:21:07,206 about it as a system that has a form of money with a fixed supply and that the alternative to 231 00:21:07,206 --> 00:21:13,266 that is something like gold or a fiat currency that can be easily printed. But another way to 232 00:21:13,266 --> 00:21:21,326 think about it is a trusted system like the Federal Reserves or the Bank of Japan's or the 233 00:21:21,326 --> 00:21:25,766 European Central Banks or a system that has removed the need for trust, which is Bitcoin. 234 00:21:25,766 --> 00:21:40,966 So it's trusted or trustless. And, you know, at the core of that, it is that if you had to trust some individual not to print money, that history has shown that anybody that has the ability to print money will print money. 235 00:21:40,966 --> 00:21:51,466 and for a group of market participants to be able to voluntarily opt in to bitcoin as a currency 236 00:21:51,466 --> 00:22:00,086 system the the only way that that system could work is if no one had to trust anybody else 237 00:22:00,086 --> 00:22:09,446 and that there is a kind of uh you know again it comes back to the showing point which is well 238 00:22:09,446 --> 00:22:16,966 just if I have a system that is, you know, that it's important that nobody have to trust anybody 239 00:22:16,966 --> 00:22:22,566 else, if each individual in the market were looking for what makes for a better or worse 240 00:22:22,566 --> 00:22:27,546 form of money, the one that has the lowest rate of change, the one that's hardest to produce is 241 00:22:27,546 --> 00:22:34,826 ultimately going to win. And so people are opting in for selfish reasons. One, oh, I can opt in 242 00:22:34,826 --> 00:22:42,226 involuntarily without permission to this form of money that can't be printed. And then everybody 243 00:22:42,226 --> 00:22:48,366 who's opting into that form of money has a selfish interest to protect the very thing that they've 244 00:22:48,366 --> 00:22:53,086 opted into. And what they are functionally doing and protecting it, whether it be running a node 245 00:22:53,086 --> 00:23:01,546 or mining Bitcoin, is ensuring that nobody else has the ability to print money. And anybody that 246 00:23:01,546 --> 00:23:08,506 attempted to create more than 21 million Bitcoin, that any of those Bitcoin transactions would be 247 00:23:08,506 --> 00:23:15,766 invalidated. And so it is, there's this common interest that everyone in the world would benefit 248 00:23:15,766 --> 00:23:21,706 from a form of money that can't be printed. And anyone that participates in Bitcoin is not doing 249 00:23:21,706 --> 00:23:27,846 so altruistically, they're doing so in their own self-interest. But by opting in, they're effectively 250 00:23:27,846 --> 00:23:33,346 saying I'm willing to opt into a system which I don't control and I can't print the money but I 251 00:23:33,346 --> 00:23:40,466 can help ensure that nobody else can as well and that you know aggregate of hundreds of thousands 252 00:23:40,466 --> 00:23:47,706 millions of people acting in their own self-interest to enforce the rules of Bitcoin against everyone 253 00:23:47,706 --> 00:23:52,426 else is just simply saying like I'm going to opt into a system in which I can't print money but 254 00:23:52,426 --> 00:23:59,506 I don't have an incentive to allow anybody else to. And so the 21 million sits at the top, 255 00:24:00,066 --> 00:24:04,466 but if somebody had to trust someone else's word or you just had to trust software, 256 00:24:05,106 --> 00:24:13,126 that statement is true. That statement is what one of the Supreme Court justices, 257 00:24:13,266 --> 00:24:17,306 Antonin Scalia, referred to as he would have described that as a parchment guarantee or what 258 00:24:17,306 --> 00:24:20,206 the founders would have described as a parchment guarantee. Like Bitcoin doesn't have a fixed 259 00:24:20,206 --> 00:24:27,666 supply because software code says so or because you or I say so. It has a fixed supply of 21 million 260 00:24:27,666 --> 00:24:31,606 that's credible because it has removed trust and everyone's enforcing the rules against each other. 261 00:24:32,166 --> 00:24:37,506 And so everyone has that same incentive to find a form of money that works, that's hard to produce. 262 00:24:37,706 --> 00:24:41,426 And in Bitcoin, they can opt in and actually enforce the rules against everybody else. 263 00:24:41,426 --> 00:24:45,806 Sure. So now we're talking about sort of the Federal Reserve, money printing, 264 00:24:45,806 --> 00:24:50,066 money creation. Is Bitcoin a hedge against inflation? 265 00:24:50,066 --> 00:24:58,566 I would describe it as, at a fundamental level, it's a solution to inflation. And that 266 00:24:58,566 --> 00:25:02,926 the important recognition is that there's a difference between a hedge to inflation 267 00:25:02,926 --> 00:25:10,146 and the solution to inflation. And that hedges to inflation historically have been 268 00:25:10,146 --> 00:25:17,466 things like gold or really anything that has well gold doesn't have their its income tied to 269 00:25:17,466 --> 00:25:23,306 two dollars but something like equities or real estate have become hedges to inflation because 270 00:25:23,306 --> 00:25:28,786 they're correlated to two dollar inflation as more dollars are created the the real estate 271 00:25:28,786 --> 00:25:32,126 earns more because there's more dollars floating around or the companies that earn 272 00:25:32,126 --> 00:25:42,186 dollars have more you know are making more money but the money is broken and the only thing that 273 00:25:42,186 --> 00:25:48,026 can fix a broken form of money is a better form of money and that while something like real estate 274 00:25:48,026 --> 00:25:54,366 or equities clearly don't fix the problem of money they aren't money they are naturally 275 00:25:54,366 --> 00:26:01,346 viewed as hedges you could look at something like gold but gold sits at the the epicenter of 276 00:26:01,346 --> 00:26:09,306 where fiat spawned from fiat emerged off of the back of gold and then was able to completely 277 00:26:09,306 --> 00:26:14,346 sever itself from the original gold-backed monetary system which is where the dollar came 278 00:26:14,346 --> 00:26:19,346 from and and i look at that and say hey we're never going like gold is part of the problem 279 00:26:19,346 --> 00:26:26,826 like if gold was viable as money fiat wouldn't exist that that the problem of fiat exists in 280 00:26:26,826 --> 00:26:32,426 large part because of the limitations of gold. And then I come look at this dilemma and say like, 281 00:26:32,546 --> 00:26:40,046 yes, Bitcoin is maintaining its purchasing power and it is offsetting inflation. And in one 282 00:26:40,046 --> 00:26:45,406 definition, you can say, hey, that's a hedge to inflation. My point is that it either is the 283 00:26:45,406 --> 00:26:51,526 permanent solution or it's not. It's a binary. And by being the permanent solution, it's not just 284 00:26:51,526 --> 00:26:56,526 offsetting the debasement of the dollar so you can get more dollars to buy the goods and services. 285 00:26:56,826 --> 00:26:58,046 It's actually the replacement. 286 00:26:58,786 --> 00:27:04,706 And if you are on that, you can't just exist in the middle of those two points. 287 00:27:04,706 --> 00:27:10,886 You either don't understand Bitcoin and Bitcoin cannot hedge inflation because it's so volatile. 288 00:27:11,506 --> 00:27:12,546 Bitcoin will go down. 289 00:27:12,746 --> 00:27:13,306 You'll sell it. 290 00:27:13,366 --> 00:27:14,226 Bitcoin will go up. 291 00:27:14,306 --> 00:27:14,906 You'll sell it. 292 00:27:15,346 --> 00:27:18,866 It hasn't hedged dollar inflation in either of those scenarios. 293 00:27:18,866 --> 00:27:54,452 But once Bitcoin starts to make sense to you once it clicks and there a function of time where your understanding needs to harden of actually owning Bitcoin experiencing it potentially running a full node controlling your own keys sending Bitcoin transactions that as the picture comes into focus you realize that it is not a hedge like that real estate is viewed to be a hedge or equities are viewed to be a hedge that it is a form of money It a currency system that is fully functional It volatile because it nascent and adoption is not yet at a mature level 294 00:27:54,932 --> 00:27:58,792 But where the end game is, where it ends is everyone adopts Bitcoin. 295 00:27:58,992 --> 00:28:00,252 Bitcoin is perfectly stable. 296 00:28:00,692 --> 00:28:02,752 And Bitcoin's the pricing mechanism. 297 00:28:03,172 --> 00:28:08,552 Prices are denominated in Bitcoin and Bitcoin is used to affect day-to-day transactions 298 00:28:08,552 --> 00:28:10,212 for virtually the entire world. 299 00:28:10,212 --> 00:28:18,612 So you're either at a point of zero knowledge where you haven't started to see why what I just described as the end game. 300 00:28:19,412 --> 00:28:23,332 And realistically, again, just Bitcoin cannot hedge inflation in that world. 301 00:28:23,652 --> 00:28:32,632 And if it starts to make sense, it becomes inevitable that you get to the other bookend of the spectrum, seeing it as the ultimate solution. 302 00:28:32,992 --> 00:28:38,512 So functionally speaking, I don't think it can be a hedge, but it is the permanent solution. 303 00:28:38,512 --> 00:28:51,812 Right. And so you see it as binary and a replacement of the dollar. Why do you consider Bitcoin relative to two guideposts like gold and the dollar financial system? Are those the only two guideposts you would look at? 304 00:28:51,812 --> 00:28:58,292 I think they're the most relevant guideposts to anyone evaluating the question today. 305 00:28:58,872 --> 00:29:04,012 And not necessarily with the exception, but I would say that would extend out to any fiat currency in the world. 306 00:29:04,372 --> 00:29:08,732 I live in a dollar economy, so the dollar emerged from gold. 307 00:29:09,592 --> 00:29:12,012 Gold and the dollar are the two most logical guideposts. 308 00:29:12,012 --> 00:29:33,272 But if you, you know, live in China and you have the yuan or Japan and you have the yen or, you know, or, you know, if you are in the UK and the pound sterling, then the pound sterling becomes the, you know, logical guidepost that it's some form of commodity money and your fiat money. 309 00:29:33,272 --> 00:29:44,332 Because the question is, hey, for practically all living people, it was a commodity money that emerged to a fiat money that got us into the problem where we're at today. 310 00:29:44,992 --> 00:29:52,512 And there's either a view that we're going back to the commodity metal or we're going forward to something else. 311 00:29:52,512 --> 00:30:06,372 And so functionally speaking, I'd say like, you know, I could respond to why it's not like something, you know, anything other than those two buckets of categories. 312 00:30:06,372 --> 00:30:11,292 but those are historically what have been money 313 00:30:11,292 --> 00:30:13,232 and if Bitcoin is money 314 00:30:13,232 --> 00:30:15,932 then the most logical things to compare it against 315 00:30:15,932 --> 00:30:17,552 from a property's perspective 316 00:30:17,552 --> 00:30:19,732 like relative scarcity 317 00:30:19,732 --> 00:30:21,432 the ability to transact 318 00:30:21,432 --> 00:30:23,112 the ability to measure value 319 00:30:23,112 --> 00:30:25,752 the ability to achieve final settlement 320 00:30:25,752 --> 00:30:27,332 to actually transfer value 321 00:30:27,332 --> 00:30:31,432 that those are what have existed previously 322 00:30:31,432 --> 00:30:33,772 and in order for one money to replace another 323 00:30:33,772 --> 00:30:41,552 it would logically need to perform the function of money better than its predecessor or predecessors. 324 00:30:42,292 --> 00:30:49,352 And then the logical question becomes, well, what properties are most relevant or significant 325 00:30:49,352 --> 00:30:50,032 to money? 326 00:30:50,712 --> 00:30:59,532 And how does Bitcoin compare from a perspective of individual properties to historical goods 327 00:30:59,532 --> 00:31:03,332 like the dollar or gold or pound sterling or silver? 328 00:31:03,772 --> 00:31:08,352 that were used as money because those are the inputs that will guide what's going to happen from here. 329 00:31:08,992 --> 00:31:12,992 The monetary properties are the inputs and the price is the output 330 00:31:12,992 --> 00:31:17,992 because the inputs of the properties like Bitcoin's fixed supply, 331 00:31:17,992 --> 00:31:21,732 like the ability to transact over a communication channel, 332 00:31:22,232 --> 00:31:25,992 like it being censorship resistant and permissionless 333 00:31:26,592 --> 00:31:29,432 and understanding some of how the network works, 334 00:31:29,432 --> 00:31:38,412 that hardened understanding is what allows someone to see why bitcoin might go in a logically ordered 335 00:31:38,412 --> 00:31:46,532 way from nascent and volatile to very stable in the end because it would might you know or the way 336 00:31:46,532 --> 00:31:50,772 to think about is it would guide an individual decision of why one individual would adopt it but 337 00:31:50,772 --> 00:31:57,572 that same decision point for any individual is the functionally same decision point for all individuals 338 00:31:57,572 --> 00:32:04,532 All right. I want to cover what is the difference between risk and volatility? Why are they so often conflated? 339 00:32:05,032 --> 00:32:08,372 Risk and volatility, to go into that at a high level. 340 00:32:09,532 --> 00:32:11,832 One, I'll just speak in practical terms for Bitcoin. 341 00:32:12,052 --> 00:32:25,192 If the price of Bitcoin is $100,000 and there's a chance that Bitcoin goes to $80,000, which it recently did, in some way based on a certain time horizon, that's a risk. 342 00:32:25,192 --> 00:32:37,772 Like if you needed your money over the last 30 days and you needed $100,000 to purchase something, if there were a probability that Bitcoin could go down in the short term by $20,000, that's a risk to you. 343 00:32:37,772 --> 00:32:45,532 But at that same time, risk is really a function of future uncertainty. 344 00:32:46,372 --> 00:32:53,092 And future uncertainty has a function of time as a component. 345 00:32:53,092 --> 00:32:59,392 So one month, three months, six months, one year, two years. 346 00:33:00,032 --> 00:33:13,152 The way I think about Bitcoin and why I view it as volatile but not risky is because the basis of Bitcoin adoption is its fixed supply. 347 00:33:13,572 --> 00:33:17,332 And that is a finite surface area. 348 00:33:17,332 --> 00:33:24,072 People can look at the equation and come to different conclusions, but it is can it enforce its fixed supply or can it not? 349 00:33:24,612 --> 00:33:33,532 And then does the logic and reason follow from there that if Bitcoin is able to enforce its fixed supply, then will the world adopt it as money? 350 00:33:34,412 --> 00:33:35,492 Because that's another question. 351 00:33:36,432 --> 00:33:44,252 The way that I look at it is that so long as Bitcoin is able to enforce its fixed supply, it is not a long-term risk. 352 00:33:44,252 --> 00:33:48,792 it becomes the least uncertain thing in the market. 353 00:33:49,312 --> 00:33:54,252 And that the least uncertain thing in the market that's also able to be easily transacted, 354 00:33:54,952 --> 00:34:02,072 sent over the communication channel to achieve final settlement and to facilitate trade, 355 00:34:03,352 --> 00:34:06,652 that then you start to see its volatility not as a risk. 356 00:34:06,932 --> 00:34:11,412 It's only a risk to the degree that you need something in the very short term. 357 00:34:11,412 --> 00:34:15,632 but it's not a risk in terms of its actual fundamental value. 358 00:34:15,632 --> 00:34:21,632 And so another way to think about risk and volatility is something like a bond. 359 00:34:21,972 --> 00:34:30,172 A bond might be – you look at the screen and you might see that its value is trading at par, 360 00:34:30,632 --> 00:34:34,212 and then you might find that the company is bankrupt and its value goes to zero. 361 00:34:35,312 --> 00:34:39,312 It becomes volatile at some future point in time, 362 00:34:39,312 --> 00:34:49,832 But the reason for that violent price movement wasn't that it wasn't volatile – sorry, it wasn't that it wasn't risky. 363 00:34:49,992 --> 00:34:53,472 It was just that the market didn't have the information to cause it to be volatile sooner. 364 00:34:54,112 --> 00:35:06,092 And so it's this idea that volatile things are not necessarily risky, and the reverse is also true, which is that things that appear not to be volatile are actually risky or can be. 365 00:35:06,092 --> 00:35:12,132 And so the short end of it is what is the relative amount of uncertainty? 366 00:35:12,892 --> 00:35:21,232 And the longer you go out in Bitcoin, the less uncertain it becomes because the short-term volatility becomes less relevant to you. 367 00:35:21,232 --> 00:35:23,452 All right. I want to kind of zoom out a little bit here. 368 00:35:24,792 --> 00:35:26,792 I want to throw two questions at you. 369 00:35:27,012 --> 00:35:28,692 Hopefully, I mean, you do an amazing job. 370 00:35:28,852 --> 00:35:30,892 So just another high-level walkthrough would be great. 371 00:35:31,852 --> 00:35:34,452 How indebted is the entire market? 372 00:35:34,452 --> 00:35:43,252 and and like when you like how short is the world dollars yeah so i'll just i'll describe the the u.s 373 00:35:43,252 --> 00:35:52,412 because i i don't have nearly as like tight a view on the the global system but but the dollar and 374 00:35:52,412 --> 00:35:58,352 the fed and the u.s financial system is the largest in the world there are there is a hundred and 375 00:35:58,352 --> 00:36:03,892 approximately 104 trillion of dollar denominated debt that exists in the world and there's about 376 00:36:03,892 --> 00:36:12,792 6.7 trillion actual dollars. So like 17 times. Now at the time of the great financial crisis in 377 00:36:12,792 --> 00:36:21,272 2009, the 104 trillion of debt, and again, that is a very vanilla way of looking at debt. It's not 378 00:36:21,272 --> 00:36:29,132 including things like unfunded pension liabilities or derivatives. It is just fixed liability, 379 00:36:29,132 --> 00:36:36,572 fixed maturity debt in terms of UOX by Y date. It could have a variable rate, it could have a fixed 380 00:36:36,572 --> 00:36:43,772 rate. That number is tracked by the Fed in the Fed's Z1 report, the Financial Council of the 381 00:36:43,772 --> 00:36:48,792 United States. So it's not a number that you have to cobble together based on a bunch of 382 00:36:48,792 --> 00:36:55,012 random sources. That $104 trillion is a Fed number. And that number at the time of the 383 00:36:55,012 --> 00:37:05,832 financial crisis was $52.7 trillion. So another framework that I think about is that the problem 384 00:37:05,832 --> 00:37:13,572 in 2007 and 2008, the great financial crisis, was that we had a credit system that was unsustainable. 385 00:37:13,572 --> 00:37:20,332 There was too much debt and too few dollars. That $52 trillion has now doubled. And the way 386 00:37:20,332 --> 00:37:24,412 that QE is designed to work, the way that the injection of money into the financial system 387 00:37:24,412 --> 00:37:31,592 is designed to work is to prop up the credit system such that the too much debt can be sustained 388 00:37:31,592 --> 00:37:37,592 for a longer period of time, but also the way that it is designed to work is to induce more 389 00:37:37,592 --> 00:37:45,912 debt creation or more credit creation. And so we went from a world that was too much debt 390 00:37:45,912 --> 00:37:50,492 and unsustainable to a world now today that exists with twice as much debt in the world. 391 00:37:50,492 --> 00:38:03,312 And so that relationship between debt and dollars is one of the principal reasons why the Federal Reserve or why any central bank constantly has to print money. 392 00:38:03,312 --> 00:38:13,412 It's also why the dollar has some tethering of value because the debt is represented or has claims against real assets. 393 00:38:13,532 --> 00:38:15,912 It has claims against equity in businesses. 394 00:38:16,092 --> 00:38:20,952 It has claims against cars and houses and personal income streams. 395 00:38:21,592 --> 00:38:29,232 So it's tied to real things, but it's also what ensures that more and more money will be created to be able to sustain higher and higher debt levels. 396 00:38:29,232 --> 00:38:29,752 Right. 397 00:38:29,752 --> 00:38:33,532 Right. And I want to read from your piece. 398 00:38:34,152 --> 00:38:40,412 The existence of a debt or credit system that is in order of magnitude larger than the amount of money that actually exists 399 00:38:40,412 --> 00:38:45,412 causes a few dynamics that may not be immediately intuitive when the Fed digitally creates money. 400 00:38:45,932 --> 00:38:50,952 There's still far more debt that exists, which is what prevents the dollar from immediately collapsing in value in the end. 401 00:38:51,552 --> 00:38:55,892 The existence of more dollars does cause each dollar to purchase less in the future and over time. 402 00:38:55,892 --> 00:39:02,452 But the credit system, given its size, is necessarily at the crux of how it all plays out. 403 00:39:02,612 --> 00:39:05,812 The debt-to-dollar dilemma is what anchors the dollar's value on a near-term basis. 404 00:39:06,332 --> 00:39:10,572 The liabilities are fixed in the sense that the fixed amount of dollars are owed. 405 00:39:12,532 --> 00:39:17,452 In terms of all this, would you want to see the Fed to disappear as soon as possible? 406 00:39:18,632 --> 00:39:25,052 Is that a positive endgame in terms of is it more positive the faster it goes away? 407 00:39:25,052 --> 00:39:28,052 When it comes to Bitcoin, the rules are simple. 408 00:39:28,652 --> 00:39:33,012 Run your own node, hold your own keys, and protect your seed phrase. 409 00:39:33,632 --> 00:39:35,452 That's where MicroSeed comes in. 410 00:39:36,092 --> 00:39:40,672 Unlike bulky backups, MicroSeed is stamped onto a tiny steel washer. 411 00:39:41,372 --> 00:39:46,952 Fireproof, waterproof, and so small you can carry it anywhere or hide it in plain sight. 412 00:39:47,532 --> 00:39:52,612 Go to MicroSeed.io and use the code MATRIX for a discount on your order. 413 00:39:52,612 --> 00:40:04,112 um i don't know um i think that the you know you could look at it from two ways from a fundamental 414 00:40:04,112 --> 00:40:08,552 perspective you're like hey the sooner that everyone can get on sound money the better 415 00:40:08,552 --> 00:40:17,812 you know another another view of it is hey the the slower the decline the more time that bitcoin 416 00:40:17,812 --> 00:40:23,952 has to mature, the more infrastructure gets built, the less likely the pain is for when 417 00:40:23,952 --> 00:40:25,912 the big collapse happens. 418 00:40:26,432 --> 00:40:33,412 So I don't really take a view as to, you know, if I were to take a view, I'd probably say, 419 00:40:33,412 --> 00:40:42,432 hey, if Bitcoin had five or 10 more years to develop, the amount of pain that is felt 420 00:40:42,432 --> 00:40:47,492 when the big collapse of the currency happens will be lessened. 421 00:40:47,812 --> 00:40:50,612 On the other side, it was like, hey, well, a lot more suffering has to happen 422 00:40:50,612 --> 00:40:57,232 between the next five and ten years of people getting slowly bled out 423 00:40:57,232 --> 00:41:01,272 by relying on a form of money that is just not working 424 00:41:01,272 --> 00:41:03,692 for the vast majority of all people that are using it. 425 00:41:03,852 --> 00:41:09,452 The vast majority of Americans have no debt – sorry, no savings and a lot of debt. 426 00:41:09,452 --> 00:41:17,752 And so it's more of like a slow death rather than like a, hey, would we be better off by a lot more volatility now and a rapid shift to Bitcoin? 427 00:41:17,972 --> 00:41:19,872 So I don't think there's a clear answer. 428 00:41:20,772 --> 00:41:23,872 And I think that Bitcoin is the other side of the same coin. 429 00:41:23,872 --> 00:41:33,392 So it's like once enough people have figured out Bitcoin, it's probably because enough infrastructure existed to allow more people to adopt it. 430 00:41:33,392 --> 00:42:05,758 and it will coincide with trillions more dollars euro yen being digitally created which will also help people understand Bitcoin So I think it going to play out however it going to play out And what I would say more definitively for people is that the way I think about it is surviving in all weathers surviving in a world where it a more rapid shift you know in the next five to seven years or 20 or 30 years that you got to be able to survive in either scenario 431 00:42:05,758 --> 00:42:10,538 And that the only way through that path is through adopting Bitcoin. 432 00:42:11,018 --> 00:42:11,378 Sure. 433 00:42:12,338 --> 00:42:14,998 And then maybe sort of just maybe touching a little bit more on inflation. 434 00:42:15,178 --> 00:42:19,578 What have you seen with maybe your price per pound of brisket tracker? 435 00:42:19,838 --> 00:42:20,318 Oh, price? 436 00:42:20,658 --> 00:42:23,418 Well, I do price per ribeye. 437 00:42:23,918 --> 00:42:28,198 But I also do pay attention to price of brisket. 438 00:42:28,198 --> 00:42:36,118 But I think it's important to track commodities at the same location. 439 00:42:37,218 --> 00:42:41,018 So to really know the true level of inflation. 440 00:42:41,018 --> 00:42:47,658 and because in your local and and i and i look at food because it's the thing that you know we need 441 00:42:47,658 --> 00:42:54,598 food and water to survive um and so when i started looking at a you know my local grocery store which 442 00:42:54,598 --> 00:43:00,458 is a whole foods that i go to you know or i used to go to every week i started paying attention and 443 00:43:00,458 --> 00:43:09,558 i noticed that the price had gone up from 1999 to 21.99 between 2020 and 2021 a 10 increase 444 00:43:09,558 --> 00:43:20,798 um that same piece of beef that cost $19.99 a pound is today $34.49 a pound and you know it 445 00:43:20,798 --> 00:43:29,418 hasn't quite doubled but it's almost doubled over the the course of five years and so you know 446 00:43:29,418 --> 00:43:34,118 whether it's the price of brisket or the price of ribeyes it's like it's the same store the same 447 00:43:34,118 --> 00:43:38,018 piece of meat now there's a chance they might have it might also be substituting in a lower 448 00:43:38,018 --> 00:43:45,458 quality of meat so shrink inflation also exists in commodities based on quality but something to 449 00:43:45,458 --> 00:43:55,938 the tune of 60 to 70 percent aggregate inflation and you know 12 to 13 percent you know annualized 450 00:43:55,938 --> 00:44:00,418 but it's just also interesting to look like i there's a local place that i go and get brisket 451 00:44:00,978 --> 00:44:05,778 probably in the last year i saw the price increase from you know 14 a half pound to 452 00:44:05,778 --> 00:44:11,558 1449 and then I just recently realized that I went you know noticed last time I went there that it was 453 00:44:11,558 --> 00:44:19,638 that it was 1499 because more commonly the way that that inflation actually happens is you know 454 00:44:19,638 --> 00:44:28,338 someone might see the CPI is 4% or 3% or 6% but if you start tracking individual goods that you 455 00:44:28,338 --> 00:44:35,458 consume you'll actually realize that the the real rate for you of things that you consume is higher 456 00:44:35,458 --> 00:44:42,298 and that the way that it gets to levels of 10% and 12% a year 457 00:44:42,298 --> 00:44:44,938 is typically not in a single price increase. 458 00:44:45,178 --> 00:44:51,918 It's typically multiple price increases throughout the course of a year 459 00:44:51,918 --> 00:44:58,038 and that there is something significant about the price is changing faster. 460 00:44:58,678 --> 00:45:02,258 That once people are able, like an exercise, someone might say, 461 00:45:02,258 --> 00:45:08,738 like oh a beer at the bar is six dollars i remember when a beer at a bar used to cost 462 00:45:08,738 --> 00:45:14,778 a dollar fifty you know and that's some some time back in time but when you can start to 463 00:45:14,778 --> 00:45:21,998 to pay attention or when you start to pay attention you're like oh that that that price 464 00:45:21,998 --> 00:45:27,538 increased three months ago and now it's increasing another four percent today it's like this is 465 00:45:27,538 --> 00:45:37,478 actually a 16% annualized rate of increase that as people start to realize both the degree 466 00:45:37,478 --> 00:45:42,138 to which goods and services are getting more expensive, but also the frequency, that is 467 00:45:42,138 --> 00:45:49,618 really where we get to this point of nearing the stage of hyperinflation when it's not 468 00:45:49,618 --> 00:45:53,578 just the rate of change, it's the frequency of changes that people become more observant 469 00:45:53,578 --> 00:45:55,798 of what is actually happening. 470 00:45:55,798 --> 00:45:58,958 When it comes to Bitcoin, the rules are simple. 471 00:45:59,558 --> 00:46:03,918 Run your own node, hold your own keys, and protect your seed phrase. 472 00:46:04,478 --> 00:46:06,338 That's where MicroSeed comes in. 473 00:46:06,998 --> 00:46:11,598 Unlike bulky backups, MicroSeed is stamped onto a tiny steel washer. 474 00:46:12,298 --> 00:46:17,878 Fireproof, waterproof, and so small you can carry it anywhere or hide it in plain sight. 475 00:46:18,138 --> 00:46:23,558 Go to MicroSeed.io and use the code MATRIX for a discount on your order. 476 00:46:23,558 --> 00:46:28,758 I want to read a little bit more from your work before I get to the final topic. 477 00:46:29,598 --> 00:46:34,678 Bitcoin simultaneously being the ultimate solution to the dollar and it not being immune to the 478 00:46:34,678 --> 00:46:39,938 dollar is entirely consistent with the nature of the problem. An understanding of one and its 479 00:46:39,938 --> 00:46:44,458 challenges necessarily informs the other as a better alternative and how it may be adopted. 480 00:46:45,298 --> 00:46:49,518 Bitcoin is competing with the dollar to replace it as the form of money which coordinates trade 481 00:46:49,518 --> 00:46:54,478 and commerce. If one were to accept that there were fundamental problems inherent to the dollar, 482 00:46:54,598 --> 00:46:58,658 but that it still coordinates practically all economic activity for those that use it, 483 00:46:59,198 --> 00:47:03,178 it would stand to reason that any replacement to the dollar would not be immune to its issues 484 00:47:03,178 --> 00:47:09,018 during the transitionary period. In an academic world, maybe everyone figures it out at the same 485 00:47:09,018 --> 00:47:14,778 time and makes a conscious decision to scrap the old world, adopt the new world, and move on without 486 00:47:14,778 --> 00:47:19,678 any consequences to the sins of the past. The dilemma is that money coordinates trade, 487 00:47:20,018 --> 00:47:24,178 and trade means the physical manufacture and delivery of goods and services in the real world, 488 00:47:24,478 --> 00:47:28,698 which is far more complex than professional economists and academia might suggest. 489 00:47:29,118 --> 00:47:34,378 The world cannot drop a bad money and adopt a better one, like a single individual can drop 490 00:47:34,378 --> 00:47:39,298 a bad habit. It's just not that simple, and that's okay. Today, the dollar exists, 491 00:47:39,298 --> 00:47:45,838 and Bitcoin has a total purchasing power of approximately 0.4% when this was written of the 492 00:47:45,838 --> 00:47:51,738 U.S. credit system, which itself is a fraction, albeit a larger one, of the global financial system. 493 00:47:52,118 --> 00:47:56,738 If the Fed reduces the supply of dollars and increases interest rates, the purchasing power 494 00:47:56,738 --> 00:48:02,038 of Bitcoin will reasonably decline on an interim basis relative to the dollar, because the entire 495 00:48:02,038 --> 00:48:06,258 world still relies on the dollar, including everyone in the dollar economy who has begun 496 00:48:06,258 --> 00:48:11,778 adopting Bitcoin. Bitcoin remains relatively small. It is also liquid, and there are very few 497 00:48:11,778 --> 00:48:17,978 Bitcoin-denominated debt liabilities on a relative and absolute basis, which means it can be easily 498 00:48:17,978 --> 00:48:23,758 sold to source dollars as the supply becomes constrained. In short, dollar inflation can exist 499 00:48:23,758 --> 00:48:28,598 and the purchasing power of Bitcoin can decline at the same time while the fundamental remains 500 00:48:28,598 --> 00:48:33,338 unchanged, that Bitcoin is replacing the dollar as a better form of money to coordinate trade. 501 00:48:34,098 --> 00:48:37,038 Bitcoin has fundamental value because of its fixed supply. 502 00:48:37,358 --> 00:48:39,038 That is the value proposition. 503 00:48:39,558 --> 00:48:42,818 A fixed supply of Bitcoin versus an ever-increasing supply of dollars. 504 00:48:43,518 --> 00:48:45,338 I'm going to skip some of the stats here. 505 00:48:45,878 --> 00:48:50,298 There will only ever be 21 million Bitcoin, and that is Bitcoin's true innovation. 506 00:48:50,918 --> 00:48:55,858 Whenever something happens in the world, and specifically anything that causes volatility in the price of Bitcoin, 507 00:48:55,858 --> 00:49:02,298 I always ask myself, did X change anything about the Bitcoin network's ability to credibly enforce its fixed supply? 508 00:49:02,298 --> 00:49:10,758 Now, one might need to know how Bitcoin enforces its fixed supply and its relevance in order to then evaluate the relative impact of anything to Bitcoin. 509 00:49:11,178 --> 00:49:12,638 But that is to the point. 510 00:49:13,138 --> 00:49:23,878 Without a prior understanding of how Bitcoin enforces its fixed supply or why it's important, it would leave anyone in a precarious position to evaluate any current event or its impact on Bitcoin's fundamental value. 511 00:49:24,458 --> 00:49:29,078 Anyone who claims that Bitcoin will fail due to the failures of a few private companies 512 00:49:29,078 --> 00:49:33,138 almost certainly does not understand how Bitcoin enforces its fixed supply or its consequences. 513 00:49:33,978 --> 00:49:38,018 Separately, anyone who claims that Bitcoin is failing on its promise as a hedge to inflation 514 00:49:38,018 --> 00:49:41,478 similarly could not tell you how Bitcoin enforces its fixed supply. 515 00:49:42,198 --> 00:49:46,518 Ask anyone who claims Bitcoin will fail or otherwise has failed that rhetorical question, 516 00:49:46,678 --> 00:49:50,758 but how does Bitcoin credibly enforce its fixed supply without the need for trust? 517 00:49:50,758 --> 00:49:59,358 The stats I skipped over around the money supply increasing from 2007 to 2024, which you covered prior in the show. 518 00:49:59,778 --> 00:50:04,038 So the final topic I want to get into is medium of exchange. 519 00:50:04,678 --> 00:50:05,678 You're at ZapRite. 520 00:50:05,778 --> 00:50:07,318 You're working on Bitcoin as payments. 521 00:50:08,518 --> 00:50:13,458 Why is the use of Bitcoin as a medium of exchange in payments important? 522 00:50:13,458 --> 00:50:14,138 Sure. 523 00:50:14,138 --> 00:50:28,378 Sure. And I'll tie it back to this idea of why, you know, thinking about this transition that we're going to from a dollarized world to a Bitcoinized world. 524 00:50:28,378 --> 00:50:42,618 And that while people realistically think about the value of a house or the value of a stock or even the value of Bitcoin in dollar-denominated terms, that functionally speaking what the dollar is doing is coordinating trade. 525 00:50:42,618 --> 00:50:49,298 that supply chains of getting goods and services to the grocery store or to a Home Depot or to 526 00:50:49,298 --> 00:51:03,258 to a Walmart is a highly complex system of you know individual supply chains and dollars 527 00:51:03,258 --> 00:51:06,798 transferring to to coordinate all the activity that allows everything that you need in your 528 00:51:06,798 --> 00:51:17,158 daily life to show up as you need it. And that that is the core utility of money. And that if 529 00:51:17,158 --> 00:51:21,398 you think about any individual supply chain, even if one person has figured out Bitcoin, it's going 530 00:51:21,398 --> 00:51:28,718 to require a lot more people than just one in that supply chain to fully shift over. But that 531 00:51:28,718 --> 00:51:36,358 for Bitcoin to work, it ultimately does need to detach itself from fiat exchange. 532 00:51:36,778 --> 00:51:43,218 And the way that I would think about articulating that is that when we talk a lot about the 533 00:51:43,218 --> 00:51:49,098 importance of Bitcoin's fixed supply and the credibility of its fixed supply and the ability 534 00:51:49,098 --> 00:51:54,358 for the Bitcoin network to enforce its fixed supply without the need for trust, it is inherently 535 00:51:54,358 --> 00:52:02,798 dependent on the network being sufficiently decentralized to be immune to outside force 536 00:52:02,798 --> 00:52:08,478 of someone saying or someone trying to co-opt the system to create more than 21 million or to say 537 00:52:08,478 --> 00:52:15,998 that you can't use the system and that the fiat system as it is constructed is hyper centralized 538 00:52:15,998 --> 00:52:22,958 it's built on top of a central bank and a diminishing number of banks but realistically 539 00:52:22,958 --> 00:52:29,298 five or six mega banks that control everything and that that both create a very permissioned 540 00:52:29,298 --> 00:52:36,898 system but but also sit at the epicenter of allowing the world to exist in such a way that 541 00:52:36,898 --> 00:52:43,558 money can be easily created by the fed and then distributed to everybody that if bitcoin only 542 00:52:43,558 --> 00:52:50,878 worked in a world where you had to convert to the to the fiat system to get dollars back out 543 00:52:50,878 --> 00:52:53,818 to then be able to access the real economy, 544 00:52:54,478 --> 00:52:57,618 the goods and services that you need to sustain yourself day to day, 545 00:52:57,618 --> 00:53:04,438 the actual fundamental utility of money as a medium independent of Bitcoin 546 00:53:04,438 --> 00:53:05,458 and coordinating trade. 547 00:53:06,838 --> 00:53:09,698 If Bitcoin only existed in a world where you could hold Bitcoin 548 00:53:09,698 --> 00:53:12,538 and Bitcoin would store its value in theory, 549 00:53:13,018 --> 00:53:16,298 and then whenever you needed dollars you could sell the Bitcoin for dollars, 550 00:53:17,018 --> 00:53:20,718 that Bitcoin would be so centralized in that world 551 00:53:20,718 --> 00:53:26,298 that the integrity of the system as a whole would not be viable. 552 00:53:27,238 --> 00:53:32,178 Basically, the centralization of the fiat system would extend onto Bitcoin 553 00:53:32,178 --> 00:53:37,238 and then that showing point of its fixed supply would be at risk. 554 00:53:37,238 --> 00:53:46,558 The other side of it is that Bitcoin is technically capable of being used day-to-day in commerce. 555 00:53:46,558 --> 00:53:52,638 and that one of the ways that I contextualize its volatility 556 00:53:52,638 --> 00:53:54,518 is because of its nascency. 557 00:53:54,718 --> 00:53:57,038 If 1% of the world has adopted Bitcoin 558 00:53:57,038 --> 00:54:01,038 and then 10% start to adopt Bitcoin, 559 00:54:01,038 --> 00:54:03,858 and that means that 9 out of 10 people 560 00:54:03,858 --> 00:54:06,258 are pricing Bitcoin for the first time, 561 00:54:06,418 --> 00:54:09,558 volatility is inevitable in that world. 562 00:54:10,458 --> 00:54:14,358 The incremental demand relative to the base demand is so great 563 00:54:14,358 --> 00:54:25,258 and the knowledge of all those market participants is so variable with the newer 9 out of 10 literally pricing something for the first time, learning about Bitcoin, 564 00:54:25,518 --> 00:54:37,058 that that script will flip when 50% of the world has adopted Bitcoin and every incremental unit of demand of Bitcoin is a fraction rather than a multiple. 565 00:54:37,058 --> 00:54:53,078 In that world, Bitcoin will become the stable thing. You won't think of the price of a Bitcoin as $100,000 or $500,000 or a million. The dollar value of everything, just like the dollar, the boulevard value of everything becomes irrelevant. 566 00:54:53,078 --> 00:54:54,958 that things will start to be priced. 567 00:54:55,058 --> 00:54:56,778 The car will cost a certain amount of Bitcoin. 568 00:54:57,378 --> 00:55:00,738 The ribeye at the grocery store will cost a certain amount of Bitcoin. 569 00:55:01,898 --> 00:55:04,618 And just as we don't think if a beer costs $6, 570 00:55:04,878 --> 00:55:07,118 we don't think of the value of a dollar as one-sixth of a beer, 571 00:55:07,438 --> 00:55:11,278 even though that is one way to think about the value of a single dollar. 572 00:55:11,278 --> 00:55:16,398 And so the point is that if we look at the world and say, 573 00:55:16,498 --> 00:55:19,998 hey, the basis of why anybody would store their value in Bitcoin 574 00:55:19,998 --> 00:55:21,278 is because of its fixed supply, 575 00:55:21,998 --> 00:55:25,758 Well, the natural extension of that is if you figured out that equation, 576 00:55:26,278 --> 00:55:32,158 you'd say, well, I could either receive my Bitcoin by accepting through 577 00:55:32,184 --> 00:55:38,824 Paying the cost of the fiat system and then paying the cost to convert fiat to Bitcoin. 578 00:55:39,544 --> 00:55:48,244 Or because Bitcoin is perfectly technically capable of facilitating that trade directly, I could just accept Bitcoin. 579 00:55:48,424 --> 00:55:53,824 So if I'm a merchant and I sell goods and services and I've figured out why Bitcoin stores value, 580 00:55:53,884 --> 00:55:58,084 it's very logical for me to ask somebody if they're willing to to pay me in Bitcoin. 581 00:55:59,844 --> 00:56:01,244 It's a logical extension. 582 00:56:01,244 --> 00:56:29,384 But then when it comes down to its necessity, it is that if Bitcoin didn't logically progress to that world of more merchants saying, oh, well, just pay me in Bitcoin and rather have the foreign money that can't be printed rather than the one that is consistently losing its value, that the only logical explanation for why that alternate reality would exist would be because somebody told you that you couldn't do it, that it was illegal to do. 583 00:56:29,384 --> 00:56:40,664 That by some fiat decree, it would say you can't use your Bitcoin to buy things like cars or gas or as a merchant on the other side to accept it. 584 00:56:41,344 --> 00:56:52,364 And that also, you know, that reality, the only version of that would be that in order for that to exist, because the Bitcoin system remained hyper centralized. 585 00:56:52,364 --> 00:57:22,344 And so it's a combination of the actual economic incentive, which is the most efficient way to transfer value will be just to accept Bitcoin directly, but then paired with the consequence, if that incentive didn't actually play out, if that world didn't exist where people weren't able to functionally accept Bitcoin in payment, it would be not because of a technical limitation of Bitcoin, but because of it being made illegal and Bitcoin not being sufficiently effective. 586 00:57:22,364 --> 00:57:27,644 decentralized at that point where you know some ban in some jurisdiction would be defensible which 587 00:57:27,644 --> 00:57:32,584 um i think about that as like the the largest game of whack-a-mole that you could ever you know 588 00:57:32,584 --> 00:57:39,564 that you could ever conceive of that if if the u.s government couldn't uh ban booze or you know 589 00:57:39,564 --> 00:57:43,524 kind of that you know they might have banned private ownership of gold but they didn't make 590 00:57:43,524 --> 00:57:50,224 gold go away that that bitcoin is a greater utility than than both gold and uh and booze and 591 00:57:50,224 --> 00:57:54,084 functionally based on how the network is actually constructed harder to stop. 592 00:57:54,604 --> 00:57:58,564 And so it's, you know, follow the incentives and I'll show you the outcome. 593 00:57:58,724 --> 00:58:00,764 Well, Bitcoin has a fixed supply. 594 00:58:00,864 --> 00:58:03,324 The most efficient way to get it is to accept it as a form of payment. 595 00:58:03,324 --> 00:58:09,124 It's technically capable of being transacted over a communication channel. 596 00:58:09,724 --> 00:58:15,264 And those facts are what will dictate that the end game is Bitcoin being used day to 597 00:58:15,264 --> 00:58:16,444 day as a form of commerce. 598 00:58:16,444 --> 00:58:22,244 but necessarily someone has to figure out why bitcoin will store value before they're willing to 599 00:58:22,244 --> 00:58:28,924 accept it as a form of payment um it's a very logical you know first a then b rather than a 600 00:58:28,924 --> 00:58:32,944 chicken and egg equation and it just comes down to each individual and as more individuals figure 601 00:58:32,944 --> 00:58:39,224 out why bitcoin stored value then more people become interested in turning around and accepting 602 00:58:39,224 --> 00:58:42,984 as payment and that's what we've seen recently you know we're working on bitcoin payments at 603 00:58:42,984 --> 00:58:49,544 Zapparate. And we do it in a way where people can accept Bitcoin side by side with fiat. So we 604 00:58:49,544 --> 00:58:54,804 integrate fiat rails. It comes with this also recognition that most people that want to, 605 00:58:54,944 --> 00:58:58,604 not all, but most people that want to accept Bitcoin, some people say I'll only accept Bitcoin, 606 00:58:59,124 --> 00:59:04,104 that's fewer and far further between, but more power to those people like SoapBiner. 607 00:59:05,204 --> 00:59:11,784 They use our platform and they only accept Bitcoin as payment, but the vast majority of people take 608 00:59:11,784 --> 00:59:18,084 fiat, but they prefer Bitcoin and we'll see a shift over time. But there's a lot of people 609 00:59:18,084 --> 00:59:22,844 working on Bitcoin payments. BTC Pay Server integrates seamlessly with ZapRite. The guys 610 00:59:22,844 --> 00:59:29,864 at OpenNode, Square, which I think is a huge watershed moment, Square just launched Bitcoin 611 00:59:29,864 --> 00:59:37,864 payments. Now anybody that uses Square with a few clicks of a button can enable it. And a number 612 00:59:37,864 --> 00:59:44,284 of merchants here in Austin, Texas have already started to do that. Now I can buy my eggs and beef 613 00:59:44,284 --> 00:59:49,584 directly for Bitcoin. I can go to the coffee shop and use Bitcoin to pay. All of it is a logical 614 00:59:49,584 --> 00:59:53,924 progression of people figuring out why Bitcoin has fundamental value, why it stores value. The 615 00:59:53,924 --> 01:00:04,064 more people that you add up, the faster the shift to Bitcoin happens. And again, just in that end 616 01:00:04,064 --> 01:00:10,124 state, it's the combination of it's technically feasible and it's perfectly consistent with the 617 01:00:10,124 --> 01:00:16,424 economic incentive that if you know why the 21 million fixed supply is relevant, Bitcoin for 618 01:00:16,424 --> 01:00:23,364 Bitcoin, sat for sat, you'll get more of it than if you go through the fiat system and incur the 619 01:00:23,364 --> 01:00:30,424 cost of the fiat system just to get Bitcoin. Yeah, I agree. And so, you know, one of my 620 01:00:30,424 --> 01:00:36,724 thought so is I used to think the government, you know, if the government couldn't keep drugs out of prisons, you know, how could they ban something? 621 01:00:36,724 --> 01:00:48,852 But now I probably think they wanted the drugs in the prison So I think the better explanation is if they couldn if they couldn prevent you from getting booze outside of prison then they not going to prevent you from you know 622 01:00:49,072 --> 01:00:55,712 running Bitcoin nodes. And, and also it's like, there's the other side of that dilemma, which is 623 01:00:55,712 --> 01:01:02,732 as soon as you say, you know, you, you can't do this, it's going to send a loud signal that, 624 01:01:02,732 --> 01:01:10,972 that there's something of real substance to Bitcoin in that it's more likely that Bitcoin is able to credibly enforce its fixed supply 625 01:01:10,972 --> 01:01:21,972 because of bottom up how the system is constructed than it is that a government by decree can prevent people from using money. 626 01:01:21,972 --> 01:01:45,452 And, you know, that I don't think of that as hope as a strategy is recognizing the economic incentives and realizing that money is a very basic necessity that, you know, functionally speaking, you would not have clean water show up to your house or electricity show up to your house on demand or get food at the grocery store if not for the function of money. 627 01:01:45,452 --> 01:01:52,272 And so human beings will find the things out of necessity or survival instincts. 628 01:01:52,752 --> 01:01:55,572 And then governments will adapt around it. 629 01:01:55,672 --> 01:02:04,852 They'll recognize, hey, governments need money too to coordinate their own operations, to coordinate their administrations, to fund militaries. 630 01:02:04,952 --> 01:02:06,912 And things aren't valuable because they're taxed. 631 01:02:07,152 --> 01:02:08,952 The government taxes things that are valuable. 632 01:02:08,952 --> 01:02:29,752 And the more logical way that this plays out is that the regulatory structure adapts around Bitcoin. The jurisdictions that are most friendly to Bitcoin, like El Salvador, will benefit from human capital immigrating to the places that respect and value sound money and that those civilizations will flourish. 633 01:02:29,752 --> 01:02:33,172 It doesn't prevent other people from being more restrictive. 634 01:02:33,652 --> 01:02:48,012 But, you know, I think America itself is evidence of people leaving everything behind to to seek out a better life where where personal freedoms and individual freedoms are more respected. 635 01:02:48,652 --> 01:02:53,092 So, yeah, on the final note, I mean, I think this is the most important topic in Bitcoin. 636 01:02:53,652 --> 01:02:54,532 Bitcoin is payments. 637 01:02:54,532 --> 01:03:01,592 I think it's the least talked about and I think more talked about probably your store value, maybe even unit of account. 638 01:03:02,372 --> 01:03:04,692 Maybe SANS is an outright government ban. 639 01:03:04,892 --> 01:03:10,932 I sort of think that the concerted effort to prevent Bitcoin is payments or delay. 640 01:03:11,232 --> 01:03:12,432 You can't prevent, right? 641 01:03:12,832 --> 01:03:17,532 Just delay and sort of push to the side are things like, well, capital gains transactions. 642 01:03:18,192 --> 01:03:19,472 So not treating it like money. 643 01:03:20,312 --> 01:03:23,592 So you have to kind of think a little bit more like, did I buy this Bitcoin today? 644 01:03:23,592 --> 01:03:29,632 Are there gains or not gains? Are they going to ask me questions about this? Is it going to be a record? 645 01:03:30,512 --> 01:03:33,912 And then the ETFs is sort of – and again, none of this has to be nefarious. 646 01:03:34,152 --> 01:03:37,692 It could be sort of how centralization just begets centralization, right? 647 01:03:38,232 --> 01:03:42,392 But ETFs are sort of like don't custody your Bitcoin. Leave it with us. 648 01:03:42,452 --> 01:03:45,112 Maybe the ETFs get different tax treatment down the road. 649 01:03:45,672 --> 01:03:52,212 So I see sort of like leaving Bitcoin more as a walled garden, sort of a digital pet rock. 650 01:03:52,212 --> 01:03:54,472 That would be sort of the effort to delay it as payments. 651 01:03:54,632 --> 01:03:59,712 And I think one of the other people who seem to be talking about it like you are is Jeff Booth. 652 01:03:59,992 --> 01:04:04,832 And he said several times, you know, Bitcoin doesn't become used as money. 653 01:04:04,872 --> 01:04:07,352 It will fail. Do you see? 654 01:04:07,992 --> 01:04:09,832 I mean, what do you see or what is your note? 655 01:04:09,872 --> 01:04:11,992 Yeah, I mean, I agree with that in the end. 656 01:04:12,052 --> 01:04:16,612 Like Bitcoin does not need to be used by everyone day to day today to succeed. 657 01:04:16,612 --> 01:04:33,232 But if that is not where it ends, it will because it was too centralized to evolve to that state. And if it is too centralized, then everything about the system that holds it together begins to break. 658 01:04:33,232 --> 01:04:40,292 so you know and the other side of it is i think that there's i'm going to wrote about this recently 659 01:04:40,292 --> 01:04:46,332 not in my in graduate and suddenly but on my blog that the vast majority of everyone 660 01:04:46,332 --> 01:04:50,752 is going to be able to understand bitcoin as they're seeing it used as money 661 01:04:50,752 --> 01:04:56,952 that maybe you know to this point 99 of people that have adopted bitcoin have adopted it because 662 01:04:56,952 --> 01:05:02,372 logically it stores value and and that's the logical first place to start you convert a little 663 01:05:02,372 --> 01:05:10,112 bit of fiat to Bitcoin, you convert more fiat to Bitcoin. But as that understanding of the system 664 01:05:10,112 --> 01:05:16,212 and how it works, why it works, that it's defensible, hardens as you experience it, 665 01:05:16,392 --> 01:05:22,212 if you run a business, it becomes very logical to say, well, yeah, if I'm just going to take the 666 01:05:22,212 --> 01:05:25,992 fiat and then convert to Bitcoin, why not just, if I have people willing to pay me in Bitcoin, 667 01:05:25,992 --> 01:05:32,212 it becomes logical. But if it's true that 99% of people who've come to understand Bitcoin, 668 01:05:32,212 --> 01:05:38,292 have done so because they've had this vision of they see they they've seen the inputs the writing 669 01:05:38,292 --> 01:05:44,772 on the wall why it's going to go from this nascent volatile store of value to a full-fledged currency 670 01:05:44,772 --> 01:06:05,180 that that is the pricing mechanism everything priced in bitcoin and traded in bitcoin it also true in my mind that the vast majority of all individuals maybe 99 of all humans will adopt Bitcoin as they see it working as money And that doesn mean that it has to be perfectly stable and it not volatile but seeing that oh actually you know you can actually use 671 01:06:05,180 --> 01:06:11,900 Bitcoin to go buy things like eggs. Because absent that, but like the mental loop is not closed. 672 01:06:12,000 --> 01:06:17,400 It's like if this idea of like, oh, everyone's buying Bitcoin and no one's using, you know, like 673 01:06:17,400 --> 01:06:20,920 saving in Bitcoin is using it, to be clear. I don't want to confuse things like that. 674 01:06:21,300 --> 01:06:26,780 But like, if they look at the world and it's like, everyone has Bitcoin, but they only, 675 01:06:27,240 --> 01:06:33,100 you know, convert in and out of fiat, there's this like, question of like, staring into the 676 01:06:33,100 --> 01:06:38,360 abyss of like, to what end? Of like, hey, is everyone just staring at their digital wealth? 677 01:06:38,360 --> 01:06:44,200 What is the value of Bitcoin? But when they see the closing of that loop, which is, oh, 678 01:06:44,200 --> 01:06:54,540 If somebody had Bitcoin and then they use that Bitcoin, again, when I go and buy eggs with Bitcoin, I'm not spending but a very, very, very small fraction of my Bitcoin. 679 01:06:54,540 --> 01:07:04,480 So the consequence of that is that I'm saving 99.999% of my Bitcoin with every purchase unless I happen to buy a home with Bitcoin. 680 01:07:04,600 --> 01:07:06,900 Maybe I'll spend more based on the relative scale. 681 01:07:06,900 --> 01:07:15,100 But the point being that for a lot of people in the world that struggle to see Bitcoin, it's going to connect for them when that loop is closed. 682 01:07:15,300 --> 01:07:23,200 They might not be doing it themselves, but they might see somebody else and be like, ah, okay, people were talking about this fixed supply and its relevance. 683 01:07:23,800 --> 01:07:26,280 And now I'm seeing businesses accepted as payment. 684 01:07:27,580 --> 01:07:33,260 That's what I needed to figure out what the utility of this thing was. 685 01:07:33,260 --> 01:07:41,280 that starts with its fixed supply, but then as everyone adopts it, it's actually transacting. 686 01:07:41,980 --> 01:07:45,880 And it's not just like the idea of me sending money to you. 687 01:07:45,980 --> 01:07:48,340 It's that what it is doing is it's coordinating trade. 688 01:07:48,440 --> 01:07:52,060 That is how money actually is a utility in creating value, 689 01:07:52,500 --> 01:07:56,620 that people use money to build things like cars and ships and airplanes 690 01:07:56,620 --> 01:08:02,620 and get gas from in the ground to above the ground to refine all of that. 691 01:08:03,260 --> 01:08:07,380 requires a working money. And if you don't have a working money, then those things don't exist. 692 01:08:08,220 --> 01:08:14,900 That economies don't scale without a working form of money. And so I think that Bitcoin being used 693 01:08:14,900 --> 01:08:20,500 as money, not only is it the logical endgame, it is what will allow people that otherwise 694 01:08:20,500 --> 01:08:29,460 aren't able to see it to then adopt it as money. But it's also with that recognition that 695 01:08:29,460 --> 01:08:34,320 if I'm spending my Bitcoin, somebody else is saving it. There will only ever be 21 million 696 01:08:34,320 --> 01:08:40,540 Bitcoin. 100% of all Bitcoin is being saved by somebody at some point in time. And the more that 697 01:08:40,540 --> 01:08:44,880 it is facilitating trade and direct commerce, the more value it's creating. But at that same time, 698 01:08:44,880 --> 01:08:50,120 when I'm spending my Bitcoin, I'm saving all my other Bitcoin that I'm not spending. So it's both 699 01:08:50,120 --> 01:08:55,080 at the same time. Sure. All right. Well, then before we roll out, tell me a little bit more 700 01:08:55,080 --> 01:08:59,860 about ZapRite and where we could find ZapRite and maybe how can I use it? Can I put my Bitcoin 701 01:08:59,860 --> 01:09:05,580 matrix store on there and sell my t-shirts and my mugs? Well, you should be using it if you have 702 01:09:05,580 --> 01:09:14,180 sponsors. So ZapRite is a payment platform that facilitates Bitcoin payments and fiat payments. 703 01:09:14,520 --> 01:09:20,680 We don't process fiat payments. We allow people to connect fiat rails like Square on the fiat side, 704 01:09:20,680 --> 01:09:26,060 Stripe on the fiat side, PayPal on the fiat side, but then rails on the Bitcoin side, 705 01:09:26,180 --> 01:09:31,880 like Lightning facilitated by Strike or OpenNote, or you can connect a cold card or another hardware 706 01:09:31,880 --> 01:09:35,840 wallet. We support non-custodial payments, custodial payments. We meet people where they are, 707 01:09:35,840 --> 01:09:42,300 but the idea is that, and we typically focus on things where, at least today, goods are purchased 708 01:09:42,300 --> 01:09:49,160 online. So that could be a WooCommerce or e-commerce store, but we have invoices. So 709 01:09:49,160 --> 01:09:53,300 if you invoice customers as a way to bill, and that's why I was mentioning, you know, if you 710 01:09:53,300 --> 01:09:58,260 invoice sponsors, that you can send an invoice and they can have Bitcoin methods of payment, 711 01:09:58,380 --> 01:10:03,780 side-by-side fiat methods of payment. So you could, you know, have automated ACH alongside 712 01:10:03,780 --> 01:10:10,440 a button to pay in Bitcoin. And that way, you don't have to have a discussion with your customers 713 01:10:10,440 --> 01:10:15,340 as to whether they want to pay in Bitcoin or not. You just give them both options. And you give them 714 01:10:15,340 --> 01:10:20,500 both options in a way that puts Bitcoin on a level playing field. Fiat puts all that in one system, 715 01:10:20,580 --> 01:10:25,300 makes your life easier. And every customer that comes through a checkout or every customer that 716 01:10:25,300 --> 01:10:32,020 is paying you, whether they're paying you via an invoice or a payment link or an e-commerce store, 717 01:10:32,400 --> 01:10:37,040 they see that they have that option. And then also we just released in the last few months, 718 01:10:37,040 --> 01:10:44,720 a tickets feature. So people that are hosting Bitcoin conferences or retreats or summits 719 01:10:44,720 --> 01:10:48,360 that now they can have a full end-to-end ticket experience. 720 01:10:48,360 --> 01:10:49,860 And so if you're going to a Bitcoin event, 721 01:10:49,860 --> 01:10:52,860 you might experience and go through the ZapRite checkout flow 722 01:10:52,860 --> 01:10:54,960 and pay in Bitcoin or pay in fiat, 723 01:10:54,960 --> 01:10:57,620 but then say, oh, hey, that was really seamless. 724 01:10:57,620 --> 01:10:59,060 Maybe I should do that too. 725 01:10:59,060 --> 01:11:11,828 And so they can find us at zaprite It Z Again we typically don focus on point of sale If you in the U go sign up for Square 726 01:11:12,648 --> 01:11:16,168 If you don't use Square, maybe consider changing to Square. 727 01:11:16,488 --> 01:11:24,648 Our view on point of sale is that the large point of sale providers will need to have an interest in Bitcoin like Square does in order to adopt it. 728 01:11:24,648 --> 01:11:33,748 And maybe ZapRite, we would love to integrate into a POS system, but recreating the POS system is a challenge. 729 01:11:33,748 --> 01:11:45,948 And so for that reason, we really focus on the kind of the epicenter of where the most likely commerce transactions between businesses that want to accept Bitcoin and Bitcoiners that have Bitcoin that are willing to spend it. 730 01:11:45,948 --> 01:11:58,288 And so we also have an API. So if you have a custom application, you can integrate our API and be able to manage one single API and facilitate all of your Bitcoin and fiat payments in a seamless way. 731 01:11:58,288 --> 01:12:07,328 So, you know, if you build people via invoices, if you have a basic web store, if you're hosting an event, you know, check us out at ZapRite. 732 01:12:08,128 --> 01:12:10,948 You know, custom application or API is phenomenal. 733 01:12:11,388 --> 01:12:21,248 But we're just building out to, you know, where we think the highest leverage is in terms of where the most logical early adoption of Bitcoin payments is. 734 01:12:21,648 --> 01:12:22,248 That's awesome. 735 01:12:22,368 --> 01:12:23,648 I'm going to have to sign up. 736 01:12:23,788 --> 01:12:23,948 Yeah. 737 01:12:24,028 --> 01:12:25,508 I think it sounds fantastic. 738 01:12:25,508 --> 01:12:33,248 It comes with a 30-day free trial, so you can test it out, plug it in, get all your payment methods set up. 739 01:12:34,708 --> 01:12:37,188 Honestly, ZapRite can be set up in 10 minutes. 740 01:12:37,708 --> 01:12:38,868 It's super easy. 741 01:12:41,648 --> 01:12:42,928 It's a phenomenal product. 742 01:12:43,228 --> 01:12:44,488 It sounds like 10 minutes well spent. 743 01:12:44,968 --> 01:12:48,668 After you solve payments over at ZapRite, are you going to finally run for mayor of Austin? 744 01:12:49,108 --> 01:12:50,488 Yeah, probably. 745 01:12:51,328 --> 01:12:51,808 Depending. 746 01:12:51,808 --> 01:12:56,268 You know, my first goal would be to get somebody else to do it that I trust. 747 01:12:56,448 --> 01:13:07,148 But if the world has solved sound money, then I could go think about, you know, other problems. 748 01:13:07,388 --> 01:13:16,068 But if we don't fix the money, then, you know, there's not a lot of use in, you know, trying to fix city politics. 749 01:13:16,328 --> 01:13:20,228 So I'll either do that or I have dreams of creating a butcher shop one day. 750 01:13:20,228 --> 01:13:22,628 So, you know, love beef. 751 01:13:22,788 --> 01:13:28,848 You know, so I don't just track the cost of my ribeyes for kicks on the Internet. 752 01:13:30,108 --> 01:13:36,368 I, you know, really value my local ranchers and want to be part of a solution there. 753 01:13:36,788 --> 01:13:36,928 Wow. 754 01:13:37,088 --> 01:13:42,628 Maybe we could find a couple of investors because we could do Satoshi Steak and Alehouse and we could have an in-shop butcher. 755 01:13:43,548 --> 01:13:45,828 You know, a little meat market in the front of the steakhouse. 756 01:13:46,268 --> 01:13:46,568 Yeah. 757 01:13:46,688 --> 01:13:47,388 I think it would be great. 758 01:13:48,068 --> 01:13:49,268 This has been such a pleasure. 759 01:13:49,268 --> 01:13:50,848 I've been looking forward to this a long time. 760 01:13:50,968 --> 01:13:52,008 It's definitely been awesome. 761 01:13:52,168 --> 01:13:52,508 So dope. 762 01:13:53,488 --> 01:13:56,628 Please let everyone know where they can find you and your personal work. 763 01:13:56,848 --> 01:13:57,048 Yeah. 764 01:13:57,148 --> 01:14:06,568 So if you're a business owner that is interested in accepting Bitcoin's payment, definitely check us out at zaprite.com, Z-A-P-R-I-T-E. 765 01:14:06,908 --> 01:14:13,388 If you submit a contact or like a contact form because you're interested, I'll likely be the person that gets back to you. 766 01:14:13,948 --> 01:14:15,488 I handle most of our inbound. 767 01:14:15,688 --> 01:14:16,608 I'll help you directly. 768 01:14:16,608 --> 01:14:42,888 And then if you're not yet there on your journey of, you know, Bitcoin's not quite making sense, but starting to come in focus, you can find my book on Safety in a Moose's website. The author of the Bitcoin Standard is there exclusively. That website is thesafehouse.com. So safe is spelled S-A-I-F, thesafehouse.com. My book is Gradually Than Suddenly, but there's a number of other great Bitcoin books there. Buy one, buy them all. 769 01:14:42,888 --> 01:14:50,548 Um, you can, uh, also, um, so the book's called graduate and suddenly, I also have a blog that I, 770 01:14:50,648 --> 01:14:57,388 I put out content, you know, once a month or every other month, um, gradually then suddenly dot X, 771 01:14:57,428 --> 01:15:04,948 Y, Z. And I'm on Twitter X at Parker A. Lewis. I think, uh, I think that pretty much, uh, 772 01:15:04,948 --> 01:15:09,248 covers most of the basis. Nice. Uh, yeah, the books coming out of the safe house are of the 773 01:15:09,248 --> 01:15:14,188 highest quality. I can attest to that. And if you guys are going to shoot Parker a note via ZapRite, 774 01:15:14,288 --> 01:15:18,468 please put it in the Bitcoin matrix and maybe the notes just so he kind of sees maybe some of the 775 01:15:18,468 --> 01:15:22,028 flow from there. But I appreciate this so much, Parker. This has been such a pleasure. 776 01:15:22,468 --> 01:15:29,028 Yeah, I really enjoyed it, Cedric. Again, sorry that it took this long to get on, but I'm 777 01:15:29,028 --> 01:15:32,288 excited to finally do it and really enjoy the conversation. 778 01:15:32,648 --> 01:15:33,748 Likewise. Thank you so much. 779 01:15:33,748 --> 01:15:38,668 Thanks for tuning in to this episode of the Bitcoin matrix. If you enjoyed the conversation, 780 01:15:38,668 --> 01:15:43,508 Don't forget to like, subscribe, and drop a comment below with any questions or thoughts you may have. 781 01:15:43,788 --> 01:15:44,928 We'd love to hear from you. 782 01:15:45,288 --> 01:15:49,488 You can support the show by checking out our sponsors and affiliate links in the description. 783 01:15:49,708 --> 01:15:54,228 It helps keep bringing you great content while connecting you with awesome products that I believe in. 784 01:15:54,468 --> 01:15:58,268 Share this episode with your friends, family, or anyone curious about Bitcoin. 785 01:15:58,648 --> 01:16:00,728 And let's keep growing this community together. 786 01:16:01,028 --> 01:16:04,548 Stay curious, keep stacking, and I'll catch you in the next one. 787 01:16:08,668 --> 01:16:09,708 Music 788 01:16:09,708 --> 01:16:14,728 .