1 00:00:21,141 --> 00:00:22,281 Ahem! 2 00:03:46,742 --> 00:03:48,267 Boom. 3 00:05:58,734 --> 00:06:00,677 You 4 00:08:11,816 --> 00:08:12,638 you 5 00:08:18,306 --> 00:08:19,088 work. 6 00:09:45,516 --> 00:09:46,137 Tom Tom. 7 00:09:46,137 --> 00:09:49,066 That's good. 8 00:12:03,950 --> 00:12:05,362 Khm, khm. 9 00:16:06,382 --> 00:16:07,724 how does it work? 10 00:16:57,486 --> 00:16:58,502 you 11 00:18:11,638 --> 00:18:12,522 who 12 00:19:26,314 --> 00:19:27,396 Mm-hmm. 13 00:19:38,882 --> 00:19:39,743 You know? 14 00:19:41,013 --> 00:19:42,356 Hey, how are you? 15 00:19:42,396 --> 00:19:43,571 good to see you again. 16 00:19:43,571 --> 00:19:44,226 a while. 17 00:19:44,226 --> 00:19:45,890 Likewise, yeah. 18 00:19:46,013 --> 00:19:48,971 I'm just, you know, I've never, have you ever used Riverside? 19 00:19:50,073 --> 00:19:56,066 I have, and I've actually had to pay to subscribe to it because so many people use it, but I really don't like it. 20 00:19:56,366 --> 00:19:58,267 really, I just bought it. 21 00:19:59,708 --> 00:20:00,759 What don't you like about this? 22 00:20:00,759 --> 00:20:08,635 Good to know, I'll, you know, pros and cons and yeah, yeah, yeah, yeah, yeah, yeah, yeah. 23 00:20:08,635 --> 00:20:20,435 I have to I have to pay just to put these backgrounds with Yeah, like as like as a guest but even if you want like you have to pay like their business plan instead of like I think 24 00:20:20,435 --> 00:20:30,095 I'm $30 a month, which to me is like sufficient to be able to put my background because if I use Google me or zoom or any other thing I ever used I could put like a custom 25 00:20:30,095 --> 00:20:31,133 background. 26 00:20:31,187 --> 00:20:36,163 In the back, you know, I like to have like a network or a Bitcoin or something like that. 27 00:20:36,163 --> 00:20:40,393 I have a silly brick wall that's Schilling Riverside in the background. 28 00:20:40,393 --> 00:20:42,414 I can't even pick what picture goes in the picture. 29 00:20:42,414 --> 00:20:44,435 It's frustrating and I have to pay for it. 30 00:20:44,435 --> 00:20:46,146 So that's but that's just me. 31 00:20:46,146 --> 00:20:50,559 I'm I use on my two for my two sats. 32 00:20:50,559 --> 00:20:51,660 I use Restream. 33 00:20:51,660 --> 00:20:53,781 They've to me, they've been the best. 34 00:20:54,241 --> 00:20:55,932 The most customization. 35 00:20:56,869 --> 00:20:58,163 And how much is that? 36 00:20:59,144 --> 00:21:04,108 I think restream is like 50 bucks a month, but I mean, you can scroll things across the screen. 37 00:21:04,108 --> 00:21:04,628 You can have. 38 00:21:04,628 --> 00:21:08,942 To me, it's just much better to each their own. 39 00:21:08,942 --> 00:21:12,283 just left zoom because I was just so lazy. 40 00:21:14,004 --> 00:21:16,504 That's what I'm so for me, it's an upgrade. 41 00:21:16,504 --> 00:21:25,137 And, you know, it's kind of like, go from like the Corolla to the Camry to the Lexus and like, if you're at the Corolla, like, yeah, someone's like the Lexus is better. 42 00:21:25,137 --> 00:21:26,307 But you're like, yeah, it's more money. 43 00:21:26,307 --> 00:21:28,688 And I'm really happy with the camera right now. 44 00:21:28,848 --> 00:21:29,708 But I hear you. 45 00:21:29,708 --> 00:21:35,550 My question about Riverside is how do I like right now we're recording, which we're not doing the show yet. 46 00:21:35,550 --> 00:21:37,366 But I don't want 47 00:21:37,366 --> 00:21:39,540 to share the screen when you talk. 48 00:21:39,540 --> 00:21:41,664 Like I want the screen to be you. 49 00:21:42,365 --> 00:21:43,934 Yeah, yeah, I don't know. 50 00:21:43,934 --> 00:21:49,937 in Zoom, just clicked on that and it would be like, I just clicked to like speaker and it would switch back and forth for me. 51 00:21:49,937 --> 00:21:50,659 Right. 52 00:21:50,659 --> 00:21:54,626 Yeah, you know, I don't I don't really ever host on Riverside. 53 00:21:55,077 --> 00:21:57,703 I so I don't know what that button is. 54 00:21:57,832 --> 00:21:58,983 yeah, yeah. 55 00:21:58,983 --> 00:22:00,615 wait, maybe layout? 56 00:22:00,676 --> 00:22:02,779 speaker full screen. 57 00:22:03,140 --> 00:22:05,806 Okay, very cool. 58 00:22:05,806 --> 00:22:06,620 Okay, cool. 59 00:22:06,620 --> 00:22:08,481 lets you put hotkeys. 60 00:22:08,481 --> 00:22:09,502 So I've just been messing around. 61 00:22:09,502 --> 00:22:14,485 You'll see you'll notice in the first couple episodes my two satchels just like you like it is now with us with two people. 62 00:22:14,485 --> 00:22:17,397 Then I started going in and out, but you could just you can hotkey it. 63 00:22:17,397 --> 00:22:20,474 So it'd be like ZXCV depending on what view you want. 64 00:22:20,474 --> 00:22:21,395 I see. 65 00:22:21,936 --> 00:22:28,733 so you don't remind like having a kind of host and figure that, like do that stuff on the fly. 66 00:22:28,733 --> 00:22:31,226 That's not a big deal for you. 67 00:22:31,226 --> 00:22:31,782 Yeah. 68 00:22:31,782 --> 00:22:33,363 on my channel, I don't. 69 00:22:33,363 --> 00:22:35,133 I'm very picky with who my guests are. 70 00:22:35,133 --> 00:22:43,367 Like I have to feel like I my audience is going to get some some orange pills or some alpha from them to really bring them on. 71 00:22:43,567 --> 00:22:46,908 I do it because I feel like I will learn something from them. 72 00:22:46,908 --> 00:22:48,615 And that's the. 73 00:22:48,615 --> 00:22:58,517 find that like when the guest is talking, if they are great, you know, and I hope I do the same, but it's like, I can't like do too many, I'm like focused on what they're saying and 74 00:22:58,517 --> 00:23:03,940 then I'm also trying to focus on my notes to see what maybe I can take it, where I could take it from what they're saying. 75 00:23:03,940 --> 00:23:04,870 go the wrong path. 76 00:23:04,870 --> 00:23:06,799 I always have like three or four points in my head. 77 00:23:06,799 --> 00:23:08,403 I'm like, all right, we're now at that fork in the road. 78 00:23:08,403 --> 00:23:09,664 Where am I going to drive this? 79 00:23:09,664 --> 00:23:11,786 And you wrong way. 80 00:23:11,786 --> 00:23:18,411 I feel like, you know, looking back on my interviews, I'm like, man, I should have went with the other because it can it could change the whole conversation. 81 00:23:18,411 --> 00:23:22,284 So doing what you do is harder than doing what I'm doing right now. 82 00:23:22,284 --> 00:23:26,304 You got to you got to rein me in your I get to have fun today. 83 00:23:26,304 --> 00:23:27,235 I want to let you go. 84 00:23:27,235 --> 00:23:28,815 want to unleash you. 85 00:23:29,476 --> 00:23:32,477 So don't worry about passing the ball back. 86 00:23:32,477 --> 00:23:33,978 We want to hear from you. 87 00:23:33,978 --> 00:23:41,783 And we do, I do want to hear your tangents and your, you know, your, what is most interesting to me and to, think the listeners, I try not to think about them too much, but 88 00:23:41,783 --> 00:23:44,004 what you're interested in talking about at the moment. 89 00:23:44,004 --> 00:23:49,427 So in that regards, like, I think all these questions are based on, I mean, I know all these questions are based on your work. 90 00:23:49,427 --> 00:23:52,428 So they probably going to be a hundred percent up your wheelhouse. 91 00:23:52,509 --> 00:23:55,554 But if you know, I always tell any guests, like if there's a question you want to, 92 00:23:55,554 --> 00:23:59,925 repurpose, ignore, run through, answer any way you want, that's fine too. 93 00:23:59,925 --> 00:24:05,397 Because ultimately, whatever you want to talk about is gonna be more interesting than me driving you to what I want to talk about. 94 00:24:05,577 --> 00:24:09,938 But I think you will be interested in the questions because they're based on your work. 95 00:24:10,718 --> 00:24:11,239 cool. 96 00:24:11,239 --> 00:24:13,679 I mean, I could do the intro, we can get into it. 97 00:24:16,120 --> 00:24:20,561 Sweet, your background has Riverside in it, that's so cheesy. 98 00:24:21,362 --> 00:24:23,021 That's funny, yeah, yeah, yeah. 99 00:24:23,021 --> 00:24:32,681 like a Bitcoin or a meme or something like it's it's just got to be that it's and it's $30 a month is the only reason I pay because otherwise you've seen the videos before like I 100 00:24:32,681 --> 00:24:37,421 was with Robin's seer and I have a green background. 101 00:24:37,421 --> 00:24:46,156 You know, it's like, nobody really cares, I guess, but I want to I want to look a little bit more professional than just having a green curtain in my behind me, you know. 102 00:24:46,156 --> 00:24:46,676 I hear you. 103 00:24:46,676 --> 00:24:49,569 All right, I'm gonna jump into this and we'll do it. 104 00:24:49,569 --> 00:24:50,590 Excited. 105 00:24:50,790 --> 00:24:51,671 Okay. 106 00:24:52,332 --> 00:25:05,964 CJ Constantinos is a 10 year Bitcoin veteran who believes Bitcoin is the reserve asset of the internet economy and the most pristine form of collateral in the world. 107 00:25:06,104 --> 00:25:12,700 CJ is the creator of the Bitcoin fair value indicator used by miners for algorithmic treasury management. 108 00:25:12,962 --> 00:25:16,967 and the founder of People's Reserve and Christian Investment Analysis. 109 00:25:17,028 --> 00:25:20,773 CJ Constantinos, welcome to the Bitcoin Matrix Podcast. 110 00:25:20,773 --> 00:25:21,854 How are you? 111 00:25:22,011 --> 00:25:22,768 I'm doing well. 112 00:25:22,768 --> 00:25:23,868 Thank you, Cedric, for having me. 113 00:25:23,868 --> 00:25:25,124 It's great to be here. 114 00:25:25,838 --> 00:25:28,738 Yeah, man, it's great to finally sit down and chat. 115 00:25:28,738 --> 00:25:38,308 You know, if I put up on Twitter or what we call X now, or what they want us to call X now, you know, who should I bring on the Bitcoin matrix? 116 00:25:38,308 --> 00:25:39,438 What guests do want to hear from? 117 00:25:39,438 --> 00:25:46,078 And I guarantee and I've seen it, you're one of the most nominated people in those threads. 118 00:25:46,078 --> 00:25:47,408 People love hearing from you. 119 00:25:47,408 --> 00:25:51,258 I think in a lot of ways, and I say this as a compliment, like you're underrated. 120 00:25:51,258 --> 00:25:56,006 think like, you know, people really get a lot of signal from you and so they want to 121 00:25:56,382 --> 00:25:57,133 me to bring you on the show. 122 00:25:57,133 --> 00:26:00,336 And I've been looking at your account for a while and loving what you're putting out. 123 00:26:00,336 --> 00:26:01,026 So I'm excited about this. 124 00:26:01,026 --> 00:26:06,430 And we got to meet briefly in Miami at Bitcoin Day Miami. 125 00:26:06,711 --> 00:26:16,439 But in about a month from now, from when we're recording, we'll be in Naples together at Bitcoin Day Naples, along with a bunch of others. 126 00:26:16,439 --> 00:26:20,722 Let me pull that up actually right now while we're talking about it. 127 00:26:20,742 --> 00:26:21,543 Yeah, me too. 128 00:26:21,543 --> 00:26:25,516 Actually, I really enjoy Bitcoin Day Naples. 129 00:26:25,516 --> 00:26:26,167 immensely. 130 00:26:26,167 --> 00:26:37,898 It's kind of got a lot of the appeal of the smaller, more focused conferences and you really, you know, it's a great group, not too big and you get to be really close to the 131 00:26:37,898 --> 00:26:45,485 panels and there's a lot of, you know, off the side on the sidelines kind of chatter and reconnecting with people. 132 00:26:45,485 --> 00:26:47,021 So yeah, I enjoy it immensely. 133 00:26:47,021 --> 00:26:50,311 I am trying to find, man. 134 00:26:50,311 --> 00:26:53,723 met you at Bitcoin Day Naples, but briefly. 135 00:26:53,723 --> 00:26:57,305 then later at Bitcoin Day Miami, we finally did some talking. 136 00:26:57,305 --> 00:27:02,146 But I also had the chance to meet Lawrence Lepard at Bitcoin Day Naples. 137 00:27:02,307 --> 00:27:04,838 So it's amazing the lineup that they produce. 138 00:27:04,838 --> 00:27:07,489 And, you know, it's really cool. 139 00:27:07,489 --> 00:27:11,481 Larry gave me like 15 minutes of his time, the first time ever meeting him. 140 00:27:11,481 --> 00:27:14,686 It was just like an amazing experience how open Bitcoiners are. 141 00:27:14,686 --> 00:27:16,643 It's such an important piece of the network. 142 00:27:17,176 --> 00:27:18,426 Well, that is true. 143 00:27:18,426 --> 00:27:24,588 I mean, that's where I met Lawrence or Larry Lepard myself for the very first time at Bitcoin Day Naples maybe two or three years ago. 144 00:27:24,588 --> 00:27:27,159 And he gave me his card and said he'd come on the show. 145 00:27:27,159 --> 00:27:30,670 And we've done two shows together and they're both in my top five. 146 00:27:30,710 --> 00:27:37,952 He'll be there again this year alongside Bob Burnett, who Bob and I are launching a couple of projects together that I'd love to share with you guys shortly. 147 00:27:37,952 --> 00:27:39,192 Charlie Shrem will be there. 148 00:27:39,192 --> 00:27:43,264 just actually got to meet him for the first time in person a few weeks ago at dinner. 149 00:27:43,264 --> 00:27:44,904 Hey, sweetheart. 150 00:27:44,910 --> 00:27:46,140 You'll be there. 151 00:27:46,140 --> 00:27:58,030 Nico will be there, of course, from simply Bitcoin myself and lots of I mean just other fantastic guests like Danny Condon, Chris Sullivan, Maddie Ice, Paul Tarantino, Rosa 152 00:27:58,030 --> 00:28:00,889 Shores, Jackie Price, Michelle Weakley. 153 00:28:00,889 --> 00:28:03,690 So I mean, they're adding guests all the time. 154 00:28:03,690 --> 00:28:09,810 So and it's an excuse to go to Florida if you're not, you know, local or just come from different parts of the state. 155 00:28:09,810 --> 00:28:12,210 So I can't wait to that. 156 00:28:12,210 --> 00:28:14,210 And, you know, kind of maybe 157 00:28:14,210 --> 00:28:16,917 segueing a bit, I'd love to hear a bit about your background. 158 00:28:16,917 --> 00:28:24,274 mean, you're a fellow Floridian, I don't know if you're from Florida, but what is maybe your background before Bitcoin? 159 00:28:24,560 --> 00:28:26,751 Yeah, so I actually grew up in New Jersey. 160 00:28:26,751 --> 00:28:33,974 I graduated high school in New Jersey and I decided to come to Florida to play hockey to get the best of both worlds. 161 00:28:33,974 --> 00:28:35,955 I was tired of the snow and the ice. 162 00:28:35,955 --> 00:28:41,017 So when I got a chance to get the beach, I said, all right, I'm going to take that opportunity. 163 00:28:41,277 --> 00:28:50,832 so that was a that was a fun experience, but it brought me down that same pathway that so many Americans are are forced to go down right now, chasing a degree, chasing a higher 164 00:28:50,832 --> 00:28:52,152 number salary. 165 00:28:52,198 --> 00:28:53,759 just to try to get ahead in life. 166 00:28:53,759 --> 00:28:58,990 And I have a very similar experience to many people that entered into Bitcoin. 167 00:28:58,990 --> 00:29:05,482 When you first find it, you have no idea what it is, but you're going to be the best, smartest trader in the world because this thing goes up and down. 168 00:29:05,482 --> 00:29:08,242 You just have to click a button a few times and you'll be a millionaire. 169 00:29:08,683 --> 00:29:09,423 And it was amazing. 170 00:29:09,423 --> 00:29:11,463 I started buying Bitcoin like at 150 bucks. 171 00:29:11,463 --> 00:29:14,784 I watched it go all the way up and then come all the way down. 172 00:29:15,084 --> 00:29:21,176 And then that's when my journey really began, which is similar to many, many people who get into Bitcoin. 173 00:29:21,186 --> 00:29:31,519 And that's what brought me into mining and and getting into the mining was an absolutely I think that was just a that changed the game for me understanding how proof of work 174 00:29:31,519 --> 00:29:35,730 consensus works understanding that I had never heard of the difficulty adjustment. 175 00:29:35,730 --> 00:29:47,373 So then fully understanding the difficulty adjustment and the role that it plays in price discovery and how a node works and how nodes trust nobody so that anybody can trust 176 00:29:47,373 --> 00:29:48,474 everybody. 177 00:29:48,474 --> 00:29:50,744 And it just sets up this this 178 00:29:51,394 --> 00:30:01,148 Ledger this perfect ledger of of truth and that's and that's when the when that light bulb went off for me I just was chasing after because at that point in time coming out of 179 00:30:01,148 --> 00:30:01,678 school. 180 00:30:01,678 --> 00:30:10,192 I was getting into a lot of conspiracy theories You know like 9-eleven and you know friends don't want to talk to me anymore I'm questioning things that they don't want to 181 00:30:10,192 --> 00:30:20,076 think about and then you finally start to land on some of these truths and Bitcoin was like one of the most powerful truths that I landed on out of everything 182 00:30:20,114 --> 00:30:21,956 Because it could be verified. 183 00:30:21,956 --> 00:30:30,253 You don't have to trust you can verify some of these other things We have strong beliefs about what the truth is, but we still can't verify the truth to this day But Bitcoin 184 00:30:30,253 --> 00:30:38,050 verifies the truth every 10 minutes and that's something that you can build an economy on top of that's something you can build a system on top of because when you have a 185 00:30:38,050 --> 00:30:47,204 foundation of truth You're built on the rock and when the storm comes it's not gonna get washed away But if you build that house on the sand and the storm comes 186 00:30:47,204 --> 00:30:48,095 You get washed away. 187 00:30:48,095 --> 00:30:49,546 And that's what we see in Fiat right now. 188 00:30:49,546 --> 00:30:51,197 We build our house on the sand. 189 00:30:51,197 --> 00:30:59,762 So when the storm comes, we have to print money and build walls to block that storm from hitting our city, because if it hits, everything will collapse. 190 00:30:59,903 --> 00:31:03,605 And that's what's so amazing about where I see the marketplace going right now. 191 00:31:03,605 --> 00:31:15,954 In my time, I've watched Bitcoin start out as digital gold, mature into the reserve asset of the Internet economy and then, know, pristine collateral now with it being fused into 192 00:31:15,954 --> 00:31:16,614 traditional 193 00:31:16,614 --> 00:31:17,694 debt products. 194 00:31:17,694 --> 00:31:27,074 To see this happen over 15 years is just mind boggling, especially for those who understand the history of money and how we went from C sales and all the way up from the 195 00:31:27,074 --> 00:31:31,454 barter system to monetization of gold and then financialization. 196 00:31:31,454 --> 00:31:35,134 These things took literally hundreds and even thousands of years to take place. 197 00:31:35,134 --> 00:31:38,274 Bitcoin is doing what they did in 15 years. 198 00:31:38,474 --> 00:31:43,074 And it's being built on top of the internet, which did the harder part and grew at a slower pace. 199 00:31:43,074 --> 00:31:45,850 So Bitcoin is even growing faster and Bitcoin adoption is faster. 200 00:31:45,850 --> 00:31:48,673 taking place faster than internet adoption did. 201 00:31:48,673 --> 00:31:57,503 So the acceleration that we're seeing into this new age of technology is just baffling, especially in 15 years. 202 00:31:57,503 --> 00:32:00,916 So, and I think the next 10 years, it won't even be recognizable. 203 00:32:01,656 --> 00:32:03,276 Yeah, I agree with what a lot you're saying. 204 00:32:03,276 --> 00:32:05,207 I like how you kind of unpacked it there. 205 00:32:05,207 --> 00:32:07,528 You know, I'm from New York myself. 206 00:32:07,788 --> 00:32:12,779 When my parents finally decided to leave New York, they asked me what would you do? 207 00:32:12,779 --> 00:32:14,370 What do you think if we moved to New Jersey? 208 00:32:14,370 --> 00:32:16,150 said I would never visit you again. 209 00:32:16,506 --> 00:32:17,780 I'm just kidding. 210 00:32:17,780 --> 00:32:25,153 But so they chose Florida, which, know, lucky for me years later, I fell in love with myself. 211 00:32:25,273 --> 00:32:30,184 But, you know, I get what you're saying about, you know, coming across a difficulty adjustment. 212 00:32:30,518 --> 00:32:31,548 Things like proof of work. 213 00:32:31,548 --> 00:32:33,279 These were all new concepts to me. 214 00:32:33,279 --> 00:32:36,820 Cryptography wasn't a new concept, but it wasn't something I'd studied before. 215 00:32:36,841 --> 00:32:49,406 Difficulty adjustments, kind of funny because it's kind of like a thermometer, but just how it's used in the Bitcoin engineering ecosystem is novel and fascinating. 216 00:32:49,406 --> 00:32:50,322 You speak about 9-11. 217 00:32:50,322 --> 00:32:52,507 I was in New York City on 9-11. 218 00:32:55,928 --> 00:32:58,219 Months before that day, I worked in the towers. 219 00:32:58,219 --> 00:33:00,387 I used to work on the 94 Tower 2. 220 00:33:01,734 --> 00:33:09,086 And similar to yourself, you know, I, you know, question things like 9-11 or what you see in the sky with the clouds or just anything. 221 00:33:09,086 --> 00:33:18,059 And just to be able to, you know, it's interesting to ask the questions doesn't even mean in my opinion that you have an interpretation. 222 00:33:18,059 --> 00:33:19,870 You know, you're just like, this doesn't look right to me. 223 00:33:19,870 --> 00:33:23,600 And then a lot of people to your point just don't even like the questions. 224 00:33:24,421 --> 00:33:28,684 And Bitcoin's really interesting because you actually find this truth machine and you 225 00:33:28,684 --> 00:33:37,539 You can know maybe more about it than someone else and ask questions and they can ask questions, but you know, like the answers, like, you know, we've debunked a lot of things 226 00:33:37,539 --> 00:33:39,480 over the years with Bitcoin. 227 00:33:39,941 --> 00:33:48,245 But, you know, it's like, you can't really debate, you know, sort of how the parameters of the system are built and how it's engineered. 228 00:33:48,586 --> 00:33:49,088 So. 229 00:33:49,088 --> 00:33:51,908 where they say, prove it, and then you can. 230 00:33:52,042 --> 00:33:53,273 Right, right. 231 00:33:53,273 --> 00:34:01,049 They might not put in the work to understand how you've proven it or you know, but it's provable and and it's audible, which is brilliant. 232 00:34:01,049 --> 00:34:02,280 It's a fantastic ledger. 233 00:34:02,280 --> 00:34:09,756 So let's talk a little bit more about that, you know, and and you're I like the way you kind of explain this concept, but what you know, how do you think of Bitcoin is the 234 00:34:09,756 --> 00:34:13,108 reserve asset of the internet economy? 235 00:34:13,623 --> 00:34:28,641 Yeah, so I've been a DeFi market maker for quite some time now, and it always intrigued me because once you find your digital gold in the earlier years, there were no ways to turn 236 00:34:28,641 --> 00:34:29,992 it into a collateral. 237 00:34:29,992 --> 00:34:42,318 So once we had some tools around Bitcoin that would help it and transform it or evolve it into a collateral with decentralized finance, that piqued my interest because the 238 00:34:43,158 --> 00:34:46,550 Counterparty risk being a smart contract, I think is pretty interesting. 239 00:34:46,550 --> 00:34:53,175 And I think for those of us who were involved early in ETH, the thought was never that ETH would ever compete with Bitcoin. 240 00:34:53,175 --> 00:34:54,736 It was there to complement Bitcoin. 241 00:34:54,736 --> 00:35:01,911 was a smart contract infrastructure to facilitate contractual agreements with Bitcoin as the main focus. 242 00:35:01,911 --> 00:35:10,117 It was not until later that Ethereum started doing some rebranding and started saying that, you know, we are money instead of gas. 243 00:35:10,117 --> 00:35:12,478 And they started messing with the 244 00:35:13,582 --> 00:35:17,645 the supply because there is no limit and they could just continuously inflate. 245 00:35:17,645 --> 00:35:20,647 So they wanted to burn some off in order to balance that mechanism. 246 00:35:20,647 --> 00:35:23,249 I mean, you see all that's all this is volatility. 247 00:35:23,249 --> 00:35:26,051 Bitcoin has been nothing but stable since the beginning. 248 00:35:26,051 --> 00:35:37,139 So Ethereum is displaying when you have that type of centralized system, the instability and policies and application of those policies and even changing of narrative. 249 00:35:37,139 --> 00:35:41,356 Bitcoin's narrative has been a natural progression from the digital gold. 250 00:35:41,356 --> 00:35:45,959 to the pristine collateral and now the reserve asset of the internet economy. 251 00:35:45,959 --> 00:35:54,165 And I call it the internet economy because I feel like in the, there's this real world economy, right? 252 00:35:54,165 --> 00:35:56,596 It's the traditional yield curve. 253 00:35:56,817 --> 00:35:59,669 is stated interest rates. 254 00:35:59,669 --> 00:36:03,161 So it's socialist interest rates with price controls. 255 00:36:03,161 --> 00:36:07,284 So people have to understand that when you, interest rates are the price of money. 256 00:36:07,284 --> 00:36:10,164 So when you state the interest rate, you are actually 257 00:36:10,164 --> 00:36:12,836 implementing price controls on money. 258 00:36:12,916 --> 00:36:15,358 And that's that causes a lot of issues that we have today. 259 00:36:15,358 --> 00:36:21,023 That's that's why people like PIMCO are exiting the bond market. 260 00:36:21,023 --> 00:36:24,156 I saw an article recently where PIMCO is is they're changing their strategy. 261 00:36:24,156 --> 00:36:25,907 There's opportunities elsewhere. 262 00:36:25,907 --> 00:36:36,456 And the reason is, is because they're starting to realize over the last 10 year period, what's happened, especially because of what happened in 2020, all of the real rates of 263 00:36:36,456 --> 00:36:39,456 return on these bonds have turned extremely negative. 264 00:36:39,456 --> 00:36:43,649 Like in some cases, they're double digit negative in real terms. 265 00:36:43,649 --> 00:36:52,174 So you have a business, you can fool a person, but a business who has like a 10 year plan and says, hey, you with a 10 year note at this rate, we'll be able to build two, two 266 00:36:52,174 --> 00:36:53,935 warehouses here. 267 00:36:53,935 --> 00:36:57,297 And then in year nine, they meet and it's like, we need more money. 268 00:36:57,297 --> 00:37:00,237 We need to allocate more money if we're just going to build one warehouse. 269 00:37:00,237 --> 00:37:02,180 And it's like, what? 270 00:37:02,180 --> 00:37:03,821 Who do I need to who's getting in trouble here? 271 00:37:03,821 --> 00:37:04,502 Who's getting fired? 272 00:37:04,502 --> 00:37:05,580 Who made the mistake? 273 00:37:05,580 --> 00:37:07,511 But it wasn't anybody's mistake on the team. 274 00:37:07,511 --> 00:37:14,634 It was the abuse of the currency system by the government through issuance, unlimited, almost unlimited helicopter money. 275 00:37:14,634 --> 00:37:14,904 Right. 276 00:37:14,904 --> 00:37:17,315 So people forget we're in the helicopter money phase. 277 00:37:17,315 --> 00:37:20,476 The government printed money and just send it to you. 278 00:37:20,476 --> 00:37:23,858 That always marks the end of a currency life cycle. 279 00:37:23,858 --> 00:37:27,159 So we're coming to a fork in the road here where. 280 00:37:27,699 --> 00:37:35,232 If we don't do something, if we don't innovate, if we don't create new revolutionary products, if we don't adopt Bitcoin and fuse it, 281 00:37:35,232 --> 00:37:36,142 with our debt. 282 00:37:36,142 --> 00:37:42,745 If we don't put it on the asset side of our balance sheet, then liability growth is going to continue to outpace asset growth. 283 00:37:42,745 --> 00:37:45,527 And eventually, trust will be lost. 284 00:37:45,527 --> 00:37:49,368 And when trust is lost, we will transition from inflation to hyperinflation. 285 00:37:49,368 --> 00:37:51,489 So we have a chance to avoid that. 286 00:37:51,509 --> 00:37:54,370 I always thought that we would not have a chance to avoid that. 287 00:37:54,511 --> 00:37:57,632 When I first learned about Bitcoin, my thought was that this is inevitable. 288 00:37:57,632 --> 00:38:02,220 But now with the maturation of Bitcoin from digital gold, 289 00:38:02,220 --> 00:38:06,973 to pristine collateral to now the reserve asset of the internet economy, which I will jump into in a second. 290 00:38:06,973 --> 00:38:14,137 But the maturation of it and the integration and fusion of it into the traditional system is actually the godsend that we need. 291 00:38:14,137 --> 00:38:18,079 Because no matter what the Fed decides to do, they can go left or they can go right. 292 00:38:18,079 --> 00:38:21,901 If they want to raise interest rates, net interest expenditures are going to go through the roof. 293 00:38:21,901 --> 00:38:23,522 We're going to need more inflation. 294 00:38:23,522 --> 00:38:24,886 Costs are going to go through the roof. 295 00:38:24,886 --> 00:38:26,454 It's going to push prices up throughout the economy. 296 00:38:26,454 --> 00:38:28,465 We're going to need more inflation. 297 00:38:28,465 --> 00:38:29,974 If they go and they lower, 298 00:38:29,974 --> 00:38:37,438 then all the trillions of dollars sitting on the sidelines is going to rush back into good services and assets and we're going to have inflation. 299 00:38:37,438 --> 00:38:40,580 So it doesn't matter which way they go, they're stuck. 300 00:38:40,580 --> 00:38:47,464 But now at this fork in the road, we have a golden path, a golden pathway in the middle with a big Bitcoin shining. 301 00:38:47,464 --> 00:38:51,165 And all you have to do is embrace that Bitcoin and step onto that path. 302 00:38:51,746 --> 00:38:55,188 And we have a Bitcoin future and it'll look like El Salvador. 303 00:38:55,388 --> 00:38:58,670 The IMF is trying to loan money to El Salvador again. 304 00:38:58,670 --> 00:38:59,550 Why? 305 00:38:59,584 --> 00:39:06,328 Because they're one of the only countries in the world whose asset side of their balance sheet is outpacing the liability side of their balance sheet. 306 00:39:06,328 --> 00:39:06,998 That's why. 307 00:39:06,998 --> 00:39:14,222 Because they're taking the dollars that they're earning through taxes or earning through growth and reinvesting them in Bitcoin. 308 00:39:14,222 --> 00:39:25,198 And then Bitcoin's compounding annual growth rate is performing at a rate and pace that the economy can't perform at, that their land, labors and material can't perform at, that 309 00:39:25,198 --> 00:39:27,489 their natural resources can't perform at. 310 00:39:27,489 --> 00:39:29,612 Like they just found a whole bunch of gold. 311 00:39:29,612 --> 00:39:36,587 But they'd have to invest hundreds of billions of dollars of gold and take a long time to pull that gold out and liquidate it and turn it into Bitcoin. 312 00:39:36,587 --> 00:39:42,841 But when they get Bitcoin, they have immediate liquidity and they have immediate growth and immediate value added to their balance sheets. 313 00:39:42,841 --> 00:39:45,623 And it's immediately accretive. 314 00:39:45,623 --> 00:39:52,838 And now the JP Morgan and the rating agencies, they're forced to increase the credit worthiness of El Salvador. 315 00:39:52,838 --> 00:39:54,339 They're forced to do it. 316 00:39:54,339 --> 00:39:56,760 And that's what will happen here in the United States. 317 00:39:56,840 --> 00:39:59,742 The United States government cannot borrow money. 318 00:39:59,774 --> 00:40:07,441 and create a deficit budget and then take that deficit and spend it into the economy and get more than a dollar's worth of growth. 319 00:40:07,441 --> 00:40:09,274 They're going to get less than a dollar's worth of growth. 320 00:40:09,274 --> 00:40:12,885 They're going to get less than principal plus interest returned on investment. 321 00:40:12,885 --> 00:40:18,370 Well, they can't put it into housing because that will make housing prices go up and you'll have a bigger affordability crisis. 322 00:40:18,370 --> 00:40:27,177 And they can't put it into natural resources because it takes hundreds of billions of dollars and a long time to liquidate those resources and bring to market. 323 00:40:27,177 --> 00:40:28,086 But now, 324 00:40:28,086 --> 00:40:32,270 the magic golden pathway, this magic internet money. 325 00:40:32,270 --> 00:40:39,796 You can embrace Bitcoin, put it on your balance sheet, and for every dollar you put into it, you're gonna get more than a dollar of return on investment. 326 00:40:39,796 --> 00:40:46,781 And this is gonna allow the asset side of your balance sheet to outpace the growth of the liability side of your balance sheet. 327 00:40:46,781 --> 00:40:51,625 That introduces, that reintroduces the idea of sustainability. 328 00:40:51,625 --> 00:40:53,267 And that's what we need here in the United States. 329 00:40:53,267 --> 00:40:54,448 We need sustainability. 330 00:40:54,448 --> 00:40:57,696 We need to rebuild trust within the system. 331 00:40:57,696 --> 00:41:02,086 It's a very clear trend that trust in government has been going down, especially since 2020. 332 00:41:02,086 --> 00:41:03,276 It's accelerated. 333 00:41:03,276 --> 00:41:13,316 But with the adoption of Bitcoin and the integration of Bitcoin into our economic and monetary and fiscal policies, we can rebuild that trust. 334 00:41:13,316 --> 00:41:20,376 And that Ray Dalio arc, that famous arc that goes up and comes down every single time on every country before. 335 00:41:20,376 --> 00:41:27,423 I think for the first time ever, we have a chance to re-strengthen our currency as long as we embrace Bitcoin as money. 336 00:41:27,423 --> 00:41:29,913 and we accept that dollars are currency and not money. 337 00:41:29,913 --> 00:41:33,783 And there's a difference between the two, but both are financial tools. 338 00:41:33,783 --> 00:41:36,423 Money is a store of value and a medium of exchange. 339 00:41:36,423 --> 00:41:37,723 Currency is not. 340 00:41:37,723 --> 00:41:40,933 Currency is a medium of exchange, but not a store of value. 341 00:41:40,933 --> 00:41:42,083 You can't save in it. 342 00:41:42,083 --> 00:41:49,443 So if we embrace that fact and we use both tools at the same time, that Ray Dalio arc is all of a going to shoot back up for the first time in history. 343 00:41:49,443 --> 00:41:54,303 And we're going to get the chance to take the lead in that internet economy. 344 00:41:54,303 --> 00:41:56,103 And I know I keep going here, Cedric, but 345 00:41:56,103 --> 00:41:59,475 I did want to dive on this internet economy because that was your original question. 346 00:41:59,475 --> 00:42:05,889 But now I've laid the groundwork for you for why on this pristine collateral and how it's working and how it's benefiting. 347 00:42:05,889 --> 00:42:10,341 And because it's working, it's now this whole this whole domain is being monetized. 348 00:42:10,341 --> 00:42:13,393 It's being adopted and monetized by the powers that be. 349 00:42:13,393 --> 00:42:14,324 And they're doing that. 350 00:42:14,324 --> 00:42:16,315 And it's solidifying the internet economy. 351 00:42:16,315 --> 00:42:20,277 And the internet economy is an aggregate economy of the world. 352 00:42:20,277 --> 00:42:23,377 No one country or people or person can control it. 353 00:42:23,377 --> 00:42:27,869 and no one country or people or person can outperform it because it's an aggregate. 354 00:42:27,869 --> 00:42:32,071 And nobody can state the interest rate in the internet economy. 355 00:42:32,071 --> 00:42:40,675 It is a free market interest rate with Bitcoin as the reserve asset based on the supply of money, the demand on loans, and the perceived counterparty risk. 356 00:42:40,675 --> 00:42:46,778 So this is the only economy in the world that offers free market interest rates on its money or on its reserve asset. 357 00:42:46,778 --> 00:42:49,757 And it's now out-incentivizing 358 00:42:49,757 --> 00:42:59,773 the socialist price controlled stated rates of the traditional economy, which means market makers are embracing it and requesting regulation and wanting exposure to the marketplace 359 00:42:59,773 --> 00:43:09,489 because it turns out as USA capitalists would have already known that free markets are always more profitable, better, safer than socialist controlled markets. 360 00:43:12,686 --> 00:43:13,746 That was tremendous. 361 00:43:13,746 --> 00:43:16,227 So I want to kind of expand on that. 362 00:43:17,008 --> 00:43:24,411 And I'll ask this in a one-two punch, because maybe you touched on the first part, but I want to ask it because maybe there's more to elaborate there. 363 00:43:24,531 --> 00:43:28,132 And we can kind of look to the second part. 364 00:43:28,613 --> 00:43:35,175 why are US Treasuries losing their place as the world's reserve asset? 365 00:43:35,976 --> 00:43:41,928 And if that's so, can we live in a world with a strong dollar and a strong Bitcoin? 366 00:43:43,155 --> 00:43:44,396 Yeah, absolutely. 367 00:43:44,396 --> 00:43:51,028 Well, I think we I think we should want to I think our goal should be to live in a world with a strong dollar and a strong Bitcoin. 368 00:43:51,028 --> 00:43:52,859 And I know some people get mad about that. 369 00:43:52,859 --> 00:43:53,669 But let me be clear. 370 00:43:53,669 --> 00:43:54,920 I'm a Bitcoin Maxie. 371 00:43:54,920 --> 00:43:59,321 Bitcoin is money and nothing else can compete with it and anything trying to compete with it. 372 00:43:59,321 --> 00:44:00,842 I believe is a scam. 373 00:44:00,862 --> 00:44:10,186 But there are going to be systems both decentralized and centralized built up around Bitcoin that are going to help financialize it, that are going to help monetize it just 374 00:44:10,186 --> 00:44:12,567 the same way real estate has been financialized. 375 00:44:12,701 --> 00:44:20,813 Now, what happened to real estate is that we financialized not money, but one of the hierarchy of needs that we need in a home and homes become less affordable. 376 00:44:20,813 --> 00:44:27,415 Michael Seller makes a great point on that when he speaks about the rich people who are land banking and that pushes up prices. 377 00:44:27,415 --> 00:44:30,676 They're eating up supply because they're just trying to store their value. 378 00:44:30,676 --> 00:44:40,539 Well, now they didn't really have that prime value store asset because the smarter ones, they did land banking instead of government banking because the real rate of return is 379 00:44:40,539 --> 00:44:41,139 negative. 380 00:44:41,139 --> 00:44:45,303 That means that the real rate of return is in terms of purchasing power. 381 00:44:45,303 --> 00:44:50,177 So if you're getting 5 % from the government, at the end of the year, your account's gonna have 5 % more money. 382 00:44:50,177 --> 00:44:51,738 There's no doubt, you're gonna get it. 383 00:44:51,738 --> 00:44:56,412 That's guaranteed by the full faith and credit of the US government and the printer that they control. 384 00:44:56,532 --> 00:45:03,898 The risk has become when I get paid that money after five years or 10 years or 30 years, what am I gonna be able to buy with it? 385 00:45:03,959 --> 00:45:07,982 And that is what has changed the dynamic between the... 386 00:45:09,375 --> 00:45:17,775 The people, the big buyers, the big bondholders who are trying to store massive amounts of wealth, they've asked that question, what am I gonna be able to buy with it? 387 00:45:17,775 --> 00:45:29,535 And unfortunately, because of the way of the centralized control system and management, prices are now outpacing the growth of wages and savings and the purchasing power value of 388 00:45:29,535 --> 00:45:30,275 the dollar. 389 00:45:30,275 --> 00:45:36,935 So you might have got paid that 5%, but when prices go up 10%, you're buying negative 5 % stuff. 390 00:45:36,935 --> 00:45:39,195 You have a negative 5%. 391 00:45:39,195 --> 00:45:47,002 increase in your purchasing power, which means you're going to buy less goods and services, which means the quality of your life and the standard of your living are going 392 00:45:47,002 --> 00:45:48,462 to decrease. 393 00:45:48,783 --> 00:45:54,108 And that negative real rate of return is what the whole world is really waking up to. 394 00:45:54,108 --> 00:45:59,332 And I think a lot of them already knew it, which is why finance, why real estate has been financialized. 395 00:45:59,332 --> 00:46:07,943 But now it's creeping down into their into their businesses because they can't even make business plans because the rate of the devaluation is nowhere near 396 00:46:07,943 --> 00:46:09,715 the headline CPI, right? 397 00:46:09,715 --> 00:46:17,861 So most people calculate the real rate of return by looking at the government's headline CPI and deducting it from the APY they're getting on whatever debt instrument they're 398 00:46:17,861 --> 00:46:18,532 holding. 399 00:46:18,532 --> 00:46:24,977 However, that headline CPI, now that it's substitution based, is not accurate to prices. 400 00:46:24,977 --> 00:46:31,123 And a lot of people will say, well, you can never be accurate to prices because it changes with each person and each person's consumption. 401 00:46:31,123 --> 00:46:31,773 Okay, that's fine. 402 00:46:31,773 --> 00:46:33,805 But you can be more accurate to businesses. 403 00:46:33,805 --> 00:46:36,859 So when businesses have a fixed 404 00:46:36,859 --> 00:46:45,774 Marginal cost of production and that cost of production goes up unless they raise their prices Then their profit margin shrinks so they can only let that marginal cost of 405 00:46:45,774 --> 00:46:54,129 production increase so much before they're forced to raise their prices and they're the ones who have to consume energy and Different types of goods and services throughout the 406 00:46:54,129 --> 00:47:05,363 world in order to build their product or service So it's inescapable when you see this this this push this cost push inflation we sure there's a demand push inflation, which is 407 00:47:05,363 --> 00:47:12,528 what we talked about earlier, if the Fed lowers interest rate, all those people incentivized by still negative interest rates, I guess they didn't think it through, but 408 00:47:12,528 --> 00:47:20,774 all those people incentivized to save with negative interest rates are now going to have even more negative interest rates, and that will push them back into the market. 409 00:47:20,774 --> 00:47:24,857 And that's going to be a demand on the existing supply of goods and services in the market. 410 00:47:24,857 --> 00:47:28,519 And that demand pushes up the price and the supply demand curve. 411 00:47:28,519 --> 00:47:34,140 But simultaneously, when you have the devaluation of the currency, you're getting that cost push 412 00:47:34,140 --> 00:47:36,860 because it's also the cost that needs to be pushed to the consumer. 413 00:47:36,860 --> 00:47:38,340 It's not always demand. 414 00:47:38,340 --> 00:47:41,060 And this is perfectly seen in Venezuela. 415 00:47:41,240 --> 00:47:47,020 They had a demand destruction campaign that destroyed the entire economy. 416 00:47:47,020 --> 00:47:56,400 Nobody really needed or wanted anything except food and water, but prices still went up because the source of inflation was not from the economy, but the abuse of the currency. 417 00:47:56,400 --> 00:47:59,194 And that's kind of where we're stuck right now. 418 00:47:59,194 --> 00:48:09,932 So it's exciting to see Elon getting in there with Doge because if we have the Department of Government Efficiency who is able to reduce the deficit, cut waste, cut fraud, and 419 00:48:09,932 --> 00:48:13,194 shrink the pace of growth on the liability side of the balance sheet. 420 00:48:13,194 --> 00:48:20,419 And then at the same time, we're able to adopt a strategic Bitcoin reserve and start putting Bitcoin on the asset side of our balance sheet. 421 00:48:20,419 --> 00:48:28,070 We are now doing everything that we need to be doing to change the trend of trust and to start to rebuild trust within the marketplace. 422 00:48:28,070 --> 00:48:36,163 to let people know, hey, we are taking the right and proper steps to not keep extracting value so that you lose purchasing power. 423 00:48:36,163 --> 00:48:45,307 We're here to restore that purchasing power, to build up our credit worthiness and to gain back the trust in the marketplace that not only through the abuse of currency expansion, 424 00:48:45,307 --> 00:48:48,909 but also through the weaponization of the dollar, we have lost that trust. 425 00:48:48,909 --> 00:48:50,969 So we got some work to do to gain it all back. 426 00:48:50,969 --> 00:48:57,452 But I think by embracing Bitcoin and putting an element of truth back into the system, this is the perfect step. 427 00:48:57,500 --> 00:49:04,262 that the United States can take to take the lead in the Internet economy, because it's been a gift that Bricks has been talking about gold. 428 00:49:04,262 --> 00:49:06,032 I mean, hopefully that wasn't a distraction. 429 00:49:06,032 --> 00:49:07,533 They haven't been accumulating Bitcoin. 430 00:49:07,533 --> 00:49:11,774 know some Middle Eastern countries have been accumulating Bitcoin, but they know game theory. 431 00:49:11,774 --> 00:49:14,525 They're not going to come out and announce it like the United States has. 432 00:49:14,525 --> 00:49:19,566 So the way that this is progressing, we are are, I think, hopeful. 433 00:49:19,566 --> 00:49:26,160 I've been this is the most hopeful I've ever been because I think the incoming administration and I think it's I think it's also bipartisan. 434 00:49:26,160 --> 00:49:31,183 I think there's a lot of bipartisan support for Bitcoin integration into the Strategic Bitcoin Reserve. 435 00:49:31,183 --> 00:49:34,324 And I love the rules around the Strategic Bitcoin Reserve. 436 00:49:34,625 --> 00:49:43,429 take the Bitcoin, you put it in there, you can't touch it for 20 years, which means you're understanding, you're acknowledging by law, it's a long term savings technology. 437 00:49:43,429 --> 00:49:46,111 When you go to sell it, you can only sell 10 % of it. 438 00:49:46,111 --> 00:49:50,453 That's good because you don't want anybody fat fingering anything in the government for whatever reason. 439 00:49:50,453 --> 00:49:53,875 And the proceeds from that sale have to go to paying down the debt. 440 00:49:53,875 --> 00:49:55,764 So those are all phenomenal 441 00:49:55,764 --> 00:49:59,066 of rules and policies that I agree with. 442 00:49:59,066 --> 00:50:06,490 But I think if we really want to take the lead in the internet economy, we also need a Bitcoin recapitalization fund. 443 00:50:06,490 --> 00:50:10,392 The Strategic Bitcoin Reserve comes with too much handcuffs. 444 00:50:10,392 --> 00:50:12,624 But I agree with those handcuffs and we need them. 445 00:50:12,624 --> 00:50:22,990 So we need a separate fund that a smaller amount of the Bitcoin we accumulate goes into that allows us to perform this financial innovation that allows the US government to issue 446 00:50:22,990 --> 00:50:24,122 Bitcoin bonds. 447 00:50:24,122 --> 00:50:35,180 that allows the US government to sell those Bitcoin bonds to the social security funds, the veteran benefits, to the fire EMT and police pension funds. 448 00:50:35,180 --> 00:50:43,526 We need to recapitalize the Republic because we've sold our debt to these pensions and now that debt is yielding in negative real terms. 449 00:50:43,526 --> 00:50:51,280 So their retirements and the benefits that they get for putting in service to our community are becoming worth less and less and less. 450 00:50:51,280 --> 00:50:53,781 That's a bad trend that doesn't incentivize good teachers. 451 00:50:53,781 --> 00:50:56,632 That doesn't incentivize cops who want to do the right thing. 452 00:50:56,632 --> 00:51:06,577 That doesn't incentivize people that want to become firefighters and EMTs to help perform these medical services, which are critical to a functioning economy in society and for 453 00:51:06,577 --> 00:51:07,327 safety. 454 00:51:07,327 --> 00:51:08,808 And everybody wants these things. 455 00:51:08,808 --> 00:51:17,251 So we need to make sure we're treating these people better and better, not letting their pensions get a lower and lower, more negative real rate of return year after year. 456 00:51:17,251 --> 00:51:18,840 And the way that we do this, 457 00:51:18,840 --> 00:51:30,616 is we integrate Bitcoin, we fuse Bitcoin, we create revolutionary new products that allow and enable the United States to take the lead in the internet economy and to do it with 458 00:51:30,616 --> 00:51:41,422 the Bitcoin recapitalization fund, a smaller portion of our stack that has less handcuffs that makes it easier to integrate into our economic, monetary and fiscal policies. 459 00:51:43,404 --> 00:51:47,517 Yeah, I mean, it's, that's exciting stuff. 460 00:51:47,517 --> 00:51:52,300 And I kind of want to kind of maybe break that down a little bit. 461 00:51:52,300 --> 00:51:56,442 So maybe to level set, what are Bitcoin bonds? 462 00:51:57,936 --> 00:52:03,140 Yeah, so Bitcoin bonds come in many forms, just like a regular bond comes in many forms. 463 00:52:03,140 --> 00:52:07,902 So I think the real question is, what's the problem? 464 00:52:07,963 --> 00:52:12,826 Right, because a lot of companies will try to create a product, but there's no, it's not a solution to anything. 465 00:52:12,826 --> 00:52:15,128 So I think at first we need to understand the problem. 466 00:52:15,128 --> 00:52:18,510 If you've been listening to the last 15 minutes, I think you have a good understanding of the problem. 467 00:52:18,510 --> 00:52:22,192 The problem is this, real negative rates of return. 468 00:52:22,613 --> 00:52:27,996 The interest rate cannot go high enough to compensate for the real increase in prices. 469 00:52:28,220 --> 00:52:33,780 And therefore, there is a negative real rate of return across the entire US Treasury yield curve. 470 00:52:33,780 --> 00:52:37,740 Even if you're in bills at four and a half and we're at five percent, it doesn't matter. 471 00:52:38,440 --> 00:52:48,240 pre 1983 non substitution based CPI, which is a government equation, which doesn't use substitution practices, is up towards 11 percent. 472 00:52:48,240 --> 00:52:52,000 So imagine if they had to put Treasury bill rates up at 11 percent. 473 00:52:52,000 --> 00:52:54,060 That would it's it's unsustainable. 474 00:52:54,060 --> 00:52:57,060 Net interest expense would balloon and 475 00:52:57,060 --> 00:53:04,032 What would happen is they would try to raise it to fight inflation, but because of the amount of debt that we have, and that's what's different between now and the 70s. 476 00:53:04,032 --> 00:53:05,693 Now we have trillions of dollars of debt. 477 00:53:05,693 --> 00:53:11,664 So when you raise that interest really high, the net interest expense makes the deficit grow. 478 00:53:11,664 --> 00:53:15,325 And the growth of the deficit is actually the definition of inflation. 479 00:53:15,325 --> 00:53:24,198 So they can't raise the rates that high to properly incentivize lenders to lend their money because the rate inflation is higher. 480 00:53:24,198 --> 00:53:30,181 than the highest yield and they literally can't push it up there because the higher they push it, the more inflation it causes. 481 00:53:30,181 --> 00:53:31,832 And that's the debt death spiral. 482 00:53:31,832 --> 00:53:38,235 Max Kaiser did a quote tweet of me and got put in Forbes talking about the debt spiral. 483 00:53:38,556 --> 00:53:41,077 They're stuck, they can't go either way. 484 00:53:41,077 --> 00:53:42,888 And that's very alarming. 485 00:53:42,888 --> 00:53:44,079 So what do we need to do? 486 00:53:44,079 --> 00:53:47,141 We need to solve the problem of negative real rates. 487 00:53:47,141 --> 00:53:53,456 We need to find a way for our debt holders to end up at the end of the maturation of that 488 00:53:53,456 --> 00:53:58,079 bill, note or bond to have a positive real rate of return. 489 00:53:58,079 --> 00:53:59,710 So that's what the Bitcoin bond does. 490 00:53:59,710 --> 00:54:06,305 It takes US Treasury debt or in our marketplace, other counterparties, issuer debt. 491 00:54:06,305 --> 00:54:11,027 And in some cases, it might be a city or a municipality. 492 00:54:11,888 --> 00:54:17,312 One thing that's amazing about the strategic Bitcoin reserve is that local politicians are waking up really quick. 493 00:54:17,312 --> 00:54:21,405 If the federal government has a strategic reserve, then the state is going to have it. 494 00:54:21,405 --> 00:54:22,676 And that's been confirmed. 495 00:54:22,676 --> 00:54:23,341 But what 496 00:54:23,341 --> 00:54:26,042 going a little bit deeper, which more people don't talk about. 497 00:54:26,042 --> 00:54:33,343 The state's balance sheet is not the same balance sheet of the city and the city's balance sheet is not the same balance sheet as the municipality. 498 00:54:33,343 --> 00:54:40,125 So you're going to see these small towns and cities, they're going to create their own strategic Bitcoin reserves as well. 499 00:54:40,125 --> 00:54:43,876 And they'll be issuing, believe, they call municipal Bitcoin bonds. 500 00:54:43,876 --> 00:54:49,207 So imagine the city of Naples, Florida, where we'll be enjoying a Bitcoin day together. 501 00:54:49,647 --> 00:54:52,508 They issue a municipal Bitcoin bond. 502 00:54:52,512 --> 00:54:55,093 And the city of Naples is pretty wealthy. 503 00:54:55,893 --> 00:54:58,444 It's a great area that people pay high taxes there. 504 00:54:58,444 --> 00:55:02,195 They have a lot of cash flow to take care of the municipality. 505 00:55:02,195 --> 00:55:03,795 So they have a good credit rating. 506 00:55:03,795 --> 00:55:09,457 So you're to have a pretty strong credit rating in the city of Naples with their debt combined with Bitcoin. 507 00:55:09,457 --> 00:55:17,749 Or depending on who you want your counterparty to be, you could also invest in a Bitcoin bond, which is a special principal protected note that combines U.S. 508 00:55:17,749 --> 00:55:20,278 treasuries with the Bitcoin. 509 00:55:20,278 --> 00:55:24,349 So there are going to be different counterparty risks depending on the issuer of the bond. 510 00:55:24,349 --> 00:55:25,449 But let's just use the U.S. 511 00:55:25,449 --> 00:55:27,110 Treasury in this example. 512 00:55:28,190 --> 00:55:30,991 We do a billion dollar issuance. 513 00:55:30,991 --> 00:55:36,332 Eight hundred million dollars will go into the ten year or excuse me, the five year note at four and a half percent. 514 00:55:36,332 --> 00:55:38,853 Two hundred million dollars goes into Bitcoin. 515 00:55:38,853 --> 00:55:40,684 So you have eight hundred million dollars of U.S. 516 00:55:40,684 --> 00:55:44,615 Treasury notes and you have two hundred million dollars of Bitcoin. 517 00:55:44,615 --> 00:55:47,976 Now what happens is it's a five year principal protected note. 518 00:55:47,976 --> 00:55:49,164 What does that mean? 519 00:55:49,164 --> 00:56:00,391 That means over the course of five years, that 800 million at four and a half percent will mature with a value of $1 billion, the same amount of your principal investment. 520 00:56:00,391 --> 00:56:06,794 So your principal is protected by the full faith and credit of the United States government by the power of the printer. 521 00:56:06,794 --> 00:56:11,277 Yeah, you're gonna get that money no matter what, because they're gonna print it and pay it to you. 522 00:56:11,277 --> 00:56:15,779 When you get it, we don't know what you're gonna be able to buy, but that's the same risk you're getting every other debt product anyway. 523 00:56:15,779 --> 00:56:17,176 What's different here, 524 00:56:17,176 --> 00:56:21,116 is what happened to the 200 million dollars worth of Bitcoin over those five years. 525 00:56:21,116 --> 00:56:27,256 And this is what's so interesting because the first question we get is, OK, well, what if Bitcoin goes down 50 percent? 526 00:56:27,256 --> 00:56:34,256 And to which I say people like you and I know Bitcoin can go down 50 percent in five days, but it's not going to go down 50 percent in five years. 527 00:56:34,256 --> 00:56:37,256 So there's, you have to be clear what happens here. 528 00:56:37,256 --> 00:56:42,596 But let's just say it did go down 50 percent in five years because these people think that's a possibility. 529 00:56:42,996 --> 00:56:45,616 The 200 million turns into 100 million. 530 00:56:46,112 --> 00:56:50,334 The principle protected note matures with a value of 1.1 billion. 531 00:56:50,434 --> 00:56:55,066 Well, 0.1 is 10 % divided by five years in simple interest terms. 532 00:56:55,066 --> 00:56:56,897 That's 2 % APY. 533 00:56:56,897 --> 00:57:01,259 So as the Fed continues to lower rates, you're gonna pretty much match that prime rate anyway. 534 00:57:01,259 --> 00:57:05,861 And if Bitcoin price stays the same, that's 4 % APY. 535 00:57:05,901 --> 00:57:09,263 But what happens if Bitcoin does what we think it's gonna do? 536 00:57:09,263 --> 00:57:12,812 What happens if Bitcoin does what it was engineered to do? 537 00:57:12,812 --> 00:57:23,181 because you and I know with proof of work consensus, the difficulty adjustment, absolute digital scarcity, that it was strategically designed to leverage the natural laws of 538 00:57:23,181 --> 00:57:30,126 economics and commodity cycles and price discovery cycles to empower its holders, we the people, to drive value into the network. 539 00:57:30,126 --> 00:57:37,152 So as it does what it was designed to do as savings technology, in the bond, it actually produces the yield. 540 00:57:37,152 --> 00:57:42,232 That's why we call it a Bitcoin bond, because it's the Bitcoin performance that produces the yield on the bond. 541 00:57:42,232 --> 00:57:44,792 even though technically it's a principal protected note. 542 00:57:44,792 --> 00:57:51,272 So if Bitcoin maintains its 60 % compounding annual growth rate in five years, the price will be 10 times higher. 543 00:57:51,272 --> 00:57:54,692 That $200 million will be worth $2 billion. 544 00:57:54,692 --> 00:57:59,392 The note will mature with $3 billion worth of value. 545 00:57:59,392 --> 00:58:01,952 And that is 200%. 546 00:58:01,952 --> 00:58:07,492 200 % divided by those five years in simple interest terms is 40 % APY. 547 00:58:07,492 --> 00:58:10,892 But what if compounding annual growth rate is cut down to 30 %? 548 00:58:10,892 --> 00:58:13,333 The note will mature with 20 % APY. 549 00:58:13,333 --> 00:58:22,057 So even if Bitcoin's performance over the next five years doesn't match its previous 10-year CAGR, half of that will still produce 20 % APY. 550 00:58:22,057 --> 00:58:34,502 Now in a credit market, you have to be willing to practice usury and charge people 26 % on credit cards and get a super high default rate risk in order to get a 20 % plus APY. 551 00:58:34,502 --> 00:58:41,094 But with a Bitcoin bond, you're getting 20 % plus APY with principal protection from the United States government. 552 00:58:41,260 --> 00:58:55,239 So this type of product, this type of engineered debt that inserts and integrates and fuses engineered money into traditional debt fixes that problem because at 20 % APY, now 553 00:58:55,239 --> 00:59:00,493 when you take away the 11 % of real price increases, you're positive 9%. 554 00:59:00,493 --> 00:59:06,337 So the person is able to increase their purchasing power over time by lending into this product. 555 00:59:06,337 --> 00:59:09,619 And some of you might be saying, well, why would a person want to do that? 556 00:59:09,619 --> 00:59:10,904 To which I would say, yeah. 557 00:59:10,904 --> 00:59:11,554 Absolutely. 558 00:59:11,554 --> 00:59:16,904 If you're an astute money manager, you should probably just put Bitcoin on your balance sheet because you're going to get 60 % CAGR. 559 00:59:16,904 --> 00:59:22,484 So why take 20 % APY when you can get 60 % CAGR just putting Bitcoin on your balance sheet? 560 00:59:22,484 --> 00:59:32,844 Well, the answer to this question lies in the bigger picture, which is we're not all using Bitcoin for our personal use. 561 00:59:32,844 --> 00:59:34,194 We want to use it in our businesses. 562 00:59:34,194 --> 00:59:36,064 We want to use it in business models. 563 00:59:36,064 --> 00:59:39,160 And for a business, they can't swallow the volatility. 564 00:59:39,160 --> 00:59:46,200 So imagine a business takes all of their profit and puts it in pays their cost and puts their profit into Bitcoin. 565 00:59:46,200 --> 00:59:49,140 And then Bitcoin goes down 50 percent in five days. 566 00:59:49,140 --> 00:59:53,180 Well, the company's profitability just got nacked 50 percent in five days. 567 00:59:53,180 --> 00:59:56,780 So that's that creates a big problem, because what if what if there's an emergency? 568 00:59:56,780 --> 01:00:02,060 What if the company needs that access to that money and liquidity, but the equity value is there is not there now? 569 01:00:02,060 --> 01:00:06,840 Well, that's different when you have a Bitcoin bond, because when you have a Bitcoin bond, you have principal protection to the downside. 570 01:00:06,840 --> 01:00:09,194 So even Bitcoin goes down 50 percent. 571 01:00:09,194 --> 01:00:11,946 well, you're looking at 2 % APY at maturation. 572 01:00:11,946 --> 01:00:17,289 You still have access to the full value, the full par value of that instrument. 573 01:00:17,289 --> 01:00:19,410 And that's something exciting we're doing at People's Reserve. 574 01:00:19,410 --> 01:00:26,224 You can post your Bitcoin bond as collateral and bar against it if you're a business and you need access to that equity value. 575 01:00:26,224 --> 01:00:30,516 You don't have to wait to maturation and you don't have to take mark to market losses. 576 01:00:30,516 --> 01:00:38,220 So it's a beautiful instrument that is going to be utilized by people to create cash flow and maintain exposure to Bitcoin upside. 577 01:00:38,220 --> 01:00:48,528 But also, more importantly, think even by businesses and corporations to eliminate downside volatility, but still maintain exposure to the best performing asset in the 578 01:00:48,528 --> 01:00:50,149 world, which is Bitcoin. 579 01:00:50,149 --> 01:00:54,632 And it's that price performance that produces the yield on the Bitcoin bond itself. 580 01:00:55,030 --> 01:00:56,751 Hmm, that's interesting. 581 01:00:57,231 --> 01:00:59,082 I want to hear more about people's reserves. 582 01:00:59,082 --> 01:01:01,613 I'll make sure to bring that up again for sure. 583 01:01:02,794 --> 01:01:12,630 What about maybe people who say that there's negative side effects or this is not a great idea, the SBR? 584 01:01:12,630 --> 01:01:17,382 I'm looking forward to I'm going to reach out to Mark Goodwin and have him back on the show again. 585 01:01:17,910 --> 01:01:21,710 He has a lot of interesting commentary on this. 586 01:01:21,710 --> 01:01:24,606 Is this a form of debt pardoning? 587 01:01:24,794 --> 01:01:29,137 The United States government has racked up lot of unfunded liabilities. 588 01:01:29,314 --> 01:01:34,342 A lot of people want to, are anti-state as Bitcoiners or want to separate money from state? 589 01:01:34,342 --> 01:01:38,925 Is this us kind of going to the state to pump our bags? 590 01:01:39,186 --> 01:01:44,810 What do you kind of say to those kind of notions or commentary? 591 01:01:45,235 --> 01:01:50,388 Yeah, I think that that is a good mindset and that should be the default mindset. 592 01:01:50,388 --> 01:01:57,212 But after a little bit of due diligence, you have to admit that Bitcoin is not scalable as it is. 593 01:01:57,212 --> 01:02:00,954 And we don't want to increase block size because we're going to lose decentralization. 594 01:02:00,954 --> 01:02:01,935 It's going to be too hard. 595 01:02:01,935 --> 01:02:04,857 And you need to be easy and cheap to spin up a node. 596 01:02:04,857 --> 01:02:07,458 So you can't have that trade off. 597 01:02:07,458 --> 01:02:11,280 So we know we need a different layer to expand Bitcoin. 598 01:02:11,280 --> 01:02:12,851 And my position is this. 599 01:02:12,913 --> 01:02:15,695 I think the dollar is the best L2 for Bitcoin. 600 01:02:15,695 --> 01:02:26,765 Why are we going to build a complete entire new infrastructure to to allow Bitcoin monetary velocity to increase because you can't buy the cup of coffee with your Bitcoin 601 01:02:26,765 --> 01:02:28,466 and you really don't want to do it anyway. 602 01:02:28,466 --> 01:02:31,008 And this comes back to like the money currency thing. 603 01:02:31,008 --> 01:02:36,933 People who think dollars are money and Bitcoin are money think that they see a money fighting a money. 604 01:02:37,834 --> 01:02:40,095 Bitcoin is an entire league of itself. 605 01:02:40,296 --> 01:02:42,057 The fiat currency is not money. 606 01:02:42,057 --> 01:02:47,719 The fiat currency is like a high school wrestler going and Bitcoin is like the UFC heavyweight champion. 607 01:02:47,719 --> 01:02:49,820 There's is not even comparable. 608 01:02:49,820 --> 01:02:53,822 You're you're talking about a shovel versus a rake. 609 01:02:53,822 --> 01:02:55,753 You're talking about something completely different. 610 01:02:55,753 --> 01:02:56,763 Money isn't currency. 611 01:02:56,763 --> 01:02:57,653 Currency isn't money. 612 01:02:57,653 --> 01:02:59,524 And I think that's where the confusion comes from. 613 01:02:59,524 --> 01:03:01,955 That's where this this diametrically opposed. 614 01:03:01,955 --> 01:03:04,586 We have to be this way or we have to be that way type thing. 615 01:03:04,586 --> 01:03:07,247 But no Bitcoin is actually the money. 616 01:03:07,247 --> 01:03:11,483 And when you when you use currency with that money, you can borrow the currency against 617 01:03:11,483 --> 01:03:21,779 Bitcoin and Bitcoin will go up and currency will go down and that actually empowers you as the holder of Bitcoin and then at the same time we get the benefits of that now today 618 01:03:21,779 --> 01:03:31,314 because there exists no solution like lightning network is beautiful and I know Gabe Higgins over at block spaces is working on some really cool stuff that's going to bring a 619 01:03:31,314 --> 01:03:39,738 lot of functionality to the lightning network so I think there's a really bright future there but in a true free market there's multiple solutions to problems and the market 620 01:03:39,738 --> 01:03:41,267 chooses the solution that bet 621 01:03:41,267 --> 01:03:44,379 that best fits the problem that they are specifically facing. 622 01:03:44,379 --> 01:03:46,761 I think lightning is one of those solutions. 623 01:03:46,761 --> 01:03:48,762 I think liquid is going to be one of those solutions. 624 01:03:48,762 --> 01:03:52,125 I think there's going to be other L2 solutions that pop up. 625 01:03:52,125 --> 01:03:57,347 But I think that the dollars network, the dollars network is undefeated. 626 01:03:57,347 --> 01:03:58,649 It's worldwide. 627 01:03:58,649 --> 01:04:00,230 It's established. 628 01:04:00,690 --> 01:04:04,753 Why not tap into that network and make it Bitcoin's L2? 629 01:04:04,753 --> 01:04:07,955 It's already built and we get all the benefits of it today. 630 01:04:07,955 --> 01:04:10,737 And the dollar is not a threat to Bitcoin. 631 01:04:10,791 --> 01:04:12,262 And Bitcoin's not a threat to the dollar. 632 01:04:12,262 --> 01:04:16,603 Like I was mentioning earlier, you put Bitcoin on your balance sheet, it makes the dollar stronger. 633 01:04:16,603 --> 01:04:17,354 How do I know that? 634 01:04:17,354 --> 01:04:21,786 Because El Salvador puts Bitcoin on their balance sheet, it makes their credit worthiness go up. 635 01:04:21,786 --> 01:04:25,727 So the same thing is going to happen here that happened there once you put it on your balance sheet. 636 01:04:25,727 --> 01:04:28,568 But what Bitcoin does is it keeps you in check. 637 01:04:28,568 --> 01:04:29,569 It keeps you in check. 638 01:04:29,569 --> 01:04:30,770 Just like gold kept them in check. 639 01:04:30,770 --> 01:04:32,270 Why did they remove gold? 640 01:04:32,270 --> 01:04:34,071 Because they didn't want to be kept in check. 641 01:04:34,071 --> 01:04:37,532 When you put Bitcoin back in it, it puts the government back in check. 642 01:04:37,532 --> 01:04:40,051 It'll be a measure of the economy. 643 01:04:40,051 --> 01:04:45,905 and people will be able to get a realistic measurement of spending versus growth. 644 01:04:45,905 --> 01:04:48,507 And I don't think we're getting that accurate measurement today. 645 01:04:48,507 --> 01:04:51,449 So I see it as being complementary. 646 01:04:51,990 --> 01:05:00,325 I see it being that the dollar as currency is the best existing L2 solution to increase Bitcoin's monetary velocity. 647 01:05:00,325 --> 01:05:08,499 Because if we're taking those dollars, going back and forth and then putting them back in Bitcoin, it's a complementary system because we want to spend our dollars with currency. 648 01:05:08,499 --> 01:05:11,652 But we want to save our time and energy in Bitcoin. 649 01:05:11,652 --> 01:05:16,928 And if we can if we can embrace that, I think we I think the United States can take the lead in the Internet economy. 650 01:05:16,928 --> 01:05:20,562 And if we don't embrace that, then bricks or somebody else is going to do it. 651 01:05:20,562 --> 01:05:24,015 And free market incentives are going to win in the long run. 652 01:05:25,080 --> 01:05:26,591 Yeah, I can see that. 653 01:05:26,792 --> 01:05:30,625 I do totally agree that there's gonna be a lot of financialization of Bitcoin. 654 01:05:30,625 --> 01:05:31,255 It's inevitable. 655 01:05:31,255 --> 01:05:32,206 It makes a lot of sense. 656 01:05:32,206 --> 01:05:33,127 It's a base layer. 657 01:05:33,127 --> 01:05:38,361 It's interesting kind of talking about the dollar as layer two. 658 01:05:38,702 --> 01:05:49,570 I think my only qualm there or worry or concern would be around on ramps and off ramps and the political control of that. 659 01:05:49,791 --> 01:05:53,294 Because I do want to see the complete separation of money of state. 660 01:05:53,294 --> 01:05:54,474 money in state. 661 01:05:54,474 --> 01:06:02,394 want to ask about the politicization or the possibility to politicize like a strategic Bitcoin reserve. 662 01:06:02,394 --> 01:06:04,934 I see that it comes with handcuffs. 663 01:06:04,934 --> 01:06:12,294 You mentioned them before, must hodl the Bitcoin for 20 years, only able to sell 10 % of the time, proceeds only to pay down debt. 664 01:06:12,294 --> 01:06:19,750 But I think all those are sort of maybe negotiable once you have the large honeypot of Bitcoin on the balance sheet. 665 01:06:19,892 --> 01:06:30,248 And maybe there's a politician who says, you know, runs for office on the, we'll change the law and we'll sell 50 % to give everyone a 50 grand check for housing, you know, these 666 01:06:30,248 --> 01:06:31,448 kinds of things. 667 01:06:32,169 --> 01:06:41,735 You know, or 50,000 sats, it doesn't even have to go out, whatever it is, but you know, the value, decimating the value in terms of what's on the balance sheet and liquidating 668 01:06:41,735 --> 01:06:42,095 it. 669 01:06:42,095 --> 01:06:44,696 I don't know if those are concerns of yours at all. 670 01:06:44,696 --> 01:06:47,798 So to the politicization of an SBR. 671 01:06:48,595 --> 01:06:59,513 Yeah, I mean, at any point in time, whenever you have a voting block, they're going to be able to come in and make changes that sometimes even what the majority of people don't 672 01:06:59,513 --> 01:07:00,233 want. 673 01:07:00,233 --> 01:07:04,897 That's kind of like the ultimate conundrum of a republic. 674 01:07:04,897 --> 01:07:05,247 Right. 675 01:07:05,247 --> 01:07:14,924 So these these problems are inescapable and they and I think they do pose a risk, but they don't pose a risk to us personally. 676 01:07:14,924 --> 01:07:17,319 That's that poses a risk to our government. 677 01:07:17,319 --> 01:07:19,290 And to me, you know, I'm a constitutionalist. 678 01:07:19,290 --> 01:07:20,311 I'm a patriot. 679 01:07:20,311 --> 01:07:22,572 I wanted to headquarter my company here in the United States. 680 01:07:22,572 --> 01:07:25,313 We'd be live already if we built offshore. 681 01:07:25,313 --> 01:07:27,214 I mean, we would have saved a lot of money, too. 682 01:07:27,214 --> 01:07:30,052 So it wasn't easy to build here, but I'm a constitutionalist. 683 01:07:30,052 --> 01:07:30,636 I'm a patriot. 684 01:07:30,636 --> 01:07:32,027 I want to be here in the United States. 685 01:07:32,027 --> 01:07:33,738 I want to be made in USA. 686 01:07:33,738 --> 01:07:35,409 I believe in make America healthy again. 687 01:07:35,409 --> 01:07:37,440 I believe in make America great again. 688 01:07:37,440 --> 01:07:40,942 And I think that I want to do that for my kids. 689 01:07:40,942 --> 01:07:47,014 I want to do that so that so that because we live in a government that admits the government doesn't give you rights. 690 01:07:47,014 --> 01:07:50,695 God has given you the right to life, liberty, and the pursuit of happiness. 691 01:07:50,695 --> 01:07:52,636 So the government has no right meddling here. 692 01:07:52,636 --> 01:07:57,737 And by the way, here's a specific bill of rights that people have that you can't take away from them. 693 01:07:57,737 --> 01:07:59,817 There's no other country that does that. 694 01:07:59,817 --> 01:08:01,658 We set the standard. 695 01:08:01,658 --> 01:08:10,961 So if we allow ourselves to destroy ourselves, we're really taking away the freedom that comes with our republic from our children. 696 01:08:10,961 --> 01:08:13,681 So I think, you know, we need to, that's probably where we got here. 697 01:08:13,681 --> 01:08:14,802 That's how we got here, Cedric. 698 01:08:14,802 --> 01:08:16,538 We got here because good people 699 01:08:16,538 --> 01:08:26,353 stood by and did nothing and bad people went and took action and over time they got into power and we wanted to enjoy our life and live it peaceably and they wanted to live life 700 01:08:26,353 --> 01:08:26,984 their way. 701 01:08:26,984 --> 01:08:30,466 They wanted to force you to put boys and women's sports. 702 01:08:30,466 --> 01:08:39,431 They wanted to force you to do things that weren't common sense because the good person stepped back and wanted to live their life and nobody wanted to extend the helping hand to 703 01:08:39,431 --> 01:08:40,211 another. 704 01:08:40,211 --> 01:08:41,962 And that's why I love Bitcoin. 705 01:08:41,962 --> 01:08:44,413 They say you don't change Bitcoin, Bitcoin changes you. 706 01:08:44,413 --> 01:08:46,224 So I think that these risks 707 01:08:46,262 --> 01:08:47,222 are real. 708 01:08:47,222 --> 01:08:56,166 But I hope that over time that the same change I've seen in myself from Bitcoin with the it would be integrated into the system, we would see that consequence on the system. 709 01:08:56,166 --> 01:09:05,910 Well, we would change our way of thinking we would change our mind because we're now not in this little fish tank of fiat economics, the fish tank has broken and we're in the 710 01:09:05,910 --> 01:09:13,733 reality and Bitcoin is powering us in the reality versus this fiat system, which is continually extracting value. 711 01:09:13,733 --> 01:09:15,836 So I think that risk is there. 712 01:09:15,836 --> 01:09:18,372 But I also think there'll be a transition of mindset. 713 01:09:18,372 --> 01:09:25,326 with that transition of mindset, if we can defend Bitcoin through that transition of mindset, we can mitigate that risk. 714 01:09:27,648 --> 01:09:35,952 So speaking of mitigating that risk and sort of, you know, back to nation states and their way of looking at Bitcoin, and this is kind of a two-part question. 715 01:09:35,952 --> 01:09:38,583 Are they going to regain our trust? 716 01:09:39,484 --> 01:09:41,645 And maybe Bitcoin is a component of that. 717 01:09:41,645 --> 01:09:51,750 But more, more the question is, are they going to print the hell out of their currency to buy the hell out of Bitcoin and tell us that's for our own benefit? 718 01:09:52,464 --> 01:09:54,535 Yeah, now that's a good that's a good question. 719 01:09:54,535 --> 01:10:03,378 My see, I hope your viewers, I'll take this second to just say that I've had the honor to be nominated to RFK's Council of Economic Advisers. 720 01:10:03,378 --> 01:10:05,419 I'm sure Cedric will put the link under the video. 721 01:10:05,419 --> 01:10:07,200 You can go and vote there for me. 722 01:10:07,200 --> 01:10:13,172 And if I get onto that council, I promise to be a voice for Bitcoin because we don't just need the strategic Bitcoin reserve. 723 01:10:13,172 --> 01:10:15,563 We need the Bitcoin recapitalization fund. 724 01:10:15,563 --> 01:10:18,585 We need to not just print and buy Bitcoin. 725 01:10:18,585 --> 01:10:20,275 I don't think that's going to solve the problem. 726 01:10:20,275 --> 01:10:22,374 And I don't think that's going to build trust. 727 01:10:22,374 --> 01:10:31,151 But when you take Bitcoin and perhaps the government is coming to the People's Reserve, instead of going to the Federal Reserve, why don't you come to the People's Reserve, issue 728 01:10:31,151 --> 01:10:40,960 your Bitcoin bond to the marketplace who values Bitcoin and understands what they're loaning into, who understands that they're getting a real rate of return, and allow the 729 01:10:40,960 --> 01:10:43,112 marketplace to reprice risk. 730 01:10:43,112 --> 01:10:44,393 That is our thesis. 731 01:10:44,393 --> 01:10:46,154 Risk is being repriced. 732 01:10:46,154 --> 01:10:51,004 We are moving from a promised-based fiat credit system 733 01:10:51,004 --> 01:10:57,157 to a commodity backed credit system where risk is reduced and therefore interest rates can be reduced. 734 01:10:57,157 --> 01:11:02,981 It's amazing how the Fiat system wants low interest rates, but then they introduce higher risk. 735 01:11:02,981 --> 01:11:06,543 That's the opposite of free market price discovery for interest rates. 736 01:11:06,543 --> 01:11:10,765 Sure, it's based on the supply of money, demand of loans, but also the perceived counterparty risk. 737 01:11:10,765 --> 01:11:12,066 That's why you have a credit score. 738 01:11:12,066 --> 01:11:16,108 The higher your credit score, the lower the perceived risk, the better the rate you can get. 739 01:11:16,108 --> 01:11:18,349 This is how the market incentivizes you. 740 01:11:18,349 --> 01:11:20,146 Well, right now, 741 01:11:20,146 --> 01:11:27,086 You can go and make a promise to your banker and he'll loan you money from 4 to 6%, depending on your relationship with him. 742 01:11:27,086 --> 01:11:38,046 And if you have Bitcoin collateral and you want to post a million dollars of Bitcoin collateral and borrow $500,000 against it and be 150 % overcollateralized, you can borrow 743 01:11:38,046 --> 01:11:39,486 at 16%. 744 01:11:39,486 --> 01:11:41,066 You see how that doesn't match up? 745 01:11:41,066 --> 01:11:47,920 You have an overcollateralized risk-free position paying 16 % and you have a promised base position paying 4%. 746 01:11:47,920 --> 01:11:53,824 What's going to happen is the pendulum is going to the seesaw is going to switch and we're going to redefine risk. 747 01:11:53,824 --> 01:11:57,857 And it's not going to be those with the printer who are risk free. 748 01:11:57,857 --> 01:12:00,399 It's going to be those with Bitcoin who are risk free. 749 01:12:00,399 --> 01:12:03,641 So if you want access to the lowest interest rates, you better be a Bitcoiner. 750 01:12:03,641 --> 01:12:12,988 If your government wants to not see its fiat currency become weaker against other governments who have adopted Bitcoin, then you better get on the Bitcoin standard, because 751 01:12:12,988 --> 01:12:16,310 if you're not putting Bitcoin on the asset side of your balance sheet, your currencies will 752 01:12:16,310 --> 01:12:21,955 purchasing power will get absolutely decimated and destroyed because everything is going to zero against Bitcoin. 753 01:12:21,955 --> 01:12:24,037 So all of these things play a role. 754 01:12:24,037 --> 01:12:35,076 But what's really magical is your listeners can go to my highlights and check out the Bitcoin bonds video because what the government can do is they can apply Bitcoin bonds to 755 01:12:35,076 --> 01:12:44,784 the Social Security funds and to the veteran benefits funds and even to the teachers and firefighters and EMTs unions and pensions. 756 01:12:44,784 --> 01:12:54,538 And what they can do is they can create a special Bitcoin bond that just locks in a five-year note rate at four and a half percent, fuse it with Bitcoin the way we discussed 757 01:12:54,538 --> 01:13:04,632 before, and sell it directly to those pension plans, sell it directly to the, take the social security tax that's coming in every month and use it to buy the Bitcoin bond that 758 01:13:04,632 --> 01:13:05,523 you're issuing. 759 01:13:05,523 --> 01:13:06,283 Perhaps the U.S. 760 01:13:06,283 --> 01:13:09,504 government doesn't even offer the Bitcoin bond to the public. 761 01:13:09,504 --> 01:13:14,138 They empower the public by making it a private offering that only the social security fund 762 01:13:14,138 --> 01:13:20,761 and only the veterans fund them teachers pensions are eligible to purchase because now they're recapitalizing that balance sheet. 763 01:13:20,761 --> 01:13:26,284 The positive rate of return on that bond will actually save some of these programs. 764 01:13:26,284 --> 01:13:27,804 Social Security is in trouble. 765 01:13:27,804 --> 01:13:33,047 It's a Ponzi scheme and the only way you can the only thing you can do is print more money and raise the retirement age. 766 01:13:33,047 --> 01:13:40,624 Well, I mean, how many people are going to be happy saving for retirement and then they can touch their money and then they're supposed to die five years later. 767 01:13:40,624 --> 01:13:42,515 I mean, that's where we're getting to. 768 01:13:42,515 --> 01:13:44,576 What happens when they have to die one year later? 769 01:13:44,576 --> 01:13:52,701 Because all they can do is raise the retirement age because they have to print more money to meet the liability, which means the purchasing power value of Social Security is 770 01:13:52,701 --> 01:13:54,682 becoming less and less less and less. 771 01:13:54,682 --> 01:14:03,287 So what is provided for by Social Security continues to decline because the liability side of the balance sheet is outgrowing the asset side. 772 01:14:03,287 --> 01:14:06,689 So how do we get the asset side to outgrow the liability side? 773 01:14:06,689 --> 01:14:09,773 Definitely not by putting more treasuries into the funds. 774 01:14:09,773 --> 01:14:14,947 You need to create a hybridized product that has a real positive rate of return, which is the Bitcoin bond. 775 01:14:14,947 --> 01:14:20,090 Now you load these funds up with the Bitcoin bond and assets are growing at a faster pace than liability. 776 01:14:20,090 --> 01:14:21,881 That's the definition of sustainability. 777 01:14:21,881 --> 01:14:24,333 And by the way, I'm a capitalist, not a socialist. 778 01:14:24,333 --> 01:14:31,718 So I think we should do this to the tune of recapitalizing the program so that we can come through on the promises that we made and then end the program. 779 01:14:31,718 --> 01:14:32,698 Cut it. 780 01:14:32,758 --> 01:14:33,859 End the program. 781 01:14:33,859 --> 01:14:35,990 We don't need a socialist retirement system. 782 01:14:35,990 --> 01:14:38,550 People can save for the retirement on their own. 783 01:14:38,550 --> 01:14:43,721 or if they choose to in a union or whatever, they can go into a pension, but we don't need a Social Security system. 784 01:14:43,721 --> 01:14:45,012 Let's recapitalize it. 785 01:14:45,012 --> 01:14:48,133 Let's come through on the promises that we made, but then let's end it. 786 01:14:48,133 --> 01:14:50,173 And then let's focus on the veterans. 787 01:14:50,173 --> 01:14:53,154 There's so many veterans in this country who don't even own a home. 788 01:14:53,154 --> 01:15:02,136 I'm really happy with the home loans that they get with zero down and the rates that they deserve every one of it because me and my children and us Americans, we wouldn't have the 789 01:15:02,136 --> 01:15:05,637 freedom that we have today if they didn't make those sacrifices. 790 01:15:05,637 --> 01:15:06,188 So you know what? 791 01:15:06,188 --> 01:15:08,032 They deserve to have a Bitcoin bond. 792 01:15:08,032 --> 01:15:09,263 in their pension plan. 793 01:15:09,263 --> 01:15:12,664 They deserve to have a Bitcoin bond in their emergency relief fund. 794 01:15:12,664 --> 01:15:15,785 God forbid someone passes away in service. 795 01:15:15,785 --> 01:15:23,649 They deserve to have these things so that their families can be empowered and so that their retirement can provide more for them for the service that they give to the 796 01:15:23,649 --> 01:15:24,329 community. 797 01:15:24,329 --> 01:15:26,450 This is why nobody wants to be a firefighter. 798 01:15:26,450 --> 01:15:28,091 Nobody wants to be a policeman. 799 01:15:28,091 --> 01:15:31,692 Nobody wants to be a teacher because they're not properly incentivized. 800 01:15:31,692 --> 01:15:35,970 It should be no surprise that our kids are dumb because we're not paying our teachers. 801 01:15:35,970 --> 01:15:39,593 We're paying our teachers like they're babysitters instead of educators. 802 01:15:39,593 --> 01:15:45,457 We're playing our policemen like we don't want them to pay attention to crime instead of going out and fighting the crime. 803 01:15:45,457 --> 01:15:46,768 We don't need to defund the police. 804 01:15:46,768 --> 01:15:49,640 We need to fund the police and we don't just need to fund the police. 805 01:15:49,640 --> 01:15:56,886 We need to recapitalize the entire system so that people want to perform these services and we can do that with Bitcoin bonds. 806 01:15:56,886 --> 01:16:02,932 So I think it's super important that we start integrating Bitcoin and fusing this engineered money into our 807 01:16:02,932 --> 01:16:07,324 monetary, fiscal and economic policies, because this is how you make America great again. 808 01:16:07,324 --> 01:16:10,275 This is how you make we the people be empowered again. 809 01:16:10,275 --> 01:16:16,068 And this is how you flip the system from a system of value extraction to a system of value delivery. 810 01:16:16,068 --> 01:16:19,329 But we have to be strategic and we have to be playing 5D chess here. 811 01:16:19,329 --> 01:16:20,730 This isn't tic tac toe. 812 01:16:20,730 --> 01:16:23,231 We can't just have a strategic Bitcoin reserve. 813 01:16:23,231 --> 01:16:24,751 We need to start thinking ahead. 814 01:16:24,751 --> 01:16:27,373 We need to take the lead and we need to innovate. 815 01:16:27,373 --> 01:16:30,818 And we need to be the revolutionary people that we know that we are. 816 01:16:30,818 --> 01:16:37,056 because we're the only ones to ever do it in this country to give ourselves the rights to life, liberty and the pursuit of happiness. 817 01:16:38,246 --> 01:16:39,166 Yeah. 818 01:16:39,947 --> 01:16:40,908 Wow. 819 01:16:41,508 --> 01:16:43,039 So then what do you say to people? 820 01:16:43,039 --> 01:16:45,971 mean, a lot of that just makes so much sense, right? 821 01:16:46,251 --> 01:16:53,916 And we can kind of predicate all that as ground zero and you build everything on top of that. 822 01:16:53,916 --> 01:16:57,878 But what do you say to people say is like, is Bitcoin too risky? 823 01:16:58,434 --> 01:17:02,356 Yeah, well, that's my most common question. 824 01:17:02,356 --> 01:17:12,110 And in my highlights where I first talk about Bitcoin bonds, say Bitcoin is too risky because I go and I talk to a family office, I talk to wealthy individuals and they say, 825 01:17:12,110 --> 01:17:16,041 listen, son, I've been in markets longer than you've been alive. 826 01:17:16,041 --> 01:17:19,303 OK, I don't need you know, we want to lend our money. 827 01:17:19,303 --> 01:17:21,844 Some entities are not even allowed to invest. 828 01:17:21,844 --> 01:17:23,644 They have to lend their money. 829 01:17:23,665 --> 01:17:27,406 So they're looking for products that give them lending exposure. 830 01:17:27,406 --> 01:17:34,386 not investment exposure, because you invest to add risk and you lend to diversify and mitigate risk. 831 01:17:34,386 --> 01:17:41,626 And with that mindset, it's automatically ingrained into them that the volatility equals risk. 832 01:17:41,626 --> 01:17:47,066 don't understand, the dots don't connect there because stability, it's always stability, right? 833 01:17:47,066 --> 01:17:49,686 With the Fed, we want stable price increases, right? 834 01:17:49,686 --> 01:17:52,066 Stable prices means 2 % price increases. 835 01:17:52,066 --> 01:17:53,726 Isn't that funny? 836 01:17:54,092 --> 01:17:57,324 That is stability, but we define what stability is. 837 01:17:57,324 --> 01:17:58,474 Well, Bitcoin stable. 838 01:17:58,474 --> 01:17:59,305 You know why? 839 01:17:59,305 --> 01:18:09,451 Because after every four year having cycle, we go through a natural boom bust credit cycle, just like the just like the real economy would if it weren't too big to fail. 840 01:18:09,451 --> 01:18:13,113 And at the end of it, we end up at a stronger, higher foundation. 841 01:18:13,113 --> 01:18:15,854 That is the definition of savings technology. 842 01:18:15,854 --> 01:18:17,975 Higher lows, not higher highs. 843 01:18:17,975 --> 01:18:20,116 The higher highs are really fun to talk about. 844 01:18:20,116 --> 01:18:23,348 The higher highs are really bullish and euphoric. 845 01:18:23,348 --> 01:18:32,863 and you get butterflies in your stomach and you start looking at yachts and you start looking at real estate and you start getting really excited. 846 01:18:33,384 --> 01:18:34,904 But that's not what's important here. 847 01:18:34,904 --> 01:18:41,498 The goal of my savings is to come down to a higher low, to increase my purchasing power over and over and over again. 848 01:18:41,498 --> 01:18:51,954 So the first thing I say is I say Bitcoin is engineered money, just like we went from a candle to a light bulb and from the horse to the horsepower in the engine and from 849 01:18:51,954 --> 01:18:53,026 newspapers. 850 01:18:53,026 --> 01:18:59,448 to nail digital strings in our phones that show us these texts from the newspapers on our devices. 851 01:18:59,448 --> 01:19:12,052 We are now going from the gold to the digital dollar, but now to pristine collateral to 100 % absolutely digital, scarce, decentralized, cannot be controlled by any one entity, 852 01:19:12,052 --> 01:19:15,093 perfect money, arguably the first form of money. 853 01:19:15,093 --> 01:19:17,878 think gold is that natural form. 854 01:19:17,878 --> 01:19:19,759 And Bitcoin is the engineered form. 855 01:19:19,759 --> 01:19:22,581 It does what every other process does in the engineering process. 856 01:19:22,581 --> 01:19:31,267 It uses human ingenuity to leverage the natural laws of the universe to empower the person that that product or service is built for. 857 01:19:31,267 --> 01:19:33,349 And Bitcoin is that in the form of money. 858 01:19:33,349 --> 01:19:35,450 Bitcoin is savings technology. 859 01:19:35,450 --> 01:19:45,597 And then if they don't get that, then I go down the cost of production line where I tell them, you know, if you're a producer and you're building something, what's the price you 860 01:19:45,597 --> 01:19:46,894 offer to the marketplace? 861 01:19:46,894 --> 01:19:48,694 Because people get really confused about this. 862 01:19:48,694 --> 01:19:51,934 like, when you go to the grocery store, do you bid for your items? 863 01:19:51,934 --> 01:19:53,624 And they go, they almost get offended. 864 01:19:53,624 --> 01:19:56,064 They're like, no, you know, like, obviously not. 865 01:19:56,064 --> 01:19:57,444 I'm like, come on, let me set it up. 866 01:19:57,444 --> 01:19:58,614 Let me let me cook over here. 867 01:19:58,614 --> 01:19:59,734 You know, let me cook. 868 01:19:59,734 --> 01:20:04,014 And I'll tell him, yeah, you don't set the prices because who sets the prices? 869 01:20:04,014 --> 01:20:05,114 The producer. 870 01:20:05,114 --> 01:20:05,654 OK, good. 871 01:20:05,654 --> 01:20:06,994 Well, what does he base that price on? 872 01:20:06,994 --> 01:20:07,934 Let me ask you a question. 873 01:20:07,934 --> 01:20:12,062 Can the producer name a price that's lower than his cost? 874 01:20:12,312 --> 01:20:13,732 Well, yeah, no, of course not. 875 01:20:13,732 --> 01:20:19,014 Okay, so then there are some rules on where these prices are coming from, aren't They're not just random. 876 01:20:19,014 --> 01:20:21,405 They're not just a number that gets spit out randomly. 877 01:20:21,405 --> 01:20:23,345 There's actually a lot of understanding. 878 01:20:23,345 --> 01:20:26,186 There's a free market price discovery cycle. 879 01:20:26,186 --> 01:20:28,606 Matter of fact, that's what makes the United States capitalists. 880 01:20:28,606 --> 01:20:29,847 That's what makes us us. 881 01:20:29,847 --> 01:20:31,947 We believe in the free market price signal. 882 01:20:31,947 --> 01:20:38,009 We believe that when the market is willing to pay a price above the cost of production, that creates the profit. 883 01:20:38,009 --> 01:20:41,858 And the profit is the invisible hand that drives the marketplace. 884 01:20:41,858 --> 01:20:52,964 So if a producer offers a good or service and the community is willing to buy that good or service at a price above the cost, that is the validation of that community with their 885 01:20:52,964 --> 01:20:54,305 monetary voting. 886 01:20:54,305 --> 01:20:59,388 They are monetarily voting and validating the value proposition of your good or service. 887 01:20:59,388 --> 01:21:04,294 Now, if your value, if your good or service does not provide value, people will not pay above the cost. 888 01:21:04,294 --> 01:21:07,532 They'll say, you know, here's a water bottle, $20. 889 01:21:07,532 --> 01:21:08,693 What are you kidding me? 890 01:21:08,693 --> 01:21:09,293 Like 20. 891 01:21:09,293 --> 01:21:09,874 What is this? 892 01:21:09,874 --> 01:21:10,860 Made of gold? 893 01:21:10,860 --> 01:21:12,390 $20, this doesn't make any sense. 894 01:21:12,390 --> 01:21:15,483 I'm not, the value proposition is not, I'm thirsty. 895 01:21:15,483 --> 01:21:21,517 And that's how free market competition helps too, prices, because now a competitor comes in and says, hey, this guy's crazy. 896 01:21:21,517 --> 01:21:22,349 He's charging $20. 897 01:21:22,349 --> 01:21:23,450 I'll charge 15. 898 01:21:23,450 --> 01:21:26,350 And the other guy says, well, I'll charge 10 and I'll charge eight. 899 01:21:26,350 --> 01:21:33,455 And competition helps bring prices down closer to the cost of production, but never below the cost of production. 900 01:21:33,455 --> 01:21:36,277 Because once you go below cost of production, there's no profit. 901 01:21:36,277 --> 01:21:39,399 And that's the free market price signal telling you, hey, 902 01:21:39,399 --> 01:21:41,070 reallocate your resources. 903 01:21:41,070 --> 01:21:50,509 You are wasting your resources as a producer here, making something that those who vote with their money are telling you are not getting the value for it. 904 01:21:50,509 --> 01:21:59,176 And a good entrepreneur reads that price signal and reallocates resources and produces a good or service that the community is willing to pay a price above the cost, which then 905 01:21:59,176 --> 01:22:01,428 validates the value proposition of that good or service. 906 01:22:01,428 --> 01:22:04,341 Well, for Bitcoin, there's a cost to production. 907 01:22:04,341 --> 01:22:07,353 There's a cost to earning the subsidy of the block. 908 01:22:07,379 --> 01:22:10,341 And that cost continues to go up and up and up by design. 909 01:22:10,341 --> 01:22:15,864 Bitcoin is the only asset in the world that can raise its own cost of production. 910 01:22:15,864 --> 01:22:19,346 It can also lower its cost of production too as a form of sustainability. 911 01:22:19,346 --> 01:22:24,269 But there exists no other asset in the world that has the its own ability. 912 01:22:24,269 --> 01:22:32,274 Imagine if oil just said, you know, I don't really like OPEC's decision, so I'm going to go ahead just make myself cost more to rip out of the ground now. 913 01:22:32,274 --> 01:22:34,065 No, I mean, like that's what Bitcoin can do. 914 01:22:34,065 --> 01:22:34,973 It can think. 915 01:22:34,973 --> 01:22:35,903 It's algorithmic. 916 01:22:35,903 --> 01:22:41,949 The difficulty adjustment is based on the amount of block time in a 2016 block period. 917 01:22:41,949 --> 01:22:50,476 And if there's a lot of hash rate and miners are finding blocks faster than a 10 minute rate, the difficulty will go up and that will push the cost of production up. 918 01:22:50,476 --> 01:23:02,467 And that means the value proposition to access the network is now going up because miners have to ask for a price above their cost, which then means the asset class itself. 919 01:23:02,467 --> 01:23:03,347 If you. 920 01:23:03,507 --> 01:23:07,810 If you ever looked at any one of my charts, you see that red price cloud, the red price cloud, keeps going up. 921 01:23:07,810 --> 01:23:11,913 The lower, the low lows keep going up because the cost of production keeps going up. 922 01:23:11,913 --> 01:23:18,378 And the, and the, and the producers, the miners, they have to ask for a price above that cost in order for their business to be sustainable. 923 01:23:18,378 --> 01:23:28,586 But what that does is it creates a natural up only savings technology that drives value into the network so that the larger the network gets, the more hashrate there is, the more 924 01:23:28,586 --> 01:23:30,783 value that's delivered by the network. 925 01:23:30,783 --> 01:23:34,605 the higher the cost to access that value proposition. 926 01:23:34,605 --> 01:23:36,196 And that's where we are right now, Sedgwick. 927 01:23:36,196 --> 01:23:48,562 We're in the middle of discovering what is Bitcoin's entire value proposition and how much should it cost me to access this perfect, pristine, truthful ledger in a world full of 928 01:23:48,562 --> 01:23:49,252 lies. 929 01:23:49,252 --> 01:23:54,902 And I think we're going to find out that that value proposition is quite a bit higher than $100,000. 930 01:23:56,664 --> 01:24:03,144 Well, thinking about how much higher than $100,000, how do you think about the future value of Bitcoin? 931 01:24:03,967 --> 01:24:04,497 Yeah. 932 01:24:04,497 --> 01:24:11,112 So as the creator of the Bitcoin fair value algorithm, that process I just described is called a commodity cycle. 933 01:24:11,112 --> 01:24:23,091 And I created the algorithm to help the miner decide where they are within their commodity cycle, because each miner has different, there's not a universal plug-in, there's so many 934 01:24:23,091 --> 01:24:30,827 variables, there's land, labor, materials, and different miners have different costs and different operational expenditures versus capital expenditures. 935 01:24:30,827 --> 01:24:31,445 So 936 01:24:31,445 --> 01:24:33,326 VFV is highly customizable. 937 01:24:33,326 --> 01:24:36,959 We'll come in and we'll help you determine your cost basis. 938 01:24:36,959 --> 01:24:44,264 And then the market price relative to your cost basis tells you where you are in that commodity cycle. 939 01:24:44,264 --> 01:24:48,947 And when you're at a premium, you want to lock in profits and capture that premium. 940 01:24:48,947 --> 01:24:52,870 And when you're in a discount, you want to deploy those profits because you're a miner. 941 01:24:52,870 --> 01:24:56,172 So whether you mine with dollars or electricity, it doesn't matter. 942 01:24:56,172 --> 01:24:59,674 Both need to be used to be fully efficient. 943 01:25:00,223 --> 01:25:07,187 When you're at that default, you deploy the dollars to mine, you turn off your machines, you deploy the dollars to mine Bitcoin and you're still building Bitcoin. 944 01:25:07,187 --> 01:25:13,331 And that's really important for people to understand because that's how it's worked through these past halving cycles. 945 01:25:13,331 --> 01:25:19,655 The past halving cycles worked like this because the halving is the catalyst to the doubling of the cost of production. 946 01:25:19,655 --> 01:25:23,817 When a halving takes place, that very block, cost of production doubles. 947 01:25:23,817 --> 01:25:26,718 Now we have to go through a new price discovery cycle. 948 01:25:27,433 --> 01:25:28,784 That's the commodity cycle. 949 01:25:28,784 --> 01:25:33,026 I believe to answer your question, we are now moving out of the commodity cycle. 950 01:25:33,026 --> 01:25:36,968 Michael Seller, famous comment of all your models will be destroyed. 951 01:25:36,968 --> 01:25:39,329 You know, I'm looking right here in the mirror and I'm saying, yeah, he's right. 952 01:25:39,329 --> 01:25:41,340 My model is going to be destroyed. 953 01:25:41,340 --> 01:25:42,591 Like it's still going to be relevant. 954 01:25:42,591 --> 01:25:45,053 I still want to see how high of a premium we go to. 955 01:25:45,053 --> 01:25:51,636 But the fact of the matter is, is that at the bottom of the S curve, you're you're in a commodity price discovery cycle. 956 01:25:51,636 --> 01:25:55,258 But Bitcoin as a commodity is now being monetized. 957 01:25:55,258 --> 01:25:57,437 So the monetization of Bitcoin is now 958 01:25:57,437 --> 01:26:00,449 accelerating us up the S curve of adoption. 959 01:26:00,449 --> 01:26:03,150 And that's going to lead to a complete repricing. 960 01:26:03,150 --> 01:26:05,932 Right now, price is trying to catch up to hashrate. 961 01:26:05,932 --> 01:26:09,594 When Bitcoin is repriced, hashrate will be trying to catch up to price. 962 01:26:09,594 --> 01:26:20,570 So we're entering into a time right now where the old four year market cycle and understanding it as a commodity cycle and the premiums to the cost that the miners are 963 01:26:20,570 --> 01:26:25,282 looking at who set the price margin because they're the only four sellers of the asset. 964 01:26:25,282 --> 01:26:26,363 That is 965 01:26:26,623 --> 01:26:27,043 changing. 966 01:26:27,043 --> 01:26:32,117 That market dynamic is evolving because we're now seeing mainstream adoption and monetization. 967 01:26:32,117 --> 01:26:36,350 And I think now it's going to be based more on credit cycles than the commodity cycle. 968 01:26:36,350 --> 01:26:36,910 Not yet. 969 01:26:36,910 --> 01:26:38,061 We're still we're not there yet. 970 01:26:38,061 --> 01:26:39,722 We still need to see all this stuff take place. 971 01:26:39,722 --> 01:26:43,224 We still need to see how all of this game theory plays out. 972 01:26:43,224 --> 01:26:45,576 But I think the new administration gets in there. 973 01:26:45,576 --> 01:26:48,018 We get a federal strategic Bitcoin reserve. 974 01:26:48,018 --> 01:26:50,339 We get the states doing the strategic Bitcoin reserves. 975 01:26:50,339 --> 01:26:53,361 Cities and municipalities are going to do the strategic Bitcoin reserves. 976 01:26:53,361 --> 01:26:56,297 Lord willing, we can get the Bitcoin recapitalization fund. 977 01:26:56,297 --> 01:27:02,232 and we see cities issuing municipal Bitcoin bonds and we can really start to pick up this pace. 978 01:27:02,232 --> 01:27:10,579 But the better that picture becomes, the more aggressive the repricing on Bitcoin is going to be because it's price agnostic demand. 979 01:27:10,579 --> 01:27:13,141 It's price agnostic demand. 980 01:27:13,582 --> 01:27:20,307 a city or a municipality or a state or the federal government starts buying Bitcoin, they are not going to care what the price is. 981 01:27:20,341 --> 01:27:22,092 That's not how it's going to work. 982 01:27:22,092 --> 01:27:23,442 They're going to dollar cost average. 983 01:27:23,442 --> 01:27:30,095 So what they'll do is they'll take a portion of the taxes that they collect and they'll take that agreed upon percentage and they'll just buy Bitcoin. 984 01:27:30,095 --> 01:27:33,556 And they don't care if it's hundred thousand or a hundred million. 985 01:27:33,556 --> 01:27:35,317 They do not care what the price is. 986 01:27:35,317 --> 01:27:37,798 It's price agnostic accumulation. 987 01:27:37,798 --> 01:27:44,101 And because of that, I think we're going to see the entire four year cycle mature because we're moving out of the commodity. 988 01:27:44,101 --> 01:27:44,251 Right. 989 01:27:44,251 --> 01:27:47,462 When Bitcoin was a commodity, it behaved in a commodity cycle. 990 01:27:47,462 --> 01:27:48,542 now being monetized. 991 01:27:48,542 --> 01:27:49,820 So it's going to behave like money. 992 01:27:49,820 --> 01:27:51,141 within a credit cycle. 993 01:27:51,141 --> 01:27:56,397 So all of these things are converging right now and we're in that interesting in-between time right now. 994 01:27:56,397 --> 01:27:59,870 And I think for the next five years, we're gonna be in that in-between time. 995 01:27:59,870 --> 01:28:05,826 But again, you add another five years onto that and I think the system is not even gonna look anything like it does today. 996 01:28:07,180 --> 01:28:10,932 Yeah, I this has all been incredibly fascinating. 997 01:28:11,013 --> 01:28:12,804 I have a few more questions for you. 998 01:28:12,804 --> 01:28:18,098 When studying history, what have you noticed about how inflation turns into hyperinflation? 999 01:28:18,534 --> 01:28:28,987 Yes, so to me, even though the textbook tries to put a mathematical number on it, what I've noticed across all time and space, whether you look at Rome or Greece or Weimar or 1000 01:28:28,987 --> 01:28:34,008 Venezuela, there is no mathematical way to define inflation. 1001 01:28:34,008 --> 01:28:36,669 Inflation turns into hyperinflation. 1002 01:28:36,669 --> 01:28:40,970 One and only thing is found the same across all these examples. 1003 01:28:40,970 --> 01:28:44,771 And it's when the people who use that currency lost trust. 1004 01:28:44,771 --> 01:28:47,598 So the difference between inflation and hyperinflation 1005 01:28:47,598 --> 01:28:48,648 is trust. 1006 01:28:48,648 --> 01:28:55,390 So if we continue to abuse the system and we don't take the proper steps to build trust, one day that trust will be lost. 1007 01:28:55,390 --> 01:28:58,511 And I like to say right now we're in financial COVID. 1008 01:28:58,511 --> 01:29:03,653 What COVID was for the medical industry, we are now facing in the financial industry. 1009 01:29:03,653 --> 01:29:07,974 The GDP is wrong because real GDP is not being deflated properly. 1010 01:29:07,974 --> 01:29:10,955 So it's overstating the economic performance. 1011 01:29:10,955 --> 01:29:15,796 CPI is understated because the substitution based practices and manipulations. 1012 01:29:15,796 --> 01:29:16,560 God 1013 01:29:16,560 --> 01:29:20,043 I'm so happy that we have, at least the government shares the data with us. 1014 01:29:20,043 --> 01:29:27,030 It's probably the only thing the government really does successfully is they aggregate all of this data from 300 plus million people and share it with us. 1015 01:29:27,030 --> 01:29:35,417 The problem is, is they're taking that raw, authentic data that is actually true and they're plugging it into manipulated equations, which tweak the data, which then tweets 1016 01:29:35,417 --> 01:29:39,221 the output, which then creates unreliable information. 1017 01:29:39,221 --> 01:29:43,312 So in the financial world right now, the government would have you think that 1018 01:29:43,312 --> 01:29:52,577 Real rates are positive because inflation is 2 % and the Treasury bill rate is four and a half percent and four and a half percent minus 2 % is two and a half percent positive. 1019 01:29:52,577 --> 01:29:56,359 So hey, you should lend us money because at the end of it, you're going to be able to buy more stuff. 1020 01:29:56,359 --> 01:29:59,081 Yeah, but I don't really I don't 2%. 1021 01:29:59,081 --> 01:30:00,202 What are you talking about? 1022 01:30:00,202 --> 01:30:01,602 In what world are you living in? 1023 01:30:01,602 --> 01:30:03,798 Not my bills are up way more than 2%. 1024 01:30:03,798 --> 01:30:11,922 You don't have you're trying to I'm offended that you're trying to tell me inflation is 2 % when my bills are up at least five to 10 % and everything I spend my money on. 1025 01:30:11,922 --> 01:30:14,014 So where's this 2 % number coming from? 1026 01:30:14,014 --> 01:30:16,517 And that doesn't do anything any good in building trust. 1027 01:30:16,517 --> 01:30:22,343 So we need to be really careful here because the medical industry is right now paying the price for the trust that they abused. 1028 01:30:22,343 --> 01:30:31,492 And we don't want to pay that price in the financial industry because the loss of trust in finance is gonna be the difference between being in an inflationary recession versus an 1029 01:30:31,492 --> 01:30:33,534 hyperinflationary depression. 1030 01:30:33,534 --> 01:30:35,706 And that's the only difference, trust. 1031 01:30:36,738 --> 01:30:39,199 Yeah, Trust is not there. 1032 01:30:39,199 --> 01:30:47,894 And it's interesting, you kind of have some notes here that kind of summarize some of you know, maybe what I think is your thinking and it's like, you know, eventually the 1033 01:30:47,894 --> 01:30:53,147 government's gonna be printing their currency to be taking our future tax revenues. 1034 01:30:53,167 --> 01:30:58,550 And they're buying Bitcoin because and what that means is that the value of those future tax revenues is nothing. 1035 01:30:59,871 --> 01:31:03,193 And, you know, they're gonna try to recapitalize the balance sheet. 1036 01:31:03,193 --> 01:31:04,784 It's this is all fascinating stuff. 1037 01:31:04,784 --> 01:31:05,526 I want to 1038 01:31:05,526 --> 01:31:09,129 Before, you know, I really want to ask you a little bit more about your rabbit hole story. 1039 01:31:11,471 --> 01:31:22,480 Rabbit hole stories can be fascinating, especially I think the earlier, you know, more veterans or OGs because you had less people to turn to, less educational resources, and 1040 01:31:22,480 --> 01:31:34,690 you had to exercise a lot more patience, both through cycles economically, your own, you know, your own bags or whatever, but really psychologically more about like how... 1041 01:31:34,690 --> 01:31:40,920 The earlier you came to maybe certain conclusions, the longer you have to sit on when the rest of the world catches up. 1042 01:31:41,221 --> 01:31:43,404 You know, it's tough living in the future. 1043 01:31:44,062 --> 01:31:45,003 Definitely. 1044 01:31:45,003 --> 01:31:46,442 It hurts to be early. 1045 01:31:46,442 --> 01:31:48,115 A lot of people are like, that'd be great. 1046 01:31:48,115 --> 01:31:48,355 Yeah. 1047 01:31:48,355 --> 01:31:52,782 But the psychological warfare with yourself through it all is intense. 1048 01:31:52,782 --> 01:32:03,386 a lot of, I mean, and I don't know what your impression of this, but I would think that a lot of early Bitcoiners, whether it was through forced holding, you know, like maybe Mt. 1049 01:32:03,386 --> 01:32:16,490 Gox or Silk Road, or just luck, they bought Bitcoin for other reasons, not, you know, sort of monetary economics or just beat inflation. 1050 01:32:17,334 --> 01:32:25,938 and just consider themselves really smart about that and then went on to other things and tried to say, well, I'm smart about, you know, energy and all these other things and how 1051 01:32:25,938 --> 01:32:35,883 to fix the world in every other area and maybe lost touch with Bitcoin or something or just went sort of manic, you know, I mean, maybe, you know, and a lot of people probably, 1052 01:32:35,883 --> 01:32:40,805 you know, got in early and then sold early, you know, and got angry or whatever. 1053 01:32:40,805 --> 01:32:43,093 So what was your 1054 01:32:43,093 --> 01:32:43,854 mistake too. 1055 01:32:43,854 --> 01:32:45,376 I made that mistake too. 1056 01:32:45,376 --> 01:32:52,224 I just told Matt Burnell, I bought my single family home for 100 Bitcoin and I wouldn't I can't even get 10 Bitcoin for it today. 1057 01:32:52,224 --> 01:32:57,870 So and that played a big role in developing our product that's you learn through your failures. 1058 01:32:57,870 --> 01:33:03,832 Any any real entrepreneur is going to tell you I learn more from my failures and bad decisions than I do my good decisions. 1059 01:33:03,832 --> 01:33:11,024 But let's maybe talk a little bit about the successes in the frame, not successes, in the framework of like, you're grokking this thing. 1060 01:33:11,464 --> 01:33:13,855 Like when did you stumble across Bitcoin? 1061 01:33:13,855 --> 01:33:15,666 Like in what context? 1062 01:33:15,806 --> 01:33:19,967 And then did you think of it as something that you could speculate on? 1063 01:33:19,967 --> 01:33:22,868 Or did you think about something as, did you go right to mining? 1064 01:33:22,868 --> 01:33:24,259 Like how did it progress? 1065 01:33:24,259 --> 01:33:28,430 Like what were the materials or conversations that impacted you? 1066 01:33:28,430 --> 01:33:28,838 Yeah. 1067 01:33:28,838 --> 01:33:31,684 know Jeff Berwick, the dollar vigilante? 1068 01:33:31,756 --> 01:33:32,662 Yeah, totally. 1069 01:33:32,662 --> 01:33:34,581 I've talked with him about coming on the show. 1070 01:33:34,581 --> 01:33:36,742 Yeah, totally. 1071 01:33:36,742 --> 01:33:40,674 Yeah, so he was my mentor when I first found Bitcoin. 1072 01:33:40,674 --> 01:33:45,546 I heard of it and I wish I bought it when I first started hearing of it, but we all have a similar experience. 1073 01:33:45,546 --> 01:33:46,257 We hear about it. 1074 01:33:46,257 --> 01:33:47,397 We don't really care. 1075 01:33:47,397 --> 01:33:50,669 And then you find out and you see all the volatility in the price action. 1076 01:33:50,669 --> 01:33:53,360 So you're like, well, maybe I can trade it here and there. 1077 01:33:53,360 --> 01:33:56,882 And then, you you get a you get a really good trade and then it all disappears. 1078 01:33:56,882 --> 01:34:00,243 And you're like, all right, I got to figure out what the heck this thing is. 1079 01:34:00,243 --> 01:34:02,184 So when I after I. 1080 01:34:02,632 --> 01:34:07,672 dip my toes in at that 150 level, watch it go all the way up and come all the way back down. 1081 01:34:07,672 --> 01:34:12,052 Now all of sudden I'm like, okay, I gotta figure out what I have here and I gotta figure out how this works. 1082 01:34:12,052 --> 01:34:13,952 And I stumbled upon Jeff Berwick. 1083 01:34:13,952 --> 01:34:19,392 So I started digging into his content and he was a great mentor. 1084 01:34:19,392 --> 01:34:24,392 I highly recommend Jeff and some of his takes today are pretty funny. 1085 01:34:24,392 --> 01:34:28,857 I would say I don't share all of my opinions that he shares, but I love. 1086 01:34:28,857 --> 01:34:32,079 his content and I'm very thankful to him and Max Kaiser as well. 1087 01:34:32,079 --> 01:34:33,410 Max Kaiser played a big role. 1088 01:34:33,410 --> 01:34:44,698 And after I after I'd learned from Jeff, I started learning from Max's content and Max's amazing orange pill for everybody like since like a dollar or even less. 1089 01:34:44,698 --> 01:34:50,111 So those two played a big role in me when I took my deep dive. 1090 01:34:50,111 --> 01:34:53,133 But I didn't take my deep dive until I until I had that. 1091 01:34:53,614 --> 01:34:56,215 I was like, this is really good trade and gone. 1092 01:34:56,215 --> 01:34:57,692 So then it makes you ask. 1093 01:34:57,692 --> 01:34:58,605 other things? 1094 01:34:58,605 --> 01:34:59,989 Were you into trading? 1095 01:34:59,989 --> 01:35:01,481 Okay. 1096 01:35:02,314 --> 01:35:07,917 In college, I had a I started out in nursing, but it didn't matter because of my undergrad years anyway. 1097 01:35:07,917 --> 01:35:11,760 And I ended up transitioning into business for accounting and finance. 1098 01:35:11,760 --> 01:35:19,354 So by those years, towards the end of those years, I was trading what was hot back then. 1099 01:35:19,354 --> 01:35:21,485 If I remember correctly, it was like marijuana stocks. 1100 01:35:21,485 --> 01:35:26,378 And I was like, do I want to get marijuana stocks or do I want to get Bitcoin? 1101 01:35:26,380 --> 01:35:34,206 And I, you know, I like, decided, okay, I should do both because one's this system and one is this system and this, I'll try to just trade this and I'll invest over here. 1102 01:35:34,206 --> 01:35:36,308 So Bitcoin was like my trading account. 1103 01:35:36,308 --> 01:35:39,950 And then the other, you know, the stocks were like my investing account, which I look back on that. 1104 01:35:39,950 --> 01:35:43,133 It's really funny to think about, but that's how it started. 1105 01:35:43,133 --> 01:35:45,735 And then I fell on their content. 1106 01:35:45,735 --> 01:35:47,496 I started getting into mining there. 1107 01:35:47,496 --> 01:35:52,824 I don't remember exactly how I got into mining, like who, who said it, but it was 1108 01:35:52,824 --> 01:35:57,998 just through the course of study, through proof of work consensus, like once we start getting having those discussions. 1109 01:35:57,998 --> 01:36:02,305 Did you get into mining to get more Bitcoin or to learn about Bitcoin or both? 1110 01:36:02,305 --> 01:36:02,904 mean... 1111 01:36:02,904 --> 01:36:03,816 Both, both. 1112 01:36:03,816 --> 01:36:05,651 I would say I got into mining to make money. 1113 01:36:05,651 --> 01:36:07,465 That was my number one driver. 1114 01:36:07,465 --> 01:36:09,276 I was like, okay, yeah. 1115 01:36:09,276 --> 01:36:11,864 this thing itself for more than it cost me to produce it. 1116 01:36:11,864 --> 01:36:13,185 Correct, correct. 1117 01:36:13,185 --> 01:36:14,526 And it was amazing. 1118 01:36:14,526 --> 01:36:17,528 I actually built my own rigs. 1119 01:36:17,528 --> 01:36:18,699 It's on one of my old phones. 1120 01:36:18,699 --> 01:36:20,460 I'll have to go back and find the picture and post it. 1121 01:36:20,460 --> 01:36:21,771 It's hilarious. 1122 01:36:21,771 --> 01:36:25,474 I built wooden rigs to hold my cards. 1123 01:36:25,474 --> 01:36:27,479 Like, how stupid could you be? 1124 01:36:27,479 --> 01:36:29,517 You know, like using wood instead of metal. 1125 01:36:29,517 --> 01:36:31,244 But I just wanted to get it done. 1126 01:36:31,244 --> 01:36:32,018 I just wanted to build it. 1127 01:36:32,018 --> 01:36:34,240 I never had built a computer before. 1128 01:36:34,240 --> 01:36:40,162 So it was a fun process to piece all the pieces together and then plug it in the wall and listen to it. 1129 01:36:40,162 --> 01:36:42,460 hum and say, my gosh, you know, this is how this works. 1130 01:36:42,460 --> 01:36:44,893 you feel better or worse about Bitcoin? 1131 01:36:44,893 --> 01:36:50,338 And I asked that in the context of worse, like anyone could put this thing together and make money or better. 1132 01:36:50,338 --> 01:36:53,131 Like, wow, this is freedom money and we're separating money. 1133 01:36:53,131 --> 01:37:06,604 I when did it become more about, I'll call it philosophical or existential or sort of like about the nature of money versus making money. 1134 01:37:06,680 --> 01:37:11,594 you know, making fiat versus like, wow, this is the future of money and it's going to change the world. 1135 01:37:11,594 --> 01:37:16,628 And like, it's more than, it's more than just what it does for net worth or something like that. 1136 01:37:16,984 --> 01:37:18,564 Yeah, well. 1137 01:37:19,165 --> 01:37:29,527 I guess that came that came definitely came later for me because mining was such a twist for me because I started mining and it was a lot of fun and then I started making 1138 01:37:29,527 --> 01:37:31,228 projections, which was even more fun. 1139 01:37:31,228 --> 01:37:38,970 But then I learned about the difficulty adjustment because you can when you project the hash rate that you preorder on the existing hash rate, it does not take into account 1140 01:37:38,970 --> 01:37:41,771 everybody else's hash rate, increasing the difficulty. 1141 01:37:41,771 --> 01:37:43,711 So my my original projections. 1142 01:37:43,711 --> 01:37:46,722 So I built this machine, I plugged it in, it was doing really well. 1143 01:37:46,820 --> 01:37:49,680 Maybe it was making like 20 or 30 dollars a day at that time. 1144 01:37:49,680 --> 01:37:52,570 I'm like, well, well, let's scale this puppy up. 1145 01:37:52,570 --> 01:37:54,690 You know, let's let's build some more machines here. 1146 01:37:54,690 --> 01:38:03,760 And as I started building more machines, I started learning about how the difficulty adjustment affects your profits, because all of a sudden, every two weeks, I was becoming 1147 01:38:03,760 --> 01:38:05,020 less and less profitable. 1148 01:38:05,020 --> 01:38:08,160 So I was like, well, this is how how's this happening? 1149 01:38:08,160 --> 01:38:08,940 What's happening here? 1150 01:38:08,940 --> 01:38:14,668 And then what really hit me hard was the having that 2016 having. 1151 01:38:15,340 --> 01:38:21,206 I didn't put two and two together and that's why I'm telling you the having is the catalyst because it doubles miners cost of production. 1152 01:38:21,206 --> 01:38:24,249 When your reward gets cut in half, your cost of production doubles. 1153 01:38:24,249 --> 01:38:27,292 It's the other side of the coin that most people don't look at. 1154 01:38:27,292 --> 01:38:35,870 And then so you have the difficulty adjustment eating away at your profits and then you have the having, having your profits all in one day, like the worst day for a business 1155 01:38:35,870 --> 01:38:40,674 ever, your guaranteed half profits perpetually now. 1156 01:38:40,674 --> 01:38:43,875 And so was good news and bad news because I was like, wow, this system is amazing. 1157 01:38:43,875 --> 01:38:48,827 Basically, what I'm doing is I'm like working for Visa or MasterCard. 1158 01:38:48,827 --> 01:38:55,950 Imagine if Visa or MasterCard allowed you to just set up a computer and then paid you to process their transactions on your computer. 1159 01:38:55,950 --> 01:38:56,970 So that was my mindset. 1160 01:38:56,970 --> 01:39:00,268 I felt like I was I was it was a payment network and I was just paying. 1161 01:39:00,268 --> 01:39:07,495 I was playing one small piece of the payment network and the bigger the portion of the payment network I contributed to, the more I got paid. 1162 01:39:07,495 --> 01:39:08,746 So it made perfect sense. 1163 01:39:08,746 --> 01:39:09,636 But then. 1164 01:39:09,966 --> 01:39:15,600 from the difficulty adjustment and then getting hit with the halving, I'm like, my gosh, this is rough. 1165 01:39:15,600 --> 01:39:23,565 So it was fun and aggravating at the same time because ultimately the halving completely decimated my operation. 1166 01:39:23,826 --> 01:39:29,330 But that's what allowed me to kind of recalibrate and account for the difficulty adjustment and halving. 1167 01:39:29,330 --> 01:39:31,684 And that's where the Bitcoin fair value algorithm came from. 1168 01:39:31,684 --> 01:39:36,355 I learned that you cannot emotionally navigate through Bitcoin cycles. 1169 01:39:36,355 --> 01:39:37,335 You need 1170 01:39:38,144 --> 01:39:45,809 mathematical understanding of where you are in the cycle to properly manage your treasury if you want a sustainable mining business. 1171 01:39:45,810 --> 01:39:46,971 It's just that simple. 1172 01:39:46,971 --> 01:39:49,092 And right now, I don't mind anymore. 1173 01:39:49,092 --> 01:39:54,636 stopped a long time ago because I believe you need access to institutional capital. 1174 01:39:54,636 --> 01:39:59,000 You cannot compete with public companies who can do ATMs and note converts. 1175 01:39:59,000 --> 01:39:59,800 you just can't do it. 1176 01:39:59,800 --> 01:40:01,762 You don't have access to that type of liquidity. 1177 01:40:01,762 --> 01:40:04,244 you need, there's just no way to outperform them. 1178 01:40:04,244 --> 01:40:04,992 So I think 1179 01:40:04,992 --> 01:40:13,536 On a personal level, I still recommend people to mine not to make money, but to learn the things that I learned, to learn how the system fits together and pieces together in the 1180 01:40:13,536 --> 01:40:16,497 background, because it helps you understand price discovery. 1181 01:40:16,497 --> 01:40:23,620 It helps you understand the intrinsic value of Bitcoin all the time and energy that goes into sustaining the network. 1182 01:40:23,620 --> 01:40:25,671 are some people who say it's not backed by anything. 1183 01:40:25,671 --> 01:40:33,668 They don't understand the time, energy and effort of the people who are processing transactions and contributing hash to the network are actually doing. 1184 01:40:33,668 --> 01:40:40,731 So that's the network itself and the effect of the network are what give it intrinsic value and what secure the value. 1185 01:40:40,731 --> 01:40:51,295 And then the free market price discovery process built around that cost of production, which Bitcoin is just engineered to continue moving up over time. 1186 01:40:51,295 --> 01:40:55,097 That experience is worth it alone just to have that experience. 1187 01:40:55,097 --> 01:40:57,398 And that set the foundation for me. 1188 01:40:57,398 --> 01:41:02,496 Once I understood that Bitcoin was engineered money and it was a savings technology, 1189 01:41:02,496 --> 01:41:12,012 When I started to hear about DeFi, and I learned this before there were any DeFi protocols, but when DeFi first started out, that was my form of the lucky. 1190 01:41:12,012 --> 01:41:14,514 Like you said before, some people just bought it for other reasons. 1191 01:41:14,514 --> 01:41:20,788 Well, when DeFi came out, I was putting 5,000 here, 5,000 here, 10,000 here, 5,000 here, not to invest. 1192 01:41:20,788 --> 01:41:23,770 mean, looking back on it, I wish I had, but I was just playing around with it. 1193 01:41:23,770 --> 01:41:27,462 I was just seeing how things worked, and this was interesting to me. 1194 01:41:27,462 --> 01:41:28,886 Like, let's bridge Bitcoin. 1195 01:41:28,886 --> 01:41:32,405 I wrapped Bitcoin, bridge protocols. 1196 01:41:32,529 --> 01:41:42,473 DeFi liquidity pools all of this stuff just intrigued me immensely and and I think it's because I had that visa understanding like my goodness now I now I'm just not gonna be the 1197 01:41:42,473 --> 01:41:47,556 guy who's processing the visa when they swipe their card now I'm like the be your own bank. 1198 01:41:47,556 --> 01:41:49,206 That's the same be your own bank right now. 1199 01:41:49,206 --> 01:41:59,301 I'm like the banker I'm the market maker in the background facilitating this type of transaction and and you can earn with it and then that exploded And that was my lucky 1200 01:41:59,301 --> 01:42:00,531 moment for sure 1201 01:42:00,821 --> 01:42:11,024 I mean, coins like Lend that were bought for pennies going up to three hundred dollars, Uniswap, Balancer, Maker, all these protocols that I think are going to be around for a 1202 01:42:11,024 --> 01:42:16,025 long time, not because they're competing with Bitcoin, but because they're there to complement Bitcoin. 1203 01:42:16,025 --> 01:42:27,159 They're there to expand the use case of Bitcoin, arguably just like the dollar system is there to expand the use case of Bitcoin and help increase the monetary velocity of 1204 01:42:27,159 --> 01:42:27,989 Bitcoin. 1205 01:42:27,989 --> 01:42:28,885 And that 1206 01:42:28,885 --> 01:42:31,637 That decentralized economy, that's the internet economy. 1207 01:42:31,637 --> 01:42:33,908 That's the free market interest rate economy. 1208 01:42:33,908 --> 01:42:42,133 So getting in there and playing with it and learning how things work and understanding your counterparty risk and that smart contract, understanding liquidity pools, 1209 01:42:42,213 --> 01:42:48,037 understanding the opportunity for delta neutral positioning and perpetual contracts and different futures. 1210 01:42:48,037 --> 01:42:54,961 It's unbelievable that this, and this is why BlackRock is tokenizing treasuries with Bildle. 1211 01:42:55,083 --> 01:42:59,754 They're tokenizing treasuries because they want liquid access to these free market internet economy. 1212 01:42:59,754 --> 01:43:05,876 That's why they were going to they're one of the biggest market makers in the world as one of the largest asset managers in the world. 1213 01:43:05,876 --> 01:43:16,520 And they are not going to pass up the opportunity to build their name and brand and deploy their market making strategies in what is the fastest growing most profitable economy in 1214 01:43:16,520 --> 01:43:17,340 the world. 1215 01:43:17,340 --> 01:43:18,530 And that's what we're looking at here. 1216 01:43:18,530 --> 01:43:19,471 That's what we're living through. 1217 01:43:19,471 --> 01:43:21,075 And that all starts. 1218 01:43:21,075 --> 01:43:22,426 At the bottom of the rabbit hole. 1219 01:43:22,426 --> 01:43:24,248 I always like to say I went to the bottom of rabbit hole. 1220 01:43:24,248 --> 01:43:27,551 I planted some dynamite and blew it up and went deeper. 1221 01:43:27,551 --> 01:43:32,375 And, know, I set up a nice man cave down there for everybody to come learn with me. 1222 01:43:32,375 --> 01:43:45,155 And it's been a heck of a ride seeing where we were back then, starting in 2013, all the way up to the 2016 having Excel, just crushing me, accelerating Bitcoin fair value 1223 01:43:45,155 --> 01:43:49,525 algorithm, moving into decentralized finance, learning how to be a market maker. 1224 01:43:49,525 --> 01:43:58,913 learning how these protocols work and how true finance works, not based on a stated rate yield curve, but based on bonding curves and different algorithms built into these 1225 01:43:58,913 --> 01:44:00,093 protocols. 1226 01:44:00,314 --> 01:44:02,715 And I'm still addicted to that. 1227 01:44:02,836 --> 01:44:04,637 That's why I'm building People's Reserve. 1228 01:44:04,637 --> 01:44:08,000 People's Reserve is a market maker for we the people. 1229 01:44:08,000 --> 01:44:14,625 So it takes all of my market making strategies I've learned and deploys them, but it deploys them to not empower myself. 1230 01:44:14,625 --> 01:44:17,428 It deploys them to empower our customers. 1231 01:44:17,428 --> 01:44:19,275 It's literally a reserve of money 1232 01:44:19,275 --> 01:44:22,327 for the people being deployed to empower the people. 1233 01:44:22,327 --> 01:44:25,329 And it's just the way it should have been. 1234 01:44:25,329 --> 01:44:28,071 Every bank should be a market maker for the people. 1235 01:44:28,071 --> 01:44:33,105 Every market maker should be looking to empower their customers, not extract value. 1236 01:44:33,105 --> 01:44:34,116 And that's the difference. 1237 01:44:34,116 --> 01:44:37,548 And you'll see that in our products versus the products that come out to try to compete with us. 1238 01:44:37,548 --> 01:44:39,019 We're a first market mover. 1239 01:44:39,019 --> 01:44:42,902 We've built these products as innovators and pioneers. 1240 01:44:42,902 --> 01:44:44,743 And the maxis will come and they'll copy us. 1241 01:44:44,743 --> 01:44:45,924 But you know what? 1242 01:44:46,024 --> 01:44:47,593 They'll make you buy Bitcoin. 1243 01:44:47,593 --> 01:44:50,594 And then they'll benefit from that Bitcoin that you own, too. 1244 01:44:50,594 --> 01:45:02,057 It's just a wild concept that someone will lend you money, force you to buy Bitcoin and then contractually obligate the benefit of that Bitcoin to the borrower and the lender. 1245 01:45:02,057 --> 01:45:03,688 That's that's value extraction. 1246 01:45:03,688 --> 01:45:05,298 That's a fiat maxi mindset. 1247 01:45:05,298 --> 01:45:07,569 So that's what we're preparing for at People's Reserve. 1248 01:45:07,569 --> 01:45:11,540 We're a bunch of Bitcoin maxis who are building for a Bitcoin standard. 1249 01:45:11,540 --> 01:45:15,401 And that Bitcoin standard is Bitcoin as the base layer money. 1250 01:45:15,635 --> 01:45:19,855 and then fiat currencies as the L2 to that base layer money. 1251 01:45:20,974 --> 01:45:31,614 You know, it's, when I came to Bitcoin as someone with a background and a love for finance, and when I say a love for finance, I don't mean as a rent seeker, but just what 1252 01:45:31,614 --> 01:45:37,414 you can do with the economic properties of money and how you can use money as a tool. 1253 01:45:37,974 --> 01:45:45,688 And, I, I did, you know, get really into, you can call them shit coins or crypto for a lot of those reasons. 1254 01:45:46,132 --> 01:45:47,193 And so it's exciting. 1255 01:45:47,193 --> 01:45:57,718 think we'll have some sort of probably, you know, 180 degree or 360 degree probably turn where we, you we hate and repudiate shit coins and crypto and all these things. 1256 01:45:57,718 --> 01:46:06,953 But I do think that our love for finance or my love for finance and the financialization of Bitcoin will come back around and we'll see different things on Bitcoin that will be 1257 01:46:06,953 --> 01:46:08,814 legit one day. 1258 01:46:09,054 --> 01:46:15,958 And that will be useful and we'll incorporate the best aspects of finance and economics for 1259 01:46:15,958 --> 01:46:20,785 people like you were saying because these are tools you know so 1260 01:46:20,785 --> 01:46:24,165 it's a perfect transition if you don't, if you don't mind me. 1261 01:46:24,165 --> 01:46:33,085 Yeah, that's a perfect transition to quickly touch on our self repaying mortgage because I know we're coming up on time here, but I can run through this to show you what I mean by 1262 01:46:33,085 --> 01:46:33,225 that. 1263 01:46:33,225 --> 01:46:35,965 When I say that, what do you mean deliver value? 1264 01:46:35,985 --> 01:46:38,205 In most cases, you're going to borrow from your Bitcoin. 1265 01:46:38,205 --> 01:46:40,105 You're going to pay an elevated interest rate. 1266 01:46:40,105 --> 01:46:41,535 You're not just going to pay prime. 1267 01:46:41,535 --> 01:46:48,661 You're going to play prime plus and sometimes it's prime plus 100 % and the rates are up towards 14 to 16 % to bar against your Bitcoin. 1268 01:46:48,661 --> 01:46:57,015 Well, you also have liquidation risk because if you post a million dollars worth of Bitcoin collateral and you borrow 500 and Bitcoin goes down 48, 49 percent, you're going 1269 01:46:57,015 --> 01:47:00,066 to get margin called and there's a chance that you can lose your Bitcoin. 1270 01:47:00,066 --> 01:47:08,770 Well, you know, my pain point was paying that 100 Bitcoin for the house and watching it become worth less, less, less, and less and less. 1271 01:47:09,431 --> 01:47:15,153 that experience helped me develop this product, which is if I had just posted that Bitcoin. 1272 01:47:15,187 --> 01:47:21,321 and allowed that Bitcoin to accrete value over time while making my payment, I'd be nine million dollars richer. 1273 01:47:21,321 --> 01:47:30,388 So there's a big problem here for Bitcoiners who want to buy their house because they've been responsible savers of the most pristine form of collateral in the world. 1274 01:47:30,388 --> 01:47:32,929 So it's very interesting that. 1275 01:47:33,530 --> 01:47:43,737 With the Bitcoin mortgage, with the self repaying mortgage from People's Reserve, when you post Bitcoin collateral, the only way you can get liquidated is if you default on the 1276 01:47:43,737 --> 01:47:44,627 mortgage. 1277 01:47:44,994 --> 01:47:46,435 That's really important. 1278 01:47:46,495 --> 01:47:48,676 it's not price dependent on Bitcoin. 1279 01:47:48,676 --> 01:47:53,659 The only way you get liquidated with your Bitcoin is if you default on the mortgage. 1280 01:47:53,659 --> 01:47:55,780 Now, what happens if the price goes down? 1281 01:47:55,780 --> 01:48:04,424 If the price goes down, what happens is there's contractually stated LTV thresholds. 1282 01:48:04,425 --> 01:48:12,779 And if the value of your Bitcoin goes down and now your LTV ratio changes and you enter into a lower threshold, your interest rate goes up. 1283 01:48:13,233 --> 01:48:16,425 because the amount of risk in the product is actually increasing. 1284 01:48:16,425 --> 01:48:18,956 So therefore the lender needs to be compensated for that risk. 1285 01:48:18,956 --> 01:48:21,938 And the way you compensate for risk is with a higher interest rate. 1286 01:48:21,938 --> 01:48:31,143 But vice versa, if the price of Bitcoin goes up and you enter into a higher threshold, your interest rate will go down even further because there's less, there's even less risk 1287 01:48:31,143 --> 01:48:32,324 for the lender. 1288 01:48:32,324 --> 01:48:39,537 And you can sleep easy at night if you have to add more margin because you know you're not going to default on the mortgage. 1289 01:48:39,537 --> 01:48:41,128 You're going to make your mortgage payment. 1290 01:48:41,128 --> 01:48:42,769 You know, and 1291 01:48:42,927 --> 01:48:44,928 It's one of your prime hierarchy of needs. 1292 01:48:44,928 --> 01:48:47,240 So it's of the utmost importance that you do that. 1293 01:48:47,240 --> 01:48:48,790 And if you don't, then your Bitcoin is at risk. 1294 01:48:48,790 --> 01:48:50,582 So you're properly incentivized. 1295 01:48:50,582 --> 01:48:55,204 But at the same time, you don't have to worry about that price action destroying your savings. 1296 01:48:55,204 --> 01:48:56,405 So that's what I want. 1297 01:48:56,405 --> 01:48:59,327 So I look at some other products in the marketplace and I say, I don't want that. 1298 01:48:59,327 --> 01:49:00,347 I don't want that. 1299 01:49:00,347 --> 01:49:01,988 I'm definitely not getting scammed by that. 1300 01:49:01,988 --> 01:49:02,628 I don't want that. 1301 01:49:02,628 --> 01:49:03,849 I don't want that. 1302 01:49:04,350 --> 01:49:06,621 well, here's something that this is interesting. 1303 01:49:06,621 --> 01:49:10,737 OK, there's a little bit of risk here because the rate can move up and down based on the price of Bitcoin. 1304 01:49:10,737 --> 01:49:20,644 But if I'm using my Bitcoin as collateral anyway, I should be using a responsible portion of it that I'd be, you know, if I default on that mortgage and I get a call from people's 1305 01:49:20,644 --> 01:49:23,926 reserve and they say, hey, you've default on your mortgage. 1306 01:49:23,926 --> 01:49:26,247 We had a liquidate your Bitcoin. 1307 01:49:26,888 --> 01:49:30,090 But congratulations, you own your home free and clear now. 1308 01:49:30,350 --> 01:49:34,173 So usually when you get liquidated, you're not used to winning anything. 1309 01:49:34,173 --> 01:49:36,535 It's a complete and total loss, right? 1310 01:49:36,535 --> 01:49:40,541 Because it's usually based on a leveraged trade or a live borrowing. 1311 01:49:40,541 --> 01:49:47,501 But now, if you breach those levels and you finally default, then you actually own your home free and clear. 1312 01:49:47,501 --> 01:49:55,721 And the worst case scenario is if the Bitcoin goes down, you let the lower threshold go, you make a few payments, the Bitcoin goes down, you make a few payments, then you default, 1313 01:49:55,721 --> 01:50:02,161 then we have to foreclose on the home as well, because there is still a lien on the property, and it has to be to protect the lender. 1314 01:50:02,161 --> 01:50:05,141 But what it does is it creates a fair product. 1315 01:50:05,141 --> 01:50:10,645 So when people are able to review this contract, which they'll be able to review later next year, 1316 01:50:11,289 --> 01:50:14,110 after we reveal our platform at the end of the first quarter of next year. 1317 01:50:14,110 --> 01:50:16,491 We've been building in stealth for three years. 1318 01:50:16,491 --> 01:50:21,992 And I think one of the big things that a lot of people are asking also, Cedric, is what about custody? 1319 01:50:21,992 --> 01:50:23,083 Like, how's the custody work? 1320 01:50:23,083 --> 01:50:32,916 Well, there's something I want to I want to say that I didn't get to say before, which is when it comes to custody, we're talking about multi sick because that's what I would want 1321 01:50:32,916 --> 01:50:34,996 to use because I'm a Bitcoin maxi. 1322 01:50:34,996 --> 01:50:37,809 We're also talking about a special purpose vehicle. 1323 01:50:37,809 --> 01:50:42,051 holding the contract so it's detached from the People's Reserve balance sheet. 1324 01:50:42,332 --> 01:50:53,117 Finally, we're talking about proof of reserves and transparency that allow you to know that, first of all, from the lender's perspective, that the borrower isn't spending that 1325 01:50:53,117 --> 01:50:54,438 Bitcoin elsewhere. 1326 01:50:54,438 --> 01:51:01,402 And from the borrower's perspective, that we, People's Reserve, are not rehypothecating your Bitcoin. 1327 01:51:01,402 --> 01:51:03,483 We don't believe in rehypothecation. 1328 01:51:03,483 --> 01:51:06,917 So we're building these products with a Bitcoin maxi mindset. 1329 01:51:06,917 --> 01:51:08,820 and security maxi mindset. 1330 01:51:08,820 --> 01:51:13,946 And we want to make sure that it's mutually beneficial to both borrower and lender. 1331 01:51:13,946 --> 01:51:16,549 And that's how you capture the market. 1332 01:51:16,590 --> 01:51:20,605 That's how you build a product that a Bitcoin maxi like myself would want to use. 1333 01:51:20,605 --> 01:51:21,986 And that's the bar that we set. 1334 01:51:21,986 --> 01:51:25,851 If I wouldn't use the product as a Bitcoin maxi, then I'm not gonna build the 1335 01:51:27,814 --> 01:51:29,165 That's why I want to ask the question. 1336 01:51:29,165 --> 01:51:34,681 So it's a multi-sig situation and you're not loaning out the Bitcoin. 1337 01:51:34,681 --> 01:51:36,262 You're not rehypothecating it. 1338 01:51:36,262 --> 01:51:50,996 How does it work in terms of you get a benefit from it, people's reserve or whoever, if I still have access to it or have one of the keys or however that works, like where is the 1339 01:51:50,996 --> 01:51:52,017 benefit? 1340 01:51:52,558 --> 01:51:55,429 there is no there is no benefit when it comes to Bitcoin. 1341 01:51:55,429 --> 01:52:00,802 So Bitcoin is not being leveraged for people's reserve in any way whatsoever to create a profit. 1342 01:52:00,802 --> 01:52:04,583 But we are still writing you a loan at a specific interest rate. 1343 01:52:04,583 --> 01:52:08,525 So there's that yield on the loan, which is going to be less than the primary. 1344 01:52:08,525 --> 01:52:10,706 So that's going to be where you take a cut. 1345 01:52:10,706 --> 01:52:16,678 But there's another element to our ecosystem which we are not sharing yet, which is which is relevant to the people's reserve. 1346 01:52:16,678 --> 01:52:18,651 Remember, I said it's a reserve of money. 1347 01:52:18,651 --> 01:52:20,742 that's being used for the people. 1348 01:52:20,742 --> 01:52:24,293 So you can keep that in mind, but I'm not I'm really not allowed to discuss any more than that. 1349 01:52:24,293 --> 01:52:33,887 But there are additional elements that don't introduce any risk to the Bitcoin that actually make writing the self repaying mortgage for People's Reserve more profitable than 1350 01:52:33,887 --> 01:52:36,429 writing a regular mortgage at the prime rate. 1351 01:52:36,429 --> 01:52:47,393 So we are pro the incentives are aligned and the incentives are proper once people understand the full feedback loop of the of the platform and the ecosystem that we built. 1352 01:52:47,505 --> 01:52:50,106 Because we're talking about two products. 1353 01:52:50,106 --> 01:52:53,989 We've revealed two products, the self-repay mortgage and the Bitcoin bond. 1354 01:52:53,989 --> 01:52:56,990 We have two other products that we have not shared yet. 1355 01:52:56,990 --> 01:53:00,012 And we've been building Stealth for three years. 1356 01:53:00,012 --> 01:53:02,874 And some people go to our website and they're like, your website has no information. 1357 01:53:02,874 --> 01:53:04,595 Yeah, because we're still in Stealth. 1358 01:53:04,595 --> 01:53:06,035 We're just teasing you guys. 1359 01:53:06,035 --> 01:53:09,678 We're showing you what we've been working on, but we're not revealing all the details yet. 1360 01:53:09,678 --> 01:53:11,138 We're the first market mover. 1361 01:53:11,138 --> 01:53:12,439 We're raising the bar. 1362 01:53:12,439 --> 01:53:15,401 We're not sharing our business plans with our future competitors. 1363 01:53:15,401 --> 01:53:16,167 Sorry. 1364 01:53:16,167 --> 01:53:24,318 when you'll get it when we go live and we'll reveal our platform at the end of the first quarter of next year and we'll start writing our first self-repaying mortgages in Q2 of 1365 01:53:24,318 --> 01:53:28,360 next year and we'll start issuing our first Bitcoin bonds in Q2 of next year. 1366 01:53:28,360 --> 01:53:32,662 And that's when you can look down and read the contracts and see all the fine print. 1367 01:53:32,662 --> 01:53:41,454 In the meantime, you can look forward to being empowered by your responsible saving of Bitcoin as the most pristine form of cloud in the world because there are coming tools for 1368 01:53:41,454 --> 01:53:45,115 you to use to empower yourself and to leverage 1369 01:53:45,115 --> 01:53:53,666 the wealth that you've built in the internet economy without all the problems that you face today, just doing a straight sell of that Bitcoin to buy that property. 1370 01:53:53,666 --> 01:53:57,540 You'll be alive on the outside, but dead on the inside. 1371 01:53:58,831 --> 01:54:04,450 Well, speaking of housing, you had a great tweet around July 4th. 1372 01:54:06,219 --> 01:54:12,064 You were invited to socialize with some of your neighbors on July 4th. 1373 01:54:12,065 --> 01:54:13,906 What was that experience like? 1374 01:54:14,027 --> 01:54:15,607 my gosh, it was funny. 1375 01:54:15,607 --> 01:54:21,806 came home, neighbors were in the driveway, they waved me over, come have a hot dog, come have a beer. 1376 01:54:21,806 --> 01:54:23,967 I'm like, okay, I'm gonna go over there. 1377 01:54:23,967 --> 01:54:26,657 And went over there and said hi to everybody. 1378 01:54:26,657 --> 01:54:34,417 And then I guess they were in the middle of talking about the housing price performance and how the housings were going up in dollar values. 1379 01:54:34,417 --> 01:54:43,207 So of course, I came over and they're like, CJ, you've been here for a while now, it's been since 2019, your house is doing great, huh? 1380 01:54:43,340 --> 01:54:45,321 more than doubled in value, hasn't it? 1381 01:54:45,321 --> 01:54:46,652 Like, are you happy? 1382 01:54:46,713 --> 01:54:50,695 And I say, look, I paid 100 Bitcoin for my home. 1383 01:54:51,056 --> 01:54:53,157 I can't even get 10 Bitcoin from my home. 1384 01:54:53,157 --> 01:54:57,420 The house is crashing and burning against my savings vehicle. 1385 01:54:57,420 --> 01:55:06,707 So even though my house is worth more than twice what I paid for it, I've actually lost more than 90 % of the value with what I paid for it with. 1386 01:55:06,787 --> 01:55:09,989 So I'm not really that happy with the performance at all. 1387 01:55:10,170 --> 01:55:10,840 I cannot. 1388 01:55:10,840 --> 01:55:14,352 by anywhere near amount of Bitcoin back that I paid for it. 1389 01:55:14,553 --> 01:55:17,055 And this this haunts me at nighttime. 1390 01:55:17,055 --> 01:55:18,526 But yeah, you know, everything else is great. 1391 01:55:18,526 --> 01:55:19,536 Love the neighborhood. 1392 01:55:19,536 --> 01:55:19,927 H.O.A. 1393 01:55:19,927 --> 01:55:20,887 going down is nice, too. 1394 01:55:20,887 --> 01:55:23,599 You know, nice to save some money on those fees. 1395 01:55:23,599 --> 01:55:29,684 And then everybody's just like they're like, you know, you got the freeze on the hot dog like, like, what? 1396 01:55:29,684 --> 01:55:30,765 What is he talking about? 1397 01:55:30,765 --> 01:55:33,487 Because, you know, I told him about it when I first moved in there. 1398 01:55:33,487 --> 01:55:34,928 Hey, how are you? 1399 01:55:34,928 --> 01:55:35,668 What do you do? 1400 01:55:35,668 --> 01:55:38,522 You know, it's like the first question everybody asked when they first meet you. 1401 01:55:38,522 --> 01:55:39,162 How are you? 1402 01:55:39,162 --> 01:55:39,812 Nice to meet you. 1403 01:55:39,812 --> 01:55:40,542 What's your name? 1404 01:55:40,542 --> 01:55:41,462 What do do? 1405 01:55:41,462 --> 01:55:43,082 And you know, I'm the Bitcoin guy. 1406 01:55:43,082 --> 01:55:44,942 And back then it was laughable. 1407 01:55:44,942 --> 01:55:48,042 But, you know, at those prices, I was like, this is amazing. 1408 01:55:48,042 --> 01:55:48,802 Like, this is crazy. 1409 01:55:48,802 --> 01:55:56,122 I can't believe I can't, you know, and someone asked me a good question, actually, that they said, hey, look, somebody who understands the Bitcoin cycles, why the heck did you 1410 01:55:56,122 --> 01:55:58,652 sell in 2019 instead of 2021? 1411 01:55:58,652 --> 01:56:00,262 Like, you know how the cycles work. 1412 01:56:00,262 --> 01:56:02,452 And I was like, wow, that's a really astute question. 1413 01:56:02,452 --> 01:56:03,642 That's a good question. 1414 01:56:03,642 --> 01:56:05,842 And I'll share an answer with everybody. 1415 01:56:05,842 --> 01:56:08,600 At that time, my wife got pregnant. 1416 01:56:08,600 --> 01:56:13,122 So we were expecting our second kid and we needed more space. 1417 01:56:13,122 --> 01:56:15,713 We could not make it work where we were. 1418 01:56:15,713 --> 01:56:20,545 So it was time to either re-rent or buy. 1419 01:56:20,545 --> 01:56:31,120 And even knowing the cycles, thankfully, been blessed enough that there was enough growth there where it made sense to my overall savings to do that and get my family in there. 1420 01:56:31,120 --> 01:56:32,230 And I'm happy I did. 1421 01:56:32,230 --> 01:56:36,984 I don't regret it at all because ultimately we want to spend our Bitcoin. 1422 01:56:36,984 --> 01:56:40,975 But what I learned through that process is that you don't want to spend your Bitcoin outright. 1423 01:56:40,975 --> 01:56:45,556 You want to first borrow dollars against it and then spend those dollars and slowly pay them back. 1424 01:56:45,556 --> 01:56:47,767 And when you do that, you get the best of both worlds. 1425 01:56:47,767 --> 01:56:50,878 You get to keep the Bitcoin and you get to keep the house. 1426 01:56:50,918 --> 01:56:57,880 And that played a big role in the development of this product so that we can help other Bitcoins who have to make a similar decision in the future, except they won't have to give 1427 01:56:57,880 --> 01:56:58,780 up their Bitcoin. 1428 01:56:58,780 --> 01:57:05,782 They'll be able to benefit from their cash flow, from their job, but also from the growth of that Bitcoin over time. 1429 01:57:05,860 --> 01:57:09,886 so that they can pass it on to future generations who can continue to benefit from that wealth. 1430 01:57:11,054 --> 01:57:11,724 That's awesome. 1431 01:57:11,724 --> 01:57:16,254 I hope I can benefit from your services in Q2 of 2025. 1432 01:57:16,394 --> 01:57:18,514 When I look to buy a house. 1433 01:57:18,514 --> 01:57:24,014 What can you tell me about you mentioned earlier in the show that the countries in the Middle East are buying? 1434 01:57:24,414 --> 01:57:27,154 This is probably my last question for you. 1435 01:57:27,154 --> 01:57:31,078 So I mean, how do you know something like that? 1436 01:57:31,598 --> 01:57:32,919 You know, it's just the rumor mill. 1437 01:57:32,919 --> 01:57:35,642 There's a rumor mill that goes around on OTC desks. 1438 01:57:35,642 --> 01:57:36,923 Who's looking for coins? 1439 01:57:36,923 --> 01:57:38,364 How many do they want? 1440 01:57:38,364 --> 01:57:39,825 How many can they buy? 1441 01:57:39,825 --> 01:57:41,667 And how much will they buy perpetually? 1442 01:57:41,667 --> 01:57:43,088 That's the real question. 1443 01:57:43,088 --> 01:57:46,931 The real OTC hunts are not for one time buys. 1444 01:57:46,931 --> 01:57:53,297 The buyers that are coming in are looking for consistent amounts of coins well into the future. 1445 01:57:53,297 --> 01:57:54,828 And they want to buy in big blocks. 1446 01:57:54,828 --> 01:57:56,089 They don't want small blocks. 1447 01:57:56,089 --> 01:57:59,766 So just seeing the natural growth 1448 01:57:59,766 --> 01:58:07,392 and pace of demand grow in some of the ways that you wouldn't really see it in an exchange, right? 1449 01:58:07,392 --> 01:58:10,214 You won't really see it when you look at a chart. 1450 01:58:10,214 --> 01:58:21,441 But when you're networked, when you're tapped in and certain people are asking you certain things about whether you'd want to sell a certain amount of coins, it all starts to add up 1451 01:58:21,441 --> 01:58:24,023 and you can piece two and two together where that money's coming from. 1452 01:58:24,023 --> 01:58:28,166 And I think that the trade deficits that we see in the United States 1453 01:58:28,262 --> 01:58:32,245 has massive trade deficits, which means the other country's got the surpluses. 1454 01:58:32,245 --> 01:58:36,608 They used to take those surpluses and Luke Gromen, I think, hit the nail on the head with this thesis. 1455 01:58:36,608 --> 01:58:39,150 They used to take those surpluses and buy the treasuries. 1456 01:58:39,150 --> 01:58:40,050 We knew that. 1457 01:58:40,050 --> 01:58:44,013 But now, since we weaponize the dollar, real rates of return are negative. 1458 01:58:44,013 --> 01:58:47,436 They're taking those surpluses and they're putting them into gold. 1459 01:58:47,436 --> 01:58:53,220 They're taking those surpluses and they're reinvesting them into the economy or into infrastructure. 1460 01:58:53,220 --> 01:58:55,281 And they're not sitting on those dollars anymore. 1461 01:58:55,281 --> 01:58:57,134 They're re-spending them immediately. 1462 01:58:57,134 --> 01:59:00,319 because that's what they're being incentivized to do by the marketplace. 1463 01:59:00,319 --> 01:59:05,715 And some of them are not just doing that, they're also starting to build their own strategic Bitcoin reserve. 1464 01:59:06,894 --> 01:59:08,154 That's wild. 1465 01:59:08,474 --> 01:59:19,477 You wrote, you know, one of your tweets, Bitcoin was engineered to leverage the natural laws of economics, commodity cycles and price discovery to empower we the people. 1466 01:59:20,338 --> 01:59:25,199 It's awesome to watch and I've loved hearing about your story. 1467 01:59:25,279 --> 01:59:27,730 I'll leave it to you to let, you know, this has been incredibly dope. 1468 01:59:27,730 --> 01:59:31,000 I'll leave it to you to let people know where they can find you and your work. 1469 01:59:31,361 --> 01:59:37,038 And you know, we'll see each other in January on January 18th in Naples, Florida. 1470 01:59:37,038 --> 01:59:42,398 And maybe we'll have some progress on Florida's strategic Bitcoin reserve by then. 1471 01:59:42,398 --> 01:59:45,118 So, you know, I'll leave it to you for an yeah. 1472 01:59:45,118 --> 01:59:45,441 Okay. 1473 01:59:45,441 --> 01:59:46,642 Florida's moving fast. 1474 01:59:46,642 --> 01:59:56,658 That guy, Jimmy Patronus, the CFO, he wrote a letter to Chris Spencer, the head of the State Board of Administration, who's in charge of the pension plans and asked for a 1475 01:59:56,658 --> 02:00:01,580 report, a report that lawmakers are going to be using in the upcoming session here in Florida. 1476 02:00:01,580 --> 02:00:08,144 So it's really important for your listeners to support people like Watchmen Action Group with R.C. 1477 02:00:08,144 --> 02:00:12,506 and Julianna Williams, Citizens for Sound Money with Daniel Diaz. 1478 02:00:12,618 --> 02:00:16,000 Even Florida Bitcoin blockchain association with Samuel arms. 1479 02:00:16,000 --> 02:00:23,263 These are the people that we want to empower Dennis Porter Satoshi action fund They are going to the politicians and they are pushing these things forward They're gonna move a 1480 02:00:23,263 --> 02:00:32,557 lot faster than then people are Anticipating the people in the power positions are now starting to listen a couple years ago when there was a war on crypto Nobody was really 1481 02:00:32,557 --> 02:00:40,410 listening but now with the incoming administration bipartisan support and rapid progress of 1482 02:00:40,410 --> 02:00:43,212 crypto's influence within the political realm. 1483 02:00:43,212 --> 02:00:48,456 More politicians are listening and they're not just listening, they're actually eager to learn. 1484 02:00:48,456 --> 02:00:50,297 The good ones are actually eager to learn. 1485 02:00:50,297 --> 02:00:53,469 So I think that's going to be hitting a lot faster. 1486 02:00:53,469 --> 02:01:01,324 That trickle down from the federal to the state to the cities to the municipality is going to happen faster than anybody really anticipates. 1487 02:01:01,805 --> 02:01:04,496 So I'm excited about that because I see it kind of working in the background. 1488 02:01:04,496 --> 02:01:10,168 So please support those groups, support those people because the work they do is of the utmost importance. 1489 02:01:10,168 --> 02:01:14,382 And you can follow me on X at CJ Constantinos. 1490 02:01:14,382 --> 02:01:17,915 And of course you can follow People's Reserve on X at People's Reserve. 1491 02:01:17,915 --> 02:01:19,416 We don't really do anything else. 1492 02:01:19,416 --> 02:01:21,608 That's that's kind of the greatness of building in stealth. 1493 02:01:21,608 --> 02:01:25,668 You don't have to have all this CRM and and manage all these things. 1494 02:01:25,668 --> 02:01:28,243 We don't need to maintain our website and other stuff like that. 1495 02:01:28,243 --> 02:01:31,246 Like we are building in stealth and we are building for you. 1496 02:01:31,246 --> 02:01:34,839 And when we're ready, we'll go live and you can look at everything until then. 1497 02:01:34,839 --> 02:01:35,760 Follow me on X. 1498 02:01:35,760 --> 02:01:37,333 Follow People's Reserve on X. 1499 02:01:37,333 --> 02:01:43,346 and we'll continue to teach you what we feel comfortable teaching until we're live in the marketplace offering our products and services. 1500 02:01:43,346 --> 02:01:49,288 And by the way, we're never gonna put our name on a stadium because we're building products and services that don't require marketing. 1501 02:01:49,288 --> 02:01:50,268 They just work. 1502 02:01:50,268 --> 02:01:53,570 And when your product works and it solves a problem, it markets itself. 1503 02:01:53,570 --> 02:01:58,772 So don't expect to be getting some blast from us trying to convince you of our products. 1504 02:01:58,772 --> 02:02:01,303 You'll hear it from your family and friends before you hear it from us. 1505 02:02:01,303 --> 02:02:06,539 We're building products that work and that empower you and then we're not gonna force you to realize that. 1506 02:02:06,539 --> 02:02:10,986 We're going to help the math realize that just the same way Bitcoin has taught us over time. 1507 02:02:10,986 --> 02:02:13,109 Never, never, never sell your Bitcoin. 1508 02:02:13,109 --> 02:02:14,961 Simply just borrow against it. 1509 02:02:15,726 --> 02:02:24,926 Yeah, I mean, probably 99.999 % of advertising and marketing is to get you to buy things that you don't really want or need and to convince you otherwise. 1510 02:02:24,926 --> 02:02:26,176 CJ, this has been so dope. 1511 02:02:26,176 --> 02:02:27,986 Thank you so much. 1512 02:02:27,986 --> 02:02:28,934 This has been. 1513 02:02:29,035 --> 02:02:29,972 Yeah, thank you so much. 1514 02:02:29,972 --> 02:02:32,828 I'll see you in Naples and I hope to see everybody else there as well. 1515 02:02:35,694 --> 02:02:39,414 I don't know how to pause it on here without leaving. 1516 02:02:39,774 --> 02:02:42,334 But this is no longer on the show. 1517 02:02:42,454 --> 02:02:43,444 Thank you. 1518 02:02:43,444 --> 02:02:44,457 That was great. 1519 02:02:44,457 --> 02:02:45,019 Yeah, it was great. 1520 02:02:45,019 --> 02:02:46,470 Thanks for letting me rip, man. 1521 02:02:46,470 --> 02:02:49,451 I know I can go on and on and on, I. 1522 02:02:51,373 --> 02:02:52,783 Yeah, that was great. 1523 02:02:52,783 --> 02:02:54,295 Great line of questioning, too. 1524 02:02:54,295 --> 02:02:55,355 I. 1525 02:02:55,875 --> 02:02:57,016 I enjoyed it. 1526 02:02:57,016 --> 02:03:01,758 Sometimes I'm like, but every line of questioning got me got me going, got me thinking. 1527 02:03:01,758 --> 02:03:02,758 good, good. 1528 02:03:02,758 --> 02:03:04,819 This will come out definitely. 1529 02:03:04,819 --> 02:03:10,631 I'm going to try to work it more towards the front because of the timing of the of Naples. 1530 02:03:10,631 --> 02:03:12,962 So probably around the 2829th. 1531 02:03:12,962 --> 02:03:15,302 It won't go out next. 1532 02:03:15,703 --> 02:03:18,053 But shortly after that, so I'll let you know for sure. 1533 02:03:18,053 --> 02:03:19,414 Hopefully you promote it. 1534 02:03:19,414 --> 02:03:22,905 But I look forward to seeing you in person in Naples. 1535 02:03:23,305 --> 02:03:24,745 So all right. 1536 02:03:24,745 --> 02:03:25,206 Thank you. 1537 02:03:25,206 --> 02:03:25,986 Be well. 1538 02:03:25,986 --> 02:03:27,186 Okay, be well.