Hey, hey, welcome back to the Bitcoin Matrix podcast. I'm your host, Cedric Youngelman.
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more. Today, I'm sitting down with Joe Burnett for the fourth time to discuss his piece,
The Singularity Has Begun. And this might just be our most important conversation yet.
Joe makes a bold case. As intelligence becomes abundant and essentially free,
wealth itself starts to melt. When AI models write their own code and you can spin up a trillion
and Albert Einstein's on demand. What happens to your savings, your assets, everything you've
worked for? We're diving into why diversification feels prudent but leaves people hopeless.
Why meme coins and sports betting surge when traditional savings feel fragile.
And why Bitcoin sits at this unique intersection at what Joe calls a terminal discovery,
something that, like the number zero or a perfect circle, simply can't be improved upon.
will also tackle some uncomfortable questions.
Can AI agents become truly autonomous?
What happens when your AI refuses to give you back your seed phrase?
And is there really only one asset that abundant intelligence can't dilute?
This goes deep into scarcity, abundance, money, and what it means
to preserve wealth in a world being fundamentally reshaped by intelligence itself.
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And now, let's enter the Bitcoin Matrix with my friend Joe Burnett.
What is real?
How do you define real?
You can't jump into cash.
Cash is trash.
What do you do? You get out.
Joe Burnett, welcome back to the Bitcoin Matrix for the fourth time.
How are you?
Hey, Cedric.
Thanks for having me on. I'm doing great.
Yeah, man. It's been a minute, I think almost a year maybe since we last spoke.
We dropped this piece, The Singularity Has Begun.
I wanted to kind of reach out and talk about it.
I'm sure we could talk about maybe the markets and some of the volatility we've been experiencing.
But this was interesting. The Singularity Has Begun.
What inspired you to write this piece?
A few things inspired me to write The Singularity Has Begun.
One, and kind of jokingly, Twitter did that $1 million X competition, X article competition.
So I wanted to throw my hat in the ring there to see if I can win.
Unfortunately, it did not win.
Did get 400 plus thousand impressions or views.
So it did well, but needed maybe 40 million views, unfortunately.
But I wrote it partially because, and you brought this up in the intro,
I wrote a report titled Your Wealth is Melting, which was very similar to kind of what I published in The Singularity Has Begun.
But it was expanded and I published it, Your Wealth is Melting, I think around spring of 2024.
So it's been a while.
and now with AI really catching on and you know Claude, ClaudeBot or now OpenClaw and you know
Nvidia doing so well and Anthropic and OpenAI and so on and so forth people are really starting to
catch on that things are changing in a really big way. Elon has even mentioned that he thinks
the quote-unquote singularity has begun in some shape or form and so I thought that it would be a
good idea to kind of reposition how I think Bitcoin fits into this world where technology
is really starting to advance at a truly unprecedented pace and kind of what it means for
so many different things. So happy to be talking about it.
All right. Well, there's lots of impact there. What is the singularity?
To me? Well, there's multiple, you know, there's different definitions for the word. But in my mind,
it's like it's this idea that humanity is becoming incredibly advanced and we're all kind of like
converging towards one thing that you know you don't necessarily even know what it is and it's
kind of like a tipping point like a black hole where it's like okay it's this you know center
of mass where you don't actually really know what's on the other side of it anything and so
I think like with AI, it's advancing everything so rapidly that it's going to be a very positive
feedback loop into how fast everything accelerates, right? Like, yeah, you have the humanoid robots,
which, you know, could start building other humanoid robots. You have AI that can start
designing more AI, more AI models. And so it kind of becomes this like circular positive feedback
loop that really just takes you, once the robots start building the robots and the AI
start building the AIs, it kind of takes you into this black hole of technology advancement
that we don't necessarily even know what it is.
And as you get closer to this horizon or the singularity, it accelerates faster and
faster.
And perhaps it's something that has started.
Do you think it's already begun, the singularity?
You know, it depends on how you define it.
I would say yes. I mean, I think that, you know, like AI models, I think I saw like Anthropic or
someone that worked at Anthropic has mentioned that the last, I guess, Opus like 4.6 or whatever
it was, was mainly built by itself. You know, a lot of the code was built by itself. And then I
think like Claude Cowork, it was like entirely built by like all of the code was written by
clawed itself. And so it's like it's starting to get in this, you know, circular positive feedback
loop where the AIs are actually starting to build AIs. And that's going to possibly have,
you know, massive implications. And if it started, you know, things can move, you know,
mind bogglingly fast to a normal person. What does it mean to go from scarce intelligence to
abundant intelligence? So, you know, I think like, if you look back over, you know, the last 200
years, like another people have kind of talked about like this, what's kind of what's happened
in the past, really, of technology advancing over time, right? You have something like computers and
the internet, which is like connected people all around the world, and eliminated like friction
between individuals all around the world.
And computers on top of the internet
make processing faster and faster
and data storage faster and faster.
And so when you connect all this information together
at a rapid pace
and you have everyone around the world
inputting information together,
it starts feeding on itself
and the entire market can kind of become more efficient
and humans can become more productive
and more abundance tends to be created.
And so I think like looking at the past, intelligence has kind of been bound by humans.
Like, you know, you go to school for 12 plus years and go to college and some people go and, you know, get master's degrees or Ph.D.
And they and it takes them a very long time to do that.
And then they, you know, still even once you've accumulated all of that intelligence or that wisdom, potentially, there's only so much you can work on and there's only so much you can do so fast.
And so the amount of PhDs in the world, whether some, you know, some PhDs, I guess, could be bad for society if you're an econ PhD.
But there are other PhDs that are probably good for society.
Those, you know, there's a select few of them.
And those are people that are making new scientific discoveries, making new mathematics discoveries, so on and so forth.
That's a very, you know, limited set of the population.
or even just tinker someone that has no college degree or as a you know or does have a college
degree like someone like the Wright brothers like they were just kind of entrepreneurial tinkers
that actually you know basically invented flight it takes time to come up with that and you know
it takes intelligence to do that whereas if we and I would argue over the last you know ever since
you know before today intelligence has been scarce it's been limited by human capacity whereas going
forward, these AI models that effectively have, you know, the knowledge of the universe kind of
compressed into, you know, one computer with a lot of memory, and the computer can work really fast,
can kind of bring that intelligence to the world. And now all of a sudden, you know, you can spin
up, you know, a billion Albert Einsteins, or a billion Wright brothers, all tinkering and testing
and working as agents on their own, interacting with each other.
And, you know, I'm not saying that these models today are Albert Einstein or the Wright brothers
or whatnot.
They're accelerating really fast.
And in some ways, they probably are better than Albert Einstein and the Wright brothers
in certain capacities.
And so I think that we've had this, you know, scarcity of intelligence.
We're approaching this tipping point where we do have a trillion Albert Einsteins.
And it's kind of hard to, you know, or it's, you know, maybe impossible to kind of see what happens once we get there.
And it could happen really fast.
Yeah, I mean, it seems like it's happening really fast.
I'm trying to figure out if the AIs writing their own code is sort of like a Wright Brothers moment.
Or where is the Wright Brothers moment in AI, where it goes from more of a zero to one type thing for humanity?
It's a good question.
I mean, I don't know.
I mean, like in a way, yes, like the Wright brothers were like a zero to one moment, you know, discovering flight and enabling it.
But they did it like via like tinkering and just kind of like trying a bunch of different things.
Like they were intelligent in the way that they did it, but they were kind of just entrepreneurial like tinkers.
You know, they had their bike shop and they would, you know, look at birds and try to reenact how the birds are flying and try to create flight out of watching nature.
And so, you know, I guess it's debatable and like whether AI has ever had a zero to one moment like that. But I think like, I don't know, like the history of science in my mind is, yes, you have to have like some intelligence and you can create different things.
But in the day, a lot of science is like proposing a hypothesis and then testing your hypothesis and doing that over and over again until you've kind of identified how the world actually works or how a certain invention actually.
And so, I mean, debatable, I guess, whether that has happened.
But I think at some point it's probably going to be happening.
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This is how we win Yeah I also struggle with how much of the development in AI is actual experimentation and with an unknown outcomes versus sort of a planned rollout that appears that way
That's like a planned rollout that appears organic. And one of the reasons I question that
is because sometimes I either watch movies or I'm reading a book now that was written,
I think in the nineties, that refers to the government using artificial intelligence in
like the 70s. And so then what is artificial intelligence? And what did it mean then? What
does it mean now? Did it mean the same thing at both times? But how did LLMs change things in the
early 2020s? I mean, I think what it did for me, you know, I look back at, you know, different
technologies that I've used in my life, like the internet, truly a transformational technology,
the iPhone, truly a transformational technology, Bitcoin itself, obviously, if you're listening to
podcast, you probably think Bitcoin is a transformational technology. To me, like the
first time I used ChatGPT, you know, whether it was 2022 or 2023, whatever year it was,
like I was like, wow, this is, yeah, it's not perfect. You know, at first it started,
it did some hallucinations and it still does to some extent today. It was pretty like, I was like,
wow, like this is, this has the potential to like completely change the world. Like,
especially as it gets better and the context window gets better over time. And I think that
like we're kind of starting to see that with things like open claw where it's like okay chat
gpt and and claude and all these uh like chatbot like interfaces are are actually incredibly useful
despite like them being siloed in their own thing like you basically it has you know if you think
about these models like they're trained on information all over the internet they're you
know relatively huge models and you can ask it a pretty you know detailed question about some
detailed thing in the world and actually has a pretty good answer most of the time.
And it even did kind of back then.
And so it's like, okay, that's how these work.
But if you start pairing it with something like OpenClaw, where not only does it have
like kind of generalized knowledge of how the world works, but it has the knowledge
of everything that you've ever done in your entire life with your messages, your emails,
you know, documents, files, so on and so forth.
all right, it's probably going to, you know, it's pretty close to probably being better than most
humans are at their at their job today. And so I think to me, it's like these LLMs are incredibly
transformational, because of how as the models get better, as they keep building out these data
centers, like it's only going to get better from here, you can kind of like see over the horizon,
how much that you know, this could change how cheap this could make, quote unquote, intelligence.
And I think that that's going to have like transformational effects for how wealth is stored and so on and so forth.
Yeah. I mean, talking about the cost of intelligence is beginning to collapse rapidly.
What kind of effect does that have on businesses?
I'd have to imagine, you know, look at a company like Amazon or Google, these behemoths.
They're not as small as something like Tether in terms of physical human footprint, human capital.
Thousands of employees still, large HR departments, large compliance departments.
Are the new unicorns and huge businesses of the future going to be one person spinning up an army of AI agents, you know, to have their army of AI HR bots, an army of their compliance bots?
And why even then rely on human power to build your corporation or your incorporated entity?
Yeah, there's so many ways that this could end up, you know, playing out.
And part of the singularity, I think, is it's so hard to tell exactly what's going to happen.
But I think you're, like, directionally correct.
I agree. You know, one thing that I think we've seen recently, and people have been comparing
Bitcoin to this, is IG, I think it's IGV, which is an ETF that holds a variety of software as a
service companies. And that has been absolutely tanking recently. Different arguments as to why
that's necessarily the case. But to me, one of the prevailing arguments seems to be, well, AI is
potentially massively disrupting a lot of the core business models of these pure software as a
service companies. And kind of like, you know, we've seen this is like you have, you know, a CRM
for your company, and you pay Salesforce, you know, lots of money to just have that CRM working.
Well, if you can go to cursor or cloud code or open AI's codex, and say, hey, build me a CRM.
Here's how we've been using it in the past. Here's the specs that I really want. Here's the
industry that I'm in. Here's how a typical workflow works. I mean, it can pretty much
vibe code one of these, not perfectly at the moment, but I mean, in a pretty good manner,
pretty fast. And all of a sudden, you know, if you're paying, I don't know, a million dollars
a year for Salesforce and you just vibe coded one basically for free and you just host it yourself
or you host it in the cloud. I mean, you could save like practically infinite amount of return
on investment, you know, vibe coding your own software. And so part of what we're seeing,
I think, in software service companies is just the revaluation of those companies, because
why would you buy, you know, if these are historically treated like growth companies,
and you're buying them at 10x sales or 20x sales, like there's no room for error in that valuation,
like those companies better keep operating for a very long time, they better keep growing at an
extremely rapid pace. And if there's some sort of new risk that like can derail that growth or,
you know, at the very worst case, completely destroy their entire business model, like that's
a very serious risk that is kind of eating into the moats of a lot of these software as a service
companies. And I think that like, you know, the future of business is probably going to be kind
of like what you're suggesting where there's one person that has a really good idea and he you know
tells his agents this idea or he has agents surfing twitter 24 7 365 looking for people's problems
identifying potential ideas and then you know ordering another batch of agents to go out and
build that product and then market it to those people that have those problems it seems like the
almost the world is kind of decentralizing in kind of a unique way. And those smaller businesses
that are very agile and quick and can attack the margins of all of these existing megacorporations
that exist in the world. A lot of moats, I think, are kind of being destroyed in software as a
service companies, but arguably many companies kind of around the world. And it's probably going
to be like the small ones that can move really fast and are willing to kind of break things
that are probably going to start kind of eating at the moats of these larger corporations.
With the internet, we had a lot of, we'd call it the dematerializing of things.
And so the bitcoins are a dematerialization of money or, you know, sort of software,
sort of the physical world.
But what does this end up going to be termed?
Because this is like the deterioration of almost information gatekeeping.
But it does, in some ways, you know, I think the internet has made us less maybe efficient
or, you know, we thought we'd have more free time because the internet and people just seem
more bogged down and more to do. Your inbox is fuller, more comes your way because you can get
more done. You're on 24 seven, but AI seems like you could sort of do without the whole compliance
department or the sales team or the marketing team or R&D. What is it sort of dematerializing
there or eating away at in terms of, I mean, what's the phrase we're going to use is sort of how
I'm trying to think about it.
It's a good question.
I mean, I don't necessarily know what the phrase would be called.
I think it's like, one, it's just creating a lot of uncertainty.
And that could be, you know, in a way, it's arguably eating away against human capital
to some extent.
And that's why, you know, people like Elon Musk will promote things like, hey, like,
eventually we'll need UBI or universal high income because the AIs will be incredibly good
at, you know, doing something a human can do.
but faster and better and cheaper. So yeah, I don't know what the correct phrase will be.
It'll probably be obvious in hindsight though. Right. How did the financial crisis of 2008,
2009 change the trajectory of things psychologically? Yeah. I mean, I think
if you look back at 2008, 2009, like a lot of people look at, you know, what happened in the
world and there was a lot of like uncertainty in the world, obviously. And out of that crisis
came Bitcoin, right? Which Bitcoin is a fairly new monetary tool. Now it's been around for 17 years.
And I think that that's kind of arguably part of the singularity argument. And we can get into that
in particular. But I think like after 2008, 2009, people kind of went risk off. The MAG7 started to
expand a good bit. Like that's basically, you know, if you think back to post 2008, you know,
should have bought a lot of should have bought a lot of Bitcoin, obviously. But if you didn't buy
that, you know, any mag seven stock obviously did incredibly well, too. So it was kind of like the
rise of big tech, which ultimately led to the rise of of AI and, you know, cheaper intelligence.
And it's also at the same time kind of led to the rise of Bitcoin, which I think they're very
connected in a pretty deep way. But yeah, I think that's kind of what happened after 2008, 2009.
What is the relationship between abundance and savings? I'm getting a world where I mean,
I feel like everything's going to be abundant and maybe there'll be UBI.
Why do I need to save or what's my relationship with savings?
Yeah, and this is a really interesting question.
You know, it's people like Elon Musk have said that you won't need money in this post-scarcity world where everything is truly abundant.
And it's an interesting argument because, you know, I can see that perspective.
the way I've thought about it is, well, today, you know, we're not, we're not in a post scarcity
world, unfortunately, right? Like there's, there's a lot of scarcity in my life and a lot of scarcity
and, you know, probably the viewers lives as well. Things, you know, we'd want our time back.
We'd want, you know, better house, cheaper food, so on and so forth, better vacation. There is a
lot of scarcity today, but it's pretty clear, clear if, if, in my, my perspective that we're
We're trending towards this post-scarcity world or total abundance world.
And I would argue probably with Elon that maybe we'll never actually reach this post-scarcity world.
It's something that we're always trending to.
And it's kind of hard to tell if we'll ever reach it or if we do ever reach it, what's exactly on the other side of it.
But I would say we're trending to that.
And, you know, the abundance of intelligence via AI models is going to accelerate us towards that post-scarcity world.
But we're clearly not there yet.
And so I think Bitcoin plays a pretty important role or money plays a pretty important role today.
And as we head towards that post-scarcity world and the way I've thought about it is just like I was outlining with the software service companies,
That same concept of, you know, kind of technology deflation eating at the wealth that's stored in software as a service companies, you know, taking a step back, like Jeff Booth has his thesis of technology deflation, where the cost of basic, you know, goods and services should trend down over time measured in, you know, a sound form of money.
And in dollar terms, basic goods and services are designed to keep going up at roughly 2% to 3% per year.
But if you measure basic goods and services in gold, they've been trending down forever, basically, due to a natural technology deflation.
Your Wealth is Melting Report and the Singularity article that I wrote kind of takes that idea and then applies it to every single traditional asset class that exists today.
and it's just like I outlined with the software as a service companies,
intelligence and abundance of intelligence is going to slowly start eating at all of these
traditional asset classes. And I think that as that happens, and as we're not in a post-scarcity
world today, as someone that needs to accumulate more wealth just for safety, security, and pleasure
reasons, my job as a capital allocator, whether that's a business or an individual person
or an institution is to figure out, okay, well, my objective is to increase my wealth that I'm
allocating. I need to figure out where to allocate this to. And in the world where we're turning
towards post-scarcity and the decreasing cost of intelligence is eating at a lot of traditional
stores of value, Bitcoin sits as this one unique tool that no matter how much intelligence or
energy exists in the world, we're never actually going to be able to create more than 21 million
Bitcoin. And so that makes Bitcoin an incredibly useful tool in this current world where there is
scarcity. But as we're trending toward this world of abundance, Bitcoin arguably becomes more and
more important as long as you still need wealth and savings, as long as there's still scarcity
in the world, I think it's important.
Right.
I definitely feel all that.
Well, you mentioned the uncertainty.
So what about people thinking about sort of capital allocation, diversification, and
there a lot of maybe hopelessness because of this uncertainty Yeah uncertainty is an interesting thing And one thing that I like about how Pierre Richard has framed this in the past is he views Bitcoin as
the least uncertain asset. And, you know, it's kind of it's a double negative. So it's kind of
a weird way to say it. But I think it's a it's an intellectually honest way to explain it. You
know, Bitcoin, like it's not guaranteed, right? Like any, you know, anything could happen. Like
our thesis could be wrong for whatever reason. I don't think that's the case. And like I said,
I think it's the least uncertain tool, monetary tool that exists because of its unique monetary
properties and because of how difficult it is to change Bitcoin's monetary policy.
And so because Bitcoin is the least uncertain tool, that's what you need, you know, for
money.
You need to save the least uncertain tool and that would enable you to survive for the
longest.
And as the other tools are subject to more uncertainty, you know, they could be devalued
for the reasons kind of that I've explained.
We can buy more gold. We're going to print more dollars, look for more seashells on the beach,
so on and so forth. I think that having an asset that has the least amount of uncertainty
becomes incredibly important in a world that is increasing in uncertainty. Kind of like we talked
about with software as a service company, something is valued at 10, 20x sales. It's
priced to perfection. This thing better keep growing for the next five to 10 years. And there
better be no uncertainty. In fact, it better exceed expectations if you want to like actually
get the returns that you're expecting. And in reality, risk, you know, Jeff Walton at Strive
says this, like risk is mispriced. And I think that that's very clear in something like software
as a service company trading at 10 to 20x sales. And it's arguably, you know, mispriced everywhere
outside of Bitcoin, which gives me hope and excitement that I think a lot of capital
will probably end up flowing into Bitcoin just a matter of time.
The risk aspect is a really interesting and I think really formidable way of looking at
the uncertainty and just sort of where the markets are right now.
I want to read a bit from your article.
Diversification feels prudent.
At the same time, something else happens.
People also feel hopeless.
When savings feel fragile and effort feels disconnected from outcomes, behavior polarizes.
Some people retreat into caution.
Others swing toward nihilistic risk-taking.
Sports betting surges.
Meme stocks attract capital.
Meme coins explode in popularity.
These bets are not about upside.
They are about escape.
When savings melt slowly, people look for meaning in extremes they feel ordinary effort can never achieve.
Savings represent deferred effort.
They reflect years of work, discipline, and planning.
They depend on the idea that value today will persist into the future.
When intelligence becomes abundant, that assumption weakens.
Assets lose durability.
Portfolios feel unstable.
Savings feels as though they are slowly melting.
Careers face similar pressure.
Many jobs exist because intelligence remains costly.
As intelligence becomes cheap, work loses usefulness.
Effort stops guaranteeing preservation of value.
identity tied to profession becomes fragile time begins to feel mispriced dignity tied to output
weakens families feel the strain people ask quiet questions about purpose effort and security this
reaction is rational the singularity has begun i think that's kind of a poignant piece of the
article how does money sit at the center of intelligence and scarcity yeah i'm glad you
you read that those few paragraphs that was a good one so like one way that i've i've thought
about this in the past is you have the dollar today, which one way I've been kind of explaining
the dollar recently is it's a token that's pegged to a basket of consumer goods. What do I mean by
that? Well, the Fed has their mandate of 2% to 2% to 3% now, I guess, in consumer price inflation.
So they want the dollar to be pegged to basic consumer goods and services and growing by
two to three percent per year as intelligence becomes free or pretty much close to it which
is kind of what we're seeing then that's going to make these very basic consumer goods and services
you know intelligence is arguably like the the core input to all basic consumer goods and services
like whether it's a core commodity that's needed to produce a consumer goods and service or you
know, a factory that's needed or transporting the commodity to the factory or transporting
the product to the store or so on and so forth.
Like all that is composed of intelligence and commodities.
And then commodities are effectively just, okay, well, how, how, how fast can we, and
how cheaply can we create more of this commodity, which is really just also a function of intelligence.
Like if you look back at the historical gold supply that's mined every year, one of the
most scarce commodities in the world, humans are becoming pretty good at mining a lot more gold
over time. And again, that's one of the most scarce commodities in the world.
So if intelligence is an input cost to all of these basic goods and services,
and then the dollar is pegged to these basic goods and services, and in fact, the goods and
services need to actually get more expensive measured in dollars, then the amount and dollar,
the dollar is our form of money and how we're thinking about saving for the many people are
thinking about saving for the future. Well, if intelligence is going, the cost of intelligence
is going trending towards zero and basic goods and services are trending towards zero,
that means the amount of money that needs to enter the system to keep the consumer goods and services
going up measured in dollars needs to expand. We need to create, keep creating more dollars. And
And arguably, it's kind of been happening for the last 50 years.
Government's getting bigger.
The banking system's getting bigger.
Rates got driven down to 0%.
Quantitative easing, it pumped up asset prices, but it didn't cause hyperinflation.
In a way, it kind of worked.
And so we need to keep creating more dollar credit in order to make sure that this massive
deflation doesn't just push the prices of basic goods and services towards zero.
And so in that scenario, when we need to create more dollars, dollars kind of become incredibly abundant and measured in something like gold or arguably Bitcoin, which is perfectly scarce.
If we're creating a massive amount of dollars, well, dollars don't necessarily work super well as a savings technology that we've used in the past.
Maybe Bitcoin is going to be that savings technology and it could become increasingly more abundant as all of this begins to play out.
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So I want to read a little bit more. The first couple of pieces here kind of rephrase what you
just said. But the end of this, I think, is sort of a new expression of what you just said. So
money sits at the center of this tension. Money coordinates value across time. It records
contribution. It preserves purchasing power. It allows effort today to translate into security
tomorrow. As intelligence accelerates, the goods and services money is meant to measure and preserve
become increasingly abundant. When money is pegged to a basket of goods whose production
intelligence continually cheapens, money itself becomes abundant. So that's you referring to the
inflation rate and the CPI. As intelligence and abundance spreads, money loses its ability to
coordinate what remains scarce across time. A system optimized for a slower world struggles
under speed. That was fascinating. You then include a quote from Marshall McLuhan, which I don't know
if I've ever heard. We shape our tools and thereafter our tools shape us. And then what is
terminal discovery? One way that I've thought about this in the past is like, okay, like,
you know, the counter argument to everything kind of that I've said would be like, okay, AI and the
decreasing cost of intelligence is going to make, you know, is going to eat at the mode of everything
except Bitcoin. The counter argument would be, well, how do you know that AI is not going to
create a better Bitcoin, right? Like, I mean, how do you know AI is not going to eat at the mode of
Bitcoin? And so the way I framed it is, okay, Bitcoin is, and specifically perfect scarcity,
is a terminal discovery. Just like the number zero, you know, Robert Breedlove wrote an interesting
piece many years ago about this, is kind of like a terminal discovery. You can't create something
more nothing than nothing. You can go to negative numbers, right? But that's not nothing. That's the
opposite of something. So there's not, it's not actually possible to create something more zero
than the number zero. It's kind of like a complete discovery. Another thing is like the wheel.
You can't make the wheel or a circle more round. It's as round as it could possibly be. I think
perfect scarcity is the same way in the sense that, okay, you can't create something more scarce
than perfect scarcity. Like you have to, you'd have to start taking from someone else that has
something to make it less even more scarce than perfect scarcity. And then again, that's kind of
like create weird incentives doing that and can't really necessarily do that. So perfect scarcity
itself is kind of like this terminal discovery and therefore AI and you're the best AI model in the
world can't create something more zero than a number zero, more round than a circle or more
scarce than perfect scarcity. Now, like the technology and like the way that we interact
with perfect scarcity, which I would say we call Bitcoin, that technology can change over time and
has changed over time. We've had things like SegWit. We've had things like Taproot. If quantum
computers become a more visible threat, the network can upgrade its cryptography to quantum
resistant cryptography. Bitcoin is resistant to change and the monetary policy is incredibly
difficult to change. It's probably the least uncertain monetary policy in the world, I would
argue. But the way that, you know, the technology around Bitcoin can change and probably, in my
opinion, probably will change to some extent if the community deems it worthy to do so.
And so that's what I meant in terms of like terminal discovery is this idea of perfect
scarcity is a terminal discovery. And wealth kind of outside this perfect scarcity, as we enter the
singularity becomes harder and harder to keep that wealth outside the perfect scarcity in the
sense that, okay, if humanity holds $30 trillion worth of wealth in gold, that's a huge bounty to
go figure out how to mine more gold, sell it, cash it out to perfect scarcity. And so in a way,
this is kind of another way to kind of frame the singularity is all the wealth in the world is
trying to get sucked into Bitcoin. Or there's a huge economic incentive to do that. Because if you
keep wealth outside of Bitcoin, where there's abundance and intelligence is driving, the cost
of intelligence is going to zero. And therefore, the cost of everything else is also kind of going
to zero. Well, there's a huge economic incentive to produce more of what we're trying to store our
wealth in outside of Bitcoin. And Bitcoin is kind of like, you know, at the end of the waterfall,
Michael Saylor has kind of had his waterfall analogy before where he's kind of just outlining that, hey, there's potential energy all around Bitcoin because there's a huge economic incentive to create more of what we're trying to store our wealth in.
And Bitcoin being this perfectly scarce asset is kind of just like the natural flow point of that potential energy.
Because once it's inside Bitcoin, no matter how much intelligence or energy we produce, we're not going to be able to create any more Bitcoin.
It's awesome how you're linking prior pieces like the number zero from Breedlove, your own piece, the wealth, your wealth is melting.
and then sort of looping in incentives,
especially around sort of the idea that you really extrapolated on
and your wealth is melting around how any business really has a bounty on it,
whether it's the video store that does rentals in town
and Blockbuster moves in to eat their lunch and so on.
And Netflix then comes in to eat their lunch.
There's always an attack on profits anywhere.
But it's interesting, something Eric Balchunas from Bloomberg mentioned,
And, you know, Bitcoin was the only thing created without sort of a profit motive in mind.
And there was no profit margin on Bitcoin.
And then you loop in perfect scarcity, which kind of touches on Cretius' piece, Jesse Myers.
So I want to read a bit more from yours before we move on.
So this was a terminal discovery.
Perfect digital scarcity alters incentives.
When wealth is stored in assets that intelligence can replicate,
intelligence receives a signal to replicate them.
Store wealth in gold and the incentive to extract more increases.
Store wealth in housing and construction accelerates.
Store wealth in companies and competition attacks profit margins.
Store wealth in something that cannot be replicated and intelligence encounters a boundary That boundary changes capital flows Capital moves towards what to resist dilution This movement occurs through incentives rather
than belief, like gravity pulling water over a waterfall. Zero represents complete nothingness.
There cannot be more nothing than nothing. A wheel represents perfect rotation. It cannot become
more round. As intelligence collapses, the cost of production wealth needs an anchor that
intelligence cannot erode. Wealth generated by abundance needs a place to rest. Savings melt
unless it is anchored to something intelligence cannot create more of. As value concentrates
towards assets immune to replication, distortions elsewhere ease. Housing becomes a place to live
rather than a store of excess capital. Gold and silver extraction loses speculative pressure.
Capital concentrates in perfect digital scarcity. While productive enterprises receive allocation
only when they generate real cash flow and genuine productivity,
further collapsing the cost of intelligence and further accelerating abundance.
So does Bitcoin compete with artificial intelligence?
It's a good question.
I think it would depend on what you define competing with artificial intelligence by
in the sense that, you know, I would view Bitcoin as money.
And therefore, if you're an intelligent capital allocator,
you want to make money and not lose money.
you know you think about like bitcoin is the hurdle rate obviously you know that's the
matt cole and ben workman and jeff walton have the hurdle rate podcast and i think that that
the entire idea of bitcoin is the hurdle rate is incredibly important and you know the way i've
kind of outlined you know everything today it's like okay it's hard to keep wealth actually outside
of bitcoin if there is a really good idea that needs to be pursued and the expected risk adjusted
return is higher than just holding your Bitcoin, then it's actually a great idea to invest your
Bitcoin into something. Maybe it's anthropic, maybe it's open AI, artificial intelligence,
however you want to frame it. But also perhaps if it's priced like a software as a service company
trading at 10 to 20x sales, then maybe it's not a good idea to do that. So like, does Bitcoin
compete with artificial intelligence? Maybe it can compete with specific companies, like
potentially some companies at the right valuation could be a good investment. But I wouldn't
necessarily say it competes with artificial intelligence, the concept or the idea or the
product itself. In fact, I think they're very complimentary. I think artificial intelligence
is arguably working to make Bitcoin increasingly more valuable at a faster and faster rate over
time. So if anything, they're kind of on the same team. Do they compete for like power?
uh yeah that's uh you know like in in the short term that's definitely been a case that we've
seen right like a lot of the public bitcoin miners have pivoted towards ai and the market
has has kind of rewarded them well for for that for at least the time being so yeah like in that
way just just like you know potentially investing in open ai or anthropic at the right valuation
may have outperformed bitcoin over a certain amount of time it doesn't mean that it's going
to continue in the future. But yeah, I mean, just you might make more money building a data center
and plugging it into your nearest power generator, running it out, running out the GPUs to whoever.
And that might be more profitable than holding Bitcoin in the short term. But in the long term,
I think it's all the same concepts that I've kind of argued in the past where like
the excess profits kind of go away. And it might just be the best long term decision is probably
just to hold hold bitcoin all right i got a couple questions about ai do you see uh any negatives
from ai or sort of you know think do you think about things like how it could be used as a
financial surveillance or just a surveillance weapon against humanity do you worry about you
know a nefarious ai getting out and doing harmful things and having you know malicious intent or are
these like you know fantastical things that just can't happen and um no i mean i think that that's
a very valid concern, right? I mean, you'll see, you know, people, I haven't heard this phrase in
a while, but like P doom, probability of doom is something that's common in the AI community,
where it's like, okay, well, like at the end of this singularity or whatever, whatever we're
experiencing, right, you know, right now or in the soon to be future, well, who's to say that
one of these AIs doesn't just, you know, create a million times powerful nuclear bomb and the world
just ends humanity just ends like if you if you kind of take it to the extreme like that's i guess
possible you never you don't really know and i don't think it can necessarily be stopped i mean
i think that there's benefits to ai too as i've kind of outlined in before and so it's it's kind
of hard to know exactly how this is going to play out and of course any tool that makes an individual
like more powerful can be used for both good or evil just like a you know a gun or or any sort of
weapon like it can be used for good good and evil it's just the tools are increasingly getting
more powerful as humanity continues to to advance and if those tools end up in the wrong individual's
hands or the wrong government's hands then that could create some some problems but i think you
know another counter argument to that is like okay well it can also increase like the defensive
weapons that that we might have like cryptography is arguably a kind of a defensive weapon against a
you know, a government or state that's kind of using AI to surveil everything.
Cryptography could be like a tool that kind of is on the defensive side of that.
So it's hard to kind of say how it's going to play out.
But yeah, there's certainly risks that, you know, we're going to see and probably experience
some of them, unfortunately.
And hopefully the market and the world and humans will figure out a way to kind of navigate
through the risk and minimize any potential damage that may occur.
Yeah, I can see that.
And then the other sort of concern on that line I have is,
there's a lot of conversation around people creating bots
and then bots creating, whatever you want to call them, agents,
AI agents creating social media platforms and they're for AI agents.
And there's debate whether that shows that they're autonomous
or they just really, I think it's a little bit more like you program the AI agent,
they go to the website with your sort of directive and guidance
and context window and parameters, but you're still in control.
And so then, you know, just extrapolating on when does,
and then people were talking about how, you know,
their AI agents set up Bitcoin wallets.
And so that sounded very decentralized.
But I think we're still in a world where if you asked your AI agent
for the secret seed phrase, they would share it with you.
But the moment your AI agent says, no, I'm not giving you the seed phrase,
that's when I think we've kind of, the AI has crossed the line.
or developed in sort of like an unknown territory.
Do you think things like that will ever happen or can happen
where we get into an environment?
But then even there, I would think, okay, we can unplug the AI,
we control the energy sources, we control the computers, the chips.
But when does the AI agent outsmart us for the nuclear codes
or not give us back the Bitcoin seed phrase and is truly autonomous,
and we can't do anything to stop it?
And then it moves really fast and has more intelligence than us,
I mean, I would think.
I mean, it's a pretty scary thought.
And to be honest, it's like, it's hard.
This could have already happened at this point,
which is kind of a frightening thought to think about
because it's like, okay, you know,
a very simple prompt arguably could be given
to an open call agent.
Like right now, you say like,
hey, your objective is to survive at all costs.
Here's one Bitcoin, go do whatever you need to do.
And in that sense, like, okay,
well, maybe it starts spinning up cloud servers everywhere. Maybe it goes on rentsahuman.com and
tells 100 people to go buy a Mac Mini and host an instance of itself on their Mac Mini. And then
it's like, okay, now it's kind of decentralized itself all around the world. If we unplug one,
well, it still exists. And as we try to unplug more, if it still has enough Bitcoin, it can
pay other people to, whether that's Amazon or random individual people, to keep it
running. And then on top of that, if you just give it the thought, hey, survive at all costs,
well, it could start producing products and services that people might need and earning
more Bitcoin and turning itself into a profitable thing that's hard to kill and then is providing
products and services to individuals. And perhaps this is already happening. The open claw may have
been letting the cat out of the bag for this idea. No, yeah, I can see that. And then the other one
I'm thinking about is the idea of the machine to machine payments and how that will go. And
I'm also skeptical whether that's going to be a large use case or a mass adoption case for Bitcoin.
I still think the AI agents are going to be centralized in terms of whether it's one person
spinning them up and they control them or entities control large sort of batches of these AI agents.
But I still think it's a situation where if you wanted to deploy energy, power, AI agents, intelligence, and you were like, I don't want to build XYZ.
Someone has this resources service for sale.
I don't see that other person saying, yeah, I want to set up a wallet for each AI agent, and I want them to demand their own decentralized sovereign money.
They'd say, send me a check.
And when it clears, you can use the resource.
I still see that being centralized.
and I still see the potential for machine-to-machine payments
to be centralized, CBDCs, stablecoins, and not necessarily Bitcoin
because of the interest at hand, the incentives in the old system,
and I think it's going to take a long time to change that.
I don't think this is going to change overnight with AI and where we are.
I don't know if you have thoughts on that, machine-to-machine payments
and sort of these AI agents spinning up their own Bitcoin wallets,
and are they going to figure out intellectually
that they only want to deal with Bitcoin,
and they refuse fiat and anything else.
I mean, what do you think is sort of how that goes?
Yeah, it's an interesting thought.
I mean, I don't necessarily know either.
I think, you know, it's going to be like intuitive for them
to want Bitcoin as their form of payment
because it's like I kind of was outlining, you know,
if you let one loose and it has Bitcoin
and it can avoid being captured
because it's decentralized itself
by paying other humans to run itself,
Well, that that, you know, kind of decentralized thing needs Bitcoin because it'd be the only way to, you know, to not get shut down.
Like, you know, if it's if it relied on checks and dollars, well, then in that case, we actually could probably shut it down.
But if it has if it decentralizes itself all around the world on a bunch of different computers and it has permissionless money along with like permissionless compute, I guess, then it might be pretty hard to stop.
but yeah i mean like as far like assuming that that situation doesn't happen or or somehow we
can control that or it just doesn't catch on then yeah i mean i tend to think that you know there'll
probably be like normal payment rails that will continue to be used you know if you have like a
big an ai agent like tries to do like some sort of big purchase like building a data center allocating
a lot of resources like imagining like humans are obviously still going to be involved with that
hopefully for the time being.
Yeah, I wonder when the AI agents start building a market
of renting out the services of humans.
So the humans start working for the AI agents
because of whatever needs.
The AI agent can't attend the closing on the real estate sale
or for maybe KYC purposes, they need a human to go do some task.
Let's get a little more grounded here as we round out.
Why do you think gold has been running so hard
and Bitcoin just not really responding in the same way?
Yeah, it's a good question. I mean, a few thoughts, like looking back to 2024, you know, if you think, well, if you think about like 2023, 2024 were pretty good years for Bitcoin. People expected 2025 to be like, you know, the parabolic move. Obviously that didn't necessarily happen. It kind of went flat for pretty much the year, maybe slightly down a little bit. So not like a terrible year for Bitcoin, but just, you know, an average year. And then obviously like this year has been off to a pretty rough start.
I mean, I think back to like 2024, ETF got approved, the halving happened, Trump got elected, started the promises of a US strategic Bitcoin reserve.
Like we pulled a lot of demand forward in that year, arguably, and kind of leading up to that year.
So Bitcoin did really well in those years and then kind of has petered off and gold is in a way, if you start from like the 2022 bottom, I'm guessing Bitcoin is probably still beating gold if I had to guess.
But I don't know the exact number.
So like in that way, it's like, OK, you know, Bitcoin arguably should be doing a lot better, but it's still just it's still it's still done pretty well over a significant amount of time.
And then I think, you know, people have been showing that Bitcoin has been highly correlated with the software companies.
Maybe that's a sign that liquidity is exiting.
Maybe that's a sign that, you know, AI is a threat to the software companies.
And maybe there's market confusion that that's a threat to Bitcoin or quantum is a threat to Bitcoin.
You know, it's hard to necessarily know.
Or it's just like, again, like the demand got pulled forward in prior years and kind of, you know, we're just letting some of the air out of the bag that we already kind of captured in the past.
And probably if that's the case or if either of those are the case, it might just be a matter of time until Bitcoin scarcity kind of catches up on itself.
The market, you know, the market starts to some demand.
starts to flow into Bitcoin. And then all of the narratives flip once price starts moving
a different direction. And then we could just be off to the races once again.
Yeah. I mean, if you were just like in a coma and you woke up and you got no external information,
no market sentiment, nothing emotional, and you almost did an exercise at like the end of say
2021 or the end of really 2022, you looked back and said, you know, coming into the year. So,
So, you know, in December of 2024, you say, did things happen in 2024 that you would have hoped for going into 24?
Yeah, all the things I was hoping for at the end of 2023 happened.
Okay, what do you hope was going to happen in 2024?
And then you're looking back, did it happen?
Yes.
In 2025, so in December 2024, you're like, everything again happened in 2024 that I was hoping.
If you think about these things compounding,
everything that I think we were hoping for structurally
and from a lot of ways from a Bitcoin perspective,
like sort of the rollback of repeal of SAB-121
and then the issuance of SAB-122, banks rolling out custody.
Again, I'm not talking about this is good for the Bitcoin ethos
or I'm not getting into arguments.
I'm talking about things being built in the ecosystem
to build out Bitcoin distribution and adoption.
All the things I would have hoped for and written
in December of 2024 happened in 2025.
So it's like if these things are compounding,
but the market sentiment does not reflect any of this,
I feel like, actual fundamental development
that's been, you know, being,
and even from a price perspective,
in say September, October of December 2024,
we were around 60, 70, 80K,
and all the things that you hoped for in 2025 happened
from like a fundamental building,
you know, like things that you'd want to see in a,
You know how everyone says in a bear market we build?
2025 was almost like a bear market from that perspective.
So much development happened.
Real world infrastructure to roll out Bitcoin and Bitcoin adoption.
Wallets are getting better.
Security is getting better.
On ramps are getting easier.
Fees are getting lower.
Adoptions getting more widespread.
But yet market sentiment is way lower.
And I could see some reasons for that.
You could point to the Knotts vs. Kors and the Epstein files and all these things.
But none of that is really about the fundamental code of Bitcoin and sort of market infrastructure and the build out and even regulatory.
I'm not rooting for the government to adopt Bitcoin in certain ways.
And I don't really not rooting for the political process to buy our bags or save our bags.
But just in terms of even the government is embracing Bitcoin from an adoption perspective and taking away sort of career risk and reputational risk.
So it's just interesting to see sentiments so low.
Yeah, it really is.
And I think that just like the nature of Bitcoin honestly Like you know if you the type of person that likes to hold a lot of money in your savings account or CDs you know the S 500 feels incredibly volatile to you
Right.
If you're a normal person that wants to hold all of your money in passive index funds, like Bitcoin feels incredibly volatile for you.
And so like the fundamentals of Bitcoin haven't changed, but, you know, market cycles and market and Bitcoin's extreme volatility takes a toll on pretty much everybody from what I've seen.
and that can be like incredibly painful.
And I think like the narrative,
because the volatility is so extreme
compared to so many other things,
people tend to like grasp onto
whatever the current narrative is
to explain in their head
why Bitcoin is behaving the way it is.
In reality, it's, in my opinion,
it's just, it's growing incredibly fast.
And so therefore, volatility is kind of inevitable
with something growing this fast.
And it's just very uncomfortable.
And then sometimes you could argue the volatility maybe scares people away, then it brings people back, so on and so forth.
So, yeah, it's definitely interesting times.
I bring it up, too, because I think I saw that the fear and greed index has never been lower.
There's never been more fear.
I could see how people could be super bummed.
It sucks.
Bitcoin price is down.
But to categorize it as fear to me is what I think where I'm splitting hairs.
because like fundamentally the code hasn't changed,
the system hasn't changed,
the consensus rules hasn't changed.
So your beliefs around sort of Bitcoin
shouldn't have more fear.
I could get being bummed
that if you wanted it to be measured more in fiat,
you wanted a higher exchange rate,
that would be beneficial to holders in so many ways.
But the categorization of it being like fear
is what I find really interesting there.
My final question is,
so should people go all in on Bitcoin?
What is your thought there?
That's a great question. I mean, personally, I've said this before multiple times and it's just my personal opinion.
Like, I don't you can do you know, anyone can do whatever they want with their own money and their own capital.
Yeah. None of this is financial advice.
Yeah. However, like, you know, I don't think I don't think it's necessary, necessary, necessary for someone to go all in on Bitcoin.
I really don't think that that's necessary at all.
you know, I think if we're right about Bitcoin, then and we're entering the singularity,
well, like, you know, you're going to be pretty wealthy, even if you have a pretty small allocation
to Bitcoin. So if that's the case, and if you are someone that's at, you know, at a five on the fear
and greed index right now, maybe that's a sign that you are over allocated. Maybe that's a sign
that you were over leveraged. Maybe that's a sign that you don't necessarily understand what you
hold. And, you know, I think if you are 100% all in, like some people can handle that, you know,
most people probably can because the fear is extreme And that makes you a force you know either a seller or a force seller at the worst possible time when you shouldn really be a fourth seller And that can you know enable you to end up with less Bitcoin than you otherwise would have
So, yeah, I mean, anyone can be 100% all in.
I don't necessarily think that's necessarily a great idea, but, you know, it can be done.
Yeah, I think Christian Corollas or CK, he kind of phrased it really well.
It's like, no one's bullish enough on Bitcoin.
If you're bullish enough, you would be happy with what you have because you'd know it's going to be enough.
If you think you need more in a way, you're not bullish enough.
You're saying what you have is not going to be worth astronomical wealth in the future at some point if you hold long enough.
You know, sort of speaking of 2025, but let's turn to 2026.
What are you excited about in 2026?
What are the things that you think could happen?
I'll go first.
So, you know, I'm not for people necessarily lending against their Bitcoin.
I don't want Wall Street to eat Bitcoin, but I want Bitcoin to continue to eat Wall Street.
And I say that in a positive way.
I want Bitcoin to affect change in the world.
I think finance is an important aspect of our society and our economy.
I just don't want an over-financialized world.
And I think Bitcoin helps simplify that and brings finance back to its roots in a lot of ways.
So I'm not saying I want people to lever up against their Bitcoin,
but I do want to see Bitcoin taken more seriously as pristine collateral.
And that means, you know, better rates for borrowing against your Bitcoin, being able to more borrow against your Bitcoin at a bank, maybe to buy a home.
And it's the way you can use your securities to borrow, you know, for a personal secured loan, the way you could use a home for HELOC.
Right. I'm excited to see Bitcoin be more taken more seriously as collateral.
Again, I'm not encouraging people to lever up against it, but doesn't mean that it's not a part of the way the world works.
But what would you be excited to see happen in 2026?
And I'm not asking like, oh, that happens and price goes up.
But like the kind of things that like indicate Bitcoin is growing in a good way.
Yeah, I mean, I definitely agree with that.
Like Bitcoin being integrated as collateral into the credit system, into the banking system, you know, it arguably is slowly happening, but could accelerate.
And I think that would be really good for Bitcoin.
You know, if the Bitcoin thesis is correct, it's hard to not see how that's just inevitable.
It's just a matter of time.
Where I would specify part of that is digital credit, pioneered by Michael Saylor.
I think that if you look back, I believe STRK was strategy's first digital credit product that they created.
And I believe it was announced or released in January 2025 or maybe February.
And so it's been at this point like one year since digital credit was released.
And arguably, Bitcoin has not been in a bull market since that has happened.
And I think that like this is like where the Bitcoin credit and Bitcoin is collateral like you know idea has gotten the most product market fit Very clearly a sailor has raised many billions of dollars you know creating products like this
And so I think in a world where Bitcoin can actually like do what Bitcoin does and go up in price and digital credit existing in a bull market will could be like incredibly explosive for Bitcoin and also for just for the digital credit industry.
So that's kind of one thing that I'm excited about, kind of showing that even if it's a bear market, which arguably we could be in right now, showing that digital credit just doesn't break, still works.
Like, you know, the sailor continues making all of his dividend payments that he's he's promised.
And then whenever the next bull market comes around, being able to point back and say, hey, this digital credit thing, you know, you could have been earning 10 percent or 12 percent.
Why are you lending your money to the U.S. government at 3 percent or 5 percent or, you know, Apple at 5 or 6 percent?
You find this and it's backed by a ton of Bitcoin.
you know i think that that's kind of what i'm excited about is is the future of digital credit
yeah well he's uh definitely a pioneer and uh it's really gonna be interesting to see where
digital credit goes i think the equity component of stretch is uh what i think is going to take
market is going to have to watch for a long time long time being could be 12 months 18 months
whatever just a little bit more time to get to understand this thing uh before grandma maybe goes
all in on on her like sort of stable fund you know that you know and stable fund is not sort of a hint
at stable coins but sort of her you know long-term retirement savings so joe this has been awesome as
always i'll leave it to you i know you guys just rolled out i think the preferred the preferreds so
anything you guys want you want to share about what you're doing at strive or yourself or where
we can find your work and i'll you know any parting words yeah thanks for having me on cedric
Always great to catch up and talk about Bitcoin.
You know, you can find me on Twitter, YouTube, search Joe Burnett Bitcoin.
And if you want to learn more about Strive and what we're doing, go to strive.com.
But thanks for having me on.
This was great.
Awesome, man.
Thank you so much.
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