Hello, everybody. My name is Daniel Prince, and I'm the host of the Once Bitten podcast.
This is a podcast focused on Bitcoin. It's my mission to interview as many people as I can
around the different aspects of Bitcoin and help people understand exactly what Bitcoin could mean
for them and for their families and for their future. I hope you enjoy the show. Thank you so
much for listening. Hello everybody and welcome to this episode of the Once Bitten podcast.
Joining me today is Hubertus the Austrian as he goes by on Twitter and he's here today to talk
about BitCredit and how he is creating a product to bring less friction to using Bitcoin, especially
when we are looking at taking this thing, this asset, this whole new monetary system on a global
scale to be used as the currency for cross-border payments for businesses. This is obviously where
we need to head. We want the businesses that are actual businesses. We're not talking about spun
up Bitcoin treasury companies. We're talking about businesses with hard assets that are
offering goods and services into the marketplace to be able to use Bitcoin in a way that they can
pay for their supplies, pay their suppliers and get terms in place, much like Hubertus was doing
back in the 80s in his original banking career. So we're going to learn about bills of exchange here
and how banking actually used to happen. And he is very much deep down the Austrian economic
rabbit hole and he brings a lot of so hubertus is 60 so he's had a whole career before finding
bitcoin and going down the rabbit hole and then bringing austrian economics and traditional
banking practices all together and that's what they're hoping to achieve here and just to let
give you a an idea of where his mind is coming from this is one of his recent tweets on first of
July a central bank is a socialist central planner hiding in plain sight in a supposed
market economy they manipulate and poison the money production with all the hubris and overconfidence
as their original brethren bitcoin can free us of them this is where we need to head guys
right there and I hope this conversation is going to pique your interest with this bills of exchange
idea and reach out to Hubertus if you want to carry on the conversation or if you have any
contacts that you might be able to put in in touch with with companies that might be interested in
joining their beta program and getting this thing off the floor and getting some real life working
examples out there so don't hold back meanwhile sit back and enjoy and I'll give a quick shout
out to the show sponsors as always you've got to be stacking your sats if you're not doing that
you're listening to the wrong podcast please get out there and stack sats do it in a sensible
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if you want to start supporting this new market that we're entering into go and check out plebeian.market
for goods and services that you can spend your bitcoin on and paywithflash.com which is a plug
and play method for you to start accepting Bitcoin immediately. Now, did you listen to my
recent episode with Kaz? Do you listen to 40 hours of podcasts per week? Do you want to start curating
this and making it easier for you to get to the parts of the conversation that you want to listen
to? So go back a few episodes, listen to my rip with Kaz and get over to bubble.fm or hit the link
in the show notes to check it out. Now sit back and enjoy this one with Hubertus the Austrian.
Okay Hubertus how are you doing nice to meet you. Hi Dan nice to meet you all good here I hope the
same at your end. Absolutely and a big shout out to our co-conspirator Max Hillebrand who put me
in touch with you and said you got to get Hubertus on and find out what he's doing and what they're
up to because it's a very interesting project and a very interesting guy so here we are thank you
max i guess the same goes for max i mean uh he's he's also deeply interested in austrian economics
in freedom um and and uh so to say he's traveled the world and so this is a very good fit in terms
of uh communicating what this project is about and and what we aim to achieve yeah how do you
want to start this then well i want to start well first of all for those that are listening um if
you don't mind sharing how old are you i'm already 60 yeah so so uh quite some gray hair as you can
see i'm only still here i'm only about 10 years behind you but uh it's always fascinating i think
to the listeners to to tune in because everybody still thinks about bitcoin and bitcoiners as uh
young hoodie wearing tech entrepreneurs. And, you know, it's, if you've been to the conferences,
you just get to see like this whole gambit of people, it brings absolutely everybody in. But
if you're just sitting there listening to the podcast, and you've not put yourself out there,
or gone to a meetup, you can have this kind of stigma around, oh, it's all just for young people.
And you got to be tech savvy. And I don't know anything about finance. But so for those people
coming in new into the Bitcoin rabbit hole, I think it's really important for them to
understand that, yeah, we're here represented across all generations and every part of the
world as well.
So let's go back then.
I guess so.
But see, I do wear my hoodie once in a while because I dropped out of banking pretty much
in 2001.
And I've been, so to say, a hoodie, very techie for quite a while then, while building an online brokerage here in Central Europe, which later got acquired by an Austrian bank.
I've developed three prediction market sites since the early 2000s.
And so, yeah, I'm a techie, but I'm also a banker who grew up in the euro dollar system.
and I still actually used the paper bill of exchange in the past,
which is one of the reasons, I guess, how this project came to be in the end.
Right. Okay. There's a lot to pull on here.
When did you enter into banking?
Was that the first step of your career?
Oh, yeah, absolutely.
So I was effectively raised in banking from a very young age
with Citicore International.
So I very, very quickly started,
even at the age of 19,
started to send me around the world.
I was hired here in Vienna,
but then went on to work in Zurich,
in Geneva, in Amsterdam,
Bombay at some stage, Amsterdam.
So that was probably the first five years,
formative years of my life
in essentially the leading technology bank
at the time in the world. Citibank at the time had a CEO called Walter Winston, who effectively
transformed Citibank into a technology bank very early in the mid 80s. So that was a very,
it was a great learning experience. So yeah, so that's how I started off in banking.
banking in 2001 yeah so you you start in like early to mid 80s um this is way before
i mean i i i walked into a foreign exchange brokerage house in the mid 90s
and the guys didn't even have emails then you know and that was the mid 90s so back in your day
like everything is literally what what kind of what departments were you in what was your role
what were you doing uh well i was hired for actually in control department to do some very
boring thing called reconciling but about one month later they pulled me out of there put me in
the uh in the it department later i went to the trading desk for for money market futures that
type of things and as i was studying uh economics at the same time i ended up as being economist
trader then at the trading desk at the well and later they sent me off to other countries to build
systems fix some option problems in in systems it was a very very diverse set of experiences
i had in extremely short term at an extremely young age right okay so you you mentioned the
euro dollar system oh yeah do you want to explain to people what that is because a lot of people i
think just um default to thinking oh it's just the foreign exchange pair um you were in fx right
you just said yes so i guess i guess uh you must have been in touch with it too right yeah so in
terms of it was just um i mean you mentioned email yeah um city bank essentially was the first email system i ever knew it was called Citimail And I think it was kind of an in thing
Yeah. When nobody else used email,
they also had a standard called Citi Dex,
which was kind of an early Swift before Swift was around.
So people at Citi were exposed to all these future technologies really,
really, really early.
But we also were exposed to old technology like the Bill of Exchange, which until recently was only available in paper format, certainly at the time was available only in paper format, but which really was used a lot in the B2B commercial banking side of things.
So that's where I still learned to use that all instrument and essentially what it could do and its role in enabling international trade and, so to say, providing businesses with the liquidity they needed to move goods.
So that's how I saw the euro dollar system and a relatively free type of banking at the time.
so uh i'm as we discussed i got way here and um so it's it's really weird to see how the banking
system goes more into let's say 1984 mode year by year every year more kyc more data more compliance
more crazy crazy rules changing monthly yeah and and reversing everyone one day um you have esg
and you're not supposed to invest in that type of energy,
then you absolutely need that energy.
Don't invest in weapons.
All of a sudden, everybody invests in weapons.
Don't buy sugar, buy sugar.
So it's a crazy, crazy situation.
And account opening and doing transactions these days
is just a chaos of big brother activity
with all kinds of disclosures,
unnecessary things to be done.
while I'm fairly sure that those people whom they want to catch
know all these things very well and don't have to do them.
So it's really just the normal people having to do all that rubbish.
Yeah, absolutely.
The KYC creep has been, I mean, just endless.
Like Basel, Basel II.
Yeah, well, the Dodd-Frank, all of that kind of stuff
that came after the global financial crisis,
which was engineered.
Go ahead.
Yeah, no, no, no. I'm just saying I was just at a trade finance conference here in Vienna, which, as you may know, is the seat of the UN branch, which deals with international trade, which is also called UNSITAL.
And they are already talking about Basel 3.5.
And from what you hear from the people, it's getting madder and madder.
And essentially, it's all there to just prop up the fiat system, which is a perversion of money.
And everybody knows that fiat currencies ultimately will fail.
And so they're just keeping it alive with whatever crazy ideas come to their mind without sort of going to the root of the problem that it is unsound, fragile money.
So that's interesting.
I wonder how many people, I often wonder about this because I still have peers that are still there in the business.
Me too.
Do they know that the fiat currency is doomed?
No, not at all.
Not at all.
For instance, the people who I met last week, it was kind of shocking to see that within trade finance, they are redefining right now trade finance in a way which seems all right in a working fiat system, but unmentals some of the very sound principles of sound money.
like trade finance used to used to be especially at special characters to to make sure that we
have a sound money for instance um but we're going to talk about bills of exchange afterwards
but trade finance when it was run on bills of exchange paper bills of exchange it was supposed
to be on goods only um because that's so to say um value which kind of has some has some retention
It was supposed to be short term because the sooner credit converts back into money, the better the credit quality, the lower the risk, the lower the discount to be applied.
It was to be done only on commercial invoices, and now the ICC is proposing to remove the word commercial from their rule books so that any old invoice can do, which is a bad idea because only commercial invoices, so to say, have the reflux into money proper to redeem credit money from the system.
So the banking rules are changing and not do the better.
And are they talking about any of these guys that you know that are still in the day-to-day? Do they bring up to you like central bank digital coins or do they ever ask you your thoughts on Bitcoin?
I think at this stage, banking is solidly captured by the politicians. So even those who dare to say slightly, let's say, freedom-oriented words are very, very cautious in expressing themselves.
So, for instance, one of the people I spoke recently said, okay, yeah, we know that banks are being forced today to do police work, which is not our job.
The police should do their own job.
It's a government job.
Other people will say, okay, there's all these things which we have to do, but still trade will find its way, which is very true.
And so there is this awareness.
But in general, the political capture is such that they're getting fed every month with another email or letter from the central banks how bad Bitcoin is and that only criminals use it.
And it's a complete contrast visiting banking conferences to Bitcoin conferences.
In Bitcoin conferences, everything is about freedom, saving technology, how inflationary fiat money is bringing the world down, pulling down productivity, pulling the state into tasks which shouldn't be a task of the state but of private business.
So there's this awareness in the Bitcoin circles of just how bad the banking system is, whereas the bankers, they kind of roll their eyes when you tell them about Bitcoin and how it could, so to say, re-enable sound money.
And they're not aware of it at all.
Also, because Bitcoin still needs work, because it is volatile.
I'm the last person to deny that.
it's still not being used in as a medium of change in the real economy which i also don't
deny in fact those are the two things which um which uh the the bit credit project is working
uh to to resolve and to improve i was shocked as well to learn that um some friends of mine they
reach out every now and then and just ask about it what's going on they know i have the podcast and
And it's always, always when the number goes up that, oh, Princey, you're still like, you know, enjoying your Bitcoin.
I guess you've sold out now.
And I'm like, oh, my God.
No.
And well, OK, what else is there?
Well, nothing.
Yeah.
What about stocks and shares?
Well, why?
But then they'll turn around in the same breath and say, actually, don't worry, because I'm not allowed to buy stocks and shares anyway.
because the bank that they work for has told them
that they're not allowed to hold stocks and shares
because that would be construed as a conflict of interest.
Yeah.
I mean, I guess the problem is that there are certain shenanigans
which have been going on there.
But yeah, it's getting more from a kind of transparency mode
to a kind of, how do you call it in English,
of the mass of forbidding activities, of prohibition of things
instead of leaving freedom to people,
but so to say make sure it's transparent and handled in a moral, ethical way.
So it's getting too much in a totalitarian mode, I would say,
in banking at the moment.
um yeah so so i hear from people who work in fund management and who have to report i don't know with
very detailed emails and whenever they they go for lunch with somebody for
to discuss the situation and so it's just madness i hear so you said um that you started studying
uh on the uh the economics deeply studying economics um back at the beginning of your
career was that was that the austrian flavor or was that keynesian or was it a mix of both
yeah i wouldn't believe it but austrian austrian universities are mostly state sponsored so you i
guess you can guess what type of economics um um they thought and and i also have to admit that at
the time uh being young i was kind of a little bit socialist minded at the time and i really
bought into the philosophy and yeah just the government's going to take care of us and it was
really only later um a couple years later increasingly seeing how this uh conflicted
with reality uh that i even became aware of that that there was such a thing as the austrian school
of economics which which probably was when i when i started my first prediction market
project in 2004.
And I sort of say observed
how markets really worked
in a very experimental way at the time.
That was the time when Vernon Smith
won the Nobel Prize about his experiment
about the Hayek hypothesis
where they found out that markets
don't need to be perfect,
that you can have clever people
and suckers at the same time in the market
And still the price which results from the market mechanism is quite indicative and informative.
Right. Okay. So why did you leave the banking then in 2001? What happened?
What happened? Well, it was a leaving in steps.
When I was working at an investment bank in 1999 and I got increasingly interested in this new thing coming up called the Internet.
including some things which were happening in the US,
internet brokerages popping up.
And so now we need such a thing in Austria,
I want such a thing.
And so I started a project to build it And then more or less we actually got a banking license for that So we had our own bank at some stage
And later, that project got taken over by an Austrian bank,
which essentially bought into the project and took it over.
Then it became part of a normal banking.
And today, as you know, every bank has internet banking.
There's no way around it.
But at the time, it required a special type of vehicle to get this going.
So that was the step number one.
And once that internet brokerage was sold, I started to work with prediction markets, real money prediction markets at the time, 2004, 2005, which also required a banking license.
and yeah so that's but that was already done in a purely entrepreneurial way on my own
on my own initiative self-sovereign so to say so what what's um what was the kind of data that
you were using feeding into the other prediction market how did you build this oh i i started gen
one uh i mean it was copied afterwards by well i think there were very early projects there were
two, three projects in the world at the time in prediction markets.
There was in Iowa something going on.
There was something going on in Ireland and Dublin by John Delaney.
And Vienna where Vernon Smith had, Nobel laureate,
had taught experimental economics in the late 90s.
So originally the prediction markets were the usual stuff
which you get nowadays, like on sports events, on stock indices,
on foreign currency price movements.
And, yeah, so you use data feeds for those essentially to make sure
the usual stuff at the time, Reuters type of data feeds,
which were available with good market prices to run those things.
But I got disenchanted at some stage with the, let's say,
first-generation prediction markets.
even though they're still around.
And I sold that venture Red Monitor off to a British bank in 2008, I think.
So that ended the real money prediction markets.
And then I got increasingly interested in prediction markets
as a truth engine, which led to the foundation of Prediki
and some new approaches on how to build automated market makers
but work off human knowledge on questions where the normal existing markets don't reach.
Because what I learned at the time, I was always interested more in extracting correct information
to distinguish truth from lies or, let's say, red herrings from proper information.
And that wasn't possible. That needed human input.
So the next generation prediction markets we built dealt with questions or with information for which there were not yet already markets.
Because we realized that where there is already a deep and active market like in FX in stock indices and these things, it's actually not necessary to have a prediction market.
the real value of prediction markets, and that's how we used it in the end on Predicty,
was to get information and thoughts caught off people's head,
translated into numbers they can trade.
So that was when my interest in Austrian economics got reawakened fairly strongly.
So there was a part in the middle of the 2000s.
So that would be deeply linked with like human action, incentive structures, praxeology. And that's where you started getting it. Where would you find the lies? Like, this is what's really interesting. And how would they be perpetuated into the marketplace?
For example, could you use very far out of the money options to put on positions to try and steer a market in a certain way?
Or were they using headlines?
What did you kind of feel?
Yeah.
What were you picking up on?
Options, in fact, turned out to be a very dangerous type.
But what really triggered this whole thing was the Internet age in the 2000s, in the early 2000s, late 1999, early 2000s, where I noticed a very funny psychological effect on myself.
in the beginning of the cycle
there was a certain amount of skepticism
towards internets and internet stocks
and it more and more turned into a form of mania
which ended in the so-called internet bubble
which you may already have experienced
I don't know
and where essentially anything
which had a dot com at the end
was valued at ridiculous prices
Now, the thing is, I was working at an investment bank at the time and I knew valuations.
And I knew that some of these things didn't really make sense, like projected market shares of Internet business, which exceeded the total market volume of the vertical.
they were in. And it didn't make sense, but the prices showed up. And I found myself taking those
prices in the market, taking them too serious and acting according to them. And this is in line
with Austrian theory. Hayek always says the price system, if understood correctly, we must
understand it as a system to aggregate and distribute information, which is correct. So
I got really interested in how price information could go so wrong.
And one of the conclusions which I had and which was incorporated
and laid in the prediction market concepts for Prediki
was that we needed to not just trade prices,
but we also needed to trade fundamental values,
like how much revenue is a company going to make?
What's a certain product line?
Is it going to be growing?
Is it going to be shrinking?
will customers accept it?
Really the fundamental things which you'd find only on the second level
of a research report instead of just trading future prices.
So that was, so to say, where this interest came from.
And we had some really good results in predicting future trends
and incorporating them later into financial models.
So let's use Warren Buffett as an example here,
so-called value investor, places everything on the fundamentals,
a scholar of Ben Graham.
How can he then not understand the fundamentals of Bitcoin,
i.e. 21 million hard cap, like that's as fundamental as it gets
for anyone looking at an investment.
He's like, aha, say that again?
Yeah, 21 million hard cap, and you are going to measure that
in a currency that is forever inflating.
So therefore, this may cost me if I say that then, but there is a lot to agree with Warren Buffett on this.
I mean, the man comes out of an age when fiat was, so to say, conquering the world, right?
So 70s, 80s.
And the situation that fiat system became what it is today with artificially low interest rates, sometimes even negative interest, which makes the whole stock market mechanics essentially a casino, detached from reality, which is so that the prices don't really make more sense.
I don't know if I need to go into detail on that, but when interest rates are artificially driven so low by fiat money printing that they're approaching zero, the prices, the PEs, the price revenue ratios, everything gets more or less closer to randomness.
so he came
from a time when that wasn't like that
and
without being an expert
on his dealings I hear that
for the past couple of years
he wasn't doing so great either
just average or something
so when he
criticizes Bitcoin
I can completely empathize
because it is those things
which any sound
economist would tell you that
Money is money when any old store of value,
and any good is a store of value, becomes medium of exchange.
That's the core.
And so if Bitcoin has trouble establishing itself as a medium of exchange,
people like him who are businessmen, not economists,
so to say correctly recognize that there is something missing.
because any money is foremost a medium of exchange.
Now, Bitcoin is somehow a medium of exchange, as we all know.
There's a reason why there's Pizza Day.
Pizza Day was the first example of Bitcoin actually working as a medium of exchange.
That's why we celebrate Bitcoin Pizza Day.
And of course, also what Ross did.
I mean, we can discuss the ethics of his venture, but the economics are undeniable.
Economically, he established or his project established Bitcoin as a medium of exchange for a very specialized situation.
The fiat money wouldn't work, right?
I mean, we can say it like that.
And the mad thing is, it's not only Ross Ulbricht's project which acts there.
It's very well known in the fiat world.
In fact, it's in the official news that the fiat system has a so-called trade finance gap of about $2.5 trillion of trade, which just cannot happen.
And this problem, this challenge of the fiat money world, the overregulated fiat money world, fragile fiat money world, essentially hits poor countries the hardest because it's the poorest countries which cannot fulfill the anti-fragility measures which the fiat money system needs.
So it's the poorest countries which are hit, the businesses in the poorest countries which can't go for lack of working capital,
business which then can't pay workers who don't earn enough and who essentially stay in poverty.
So this so trade finance gap is a huge problem essentially caused by the fiat system and its instability So when you were still running the prediction market thing that was leading up to 2007
2008, were you catching the information?
Were you seeing that something was coming with regards to the financial collapse and
the collapse of a few of the big banks there?
I was more in business fundamentals at the time, so not in macroeconomics, but as you may have suspected that really the financial crisis of 2007-2008 was what brought me back into economics.
It was one of my study majors, so I always had a really high degree of interest in it.
And that was the time when I finally switched to Austrian economics.
Until then, I was mostly on it because of free markets, market mechanisms, auction theory.
But at the time, I recognized just how bad the system actually was.
Because I was in a parliamentary, I was called into a parliamentary working group to find out the reasons of the great financial crisis and what to do about it.
And essentially what I noticed was that the political class was not really interested in finding out the real reasons.
They essentially wanted to find out how could the bankers shift the blame to bankers for what they did superficially,
but completely, so to say, ignoring or hiding in the narrative what really happened and how the political class contributed and actually caused the financial crisis.
And even today, if you ask people of the great financial crisis, they will say, yeah, it was the banks, it was Wall Street who caused it all.
And at the time, I came to completely different conclusions.
I put that into the working group
and was sort of shocked
to see that all the politicians
who had ordered that commission
all they were interested in
was being seen as the saviors
they now coming in like Superman
we're going to save the world with our politics
whereas it was them who originally caused the crisis
I can go into detail on the three major things
which they did to cause this problem.
But yeah, let's do it.
Since we are about Bitcoin here, aren't we?
Yeah, I know.
But people love,
Bitcoiners love figuring this out.
And I was just chatting to another Bitcoiner the other day.
He's making a short film about the collapse
of long-term capital management.
Oh, yeah.
Which happened in 1999.
The Big Short is one of like our favorite films in the space
because we believe it's explaining what happened and what went down.
Margin call is another one that people watch and reference.
So I'd be interested to know,
what were the three points that you brought up to the political class?
And I can imagine the air leaving the room
as you're pointing out all of this information to them.
Yeah, look, I think the general narrative,
which the politicians tried to, well, and successfully communicated, because they are
good communicators, if they do one thing well, then they can communicate very well, is, yeah,
the bankers were greedy, they made all these profits, they did everything wrong. And let me
just see out of memory that the three things which struck me most at the time was, how could this
whole thing happen? The first thing happened because of good intentions. Essentially, politicians
sped out regulations, which were supposed to help the needy to get loans, which a normal banker
wouldn't have given to them. So there were regulations which essentially drove bankers
or created a kind of obligation, not just moral, but even economical and regulation-wise to give
loans to subprime, it was called at the time. Now, since the bankers didn't want to do that,
So that was fault of the politicians.
Since the bankers didn't want to do that, the politicians, so to say, created guarantee instruments to hold the bankers harmless if something went wrong.
So essentially, they were inviting reckless behavior.
Now, obviously, from reckless credit giving, you can have fantastic profits for a little while.
But they blamed those profits on the bankers, which were kind of innocent.
But of course, you don't look innocent if you make a profit because of what politicians did.
The other thing which really was wild is the politicians regulated that certain institutional investors only could invest in bonds of a certain rating.
and the ratings which were to be supposedly used by the banks
and by the institutional investors
were ratings from three very specific rating agencies,
effectively creating an oligopoly of three companies
who could say what was investment grade
and what could be bought and what not.
And of course, once you have such an oligopoly,
life is very nice.
You don't take your job too serious.
And then we all know how the story ended when some models about, you know, some risk models were used in a wrong way.
It's called in English now with cluster risk, which essentially led to a breakdown when things did turn sour.
So there was so much political interference in this whole thing, which was causal to everything.
But people didn't see that because those those political mistakes caused excesses in the banking system.
That's that's undeniable, but it was not causal.
So that's that's the Austrian view of of the financial crisis.
it was the fault of the politicians.
And as business people, businesses have to make use of those things.
Otherwise, they lose out in competition.
So there is not really much choice.
Yeah, that's the classic scene, isn't it?
When Steve Carell's character is in the US.
And was it his character or one of the other characters?
It's so long that I've seen that, yeah.
Yeah, but it gets talking to the stripper.
and the stripper explains that she has um three condos and he all of a sudden it twigs for him
it's like oh my god like the leverage in this system is absolutely beyond control and but it's
exactly what you're saying the politicians were forcing so if you're a loan manager like if you'd
have been back in the 80s or 90s early 90s and somebody comes into you asking for a loan for x y
lz it could be anything right and it's up to that loan manager to look at this specific individual
case and say yes or no and nine times out of ten is probably going to be no but we get to this
point where it's like no we have to flood the the the economy uh with money politicians most likely
trying to favor votes as always because that's pretty much all of that's their incentives right
Their incentive structure is to win votes.
So how do you do that?
You give people cheap money.
And you force the banks into giving out these very cheap loans.
And it got down to like 0% deposit in some places.
It was absolute, you know, complete bananas.
Yeah, yeah.
But it was always like that.
I mean, that's how unsound money came around.
I mean, in the US, for instance, they had, while they were on the gold standard,
gold had a straight line price for 150 years, $20 for an ounce of gold.
And even the purchasing power of that one ounce gold remained remarkably stable over 150 years
with some dents, which you could observe during wartimes.
Because what happened during wartimes was that governments, so to say,
suspended gold redeemability of credit money.
and thereby allowed the system to inflate
and people lost their savings.
And when the gold redeemability was reestablished,
gold very soon found back to its fundamental value of $20 an ounce
with a very remarkably, as I said, stable purchasing power over centuries.
And this, by the way, is also why I have a very different expectation of Bitcoin to, I would say, unfortunately, 99% or maybe meanwhile 90% of the Bitcoiners, because I do expect that Bitcoin ultimately will have a very specific fundamental value once it establishes itself as a medium of exchange.
Okay, so.
So there's no unlimited, in my mind.
It could be, if it remains store of value.
But if it does what the money must do sooner or later,
become a medium of exchange,
then there will be a fundamental value,
just like gold-headed.
Yeah, no, I understand.
But I think what people are looking at
is kind of like the US dollar price, right?
Which if you're going to pay,
if that's the only unit of measurement
that you're going to use,
then it is going to keep going up and up and up because the US dollars are going to be infinitely printed.
Yeah, which you should never do.
So what I recommend to anybody, if he looks at the gold price at a minimum,
please adjust the dollar value for the publicly announced consumer price index.
I mean, that's the minimum you should do when you look at the development.
Otherwise, you get tricked by fear shenanigans.
and what's a good reference also at the same time
which I always watch is how many gold coins is one Bitcoin.
That's also a very good indicator of where we are
in this evolution of Bitcoin to a medium of exchange.
So latest it was 32 one ounce gold eagles
or Viennese Philharmonics for one Bitcoin.
So that's the thing to be conscious about.
It was 32 coins?
Yep.
One ounce coins?
Yep.
Right. Okay. Interesting. All right, cool.
Yeah, you need to build a dashboard for that.
I'm sure people would be interested to watch it.
Yeah, yeah. I mean, it's on charts.
Whoever wants to see it, all kinds of trading websites
have gold, Xau versus XPT or PTC, depending on what code they use.
So it's very easy to follow and it's a very instructive,
chart because as we know, silver has solidly demonetized these days, right?
So it's really only enormous scarce good for industry trade for various applications.
Whereas gold, gold is still not only used in industry, but it's also used as backing
at central banks.
I don't know what it is today, but maybe 17, 80, 19% of gold is backing central banks because they're simply, I think they're still kind of halfway scared of a return of the gold standard.
And therefore they keep it.
And also privately people, of course, hold gold as a store of value.
And then, of course, there's all the jewelry and industrial applications.
But only 17% to 18% of gold are in central banks.
And that's the portion and the market cap to watch to find out what's really going on.
Yeah, so people can go to bitbow.io and just on the top right, drop down, just put in XAU and you'll get the price of Bitcoin to gold.
And yeah, right now it's 31, yeah, 31, 32, 31 ounces, 31.32 ounces.
Yeah, so we're not yet at peak gold.
It's, yeah, what's called Tatoune Mao, the finding of the right level is ongoing.
So we'll see what it is.
You get a good feeling looking at the chart.
So medium of exchange.
This is the big debate at the moment in, well, one of the big debates at the moment in the Bitcoin world.
Some people are saying, well, no, Bitcoin is only going to act as a store of value.
And hopefully lots of people are kicking and screaming and saying,
that's a load of bullshit.
It's a medium of exchange.
That's what it's supposed to be.
And we have to work as hard as we possibly can to make it medium of
exchange.
Yes.
So this is how your project ties in?
Yeah.
I think what's propping up and doing the return waves of Bitcoin,
whenever it gets, so to say, into a sell-off,
So far, we were in a good situation to new things popped up.
People are building.
So I think the builders are really the heroes in the Bitcoin space.
I mean, all the attention goes to the corporate treasury guys at this moment.
But the real heroes in my mind are the ones who are building to improve Bitcoin, Bitcoin's usability, Bitcoin's technology, self-sovereignty, non-custodial businesses,
privacy for censorship resistance. So, yeah, I think those are the really important things.
Of course, I mean, yes, the corporate treasurers, as long as Bitcoin hasn't reached its fundamental
value, I don't see a problem in there. Maybe not even if it slightly overshoots that value,
whatever it is, we don't know yet. We don't have a historic value like we had for gold.
So I guess everybody is contributing,
but the real important ones are the ones building for medium of exchange,
I think.
Yeah.
So let's get on to, you've used the word or the phrase a couple of times here,
bill of exchange.
This is what you've been building and what we wanted to talk about today.
So yeah, lay it on us.
What's been keeping you busy?
What has to be known is there is some false narratives about Austrian economics floating around in Bitcoin space.
So to say that for a complete monetary system, you only need a fixed amount of base money.
That's not true.
That's not what Austrians said.
Yeah. Those who are concerned themselves much with money like Mises, Ludwig von Mises and Friedrich Hayek, they all said that you need bank money, as it was called, an elastic supply of money also to ensure that businesses can work, that there is full employment, that people find work and that the economy can thrive and do its circumstances.
thing. You produce goods, you exchange the goods against the
medium of exchange, and then you use the medium of exchange to get your goods, which
completes the real exchange. So that was always
the case. And somehow that got completely lost in
a, let's say, singular focus
on the fixed quantity of base money, which a good monetary
system needs, an ideal monetary system needs. And
there's very little attention for this needed elastic supply of credit money.
So, business money, credit money.
Okay, yeah.
That's going to get a few people.
Does it make sense?
Well, it's definitely going to get a few people scratching their heads
because I think very much of a, well, I'd say all of us
are very much focused on the fixed supply, the 21 million hard cap.
Which is very important, yeah.
Yes, which it's hard to see past after a lifetime of just complete and utter total fiat fuckery, right?
It's such a refreshing idea.
But what you're saying is you need that fundamental baseline.
But on top of that, you're going to have to use some form of credit, some form of elasticity for trade to be able to prosper.
Exactly.
And in the pre-fiat times, so let's say at least from the Middle Ages in Europe till 1913, 1914, that was the invention of the Bill of Exchange.
So this is a 500-year-old instrument, which arose, let's say, there were some more early versions in China and in India and Arabia.
But in Europe, in modern times, it really arose in Lombardia in northern Italy in the late 15th century, early 16th century, which is the bill of exchange.
I guess many people still know the names of the famous banking families from the time, the Medici and these similar families down there, which invented it and which solved at the time something terrible, which was the so-called Great Bullion Famine, which was a scarcity of species of gold and silver in Europe, which essentially caused a deflationary spiral, as it's called,
whereby businesses couldn't sell their goods,
businesses couldn't pay their workers,
and essentially the production of food and goods in Europe shut down.
That was around 1460.
Now, thank goodness these other instruments came in,
payment instruments, which were called bill of exchange,
whereby one businessman promises another bill of business
man to pay him for B2B goods in a certain period, let's say in a month, two months,
three months, whenever they process them or whenever they sold them on to consumers.
And from that money received from consumers pays back the bill of exchange, which gets
torn apart, burnt, as we would say in cryptography language today.
And the cycle can start anew.
So that's what the bill of exchange does.
And it caused it allowed a huge growth in the economy, division of labor, specialization of business, which essentially produced the wealth of nations, which something which Adam Smith already recognized.
So by the time Mises wrote his book, it was already clear that the amount of money in circulation through those bills of exchange of business people exceeded the amount of gold in circulation by a factor 1 to 10 and later 1 to 20.
So that's what kept trade and industry growing, wealth increasing, more goods for consumption and essentially supporting a much larger number of people on Earth, just like agriculture improved at the same time.
So now this leads you to what you've created here, a bit credit.
yeah essentially um uh what what the bit credit initiative does it's an open source project yeah
obviously because uh i can't go into reasons why it has to be um is essentially it it um
reinvents what was happening during gold standard times but uh on cryptography and and using bitcoin
as the finality layer because you need a fixed amount of base money
to make such a system work honestly and recognizable
and non-inflationary.
Yeah, that's essentially what the project is.
So could you talk us through an example then of how it would work?
Yeah, it's essentially what happens if –
I always use this example of apricots in Austria because they're very, let's say, volatile good in terms of it spoils fast.
So you really need to process it.
So if you are an apricot farmer, you need to sell the stuff really, really fast for the apricots not to spoil.
And so if you had, for instance, something like in the Great Bullion famine, a shortage of gold or silver, nobody had gold or silver available.
scarcity, then you couldn't move your goods.
So what the merchants did at the time is they sold their produce against essentially an IOU,
but a commercial IOU between business people, which said, okay, I'm going to pay you, I don't
know, 10 gold coins for your apricots, and I'll pay you those in 10 months.
When I have sold them, when I have produced something like the example of apricot brandy comes to mind because that's a durable good and more durable food than just apricots.
And once the apricot brandy manufacturer then sold his apricot brandy or his apricot jam or whatever, he then gets, so to say, from his consumer customers the money with which he can pay back the bill of exchange.
So that's how the bill of exchange supported a circular economy.
The way this was made payable at the time was a mechanism which was called discount banking.
So it was still something which required a modicum of trust into the institutions which produced credit money from bills of exchange
But that's just the effect of the paper technology they used.
So essentially what happened is that the apricot farmer who produced and sold the apricots
could go to a so-called discount bank and say, OK, I have this bill of exchange.
I signed it.
I'm liable for it.
but it's the apricot brandy manufacturer who will pay, I don't know, 10 Bitcoin in three months.
Please advance me some money so that I can pay my workers, that they can buy their food,
that I can pay my suppliers, pay my lease for my land or whatever.
So that's how the system worked.
And once the farmer, his workers then spent the money, that money earned went back to other businesses
who could also pay their workers and ultimately was spent by consumers
for the company who had to pay back the bill of exchange.
So instead of today's circle of where we buy Bitcoin and then we spend it at merchants
and the merchants sell it for fiat, and so everybody is just buying and selling,
once you have a bill of exchange system, people can start earning Bitcoin and spending Bitcoin,
which means we remove the friction of buy-sell.
And most importantly, we are removing the on-off ramps,
which tyrannically governments will increasingly get under their control
and imply first surveillance and later absolute control and up to confiscation.
Oh, man, there's a lot here.
So, the first thing I'm thinking about is what Hal Finney said about a whole banking system being created around Bitcoin.
And that's pretty much exactly what you're saying.
But you're talking about bills of exchange, which is going back centuries.
When was the last time, you know, bills of exchange, when was the last time that was used?
Have we just gone completely full fiat credit system mad right now?
As I said, in my early commercial banking days, it was still a very normal instrument in international trade.
And in fact, the funny thing is I mentioned this trade finance conference, which organized by the International Chamber of Commerce, the ICC, where it was last week.
they're now talking about abolishing the bill of exchange because believe it or not just out of
tradition even in fiat times they still add a bill of exchange letters of credit but nobody
remembers anymore why that is so so now that they have the fiat system they're thinking of abolishing
it, which may happen.
But again, in Bitcoin, we can rebuild the necessary credit money layer for trade and
industry by using that instrument, because the law of bill of exchange is essentially
in all the important trading nations of the world.
So it has a very solid foundation in commercial law.
where I sort of say disagree with Hal
is I wouldn't call banking anymore
what's happening there
because banking implies that you need money,
central bank money especially,
and there's trust involved.
So what we are building,
and it's still ongoing,
but the first part of the system
already operational and ready to beta test.
um yeah what we are building is essentially a trust minimized version essentially just like
bitcoin is trust minimized yeah that's the other point i was going to make it's the you know there
are no banks existing at the moment that would even want to do something like this uh you know
they've been so ultimately captured since the formation of the federal reserve in 1913 and you
You know, it's been, here we are, what, 110 or so years later,
where if you go back in history, there used to be thousands of banks
and all of these different banks would be competing against each other
and they would have been offering these bills of exchange
and the discount, what was the language he used,
so they could bridge the gap between the writer of the bill of exchange
and the receiver and forward them some money so they could, right?
So there would have been a marketplace for that
within like the thousands of banks that could offer that.
But now those thousands of banks have been whittled down
to a very small core of banks.
And all of these banks have to be members of the Federal Reserve System
or equivalent, depending in which country you live.
So it's completely captured.
So it's not like we're not going to be going to those people for this.
We're going to be going to people like yourself
that are building this system.
and many more entrepreneurs like you, I hope.
Yeah.
I mean, yeah, I mean, this is an open permissionless system.
So anybody will be able to run that just like anybody can run their minor bid eggs if they want.
So, but going back to what you just said, yes, it's actually not so long ago that this was killed.
So when I was working in my youth in Citibank, these bills of exchange,
you could still go back to the then central banks, the hard money ones like the Deutsche Bundesbank, the Austrian National Bank,
and say, OK, here's a bill of exchange by a good business company.
It's backed by goods. Please rediscount that.
And the bank could get liquidity, even though the central bank already had monopoly.
What changed was that with the advent of the EZB, the EU, essentially the victory of the political class over democracy, if I may say so.
So with the advent of the EZB, they stopped that instrument.
So they're not taking commercial bills of exchange anymore, which, so to say, facilitate and are limited by the goods in circulation.
No, they're now essentially creating money from government bonds.
And as we know, government bonds can be produced at will of politicians.
And if the politicians want, then the central banks will also convert them into money when they want the interest rates to go lower, when they want to spend, like Lagarde just announced, that they want to print another trillion dollars for building bridges and producing weapons.
So, yeah, it's an unlimited system, the fiat system where they can create.
And you couldn't do that when you discounted bills of exchange.
There was some leeway, but ultimately everybody could see if a business recovered the money through their product to pay back the bills of exchange or not.
There were short-term instruments.
After one, two, three months, you knew if something was wrong.
Right now, this can go on for years with the fiat system,
which is why this perversion has been going on so long.
So this is what we say all the time.
We have to build the parallel structure.
We literally have to opt out of that madness
and start trading with each other.
So have you got any use cases yet?
Has anyone found you yet and started using the services?
You've done any tests?
You've got any good...
Yeah, we were in alpha testing since about February.
We're just, while we are changing the system over to be completely on NOSTA,
we're also starting some beta tests now.
There are quite a few Bitcoin businesses who are, so to say,
feeling strong enough about the medium of exchange future
where Bitcoin is circular,
where Bitcoin serves real trade,
that they're willing to spend the energy
to beta test this with real use cases.
This would be in soft commodities,
like agricultural products of all kinds,
cotton, timber, beef, that type of thing.
But also in import-export, we found people importing things from China, selling them and redistributing them in Europe.
Yeah, so we are starting beta testing as we speak.
So let's use an example.
We've got a Bitcoiner somewhere in the UK that has a timber yard and is milling wood into lumber.
and wants to export that.
As a founder buyer, some other Bitcoiner in a different country
is looking to build a Citadel and wants 10 log cabins built there.
So how would this start looking from the flow of things?
The guy that wants to build the cabins, he needs the lumber.
Yeah.
So if the lumber producer is satisfied enough that the cabin builder will be able to sell his cabins then to some Bitcoiners, he may say, OK, you have a good business.
You have your customers. You have your pipeline. I trust that you will be able to do it.
So on the wholesale level, between businesses, there must be this mutual understanding of each other's business.
And people do that.
So if I'm a lumber salesman, most likely I know the construction business with timber.
This is very different.
That's getting back to good old-fashioned business deals, right?
Like another thing of the past where you will build that relationship between the two owners of the business and get to know each other and go and visit the site if need be, or at least get a walkthrough and do a little bit of due diligence.
You might hire some outside help to do that as well.
exactly this is very different to what's happening in the in the fiat system today where you have the
the banks acting as a state captured intermediary who essentially is following strict rules of
basel of compliance blah blah blah with a lot of paperwork a lot of red tape incredible red tape
getting more every year. So, so they almost forgot the need to watch what they're here for,
which is to, is this good risk or is it not? Whereas if the two business people just do it
directly, this intermediating the, the old style banks. Yeah. They know each other's business. They
can, can judge that they probably have been in, in, in a business relationship. They have a mutual
interest because the timber salesperson has an interest and makes a profit if the transaction happens The profit of the intermediary of the bank is extra So yeah I fully with you And it also people who know each other anyway
So the problem, so to say,
of the KYC requirements of the banks go away.
There's no need for that
because the business partners know themselves anyway.
So yeah, it's a completely different paradigm.
It's peer-to-peer.
and it's on an absolute need-to-know basis.
So now they've met and they've formed this idea
that he wants to build the 10 log cabins.
He can provide the lumber
and he's absolutely certain
that the guy is going to be able to sell these off
and be able to pay him back.
And again, going back to old-fashioned business,
you're putting a lot of reputation at stake as well.
There's reputational risk.
There's real skin in the game,
especially in Bitcoin circles now, because word will get out if you are a bad business partner,
and then that's you done.
Everybody knows everybody.
Yeah.
So what's the next step?
The guy that needs the wood, what does he do?
So in the most primitive version, which we are testing right now,
simply the timber producer draws a bill of exchange on the buyer of the timber,
says, okay, you need a month or two to produce your cabins.
then your customers will buy them, pay them.
Okay, you pay them in two months.
It's essentially the same as trade credit,
but with a payment instrument being exchanged instead.
So the exchange is instrument.
And whenever the cabin producer has sold his cabins,
he can pay back the bill of exchange.
That's the most primitive case.
And since there is no absolute certainty about the future, normally, if the business grants terms, they usually add a certain percentage for the risk of things going sour over the next few months.
However, we know from the past, there's lots of archives about those transactions that if these are established businesses with a solid business model, the risk is fairly low.
So the price of that risk is far less than what you have to add if you involve the traditional banking sector with all its overhead and red tape and bureaucracy these days and legal cost and all kinds of cost you have to add.
So it's a very cheap form of trade finance.
So that's the most primitive case.
In the more advanced case, which we envisage with the bid credit protocol, is the timber
seller in, you said, in England, could then go and use a credit mint, as they're called,
the Wildcat, we call them, to essentially snip that bill of exchange into divisible,
fungible, mini payment instruments.
We call them mini bills.
And the mini bills are represented by something called Xiaomi and eCash,
for which there are some very good projects in Bitcoin space.
There's Calais Cashew project.
There's the Fediment project.
So eCash is a rapidly evolving, rapidly improving technology within the Bitcoin space.
Still problematic because it's still custodial.
But we have good hopes that by the time we finish this, that the credit part, the credit Satoshi part, can be non-custodial through some game theoretical arrangements between mints.
Interesting.
So now the lumberyard, the timber merchant, he ships over all of the timber to the guy that's going to build the cabins.
Meanwhile, he can now go to what you called the Wildcats.
A Wildcat is essentially a name for a credit mint.
We used the term because it was a term used by the politicians in the 19th century to actually kill free banking.
Yeah, because there was the odd case in somewhere in the Wild West of the USA where there was some, you know, a bank, you may know them from Western movies, some little bank out in the Wild West, which didn't have full gold coverage for some reason.
So they must have discovered one or two really rare cases where there was not full gold coverage.
And the politicians then, of course, used that to create a narrative that only central banking is safe.
And, yeah, OK, there were these cases. That's a historic fact.
But the actual losses from that was far less than what people lose every year nowadays to inflation,
even if it's just 2% inflation.
But the losses in the altars were minimal compared to those 2%.
And they were especially minimal to when the fiat system goes haywire,
producing 10% or inflation or more,
like we had during the COVID money printing excesses.
I suppose it could also work in such a way that,
say, the business owner of the lumber
could build relationships with other Bitcoin holders
that could also step in to backstop if need be
for a small charge maybe on the back end
once the bill of exchange was settled.
So now you can see how free market banking
peer-to-peer would start exploding,
especially with what you've you know bit exchange absolutely also because now with the technology we
have we can trust minimize those things nobody needs to rely anymore that in some safe uh in in
the wild west there are really the gold coins um deposited to pay back the the bill of exchange
or i don't know that you don't have some cowboy come along and then rob the bank
as was fashionable then according to the movies.
Yeah, so you can always verify and have cryptographic proof
that a wildcat mint can actually fulfill its promises
and much better proof than today's banking system
because we know it's all house of cards built on government bonds out of thin air.
And so if one bank, which is not even a top 10 bank,
these days topples, it could essentially kill the whole system,
which is what we have recently seen again in 2022,
Silicon Valley Bank and these things.
So this instable system, at some stage, it will implode.
It's very clear.
Yeah, absolutely.
And this is why you made it free and open source, right?
So you can have this explosion of these so-called banking services.
Yeah, no, it's free and open source because it must be. Because the situation when Bitcoin has a chance to establish itself as a medium of exchange based on this mini bill e-cash is exactly when the banking system breaks down.
And there are these cases all the time.
We've seen, for instance, Greece, which was cut off from the money supply of the EZB in 2015.
We've seen Lebanon, which essentially the central bank killed the monetary system in 2019.
There were multiple such situations in Venezuela.
Bolivia is about to break down.
So there's always something going on somewhere in the fiat system.
And in that situation, Bitcoin people, businesses must be able to immediately just enter a URL, be ready to go to the electronic bills of exchange with other merchants, create a mini bill e-cash, credit e-cash to pay their workers.
So workers earn money immediately based on the goods which are going into the channel.
The workers can spend the money, pay back the bill.
So essentially the goal is to replace the system on the spot.
Wow.
I'm ready for it.
And I'm sure most of the listeners of this show are ready for it as well.
So if people want to look at the website, it's very easy.
Just go to bit.cr and there's a landing page there.
So, yeah, that landing page is currently, so to say, in under construction for the for the beta version of the thing.
So it focuses exclusively on what businesses have to do.
It doesn't talk at all about about the macroeconomics, about it, the Austrian economics powering it.
We are also building another website for the community of builders who want to get involved.
So that should be also coming out in the next two months again.
So that would be bitcr.org for those who want to.
But meanwhile, it's easiest to join the project by either going to BitCredit community on Telegram or follow bitcr.org on Twitter.
So those are the main channels to follow us at the moment.
And what we are currently looking for is as we are ramping up for the beta tests is we are looking for Bitcoiners who want to support the effort to get this software ready for the big day when a fiat currency breaks down to make it rock solid, make the UX absolutely smooth.
And so the more better use cases we can get, things like the timber you just mentioned or any agricultural producer, cotton producers, food producers, apricot producers, but also construction industry, import, export, hard commodities like metal producers or construction materials of all kinds.
And any Bitcoiner who's in the real economy or knows a CFO in the real economy who kind of has the freedom mindset of separating money and state, that's what we're looking now.
So the more real-life use cases we have to test this out, the better we'll be able to kickstart this once Bitcoin gets going.
Also, if people are interested to test out the minting, because the idea is that anybody will be able to spin up a mint, just like you can spin up a miner.
Also, those type of testers would be very welcome.
And how many people do you have working on the project?
Do you need more developers?
It's a community driven project.
So we do have also a lab because we found a sponsor from the ecosystem who also believes in Bitcoin as a medium of exchange and wants it as a medium of exchange So that was very helpful
So we have a lab where some people work on this actually a good part of the time.
The community on Telegram is usually the best to join the system.
There's an open source GitHub, of course, with a Kanban.
where we'll probably add some tasks soon
for what type of tests would be appreciated.
So yeah, those are the channels
where we interact with the community.
All right, mate, this is awesome.
I didn't even ask you how you found Bitcoin.
When did you actually find Bitcoin?
After being like Mr. Banker and Markets Predictor
and everything, Fiat, Keynesian,
And all of a sudden, all of a sudden you find Austrian economics and Bitcoin comes along in your life at some point.
Yeah, no, it was a funny story, but it's probably too long.
So to cut it very short, while I was working in San Francisco for a while on something completely unrelated, I saw this message somewhere.
I don't even know that somewhere in the Heath district of San Francisco, there was a hundred dollar party of Bitcoin.
And at the time, Bitcoin was really just a rumor.
And I had heard it.
I heard this and I must know it.
So I went to that $100 party, which was in a really shonky bar somewhere with, I don't know, a couple of people running around and showing QR codes and doing things.
And on one table, there were three guys from Ripple trying to explain how Ripple is better than Bitcoin.
And I was thinking, so yeah, that was just really funny.
So I don't know when that was.
I always forget when it was, must have been 212 or 213,
some of the time.
And then of course there was this disappointment after,
after the Cyprus crisis and the Greek crisis that Bitcoin couldn't,
so to say,
establish itself as a counter economy money against the fiat shenanigans.
So that's, that's how it started.
Yeah.
Well, it's nice to hear that the meetups haven't changed that much.
It's still the same.
People running around, showing QR codes to each other.
I was at one this weekend in London,
and it was really excellent grassroots level stuff.
Max was there, so I got to hang out with Max,
and he was hosting just like basic questions
because people were walking in off the street.
We had at least three or four walk-ins,
and somebody did their first peer-to-peer trade with me.
they gave me 10 pounds i sent them like i love seeing that flash of oh my god in their eyes when
they hold it in their hands like what oh shit wow this really is real why have i not been paying
attention that's exactly the feeling uh we need to create for you know when things go sour
for businesses yeah imagine that first business that has that bill of exchange they're like oh
shit this unlocks opportunities i could only have ever dreamed of because now i don't have to go
cap in hand to the bank manager to get a hundred thousand pound advance to mill the timber to find
the um yeah businesses i said what an it's actually it's a mockery of how to run and um
do business.
This is not the way that we evolved
to interact with each other
and to enter into business partnerships with each other.
We're forced into these corners
and they're complete and utter total
fiat monstrosities in clown world situations.
Yep.
That's exactly what we're up against.
But anyway, it's going to be...
Let's see how this is.
It's a very difficult project.
one shouldn't underestimate it because the volatility of bitcoin will be making this hard
fiat-backed stable coins have it far easier but i i kind of i'm very much expect that the politicians
will sooner or later be able to kill stables in favor of cbdc's it's if we don't do something
which is completely uh non-custodial like like on bitcoin and you can't do that with stables
no exactly so um anyway um dan it was really good to talk to you uh sorry for that i have to run at
this moment yep i just need the time as well so thank you very much for coming on uh i i do
one word one word one word answer if you could give one orange pill to somebody who would it be
a certain dairy company
which could be a very good
beta user
oh that would be excellent
alright I love it
thanks Hubertus
I'll let you run
take care
bye
thanks bye
well thank you Hubertus
thank you everybody
for listening
and I hope you enjoyed
that discussion
going down the rabbit hole
there was a few things
there. So yeah, looking at the price of Bitcoin compared to gold rather than your local fiat
currency. Easily done. Just head over to bitbo.io. That's an unofficial shill. I'm sure you can find
it on all the other trading platforms or wherever else that you're hanging out if you're looking at
charts. And yeah, just choose that currency pair. Dollar, excuse me, dollar. Bitcoin against gold.
The all-time high of Bitcoin against gold is $38.51.
Excuse me, 38 ounces.
You see how difficult this is?
38 ounces and 38.51 ounces of gold to a Bitcoin.
Currently hovering around 32.68.
So this is a great point for you to start thinking about.
Don't just keep looking at the sticker price and cheering that on because any fiat currency is going to get printed into complete and utter irrelevance against Bitcoin.
So it's always going to go up and you're getting distracted by the shiny things if you keep looking at that.
So very good point there and very much worthy time starting to look at that.
And the other thing Hubertus touched on was the, it sounds so against the narrative, doesn't it?
The elasticity of money.
And he was quoting Mises and Hayek when he was talking about that.
And obviously having the base monetary supply fixed is obviously very, very important.
But having some kind of elasticity on top of that is what he was talking about.
This bills of exchange idea, certainly like a 500-year-old practice before we got to where we are today under a complete fiat system.
That was already in existence and it shouldn't be anything new to us.
It's just that because we have been where we have been, I mean, what is it now, 111 years of central banking?
yeah there's two or three generations that we just have been completely programmed brainwashed by
this idea of this modern monetary theory and just nonsense uh but the there is a quote from ludwig
uh von mises that uh hubertus has on his twitter thread about the theory of elasticity and he says
the theory of elasticity is correct banks increase and decrease their circulation pari passu which
means an equal amount with variations in the demand for money in doing so they help to stabilize
the objective exchange value of money so a lot to uh to unpack there and as we discussed in this
conversation that ain't ever going to happen under the current regime where we only have a handful of
banks controlling all of the levers uh and socially engineering us through these levers
They can socially engineer us by changing the amount that they're willing to lend money to us poor plebs at the bottom of the pyramid.
They do that on a whim.
And that has incredible effects, ripple effects throughout the economy and throughout your life and your decision making and everybody around you and their decision making.
and the other option is either to stop printing money into the system
or to start printing money into the system at ridiculously abrupt rates.
Just printing as much money as you possibly can between 2020 and 2022, for example.
Look where that has led us and the inflation and prices for everyday goods and services that we need
that have gone through the roof.
but you know inflation is transitory right if you're if you're willing to sit there and listen
to Christine Lagarde uh I'm not I'm opting out I'm opting for bitcoin and I'm opting to
carry on listening to these interesting conversations and watching these new projects
get built out and this is certainly one that's caught my attention and I hope it's caught yours
and it's definitely worth you getting over to the website.
Go check it out.
It's very easy, bit.cr.
So B-I-T dot C-R.
And reach out to Hubertus or myself
and I can put you in touch.
Don't forget to stack your sats.
Swan Bitcoin over in the US.
Relay across Europe.
Please self-custody.
That's very important.
Bitbox have got you.
Get yourself an orange pill app.
Get connecting with people in real life.
Go and check out paywithflash.com
because this is the way that you are going to be able to start accepting Bitcoin
for your goods and services in the marketplace.
And if you do want to support people who are building in the Bitcoin space
and spend your sats, plebeian.market is a place for you to go and check out.
And don't forget what I said about Bubble at the beginning here.
We're out of music again.
I'm going to have to either lengthen the music or cut short my rants
at the end of each episode.
But whatever, here we are.
It's all just good old-fashioned pleb work.
Bubble.
I had Kaz on recently.
And if you are looking to track or try and curate all of the Bitcoin conversations that are happening across thousands of podcasts right now,
you can use Bubble FM, which monitors the entire system and will find exactly what you want to listen to.
They'll help you super focus your attention on the exact things that you want to listen to.
So no need to miss any crucial insights and no need to listen on two and a half-hooks speed or something until you get to that point.
You can pick a topic and it will curate a bunch of different conversations with different people from different shows for you.
So there is a link in the show notes that you can hit or just get over to bubble.fm and start curating your listening experience.
But I would honestly recommend coming back and listening to the episode with Kaz.
because he's the guy that made this.
He's another builder on the Bitcoin space
and he explains it very, very clearly.
If you've got any interest
in getting across to a conference,
what do we have coming up?
Riga in August.
You can use the code BITTON
at checkout for 10% discount
and BTCHELL.
That's going down in Helsinki.
That's in mid-August.
All the links are in the show notes
to these conferences.
You will get discounts
if you use the code BITTON
and it will change your life.
I mean, we had a great time in Prague again
and it's great to see so many first-timers,
people that came to a conference for the first time.
It was really a large percentage of that conference
were at their first Bitcoin conference
and I got to meet a lot of them
and it was individuals, couples, families
bringing their kids and having the most incredible time.
It will change your life.
I am not pumping that up.
It's amazing when you get out there and experience talking to Bitcoiners in real life.
If you haven't done that, you're missing out.
Get to Orange Pill app, find your local people, start building your meetups, start building
your conferences or your events, whatever it is.
And yeah, this is how we're just going to educate as many people as we possibly can
going forward.
And I'm here for it.
So that's the end of that.
I hope you guys enjoyed the episode.
Take care.
I'll catch you on the next show.
Thank you.