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Welcome to episode five of the Bitcoin Boomers. I'm Bob Burnett. I'm here with my buddies Gary Leland and Larry Lepard.

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And this is our fifth episode, guys. And yeah, so we're starting to put together a little portfolio here.

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And our first solo one, though. So we'll see if we can keep people entertained.

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You know, there's a lot of things to talk about. We've got the Nancy Guthrie story, which Bitcoin has woven into.

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We've got certainly the price to talk about. Gary's got his Bitcoin Bitbob Boom conference coming up soon that we'll all be at. And of course, some things happening in the mining world that are probably things that some people might want to hear about.

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So anyway, maybe get started on the Nancy Guthrie thing. Anybody want to start there? Any interesting thoughts about Nancy?

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This seems like – and this is a terrible situation, so don't get me wrong. I mean I would die at that in my mom if she was alive. But taken off on this, so much FOMO has been created about how Bitcoin is being used by criminals and the cartels.

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And haven't we heard this like since Bitcoin was created, you know, and isn't it the most trackable thing there is?

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I mean, when you really get down to it, I mean, I don't know where that's coming from.

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I was watching a clip MailScent and it had these, I guess, experts on, I don't know, NBC, CNN or whatever.

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And one of the experts said they asked me, said, well, I really don't know much about Bitcoin, but I think all cartels use it.

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And I'm going, why would they have them on there if they're admitting they don't know much about Bitcoin as the export?

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It seems like they're just pulling out all this stuff to make us scared for some reason without doing any research.

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Am I alone in my feelings on that?

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That this is the same old song and dance that we hear every three or four years about Bitcoin?

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It's unclear.

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I mean, whether it's a conspiracy or whether it's just stupidity on their part, it's kind of a toss-up, right?

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it's unfortunate though i mean it you know it does it does you know revisit or revive the you

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know bitcoin is used by criminals argument but you know guess what cash is used by criminals too

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yeah but yeah they're shipping bricks of cash around and bricks of cocaine and all you know

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i don't know to me it's it's what a tragic and unfortunate situation and and also unfortunate

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that bitcoin gets mentioned on the other hand you could argue there's a streisand effect you know

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Any publicity is good publicity.

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You want to move a lot of money and you want to have something that everybody knows what it is these days.

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Well, Bitcoin's actually beginning to qualify.

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So I don't know.

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The whole thing is just tragic.

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Kind of like P.T. Bailey said, just say anything you want about me, but get my name right.

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Spell my name right.

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Exactly.

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Well, Gary, you were talking about the interview that you saw.

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And you said one of the quote unquote experts said something to the effect of I think.

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And, you know, experts typically don't say I think, they say I know.

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And so and I think that's, you know, one of the problems with Bitcoin is determining who the experts are is difficult, especially for somebody that's completely outside of it.

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And, you know, we haven't established who those people are.

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I just saw as well, in a similar note, Trump announced a new panel kind of overseeing crypto and like online prediction markets.

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and they had people like the CEO of FanDuel on there,

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which is predictable,

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but there wasn't a single,

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there was 25 people,

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not a single Bitcoin person on there,

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but we had the CEO of Ripple, Brad Garlinghouse,

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and the head of the Solana Foundation,

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the head of the Chainlink Group,

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Brian Armstrong from Coinbase.

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Now, some of those people,

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obviously do know some things about bitcoin but they have a they all have an agenda yet

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you basically though you have you have 25 people in this group and the most significant asset

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doesn't have a representative um you know no match is on the list yeah but i mean the reason

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i bring it up though is is just you know because of this like i don't even think the media knows

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who to reach out to because like going way back to my PC days when when there were times when for

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whatever reason the personal computer would would come into you know mainstream thought and you know

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they would seek out CEOs and executives from Dell and Gateway and IBM and places like that and I'd

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occasionally find myself on CNN or you know something like that if it if I was the best

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person from the company but for bitcoin um we don't have a ceo uh we we don't have a pr department

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uh and and maybe that's a problem sometimes um that's probably why companies like

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that's probably why things like xrp have grown so fast you know they have a big advertising budget

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i'm sure yeah it's it's unfortunate i mean shit coins have been a you know a bane of our existence

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for a long, long time, and they continue to hang around the rim, right?

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Well, you know, speaking on this, Bob, and the subject,

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I was at the Dallas Bitcoin meetup last night, and I rarely go to meetups.

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I think that's the second one I've been to since BitBlock boomed locally.

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I just stopped going for some reason.

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But I met a gal there who had sold her gold like three months ago

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and bought Bitcoin at the high.

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And she's going, God, what an idiot I am.

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what an idiot and i'm you know just trying to give her a real reassurance saying you know while you

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might feel like an idiot now in five years i'm sure you'll feel like a genius um but she was

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going i don't know who to listen to i see all these shows that tell me everybody's saying

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bitcoin scope was going to go to 180 because they got a lot of bitcoin i said well those particular

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people probably have sold their bitcoin ends i have to worry about them and i was trying to tell

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Or, and this is true, I guarantee both of you are going to agree with me, every time we see Bitcoin come out of bear market and go into a bull market, we see all these people on YouTube who are experts and we go, who the hell is that?

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Because I feel like I know most people, not necessarily in person, but I know who they are.

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I'm going, who is this export?

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Like Ty or whatever a few years ago came on.

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And then when Bitcoin goes in the toilet, all their shows are gone, you know, and they just disappear.

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and then magically three years later, four years later,

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well, here's all these new experts that no one knows.

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I mean, am I wrong on that?

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That sounds about right.

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Yeah.

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So if you're new and you come in when all those experts are on there,

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you don't know who to listen to and you may listen to those experts,

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so-called experts that are experts until Bitcoin drops in price.

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Their numbers aren't there anymore for followers.

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Yeah, I think, you know, classically, I think what happens to is I think a lot of media gravitates to people that have a financial angle, like they're used, they kind of categorize this in that space. And I've run into it a million times, you know, arguments in Twitter or in person with somebody who's a financial advisor or a wealth advisor and thinks that they are the classic

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dunning kruger curve people you know standing on the top amount stupid uh you know thinking that

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that they have i feel that i like that you know thinking they have a comprehensive view of

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bitcoin and that it's a scam or it's a posi or it's a speculative asset and they throw this sort

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of banter around without without really any true knowledge of you know what it is i don't know

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anything about it but you're wrong right yes yeah well actually no no i i know everything there is

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that's that's pertinent about it it's so wrong yeah and yeah when they don't really know everything

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yeah no i mean we said they don't know anything about it yeah yeah and i still think this is the

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use case i think yeah well there is no use case there is no intrinsic value there is no cash flow

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there's like these are the things that they will uh you know because they spend it anywhere well

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yeah and they don't they don't know how to evaluate it in measurement they don't have um

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the technical chops to do it although i will say it's changing somewhat um that i i may have shared

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this story before, sorry for repeating it, but I have a good friend who's an executive at Morgan

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Stanley. And he, um, he reached out to me probably six, eight weeks ago now. And, and after five

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years, you know, he came to me and said, Hey, we're all in now. And he, he said, he, he made

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a request to me that, that I was kind of surprised by. He said, Hey, he, he oversees a really large

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team. He said he's got like 300 people. And he said, I want you to create a Bitcoin

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exam for me, a quiz for me. He said, I want five questions. He said, I don't want them super hard,

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but I don't want them to be exactly layups either. And I want to give it to my team

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so that they realize they're not ready and they have to pour in the work. So I did five questions

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and a couple of them were harder than others,

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but one of them was simple,

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like, you know, what is the supply of Bitcoin?

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But basically, nobody got...

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Tell us the other four.

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Tell us how five.

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I can look it up as we talk.

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I don't remember them all off the top of my head.

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I just was curious.

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So most of them didn't know the supply.

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But, you know, they were getting like one of five right.

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Like, nobody did well.

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Yeah.

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Yeah. And but but they I'm saying he speaks for Morgan Stanley in this case.

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There's a recognition that they're behind, that they don't know and they have to know.

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So that was the purpose of the of the quiz was to get them to to do that.

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But it, you know, it's going to take time.

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I think that, you know, on this Nancy Guthrie story, I guess kind of where we started to.

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you should probably explain to people why this may not be a great strategy, right?

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That, you know, if, let's say I send Gary $6 million of Bitcoin right now,

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and we do it as a Bitcoin transaction,

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well, nobody, well, I'm not doing a good job articulating this for some reason,

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but anyway, I send the Bitcoin to Gary to his address,

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Well, we can do an example. Send me some now.

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Yeah, okay. Let's do it live.

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I send Gary some Bitcoin.

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Now, Gary wants to do something with it at some point.

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So he buys something from Larry.

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And let's even say it's still on the Bitcoin.

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It's all purely Bitcoin transactions.

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But now Larry and Gary are connected.

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At some point, Larry does something with it.

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Well, at some point it reaches somebody who maybe wants to be on an exchange and they want to turn it into dollars or something more tangible.

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Well, they can start reversing that chain and start tracing back.

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But they don't necessarily have to go that far, I can send it to Larry and maybe Larry has sent Bitcoin from his wallet to Coinbase.

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Yeah.

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And so now that wallet's basically Larry's wallet.

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And they go, oh, Larry got some of that Bitcoin from the Guthrie's.

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And they go visit Larry and go, who sent you this Bitcoin?

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Yeah.

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So I think the FBI and the CIA have stated they love Bitcoin because it's –

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And even after years, remember – y'all remember that story about that – I can't remember the exact details.

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That guy and his girlfriend, they stole a bunch of Bitcoin, millions of dollars worth of Bitcoin.

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And then years later, six years, seven years later or something, they spent some and they nailed them, took all their Bitcoin and they went to prison.

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You know, so, I mean, it's what they may wait a long time to do that.

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Yeah. I think was that like a Canadian exchange or something like that?

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Yes, I think so. I think so. Yeah.

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Yeah. So it's a trail there they can follow of the Bitcoin and you have to get it out sooner or later.

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you're going to spend or you just got six million dollars going i got six million dollars here i

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can't spend any of it you know so somewhere it's going to come back to you but that's a terrible

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situation for sure though but it's not this thing that um criminals you know also a thing i saw the

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guy was uh me i saw this i can't remember what channel it was they were talking about the situation

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and evidently they sent someone sent money to the wallet or bitcoin to the wallet like a few hundred

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and they were talking on their show about these people that knew so much about Bitcoin,

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how they thought that was some kind of test that the FBI did

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because they have special tools that we don't know about

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that by sending that $600, they can go ahead and probably find out who owned the wallet.

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And as you and I, as we all know, if they're going to ask $6 million,

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they probably got a wallet that's not connected to anything.

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Unless they were just checking to see if they were stupid,

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you know because it could always look up and they were just stupid you know so i thought that was

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interesting how they they knew about these secret tools the fbi had for figuring out whose wallet

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that was yeah well the records the records are immutable so that's that's one of the issues that

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goes with it why don't we shift over to talking about the price um i don't know about you guys

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but i've been getting a lot of nervous people that are newer in the space coming to me you know

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looking at the price action and wondering if the thesis is broken or they've made a mistake or

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and you get older ones like my wife yeah yeah all yeah all the above yeah i've had a little of that

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too all the above and um i don't know you know i guess maybe because i've been around it since

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13 or 14 and since i watched it go from 17 to 9 and then 3 or 4 and then you know we watched it go

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from 65 to 15 and all this stuff.

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I mean, I'm pretty sanguine about the price.

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And it kind of reminds me, you know, it's, it's a, as you know,

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Saylor says, it's digital capital.

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It's a very volatile asset and you have to be willing to hold it off with 10

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year timeframe. And I've always told people who are looking to get into it,

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you know, they ask how much did I buy? I say, you gotta be,

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no matter how much you buy, you gotta be willing to endure a 50% drawdown.

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Actually probably a tad more than that. But, you know, as you,

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as we both all know, they've had, you know, we've had 90, 80, 70, 70, you know, 60% drawdowns in the

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past. This drawdown right now, we're kind of 50% down from the high in October. You know,

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my sense is we could go 60% down. I don't think we're going to go 70 down. We'll talk about why

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in a minute, but the, you know, to me, what's going on here is, is it's just classic, you know,

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fear and greed investor behavior. That's as old as time. I mean, this is, this is Buffett's,

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you know, you know, Mr. Market is, um, he's a manic depressive and, you know, at 125 people

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chasing Bitcoin, it's going to 250 and at 67, you know, nobody wants it and it's going to zero.

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And, uh, you know, there's a, there's a good study that I tried to get a copy of it, but it's

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turns out it was pre-ChatGPT. ChatGPT refers to it, but they can't show me the original study,

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but I remember they summarize it. And the study is back in the, um, in the seventies and eighties,

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there was a guy named Peter Lynch who ran the Magellan Fund. From 1977 to 1990, Magellan had a

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29% compound annual rate of return, which truly puts him in Buffett-like stock-picking categories.

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It was a fabulous fund. I mean, anyone who put money in it early and hung on to it just made a

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fortune. And Fidelity actually went back and studied all their customers and holders of the

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Fidelity Magellan Fund, and they found that 50% of the people who at one point held the Magellan

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Fund did not make any money. They made zero money. And the average return for the average person who

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invested in the Magellan Fund was 7%. So let's just think about how that happened. The ones who

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didn't make any money, they chased the Magellan Fund when it was doing well. They're like, this is

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great. This is great. I got to buy it. And they were chasing the high. And then when it turned

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down, they're like, oh my God, I made a mistake. I got to sell it. Right. And, and, and everybody,

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it turns out did some, or not everybody on average, most people did some version of that,

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because if you had bought it in the beginning and held it to the end, your, your compound IRR would

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have been 29%. But you know, the average they found of all their customers over all those years

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was 7%. And, and so I guess what I'm trying to say is that human nature, you know, almost wires

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us to make investment mistakes, which is to say we chase price and we throw up on deep value.

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And this is how great investing fortunes have been made for decades and centuries, which is

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the blood is running in the streets. You buy deep value and you sell over valuation. I'm not

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suggesting you ever sell Bitcoin, but I'm pointing out that there are these metrics that we use to

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determine what is great value and what's not great value. And right now, Bitcoin is in that great

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value zone. I retweeted it this morning. It's James Cech's work, and it fits with the Tipmeyer

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multiple that right now, comparing the Bitcoin price to the 200-day moving average, we're at

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either 6% or 10%, depending upon whose numbers you use. It's only been this cheap 6% to 10% of the

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time. In other words, 90% of the time, it's been more expensive than it is right now. The other

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model I use is I use this power law model, which Giovanni and Kruger have worked up, which shows

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that they've drawn a curved line, log of time, log of price,

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that shows the price of Bitcoin over its entire life.

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And they've managed to fit this curve to the data, 96% R-squared,

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which anyone who's familiar with statistics knows that's good correlation.

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Having said that, it also varies a lot around the means.

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It's a volatile asset.

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And through all of its cycles, sometimes it trades at two standard deviations

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above the power law number.

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it's cheapest it goes to half one half a standard deviation below the power law number it's never

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broken that right now the power law mean says it should be trading at about 120 130 somewhere in

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there and a half of that half a standard deviation below that is 50 to 55 and so we're almost there

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so you know on both those measures bitcoin is extraordinarily cheap i've been buying it i've

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been selling gold and silver things to buy it and i've been buying microstrategy as well

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in size, actually, in both of those buys, just because gold and silver have taken off.

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And to me, what they're saying is, you know, the big print's coming.

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The Fed's going to have to, you know, debase the currency.

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And I think it's interesting they picked this guy Warsh.

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He's a hawk.

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I mean, it's a perfect, it's a brilliant political move.

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Pick a hawk to do something really dovish.

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I mean, they got him to buy in on he's going to have to be dovish.

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But because he's a hawk, he'll be able to sell it, right?

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And so that's coming and gold and silver smell it.

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And Bitcoin's just on this lag program like it was in 2020.

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You know, I've said this in another pause, I'll say it again.

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I mean, in 2020, I remember very well, because I own both Bitcoin and a lot of gold and silver,

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as most people know.

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And in 2020 when Powell pivoted and then you know gold took off it went up 50 And from I don know I think it was 1 around 2 back at the time

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And all this, and gold stocks went up a lot.

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I thought it did well.

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We were all feeling great.

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And Bitcoin was just bumping along between five and nine, kind of averaging seven.

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And then suddenly, and then all the liquidity hit.

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You know, Powell grew the balance sheet from, you know, three trillion to something trillion to nine trillion.

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It's just crazy.

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and it all came flowing into the system that summer.

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In October, Bitcoin went from 10 to 60 X.

255
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You know, it took like six months.

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It was really quick.

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And that's the way this asset trades.

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And so, you know, when this next big print hits,

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that's what's going to happen again.

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We're going to go from 50 or 60 or 70 to 240 or 300 or some big numbers.

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But they're going to print a lot this year.

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I mean.

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Well, they're already starting.

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Yeah, they started printing.

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I mean, they pivoted, right?

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They were tightening, then they stopped.

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Now they've got this reserve management program, which I think is hilarious.

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It's just rebranding QE.

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They're saying, well, the banks need some reserves, so we're going to inject $40 billion a month then.

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Of course, that's going to have to grow.

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And that's just a mathematical fact.

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That's not some opinion.

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That's just mathematically proven that they will have to grow the money supply or the bank reserves.

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Did you say $40 billion a month?

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yeah they're doing 40 billion a month which is 480 a year which lynn has called the gradual print

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playing off my book and i'm like yeah and i responded to her on tour i said yeah lynn but

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gradual can become big and that's what i think is going to happen so so i don't know i guess the

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point i'm trying to make is i think there are a lot of people i had a call yesterday from a really

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good guy very smart investor but he's just kind of like jesus i'm really heavily into this bitcoin

280
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and i'm getting scared and i was just kind of like no and but he's newer i mean he hasn't been around

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it for 10 years. He's gone through a couple of these. Yeah. And I just said, I said, you got to

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relax, man. It's all good. I mean, you know, I think for some people, Larry, the money in three

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months, you're fine. I mean, it's, it's like, give it, give this thing some time. Right.

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I think for some people, Larry, like my, I'm going to use my wife as an example. I use her

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as an example a lot. She hates it when I do that, but it's, it's not the drawdown percentage.

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because she's seen this but doesn't really remember it.

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It wasn't as big a deal.

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She looks at the total dollar amounts.

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And the dollar amount now is so high.

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Yeah, it's a big number, right?

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Yeah.

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And she's like, oh my, I said, well, what are you going to do when it hits $350,000 and drops to $180,000?

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And you know, it's going to be a lot bigger number, you know?

294
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Well, that's the thing.

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I mean, and obviously it's easy for us to say that because our average cost bases are much lower.

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Although I was buying it at $65,000 and I even bought some at $100,000.

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I didn't pay $125, but the point is that, yeah, I mean, look, it's higher highs and higher lows.

298
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I mean, that's the pattern.

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It's going to continue.

300
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Yeah, I think if you, I have this chart somewhere.

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If you look at the volatility, the volatility itself does appear to be dampening on a percentage basis.

302
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So if we look at the big drawdowns like you referred to, Larry, the 90%, 80%, 70%, those were fairly early in Bitcoin's history.

303
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The post-2020 era is all like 50-ish, give or take a few.

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So we're starting to see that gap dampen.

305
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Now, it's still big.

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And as Gary pointed out, the dollar value difference can be shocking.

307
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Oh, Bitcoin's down $8,000 today or something like that.

308
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We've had a $10,000.

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It only matters if you have to sell.

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If you don't have to sell and you understand what you hold, it just doesn't matter.

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You know, your your tale there reminds me, Larry, of that meme that's going around the cartoon and it shows two desks of people selling Bitcoin.

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Yeah, right. And one desk has one hundred thirty five thousand and there's just people all around it in line to buy it.

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And the next to the right shows sixty thousand and there's one guy, you know, in line buying Bitcoin.

314
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Well, and that's, and that's, and it's just, it's crazy. It's human nature. You know, we're, I guess, you know, we're hardwired to herd, right? I mean, and there was, there's a reason for that. Probably back in the ancient days, you know, some animals come into each and it's like people start running. Everyone doesn't even know why they're running, but they're like, shit, they're running. I better run too.

315
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Get on the track.

316
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Yeah.

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And so, you know, it's going crazy and, you know, greed takes over and, oh, my God, I got to, you know, I got to chase it.

318
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Well, then the opposite emotion is, you know, it's going to zero and Bitcoin's dead.

319
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And, you know, I mean, we've had we've heard a hundred times.

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Yeah.

321
00:25:36,398 --> 00:25:37,998
We've had no end to the FUD stories.

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I mean, they've been terrible.

323
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I mean, you know, in fact, there was a good pod.

324
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I just listened to it.

325
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You know, the quantum FUD.

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Preston and some others were on.

327
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I think Jeff Booth was on it.

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the quantum FUD was just outrageous. I mean, I just, Bob, I'm sure you agree with me on that.

329
00:25:51,318 --> 00:25:56,738
I mean, you know, every, I mean, there's a little bit more substance to the governance FUD,

330
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you know, the, the op return stuff and the, and the core people not really understanding

331
00:26:01,558 --> 00:26:06,018
that it's money. But actually I think we had a really good development this past week on that

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where, or I guess it was last week when on the strategy call, Michael said, you know,

333
00:26:11,758 --> 00:26:16,938
we're going to try and take a leadership role in, you know, the governance of core and, and

334
00:26:16,938 --> 00:26:21,398
contributing to what the proper way is to evolve this protocol over time, because we've got such

335
00:26:21,398 --> 00:26:25,638
a big stake in it. And, and frankly, it's going to take that it's going to take the black rocks

336
00:26:25,638 --> 00:26:30,778
and the strategies of the world to say, Hey, this is a really important asset, we're going to protect

337
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it. And so to the degree that changes are made in it on a go forward basis, we're going to weigh in

338
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on it. And honestly, I, you know, strategies got more to lose than anybody else if it doesn't work.

339
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So I'm willing, and Michael seems to be an honest actor and a very smart guy.

340
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I think it's a huge positive that he's weighed in on this and said,

341
00:26:50,218 --> 00:26:52,618
we're going to stand up and take a leadership role in this area.

342
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There's a lot of people who are scared of that too, though.

343
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I know they are, but they shouldn't be.

344
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And I think he's a stand-up guy too.

345
00:27:01,778 --> 00:27:08,178
Yeah, and to me, that was really the only, that's the one piece of FUD that I could see

346
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central banks and sovereign wealth funds still being concerned about

347
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who really governs this thing.

348
00:27:16,318 --> 00:27:19,518
But I think that piece, just like every other piece

349
00:27:19,518 --> 00:27:22,918
has been dealt with over time, I think that piece will be dealt with too.

350
00:27:24,198 --> 00:27:27,039
Things we fear, block size stuff, all the other stuff.

351
00:27:27,638 --> 00:27:29,638
There's been a lot of FUD along the way,

352
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and it just kind of tends to get resolved.

353
00:27:32,818 --> 00:27:35,958
Another thing on that, Larry, is I think Jimmy Buffett,

354
00:27:36,518 --> 00:27:38,098
Warren Buffett, I saw Jimmy Buffett,

355
00:27:38,178 --> 00:27:46,578
I saw Warren Buffett say one time, the hardest thing investors do, have trouble doing, is doing nothing.

356
00:27:47,039 --> 00:27:48,238
Well, that's true, too.

357
00:27:48,498 --> 00:27:50,798
And that's the hardest thing that they can do is nothing.

358
00:27:51,039 --> 00:27:52,039
And they just can't do it.

359
00:27:52,758 --> 00:27:52,938
Yeah.

360
00:27:53,878 --> 00:27:57,258
Yeah, your emotions are your enemy in investing.

361
00:27:58,698 --> 00:28:02,338
And the older you get, the more cycles you see, the more you realize that.

362
00:28:02,338 --> 00:28:10,638
and that's where I us older bitcoiners can maybe provide some comfort and and uh just perspective

363
00:28:10,638 --> 00:28:16,039
to some of these younger people who you know I get it they've got a lot in it they've really made

364
00:28:16,039 --> 00:28:19,698
a bet on it they believe in it but they're looking at now they're saying hey hang on a second is this

365
00:28:19,698 --> 00:28:25,358
broken and my answer is no not at all I mean it you know which is not to say by the way that it

366
00:28:25,358 --> 00:28:31,278
couldn't dip down I think that the Mel and I were talking about this pre-show you know one of the

367
00:28:31,278 --> 00:28:38,178
issues of where the price goes is the macro landscape. I mean, and so, you know, if we get

368
00:28:38,178 --> 00:28:44,678
something that breaks and we get a correlation of one event like COVID marks one or, you know,

369
00:28:44,718 --> 00:28:49,858
Lehman in 2008, you know, guess what? Everyone scrambles for cash and liquidity until the Fed

370
00:28:49,858 --> 00:28:57,818
provides it. And everything goes down, you know, a lot. And so, you know, I don't know what the

371
00:28:57,818 --> 00:29:01,518
bottom on Bitcoin in that event would be that there probably is no bottom. But my sense is,

372
00:29:01,998 --> 00:29:06,938
I'd be very surprised if it went below 50. And so, you know, if you're looking at it today to

373
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buy it at 67 with a downside of, you know, 50, there's an upside of, you know, kind of 250 to

374
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400 next three, four years. It seems to me like an incredibly asymmetric bet.

375
00:29:18,358 --> 00:29:23,778
I would, um, excuse me. Yeah. I, I think I want to come back to the,

376
00:29:23,778 --> 00:29:25,798
the FUD and the

377
00:29:25,798 --> 00:29:26,518
governance.

378
00:29:27,998 --> 00:29:29,018
Yeah, that's your area.

379
00:29:29,758 --> 00:29:32,198
Yeah, but before we do that, I want to

380
00:29:32,198 --> 00:29:33,498
I think we should

381
00:29:33,498 --> 00:29:35,458
flush out the price thing just

382
00:29:35,458 --> 00:29:36,778
a little bit more.

383
00:29:39,258 --> 00:29:39,958
One of the

384
00:29:39,958 --> 00:29:41,918
things that I look

385
00:29:41,918 --> 00:29:43,818
at, my optics are different than probably

386
00:29:43,818 --> 00:29:45,618
a lot of people. I'm not a trader.

387
00:29:45,798 --> 00:29:47,278
I'm not a speculator, but

388
00:29:47,278 --> 00:29:48,978
what I am is a producer

389
00:29:48,978 --> 00:29:51,098
because I run a mining company.

390
00:29:52,238 --> 00:29:53,218
And I think

391
00:29:53,778 --> 00:30:03,358
If you zoom out and you look at a longer term lens, one of the key factors in establishing price is cost.

392
00:30:03,838 --> 00:30:06,838
That's true in most markets, right?

393
00:30:06,878 --> 00:30:10,758
The cost of something dictates the price that related.

394
00:30:11,198 --> 00:30:16,478
Bitcoin's at a weird point in its maturity where it's a commodity.

395
00:30:17,078 --> 00:30:22,898
That's the first thing that I think probably people don't think about enough is the fact that Bitcoin is a commodity.

396
00:30:23,778 --> 00:30:28,438
And the companies like mine that are mining companies, we are commodity producers.

397
00:30:28,978 --> 00:30:43,018
I think it's, by the way, one of the reasons that the public mining companies have been grossly misvalued is they've been valued as tech and growth companies, not as commodity producers.

398
00:30:43,018 --> 00:30:57,678
And then they've been evaluated as technology and growth companies instead of commodity producers, because commodity producers should be valued based on their efficiency, their productivity.

399
00:30:58,218 --> 00:31:05,138
Like those those are their factors. Tech and growth tech companies are evaluated more on growth.

400
00:31:05,138 --> 00:31:08,718
And so that's that's we could go into that rabbit hole a little deeper sometime.

401
00:31:08,718 --> 00:31:21,998
So what happens is right now is we have an average cost of production, my models, but a few other people have similar ones, that would somewhere be in the mid-80s to high 80s.

402
00:31:22,278 --> 00:31:27,078
So if you take all the mining in the world, that's what the average is.

403
00:31:27,938 --> 00:31:31,838
The worst ones are in the low six figures.

404
00:31:32,758 --> 00:31:36,878
And those tend to be the bigger public companies.

405
00:31:37,558 --> 00:31:41,558
And by the way, one other thing, when I talk about cost, I am not talking about the cost of electricity.

406
00:31:41,838 --> 00:31:45,178
There's a lot of people that think that that's all that it takes.

407
00:31:45,358 --> 00:31:47,158
And so they constantly look at that.

408
00:31:47,238 --> 00:31:49,838
But there's massive depreciation.

409
00:31:50,298 --> 00:31:51,458
We have labor.

410
00:31:51,698 --> 00:31:52,438
We have insurance.

411
00:31:52,798 --> 00:31:53,998
We have facility costs.

412
00:31:53,998 --> 00:31:56,978
We have all these other things that are part of that.

413
00:31:58,158 --> 00:32:05,698
Now, so if we have the worst in the world, let's just call it in the low 100s, the average at 88, the best in the world,

414
00:32:05,698 --> 00:32:12,098
are right in that $50,000 to $55,000 range per Bitcoin produced,

415
00:32:12,478 --> 00:32:19,138
which interestingly is the same number that Larry just said,

416
00:32:19,378 --> 00:32:23,818
you know, he views as the kind of the floor, right?

417
00:32:23,818 --> 00:32:31,078
I mean, the power law was another half a standard deviation down,

418
00:32:31,198 --> 00:32:33,338
and there are different ways at which you arrived at that number.

419
00:32:33,338 --> 00:32:42,098
but i think i think it's a very important number to keep in mind that that uh and and larry you may

420
00:32:42,098 --> 00:32:47,498
have some some perspective on this when you look at like gold and silver and and how it is whether

421
00:32:47,498 --> 00:32:53,778
it is properly valued or not um but but that's the way i look at the world and i i view these

422
00:32:53,778 --> 00:33:01,438
costs of production as kind of setting a floor in in the longer term on any given day i never

423
00:33:01,438 --> 00:33:03,018
I have a question for you, Bob, too.

424
00:33:03,558 --> 00:33:07,178
Have you observed, and well, you watch hash carefully,

425
00:33:08,058 --> 00:33:12,578
and I was surprised to hear you say that people are 100, 120K to mine a coin.

426
00:33:13,158 --> 00:33:15,838
Have you observed anybody taking stuff offline,

427
00:33:15,958 --> 00:33:21,038
and has the growth in hash slowed as a result of what you're describing?

428
00:33:22,198 --> 00:33:22,558
Yes.

429
00:33:23,458 --> 00:33:27,278
Obviously, we can't know why hash comes offline.

430
00:33:27,758 --> 00:33:27,998
Right.

431
00:33:27,998 --> 00:33:36,378
Right. But I just looked at it yesterday. We we haven't moved. Global hash rate is where it was six months ago.

432
00:33:37,138 --> 00:33:44,238
So we you know, it went up and it came down. But it's you know, we've essentially had no movement in global hash rate.

433
00:33:44,238 --> 00:33:47,098
Prior to that, it was actually growing pretty consistently. Right.

434
00:33:47,458 --> 00:33:55,098
Growing meteorically. And and, you know, I've said on what I've said and by the way, this has been for a couple of years.

435
00:33:55,098 --> 00:33:57,458
it's been growing unnaturally.

436
00:33:57,758 --> 00:33:58,838
I think a lot of people look at it,

437
00:33:58,858 --> 00:34:00,558
oh, look at the growth of the hash rate

438
00:34:00,558 --> 00:34:03,138
and isn't it great and the network's more secure.

439
00:34:03,638 --> 00:34:05,598
So, well, not exactly.

440
00:34:06,958 --> 00:34:08,798
There's on the surface, yes.

441
00:34:09,698 --> 00:34:11,499
But what can happen

442
00:34:11,499 --> 00:34:16,098
is because the public companies

443
00:34:16,098 --> 00:34:20,318
have massive pocketbooks now

444
00:34:20,318 --> 00:34:22,878
because they've been kind of following

445
00:34:22,878 --> 00:34:25,138
a bit of the sailor strategy to a certain degree.

446
00:34:25,278 --> 00:34:29,939
What they've learned was if they deploy $100 million

447
00:34:29,939 --> 00:34:34,598
into new capital to expand operations,

448
00:34:34,979 --> 00:34:36,979
they've been getting a market cap lift of,

449
00:34:37,078 --> 00:34:38,598
let's just say, 200 to keep it simple.

450
00:34:39,878 --> 00:34:45,999
And so even though they're bleeding cash operationally,

451
00:34:46,738 --> 00:34:49,979
they've been able to sell shares,

452
00:34:49,979 --> 00:34:54,398
show the Bitcoin balance sheet growing.

453
00:34:54,818 --> 00:34:55,378
Right.

454
00:34:55,959 --> 00:34:59,439
And in my opinion, not giving financial aid,

455
00:34:59,499 --> 00:35:01,098
people are kind of falling for it.

456
00:35:01,499 --> 00:35:04,698
And they, you know, now they might get bailed out

457
00:35:04,698 --> 00:35:07,078
out of, I would say, sheer luck

458
00:35:07,078 --> 00:35:10,479
because those same companies are pivoting to AI.

459
00:35:11,419 --> 00:35:11,979
Interesting.

460
00:35:11,979 --> 00:35:14,718
And what they did build to their credit,

461
00:35:14,898 --> 00:35:16,858
I'm not saying they didn't do anything of value.

462
00:35:17,038 --> 00:35:18,459
Power centers have value, right?

463
00:35:18,459 --> 00:35:27,058
Yeah, and now they've been able to redeploy the asset into something that may throw them a lifeline.

464
00:35:27,058 --> 00:35:43,698
But I think what we're seeing, and anecdotally through my context, I think we're seeing a lot of energy that was directed toward mining as those machines are coming offline.

465
00:35:43,698 --> 00:35:50,618
they're getting old and instead of replacing them with more mining equipment that energy is going to

466
00:35:50,618 --> 00:35:58,558
ai and so i should point out usually we see stronger growth in the winter months than we do

467
00:35:58,558 --> 00:36:04,878
in the summer months in hash rate and and we've had nothing this whole this whole winter so i think

468
00:36:04,878 --> 00:36:10,439
we have we have had some weather issues that have forced some equipment offline we have had some

469
00:36:10,439 --> 00:36:16,898
obviously this ai issue um and and people pivoting um

470
00:36:16,898 --> 00:36:24,678
but i think this will be very healthy for bitcoin in the long run to see hash rate slow for quite a

471
00:36:24,678 --> 00:36:34,878
while because if if we continued in the a world where the least efficient operators continued to

472
00:36:34,878 --> 00:36:41,298
be those that survived eventually what that does is it forces out even the smaller private

473
00:36:41,298 --> 00:36:47,519
efficient operators and and i think that would be bad for bitcoin you know that if in the end all

474
00:36:47,519 --> 00:36:53,158
you had was a handful of really big companies that don't have any operational excellence that

475
00:36:53,158 --> 00:36:57,378
lose money continually and that just seems like a house of cards to me

476
00:36:57,378 --> 00:37:05,939
makes sense it's also a very centralizing force too that you know if only the big guys live

477
00:37:05,939 --> 00:37:14,258
out of sheer size then that's that's very centralizing so that you know i'm excited about

478
00:37:14,258 --> 00:37:19,038
that um i had asked you earlier larry though about kind of what what do you see in the gold

479
00:37:19,038 --> 00:37:25,338
and silver world like you know cost of production and and is there are there any analogies or no

480
00:37:25,338 --> 00:37:38,979
Well, there are. I mean, it's, um, and there were times, you know, that the big long cycles there and the cost of mine an ounce is always, you know, the cost of sell an ounce versus the cost of mine an ounce is obviously what determines the profitability.

481
00:37:38,979 --> 00:37:48,999
And, you know, you saw back in the, you know, it went to 800 an ounce, you know, in the 70s when we had all that inflation.

482
00:37:48,999 --> 00:37:54,578
And then it drained itself from 800 an ounce down to 250 to 300 an ounce in 2000.

483
00:37:54,778 --> 00:37:58,158
So that was a 20-year decline, kind of a steady decline.

484
00:37:58,419 --> 00:38:03,919
And, you know, at 800 an ounce, they were adding capacity like crazy because it made sense to.

485
00:38:03,919 --> 00:38:11,178
And what you saw was just a general attrition of the higher cost mines through that 20-year period.

486
00:38:11,519 --> 00:38:20,758
And now it's funny because I actually see companies going back and they're looking at companies and saying, well, this was a profitable company or profitable mine back in 1985.

487
00:38:21,598 --> 00:38:26,039
But they had to shut down in 1990 when the price dropped to 300 bucks or something, right?

488
00:38:26,039 --> 00:38:42,138
And, you know, the issue, and it's a little different than your industry, Bob, is that, you know, I mean, you can probably spin up a new Bitcoin miner in, you know, three, six months, certainly a year if it takes you the time to get the power.

489
00:38:42,939 --> 00:38:50,358
You know, mining minerals is a, you know, three to ten year cycle to open up a new mine.

490
00:38:50,358 --> 00:38:57,479
And so, you know, so they tend to not shut them down casually and reopening them is expensive, too.

491
00:38:57,638 --> 00:39:04,598
So but what you're seeing going on right now, and it's interesting because a lot of the Bitcoiners say, well, gold price is high.

492
00:39:04,678 --> 00:39:06,439
You know, we're going to get a huge supply of gold.

493
00:39:06,638 --> 00:39:10,439
Well, yes, over two decades, the growth will occur.

494
00:39:10,439 --> 00:39:16,218
But because it takes three to 10 years to spin up a new mine, it doesn't happen quickly.

495
00:39:16,218 --> 00:39:21,298
and the thing that makes the reason the stocks have gone wild

496
00:39:21,298 --> 00:39:23,678
and the reason it's a pretty attractive industry right now,

497
00:39:24,439 --> 00:39:28,658
the average cost to pull an ounce of gold out of the ground is about $1,500,

498
00:39:29,218 --> 00:39:32,878
which, you know, when gold was at $2,500, you know, $2,000, $2,500,

499
00:39:33,078 --> 00:39:34,338
that was kind of normal times.

500
00:39:34,898 --> 00:39:37,218
Well, as you all know, gold is now $5,000 an ounce.

501
00:39:38,278 --> 00:39:42,118
And so when you can pull something out of the ground for $1,500

502
00:39:42,118 --> 00:39:45,059
and sell it for $5,000, that's one hell of a profit margin.

503
00:39:45,999 --> 00:39:47,959
And so these companies are really minting money.

504
00:39:48,298 --> 00:39:50,718
And of course, they're going to try and grow the capacities too.

505
00:39:51,499 --> 00:39:58,338
But the supply response, you know, first of all, the amount of gold we mine every year is less than 2% of the outstanding gold on the face of the planet.

506
00:39:59,198 --> 00:40:04,238
And, you know, in general, over the last 30 years, production has not grown.

507
00:40:04,358 --> 00:40:08,658
It's kind of been, well, it's grown a little, but more recently it's been declining.

508
00:40:09,358 --> 00:40:12,439
Fed and, you know, one, but time is the biggest thing.

509
00:40:12,439 --> 00:40:21,039
So Bitcoin is very interesting in that as a miner, for the most part, you can turn off instantly.

510
00:40:21,218 --> 00:40:28,298
So if we woke up tomorrow morning and Bitcoin was at $25,000, we could see the network, half of it turn off in a day.

511
00:40:29,098 --> 00:40:38,218
But on the other side, if we woke up tomorrow morning and Bitcoin's at $200,000, you would see almost no lift.

512
00:40:39,499 --> 00:40:40,539
Hash rate would be the same.

513
00:40:40,539 --> 00:40:52,758
Now, miners would become ungodly profitable very, very quickly because the operational costs don't change, but the cost to produce a Bitcoin would get dramatically cheaper.

514
00:40:52,758 --> 00:40:53,818
Eventually, there would be a lift.

515
00:40:53,919 --> 00:40:57,318
The question about was how long is the lag between, you know.

516
00:40:57,419 --> 00:40:57,638
Yeah.

517
00:40:58,138 --> 00:41:07,838
So to your point, in fact, Larry's part of the Bitcoin Opportunity Fund, which we've done a few partnerships together.

518
00:41:07,838 --> 00:41:16,338
And once we did a small project, I think it was maybe about a half a megawatt project, if I remember right, in partnership with Larry Sermon.

519
00:41:16,698 --> 00:41:17,939
And we did it in six weeks.

520
00:41:18,678 --> 00:41:23,439
So at that scale, we find an advantageous situation.

521
00:41:23,578 --> 00:41:25,338
We can pounce, like, and we can go quickly.

522
00:41:26,059 --> 00:41:28,999
And at a few megawatts, it may be a six-month project.

523
00:41:29,419 --> 00:41:34,138
But at 100 megawatts, it's an 18-month project, 12 to 18 months, let's say.

524
00:41:34,138 --> 00:41:45,857
So it has some of the same probably not as dramatic as gold but it does to materially react to the price requires let say a year plus

525
00:41:46,197 --> 00:41:51,617
And one of the problems is that by then the market could have changed dramatically, right?

526
00:41:51,657 --> 00:41:52,617
And we've seen that.

527
00:41:53,017 --> 00:42:01,557
That when we look at late 2021, early 2022, a lot of money went into mining.

528
00:42:01,557 --> 00:42:08,377
new projects that didn't come online until late 2022.

529
00:42:09,477 --> 00:42:15,837
And they invested during the peak of a bull

530
00:42:15,837 --> 00:42:19,597
and came online in the middle of a deep bear.

531
00:42:20,297 --> 00:42:21,177
Ouch. Yeah.

532
00:42:21,177 --> 00:42:21,657
Yeah.

533
00:42:22,317 --> 00:42:27,697
Which, by the way, also means there's a secondary effect

534
00:42:27,697 --> 00:42:30,117
of a bull market typically,

535
00:42:30,117 --> 00:42:32,177
which is the cost of equipment goes way up.

536
00:42:32,657 --> 00:42:38,077
So not only are you, you kind of overpay for the servers and the transformers

537
00:42:38,077 --> 00:42:39,797
and some of the key pieces of equipment.

538
00:42:40,777 --> 00:42:44,817
So ironically, just like buying Bitcoin itself,

539
00:42:44,917 --> 00:42:49,297
the time to invest capital into mining, not saying by mining stocks,

540
00:42:49,377 --> 00:42:53,097
I'm saying invest capital in mining is in the middle of the bear.

541
00:42:53,297 --> 00:42:58,557
Like you got to have the balls to go put the money up when everything looks coming.

542
00:42:58,557 --> 00:43:01,177
Yeah, and then you'll be online when it happens.

543
00:43:01,377 --> 00:43:01,517
Yeah.

544
00:43:01,917 --> 00:43:03,457
Well, that's true with the gold mining too.

545
00:43:03,557 --> 00:43:06,897
I mean, I was telling all these gold miners a couple of years ago to be buying deposits and growing.

546
00:43:07,497 --> 00:43:09,077
And, of course, they were all scared out of their minds.

547
00:43:09,437 --> 00:43:16,017
And so, because in 2003, 2023, you know, Paul had tightened and gold was going down.

548
00:43:16,157 --> 00:43:20,897
And, you know, we weren't going to have any monetary inflation, which, of course, all turned out to be incorrect.

549
00:43:20,897 --> 00:43:25,637
But, yeah, it's, I mean, it's interesting.

550
00:43:25,777 --> 00:43:27,757
You know, you mentioned the commodity business earlier on, Bob.

551
00:43:27,757 --> 00:43:37,237
I mean, there's a great guy up in Boston, Jeremy Grantham, who ran something called Grantham and Auto, which was one of the best value investment shops in the country for many, many years.

552
00:43:37,837 --> 00:43:43,257
And as he always said, you know, there's more money made and lost in commodities than any other place in the investment world.

553
00:43:43,557 --> 00:43:54,157
And you can literally make fortunes and commodities, but the average person doesn't do it because the cycles are long and it's so hard to hang on at the wrong part of the cycle.

554
00:43:54,157 --> 00:43:57,437
In fact, it's a career killer, you know, because.

555
00:44:00,937 --> 00:44:04,997
So, Bob, you mentioned earlier on, you know, that Bitcoin is a commodity.

556
00:44:04,997 --> 00:44:09,437
And I think that's an important thing for people to understand, because investing in commodities is very, very hard.

557
00:44:10,517 --> 00:44:12,737
And there have been great fortunes made in commodities.

558
00:44:12,917 --> 00:44:14,697
You guys like Robert Friedland, you get in copper.

559
00:44:15,157 --> 00:44:20,277
And there have been great fortunes lost in commodities, the Hunt Brothers and others, because they're very volatile.

560
00:44:20,277 --> 00:44:27,737
And, you know, Jeremy Grantham ran Grantham Mayer von Otto, one of the best value investment shops in the world.

561
00:44:27,857 --> 00:44:32,937
He said there's been, you know, the commodity is an area, commodity investing is an area where you can get incredibly rich.

562
00:44:33,217 --> 00:44:40,977
But it's very, almost nobody can do it because you have to be willing to play five and 10 year cycles and be willing to hold through the cycle.

563
00:44:41,357 --> 00:44:47,057
And there's enormous career risk for a professional money manager in doing that because you're evaluated on your annual performance.

564
00:44:47,057 --> 00:44:52,857
and uh and that's why you know i've been managing gold stock funds since 08 and you know it's really

565
00:44:52,857 --> 00:44:57,777
brutally hard i mean and when you're right you just look incredibly right i mean my fund was up

566
00:44:57,777 --> 00:45:03,377
175 last year but you know full disclosure there were other years almost down 30 or 40 percent so

567
00:45:03,377 --> 00:45:08,197
it's it's a very it's a very rough ride and that's that's the case with bitcoin too because it's

568
00:45:08,197 --> 00:45:14,697
commodity it follows a commodity-like cycle and you know we all know i mean to me to me probably

569
00:45:14,697 --> 00:45:21,637
the biggest thing that prevents Bitcoin from just becoming global money tomorrow is this volatility,

570
00:45:21,977 --> 00:45:28,197
this early stage adoption volatility. And I know really smart monetary people who are like,

571
00:45:28,757 --> 00:45:31,837
yeah, I get why it's better money than everything else. But until the volatility

572
00:45:31,837 --> 00:45:37,977
dissipates, it's not going to be money. And there's some point of a point to that,

573
00:45:38,337 --> 00:45:44,397
but it's emerging as money and the volatility, as you pointed out earlier, Bob, is going down.

574
00:45:44,397 --> 00:45:50,537
And so, you know, it's both the cost and the opportunity of being where we are right now.

575
00:45:50,637 --> 00:45:57,977
I mean, you know, literally, this is a once in a lifetime, once in a generation opportunity to build enormous wealth.

576
00:45:57,977 --> 00:46:05,677
And those of us who deeply understand it, you know, feel that and are convicted about that in our bones, that we're going to end up with all the marbles and be incredibly rich.

577
00:46:05,697 --> 00:46:06,597
It's going to be gross.

578
00:46:07,717 --> 00:46:12,037
But, you know, in turn, you know, there's no free lunch in the world.

579
00:46:12,037 --> 00:46:38,597
And so, you know, you want that reward, you know, you got to handle 50 to 70% drawdowns, right? And that's, you know, so it's just, it's a mindset you got to get your head around and the average TradFi investor just can't do that. They get a 50 to 70% drawdown and they're like, screw it, I'm out of here. You know, I'm not, I'm just not riding this wave, you know, and so that's, that's why it's such a tough thing for people to get their heads around.

580
00:46:38,597 --> 00:46:42,457
And that's why, you know, there will be very few who will be able to hobble through it all.

581
00:46:42,557 --> 00:46:47,197
But those of us who do, you know, we've been rewarded thus far and I think we'll continue to be rewarded.

582
00:46:47,757 --> 00:46:49,537
And it's also why you're not too late.

583
00:46:49,637 --> 00:46:52,397
I mean, I, you know, people say, well, you know, it's a hundred thousand.

584
00:46:53,757 --> 00:46:54,717
You know, I was too late.

585
00:46:54,737 --> 00:46:55,777
I was getting this six months ago.

586
00:46:55,797 --> 00:46:56,437
Oh, it's a hundred thousand.

587
00:46:56,497 --> 00:46:57,077
You bought it cheaper.

588
00:46:57,137 --> 00:46:57,837
I can't buy it.

589
00:46:58,217 --> 00:46:59,857
Well, I finally convinced them to buy it.

590
00:47:00,217 --> 00:47:01,377
And now it's at 60.

591
00:47:01,417 --> 00:47:05,197
And instead of looking at it and saying, hey, it's a 40% off sale, they're like, oh, shit, it's broken.

592
00:47:05,277 --> 00:47:06,157
I can't buy it now.

593
00:47:06,157 --> 00:47:10,477
like well which you know do you want you can't have it both ways right i mean

594
00:47:10,477 --> 00:47:16,217
you know okay um you want it to feel great you know 100 120 you can buy it and buy it high and

595
00:47:16,217 --> 00:47:21,997
you know but but uh it's you know eventually eventually enough people are going to come to

596
00:47:21,997 --> 00:47:27,817
realize that this is really a case of you buy the dip on this asset and you know and it gives you

597
00:47:27,817 --> 00:47:31,577
you know if you're wrong about it at any given point in time it gives you an opportunity to

598
00:47:31,577 --> 00:47:33,617
quote unquote, get right about it on the next dip.

599
00:47:34,497 --> 00:47:38,537
But Larry, on that same note, those same, not those same people,

600
00:47:38,657 --> 00:47:41,977
but a lot of people will tell you that it's too high

601
00:47:41,977 --> 00:47:45,157
and they'll say things like it's 69 or whatever.

602
00:47:45,337 --> 00:47:48,757
I had several friends saying, oh, I think it's going to get down under 20

603
00:47:48,757 --> 00:47:49,717
and I'm going to buy then.

604
00:47:50,077 --> 00:47:50,697
Well, that's right.

605
00:47:50,717 --> 00:47:51,837
And it gets down to 17.

606
00:47:52,357 --> 00:47:54,937
And then I see them months later when it's gone back up and say,

607
00:47:54,977 --> 00:47:55,737
well, did you get in it?

608
00:47:56,297 --> 00:47:57,357
You know, because it got down to 17.

609
00:47:57,457 --> 00:47:58,797
They go, no, I didn't do it.

610
00:47:59,097 --> 00:48:00,297
No, nobody ever does it.

611
00:48:00,357 --> 00:48:00,777
That's right.

612
00:48:00,777 --> 00:48:13,957
And that's why, but unfortunately with 17 years of data now and a couple of really good models emerging, like this power law model with a, you know, 96% R squared, you know, you can actually kind of come to understand how the assets going to behave.

613
00:48:14,077 --> 00:48:18,837
And, you know, as a financial investor, what I've always looked at is you want pattern recognition.

614
00:48:18,837 --> 00:48:27,577
And in my book, I laid it out, you know, you can see these drawdowns, you know what they are, you know how large they're going to be, you know that they're coming, you know, and then you can look at the power law.

615
00:48:27,577 --> 00:48:31,657
I mean, I highly recommend people buy Fred Kruger's book, you know, Bitcoin one million.

616
00:48:31,797 --> 00:48:35,777
It lays it out clear as day, you know, and all the supporting arguments are brilliant.

617
00:48:36,137 --> 00:48:39,717
And, you know, what you can see, I mean, what I'm what I'm kind of modeled towards is in

618
00:48:39,717 --> 00:48:42,037
2032, which is admittedly six years away.

619
00:48:42,477 --> 00:48:45,097
You know, the mean on this thing is about a million bucks a coin.

620
00:48:45,637 --> 00:48:50,477
So, you know, if I get if I buy a coin for 100 grand, it's going to be 10 a 10 bagger

621
00:48:50,477 --> 00:48:51,037
in six years.

622
00:48:51,037 --> 00:48:51,857
That works for me.

623
00:48:52,277 --> 00:48:55,117
And hey, it's even better if I buy it for 67 grand.

624
00:48:55,117 --> 00:48:58,877
and it's going to be a million in 10 years, you know, six years, that works for me too.

625
00:48:59,097 --> 00:49:02,917
So, you know, I think, and this is the argument for dollar-crossed averaging

626
00:49:02,917 --> 00:49:04,537
because we just never know where it's going.

627
00:49:04,677 --> 00:49:07,017
And I've also always been a proponent of that.

628
00:49:07,477 --> 00:49:10,897
So, look, it's a tough asset for people to get their heads around.

629
00:49:10,897 --> 00:49:16,837
But once you get your head around it, you know, you'll develop the conviction that I have

630
00:49:16,837 --> 00:49:19,477
and that you guys have and that Saylor has and that others have.

631
00:49:19,637 --> 00:49:22,977
And I think, you know, it's, what is it that people say?

632
00:49:22,977 --> 00:49:25,997
It's time in the asset, not timing the purchase of the asset.

633
00:49:26,957 --> 00:49:29,777
You know, I mean, this thing's going to be worth a million in six or seven years.

634
00:49:29,837 --> 00:49:31,517
It's going to be worth 10 million in 20 years.

635
00:49:32,097 --> 00:49:36,597
And so, you know, if you buy a coin today, you're going to be really glad you did that, in my opinion.

636
00:49:37,217 --> 00:49:39,857
You know, but you've got to wait in 20 years is a long time.

637
00:49:40,457 --> 00:49:45,077
Gary, you were at a meetup yesterday, I think you said, right?

638
00:49:45,197 --> 00:49:45,877
Yeah, last night.

639
00:49:46,237 --> 00:49:47,557
So I was buying that book.

640
00:49:47,637 --> 00:49:47,957
I'm sorry.

641
00:49:48,057 --> 00:49:49,477
I was buying that Bitcoin 1 million.

642
00:49:49,657 --> 00:49:49,937
Okay.

643
00:49:50,217 --> 00:49:50,817
That's okay.

644
00:49:51,357 --> 00:49:52,957
What was the sentiment there?

645
00:49:52,977 --> 00:49:59,197
it was a smaller crowd than normal um i can tell you that because usually i go there and there's like

646
00:49:59,197 --> 00:50:06,597
60 70 people there and there were maybe 35 um so the crowd was down and they were surprised

647
00:50:06,597 --> 00:50:12,897
at the crowd being down but everybody there except for one or two new people i met who just

648
00:50:12,897 --> 00:50:19,017
got in at the high no one was worried you know they were going oh we've seen this several times

649
00:50:19,017 --> 00:50:24,917
you know so it's talking like us they're a seasoned group so yeah which could be indicative

650
00:50:24,917 --> 00:50:33,317
of a 35 right yeah half of the normal audience the other 30 were back at home crying that's what

651
00:50:33,317 --> 00:50:37,197
i said i said i said their wives wouldn't let them come yeah their wives wouldn't let them come get

652
00:50:37,197 --> 00:50:44,917
out of that shit and they're embarrassed to come say i'm out of it now you know but actually most

653
00:50:44,917 --> 00:50:49,317
of the people there and now that i'm now that i'm thinking about from that aspect that i knew almost

654
00:50:49,317 --> 00:50:55,257
everybody there you know so it was definitely seasoned people i think there were like four new

655
00:50:55,257 --> 00:51:00,377
people five new people that i met you know that i didn't know already so i don't know if that's a

656
00:51:00,377 --> 00:51:08,037
good indicator you know of anything on that group there well i i just actually i have it's one of

657
00:51:08,037 --> 00:51:14,277
three data points that i wanted to kind of gather and and and i think that's an interesting one

658
00:51:14,277 --> 00:51:20,057
Another one, Larry and I are part of a group here in Naples, Florida, which I don't know.

659
00:51:20,137 --> 00:51:29,097
It's a bunch of older, primarily business executive leaders from the past.

660
00:51:30,277 --> 00:51:37,457
People like one of the guys, the ex-CEO of Union Pacific and guys from J.I.

661
00:51:37,457 --> 00:51:43,777
Case and former guy from the CIA, NSA, like that sort of group.

662
00:51:44,277 --> 00:51:50,337
And Larry and I got several questions yesterday from the group.

663
00:51:50,337 --> 00:51:56,797
I don't think anybody was like super negative, but they were kind of questioning, right?

664
00:51:56,857 --> 00:51:59,877
I'm not sure how you would categorize that sentiment, Larry.

665
00:52:00,297 --> 00:52:01,177
Yeah, I think that's right.

666
00:52:01,257 --> 00:52:02,837
I mean, it's very easy.

667
00:52:02,897 --> 00:52:06,057
I mean, they're doing what most people doing is, you know, oh, gosh, it's not working.

668
00:52:06,137 --> 00:52:08,677
You said it was going to keep going higher and it's not going higher.

669
00:52:09,277 --> 00:52:10,377
And I said, yes, it will.

670
00:52:10,457 --> 00:52:13,017
But with volatility, you know, as a part of that journey.

671
00:52:13,017 --> 00:52:18,297
and so there's nothing fundamental about the thesis that's changed they're still debasing

672
00:52:18,297 --> 00:52:22,737
the currency this is still digital gold it's better than gold in a million ways you can move

673
00:52:22,737 --> 00:52:30,277
it faster store it cheap verify it more completely but you know it's it's going to take time and i

674
00:52:30,277 --> 00:52:32,937
think that's one of the hard things bitcoiners have had a hard time dealing with it's just how

675
00:52:32,937 --> 00:52:37,957
well gold is done my view is that you know that's that's just a function of the fact that gold's

676
00:52:37,957 --> 00:52:43,737
been around longer and when people you know come to the debasement trade conclusion which i think

677
00:52:43,737 --> 00:52:48,957
more and more of the world is coming to they go to the the old tried and true and central banks buy

678
00:52:48,957 --> 00:52:53,697
gold and they're not buying bitcoin yet but again you know you can look at that as a negative and be

679
00:52:53,697 --> 00:52:57,477
bothered by that or you can look at it as a positive hey gold is signaling that our stuff's

680
00:52:57,477 --> 00:53:03,057
about to work and furthermore because isn't this amazing the market's giving us an opportunity if

681
00:53:03,057 --> 00:53:07,597
We don't have enough to buy some more at 40% off or 50% off actually from the

682
00:53:07,597 --> 00:53:07,977
highs.

683
00:53:08,457 --> 00:53:08,897
Yeah.

684
00:53:08,897 --> 00:53:11,597
People don't really don't get that at all.

685
00:53:11,657 --> 00:53:11,937
No,

686
00:53:12,057 --> 00:53:12,477
they just don't.

687
00:53:12,897 --> 00:53:13,537
If they're new.

688
00:53:13,737 --> 00:53:13,977
I mean,

689
00:53:14,077 --> 00:53:14,557
you don't get that.

690
00:53:14,557 --> 00:53:18,497
All you know is you paid 134 and you're down half,

691
00:53:18,877 --> 00:53:19,177
you know,

692
00:53:19,197 --> 00:53:20,017
and that's a lot,

693
00:53:20,097 --> 00:53:20,697
as you said,

694
00:53:20,937 --> 00:53:24,277
maybe because it's a commodity instead of a stock.

695
00:53:24,277 --> 00:53:24,857
But it is.

696
00:53:25,057 --> 00:53:26,137
It's a volatile asset.

697
00:53:26,257 --> 00:53:28,297
And that's why it goes up a lot because it's a volatile asset.

698
00:53:28,637 --> 00:53:28,897
Yeah,

699
00:53:28,997 --> 00:53:29,377
exactly.

700
00:53:29,557 --> 00:53:29,637
I mean,

701
00:53:29,717 --> 00:53:30,077
yeah.

702
00:53:30,297 --> 00:53:32,557
So it is what it is.

703
00:53:32,557 --> 00:53:37,737
And, um, I, you know, I think the only way you can get to where we are is by time in

704
00:53:37,737 --> 00:53:39,997
it and understanding of what it is.

705
00:53:40,617 --> 00:53:42,677
And, you know, there are a lot of good books on it.

706
00:53:42,737 --> 00:53:46,717
You know, I've got one, Safe's got one, Lynn's got one, Kruger's got one.

707
00:53:46,757 --> 00:53:50,917
I mean, there are ways you can educate yourself about it and you'll come to the conclusion

708
00:53:50,917 --> 00:53:55,557
I think we've come to, which is, you know, this is as good a place or probably the best

709
00:53:55,557 --> 00:54:01,877
place to store long-term wealth, um, in a monetary and base monetary debasement environment.

710
00:54:02,557 --> 00:54:03,177
Yeah, what are you going to do?

711
00:54:03,197 --> 00:54:05,297
Keep it, put it in fiat and take it out.

712
00:54:05,457 --> 00:54:05,717
Yeah, right?

713
00:54:05,897 --> 00:54:06,737
I mean, yeah, that's the other thing.

714
00:54:06,817 --> 00:54:07,317
You're going to sell it.

715
00:54:07,317 --> 00:54:07,917
Where are you going to go?

716
00:54:08,337 --> 00:54:08,617
You know?

717
00:54:09,277 --> 00:54:10,097
Where are you going to go?

718
00:54:10,797 --> 00:54:16,717
Well, you know what I, one of the reasons I brought up this group that Larry and I went to yesterday was,

719
00:54:16,717 --> 00:54:20,477
I think you had to leave a little earlier than I did, Larry.

720
00:54:20,897 --> 00:54:21,157
Yeah.

721
00:54:22,317 --> 00:54:28,437
Is at the end, I hung around probably till like two, Larry, just by the way.

722
00:54:28,917 --> 00:54:30,197
And there were three or four guys.

723
00:54:30,197 --> 00:54:36,417
so there are three people coming out of that meeting these are these are very high net worth

724
00:54:36,417 --> 00:54:41,837
people let's just say general right very high net worth people i'm quite convinced that today

725
00:54:41,837 --> 00:54:48,577
three of those people are buying their first bitcoin interesting and uh now i think two of

726
00:54:48,577 --> 00:54:53,697
them are buying an etf and one of the guys probably going to coinbase so you know those those out there

727
00:54:53,697 --> 00:54:59,717
who are a bitcoin maxi's and purist don't get upset but these are these are new people entering

728
00:54:59,717 --> 00:55:01,777
the ecosystem with deep pockets.

729
00:55:02,397 --> 00:55:03,677
And, you know, they're probably going to,

730
00:55:03,677 --> 00:55:06,037
they're probably going to enter with,

731
00:55:06,737 --> 00:55:09,637
you know, maybe a couple hundred thousand dollar

732
00:55:09,637 --> 00:55:13,197
kind of investment would be my guess.

733
00:55:13,377 --> 00:55:14,577
Like that would be how they would,

734
00:55:14,657 --> 00:55:15,477
they would enter.

735
00:55:16,137 --> 00:55:19,117
But the thing about these folks,

736
00:55:19,177 --> 00:55:20,997
and remember these are very successful folks

737
00:55:20,997 --> 00:55:23,037
and they're older, they've seen the cycles.

738
00:55:23,757 --> 00:55:25,457
They view this downturn

739
00:55:25,457 --> 00:55:29,317
just like we were kind of talking about.

740
00:55:29,317 --> 00:55:34,937
like hey this this maybe is the time this is my chance because i've been in this group for like

741
00:55:34,937 --> 00:55:38,117
six years and been telling them to buy and they never bought they never bought they never about

742
00:55:38,117 --> 00:55:46,417
like oh now i got a 50 drawdown maybe now is the time so i i found actually the new member that i

743
00:55:46,417 --> 00:55:52,357
bought uh brought to the meeting bob um will mention his name he actually said to me he said

744
00:55:52,357 --> 00:55:57,237
you know i'm gonna buy some and he's read my book he knows that he believes in all that kind of

745
00:55:57,237 --> 00:56:03,677
stuff. He was one of the, you know, God, 100, 125, God, you got it cheaper. I'm not going to chase it.

746
00:56:04,077 --> 00:56:07,577
And, you know, we were riding in the car on the way home and he kind of said, you know,

747
00:56:08,097 --> 00:56:11,417
gosh, if I want to get some of this, now is probably the time to do it, right?

748
00:56:11,917 --> 00:56:15,617
You know, it's 50% off the all-time high. And I said, yeah, I think it's going,

749
00:56:16,297 --> 00:56:21,257
you know, the long-term thesis hasn't changed. You know, because of all this FUD, it's down 50%.

750
00:56:21,257 --> 00:56:25,317
And it's like you say, I mean, he's got a huge net worth and he's not going to spend

751
00:56:25,317 --> 00:56:27,037
a ton of money on it,

752
00:56:27,537 --> 00:56:28,837
but he's going to buy, you know,

753
00:56:28,897 --> 00:56:30,577
buy probably a hundred grand or, you know,

754
00:56:30,597 --> 00:56:32,917
buy something on it and get started.

755
00:56:32,917 --> 00:56:34,977
And then, you know, then he'll start watching it.

756
00:56:35,017 --> 00:56:36,077
And he'll, you know, I mean, it's like,

757
00:56:36,577 --> 00:56:37,957
and another Bitcoiner is born.

758
00:56:38,977 --> 00:56:39,337
Yes.

759
00:56:39,577 --> 00:56:40,857
You mentioned, Bob,

760
00:56:40,997 --> 00:56:43,657
one of them was going to buy Bitcoin at Coinbase

761
00:56:43,657 --> 00:56:45,557
and the other two were probably going to do ETFs.

762
00:56:45,657 --> 00:56:47,997
And my question to you that brought up is,

763
00:56:48,317 --> 00:56:51,277
do you think part of our drop this time

764
00:56:51,277 --> 00:56:54,177
has been due to people buying ETFs

765
00:56:54,177 --> 00:56:58,117
and they feel like they're buying stocks and they don't even know what they have.

766
00:56:58,177 --> 00:56:59,497
They have no idea what they have.

767
00:56:59,557 --> 00:57:02,497
They just know they own the ETF and they see the price dropping

768
00:57:02,497 --> 00:57:04,257
and they just sell so easy online.

769
00:57:04,417 --> 00:57:06,677
You know, just so I'm getting out of that stock.

770
00:57:06,977 --> 00:57:08,037
You know, just like they would a stock.

771
00:57:08,177 --> 00:57:12,397
I can only, yeah, I mean, I'd just be speculating, but probably.

772
00:57:12,397 --> 00:57:16,877
I think people viewing it as a stock, yes, I think that that's true.

773
00:57:17,257 --> 00:57:21,917
And I think we saw maybe the start of the fall down,

774
00:57:21,917 --> 00:57:27,857
uh not the latest drop but the the drop from the high in october some profit taking

775
00:57:27,857 --> 00:57:33,737
mentality that kind of started that when we were in the 120s some people that had had done really

776
00:57:33,737 --> 00:57:39,997
well and are used to saying oh well i i just made 40 in the year so i'm gonna take some i'm happy

777
00:57:39,997 --> 00:57:46,177
with 10 10 would be fantastic and i just made 40 yeah yeah there's no doubt that there will be

778
00:57:46,177 --> 00:57:52,017
those who chase it and then sell it and trade it. The thing that's tricky, and there's a very high

779
00:57:52,017 --> 00:57:56,137
profile analyst who, you know, looked at the technicals and suggested this call, and he made

780
00:57:56,137 --> 00:58:00,057
a good call. It was going to go down. You know, the thing that's tricky with all that is it's a

781
00:58:00,057 --> 00:58:05,117
short-term gain. You've got to pay tax on it. And when are you going to get back in? You know, I mean,

782
00:58:05,357 --> 00:58:11,477
it's okay. So you sold great. You're a genius. You sold it for 95 or 100, or maybe you sold for 120.

783
00:58:11,477 --> 00:58:16,517
you know are you going to have the guts to get back in at 67 or are you going to hold out for 40

784
00:58:16,517 --> 00:58:21,297
and never get it get any more of it you know what i mean yeah because it's it's it's like it's you

785
00:58:21,297 --> 00:58:26,697
know you the the part about selling it when that when it runs is you got to think to yourself okay

786
00:58:26,697 --> 00:58:30,637
fine what what am i going to use when am i going to buy it back how cheap does that have to get to

787
00:58:30,637 --> 00:58:35,297
buy it back and will i buy it back or will i be left behind i mean i i had an investor in my fund

788
00:58:35,297 --> 00:58:39,317
who sold it at 90-something,

789
00:58:39,677 --> 00:58:41,217
and then it went to 125,

790
00:58:41,617 --> 00:58:42,817
and he was experiencing regret.

791
00:58:42,917 --> 00:58:44,397
Now, he didn't go and buy it at 125,

792
00:58:45,277 --> 00:58:47,777
and I'm trying to get him to now buy it at 67,

793
00:58:48,077 --> 00:58:49,177
and I'm not sure if he will or not.

794
00:58:49,217 --> 00:58:50,557
I'd probably wait until it starts to turn,

795
00:58:50,657 --> 00:58:54,797
but it's also a levered asset with really rapid flows,

796
00:58:54,797 --> 00:58:56,317
and one of the things you'll learn

797
00:58:56,317 --> 00:58:58,637
if you read that Bitcoin One Million book, Gary,

798
00:58:59,537 --> 00:59:04,537
is that from 2018 to 2024,

799
00:59:05,297 --> 00:59:07,677
It went up like 6x, okay, something like that.

800
00:59:07,817 --> 00:59:12,437
These are round numbers from memory, so I'm perfectly right, but the idea is right.

801
00:59:13,197 --> 00:59:18,517
And if you miss like the best 20 days of that period, you're flat.

802
00:59:19,257 --> 00:59:23,017
So, you know, this is the God candle phenomena, right?

803
00:59:23,017 --> 00:59:28,977
I mean, it's a very volatile asset, and when it really runs, it runs hard.

804
00:59:29,897 --> 00:59:31,877
And so think about that.

805
00:59:31,877 --> 00:59:37,857
I mean, in a six-year period where it multiplied in value by 6X, if you missed the top days, you didn't get it.

806
00:59:38,497 --> 00:59:42,397
And so for that reason, you know, that's why I just don't trade it.

807
00:59:42,497 --> 00:59:45,257
I don't think you're smart enough to know what it's going to do next.

808
00:59:45,557 --> 00:59:49,817
And if you're not there when it goes on a tear, you know, you missed it.

809
00:59:49,817 --> 00:59:53,937
And so it's hard to buy when it gets up again and you missed it.

810
00:59:54,137 --> 00:59:55,417
Well, that's exactly right.

811
00:59:55,637 --> 00:59:56,637
That's exactly right.

812
00:59:56,717 --> 00:59:57,857
You know, you sell it at a hundred.

813
00:59:58,077 --> 01:00:00,337
You're hoping it goes to 60.

814
01:00:00,337 --> 01:00:08,697
Well, what happens if it's suddenly, you know, worse comes in and they do a big QE program and the next thing you know, it's at 140, you know, and now you sold it 100.

815
01:00:08,797 --> 01:00:12,337
You felt like a genius because it went to 70, but are you going to chase it at 140?

816
01:00:12,597 --> 01:00:13,597
I mean, it's.

817
01:00:13,757 --> 01:00:17,377
And I know a lot of people who've done that in the past lower dollar amounts, of course.

818
01:00:17,597 --> 01:00:17,877
Yeah.

819
01:00:17,937 --> 01:00:19,357
But they said, oh, I'm getting out of this.

820
01:00:19,397 --> 01:00:19,957
I'm genius.

821
01:00:20,157 --> 01:00:25,357
And then all of a sudden it goes up to 135 and I sold five of them at 10.

822
01:00:25,677 --> 01:00:25,997
Yeah.

823
01:00:26,077 --> 01:00:28,677
It's so volatile and it trades like a wild animal.

824
01:00:28,677 --> 01:00:37,577
My view is just, you know that it's going up and to the right over four to, you know, as Salish says, if your time frame is four to 10 years, it's going up and to the right.

825
01:00:37,877 --> 01:00:41,297
So just buy it and sit on it, you know, just hodl it.

826
01:00:41,497 --> 01:00:44,877
I mean, it's not, you know, that's, it's not that hard to do.

827
01:00:44,937 --> 01:00:49,217
I mean, it is hard if you're, you know, if you're a trader to sit there and watch it go up and down.

828
01:00:49,237 --> 01:00:52,897
But if you're not, I mean, I just, I don't want, you know, I don't care what it does any given day.

829
01:00:53,537 --> 01:00:53,937
Yeah.

830
01:00:53,937 --> 01:01:04,197
Yeah. Well, yeah, there's a anybody that's bought and held for four years hasn't lost money. That's that's still a true statement as of today.

831
01:01:04,677 --> 01:01:06,737
I think that'll continue to be a true statement.

832
01:01:06,797 --> 01:01:15,637
Yeah. And I think that by the way, that doesn't mean there's a there's this whole thing about four year cycles. I think the four year cycle is dead. Actually, I don't think it ever existed, to my opinion.

833
01:01:15,957 --> 01:01:18,877
Well, I'm not so sure, Bob. I used to say I thought it was dead.

834
01:01:18,877 --> 01:01:20,017
Looks like on paper it's there.

835
01:01:20,017 --> 01:01:25,417
yeah i i used to think it was dead but now i know i'm not so sure because you know kind of

836
01:01:25,417 --> 01:01:30,577
look at the top last you know 125 whatever i mean look there's a there are cycles and to me they're

837
01:01:30,577 --> 01:01:34,957
actually more just stand and they're not really they don't have to do with the having anymore

838
01:01:34,957 --> 01:01:40,197
because the reward is not what's driving the demand the reward is trivial compared to the

839
01:01:40,197 --> 01:01:45,157
demand from etfs and everything else that's not the issue but i i think like any financial asset

840
01:01:45,157 --> 01:01:50,117
that there will be cycles where just standard fear and greed, you know,

841
01:01:50,177 --> 01:01:53,757
people will chase it and buy it and lever up and get way too far out over their

842
01:01:53,757 --> 01:01:57,437
skis. It'll get way ahead of the model price. And guess what? You know,

843
01:01:57,497 --> 01:02:00,537
some people will sell and it'll get cleaned out and it'll get way below the

844
01:02:00,537 --> 01:02:03,437
model price. And that's where we are right now. And that,

845
01:02:03,437 --> 01:02:10,197
I can buy, I can buy that there's a cycle, I guess a cycle based on that.

846
01:02:10,537 --> 01:02:14,997
Yes. To the point that you, I mean, you said it like,

847
01:02:14,997 --> 01:02:17,117
It has nothing to do with the halving.

848
01:02:17,497 --> 01:02:17,757
Right.

849
01:02:17,877 --> 01:02:35,335
And I think that the fervor that has come around the last couple halvings it kind of fun I guess in a way But it not so fun if you a miner when the next halving comes up that like six months leading into the halving it going to start going up

850
01:02:35,335 --> 01:02:39,155
because everybody well it's going to be cut in half it's going to we're going to have this giant

851
01:02:39,155 --> 01:02:43,855
thing people are going to start buying it forcing the price up well here's the only thing i can say

852
01:02:43,855 --> 01:02:51,355
the cost of production doubles overnight so so if you look at it if you look at it from what does it

853
01:02:51,355 --> 01:02:53,935
due to the supply, it's meaningless.

854
01:02:54,335 --> 01:02:57,655
And it has been meaningless for several halvings, right?

855
01:02:57,695 --> 01:03:01,255
It really doesn't affect the amount of Bitcoin

856
01:03:01,255 --> 01:03:02,095
getting in the market.

857
01:03:02,575 --> 01:03:05,115
What it does do is it doubles the cost

858
01:03:05,115 --> 01:03:06,155
of production overnight.

859
01:03:08,055 --> 01:03:09,835
So that is a true statement.

860
01:03:09,835 --> 01:03:11,615
And it can hit the miners in a big way, obviously, right?

861
01:03:12,155 --> 01:03:12,895
Yeah, yeah.

862
01:03:13,055 --> 01:03:15,635
So, you know, we care a lot about it.

863
01:03:15,635 --> 01:03:24,275
Um, we, I should point out, it only doubles the cost of production in a world where the

864
01:03:24,275 --> 01:03:29,835
fees are really low and which is they are abysmally low right now.

865
01:03:29,935 --> 01:03:37,995
Um, and this is like, we were talking about FUD before and, um, I, I spend a lot of time

866
01:03:37,995 --> 01:03:40,875
and effort over the last few years talking about block space scarcity.

867
01:03:40,875 --> 01:03:54,335
And I still hold everything I've said about that to be true, that I think ultimately we will find that block space itself is phenomenally scarce and there will be fierce competition just for access to the base layer.

868
01:03:54,695 --> 01:03:57,855
That said, people aren't using the network right now.

869
01:03:58,515 --> 01:04:00,615
And that's not good for Bitcoin.

870
01:04:00,615 --> 01:04:09,735
you know it needs metcalf's law is you know the the value of a network is equal to the square of

871
01:04:09,735 --> 01:04:14,295
the number of users of the network but people aren't using the network and we talked about the

872
01:04:14,295 --> 01:04:19,315
ets well that kind of takes people off of the network right you know the the new people coming

873
01:04:19,315 --> 01:04:24,615
in aren't running nodes they're not running base layer transactions themselves like these sort of

874
01:04:24,615 --> 01:04:32,675
things. And that is concerning. That does hurt. Probably don't want to go too deep into it,

875
01:04:32,675 --> 01:04:37,835
but maybe we can do it in a different episode about governance and things like that. But

876
01:04:37,835 --> 01:04:45,855
while Bitcoin adoption has gone way up over the last several years, and we have a couple hundred

877
01:04:45,855 --> 01:04:53,755
million people with wallets and all that sort of stuff, there's like 25,000 listening nodes,

878
01:04:53,755 --> 01:04:57,095
like what I would call active nodes on the network.

879
01:04:57,215 --> 01:04:57,675
That's it.

880
01:04:58,275 --> 01:04:59,795
And that's not good.

881
01:05:00,275 --> 01:05:03,555
And when we are faced, by the way,

882
01:05:03,995 --> 01:05:11,315
with junctures in the protocol and the governance,

883
01:05:11,515 --> 01:05:13,115
which you were talking about, Larry,

884
01:05:13,355 --> 01:05:15,935
the nodes play an important part in that.

885
01:05:16,135 --> 01:05:19,195
And the only people that essentially get a vote,

886
01:05:19,275 --> 01:05:19,915
I'll put it that way,

887
01:05:19,995 --> 01:05:21,855
the only people that get a vote in those sort of things

888
01:05:21,855 --> 01:05:22,935
are those with nodes.

889
01:05:22,935 --> 01:05:36,635
You know, they can signal for protocol changes. And if there happens to be what's called a competing chain, they get to pick which of the chains they're going to follow. Those are important.

890
01:05:36,635 --> 01:05:43,935
Now, maybe a good time to just real quickly hit a couple of the things from earlier before, like quantum.

891
01:05:44,875 --> 01:05:52,655
I think the two things that are kind of prevalent in the industry right now are quantum FUD and kind of governance.

892
01:05:52,975 --> 01:06:00,475
And I would say, you know, one has legs and one has a reason for concern and one has no reason for concern.

893
01:06:00,475 --> 01:06:02,395
The one that has no reason for concern is quantum.

894
01:06:02,395 --> 01:06:09,815
contrary to I think what a lot of people especially outside experts outside of Bitcoin

895
01:06:09,815 --> 01:06:15,115
Bitcoin doesn't even use really encryption that's not the way that it works first of all

896
01:06:15,115 --> 01:06:20,295
quantum theoretically could have an impact on certain

897
01:06:20,295 --> 01:06:30,895
certain Bitcoin addresses but we already even in today's world of today's implementation of Bitcoin

898
01:06:30,895 --> 01:06:38,475
we can, that Bitcoin can be made safe right now. Like you, you, you, you just move it to a new

899
01:06:38,475 --> 01:06:45,735
address that's never had its public address exposed and you're safe. Okay. So now, and,

900
01:06:45,835 --> 01:06:52,355
and there are very active groups. There's several of them working on protocol upstate grades to

901
01:06:52,355 --> 01:06:59,035
create even better quantum resistant addresses. Nothing to worry about. That doesn't mean work

902
01:06:59,035 --> 01:07:06,315
isn't required, but the work is happening and we're fine. Probably the thing that's

903
01:07:06,995 --> 01:07:14,075
probably more concerning is, you know, governance. And this is what Saylor, like you said, Larry,

904
01:07:14,255 --> 01:07:20,175
you know, Saylor has basically said, hey, I'm going to get involved and he should.

905
01:07:20,175 --> 01:07:27,775
how the protocol evolves, who has a say in it,

906
01:07:28,215 --> 01:07:31,235
the pace of the change, what are the priorities of the changes.

907
01:07:31,775 --> 01:07:33,615
These are big, big deals.

908
01:07:33,615 --> 01:07:37,555
And there's something called BIP-110 right now,

909
01:07:37,915 --> 01:07:41,695
which is probably not worthy of a deep dive here,

910
01:07:41,915 --> 01:07:44,195
but it's caused a controversy.

911
01:07:44,195 --> 01:07:51,995
there's somewhere around seven eight percent of the nodes are now signaling that they want this

912
01:07:51,995 --> 01:07:59,235
change the potential change would come in late september if it were to come it's created within

913
01:07:59,235 --> 01:08:08,195
the technical community a lot of um butting heads um and some of it gets kind of i would say vocally

914
01:08:08,195 --> 01:08:19,095
violent at this point or, you know, very contentious. It's my opinion that we have to evolve

915
01:08:19,095 --> 01:08:26,775
the way that we make changes. And I think Sailor is kind of saying the same thing, like, hey,

916
01:08:26,775 --> 01:08:35,275
the system that's been used and the group of people that have been driving it will certainly

917
01:08:35,275 --> 01:08:42,795
a lot of technical competency, but they're very insular. They don't communicate well.

918
01:08:43,375 --> 01:08:51,855
They're very closed off to newcomers. And some changes need to be made there because we have a

919
01:08:51,855 --> 01:09:00,615
$2 trillion asset now. People all over the world are using it and counting on it. And the old way

920
01:09:00,615 --> 01:09:06,375
doesn't work. And, you know, I would say, by the way, I went through this in the personal computer

921
01:09:06,375 --> 01:09:15,575
industry, the way in which we developed products and made changes in, let's say, the early to mid

922
01:09:15,575 --> 01:09:22,355
80s is very different than the way we had to do it by the late 90s. And it was very difficult for

923
01:09:22,355 --> 01:09:31,315
the developers to accept that because essentially they drove the bus in the early days and it was a

924
01:09:31,315 --> 01:09:38,495
much wider committee or not committee much wider community that had a say in the later days and

925
01:09:38,495 --> 01:09:43,435
the technical community really pushed back against it so i think we're seeing a lot of that it's kind

926
01:09:43,435 --> 01:09:51,475
of a psychological thing well there you go that's interesting that is interesting look it's um you

927
01:09:51,475 --> 01:09:58,275
know tick tock next block right it's just going to continue marching forward and um yeah you know

928
01:09:58,275 --> 01:10:04,915
i feel sorry for people who aren't in it uh because you know there's no excuse for not being in it now

929
01:10:04,915 --> 01:10:10,455
there's enough information out there there's enough time enough data um you know it's to me

930
01:10:10,455 --> 01:10:15,695
it's just blindingly obvious where it's going what's happening um you know if you don't want

931
01:10:15,695 --> 01:10:20,715
to do the work and take the time to understand it you know i i mean one thing i've been able to do

932
01:10:20,715 --> 01:10:24,955
with a lot of my friends is just to get them and and i'm sure you guys do the same just to get them

933
01:10:24,955 --> 01:10:32,255
to get started you know it's like um you know investing is all about asymmetry and so you know

934
01:10:32,255 --> 01:10:36,675
if you can only lose one x what you put in you can make five to 20x what you put into something

935
01:10:36,675 --> 01:10:40,815
you know well then you should take the and that's you really do believe the odds are favored

936
01:10:40,815 --> 01:10:46,075
that it's going to work and you should take that back you know every time you know even if

937
01:10:46,075 --> 01:10:51,895
occasionally you do lose the one x so um and i i don't think you're gonna lose the one x here but i

938
01:10:51,895 --> 01:10:57,735
you know i do know that the asymmetry is really there so you know i just try and get everybody i

939
01:10:57,735 --> 01:11:02,415
talk to to buy some bitcoin because that's how it starts you know you buy something you watch it then

940
01:11:02,415 --> 01:11:07,155
you learn something about it that starts to work then you buy some more you know pretty soon you

941
01:11:07,155 --> 01:11:14,675
end up doing podcasts for most of your life you know i found personally if you're if you're not

942
01:11:14,675 --> 01:11:16,515
talking about high wealth

943
01:11:16,515 --> 01:11:17,755
individuals necessarily.

944
01:11:18,675 --> 01:11:20,535
But if you're talking to just regular

945
01:11:20,535 --> 01:11:22,115
folks and they're interested in Bitcoin,

946
01:11:23,075 --> 01:11:24,735
it's a lot easier to talk

947
01:11:24,735 --> 01:11:26,555
them in to start dollar-cost averaging

948
01:11:26,555 --> 01:11:27,235
a small amount.

949
01:11:28,175 --> 01:11:30,575
And then, all of a sudden, within

950
01:11:30,575 --> 01:11:32,475
a year, they get it and they go

951
01:11:32,475 --> 01:11:33,295
buy some.

952
01:11:34,255 --> 01:11:34,655
Because

953
01:11:34,655 --> 01:11:38,655
most of those places do a good job of sending out

954
01:11:38,655 --> 01:11:40,795
some information, a newsletter,

955
01:11:41,295 --> 01:11:42,555
blah, blah, blah, and they've got money

956
01:11:42,555 --> 01:11:43,995
in the game, even though it's not a lot.

957
01:11:43,995 --> 01:11:50,335
Once you've got a little bit of skin in the game, it immediately forces you to pay more attention.

958
01:11:50,915 --> 01:11:54,675
And then, of course, you start to learn and you realize what the difficulty adjustment is.

959
01:11:54,815 --> 01:11:58,875
And, you know, and you're and it's just the evidence continues to build and build and build.

960
01:11:58,955 --> 01:12:01,095
And you're like, Jesus, why do I only have so little of this?

961
01:12:01,115 --> 01:12:01,935
I need to own more.

962
01:12:02,495 --> 01:12:08,435
Yeah, I've had so many times a friend or something I've talked into doing a small amount monthly or weekly.

963
01:12:08,435 --> 01:12:10,715
And then within six months, I hear from him.

964
01:12:10,775 --> 01:12:13,495
They're going, oh, I just bought, you know, blah, blah, blah.

965
01:12:13,495 --> 01:12:14,235
amount.

966
01:12:15,295 --> 01:12:17,175
It's an easy sell

967
01:12:17,175 --> 01:12:19,555
compared to, say, if they go on and buy

968
01:12:19,555 --> 01:12:21,635
Bitcoin. Because then you've got to explain

969
01:12:21,635 --> 01:12:23,875
they don't have to buy $135,000 worth

970
01:12:23,875 --> 01:12:25,375
and all this stuff.

971
01:12:26,115 --> 01:12:27,755
Actually, with the guy

972
01:12:27,755 --> 01:12:29,295
I was with yesterday, Bob, he's like, well,

973
01:12:29,815 --> 01:12:31,715
if I'm going to buy this, do I need to buy a whole one?

974
01:12:31,795 --> 01:12:33,275
And I was like, no, of course you don't.

975
01:12:34,475 --> 01:12:35,695
Did he ask you if you had one in your

976
01:12:35,695 --> 01:12:37,555
pocket? I used to get asked that.

977
01:12:37,815 --> 01:12:38,655
Do you have one on you?

978
01:12:38,935 --> 01:12:41,515
I go, wow, I just explained it for 20 minutes

979
01:12:41,515 --> 01:12:43,315
and you asked me if I have one.

980
01:12:43,495 --> 01:12:45,655
I really did a shitty job, didn't I?

981
01:12:46,435 --> 01:12:52,955
Well, you know, it's funny you say that, Gary, about doing a shitty job, because I had a little story I wanted to tell you guys.

982
01:12:53,655 --> 01:13:00,775
And on Tuesday evening, I had been asked to go speak to a group here in Naples.

983
01:13:01,395 --> 01:13:04,815
And it was about 75 people in the room.

984
01:13:07,495 --> 01:13:13,435
I would say 80 percent boomers, by the way, but a few younger people in the room.

985
01:13:13,495 --> 01:13:31,415
And they had asked me to come speak about Bitcoin and money. And so I, I'm not going to give you the whole presentation, but, you know, I started with some basics like, you know, what is money? What's broken in the system? Like these, these types of things before I got to Bitcoin.

986
01:13:31,415 --> 01:13:48,695
And then I thought what I gave was a pretty good, compelling reason why Bitcoin was important and encouraged them, much like you're saying, Gary, to maybe dabble a little bit.

987
01:13:48,995 --> 01:13:50,995
Basically, nobody in the room owned any, right?

988
01:13:50,995 --> 01:13:59,435
super novice group and and told them to buy it with the expectation that they would hold it at

989
01:13:59,435 --> 01:14:04,935
least four years before they evaluate it you know the whole thing and i should point out i went

990
01:14:04,935 --> 01:14:13,995
through what i thought was a decent primer on bitcoin well um we opened it up for q a and one

991
01:14:13,995 --> 01:14:23,475
of the first questions was from an older gentleman. And I would say he was almost angry at me.

992
01:14:24,235 --> 01:14:34,475
And he said, paraphrasing, who's the head of Bitcoin? Who makes the decisions?

993
01:14:35,715 --> 01:14:41,915
Until I know who that person is, I'm not going to trust anything. And how do I know that the

994
01:14:41,915 --> 01:14:43,915
Russians aren't going to just hack this thing.

995
01:14:44,175 --> 01:14:46,175
And obviously he hadn't listened very well,

996
01:14:46,175 --> 01:14:49,835
or I did a very poor job of, you know, communicating.

997
01:14:50,535 --> 01:14:53,975
And I tried, probably both of you guys,

998
01:14:54,075 --> 01:14:57,095
I know you both do a fair amount of public speaking, you know,

999
01:14:57,095 --> 01:14:59,335
so you get these kind of confrontational things

1000
01:14:59,335 --> 01:15:02,995
and trying to stay professional, you know, at the beginning.

1001
01:15:03,995 --> 01:15:06,435
And so I responded with,

1002
01:15:07,235 --> 01:15:09,355
hey, you have to get comfortable with decentralization.

1003
01:15:09,355 --> 01:15:13,475
and, you know, Bitcoin is about not having a trusted third party

1004
01:15:13,475 --> 01:15:15,815
and things I had actually covered, of course, you know,

1005
01:15:15,855 --> 01:15:17,055
earlier in the presentation.

1006
01:15:17,955 --> 01:15:22,255
And he came back, you know, same sort of thing.

1007
01:15:22,635 --> 01:15:29,375
Like, you know, basically, you know, it's a Ponzi scheme.

1008
01:15:29,715 --> 01:15:30,735
It's, you know, blah, blah, blah.

1009
01:15:32,235 --> 01:15:36,795
So what I said was I said, well, you know, sure,

1010
01:15:36,795 --> 01:15:41,295
you're obviously in the back nine of life.

1011
01:15:42,195 --> 01:15:44,375
So you were around in 71

1012
01:15:44,375 --> 01:15:47,835
when Nixon took us off the gold standard.

1013
01:15:48,235 --> 01:15:49,555
How do you feel about the fact

1014
01:15:49,555 --> 01:15:53,855
that your money's been devalued by 95% since 1971?

1015
01:15:54,595 --> 01:15:56,815
Are those the people that you want to trust?

1016
01:15:57,375 --> 01:15:59,475
Is that where you want to place your faith?

1017
01:15:59,475 --> 01:16:00,255
Great question.

1018
01:16:01,035 --> 01:16:01,235
Yeah.

1019
01:16:01,835 --> 01:16:04,235
And boy, he got really red.

1020
01:16:04,655 --> 01:16:06,475
He didn't,

1021
01:16:06,795 --> 01:16:12,095
And not that it was a debate or anything like that, but I find it.

1022
01:16:13,155 --> 01:16:17,175
It's funny because when you go to a show like that, there were 20 other questions.

1023
01:16:17,295 --> 01:16:18,115
They were great questions.

1024
01:16:18,235 --> 01:16:21,835
I'm pretty confident several people walked out of that room and bought Bitcoin.

1025
01:16:22,775 --> 01:16:26,595
But what's funny is it's always the one guy that sticks in your head, right?

1026
01:16:26,595 --> 01:16:33,295
That, you know, you wonder like what's going on in his head.

1027
01:16:33,295 --> 01:16:56,875
And, you know, the takeaway I had from it was that it's indicative of, I think, people in society that really want to be a slave, that they want there to be somebody else that's in charge, right?

1028
01:16:56,875 --> 01:17:01,035
And that's where their comfort comes.

1029
01:17:02,155 --> 01:17:09,555
And, you know, there's always going to be a group of those folks, probably, and just have to accept it.

1030
01:17:09,895 --> 01:17:11,875
I think that was a great question you asked them.

1031
01:17:12,055 --> 01:17:18,535
I mean, I'm going to put that in my back pocket, too, next time I have some kind of situation about trust.

1032
01:17:19,815 --> 01:17:25,855
Yeah, yeah, but the desire to trust people.

1033
01:17:25,855 --> 01:17:29,275
But I think that's where kind of the whole socialist movement comes from.

1034
01:17:29,355 --> 01:17:33,475
Like there's that the whole group of people, they want to trust the central planner.

1035
01:17:33,615 --> 01:17:36,575
They want to trust the authority.

1036
01:17:37,515 --> 01:17:40,255
And no matter how many examples they see a bad.

1037
01:17:40,255 --> 01:17:47,735
Yeah. Yeah. Because I said to him, I said a couple of things, you know, and I said to him, I said, sir, you know, history is not on your side.

1038
01:17:49,335 --> 01:17:53,995
Every every currency ever created by governments is essentially failed.

1039
01:17:53,995 --> 01:17:57,895
and, you know, I don't know why you want to trust it.

1040
01:17:59,415 --> 01:18:00,375
So, yeah.

1041
01:18:00,375 --> 01:18:01,975
Some people are more comfortable in that world.

1042
01:18:02,115 --> 01:18:05,955
I mean, the thing that I think we all have going for us

1043
01:18:05,955 --> 01:18:08,075
is that, you know, I mean,

1044
01:18:08,175 --> 01:18:11,375
now you literally week by week, hour by hour,

1045
01:18:11,555 --> 01:18:15,595
have examples of why none of these people

1046
01:18:15,595 --> 01:18:16,875
should be trusted.

1047
01:18:17,035 --> 01:18:19,475
I mean, we now know that, you know,

1048
01:18:19,475 --> 01:18:21,335
many of the leaders of our country

1049
01:18:21,335 --> 01:18:23,715
and other countries and so forth have compromised

1050
01:18:23,715 --> 01:18:24,995
in this Epstein thing.

1051
01:18:25,355 --> 01:18:27,735
And I mean, it's just one, you know,

1052
01:18:27,795 --> 01:18:31,315
outrageous example of broken trust after another.

1053
01:18:31,695 --> 01:18:32,235
You know what I mean?

1054
01:18:32,995 --> 01:18:33,175
Right.

1055
01:18:33,435 --> 01:18:35,095
How anybody can look at the system and go,

1056
01:18:35,115 --> 01:18:36,075
oh yeah, this is a good system.

1057
01:18:36,115 --> 01:18:37,095
We should just trust this.

1058
01:18:37,175 --> 01:18:38,775
I mean, give me a break.

1059
01:18:39,035 --> 01:18:39,475
You know, I mean.

1060
01:18:39,675 --> 01:18:42,075
Well, you know, people of low moral value

1061
01:18:42,075 --> 01:18:44,555
when they get into any kind of position of power

1062
01:18:44,555 --> 01:18:47,315
are going to stoop to the lowest they can with that power.

1063
01:18:47,755 --> 01:18:49,715
Many, many people, not all, but you're right.

1064
01:18:49,795 --> 01:18:50,855
Many of you, I agree with you.

1065
01:18:51,135 --> 01:18:52,715
Well, I'm saying people with low moral value.

1066
01:18:52,715 --> 01:18:53,735
Oh, yeah, yeah, yeah.

1067
01:18:54,135 --> 01:18:55,515
I'm not saying good people.

1068
01:18:55,695 --> 01:18:57,435
I believe you guys would be okay.

1069
01:18:57,815 --> 01:19:00,615
But, you know, if you have no mortals to begin with,

1070
01:19:01,175 --> 01:19:02,435
and you're given by your power.

1071
01:19:02,735 --> 01:19:04,015
You're going to do whatever, yeah.

1072
01:19:05,295 --> 01:19:09,555
Look, it's, to me, it's just as obvious as day.

1073
01:19:09,695 --> 01:19:10,415
It's interesting.

1074
01:19:10,595 --> 01:19:13,795
I mean, it does shake some people's worldview.

1075
01:19:13,995 --> 01:19:16,135
I mean, if you're a statist and you believe in the state

1076
01:19:16,135 --> 01:19:19,095
and you believe in government, you know,

1077
01:19:19,095 --> 01:19:24,815
And, I mean, you know, self-custody, for example, I mean, you know, freedom is uncomfortable.

1078
01:19:25,175 --> 01:19:29,395
I mean, you've got to take responsibility, you know, for yourself and for others.

1079
01:19:29,575 --> 01:19:31,655
And some people don't want that.

1080
01:19:31,835 --> 01:19:35,415
They actually want to believe that there's a nanny state that's going to take care of them.

1081
01:19:36,615 --> 01:19:39,775
You know, I think that has to do with kind of something Bob mentioned.

1082
01:19:40,335 --> 01:19:40,855
Maybe it's you, Bob.

1083
01:19:41,055 --> 01:19:43,155
Maybe it's Mel mentioned it before we started the show.

1084
01:19:43,155 --> 01:19:50,155
You know, a lot of people in today's society, we've had such a comfortable life here in the United States for so many years.

1085
01:19:50,275 --> 01:20:07,155
I mean, we're like, what, 200 years now, whatever, so, or however many years, that they don't have, they feel like they, that everything's great, that the United States is, I remember my wife, to change the example, told me back in 79, oh, the United States will be here forever.

1086
01:20:07,255 --> 01:20:08,415
This is the greatest country ever.

1087
01:20:08,555 --> 01:20:09,135
I go, really?

1088
01:20:09,275 --> 01:20:12,575
I'm going, you know, Rome was there 500 years and it disappeared.

1089
01:20:13,155 --> 01:20:19,275
You know, so people have that concept, you know, that slowly but surely that's breaking down.

1090
01:20:19,435 --> 01:20:24,495
But for the most part, older people have that concept because they've never seen anything happen.

1091
01:20:24,575 --> 01:20:27,895
It's not unrealistic. I mean, I don't think it's all going to devolve and fall apart tomorrow.

1092
01:20:28,295 --> 01:20:33,635
But, you know, we can see and I think we'll see radical, radical change.

1093
01:20:33,835 --> 01:20:38,095
I mean, I think that, you know, the next generation is not going to put up with this shit and they shouldn't.

1094
01:20:38,095 --> 01:20:42,515
You know, America will probably be here in some form, but it may not be the form that we're in right now.

1095
01:20:42,515 --> 01:20:44,795
this next generation is just not going to put up with this shit.

1096
01:20:45,575 --> 01:20:49,055
And, you know, there's this fourth turning is going to create some massive reform.

1097
01:20:49,055 --> 01:20:54,195
And it should, you know, because we all look at, you know, we watch what we see on the news every day.

1098
01:20:54,255 --> 01:20:58,195
We watch people testifying in front of Congress and we're like, you know, what the hell?

1099
01:20:58,255 --> 01:20:59,315
This is just not right.

1100
01:21:00,535 --> 01:21:02,455
Well, where do you think we're at in the fourth turning?

1101
01:21:02,755 --> 01:21:06,675
I mean, yeah, so I think we're just at the beginning or are we in the middle?

1102
01:21:06,755 --> 01:21:07,815
I know we're not at the end.

1103
01:21:08,335 --> 01:21:10,455
So my view is the beginning was 08.

1104
01:21:10,455 --> 01:21:15,595
That was when the fabric started to tear and that we're now deep into it.

1105
01:21:17,095 --> 01:21:21,415
I think most fourth turnings have lasted between 20 and 30 years.

1106
01:21:21,535 --> 01:21:23,235
So 20 years would take you to 2028.

1107
01:21:23,355 --> 01:21:24,815
30 years would take you to 2038.

1108
01:21:25,415 --> 01:21:28,335
I don't think it's going to take all the way to 2038, but it could.

1109
01:21:29,075 --> 01:21:35,235
I kind of tend to think that the culmination and the reset will occur in the early 2030s.

1110
01:21:35,235 --> 01:21:41,635
you know i think i think that i've said this in other pods to briefly recap it i think that

1111
01:21:41,635 --> 01:21:49,635
basically i think that you know um blue team or red team's gonna lose in 2028 um for a variety of

1112
01:21:49,635 --> 01:21:54,295
reasons i'm not gonna argue those but and then blue team's gonna win and blue team's gonna go

1113
01:21:54,295 --> 01:22:00,575
ubi you know debt forgiveness low interest rates print money and they're gonna trash the currency

1114
01:22:00,575 --> 01:22:03,235
We're going to have inflation like it's going to melt people's faces.

1115
01:22:03,895 --> 01:22:06,555
And so that's from 2028 to 2032.

1116
01:22:07,135 --> 01:22:11,735
You know, it may be Weimar style or it may be just really high South American style.

1117
01:22:12,255 --> 01:22:17,315
But but in either case, everyone's just going to be like, do whatever it takes to stop this shit.

1118
01:22:17,815 --> 01:22:20,915
And I think in 2032, Michael Saylor is president.

1119
01:22:21,635 --> 01:22:24,155
I think he stands up and he says, I've got the receipts.

1120
01:22:24,595 --> 01:22:26,835
I'm an engineer. I know what went wrong.

1121
01:22:26,915 --> 01:22:28,515
The money is broken. I'm riches.

1122
01:22:28,615 --> 01:22:30,415
I'm the richest man in the world. Doesn't really matter.

1123
01:22:30,415 --> 01:22:31,675
I'm going to give it all away anyway.

1124
01:22:32,595 --> 01:22:34,275
And here's how we refine it.

1125
01:22:34,475 --> 01:22:36,615
We reset the system, guys.

1126
01:22:37,415 --> 01:22:41,415
We're going to go to a Bitcoin standard, and we're going to have a constitutional convention

1127
01:22:41,415 --> 01:22:49,195
so that the original vision of the founding fathers is reenacted in things like term limits

1128
01:22:49,195 --> 01:22:52,195
and the ability to fire judges and just a lot of...

1129
01:22:52,195 --> 01:22:56,515
There'll be massive reforms, and he will have the credibility to pull it off.

1130
01:22:56,515 --> 01:23:00,655
And everyone will be hurting so bad that they'll be begging him to do it.

1131
01:23:01,375 --> 01:23:05,115
So I've never had a president following me on Twitter.

1132
01:23:05,115 --> 01:23:06,055
So that'd be kind of cool.

1133
01:23:06,495 --> 01:23:07,395
Yeah, right.

1134
01:23:07,495 --> 01:23:07,975
Exactly.

1135
01:23:08,175 --> 01:23:08,395
So.

1136
01:23:08,955 --> 01:23:10,715
So, I mean, that's that's my dream case.

1137
01:23:10,795 --> 01:23:19,935
I don't know if that's really what will happen, but I I think the problems will get severe enough in the early 2030s that, you know, a solution will will will emerge.

1138
01:23:19,993 --> 01:23:24,093
you know i mean they'll be able at that point in time they'll also the boomers enough of the

1139
01:23:24,093 --> 01:23:28,093
boomers will have died off they'll be able to reform social security and medicare you know

1140
01:23:28,093 --> 01:23:32,533
they'll be able to balance the budget you know a lot of a lot of things will happen and and and

1141
01:23:32,533 --> 01:23:35,713
the next generation will be taken over and they're just not going to put up with any of this shit

1142
01:23:35,713 --> 01:23:41,573
that's going on right now so so i i think you know i think the bad news is it would probably be a

1143
01:23:41,573 --> 01:23:47,273
pretty rough six years i think the good news is you know on the other side of that six years you

1144
01:23:47,273 --> 01:23:50,553
You know, we're going to have, we're going to go back to first principles in America,

1145
01:23:50,553 --> 01:23:54,953
which, you know, is founded as a sound money country with gold and silver being the only forms of money

1146
01:23:54,953 --> 01:23:56,673
written in the Constitution.

1147
01:23:57,453 --> 01:23:59,233
You know, in this case, I think it'll be Bitcoin.

1148
01:23:59,233 --> 01:24:04,373
And in that respect, we'll leapfrog China because China's made a bet on gold, which is a mistake.

1149
01:24:05,173 --> 01:24:05,833
They're making the same mistake.

1150
01:24:05,833 --> 01:24:07,973
And they made a bet on silver one time before.

1151
01:24:08,393 --> 01:24:10,693
Exactly. And we screwed them as a result of it.

1152
01:24:10,993 --> 01:24:14,913
So, you know, that's kind of how I see it unfolding, Gary.

1153
01:24:14,913 --> 01:24:17,253
I don't know if that's really what will happen, but that's just a guess.

1154
01:24:17,533 --> 01:24:17,613
Yeah.

1155
01:24:18,073 --> 01:24:22,773
Obviously, we all have, you know, a murky crystal ball.

1156
01:24:22,913 --> 01:24:23,173
Right.

1157
01:24:23,793 --> 01:24:37,313
But what I would say that is interesting right now is if we zoom out globally, you know, we have a serious secession movement in Canada with Alberta.

1158
01:24:38,953 --> 01:24:43,913
We have an Iranian revolution on seemingly simmering.

1159
01:24:43,913 --> 01:24:58,533
We have Venezuela that may flip. Looks like Cuba. Cuba seems to be falling apart. Costa Rica just elected a woman as president, basically following the Bukele.

1160
01:24:59,533 --> 01:25:00,233
I didn't know that.

1161
01:25:00,233 --> 01:25:15,313
Yeah. And so there are these spots in the world where, you know, the revolt is coming. I think, you know, we see Italy and Japan like this, I think, is actually really cool.

1162
01:25:15,313 --> 01:25:26,333
super strong female heads of state who are pushing almost a, you know, a radical shift

1163
01:25:26,333 --> 01:25:34,253
against socialism, protecting national sovereignty. Poland's always been very strong about it.

1164
01:25:34,993 --> 01:25:42,233
So those are the things that give me hope, frankly. But on the other hand, we have

1165
01:25:42,233 --> 01:25:44,573
Mondami being elected in New York,

1166
01:25:44,733 --> 01:25:58,700
similar person in Seattle You have this sort of bullshit happening in the U And you know it may come back to it You know it interesting in Atlas Shrugged the U kind of falls first

1167
01:25:59,700 --> 01:26:08,040
And I think in their case, in the case in the book, it's more Europe that kind of went the right way.

1168
01:26:08,500 --> 01:26:09,800
I don't think Europe's going the right way.

1169
01:26:09,920 --> 01:26:11,580
They're even they're they're really bad.

1170
01:26:11,780 --> 01:26:13,260
They're way down the wrong path.

1171
01:26:13,260 --> 01:26:16,280
But these other areas of the world, people get it.

1172
01:26:16,360 --> 01:26:21,100
They're revolting against all these things.

1173
01:26:21,280 --> 01:26:21,940
It's all coming.

1174
01:26:22,240 --> 01:26:27,580
It's coming our way, but it's, you know, it's messy.

1175
01:26:27,760 --> 01:26:28,600
It's going to be messy.

1176
01:26:28,700 --> 01:26:29,320
That's for sure.

1177
01:26:29,560 --> 01:26:33,200
So, Gary, we have your conference coming up.

1178
01:26:33,500 --> 01:26:37,460
I think this show, by the way, is being recorded on February 13th,

1179
01:26:37,460 --> 01:26:40,020
probably released a week or so after that.

1180
01:26:40,020 --> 01:26:49,140
So as people are listening, Larry and I will be joining Gary in Texas for BitBlock Boom in early April.

1181
01:26:49,380 --> 01:26:55,040
And, you know, if you're looking to gather with other Bitcoiners, it's a great conference.

1182
01:26:55,100 --> 01:26:56,880
I've been there several years in a row now.

1183
01:26:57,420 --> 01:27:03,920
And I've always found it to be one of the better gatherings.

1184
01:27:04,380 --> 01:27:05,620
So if you're looking to connect.

1185
01:27:05,620 --> 01:27:10,660
It's a human scale conference with a lot of good speakers and I'll have books there for sale.

1186
01:27:10,820 --> 01:27:13,380
If you want to buy a hard, sign hardcover, I'll be able to sell you a book.

1187
01:27:13,980 --> 01:27:17,720
And we actually have several people signing books there.

1188
01:27:17,840 --> 01:27:19,940
We have Jimmy Song's there signing books.

1189
01:27:20,080 --> 01:27:22,380
We have Parker Lewis is there signing books.

1190
01:27:23,560 --> 01:27:28,280
Yeah, this will be, I'm kind of excited about this year's event.

1191
01:27:28,400 --> 01:27:32,760
This is our ninth event, you know, which makes us like the longest running Bitcoin conference around.

1192
01:27:32,760 --> 01:27:38,060
But we're doing it in Fort Worth in what's called Cowtown in the stockyards.

1193
01:27:38,460 --> 01:27:47,560
And if you've watched any of the shows by Sheridan, like the 1870s, when they go out west, they're in the stockyards.

1194
01:27:47,780 --> 01:27:52,760
They just bring dirt on the road and make it look like – because it looks like it did in the 1870s.

1195
01:27:53,960 --> 01:27:58,760
Landman, when they go to a restaurant at the Cattleman's Steakhouse, that's down there in the stockyards.

1196
01:27:59,440 --> 01:28:01,760
Interesting. I can't wait to go to that. I love Landman.

1197
01:28:01,760 --> 01:28:07,160
yeah so yeah Landman is is the hit we watch that every night but it's in that area so it's going to

1198
01:28:07,160 --> 01:28:11,680
be really cool and it's a cattle drive that'll come by Saturday every Saturday Longhorn Steers

1199
01:28:11,680 --> 01:28:16,220
they do a cattle drive it's more for a show than it is real it's probably the same cattle every

1200
01:28:16,220 --> 01:28:38,106
week but it kind of neat to see the Longhorn Steers come by and we in an old rustic place that has been there for years and years And because of where the event is at in the room we have it a big room and it got brick flooring and hard walls and the tables in the back

1201
01:28:38,106 --> 01:28:44,426
So we're doing something that we've never done at VetBlockRoom is when you check in, you're handed a set of headphones.

1202
01:28:45,226 --> 01:28:51,166
Now, like on Friday, when the workshops are going on or the sessions, three are running at the same time.

1203
01:28:51,946 --> 01:28:55,206
And with side by side is the way we're doing it.

1204
01:28:55,226 --> 01:28:58,066
And you could be sitting over here watching the mining sessions.

1205
01:28:58,666 --> 01:29:00,946
And you go, I wonder what these other ones are.

1206
01:29:00,986 --> 01:29:07,326
And you can switch the channels and listen to the other sessions and say, oh, wow, I really want to walk over there.

1207
01:29:07,326 --> 01:29:11,066
You can just walk over there and listen to the lightning sessions, sit down and watch it.

1208
01:29:11,066 --> 01:29:14,866
or if you have to go to the restroom, you don't have to wait for the break.

1209
01:29:15,326 --> 01:29:16,526
You still got your headphones on.

1210
01:29:16,566 --> 01:29:17,746
You still can go to the restroom.

1211
01:29:18,406 --> 01:29:22,266
And then Saturday, of course, there's one stage, so all the headphones and a BSL.

1212
01:29:22,446 --> 01:29:25,546
I think this is really cool, and I know several people who've been to conferences

1213
01:29:25,546 --> 01:29:31,006
with the headphones, and they really, really, people seem to like it a lot.

1214
01:29:31,066 --> 01:29:32,706
So I'm curious to see how this goes.

1215
01:29:32,706 --> 01:29:37,926
We're trying to do one of our parties at a rodeo, the Thursday night event,

1216
01:29:38,086 --> 01:29:39,186
which is going to be really cool.

1217
01:29:39,186 --> 01:29:45,566
and then we have um gosh it's just going to be you know this year i think everybody especially

1218
01:29:45,566 --> 01:29:51,366
people who come from like australia europe or even up north when they come to bit block boom

1219
01:29:51,366 --> 01:29:56,946
they're thinking they're going to be seeing cowboy stuff and they don't because it's been in austin

1220
01:29:56,946 --> 01:30:02,266
or in dallas and that could be in any town usa where this time they're going to see cowboys

1221
01:30:02,266 --> 01:30:05,826
walking around you know as soon as you walk out of the venue you go four feet and there's a cowboy

1222
01:30:05,826 --> 01:30:10,926
a hat store and there's a boot store so i think people are really going to get a good taste on

1223
01:30:10,926 --> 01:30:17,586
texas yeah it's awesome and also just want to mention if anyone is um interested in checking

1224
01:30:17,586 --> 01:30:22,446
out the site and decided to come we have a discount code i'll just give out mel's code it's mel 10

1225
01:30:22,446 --> 01:30:28,086
10 that'll give you 10 off but check it out uh we're going to have a good crowd it's a bitcoin

1226
01:30:28,086 --> 01:30:32,386
only crowd if you like bitcoin yeah i talked to someone last night was telling me they went to

1227
01:30:32,386 --> 01:30:37,026
archipelago and all these places in there in dallas i said so you go all these places and

1228
01:30:37,026 --> 01:30:42,266
you hadn't hit the block boom and it's been here like nine years i didn't know about it till tonight

1229
01:30:42,266 --> 01:30:48,126
you know so um yeah so we should have a good time thanks for bringing that up and like you said we

1230
01:30:48,126 --> 01:31:01,772
got a panel with the boomers on it um yep yeah we gonna have a buddy george our buddy george is gonna come in our first guest on this show and we do a panel with him so that be great it gonna be a good it gonna be a good show people will enjoy you guys will like it this year

1231
01:31:01,772 --> 01:31:07,692
yeah you really will you like everything's in walking distance the hotel is literally two

1232
01:31:07,692 --> 01:31:12,392
minutes we're using an outdoor venue a different venue not outdoors but it's outside of the hotel

1233
01:31:12,392 --> 01:31:17,912
but the hotel is two minutes from the venue and like everything the parties everything are in

1234
01:31:17,912 --> 01:31:22,452
walking distance pretty much you know instead of having to rent an uber or you know because i don't

1235
01:31:22,452 --> 01:31:27,412
know if you were there when we were in austin the second year to go to that city i rented it was a

1236
01:31:27,412 --> 01:31:32,472
45 minute drive you know yeah i was at that one yeah that was a good deal but it was a long drive

1237
01:31:32,472 --> 01:31:40,172
that was a hike it was but not many people rent a whole city like that too uh yeah no that was fun

1238
01:31:40,172 --> 01:31:47,772
it was well done yeah so yeah well i said i'm i'm i'm a big fan of your show gary i'm i'm going

1239
01:31:47,772 --> 01:31:53,012
to a lot less this year by the way i think larry and i have actually talked about larry's of the

1240
01:31:53,012 --> 01:31:57,372
same mindset we're probably not going to be as many places as we have in the past it just

1241
01:31:57,372 --> 01:32:03,352
there's there's a lot of shows um you know if you got one in your area i certainly encourage you to

1242
01:32:03,352 --> 01:32:10,492
go to it and gather with other bitcoiners but you know um it it can get draining and uh

1243
01:32:10,492 --> 01:32:15,772
you know because you can go to one almost every weekend there's some somewhere in the world or

1244
01:32:15,772 --> 01:32:17,412
every week, almost everywhere in the world.

1245
01:32:17,912 --> 01:32:22,372
And so I, uh, I frankly been to too many the last handful of years and I have

1246
01:32:22,372 --> 01:32:27,252
to a little more time with my family, a little more focus on my business, uh,

1247
01:32:27,632 --> 01:32:29,092
than, than previous years.

1248
01:32:29,772 --> 01:32:31,792
Looking forward to it though, Gary, it should be fun.

1249
01:32:31,992 --> 01:32:32,112
Yeah.

1250
01:32:33,512 --> 01:32:35,332
So we'll have a good time this year.

1251
01:32:35,512 --> 01:32:35,792
Yeah.

1252
01:32:36,752 --> 01:32:40,632
So I don't know if you guys have anything else, um, that we should cover today,

1253
01:32:40,632 --> 01:32:45,552
but, but, uh, I know next, next show we're planning to have Joe Kelly

1254
01:32:45,552 --> 01:32:46,712
from Unchained Capital,

1255
01:32:46,972 --> 01:32:48,432
and we'll talk about some security

1256
01:32:48,432 --> 01:32:50,472
and scams and custody

1257
01:32:50,472 --> 01:32:51,872
and stuff like that with Joe.

1258
01:32:52,452 --> 01:32:53,092
I love Joe.

1259
01:32:53,372 --> 01:32:54,012
He's a great guy.

1260
01:32:54,392 --> 01:32:56,212
And Unchained's been our platinum sponsor

1261
01:32:56,212 --> 01:32:57,232
for like seven years.

1262
01:32:58,212 --> 01:32:58,372
Yeah.

1263
01:32:58,792 --> 01:32:59,772
Yeah, great organization.

1264
01:33:00,012 --> 01:33:01,952
I do use them personally

1265
01:33:01,952 --> 01:33:03,192
and for some of my businesses.

1266
01:33:04,172 --> 01:33:05,852
So I'm a big fan.

1267
01:33:05,932 --> 01:33:07,372
That's an unpaid plug, by the way.

1268
01:33:07,372 --> 01:33:10,032
But just to be clear,

1269
01:33:10,412 --> 01:33:12,332
I really do use them and like them.

1270
01:33:13,092 --> 01:33:14,672
So look forward to having Joe.

1271
01:33:15,552 --> 01:33:16,232
All right, guys.

1272
01:33:16,412 --> 01:33:18,292
Well, I think that's about it.

1273
01:33:19,392 --> 01:33:20,292
Enjoyed it completely.

1274
01:33:20,512 --> 01:33:21,852
I'll see you guys next month.

1275
01:33:22,552 --> 01:33:22,872
Likewise.

1276
01:33:23,252 --> 01:33:23,572
See ya.