Anthony Pompliano: Bitcoin | Lex Fridman Podcast #171

00:00:00.000 | The following is a conversation with Anthony Pompliano,

00:00:03.400 | entrepreneur, technology investor, prolific writer,

00:00:06.760 | podcaster, and Twitter user on topics of finance,

00:00:10.500 | cryptocurrency, technology, and economics.

00:00:13.580 | I highly recommend his popular podcast and daily letter

00:00:18.180 | called "The Pomp Podcast" and "The Pomp Letter."

00:00:22.500 | Quick thank you to our sponsors,

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00:00:32.060 | Click their links to support this podcast.

00:00:35.220 | As a side note, let me say that I'll be having

00:00:37.660 | many conversations in the coming months

00:00:40.260 | about cryptocurrency with people

00:00:42.180 | of all kinds of backgrounds and worldviews.

00:00:44.980 | Those who are proponents of Bitcoin,

00:00:47.300 | like Anthony, Nick Carter, Robert Breedlove,

00:00:50.980 | Alex Glassstein, and many others.

00:00:53.540 | And those who are proponents

00:00:54.700 | of other cryptocurrency technologies,

00:00:57.020 | like Vitalik Buterin, Charles Hoskinson,

00:01:00.180 | Richard Hart, Sergey Nazarov,

00:01:02.460 | Sylvia McCauley, and many others as well.

00:01:05.420 | I'm not framing this as a debate.

00:01:07.660 | I'm simply looking to explore exciting ideas

00:01:11.180 | in the space of technologies

00:01:12.980 | that could very well change human civilization

00:01:15.800 | and AGI civilization as well.

00:01:18.620 | I appreciate that some communities are a bit more intense

00:01:23.260 | in their style of communication than others,

00:01:26.140 | but I personally am only interested in open-minded,

00:01:29.380 | respectful collaboration in exploring ideas.

00:01:32.940 | I personally try to, like to approach conversations

00:01:36.640 | by considering that I may be wrong about everything

00:01:40.860 | and I'm looking to learn.

00:01:42.980 | I won't engage in groupthink, social signaling,

00:01:46.420 | outrage mobs, mocking, and derision.

00:01:49.340 | If you do, I understand.

00:01:51.700 | It's just not my thing.

00:01:53.380 | I send you my love either way

00:01:55.600 | and hope to meet you in person over some drinks,

00:01:58.420 | some good laughs, and a good conversation one day.

00:02:02.060 | No matter the difference in style or substance,

00:02:05.060 | we're all just human after all.

00:02:06.980 | This is an amazing ride we're all on together.

00:02:10.220 | Buy the ticket, take the ride, as Hunter S. Thompson said.

00:02:13.820 | Whether you pay for that ticket with Bitcoin, Ethereum,

00:02:17.540 | the dollar, gold, seashells, a beer,

00:02:21.180 | or just a good old smile,

00:02:23.940 | this is the Lex Friedman Podcast

00:02:26.280 | and here is my conversation with Anthony Pompliano.

00:02:30.460 | You served in the US Army for six years

00:02:34.180 | and spent 13 months in Iraq in 2008 and '09.

00:02:38.180 | Can you tell the story of why you joined the Army

00:02:40.100 | and what were some of the moving, difficult,

00:02:43.180 | and maybe lasting experiences from the time you served?

00:02:46.140 | - Sure, I joined when I was 17 years old.

00:02:49.060 | I needed my parents to basically sign in order to join.

00:02:54.020 | And I'd graduated a semester early from high school

00:02:56.780 | and thought I was gonna go play football in college

00:02:58.780 | and kind of enroll in the spring semester.

00:03:00.300 | And when that didn't happen,

00:03:01.900 | basically was working at Chick-fil-A in Quiznos

00:03:04.620 | and had in my mind,

00:03:06.580 | "Look, this is probably not the path in life that I want."

00:03:09.740 | And so I knew I was gonna go to college.

00:03:11.420 | I knew I was gonna go play football in the fall,

00:03:12.860 | but I had this window of time.

00:03:14.380 | And so I walked into a recruiting office

00:03:17.180 | and just basically was like,

00:03:18.740 | "I'm assuming you guys need some help."

00:03:20.620 | And they gave me the whole pitch

00:03:22.780 | and give you a signing bonus.

00:03:24.460 | You can go jump out of planes

00:03:25.740 | and go do all this crazy stuff.

00:03:27.540 | I just said, "Okay, let's do it."

00:03:28.860 | - This was close to 9/11.

00:03:31.700 | - This was in 2006, about five years after.

00:03:35.740 | - So what impact, I mean, do you remember 9/11?

00:03:38.660 | What impact did that have on your thinking about this?

00:03:41.140 | - So I was in eighth grade, if I remember correctly.

00:03:45.060 | And I remember being in school when it happened

00:03:49.340 | and I walked into a classroom and the entire class,

00:03:53.940 | it was somebody else's class,

00:03:55.040 | they were all talking to the teacher about something.

00:03:57.380 | The second that me and a couple other kids walked in,

00:03:59.260 | everyone got real quiet and the teacher was like,

00:04:00.660 | "Hey, go back to your home room."

00:04:02.740 | And so it was just kind of a weird, like what's going on.

00:04:05.260 | And then next thing I know,

00:04:06.700 | they called all of the students into the cafeteria.

00:04:08.780 | And this is back before every classroom

00:04:11.180 | really had a television in it

00:04:12.700 | and cable and all that kind of stuff.

00:04:14.860 | And so when we were there, they basically just said,

00:04:16.100 | "Listen, there's been this event that's occurred.

00:04:18.860 | All of your parents are gonna come pick you guys up

00:04:20.940 | and they'll explain it to you."

00:04:23.100 | And so to a kid in eighth grade,

00:04:25.580 | you're basically like, "What happened?"

00:04:27.940 | And so I got home and I remember talking to my dad about it.

00:04:31.180 | And my dad basically gave me

00:04:33.700 | the core American kind of talking points, right?

00:04:36.620 | Look, somebody from another country came here

00:04:38.940 | and tried to kill Americans

00:04:40.940 | and was successful in doing that.

00:04:43.500 | And to some extent, he just said,

00:04:45.740 | "And I'm willing to bet we're gonna go back after them."

00:04:48.220 | - Did that wake you up a little bit

00:04:49.300 | to the idea that there's evil out there,

00:04:51.220 | that even just the idea of terrorism,

00:04:53.540 | for many people that was,

00:04:54.860 | when it hits you on your own land,

00:04:57.500 | it really shakes up your mind.

00:05:00.980 | In some sense, World War II,

00:05:03.020 | that's why World War II was fundamentally different

00:05:05.900 | for Americans than it is for the people like in Russia,

00:05:09.300 | in England, in France, in Europe in general,

00:05:13.940 | there's something about when there's families,

00:05:18.340 | women, children dying on your own land, that's different.

00:05:23.300 | And that was one of the first times in America

00:05:25.980 | where like on your, of course, it's Pearl Harbor,

00:05:29.340 | but like this is like in recent history,

00:05:31.480 | it's like they hit us here.

00:05:34.820 | That was like a profound idea.

00:05:37.580 | I think America was very, very good

00:05:39.100 | at exporting the violence elsewhere for a long time.

00:05:41.780 | And there was this element of complacency,

00:05:45.240 | but also this element of really just American superiority,

00:05:49.940 | that doesn't happen here.

00:05:51.660 | And I think that that woke people up,

00:05:53.500 | not only to kind of the idea

00:05:56.340 | that other places around the world

00:05:57.940 | may not like the American ideals,

00:05:59.680 | may not like democracy and capitalism and that,

00:06:02.580 | but also maybe we aren't as big, tough,

00:06:06.300 | and secure as we thought we were.

00:06:08.380 | And so obviously I think you see the kind of the over-rotation

00:06:10.740 | with a lot of the kind of security theater

00:06:12.800 | that came after that of almost psychologically,

00:06:15.260 | let's make our citizens feel like they're safe,

00:06:17.700 | even if the things that we're doing don't necessarily

00:06:20.300 | kind of change that apparatus.

00:06:22.020 | But on top of that,

00:06:22.860 | I think that it really woke people up

00:06:24.780 | to extremism around the world.

00:06:27.860 | And I don't know if necessarily

00:06:29.860 | there was a change in the extremism

00:06:32.020 | as much as it just was an awareness thing.

00:06:34.660 | How many people kind of drew a line from,

00:06:37.660 | was it '92 or '93 with the World Trade Center bombing

00:06:40.980 | to deep levels of extremism

00:06:43.540 | and hatred of kind of the American industrial complex?

00:06:46.840 | Probably not that many.

00:06:48.100 | 2001, a lot of people.

00:06:50.100 | And so I think that was, again, as a young kid,

00:06:52.940 | you don't understand a lot of this stuff.

00:06:54.340 | You basically just, hey, somebody came here

00:06:56.620 | and tried to kill Americans.

00:06:58.540 | And so we should go fight back, right,

00:07:01.340 | was kind of the response I think that I had.

00:07:03.900 | - What role did that have psychologically for you

00:07:06.940 | when you then in 2006 joined the Army?

00:07:10.300 | I mean, this is a very different joining the Army

00:07:13.560 | than in the time when like it's more peaceful.

00:07:17.620 | Here you're essentially facing,

00:07:20.020 | I mean, I don't know if you see it that way,

00:07:21.320 | but there is a war on terror.

00:07:23.100 | And I know that people kind of criticize

00:07:25.980 | that whole formulation framework of thinking,

00:07:28.380 | but nevertheless, you are going to Iraq,

00:07:31.140 | you are going to Afghanistan,

00:07:32.860 | you're going to these places

00:07:34.780 | and are fighting these complicated,

00:07:36.700 | I mean, it's not even clear what you're fighting.

00:07:40.620 | - Yeah, well, I think that there's a couple of key pieces.

00:07:43.540 | So one, like one of the actual most impactful data points,

00:07:46.820 | if you were, or kind of stories for me

00:07:49.020 | was the Pat Tillman story.

00:07:50.260 | So I played football in high school

00:07:52.500 | and I was gonna go play in college

00:07:54.700 | and seeing this NFL player who basically just one day said,

00:07:58.260 | hey, I'm gonna go and do this instead and walk away.

00:08:01.980 | I don't know necessarily if it was a,

00:08:04.060 | I wanna pursue the same story, right?

00:08:06.420 | And obviously he ended up dying

00:08:07.860 | and so not exactly the end result that you want,

00:08:10.380 | but I think it was almost like he made it okay

00:08:13.600 | if you were on a certain trajectory in life

00:08:15.340 | to go take this detour and to go do it.

00:08:18.780 | But the second thing is I was 17.

00:08:20.900 | You're pretty stupid when you're 17,

00:08:22.060 | you're pretty naive when you're 17, right?

00:08:23.940 | And so I almost kind of backed into the deployment

00:08:28.300 | because I signed up as a reserve member.

00:08:32.100 | And so basically the plan was to sign up for the reserves,

00:08:34.940 | I was gonna go to basic training,

00:08:36.060 | get all the kind of education and qualification.

00:08:38.940 | I was gonna go to college and then after college,

00:08:41.380 | maybe there's a chance that you will go and serve

00:08:43.700 | or do whatever.

00:08:45.180 | For me, I ended up getting deployed

00:08:46.860 | when I was a junior in college,

00:08:48.500 | literally got pulled out of school.

00:08:50.300 | And so at 20 years old,

00:08:52.820 | it's not exactly what you thought you were signing up for,

00:08:54.900 | right, especially to kind of leave school to go do it.

00:08:57.820 | And then on top of that,

00:08:59.260 | I probably had an advantage over most people

00:09:01.580 | both on the entry to combat and the exit

00:09:04.900 | to kind of a combat situation, which was football.

00:09:08.380 | So I always explain that in hindsight,

00:09:11.900 | you're in a male dominated, testosterone driven

00:09:14.900 | kind of combative sport where it's us first them

00:09:17.820 | and there's training and injuries

00:09:21.220 | and just kind of all of the things that go into

00:09:22.820 | playing a combat sport like football

00:09:24.900 | to now they give you guns,

00:09:26.500 | but you still have a uniform on still male dominated.

00:09:28.980 | It's just a little bit more serious

00:09:31.060 | in terms of the injuries and potential death

00:09:33.460 | and things like that.

00:09:34.620 | But also on the exit from that deployment,

00:09:37.420 | most guys I was there with,

00:09:38.860 | they're going back to being prison guards,

00:09:41.900 | police officers working at the lumber yard,

00:09:45.580 | just kind of everyday Americans.

00:09:48.580 | And so I had the fortunate ability to go back

00:09:51.700 | into kind of that combative environment,

00:09:53.740 | go back to play football.

00:09:55.060 | And so it was almost this like deescalation on the way out

00:09:58.420 | where they take your guns away,

00:09:59.660 | we still got a uniform still male dominated,

00:10:02.100 | still combative and then eventually

00:10:03.500 | you're just a normal citizen.

00:10:05.140 | And so I think that in some weird way,

00:10:06.860 | I was very fortunate to kind of on the entry and exit

00:10:09.860 | have that experience where other guys didn't.

00:10:12.140 | - So what you were deployed to Iraq,

00:10:15.340 | were there any memories, experiences that changed you

00:10:19.980 | or in general, like you're probably a different man

00:10:22.940 | on the other side of it.

00:10:24.260 | How did that time change you?

00:10:26.300 | - I think there was two main takeaways that I took, right?

00:10:28.900 | So one was not a specific moment, but on multiple occasions,

00:10:32.860 | I remember we were driving down the road and I would look

00:10:35.780 | and there would be a 10, 12, 14 year old kid.

00:10:39.060 | And if you've never seen somebody who literally has hate

00:10:42.420 | and disdain in their eyes.

00:10:43.820 | - Towards you?

00:10:45.140 | - Just not necessarily to you personally,

00:10:46.940 | just to the uniform, to what you stand for,

00:10:48.900 | to all this stuff.

00:10:50.380 | When you see it, you see it, right?

00:10:51.940 | And I always think of, if you've ever watched the movie,

00:10:55.500 | A 12 Strong and in it, they've got this Afghanistan warlord

00:10:59.820 | and he's talking to a bunch of soldiers and he says,

00:11:02.580 | "You don't have killer eyes, you do, you do."

00:11:04.620 | And he's just like, he can just tell, right?

00:11:05.940 | He's seen so many soldiers.

00:11:08.020 | And so I think that that was a memory

00:11:10.780 | on a number of occasions where I just saw a young kid

00:11:13.860 | and I just said, "They hate us."

00:11:16.020 | Right?

00:11:16.860 | And it's not you personally, it's what you stand for.

00:11:19.460 | - But the really big event was when you first get

00:11:22.300 | to these combat zones, a lot of times what will happen is,

00:11:25.740 | you basically, your unit teams up

00:11:27.900 | with a unit that's leaving and there's a handoff

00:11:30.020 | and it happens over a couple of weeks.

00:11:31.220 | And so you can imagine almost 1% of our team goes out

00:11:34.180 | with 99% of their team, then 5, 95, 10, 90,

00:11:37.580 | all the way till it's 50, 50,

00:11:38.940 | and then eventually it rotates

00:11:39.940 | and then it's majority of our team

00:11:41.140 | and a small number of their team.

00:11:43.380 | And so what a lot of people will explain

00:11:45.140 | is the two most dangerous times in war

00:11:47.380 | are actually the first two or three weeks

00:11:49.500 | and the last two or three weeks.

00:11:51.100 | When you first get there,

00:11:51.940 | you don't know who the people are,

00:11:52.940 | you don't know the terrain,

00:11:53.980 | you don't know kind of the local cultures

00:11:56.380 | and who to look out for, what signs, all that kind of stuff.

00:11:59.180 | And the last two or three weeks

00:12:00.420 | is you basically think you've survived the deployment,

00:12:02.740 | you're looking forward to going home,

00:12:03.660 | so you become complacent, things like that.

00:12:05.820 | And so we made it through that transition period

00:12:08.180 | with no issues, but the literally the very first mission

00:12:12.100 | that we went out as a team ourselves, 100%,

00:12:15.820 | there was two separate incidents.

00:12:17.700 | One was we were driving in the middle of the night

00:12:19.380 | and what we think was a sniper shot at a truck

00:12:23.380 | that I was in, I was standing up outside of it,

00:12:25.420 | along with another guy.

00:12:27.500 | And that was kind of just a wake up call again

00:12:30.100 | of never been shot at before.

00:12:31.940 | - Right.

00:12:32.780 | - And so I'll never forget,

00:12:34.500 | you kind of heard this whiz go by

00:12:36.020 | and the guy next to me was from rural Pennsylvania

00:12:39.020 | and he just said, "Look, I never been shot at before either

00:12:41.460 | but I've done a lot of hunting, get the fuck down."

00:12:43.220 | (both laughing)

00:12:44.900 | - Okay.

00:12:46.020 | And so we kept driving that night

00:12:48.940 | and later on in the night, an IED went off.

00:12:52.860 | A guy ran over an IED who was at the front of the convoy.

00:12:56.260 | And when that IED went off again,

00:12:59.060 | I'd never been in a convoy that had been blown up before,

00:13:01.980 | but the training kicks in.

00:13:03.340 | And so immediately every single person starts screaming out,

00:13:05.380 | "IED, IED."

00:13:06.300 | And they started looking and trying to figure it out.

00:13:08.060 | And you realize the United States military

00:13:10.580 | did a fantastic job training us before we went,

00:13:13.520 | because in that moment, nobody thought about anything.

00:13:16.000 | You just did what you had been programmed to do.

00:13:18.920 | And so ultimately kind of through the end of that event,

00:13:22.120 | there was a US soldier that ended up dying.

00:13:23.420 | He was shot in the head.

00:13:25.020 | And when we got back to the base

00:13:28.360 | kind of after that entire event, I think it just hit us.

00:13:31.980 | We are at war and if we make mistakes here,

00:13:34.960 | that is the cost of kind of those mistakes.

00:13:38.380 | And this was somebody who I didn't know.

00:13:41.080 | It was somebody who literally showed up

00:13:42.940 | kind of as secondary support for our unit

00:13:46.160 | and basically was there to help us.

00:13:49.460 | And so it was one of those weird situations

00:13:51.500 | where you have this emotional connection

00:13:53.880 | because it's somebody who shared an event with you,

00:13:57.460 | but you didn't know them.

00:13:58.860 | And you learn their name later

00:14:00.240 | and you understand that they have a family

00:14:01.940 | and they have young kids and all this stuff.

00:14:03.540 | And so again, as a 20 year old kid,

00:14:05.300 | you're kind of processing all this.

00:14:06.580 | And you just realize like,

00:14:08.300 | the gun I have in my hands, it's real for a reason.

00:14:11.900 | And we better take this seriously.

00:14:14.460 | This is not, you know,

00:14:15.340 | let's joking around in kind of the barracks

00:14:17.340 | and all the things that you would expect

00:14:19.780 | guys are doing in the army.

00:14:21.200 | So I think that was like the moment where I said,

00:14:23.640 | hey, I'm gonna learn a lot here

00:14:25.700 | and I gotta make sure I get home.

00:14:27.100 | - And you snap it into the training, but nevertheless,

00:14:29.900 | I mean, you're somebody who thinks philosophically

00:14:31.700 | about this world now, right?

00:14:32.980 | You're very intelligent and thinks deeply about the world.

00:14:37.740 | So looking back, you mentioned hatred

00:14:40.140 | in the 14 year old kid's eyes, there's death.

00:14:44.020 | So the way you kind of describe this whole story

00:14:46.740 | is like training kicks in, this shit is serious.

00:14:51.060 | Like this is, you know,

00:14:52.980 | there's a reason there's a gun in your hand.

00:14:55.820 | So there's a strategic element.

00:14:57.460 | There's like, you have to get the job done.

00:14:59.060 | There's a task at hand.

00:15:00.580 | But at the same time, if you zoom out,

00:15:03.020 | there's a kid who has hate for you.

00:15:06.980 | Some of those kids would probably, if they could,

00:15:09.620 | would kill you for the thing you stand for in the uniform.

00:15:13.940 | And then there's bullets flying at you.

00:15:17.480 | And then there's people that some of them

00:15:20.620 | you might already care for deeply are dying.

00:15:24.380 | What the hell do you make of that?

00:15:26.400 | Do you think about that?

00:15:28.700 | Does any of that haunt you?

00:15:30.260 | How do you think about the world having witnessed that?

00:15:34.260 | - Yeah, a lot of times when we would talk about it,

00:15:37.180 | we were there.

00:15:38.300 | If I was that kid,

00:15:40.140 | I would wanna kill that person too, right?

00:15:42.300 | I would have hatred as well, right?

00:15:44.020 | Imagine if in the United States tomorrow,

00:15:46.220 | you and I woke up and there was tanks rolling down the street

00:15:49.420 | from another country,

00:15:50.940 | and they were basically imposing their rules on us,

00:15:54.380 | whether they thought it was the right thing to do or not,

00:15:56.820 | the soldiers were there, they were doing this.

00:15:58.780 | We would probably feel not so great about it, right?

00:16:01.500 | At kind of a minimum and at a maximum,

00:16:03.660 | we'd be really, really pissed off, we would fight back.

00:16:05.940 | And so what you don't understand

00:16:07.780 | when you're in the heat of the moment is,

00:16:09.460 | why does this person feel this way?

00:16:11.180 | And so what's very weird is,

00:16:14.420 | well, what happens if a year ago,

00:16:16.260 | US soldiers came through, they got shot at,

00:16:19.100 | they returned fire and they killed that kid's uncle?

00:16:21.740 | You'd be pissed off, right?

00:16:24.420 | And so you just start to understand,

00:16:26.180 | like we look at war very black and white.

00:16:28.480 | We look at it very much from a clinical perspective.

00:16:31.340 | We're gonna go, we're gonna go kind of invade somewhere.

00:16:34.660 | We are the most dominant military in the world.

00:16:36.740 | We're very good at invading

00:16:38.700 | and we will crush wherever we invade.

00:16:41.780 | But when you're actually on the ground,

00:16:42.880 | what you understand is the humanity of it all, right?

00:16:45.460 | And so what becomes very interesting is,

00:16:48.280 | pretty much every veteran I know that comes back,

00:16:50.900 | they're some of the largest pacifists in the world.

00:16:53.060 | And I always revert back to Marcus Luttrell,

00:16:55.860 | who's a famous Navy SEAL,

00:16:57.680 | and there's a movie made about him and his story.

00:17:00.380 | He gave a speech one time that I saw,

00:17:02.940 | and he basically said, listen, if you're a politician,

00:17:05.240 | your job is to be the diplomat,

00:17:07.140 | do everything you possibly can

00:17:08.420 | not to send me and my friends anywhere.

00:17:11.100 | 'Cause when you send us,

00:17:11.980 | we're gonna bring hell with us, right?

00:17:14.700 | And understand that is the business that we are in.

00:17:17.300 | But every single other person up until we get sent

00:17:20.060 | has a job to do to prevent having to send us.

00:17:22.540 | And I think that ultimately that's where you see a lot of

00:17:24.900 | kind of this generation that has fought in Iraq

00:17:26.940 | and Afghanistan that says, listen,

00:17:29.420 | maybe we shouldn't be running around the world

00:17:31.620 | being the police.

00:17:32.740 | Maybe we shouldn't be going and invading

00:17:34.420 | all these different countries.

00:17:35.820 | Because when you actually get to see firsthand what happens,

00:17:39.660 | it's just something that we should avoid at all costs.

00:17:42.140 | But if we have to go,

00:17:43.480 | or we have to actually send soldiers somewhere,

00:17:46.560 | understand what happens when that occurs.

00:17:48.900 | And the United States is the best in the world at doing it.

00:17:52.060 | - Do you think, I'm thinking about that kid with the hatred,

00:17:55.460 | do you think there will always be hatred in the world?

00:17:57.900 | Do you think from another perspective,

00:18:00.760 | do you think there'll be war always?

00:18:03.540 | Is that a fundamental aspect of human nature

00:18:06.060 | or is that something we can escape?

00:18:08.420 | - Yeah, so war I think has like very negative connotations

00:18:11.540 | in terms of bullets and bombs and death

00:18:13.660 | and kind of just very morbid type understanding.

00:18:18.660 | Conflict on the other hand,

00:18:21.120 | I think people look at and say,

00:18:22.340 | of course there will always be conflict, right?

00:18:23.820 | You just can't have billions of people

00:18:25.980 | all on the same planet without some level of disagreement.

00:18:28.820 | Whether that's a disagreement of ideas,

00:18:30.680 | disagreement over physical geography or something else.

00:18:34.480 | And so I think conflict will always exist.

00:18:37.140 | The question is what form does war take moving forward?

00:18:40.560 | And so in my mind,

00:18:42.660 | it's starting to look a lot more clinical, right?

00:18:45.240 | A lot more drones, a lot less soldiers on the ground,

00:18:47.980 | a lot more use of special forces

00:18:49.880 | and kind of these small highly specialized teams

00:18:52.080 | rather than kind of big mechanical armies.

00:18:54.200 | And then you get into like the information warfare

00:18:56.760 | and kind of cyber warfare.

00:18:58.200 | And you start to understand that

00:19:00.080 | we're at war with a lot of people right now, right?

00:19:02.480 | Doesn't mean we're necessarily dropping bombs

00:19:04.480 | on their countries.

00:19:05.560 | Doesn't necessarily mean we're sending soldiers there,

00:19:07.800 | but on a daily basis,

00:19:09.200 | we are engaged in these kind of cyber battlefields.

00:19:12.320 | And so if that's where war starts to play out,

00:19:16.000 | one changes the tools and tactics and techniques

00:19:18.600 | that we need to arm our country

00:19:20.960 | and other countries will arm themselves with.

00:19:22.840 | But it also changes the way that we think about war, right?

00:19:26.520 | It sounds a lot less worrisome if I say,

00:19:29.160 | hey, we're gonna go to war with a country,

00:19:31.360 | but by the way, there's gonna be no death, right?

00:19:33.880 | Okay, like that doesn't sound nearly as bad as,

00:19:35.760 | hey, we're gonna go send 10,000 soldiers

00:19:37.600 | and some percentage of them are gonna die on the battlefield

00:19:40.040 | and then we're gonna basically pipe back videos

00:19:42.800 | and articles saying that American soldiers are dying.

00:19:45.520 | - Yeah, there does seem to be a fundamental difference

00:19:48.080 | between the Genghis Khan style.

00:19:50.920 | Like if I would feel differently

00:19:54.360 | if somebody like hand to hand

00:19:57.960 | with a knife murdered my family

00:20:00.480 | versus cybersecurity where I stole all their data,

00:20:04.240 | stole all their money,

00:20:05.880 | stole everything they own,

00:20:07.280 | falsified their identity, all that kind of stuff.

00:20:10.360 | Those are both traumatic events,

00:20:12.800 | but they do seem to be fundamentally different,

00:20:16.840 | but maybe that's actually very narrow style thinking

00:20:20.520 | because ultimately you have to think about what is life

00:20:24.080 | and what's happiness.

00:20:25.760 | And it's like the samurai thinking,

00:20:29.800 | I'm not sure what's more painful.

00:20:32.560 | If I take it to myself,

00:20:34.080 | like I'm not sure what I would rather live through,

00:20:38.020 | being stabbed like to death

00:20:40.920 | or having my identity stolen, all my money stolen

00:20:46.840 | or maybe reputation destroyed,

00:20:52.380 | like with lies or something like that.

00:20:55.360 | That's very interesting to think about

00:20:57.120 | if you think about quality of life

00:20:58.520 | and all those kinds of things.

00:20:59.680 | - Well, one's finite, right?

00:21:02.360 | One's the pain ends

00:21:03.800 | and the other is kind of a long, prolonged, almost torture.

00:21:06.480 | - So it's physical pain versus psychological pain.

00:21:09.280 | It's really interesting to think about.

00:21:12.920 | - And I think another key piece to this,

00:21:14.900 | which I don't have answers to,

00:21:16.080 | but there is an element of emotion and rage

00:21:18.860 | in the physical violence versus,

00:21:20.760 | again, more of that clinical information warfare.

00:21:23.680 | And so it's really easy to show a battlefield

00:21:28.680 | where there's death on both sides

00:21:31.040 | and bombs being dropped and buildings destroyed.

00:21:34.100 | It fits very well into propaganda for everyone involved,

00:21:37.680 | right, regardless of what side they're on.

00:21:40.200 | When you start talking about cyber warfare,

00:21:42.680 | how many times have we seen a big company

00:21:44.600 | get data hacked or information hacked

00:21:46.680 | and we all read the headlines, maybe throw a tweet out

00:21:50.040 | and then move on with our day and don't remember it anymore.

00:21:52.600 | And so it's just very, very different, I think,

00:21:55.400 | in the emotion and response that it invokes in people

00:21:58.480 | when they hear about it as well.

00:22:00.440 | - Given the conflict,

00:22:01.640 | do you think people are fundamentally good

00:22:03.680 | or are we all sort of like blank slates

00:22:07.020 | that could be evil given the environment

00:22:10.000 | or good given the environment?

00:22:11.760 | Or can we kind of, is there some base

00:22:14.800 | that we can rely on that people,

00:22:18.040 | if left to their own devices,

00:22:19.960 | will be good and trustworthy and honest?

00:22:24.240 | - I think you have to separate out intention from action.

00:22:27.360 | So if you talk to some of the most heinous criminals

00:22:31.320 | in the world, they've rationalized their actions.

00:22:34.840 | And so you've got to ask yourself,

00:22:36.880 | what is the level of which they understood

00:22:39.520 | what they were doing,

00:22:40.600 | that they intended to be malicious, nefarious,

00:22:43.700 | and kind of do bad things

00:22:46.300 | versus the actual actions themselves?

00:22:49.320 | And so even as a society,

00:22:52.800 | if let's say, for example,

00:22:54.200 | you were to walk down the street

00:22:55.520 | and you were to murder somebody on the sidewalk,

00:22:57.160 | completely unprovoked,

00:22:58.880 | we would look at you and say, you are a sociopath,

00:23:02.960 | you have everything wrong with you

00:23:04.760 | and that is somebody that we do not want in our society.

00:23:07.000 | And therefore we will levy the extent of rule of law

00:23:11.120 | against you in order to protect society from you, right?

00:23:14.040 | And you become that monster, that beast.

00:23:16.580 | If in the same situation,

00:23:17.740 | somebody walks in your house with a knife

00:23:20.020 | and you murder them or you kill them,

00:23:23.020 | now we put you up on a pedestal as a hero.

00:23:25.580 | And those are two very, very different responses.

00:23:28.280 | They may be just as morbid,

00:23:30.240 | they may be just as violent in terms of the actual actions,

00:23:34.440 | the intentions, the way it's perceived

00:23:36.120 | is very, very different.

00:23:37.040 | And so I think that as a world,

00:23:39.720 | we like a very black and white, clean cut, good, bad.

00:23:43.320 | I think the world's a lot more messy than that.

00:23:45.240 | And I think that a lot of times

00:23:47.200 | when you look at intention,

00:23:49.360 | it's hard for us to tell what somebody's intention is.

00:23:51.920 | But I've looked at a lot of people

00:23:55.000 | who are both considered very good

00:23:56.720 | and also a lot of people are considered very bad.

00:23:59.100 | And they sound very similar

00:24:00.320 | in terms of the motivations for their actions.

00:24:03.220 | And so I think that it's just a really hard problem

00:24:05.680 | that probably doesn't have a perfect solution or an answer.

00:24:08.360 | - Do you give much value to the intention

00:24:10.440 | or do you think it's better to look

00:24:12.520 | at the results of the behavior

00:24:14.760 | as opposed to the underlying ideology,

00:24:18.800 | the underlying intention of the behavior?

00:24:22.300 | - I think that intention gets at the question

00:24:24.360 | of like, are people inherently good or bad?

00:24:26.360 | I think that they're generally inherently good

00:24:29.500 | and the intention is driving towards the thing

00:24:32.140 | that they believe is the best outcome

00:24:34.520 | or the best thing for them to pursue.

00:24:37.000 | The action I think is where we spend

00:24:38.700 | most of our time focused on.

00:24:40.960 | And frankly, we actually may be a better society

00:24:44.120 | or kind of kinder as a humanity to each other

00:24:47.440 | if we spent more time looking at intention

00:24:49.100 | rather than action.

00:24:50.760 | But again, if somebody walks down the street

00:24:53.040 | and murders somebody, it's really hard

00:24:55.700 | to have a conversation and it may be inappropriate

00:24:57.960 | for us to have a conversation about intention

00:25:00.280 | versus any level of action.

00:25:03.160 | - So you're one of the prominent,

00:25:08.200 | I would say even the faces of the world of cryptocurrency,

00:25:12.680 | Bitcoin, that whole entire world.

00:25:15.240 | Let's dive straight in and ask,

00:25:17.680 | do you think, do you consider yourself a Bitcoin maximalist?

00:25:22.680 | - I think that the way I really look at it is

00:25:26.080 | I work backwards off of what is the maximalism

00:25:29.480 | that I believe in.

00:25:30.640 | And the world that I believe in is kind of an automated world

00:25:35.260 | that is run on these open decentralized protocols.

00:25:40.440 | And what we ultimately do is we return sovereignty

00:25:44.900 | and individualism and kind of personal responsibility

00:25:48.520 | and liberty to people over institutions.

00:25:52.000 | And what we end up doing is we end up kind of taking

00:25:55.800 | what has historically been a very analog

00:25:58.640 | or physical world economy and geographic rule.

00:26:02.480 | And we then kind of put it in the cloud

00:26:04.740 | and this digital economy becomes the prevalent way

00:26:07.440 | that we all conduct commerce, communicate, et cetera.

00:26:11.880 | And so it's less about any one single technology to me.

00:26:16.040 | I think that it's pretty stupid for people to almost

00:26:19.440 | in a way put an inanimate object up for

00:26:23.880 | some sort of obsession.

00:26:26.920 | To me, it's much more about the ideals, the ethos,

00:26:30.480 | and the most rational and likely path

00:26:33.320 | to that kind of end result or that world that I think

00:26:36.120 | is at this point just a foregone conclusion.

00:26:37.840 | - So the distinction there,

00:26:39.160 | and maybe people don't know the terminology,

00:26:41.960 | maximalism is basically saying,

00:26:45.100 | I really think this is a good idea.

00:26:48.540 | Like, you know, if you prefer a certain kind of diet,

00:26:52.980 | you could be a keto maximalist saying like,

00:26:54.980 | this is probably, maybe it's not 100%,

00:26:58.360 | but probably the diet that's healthiest for humans

00:27:01.420 | kind of thing.

00:27:02.340 | In the same sense, Bitcoin maximalism is saying,

00:27:06.200 | you know, of course we don't know,

00:27:08.080 | there's a lot of uncertainty,

00:27:09.200 | but this particular technology seems to be

00:27:11.480 | the best representations of some set of ideals

00:27:14.840 | that defines progress in the future.

00:27:17.400 | But you're drawing a distinction between sort of

00:27:19.760 | cult-like obsession about an object of any kind,

00:27:24.520 | whether it's keto or Bitcoin,

00:27:28.640 | and just sort of believing that a technology

00:27:32.240 | is the best representation of a particular set of ideals.

00:27:35.720 | And you believe that sort of this moving into the cloud,

00:27:40.720 | both the distributed nature of it,

00:27:44.240 | but also just the digital nature of it

00:27:46.800 | is something that's going to be a positive step

00:27:49.960 | for humanity.

00:27:51.000 | - Yeah, I would even take maximalism a step further,

00:27:53.080 | and it's not just the kind of singular viewpoint

00:27:55.920 | of this is the best,

00:27:57.680 | it's also an element of it's anti-everything else, right?

00:28:02.200 | - Yeah.

00:28:03.040 | - So, you know, take keto for example,

00:28:04.720 | the keto diet is not only the best diet,

00:28:06.840 | all the other diets are bad.

00:28:08.280 | - Yeah.

00:28:09.120 | - Right?

00:28:09.960 | And so it's a very binary view of the world.

00:28:12.040 | I think that what's probably most misunderstood about,

00:28:15.280 | let's take Bitcoin as a specific example,

00:28:17.960 | is that most of the people

00:28:19.500 | who are labeled Bitcoin maximalist,

00:28:22.080 | they would be open-minded if they believed

00:28:24.160 | that something else came along that was a superior technology

00:28:27.440 | or had a better kind of probability of achieving,

00:28:30.840 | again, that ultimate vision.

00:28:32.640 | I think where there's this controversy

00:28:35.840 | and kind of clashing of ideas

00:28:38.200 | is that the Bitcoin community believes

00:28:40.520 | Bitcoin is the best way to do that,

00:28:42.760 | and has very specific arguments

00:28:45.000 | as to why the other things are not, right?

00:28:47.600 | And so what ultimately ends up happening,

00:28:49.040 | which is very weird in the investing world, right?

00:28:51.880 | It's unlikely that you and I are gonna sit down

00:28:54.000 | and you're gonna be like, "Apple stock is the best stock,

00:28:55.600 | "and there's no other stock that's worth anything."

00:28:57.200 | - Yeah.

00:28:58.040 | - Right?

00:28:58.880 | And then also it's very weird if you said to me,

00:29:01.920 | "This stock is worth zero,

00:29:03.420 | "and that's where everything that I own,

00:29:05.900 | "I've put on a short on one single company."

00:29:08.320 | Right?

00:29:09.160 | There's diversification,

00:29:09.980 | there's much more kind of probabilistic thinking

00:29:11.440 | in finance in general.

00:29:13.200 | When it comes to this specific world of cryptocurrency

00:29:16.640 | and kind of digital assets, if you will,

00:29:18.960 | is there's two main groups of people

00:29:22.000 | who are trying to build two very, very different things

00:29:25.080 | at the onset, but when you unpack it

00:29:27.560 | and you start to spend more and more time on it,

00:29:29.040 | you realize they're actually trying to accomplish

00:29:30.640 | the same thing in two different ways.

00:29:32.520 | So Bitcoin is seen, I think, as a digital currency, right?

00:29:35.760 | Kind of the idea that this is going to ascend

00:29:37.800 | to become the next global reserve currency.

00:29:39.720 | It's a programmatic kind of transparent money,

00:29:43.260 | and it's essentially just 180 degrees difference

00:29:46.120 | than the inflationary, non-transparent fiat currencies

00:29:50.320 | that exist in the world.

00:29:51.960 | You then look at kind of everything else, right?

00:29:53.960 | And you have a lot of smart contract platforms

00:29:56.180 | and various things that they're all going after, right?

00:29:58.280 | Ethereum with kind of the world computer approach,

00:30:00.780 | and you can kind of go down the line

00:30:01.800 | with all their other arguments

00:30:03.080 | as to what they're trying to build.

00:30:04.640 | I think the big difference just comes down

00:30:06.480 | to innovation versus security.

00:30:10.080 | And when you simplistically look at it via that lens,

00:30:14.000 | you actually understand where both people are coming from.

00:30:17.240 | - When you say security, sorry to interrupt,

00:30:19.000 | do you mean financial security

00:30:20.360 | or do you mean like literally the security

00:30:22.560 | of the particular cryptocurrency?

00:30:26.260 | - The technical security of a blockchain.

00:30:28.460 | So when you look at, let's say Bitcoin versus Ethereum,

00:30:31.300 | right, Bitcoin has decided,

00:30:33.460 | and that community has decided security

00:30:35.340 | is the number one thing that you have to optimize for.

00:30:37.060 | So decentralization over everything else

00:30:40.180 | in terms of transaction speeds, cost,

00:30:43.940 | anything that you could come up with

00:30:45.460 | that is something that would be important for a currency,

00:30:48.560 | the number one thing to optimize for is security.

00:30:50.740 | And as we have seen with a lot of technologies, right,

00:30:53.960 | Facebook's Libra, or now what's known as Diem

00:30:56.160 | is a great example, not having decentralization

00:31:00.200 | is susceptible to the nation state.

00:31:03.100 | And so a lot of these other platforms and blockchains,

00:31:07.700 | they say security is important,

00:31:09.560 | but it's not the most important thing.

00:31:11.200 | We believe there's a trade-off between, you know,

00:31:13.120 | a little less security and transaction speed

00:31:15.960 | or composability or whatever it is.

00:31:18.600 | And so take Ethereum as kind of the second largest community

00:31:23.420 | in blockchain by market cap.

00:31:25.540 | It was created because somebody wanted to,

00:31:27.700 | or a group of people wanted to do something on Bitcoin.

00:31:29.460 | They felt like they couldn't do it.

00:31:30.460 | And so they said, "Hey, we're gonna go create something

00:31:32.140 | that has these smart contracts that we can then go do here."

00:31:35.100 | Again, this is technology, right?

00:31:36.420 | So the tribalism of like, you're right, you're wrong,

00:31:39.220 | to me is a little childish,

00:31:40.540 | just in the sense of like the market is going to decide

00:31:42.660 | what is most valuable.

00:31:44.100 | And then when you go inside of that community,

00:31:46.020 | like there's a lot of dumb ideas

00:31:47.300 | people are trying to build around Bitcoin.

00:31:48.900 | There's also a lot of really, really great ideas

00:31:50.900 | that people are trying to build around Bitcoin.

00:31:52.660 | Same thing in the Ethereum world.

00:31:54.500 | And so what you end up getting, I think,

00:31:56.140 | is the tribalism really comes out of the idea

00:31:57.980 | that there's a ticker price

00:31:59.700 | that is attached to all of this, right?

00:32:01.860 | If you go back in history of technology,

00:32:05.380 | venture capitalists didn't sit around the table

00:32:08.020 | and yell and scream at each other

00:32:09.340 | in this like religious zealot way, right?

00:32:11.700 | Because you bet on one type of cloud computing platform

00:32:14.600 | and I bet on another one, right?

00:32:16.380 | Just the market's going to decide

00:32:17.460 | we're both going to work on

00:32:18.300 | and try to make ours successful.

00:32:20.500 | Here, I think that the sensitivity,

00:32:22.380 | and mainly it comes out of the Bitcoin community,

00:32:24.260 | is that a lot of this is being funded

00:32:26.660 | not only by venture capitalists

00:32:28.620 | and kind of professional money managers and asset allocators.

00:32:32.140 | There's also this element of including the retail investor

00:32:35.100 | and the public.

00:32:36.380 | And so whether it's through ICOs

00:32:38.580 | or some other forms of capital raising,

00:32:41.140 | there's arguments for it saying,

00:32:42.740 | "Hey, look, this now gives kind of the little guy

00:32:45.980 | some sort of access and ability to do it."

00:32:48.660 | But there's also arguments against it.

00:32:50.220 | Some people say, "Hey, it's easier to dupe them

00:32:51.860 | and it's easier to run scams and kind of all this stuff."

00:32:54.100 | And so ultimately I think that crypto

00:32:56.860 | is this like arena of ideas.

00:32:59.140 | It is literally the war of attrition.

00:33:01.220 | And what will end up happening is 10 years from now,

00:33:04.500 | you and I will talk and we're going to say,

00:33:06.420 | "Well, the market said X was valuable and Y wasn't."

00:33:09.540 | And so all of the tribalism from between here and there,

00:33:13.980 | it's fun, it's engaging, whatever,

00:33:15.900 | but ultimately it doesn't really matter.

00:33:17.180 | - Yeah, because the public is involved

00:33:18.580 | so there's a lot of personalities.

00:33:19.940 | And so a lot of times we focus on the extreme personalities

00:33:24.340 | that do a lot of maybe, pardon the French, shit talking.

00:33:28.020 | And so we kind of focus on that,

00:33:30.420 | but that's not necessarily representative

00:33:32.060 | of the communities involved.

00:33:33.740 | - Let's talk about Bitcoin first

00:33:34.900 | and then it'll help us use as a kind of comparison

00:33:37.060 | to Ethereum or whatever else.

00:33:39.460 | So when you think about what is money, right?

00:33:41.620 | That's kind of the first question

00:33:42.500 | people really kind of go down the rabbit hole on.

00:33:44.300 | And ultimately today it's a belief system, right?

00:33:47.740 | And you may believe that one currency

00:33:49.340 | has more value over another

00:33:50.780 | because it's backed by a certain military

00:33:52.540 | or a certain government has a monetary policy

00:33:55.740 | that you believe in or don't believe in,

00:33:57.900 | but ultimately it's a belief system.

00:33:59.100 | There's nothing backing this

00:34:00.980 | other than a government asks you to pay your taxes in it.

00:34:04.020 | Right?

00:34:04.860 | And they can have a monopoly on violence

00:34:06.700 | in terms of they can put you in jail

00:34:07.740 | if you don't pay your taxes.

00:34:09.140 | They can go to other countries

00:34:10.520 | and they can invade and do all this stuff.

00:34:13.820 | It wasn't always like that, right?

00:34:15.660 | It was historically a layer one technology was gold.

00:34:19.540 | And so gold was a fantastic store of value.

00:34:22.780 | You knew that if you held gold,

00:34:24.140 | it wasn't gonna be inflated away.

00:34:25.420 | It was sound money.

00:34:26.260 | It was outside the system

00:34:27.180 | and no one could create more of it.

00:34:29.180 | The reason why that's important

00:34:30.500 | is because that optimization for store of value

00:34:33.260 | served as the bedrock of the entire stack of money

00:34:38.260 | for 5,000 years.

00:34:39.780 | And so the problem with that, though, again,

00:34:41.860 | trade-off between store of value

00:34:43.420 | is it was really hard to transact with, right?

00:34:45.420 | If I came in here and you said,

00:34:47.300 | "Hey, I want a couple of ounces of gold."

00:34:49.020 | And I had a whole bar,

00:34:49.860 | I'd have to literally shave off the ounces of gold.

00:34:52.860 | It's heavy to carry around.

00:34:54.100 | If you said to me, "Hey, you're in one city,

00:34:56.340 | mail it to me."

00:34:57.180 | It's really expensive.

00:34:58.260 | You know, there's all these issues with it.

00:34:59.820 | And so ultimately what people said was,

00:35:01.620 | "Well, let's create a second layer on top of that gold

00:35:04.380 | in order to make it easier to transact."

00:35:06.460 | And so we created paper claims on the gold.

00:35:08.460 | So, hey, don't carry around the gold in your pocket anymore.

00:35:10.500 | Put it in a vault or a bank.

00:35:12.000 | They're gonna issue a paper claim.

00:35:13.960 | Now you and I can trade these paper claims around.

00:35:16.260 | And at any point, if you want the gold,

00:35:17.380 | you just show up and you say,

00:35:18.340 | "Hey, give me three ounces of gold or two bars or whatever."

00:35:21.580 | And so that actually made the store of value,

00:35:24.380 | it allowed that to be the anchor

00:35:26.220 | and kind of the most important part,

00:35:27.420 | the security of your purchasing power.

00:35:29.540 | But now it became easier to transact.

00:35:31.140 | And then eventually we built layers even on top of that.

00:35:32.980 | So everything from electronic money,

00:35:35.100 | kind of electronic Q-SIPs,

00:35:36.140 | all the way to credit and other systems on top of that gold.

00:35:39.180 | 1971 comes around and obviously we de-peg

00:35:41.620 | from that gold, right?

00:35:42.980 | And it was a temporary measure at the time.

00:35:44.460 | We ended up not going back to it.

00:35:45.780 | And so what you moved or transitioned from

00:35:48.120 | was sound money, which was outside the system.

00:35:49.940 | No one could create more.

00:35:51.240 | To now the government had full control.

00:35:52.760 | They could create as much as they wanted to.

00:35:54.660 | They tried to be responsible and disciplined,

00:35:56.340 | but obviously hard to do.

00:35:57.500 | Sometimes we've been really good at it.

00:35:58.660 | Sometimes we've been less good at it.

00:35:59.940 | And then you go around the world

00:36:00.900 | and some countries have absolutely sucked at it

00:36:02.820 | and some have been good at it.

00:36:04.300 | And so when you look into the Bitcoin world,

00:36:06.920 | I think that when you look at the optimization for security,

00:36:09.860 | it's similar to gold, store value.

00:36:11.780 | People hold it, purchasing power has gone up a lot

00:36:14.500 | year over year.

00:36:15.340 | It's like a 200% year over year compound annual growth

00:36:18.780 | for over a decade, right?

00:36:19.900 | And so you measure this in kind of the US dollar exchange

00:36:22.300 | price, et cetera.

00:36:23.540 | But there's still a lot of people who will yell

00:36:25.300 | and scream about it's slow, it's costly, right?

00:36:28.260 | All the things around those transactions

00:36:30.380 | that are obstacles or challenges.

00:36:32.820 | And so there's basically two schools of thought,

00:36:34.980 | and this is where we kind of get into the bifurcation.

00:36:37.380 | Some people just said,

00:36:38.200 | "Hey, this technology is antiquated, we can't use it.

00:36:41.260 | It doesn't make sense."

00:36:43.060 | And so what we're gonna do is we're gonna go

00:36:44.180 | build something new.

00:36:45.260 | And so you go get kind of all of the various versions there.

00:36:48.820 | The Bitcoin community says,

00:36:49.860 | "No, just like gold had paper claims

00:36:52.380 | and other things built on top in layer two, three, four,

00:36:54.300 | five, we're gonna do that here."

00:36:55.980 | And so they've already started to build

00:36:57.260 | kind of this layer two where it's easier to transact,

00:36:59.900 | it's cheaper, it's faster, et cetera.

00:37:02.360 | And so I actually think that both of those worlds

00:37:05.940 | are gonna coexist in the future.

00:37:07.780 | The big question is just which one has more importance?

00:37:10.940 | Right, so again, get out of binary,

00:37:13.240 | it's just probabilistically.

00:37:15.020 | And so my personal belief is that the security,

00:37:18.300 | that the store of value component as the bedrock

00:37:21.260 | for a monetary system is essential, right?

00:37:23.980 | Like that is the most important thing

00:37:26.460 | 'cause you can always improve the other components,

00:37:29.460 | but you can't go back and fix that kind of core piece.

00:37:32.840 | - So if money is an idea that we all,

00:37:36.700 | it's like an emergent idea that we believe in,

00:37:39.260 | you're saying that security

00:37:40.940 | is one of the most fundamental catalysts or fuels

00:37:44.700 | for that idea to sort of take hold and be stable

00:37:48.960 | and sort of take over the world.

00:37:51.340 | The other stuff is really nice to have,

00:37:53.760 | but if you don't have the security,

00:37:55.340 | you're not going to,

00:37:56.540 | like it's not going to spread in a viral sense

00:37:58.980 | in our human brains.

00:38:01.660 | - Well, and especially in light

00:38:03.340 | of the kind of the macro economy, right?

00:38:05.440 | So like what's so fascinating about the last 12 months

00:38:08.460 | is in investing in general, the best returns,

00:38:12.740 | right, I kind of put that in air quotes a little bit,

00:38:14.420 | is something that is different than everything else

00:38:17.500 | and right.

00:38:18.800 | So being different and wrong just means you're an idiot,

00:38:21.300 | right?

00:38:22.140 | Being different and right means that

00:38:23.340 | that's where kind of the outsized returns are.

00:38:25.700 | And so if you look around the world at currencies today,

00:38:28.180 | they're all the same.

00:38:29.320 | They're all inflationary, unlimited supply,

00:38:31.620 | controlled by a government,

00:38:33.360 | and decisions made in a very non-transparent process.

00:38:37.000 | And what we've watched is the manipulation

00:38:38.840 | of all of those currencies over the last 12 months.

00:38:41.600 | In direct contrast to that is this thing, Bitcoin,

00:38:44.720 | which is outside of the system, has a finite supply,

00:38:48.240 | transparent and programmatic monetary policy.

00:38:50.840 | And so when you see those two systems

00:38:52.800 | kind of in comparison to each other,

00:38:55.360 | in the United States,

00:38:57.100 | there's a lot of people who say

00:38:57.940 | the dollar works great for me.

00:38:59.480 | I can go to the ATM, I can get out physical cash.

00:39:01.800 | If I want to swipe a card,

00:39:02.880 | I could do that.

00:39:04.160 | My money in my bank doesn't lose 50% of its value in a day

00:39:07.480 | in terms of purchasing power.

00:39:08.840 | Like the dollar's pretty good.

00:39:10.800 | When you go to other countries,

00:39:12.360 | that might not be the case.

00:39:13.960 | And so I do think that there's kind of a relative analysis

00:39:17.240 | that goes on here.

00:39:18.080 | If you compare Bitcoin to the dollar,

00:39:19.880 | there's all kinds of arguments to make that the dollar

00:39:22.080 | is better as a medium of exchange today.

00:39:24.560 | But if I go and I tell you,

00:39:25.600 | well, what about in these kind of extreme examples

00:39:28.540 | of Venezuela, Zimbabwe, Turkey, et cetera.

00:39:32.160 | And so I think that that's kind of one perspective

00:39:34.440 | to view this through is security

00:39:36.800 | versus all of the innovative components

00:39:39.000 | of a medium of exchange, et cetera.

00:39:40.800 | The second thing though,

00:39:41.840 | that I think is really, really important

00:39:43.560 | is around censorship.

00:39:45.480 | And so when you look at, again,

00:39:47.240 | every currency in the world today,

00:39:48.960 | every single financial service,

00:39:50.900 | they're highly susceptible to censorship.

00:39:53.280 | And actually I would argue the United States

00:39:55.560 | is in the business of censorship

00:39:57.440 | in terms of how many countries around the world

00:40:00.080 | do we sanction and cut them off in either a minimal

00:40:04.160 | or a very material way from the global financial system.

00:40:07.480 | - So when you talk about censorship,

00:40:10.600 | do you mean just the censoring your ability

00:40:13.600 | to operate freely in the world?

00:40:15.560 | - Well, look at it a little bit differently,

00:40:17.240 | which is that the United States

00:40:19.120 | has kind of the American superiority

00:40:21.400 | because we have the bombs, the bullets, the soldiers,

00:40:23.560 | and that military might,

00:40:25.660 | we basically impose our will around the world.

00:40:29.720 | And so there's a very strong argument to be made

00:40:33.800 | that there are certain countries around the world

00:40:35.920 | that are being sanctioned,

00:40:37.400 | that the people of those countries did nothing wrong.

00:40:40.760 | Now, the governments are bad, right?

00:40:42.560 | In terms of the way that you and I would look

00:40:44.200 | at democratic rule or communism or whatever it is,

00:40:48.760 | but the people are being hurt as well.

00:40:50.800 | So there's a whole group of people

00:40:52.080 | who would have just argued,

00:40:52.920 | listen, we shouldn't hurt anyone

00:40:55.160 | at the expense of punishing one person or a group of people.

00:40:59.040 | There's other people who argue against that.

00:41:00.560 | But I do think that if you really kind of zoom out

00:41:03.800 | and you say, I'm gonna take myself

00:41:05.000 | out of the Western worldview,

00:41:07.160 | and I'm simply gonna look at this

00:41:08.320 | as we're all part of the human race, it's censorship.

00:41:12.040 | And there might be an argument for censorship,

00:41:14.320 | but there also might be an argument against the censorship.

00:41:16.720 | And so what Bitcoin does

00:41:19.080 | as that specific kind of payment network

00:41:21.600 | is it says anyone in the world with an internet connection,

00:41:24.160 | I don't care where you were born,

00:41:25.720 | what language you speak, what religion you are,

00:41:27.680 | your wealth status, your education status,

00:41:30.160 | none of it matters.

00:41:31.440 | If you have an internet connection,

00:41:33.200 | you can plug into this monetary system

00:41:35.480 | and you can move value around the world

00:41:37.400 | to anyone else without asking for permission.

00:41:40.640 | And in the United States,

00:41:42.680 | we basically have that ability in the US dollar

00:41:45.120 | kind of traditional banking system.

00:41:46.440 | I can pretty much send money to almost anyone I want

00:41:48.280 | unless they're a really bad person

00:41:49.320 | that's on some list or something.

00:41:51.680 | Most people in the world don't have that capability.

00:41:54.280 | And so what you're essentially doing

00:41:55.520 | is you're democratizing access to a true store value

00:42:00.520 | and a medium of exchange, right?

00:42:03.720 | And so what you see in many of these countries

00:42:06.520 | is that when their currency starts to fail,

00:42:09.200 | the first thing that a government

00:42:11.200 | or a group of people in power and influence do

00:42:14.520 | is they lock the citizens into the currency

00:42:16.760 | with capital controls.

00:42:17.900 | Why?

00:42:19.680 | 'Cause if you let them out, it exasperates the problem.

00:42:23.520 | And so now what we're seeing is

00:42:26.000 | we basically are giving a tool

00:42:28.320 | to billions of people around the world

00:42:30.160 | that is a peaceful protest, right?

00:42:32.520 | You and I had no say at all

00:42:35.360 | when not only the Federal Reserve

00:42:37.400 | and elected officials here in the United States,

00:42:39.080 | but central banks around the world over the last 12 months

00:42:41.120 | decided to create trillions of dollars

00:42:43.520 | and inject it into the monetary system, right?

00:42:46.200 | They have arguments,

00:42:47.040 | and some of them are very good arguments

00:42:48.040 | as to why they should do that.

00:42:49.200 | They're trying to mitigate short-term pain,

00:42:50.920 | long-term they'll figure out the other issues, right?

00:42:52.720 | They have very kind of elaborate

00:42:55.760 | and well-articulated kind of viewpoint

00:42:58.160 | as to why they're doing it,

00:42:59.600 | but you and I had no say.

00:43:01.600 | And so when you start to look at,

00:43:03.480 | we have a very small group of people in this world,

00:43:06.120 | both in our country and in countries around the world

00:43:08.280 | that make these decisions

00:43:09.740 | that have very, very far-reaching kind of impact.

00:43:13.280 | And on top of that, in many cases,

00:43:15.320 | there's actually not that much kind of accountability

00:43:18.880 | because usually these are not elected officials

00:43:20.960 | who are making some of these decisions.

00:43:22.440 | These are appointed.

00:43:23.760 | And you can argue that,

00:43:24.600 | hey, we elected somebody who appointed them,

00:43:26.560 | but at the same time,

00:43:27.960 | that accountability isn't quite there.

00:43:30.560 | And so I think ultimately when you just back out,

00:43:32.360 | you say, what is Bitcoin,

00:43:33.720 | and why is it important to the world?

00:43:35.720 | It is giving access to anyone in the world

00:43:38.320 | with an internet connection

00:43:39.400 | to a store of value and a monetary network

00:43:41.900 | that allows them to peacefully protest

00:43:44.080 | and to opt out of a system

00:43:46.600 | that pretty much is not working

00:43:49.320 | for majority of people in the world.

00:43:51.320 | - So it's moving the power from these centralized places,

00:43:54.000 | sometimes unelected, to the individuals and to the people.

00:43:59.000 | So the dollar does seem to work for Americans

00:44:03.640 | and for many people in the world,

00:44:06.120 | but you kind of have a vision.

00:44:07.800 | You paint a picture of a future

00:44:09.600 | where potentially we move to cryptocurrency.

00:44:12.080 | So what kind of trajectory do you see

00:44:15.460 | where Bitcoin can become the main currency in the world,

00:44:19.040 | or at least cryptocurrency become the main,

00:44:21.280 | way of storing value in the world

00:44:23.640 | and basically overtake the dollar?

00:44:25.640 | - Yeah, so I always go first to,

00:44:28.160 | we don't need to have competition

00:44:30.240 | in terms of like a direct competition

00:44:32.240 | between the dollar and Bitcoin, right?

00:44:35.480 | If you look at most technologies in the world,

00:44:38.160 | the really valuable ones

00:44:39.200 | are actually market expanding technologies

00:44:41.320 | rather than simply just

00:44:42.920 | market share stealing technologies, right?

00:44:45.680 | So if you look at Uber, for example,

00:44:47.220 | Uber didn't just say,

00:44:48.160 | hey, I'm gonna go take out all the taxis, right?

00:44:50.360 | It actually drastically expanded the market for people.

00:44:52.920 | Now there's literally millions of people

00:44:54.440 | in the United States who don't have cars

00:44:55.720 | 'cause they use Uber, right?

00:44:57.440 | And so I think that Bitcoin is very similar

00:44:59.320 | in that, yes, there is a component of medium of exchange

00:45:03.760 | in terms of the dollar,

00:45:04.940 | but also there is this component

00:45:06.640 | of just store of value assets in general.

00:45:08.840 | And so when you start to look at Bitcoin specifically,

00:45:11.560 | I think that what you're seeing

00:45:12.660 | is you're seeing a generational gap

00:45:14.960 | where young people say,

00:45:16.520 | I grew up with a phone in my hand, I'm digitally native.

00:45:18.960 | The whole idea of going to the bank and sending a wire

00:45:22.280 | or going to an ATM and getting physical cash

00:45:24.720 | is an antiquated idea in their mind, right?

00:45:26.760 | I one time asked my brother, he's 24 years old,

00:45:29.040 | and I said, hey, how do you send money to your friends?

00:45:31.720 | And he gave me one answer, which I expected,

00:45:33.440 | which was Venmo.

00:45:34.480 | And the second answer I didn't expect, he said, Uber.

00:45:37.400 | I said, how do you send money via Uber?

00:45:38.840 | He said, well, we get in a car together

00:45:40.160 | and at the end we split the ride.

00:45:42.640 | And so again, you and I have probably both done that,

00:45:45.360 | but I never thought of it

00:45:46.200 | as a way to send money to each other.

00:45:47.600 | And so it is a psychological difference between even me,

00:45:51.560 | who's only a decade older than him or so,

00:45:54.760 | and his peer group.

00:45:56.400 | And so I think as we're watching kind of Bitcoin

00:45:58.600 | continue this ascent,

00:46:00.440 | ultimately what we're seeing

00:46:01.760 | is an entire generation of kids are saying,

00:46:04.080 | listen, if I look at financial assets across the board,

00:46:08.000 | I have stocks, I have bonds, I have currencies,

00:46:09.760 | and I have commodities.

00:46:11.160 | I know that bonds from a real rate return perspective

00:46:15.640 | is flat to negative, right?

00:46:17.200 | I'm gonna make no money on this

00:46:18.520 | because I have a belief that my dollar is being devalued.

00:46:22.600 | And actually what we're starting to see is again,

00:46:24.640 | the internet has broken down these walled gardens

00:46:27.920 | and kind of these centralized hubs of information

00:46:31.080 | in that if you were to look at, let's say the stock market,

00:46:34.000 | from 1971 to today in dollar terms,

00:46:37.000 | it's a 45 degree angle right up into the right, right?

00:46:39.520 | You know, it's kind of seven, eight, 10% growth every year.

00:46:42.960 | And it's amazing.

00:46:43.800 | Just get invested in the stock market

00:46:44.880 | and you'll make money over a long period of time,

00:46:46.240 | regardless of the dips along the way.

00:46:48.600 | If you denominate that same stock market in gold,

00:46:51.200 | the stock market is down since 1971.

00:46:53.600 | And so is it so much that the stock market

00:46:56.560 | is accruing true value,

00:46:58.040 | or is it that the underlying currency

00:46:59.720 | in which it is denominated in is being devalued, right?

00:47:03.360 | And now it's being devalued in a very disciplined way,

00:47:06.200 | right, in terms of it's not like it went 50% devaluation

00:47:09.040 | in a short period of time, but it's still being devalued.

00:47:11.600 | And so I think that people are waking up to this idea

00:47:13.960 | that a traditional 60/40 type global portfolio

00:47:16.880 | doesn't work anymore, right?

00:47:18.240 | 40% of it in bonds is just not going to get it done.

00:47:22.640 | And so when you start to look at this,

00:47:24.520 | people first look at Bitcoin

00:47:26.280 | via two main ways in my opinion.

00:47:28.760 | They look at it one as a store value.

00:47:30.280 | Should I actually go and put some of my wealth there,

00:47:32.400 | use it as a savings technology, right?

00:47:34.360 | We ask people in the traditional world,

00:47:36.480 | if you're a teacher, a fireman, an accounting,

00:47:39.160 | you know, mid-level manager, we say, hey, go do your job,

00:47:42.240 | be the best in class as a fireman,

00:47:43.880 | or as a teacher.

00:47:45.040 | And then, oh, by the way,

00:47:45.880 | you have to be a professional investor as well,

00:47:47.360 | because if you just put your dollars in your bank account,

00:47:49.680 | you're literally going to have your wealth

00:47:51.240 | devalued away over time.

00:47:53.160 | So you can't just save, you have to invest.

00:47:55.320 | That is a really tall task for people.

00:47:58.400 | They have a hard enough time just doing their job right,

00:48:00.560 | taking care of their family, right?

00:48:02.040 | Now they gotta go be an investor.

00:48:03.600 | So I think savings technology from a Bitcoin standpoint

00:48:05.920 | is if you buy Satoshi's or Bitcoin,

00:48:09.280 | over time it will increase

00:48:11.440 | from a purchasing power standpoint,

00:48:12.640 | because there's a fixed supply and demand continues to rise.

00:48:15.520 | But then you start to look at, well,

00:48:17.320 | what other assets do people put in their portfolios?

00:48:20.080 | Whether it's art, it's real estate,

00:48:22.600 | it's precious metals, or something else.

00:48:25.120 | Most of those assets are not because people actually think

00:48:28.000 | that they're gonna go up in value over time,

00:48:30.600 | they're using them to store value, right?

00:48:32.800 | The reason why somebody buys gold

00:48:34.200 | is 'cause it's a store of value, right, historically.

00:48:36.720 | That's a narrative-driven type asset though, right?

00:48:40.440 | We tell people it's scarce.

00:48:42.040 | We tell people that it is a store of value.

00:48:44.680 | When you look at it though,

00:48:45.880 | we don't know how much gold exists in the world.

00:48:47.760 | We have a good estimate, right,

00:48:49.000 | but we don't actually, we can't prove how much there is.

00:48:51.800 | We don't know how much is coming out of the ground every day.

00:48:53.800 | Again, great, fantastic estimate, but we can't prove it.

00:48:57.600 | And we don't know what the total supply is.

00:48:58.800 | - And that's what you mean by narrative-driven,

00:49:00.160 | we can't really prove it, like mathematically.

00:49:02.560 | - You, I, and everyone else in the world

00:49:04.120 | has lived in a narrative-driven world

00:49:06.160 | for the last couple of decades, right?

00:49:08.240 | And what the internet and digital technologies have done

00:49:10.880 | is it opened up the possibility and the desire from people

00:49:15.120 | to have a world now where I can validate things.

00:49:18.880 | So when I see that headline,

00:49:21.160 | I want to see you say whatever happened in the news,

00:49:24.520 | if you're the subject of the news,

00:49:25.840 | rather than have somebody else tell me the story.

00:49:28.120 | If I see that you say something is scarce,

00:49:30.400 | prove to me that it is scarce.

00:49:33.040 | And so I think that's kind of a psychological shift

00:49:35.440 | the younger generation is starting to understand

00:49:37.240 | because ultimately, you and I probably grew up

00:49:39.600 | in a world where our parents could tell us a story

00:49:41.320 | and we just believed it.

00:49:42.800 | You know, dad or mom says it, it must be true.

00:49:45.240 | If my brother heard a story, what does he do?

00:49:47.080 | He goes to Google and he looks it up, right?

00:49:49.280 | He comes back and usually tells my parents,

00:49:50.520 | oh, you got the story wrong, right?

00:49:52.080 | And so I think that that provability or that validation

00:49:55.840 | ends up becoming really, really important.

00:49:57.400 | And so, you know, look at something like gold.

00:49:59.160 | I think that people are drastically underestimating

00:50:02.040 | the shift that's underway right now.

00:50:03.920 | Gold is one, down in value since April,

00:50:08.160 | or I'm sorry, August of 2020.

00:50:10.040 | And so in a timeframe where central banks

00:50:13.400 | have had historic quantitative easing,

00:50:15.360 | literally $6 trillion in the United States,

00:50:17.880 | the one asset that historically has been

00:50:19.680 | the best store of value and has, you know,

00:50:21.880 | in 2008 financial crisis hit an all time high

00:50:24.480 | based on the government response,

00:50:26.560 | has actually suffered for a main part

00:50:30.200 | of this financial crisis.

00:50:32.560 | You then look at central banks around the world

00:50:34.360 | who have been very large holders of gold for a long time

00:50:36.880 | and net buyers on a monthly basis.

00:50:39.200 | For multiple months over the last six months,

00:50:42.160 | they've been net sellers of gold.

00:50:44.760 | And then you start to look at jewelry demand.

00:50:47.040 | So the actual non-monetary value of gold

00:50:50.120 | and that demand for gold jewelry peaked in 2013

00:50:54.240 | and has continued to fall since.

00:50:56.840 | And so what you start to say to yourself

00:50:58.000 | is take just the asset of gold,

00:50:59.760 | which about $10 trillion market cap,

00:51:02.200 | and you say, okay, well,

00:51:03.120 | if jewelry demand continues to fall,

00:51:04.640 | even if it's at a slight rate,

00:51:05.840 | but it's continues to contract,

00:51:07.680 | you have central banks that now at sometimes

00:51:09.800 | are net sellers and sometimes net buyers, right?

00:51:12.120 | So, okay, again, contraction there.

00:51:14.200 | And then from the investment standpoint,

00:51:16.480 | the actual price, the daily price of this continues to fall,

00:51:20.160 | which is a signal that there's a contracting demand

00:51:23.280 | from an investment perspective.

00:51:25.000 | That's 93% of all use of gold.

00:51:27.800 | Only 7% of it's used for actual technology

00:51:29.920 | and metal conduction and things like that.

00:51:32.200 | And so you have a $10 trillion asset that it appears,

00:51:35.440 | and again, maybe data changes and I'll change my mind

00:51:38.040 | and other people change their mind,

00:51:38.880 | but it appears is on the decline.

00:51:40.800 | And so if that happens,

00:51:41.760 | you're gonna get the contraction of a $10 trillion asset.

00:51:44.680 | Where's all that value go?

00:51:46.760 | And what you're seeing is at the same time

00:51:48.120 | that that asset is contracting,

00:51:49.980 | you're also seeing a massive influx

00:51:53.320 | from not only retail investors,

00:51:55.240 | not only kind of the wealthy and the elite,

00:51:58.160 | but also from financial institutions, corporations,

00:52:00.920 | pension funds, et cetera,

00:52:02.480 | into this kind of digital sound money.

00:52:04.600 | - So you're saying that there's a kind of shift

00:52:06.480 | from gold to Bitcoin

00:52:08.760 | because they have a lot of the same properties,

00:52:10.480 | except one is in the physical space,

00:52:12.640 | the other is in the digital space.

00:52:14.640 | So do you see like central banks

00:52:16.600 | quietly potentially switching out

00:52:20.160 | from sort of gold to Bitcoin?

00:52:24.360 | Like naturally it's just doing,

00:52:27.040 | seeing the pattern that you're referring to now,

00:52:29.560 | but more drastically into the future

00:52:31.400 | where there's a complete shift.

00:52:32.840 | - If you line up the gold community

00:52:34.720 | and the Bitcoin community next to each other,

00:52:36.680 | they'll agree on all the problems

00:52:38.240 | that they see in the world, right?

00:52:41.120 | They'll actually agree on the solution

00:52:42.480 | that sound money is the solution.

00:52:44.900 | Where they differentiate is the gold communities

00:52:48.200 | believes that it's the analog application of sound money.

00:52:51.040 | Right, the physical gold, that is the solution.

00:52:53.680 | The Bitcoin community believes

00:52:54.800 | the digital application of sound money.

00:52:56.560 | Bitcoin-- - Can you define sound money

00:52:58.120 | by the way?

00:52:58.960 | - Sound money is just outside the system

00:53:00.040 | and no one can create more of it.

00:53:01.320 | So nobody controls it.

00:53:02.480 | - This is scarcity is fundamental.

00:53:04.160 | - Exactly.

00:53:05.000 | - Why is scarcity important in money?

00:53:07.240 | - I think scarcity just has this very high correlation

00:53:10.360 | to value across all assets, not just money, right?

00:53:12.720 | Money happens to be the unit of account

00:53:14.640 | that we use in terms of daily commerce.

00:53:17.800 | But whether it is, as we're seeing now,

00:53:21.400 | sneakers, art, whatever it is,

00:53:24.240 | scarcity ultimately is that signal of value, I think.

00:53:27.360 | And that's just been the way that humans derive value

00:53:31.160 | for literally thousands and thousands of years.

00:53:33.200 | - Yeah, I gotta say, that's my view on life

00:53:35.400 | and love in general, is scarcity is what makes it valuable.

00:53:39.880 | People talk about immortality.

00:53:41.520 | I would like to be immortal,

00:53:44.400 | but it does seem that when you let go

00:53:48.560 | of the finite-ness of life,

00:53:50.380 | I feel like that meals and the experiences you have

00:53:56.460 | get devalued significantly.

00:53:59.320 | Like the longer you live,

00:54:01.440 | the less value there are in infinity if you live forever.

00:54:06.000 | I worry that all the meaning will dissipate.

00:54:09.120 | And the same thing with love,

00:54:10.600 | a quick criticism of sort of dating culture

00:54:12.640 | and all that kind of stuff.

00:54:14.080 | Like I haven't, a shocking revelation

00:54:17.320 | that I've never been on a tinder date

00:54:18.800 | or any of those things.

00:54:20.160 | I believe that scarcity in dating and interaction

00:54:24.560 | is like intensifies the value

00:54:27.280 | of when the interactions do happen.

00:54:29.120 | So when love does happen.

00:54:32.120 | And so in that sense,

00:54:33.880 | there's something magical about scarcity

00:54:35.760 | in the more subjective psychological social world as well.

00:54:39.760 | And perhaps money is just another version of that.

00:54:42.480 | It's all about the stories and ideas we tell ourselves.

00:54:45.560 | - I think they're actually more interconnected

00:54:47.320 | than you're giving it credit for,

00:54:49.120 | which is what is money?

00:54:51.120 | Money is time, ultimately.

00:54:54.560 | The pursuit of the acquisition of money, right?

00:54:59.560 | Of whether it's a currency or true money

00:55:02.400 | is because that should give you more time.

00:55:05.720 | And so one of my favorite movies ever is,

00:55:08.440 | and it's funny because Justin Timberlake is in it,

00:55:11.280 | is this movie, "In Time." - You lost me.

00:55:12.840 | (laughing)

00:55:13.840 | - I lose most people at that part.

00:55:15.400 | - "In Time." - "In Time."

00:55:16.720 | And basically the premise of the movie

00:55:18.200 | is that everyone has a clock

00:55:20.080 | that's embedded into their arm.

00:55:21.840 | And so if you go to work,

00:55:24.280 | you basically put your arm underneath when you leave,

00:55:27.120 | and there's time that's deposited into your clock.

00:55:29.360 | And if your clock ever hits all zeros, you're dead.

00:55:33.000 | You die on the spot.

00:55:34.440 | And so there's a number of scenes

00:55:35.920 | where people are basically running to get to you,

00:55:38.560 | and I give you a little bit more time

00:55:39.920 | so that you can get to work on Monday,

00:55:41.280 | and then you work to acquire time.

00:55:43.440 | And so basically time becomes this currency.

00:55:46.000 | But what becomes very fascinating about it

00:55:47.880 | is there are sections in society

00:55:50.560 | where literally there's physical places.

00:55:52.840 | If you only have, let's say, 72 hours or less,

00:55:56.200 | you're allowed to go to section one.

00:55:58.200 | Section five, though, is 'cause you have years

00:56:00.320 | and years and years on your clock.

00:56:02.680 | And in this movie, everyone at the age of 25

00:56:05.480 | freezes from a biological aging standpoint.

00:56:09.800 | So everyone stays the same,

00:56:10.920 | but you may have lived for 1,000 years.

00:56:13.920 | And so what becomes so fascinating about it

00:56:16.280 | is that rich people have time,

00:56:19.080 | poor people do not have time.

00:56:20.840 | And so in it, Justin Timberlake,

00:56:22.600 | the main character, at one point,

00:56:24.760 | essentially acquires a bunch of time,

00:56:27.200 | and he's able to go to one of the higher levels.

00:56:30.640 | And now he's attending all of these galas

00:56:32.840 | and poker nights and all that stuff.

00:56:35.040 | And one of the first things that he learns

00:56:37.280 | is that in the lower end of society,

00:56:40.240 | everyone is running everywhere at all times in the movie

00:56:43.840 | because time is so finite and it is so scarce.

00:56:46.720 | And so therefore, why would I walk down the street?

00:56:48.920 | I must run down the street.

00:56:51.440 | In the highest level of society, no one runs anywhere.

00:56:55.240 | And in fact, if you run, you are seen as lower class

00:56:59.160 | because wealth is time.

00:57:01.800 | And so that movie, it's got a ton of things

00:57:05.000 | that you can pull out of it,

00:57:05.920 | but to me, is the perfect epitome of money is time.

00:57:09.720 | And so when you start to think about

00:57:11.280 | the acquisition of money,

00:57:14.720 | it goes to this whole idea of time billionaire.

00:57:16.280 | And I know that there's probably a lot of people

00:57:18.680 | who have heard about this already,

00:57:20.240 | but if you think of a million seconds,

00:57:23.480 | it's about 11 days, a billion seconds is 31 years.

00:57:28.480 | And so if I said to somebody,

00:57:31.520 | "You have to switch lives with Warren Buffett,

00:57:34.800 | would you do it?"

00:57:35.760 | Some people would say, "Sure."

00:57:37.840 | That'd be their initial reaction.

00:57:39.360 | But you gotta have to be 92 years old.

00:57:42.560 | Is the money worth the lack of time?

00:57:45.520 | Most people would say no.

00:57:46.800 | Right, and there's this guy Graham Duncan

00:57:48.600 | who really articulated this well.

00:57:51.160 | And ultimately what ends up happening

00:57:53.080 | is you realize time is more valuable than the money,

00:57:55.360 | but you acquire the money to gain more time.

00:57:59.440 | - And the reason it's valuable

00:58:00.960 | is because of the scarcity of time.

00:58:03.000 | We currently have the biology, the physics,

00:58:08.000 | it means that this is not just the narrative

00:58:11.000 | we tell ourselves, it may be this, I don't know,

00:58:13.280 | but it feels like pretty sure we're mortal.

00:58:17.960 | And in that sense, the scarcity there gives value to time.

00:58:21.840 | It's fascinating to think about

00:58:23.080 | all the thought experiments here

00:58:25.000 | of if that could actually be in the economy,

00:58:28.120 | if you could actually convert time

00:58:30.560 | in a frictionless way to money.

00:58:33.160 | - Well, and if you start to pull on this a little bit

00:58:35.440 | and say, "Okay, a young person today,

00:58:37.360 | let's say somebody in their 20s,

00:58:39.120 | has about 2 billion seconds left in their life, right?

00:58:41.680 | Kind of 60 years, give or take, based on life expectancy."

00:58:46.440 | They usually, until they start to understand this concept,

00:58:51.240 | think of wealth in dollar terms,

00:58:55.120 | but dollars are being devalued.

00:58:57.360 | And so, a million dollars doesn't get you

00:58:59.520 | what it used to get, right?

00:59:00.560 | It's kind of an old adage.

00:59:02.560 | And so what you're doing is you're pursuing

00:59:04.720 | something that ends up losing value.

00:59:07.320 | And so it's the constant rat race.

00:59:09.880 | It's how do I constantly try to get more?

00:59:11.640 | How do I get more dollars?

00:59:12.560 | How do I get more dollars?

00:59:13.720 | Because even if I say to myself,

00:59:15.560 | I'm gonna retire when I get $100,000,

00:59:18.640 | when I get the $100,000,

00:59:21.240 | the $100,000 five years from now

00:59:22.720 | doesn't buy me what I thought it did.

00:59:24.040 | So now I need 500,000 or 200,000 or a million

00:59:26.920 | or whatever the number is.

00:59:28.520 | And so ultimately what ends up occurring

00:59:30.720 | is that the Bitcoin community and many people

00:59:33.400 | in kind of this idea of sound money

00:59:35.680 | is you want to be able to acquire an asset

00:59:38.760 | that not only will hold the value, right?

00:59:41.480 | The store of value over time,

00:59:43.160 | but it will actually appreciate over time.

00:59:46.520 | And so when you look at something like Bitcoin

00:59:48.680 | against the dollar, against other types of assets,

00:59:51.160 | all of these assets are down compared to Bitcoin, right?

00:59:54.280 | Now, some of that's just in the early days

00:59:56.320 | of kind of the pricing of an asset,

00:59:58.360 | you go from very small to something much larger.

01:00:01.080 | But now what you start to look at is,

01:00:02.360 | well, if you have a finite supply of something,

01:00:05.280 | what ends up happening is people begin to value it more.

01:00:09.360 | And so in a world where dollars are infinite

01:00:12.840 | and other fiat currencies are infinite,

01:00:15.360 | Bitcoin becomes very, very interesting, very special,

01:00:19.480 | and something that is very aspirational.

01:00:21.760 | And so I think that's where you're starting to see people

01:00:23.360 | say, wait a second, this is something where

01:00:25.640 | that finite, secure store of value is essential

01:00:30.640 | to wealth generation and preservation

01:00:32.600 | over a long period of time.

01:00:34.200 | - And if Sam Harris is right, that free will is an illusion,

01:00:37.600 | this is really interesting to think about.

01:00:39.560 | Maybe time is a kind of blockchain

01:00:43.840 | 'cause you can't change anything.

01:00:45.760 | And then the physical space-time of the universe

01:00:50.760 | is a ledger.

01:00:52.200 | So maybe it won't be Bitcoin that replaces gold,

01:00:57.640 | maybe it'll be time.

01:01:00.160 | Once we crack open that, in fact,

01:01:02.200 | the universe is fully deterministic.

01:01:04.080 | So maybe that's what like Eric Weinstein is afraid of

01:01:06.600 | once you figure out the theories of everything, of physics,

01:01:10.960 | we'll be able to then start trading,

01:01:14.360 | create a market out of like the very fabric of reality.

01:01:18.560 | And that way break it.

01:01:20.040 | - Well, if you look at infinite,

01:01:23.120 | inflationary type currencies, you can't do that, right?

01:01:26.760 | Because it constantly is losing value.

01:01:28.960 | When you look at a finite asset,

01:01:30.880 | again, that has the provability

01:01:33.160 | of the actual finite element to it,

01:01:36.160 | ultimately the wealth is that marketplace.

01:01:40.680 | And so, I always kind of try to highlight for people,

01:01:45.320 | the top 55% of Americans understand something

01:01:48.560 | that the bottom 45% don't, they invest, right?

01:01:52.440 | The bottom 45% consume, the top 55% invest.

01:01:56.560 | And that's why we have a wealth inequality gap

01:01:58.920 | and it continues to get wider and wider and wider

01:02:01.540 | is because the people who are holding the devaluing assets

01:02:04.900 | and saving are watching their wealth be devalued away.

01:02:08.240 | And there's arguments and controversy

01:02:10.120 | over how fast that's happening, but it's happening.

01:02:13.480 | The people who are holding the assets

01:02:15.000 | that have any level of scarcity, right?

01:02:16.820 | Real estate may not be finite, but it's scarce, right?

01:02:20.160 | Art may not be finite, but it's scarce.

01:02:22.640 | Gold may not be finite, but it's scarce.

01:02:25.240 | Those assets continue to appreciate

01:02:27.880 | against the devaluing currency.

01:02:29.980 | And so when you then say,

01:02:31.240 | no, I have complete finite supply with provability

01:02:36.240 | and this transparency around it,

01:02:38.420 | where everyone knows how much is there

01:02:40.300 | and where it's going.

01:02:42.300 | Now, all of a sudden, you and I can transact

01:02:44.620 | back and forth that value.

01:02:46.700 | And it is a representation of time

01:02:48.580 | because what I can essentially do is if I gather

01:02:51.020 | or acquire more of that wealth,

01:02:53.300 | I then can apply leverage to my life.

01:02:56.620 | I can use machines, humans, or some other resources

01:03:01.620 | and basically now free up my time.

01:03:05.440 | - Yeah, and it's not fun about the way you are trading time.

01:03:08.000 | Maybe it's a little bit indirect, but maybe not.

01:03:11.920 | So just 'cause I brought up Eric and you're on Twitter,

01:03:15.400 | I'd love to hear your opinions.

01:03:17.520 | I talk to him a lot.

01:03:19.040 | He seems to have stepped into the beautiful dance

01:03:22.480 | of human communication and the social dynamics

01:03:25.040 | that is the Bitcoin cryptocurrency community.

01:03:27.440 | Do you have thoughts on gauge theoretic conceptualization

01:03:32.440 | of the world or just Eric in general?

01:03:37.720 | He's got a lot of love in his heart

01:03:39.840 | and he's got a grace in the way he communicates,

01:03:42.340 | but he's also loves to play with ideas

01:03:46.880 | and seems to have touched a sensitive point

01:03:49.120 | with the Bitcoin community.

01:03:50.080 | Is there anything you could say that's hopeful,

01:03:53.240 | inspiring about that whole dynamic that went down?

01:03:57.040 | - So I don't know all of the details,

01:03:59.080 | but what I will say is I've listened

01:04:00.640 | to a number of his podcasts and him,

01:04:03.880 | and there's a whole bunch of people like him.

01:04:06.320 | I basically put them in the bucket

01:04:08.000 | of they're an independent thinker

01:04:09.720 | who are courageous enough to speak their truth,

01:04:13.520 | whatever that may be.

01:04:15.440 | They are humble enough to revisit their ideas

01:04:19.560 | and say, I got this right, I got this wrong,

01:04:21.840 | information changed, I'll change my mind.

01:04:23.800 | It's obviously a sign of intelligence

01:04:25.640 | to be able to do that type of stuff.

01:04:27.680 | And I actually think that one of the most scarce things

01:04:29.320 | in our society are those independent thinkers

01:04:31.480 | who are able to do all this, right?

01:04:33.440 | - Speaking of scarcity, yeah.

01:04:34.720 | - And so to me, I put Eric

01:04:37.760 | and the whole host of other people,

01:04:39.840 | if you look at the intellectual dark web

01:04:41.560 | as kind of a label that's been used,

01:04:44.560 | they're actually some of the most important people

01:04:46.520 | in our society because they're the people

01:04:48.760 | who are willing to stand up against

01:04:50.320 | the mass kind of thought process.

01:04:53.040 | They're willing to talk about things

01:04:55.080 | that others may think are taboo, right?

01:04:57.240 | They're willing to change their mind,

01:04:59.520 | which all of a sudden has become a bad thing

01:05:01.500 | rather than a good thing.

01:05:02.960 | And so when I see the exploration of ideas in public,

01:05:07.200 | I actually think that those are the people

01:05:09.120 | who are most open to the kind of vehement blowback as well,

01:05:13.760 | right, because that's part of what they're doing

01:05:15.700 | is that they're eliciting, hey,

01:05:17.360 | I'm gonna throw an idea into the arena.

01:05:19.120 | If it doesn't get attacked,

01:05:20.320 | they actually may be more nervous

01:05:21.800 | than if there is some level of kind of war of attrition,

01:05:24.720 | if you will.

01:05:25.760 | And so what I've seen with a number of the people

01:05:27.640 | who have done this, everyone from some of the best

01:05:29.920 | hedge fund managers and kind of money managers in the world,

01:05:32.220 | all the way to what I'll consider

01:05:33.400 | some of the most intellectual people in the world

01:05:36.320 | is they play with these ideas

01:05:38.880 | and they play with the ideas and they play with them

01:05:40.360 | and they play with them

01:05:41.200 | and they all arrive at the same conclusion.

01:05:43.320 | And sometimes it takes a month, sometimes it takes years,

01:05:46.560 | but they arrive at this Bitcoin thesis.

01:05:49.000 | And what's so interesting about it

01:05:50.800 | is it highlights something that many people view as a bug,

01:05:55.460 | but I think people in the Bitcoin community view as a feature

01:05:57.760 | which is that community.

01:05:59.720 | And so what ends up happening is

01:06:01.440 | when you have something that is as ambitious

01:06:03.960 | as creating a global reserve currency,

01:06:07.640 | doesn't mean it needs to unseat any of the existing ones,

01:06:09.760 | but become the global reserve currency of the internet,

01:06:12.040 | right, this digital economy, you need shepherds of it.

01:06:15.760 | And so just like a technology company

01:06:17.440 | wants to find those loyal fans

01:06:19.240 | that are willing to go out and market and word of mouth

01:06:22.080 | and kind of not only promote it, but also protect it,

01:06:26.220 | this technology that is this decentralized thing,

01:06:30.120 | which uses a financial incentive

01:06:32.400 | in order to elicit the buy-in,

01:06:34.920 | not from a financial perspective,

01:06:36.080 | but from a mental energy standpoint,

01:06:38.760 | has built one of the most rabid, powerful,

01:06:42.960 | and engaged communities on the internet.

01:06:45.760 | And what ends up happening is

01:06:47.680 | those people have thought more about these ideas

01:06:50.960 | and actually challenged those ideas

01:06:53.580 | more than anyone else in the world.

01:06:55.280 | And so I've got a lot of folks who will just say,

01:06:58.160 | there's this guy Marty Bent who we'll talk all the time about

01:07:01.200 | the Bitcoin critics

01:07:02.400 | haven't done their homework in a lot of cases.

01:07:04.460 | So they show up and sometimes

01:07:05.760 | it's super intellectual, lazy arguments.

01:07:07.760 | Sometimes it's actually very well thought out arguments

01:07:10.400 | on the counter to the Bitcoin thesis.

01:07:12.880 | But ultimately what ends up happening is

01:07:14.720 | you're talking to somebody who's an expert.

01:07:16.720 | They've been thinking about this for five,

01:07:17.760 | seven, eight, 10 years, right?

01:07:19.480 | They've gone through every simulation you possibly can.

01:07:21.800 | And they show up with data examples and responses.

01:07:26.040 | Now they're not always right, but they've just done the work.

01:07:28.840 | And so what I actually like about folks like Eric and others

01:07:32.400 | is as they're kind of going through this journey,

01:07:34.460 | they're incredibly smart, right?

01:07:36.240 | And they provide or they apply a lot of intellectual rigor

01:07:40.840 | to some of these arguments.

01:07:42.280 | And so what it does is what does it do?

01:07:43.560 | It's a marketplace.

01:07:44.480 | It keeps people honest.

01:07:45.580 | - Yeah.

01:07:46.420 | So let me sort of make a few comments.

01:07:48.800 | It's kind of interesting.

01:07:49.920 | So you're exactly right.

01:07:51.340 | Maybe the blowback is part of the mechanism

01:07:54.920 | that actually develops these ideas and so on.

01:07:57.000 | I do want to kind of speak to a little bit of the toxicity

01:08:00.680 | that I've experienced in the Bitcoin community.

01:08:02.660 | I kind of see it, the Bitcoin community,

01:08:04.940 | I think you paint a really nice picture,

01:08:06.700 | which I kind of see it as an immune system

01:08:09.520 | that protects against sort of the viruses

01:08:13.520 | that are bad ideas.

01:08:15.240 | That said, the immune system can destroy a body, right?

01:08:20.400 | And the thing you mentioned about Eric

01:08:22.840 | and maybe about myself and in general,

01:08:25.920 | just people exploring ideas,

01:08:28.780 | is there is a Dunning-Kruger effect,

01:08:30.520 | which is when you first start exploring ideas deeply,

01:08:34.680 | you have an overblown level of confidence

01:08:38.620 | about how much you understand.

01:08:40.800 | And that's actually the process about learning,

01:08:42.440 | then you realize you don't understand much.

01:08:44.340 | What I've noticed with the Bitcoin community

01:08:46.240 | is they're not as patient with the basics

01:08:51.240 | of the Dunning-Kruger effect.

01:08:52.720 | If I step in and make declarative statements about Bitcoin,

01:08:57.720 | I read a long time ago, the white paper,

01:09:02.800 | at the cursory level,

01:09:05.200 | I felt that I understand the technology,

01:09:09.340 | this is basic intuitions.

01:09:10.940 | You know, I didn't think about the social dynamics,

01:09:12.740 | I didn't think about any financial implications

01:09:15.340 | and a lot of the deep,

01:09:16.740 | actually the ongoing innovations and all that kind of stuff,

01:09:19.860 | but I thought I understood that technology.

01:09:21.580 | And so I step in and make declarative statements.

01:09:23.620 | I think those are the first time you say,

01:09:26.260 | "Okay, what's the role of Bitcoin in the world?"

01:09:28.140 | You start thinking about it deeply,

01:09:30.140 | and then you make statements.

01:09:31.760 | The toxicity that you get in those first few statements

01:09:35.740 | is really up-putting to me.

01:09:37.100 | I'm somebody that tries to communicate love

01:09:38.980 | and live that with everything I do.

01:09:42.260 | And there is a level of disrespect that I've experienced,

01:09:47.260 | not directly, just observing others.

01:09:49.020 | People have been mostly kind to me, and I appreciate that.

01:09:52.320 | But if you're going to criticize me

01:09:55.180 | about my exploration of ideas in Bitcoin,

01:09:58.660 | you have to also acknowledge that I'm a human being

01:10:01.380 | that got a PhD in stuff.

01:10:03.680 | I did some hard shit.

01:10:05.680 | It could be in farming, or it could be in whatever.

01:10:08.560 | I've lived life, and I've really thought deeply,

01:10:10.800 | and I really care.

01:10:11.840 | I know a lot of shit.

01:10:13.880 | And it's possible that I actually have a lot of ideas

01:10:17.640 | that you can learn from.

01:10:19.640 | Now, if it's agriculture, fine,

01:10:21.840 | or if it's artificial intelligence, fine.

01:10:24.560 | I know what I'm talking about about certain things,

01:10:27.200 | and I could be wrong about a lot of things.

01:10:28.840 | And there's an exchange of ideas

01:10:30.440 | that makes that mechanism that you talked about

01:10:34.400 | more efficient.

01:10:36.660 | Sometimes when the blowback is too strong too early on,

01:10:40.000 | the development of ideas is just inefficient.

01:10:42.640 | And I'm not sure if there's a,

01:10:45.040 | the way it was explained to me is that for so long,

01:10:49.820 | that community was bombarded

01:10:53.980 | with just bad ideas, criticisms.

01:10:56.940 | They're just overly sensitive now to bullshit.

01:11:01.940 | They're triggered by statements.

01:11:05.360 | They've heard it all before, and they're like,

01:11:07.060 | "Oh, there they go again with the same old arguments."

01:11:10.460 | But that doesn't mean that you have to, I guess,

01:11:14.340 | develop patience and so on,

01:11:16.020 | especially when you feel, like in my case,

01:11:18.580 | that the person is coming from a good place.

01:11:20.780 | I don't know if there's something you could say

01:11:22.820 | that's positive about the future

01:11:24.660 | of this kind of overcoming this toxicity.

01:11:26.780 | - I think there's a couple of trends

01:11:28.220 | that are all kind of coalescing here

01:11:30.660 | in these types of experiences.

01:11:31.780 | So one is when you look at a community,

01:11:33.740 | there's always a spectrum in terms of,

01:11:36.860 | there's some people who over-index on kindness

01:11:39.460 | and stupidity, and there's some people

01:11:41.140 | who over-index on intelligence

01:11:42.580 | and basically just being an asshole.

01:11:44.980 | And then you get everyone in between.

01:11:46.380 | And so naturally, as we know,

01:11:48.680 | the extremist ends of any community

01:11:51.940 | end up being the loudest usually.

01:11:54.380 | The second thing is there is from the outsider view,

01:11:59.380 | like at the beginning of the exploration of ideas,

01:12:02.580 | it's very much a learning process, right?

01:12:04.700 | I don't know if I understand this or not,

01:12:07.500 | but here's ideas A, B, and C.

01:12:09.860 | From the internal perspective,

01:12:12.380 | there's a trillion dollars of value at stake

01:12:14.780 | and we must protect it with our lives, right?

01:12:18.020 | The truth is probably somewhere in between there, right?

01:12:20.140 | And again, the world's not black and white.

01:12:22.460 | There's this kind of more gray area

01:12:24.020 | that I think actually is where most people exist.

01:12:27.500 | The other thing that's at play here is,

01:12:29.680 | I think the Bitcoin community understands the internet

01:12:33.220 | and internet culture and narratives

01:12:35.880 | better than almost anyone.

01:12:37.300 | And so you see this with kind of the,

01:12:39.420 | the just complete destruction of narratives with memes

01:12:43.140 | and just the visceral reaction

01:12:46.260 | and the use of things like Reddit and Twitter

01:12:48.700 | and YouTube, podcasts, just areas where I think a lot about

01:12:54.660 | if you are an upstart, right?

01:12:56.940 | And you are gonna go challenge the most well-respected,

01:13:01.220 | elite kind of establishment institutions in the world.

01:13:05.620 | If you walk in in a suit and tie and you say,

01:13:09.100 | "I'm here to debate you with ideas,"

01:13:12.060 | you're gonna get your clock cleaned, right?

01:13:14.500 | 'Cause they're gonna try to help their lawyers,

01:13:16.420 | their regulators, their lobbyists, right?

01:13:18.340 | Like all this stuff.

01:13:19.540 | If you instead say,

01:13:21.940 | "I'm gonna meme you to death on the internet

01:13:23.900 | "and I'm gonna control the public narrative."

01:13:25.900 | - You've shifted the power,

01:13:28.100 | the asymmetry of power is more symmetrical now.

01:13:30.100 | - It's the ultimate insurgency, right?

01:13:32.700 | If you bring it back to the battlefield.

01:13:34.740 | Yes.

01:13:35.580 | And so when you think about this,

01:13:37.780 | you have to lean into the advantage that you have.

01:13:40.860 | And so what ends up happening is you and I

01:13:43.540 | would absolutely lose it if we saw JP Morgan

01:13:47.700 | or Goldman Sachs or the Federal Reserve

01:13:50.060 | start tweeting memes, right?

01:13:51.960 | It would almost, the validation it would give to the medium

01:13:55.820 | and the even playing field that it would provide

01:13:59.880 | would pull these establishments down

01:14:03.040 | to the level of what is this upstart?

01:14:05.380 | But now what you're starting to see

01:14:07.760 | is that the Bitcoin community,

01:14:09.800 | even though there's some level of toxicity at times,

01:14:13.920 | even though there's this visceral reaction,

01:14:16.120 | sometimes there's even what I would call bullying

01:14:20.180 | or kind of outward projection of things, right?

01:14:23.220 | Even though it may be a small percentage,

01:14:24.660 | it'll happen every once in a while.

01:14:26.940 | What they do understand though is that these establishments

01:14:30.140 | are made up of humans.

01:14:32.040 | And what you can actually do,

01:14:33.140 | one of the best ways to pick apart an institution

01:14:35.980 | is to recruit from inside of them one by one.

01:14:39.660 | - Yes.

01:14:40.640 | - And so what you're starting to see now is,

01:14:42.880 | I get the messages on Twitter and LinkedIn all the time.

01:14:45.820 | Hey, I'm a banker by trade, but I'm a Bitcoiner at heart.

01:14:49.300 | (laughs)

01:14:50.140 | Right?

01:14:50.960 | And so what you're doing is you're essentially

01:14:52.180 | infiltrating the organizations,

01:14:54.460 | not in physical population,

01:14:58.860 | but with the ideas and with the philosophies.

01:15:01.980 | - Banker in the streets, Bitcoiner in the sheets.

01:15:04.820 | (laughs)

01:15:07.020 | I like it.

01:15:07.860 | That said, in terms of shit posting and memes,

01:15:11.700 | I gotta say, like bring it on

01:15:15.660 | because I believe in terms of asymmetry of power,

01:15:20.660 | I believe in that love will save the world, not memes,

01:15:25.020 | or at least good vibe memes as opposed to shit posting.

01:15:30.020 | It's an interesting battleground though.

01:15:33.100 | It's an interesting battleground to think about.

01:15:35.100 | - The other thing I would say too is,

01:15:37.140 | one of the elements that's always kind of funny to me

01:15:40.720 | is how much of the entertainment is love, right?

01:15:44.960 | So when you start to think about how many of the memes

01:15:47.020 | that are posted, for example,

01:15:48.540 | are for outsiders versus insiders.

01:15:50.620 | - Yes.

01:15:51.460 | - Laser eyes, right?

01:15:52.740 | Which seems absolutely ridiculous, elementary,

01:15:55.580 | and frankly, beneath anyone in any level of power

01:16:00.100 | or influence in the world.

01:16:01.680 | Somehow has congressmen and senators who have done it.

01:16:05.180 | They're not trying to convince their colleagues

01:16:08.540 | in elected positions to become Bitcoiners.

01:16:11.620 | They're speaking directly internally

01:16:13.140 | to the Bitcoin community.

01:16:14.180 | - Yeah, there's some sense in which, yes,

01:16:16.480 | memes is love, even, I keep hearing Bitcoin is love.

01:16:21.220 | They're trying to convert me.

01:16:22.620 | (laughing)

01:16:23.820 | - The one that you have to laugh at, right?

01:16:26.540 | Probably my favorite one out of all of it

01:16:27.860 | is I've seen on multiple occasions,

01:16:29.660 | Mark Cuban a couple of years ago, Kevin O'Leary,

01:16:33.500 | whoever, wealthy people, billionaires, et cetera.

01:16:36.780 | And you have people on anonymous accounts

01:16:38.700 | who who knows who they are,

01:16:39.820 | telling them have fun staying poor, right?

01:16:42.260 | (laughing)

01:16:43.540 | It's just, again, part of a community,

01:16:46.460 | and I think it's a feature, not a bug.

01:16:48.820 | There's bad aspects to it at times,

01:16:51.100 | but I do think it's a net positive.

01:16:53.140 | - Yeah, just like the immune system.

01:16:54.580 | (laughing)

01:16:55.700 | It does a lot of crappy stuff,

01:16:57.020 | but overall, it's a major net positive.

01:17:01.260 | Maybe this is a bit of a personal question for me,

01:17:03.380 | just out of my own curiosity,

01:17:04.980 | but I've talked to Ray Dalio a few times.

01:17:08.380 | So Ray Dalio, I think, was one of those people

01:17:10.860 | that took that journey, the Bitcoin journey.

01:17:15.300 | Do you have thoughts about him specifically,

01:17:18.220 | about that whole world, and about the journey,

01:17:20.580 | maybe of others that are going through the same process?

01:17:23.200 | Because Ray is, at least from my perspective,

01:17:26.620 | I'm a bit of an outsider.

01:17:27.780 | He's one of the most insightful and deep thinkers

01:17:32.780 | about investment, about finance,

01:17:36.100 | about economics in general, actually about life.

01:17:40.140 | So it's interesting to see him go on that journey.

01:17:43.500 | Do you have something to comment about Ray,

01:17:44.980 | or just those kinds of people in general?

01:17:47.100 | - So if we look at what I'll just consider

01:17:49.220 | the legends of Wall Street in general, right?

01:17:52.220 | There's no denying that they're incredibly intelligent.

01:17:54.740 | There's no denying that actually,

01:17:56.300 | especially in the hedge fund world,

01:17:57.580 | they're some of the most open-minded people

01:18:00.220 | in terms of they're willing to change their mind

01:18:01.860 | when they get new information.

01:18:03.660 | There's no doubt that they are historians

01:18:06.100 | in the sense of having studied financial markets

01:18:08.460 | in cycles over time.

01:18:10.460 | And also, one of the things that I really respect

01:18:12.900 | about all those guys is almost all of them

01:18:15.140 | are willing to put ideas out via various writings

01:18:18.260 | that they do, and accept the public criticism, right?

01:18:21.380 | Whether it's Howard Marks, Ray, or others,

01:18:23.500 | they will put this stuff out in public.

01:18:25.080 | And sure, there's a lot of people who are supportive

01:18:29.020 | and kind of are part of a fan base, if you will.

01:18:31.860 | But there's a lot of people who also think

01:18:33.100 | that sometimes they say stupid things.

01:18:34.700 | And so putting that out takes kind of courage, right?

01:18:38.400 | I think Ray's actually the most fascinating though

01:18:40.480 | out of all of these kind of legends of Wall Street

01:18:42.800 | in that he understands debt cycles,

01:18:46.280 | he understands currencies,

01:18:47.800 | he, for a while now, has been all over

01:18:51.660 | and famously said, "Cash is trash, investable assets," right?

01:18:55.560 | He just kind of like just knew all of it.

01:18:57.880 | And for a long time, Bitcoiners have said,

01:18:59.200 | "Ray, you understand the Bitcoin argument,

01:19:00.920 | you're just missing the last part,

01:19:01.920 | which is Bitcoin's the solution," right?

01:19:03.960 | And so he was gold and some other ideas.

01:19:06.560 | But I think that he's a perfect example

01:19:09.400 | of when you are part of the establishment,

01:19:13.360 | people view you in a very static way

01:19:15.640 | as the leader of a part of establishment.

01:19:18.920 | But whether it's Bill Gates, Ray Dalio, or somebody else,

01:19:22.260 | each one of these people were innovators

01:19:24.080 | and challengers to a system.

01:19:25.480 | They were upstarts at one point.

01:19:27.240 | And so it's kind of this idea that like,

01:19:28.560 | if you live long enough, you eventually become the man,

01:19:31.280 | right? - Yeah.

01:19:32.120 | - And so Gates is a good example, right?

01:19:34.640 | Warren Buffett is a good example.

01:19:36.160 | Ray Dalio is a good example, et cetera.

01:19:37.760 | And so you have to give credit, I think,

01:19:39.920 | to Dalio in the sense of he kept an open mind

01:19:43.320 | about all of this, and more so than many of his peers

01:19:46.440 | has continued to do the work and come around to this idea.

01:19:50.400 | And now, I don't wanna know if I wanted to say

01:19:52.920 | that he's a Bitcoin proponent,

01:19:54.600 | as much as he believes it is one of a portion of assets

01:19:58.900 | that can be a solution.

01:20:00.560 | And so to me, when you start to convince

01:20:03.040 | those types of people, when it's Paul Tudor Jones,

01:20:05.760 | or Stanley Druckenmiller, or Ray Dalio,

01:20:08.120 | Howard Marks now even writing about it saying,

01:20:09.880 | "Hey, I was anti-Bitcoin,

01:20:12.440 | I didn't put a ton of intellectual rigor into it,

01:20:14.600 | but thank God my son bought a bunch for our family, right?

01:20:17.560 | And kind of we've had exposure to it."

01:20:20.680 | I think what it does is more than anything,

01:20:22.840 | it's not gonna convince somebody to go and,

01:20:24.960 | take it seriously or go ahead and make an allocation.

01:20:29.800 | It reduces career risk.

01:20:32.120 | And so if all of a sudden when Paul Tudor Jones

01:20:34.400 | and Stanley Druckenmiller come out and say,

01:20:35.600 | "Hey, I own Bitcoin and here's why."

01:20:38.360 | Every other investor on Wall Street now

01:20:40.160 | can say to an investment committee,

01:20:42.120 | "Well, it's good enough for Paul Tudor Jones,

01:20:44.400 | it's good enough for Stanley Druckenmiller."

01:20:46.440 | And so I think that it's very interesting

01:20:48.600 | 'cause Ray doesn't just represent Wall Street.

01:20:51.320 | I think Ray in some weird way represents

01:20:54.360 | this like macro economic investor.

01:20:57.640 | And so some of those are in hedge funds

01:20:58.960 | and some of those people would be like CIOs at organizations,

01:21:02.520 | some of them would be at corporations

01:21:04.200 | and some of them are just kind of retail investors.

01:21:06.720 | And so you can see this kind of inflection point

01:21:10.320 | throughout the adoption of Bitcoin, right?

01:21:12.560 | There was infrastructure that got built,

01:21:14.480 | okay, that kind of led to more adoption.

01:21:16.560 | There was certain individuals, right?

01:21:18.920 | Usually they were kind of technology oriented,

01:21:21.840 | entrepreneurial billionaires.

01:21:23.760 | They would buy it and come out and say it,

01:21:25.120 | "Okay, that led to inflection points."

01:21:27.440 | You started to have some of these

01:21:29.440 | kind of Wall Street legends come out,

01:21:32.400 | started to have financial institutions,

01:21:34.280 | started to now you're seeing corporations

01:21:36.200 | start to do it, right?

01:21:37.780 | Eventually there's gonna be a central bank that does it.

01:21:40.000 | And so you kind of walk through that line

01:21:41.600 | and what you understand is like,

01:21:43.120 | it's the same thing every time,

01:21:44.440 | it's just somebody new, right?

01:21:46.560 | That path, right?

01:21:47.600 | That Bitcoiners journey, if you will.

01:21:50.040 | And I think that that is almost the beauty of it

01:21:53.780 | is if you short circuit the journey,

01:21:57.560 | it's almost like somebody doesn't appreciate it, right?

01:22:00.040 | If you take, let's say, somebody who's a young kid

01:22:02.600 | and you just give them a bunch of money

01:22:03.720 | and they didn't have to work hard for it,

01:22:05.680 | they don't really appreciate it.

01:22:07.520 | - Well, and Ray actually has a book, "Principles," right?

01:22:10.800 | And he talks about the hero's journey.

01:22:12.320 | So he's like living it in some sense

01:22:14.880 | in terms of thinking about digital currency in general,

01:22:19.320 | like digital finance.

01:22:21.840 | It's one of the big transitions,

01:22:24.800 | transformations of our world in some sense.

01:22:28.720 | It's not just about money.

01:22:30.020 | Or you could argue that money is everything.

01:22:32.520 | I mean, it's like, money isn't just

01:22:34.720 | the narrow definition of money.

01:22:36.960 | Money is really everything.

01:22:38.160 | And so where you could argue that sort of cryptocurrency

01:22:42.720 | is like the base layer of this transformation

01:22:45.800 | to the digital space and everything else

01:22:47.520 | would just be built on top of it.

01:22:49.960 | - I use a different word that I think

01:22:52.760 | is kind of closer to your world,

01:22:54.840 | which is it's ultimately automation.

01:22:57.720 | And what I mean by that is,

01:23:00.040 | before 1970 or 1980, all the assets were analog.

01:23:03.600 | And so when you have analog assets,

01:23:04.840 | physical stock certificates, physical bonds, right?

01:23:07.160 | Physical deed to a home,

01:23:09.800 | you had to physically exchange them.

01:23:11.600 | - Yeah.

01:23:12.520 | - When we wanted to increase transactions

01:23:16.040 | and increase kind of global finance and access,

01:23:19.280 | we took those physical assets

01:23:20.720 | and we created electronic Q-SIP assets.

01:23:22.920 | So now we have in centralized databases,

01:23:24.680 | kind of a file represents the asset

01:23:27.400 | that's sitting somewhere in custody.

01:23:29.120 | And you and I can transact them a little bit easier,

01:23:31.080 | but still centralized.

01:23:32.200 | There's still some bureaucracy and, you know,

01:23:34.400 | maybe it takes two days to transact

01:23:35.880 | rather than actually mailing it across the world.

01:23:38.520 | Now, what we're seeing is a transition

01:23:42.200 | from those electronic Q-SIPs to these digital assets.

01:23:45.280 | And so if you look at, again,

01:23:46.640 | just let's say money or currency,

01:23:49.440 | every currency in the world is gonna be digital.

01:23:51.520 | You're gonna have a digital dollar,

01:23:52.720 | a digital Euro, yen, RMB.

01:23:55.280 | You're gonna have decentralized

01:23:57.320 | kind of open source money like Bitcoin.

01:24:00.520 | You're also gonna have private currencies

01:24:02.440 | like Facebook's attempt at Diem,

01:24:04.480 | and there will be others that will try to do this.

01:24:07.160 | And so when you get everything digital, right?

01:24:09.640 | And I think that's the kind of the first step

01:24:10.880 | that everyone focuses on.

01:24:12.160 | The competition at the technology layer

01:24:14.080 | essentially goes away.

01:24:15.360 | You get some level of feature parity.

01:24:16.880 | And sure, there's bells and whistles

01:24:18.000 | on each kind of implementation of a digital currency,

01:24:20.720 | but at the end of the day,

01:24:21.560 | the technology is relatively the same.

01:24:23.720 | And ultimately what it will do

01:24:24.680 | is it will facilitate the adoption of digital wallets.

01:24:28.160 | So you have to have a digital wallet

01:24:29.280 | regardless of what digital currency you have.

01:24:30.840 | Same with me, same with everybody else in the world.

01:24:33.480 | But what it does do is when you kind of push away

01:24:36.680 | and reduce the friction of competition

01:24:38.400 | at the technology layer,

01:24:40.600 | it moves the competition to the monetary policy layer.

01:24:44.120 | And so when you get to that layer,

01:24:45.440 | now all of a sudden it becomes interesting

01:24:46.520 | because all of the currencies are the same

01:24:48.760 | except for this one right now.

01:24:50.400 | And maybe there'll be others in the future.

01:24:52.240 | But for sure, Bitcoin today,

01:24:53.840 | and people may try to replicate

01:24:55.080 | in a private manner or something,

01:24:56.360 | but Bitcoin is kind of the only

01:24:58.240 | finite scarce digital sum money.

01:25:00.760 | And so when you then have that pretty big difference

01:25:04.760 | in that competition at the monetary policy layer,

01:25:06.960 | it's actually not gonna matter where you get paid.

01:25:09.840 | And what I mean by that is like you and I

01:25:12.600 | both live in a single currency environment.

01:25:15.680 | I get paid in dollars.

01:25:17.760 | I historically have saved in dollars.

01:25:20.440 | All of the assets in my life are denominated in dollars.

01:25:23.720 | And I owe my debts in dollars,

01:25:26.240 | whether it's taxes or in the private market.

01:25:28.520 | And I don't have to worry about foreign currencies.

01:25:31.080 | I don't exchange anything.

01:25:32.520 | The only time I would ever think about another currency

01:25:34.160 | is if I'm going to another country

01:25:35.480 | in their single currency environment.

01:25:37.560 | And in order to change or exchange my currency,

01:25:42.000 | I go to the bank or I go get ripped off at the airport.

01:25:44.600 | (both laughing)

01:25:45.440 | Like those are my two options.

01:25:46.280 | So it's high friction to change between currencies.

01:25:49.360 | When the competition of technology is kind of innovated away,

01:25:54.360 | now I can get paid in dollars, the digital dollars,

01:25:57.120 | and with a click of a button,

01:25:58.080 | switch into any other currency in the world.

01:26:00.360 | And so what ultimately happens is value and liquidity

01:26:03.360 | is going to coalesce around the best monetary policy.

01:26:07.440 | And so you get in this very weird world

01:26:08.720 | where even if the United States says,

01:26:09.680 | "Hey, you're gonna get paid in dollars,

01:26:11.000 | "you have to pay your taxes in dollars,"

01:26:12.720 | you're gonna start to see people operate

01:26:14.200 | in a multi-currency environment where they say,

01:26:16.100 | "Okay, I got paid in my digital dollar.

01:26:17.360 | "Click a button, I save in Bitcoin.

01:26:19.200 | "It stays there, protects or grows my purchasing power.

01:26:21.800 | "Oh, I need to pay my taxes.

01:26:22.840 | "Let me switch back into dollars

01:26:24.120 | "with a click of a button and pay."

01:26:26.240 | When you go to a multi-currency world,

01:26:28.760 | it's not just about currency, it's now multi-asset world.

01:26:32.040 | Because not only is the currency digitized,

01:26:35.960 | but that same technology is used to digitize stocks,

01:26:39.120 | bonds, and commodities as well.

01:26:41.280 | And so today we live in a very fragmented financial world

01:26:43.760 | where basically I have a brokerage account,

01:26:45.600 | I have a bank account,

01:26:46.600 | I may have an alternative asset account, et cetera.

01:26:49.640 | When I can put all of those assets

01:26:50.920 | in a single digital wallet,

01:26:53.040 | and I can then go from asset to asset

01:26:55.840 | without having to go back to a single unit of account.

01:26:58.320 | - Like frictionless going from asset to asset, yeah.

01:27:01.600 | - So now what you end up doing

01:27:02.900 | is you start to open up the possibility

01:27:04.740 | for machine to machine transactions.

01:27:07.100 | So today, if you and I write software code

01:27:10.160 | for two machines to transact with each other,

01:27:12.760 | they can't transact physical currency,

01:27:15.120 | and in many cases they can't actually transact

01:27:16.960 | the electronic Q-SIP currencies or assets either

01:27:19.680 | 'cause there's too long of a settlement time.

01:27:21.400 | So you can't get true automation, right?

01:27:23.100 | So the whole idea of like the car's gonna drive

01:27:25.320 | over a strip in the road and it's gonna pay the toll, right?

01:27:28.880 | Well that can't happen right now

01:27:29.800 | because literally the transaction won't go through, right?

01:27:32.560 | And so I always joke that like in an automated world,

01:27:35.520 | it's like a CD-ROM,

01:27:37.120 | but we're trying to take cassette tape player assets

01:27:39.120 | and put it in the CD-ROM.

01:27:40.160 | It's just incompatible technology.

01:27:41.560 | - References nobody understands at this point.

01:27:44.840 | By the way, you need to update your references.

01:27:46.480 | - I probably do.

01:27:47.320 | It's like taking a CD-ROM

01:27:48.140 | and trying to put an MP3 player into a streaming.

01:27:51.280 | But I think that the reason why

01:27:52.880 | that becomes really interesting

01:27:53.720 | is when you start to create these digital assets,

01:27:56.720 | now you open up the world of possibilities.

01:27:58.840 | So when new technology is created, you can do two things.

01:28:00.760 | You can either create new things

01:28:02.260 | the world's never seen before,

01:28:03.640 | or you can use it to improve the old world.

01:28:05.760 | Most people, because it's the easiest thing to think about,

01:28:09.000 | wanna improve the old world.

01:28:11.280 | So an equivalent of this would be

01:28:12.960 | when the internet came along,

01:28:14.480 | a media company that had newspapers would say,

01:28:16.640 | "Hey, we should take a PDF of the newspaper

01:28:18.680 | and we should put it on a website.

01:28:20.200 | And now anyone in the world can go to this website

01:28:21.880 | and they can read the newspaper today."

01:28:23.760 | That was valuable,

01:28:24.840 | but it missed out on the ability to change headlines,

01:28:28.260 | to test, to put multimedia, to distribute it differently,

01:28:31.600 | to do all kinds of things that today

01:28:33.840 | we understand the internet really empowered.

01:28:36.120 | And so what I think we're about to watch happen

01:28:38.000 | is we're gonna digitize the assets.

01:28:39.720 | We're gonna put them all into these digital wallets.

01:28:42.640 | You're gonna get automated technologies

01:28:44.600 | where machines can now transact with each other.

01:28:46.600 | And we're gonna do simple things.

01:28:48.240 | Like, why do we pay people once every two weeks?

01:28:52.180 | Why don't we just pay them at the end of every day?

01:28:55.000 | Or why don't I literally stream payments to you

01:28:57.780 | on an hour by hour basis based on the work you do?

01:29:00.480 | It would solve incredible economic issues

01:29:03.480 | in our country and in countries around the world.

01:29:05.680 | But historically, businesses can't do this

01:29:08.080 | because of the technology problem.

01:29:09.680 | They can't keep track of it all.

01:29:10.600 | How do they pay everyone every day?

01:29:11.700 | How do they pay everyone every hour?

01:29:12.760 | Like, you just can't do it.

01:29:14.240 | - Yeah, it's funny.

01:29:15.160 | The vision of the future you're painting,

01:29:18.320 | it's kind of an exciting one.

01:29:20.160 | And it almost makes me sad looking into the future

01:29:23.600 | when we'll look back at this time.

01:29:25.120 | It's like, how incredibly inefficient

01:29:29.320 | our financial transactions were,

01:29:31.160 | like the transaction of value of any kind.

01:29:35.200 | Like how, like, what to pay each other.

01:29:37.520 | Like, there has to, like, processes.

01:29:39.200 | There's like payroll and all this kind of,

01:29:42.580 | just the entirety of the transactions is just like painful.

01:29:47.140 | Almost all transactions are painful.

01:29:49.580 | And even, and the companies that innovate

01:29:52.060 | to make the transactions a little bit more frictionless,

01:29:56.340 | like Amazon with the one-click purchase button,

01:29:58.820 | like went out huge.

01:30:00.140 | But even that's really painful.

01:30:02.220 | There's actually a really interesting,

01:30:03.600 | especially then you start to move that

01:30:05.180 | into the space of data.

01:30:06.880 | There's a lot of people thinking about privacy and data

01:30:09.140 | and like, can we put,

01:30:10.200 | can we like convert data into like money

01:30:15.900 | so that you can pay for how much you reveal

01:30:18.500 | to the companies about your own private data

01:30:20.640 | that can then be used to assign value to you.

01:30:24.340 | So you can use the service for free

01:30:26.020 | if you hand over the data,

01:30:27.300 | but there's like explicit transaction going on.

01:30:30.040 | So you can empower all those kinds of things

01:30:32.860 | that will just like fundamentally change our world.

01:30:36.500 | That's really, really, really exciting.

01:30:38.100 | - One of the most interesting things to me

01:30:40.540 | is I invested in a company called Bridget.

01:30:42.540 | And what they told me was they said $8 billion

01:30:45.540 | was paid to the top four banks last year on overdraft fees.

01:30:50.440 | So literally they took $8 billion

01:30:53.140 | from people who didn't have money in their bank account.

01:30:56.180 | And so when you dig into why is that,

01:30:57.860 | a lot of times it's not that the people don't have the money,

01:31:00.620 | it's actually a mismatch of the payments.

01:31:03.500 | So what ends up happening is you get paid

01:31:04.900 | on the 1st and the 15th,

01:31:06.060 | but on the 12th, your Netflix bill hits,

01:31:08.380 | on the 13th, you went grocery shopping,

01:31:10.620 | and on the 14th, your car payments hit, you overdraft,

01:31:13.540 | and then on the 15th, you actually get the check,

01:31:14.940 | and then you're able to pay not only the overdraft,

01:31:16.460 | but for the expenses that you have.

01:31:19.020 | And so something as simple as just getting paid

01:31:21.220 | at the end of every day,

01:31:22.540 | immediately would eliminate some big percentage

01:31:25.580 | of those $8 billion of value that flows

01:31:27.860 | to large institutions on overdraft fees.

01:31:30.420 | - Yeah, and also, I mean,

01:31:31.740 | this whole process with overdraft fees,

01:31:34.340 | and just many of the financial transactions

01:31:36.740 | we have to live through today,

01:31:38.420 | forces many of us to be like accountants,

01:31:42.620 | like to understand the different mechanism

01:31:45.980 | of financial movement of money,

01:31:48.340 | as opposed to you,

01:31:49.620 | which is what we wanna do as human beings,

01:31:51.580 | operating in higher layers of providing services for others,

01:31:56.580 | of following your passions,

01:31:59.020 | and working for others, doing cool shit,

01:32:02.020 | or basically providing value,

01:32:06.220 | exchanging value in the world,

01:32:07.660 | and not thinking about the money.

01:32:09.420 | The money takes care of itself,

01:32:11.180 | and then you see the results of it.

01:32:12.620 | So you're able to think in terms of money,

01:32:17.620 | but not have to know how the accounting works.

01:32:23.140 | - Automation simply frees humans up

01:32:25.620 | to do more creative work.

01:32:26.860 | - Yeah, yeah. - Right?

01:32:28.500 | Like that's it.

01:32:29.860 | And what we-- - Which is why

01:32:30.900 | you use the term automation,

01:32:33.620 | which I think is kind of brilliant,

01:32:35.420 | reframing of all of this.

01:32:36.860 | - Yeah, 'cause ultimately,

01:32:38.260 | digital technologies are merely the conduit

01:32:41.100 | to usher us into that world.

01:32:43.060 | And I think the most fascinating part

01:32:46.180 | of this entire industry

01:32:48.500 | is people who are trying to figure out,

01:32:52.180 | now that we're gonna have these digital technologies,

01:32:54.580 | how do we usher in that automated world faster?

01:32:57.860 | And so there's people who are building

01:32:59.460 | all kinds of incredible things, right?

01:33:01.260 | There's literally some technologies

01:33:04.500 | where you can stream for paying

01:33:07.900 | for consumption of content.

01:33:09.420 | - Yeah. - Right?

01:33:11.060 | I saw somebody recently who they basically said,

01:33:13.340 | "Hey, I have created something,

01:33:16.060 | "but it's not gonna be released

01:33:17.540 | "until everyone,"

01:33:18.980 | in almost like a GoFundMe type situation,

01:33:21.740 | "pays for it in combination, then it gets unlocked."

01:33:24.700 | And so when you start to think about this,

01:33:26.060 | it's not only innovation on the technology front,

01:33:28.380 | it's innovation around the way that we form capital,

01:33:32.740 | it's the way that we organize resources,

01:33:35.460 | it's the way that we build companies,

01:33:36.860 | it's the business models, right?

01:33:38.380 | It's the application of those technologies.

01:33:40.660 | All that stuff starts to change.

01:33:42.540 | And go back to 2007,

01:33:46.220 | it's when the iPhone came out.

01:33:48.500 | Uber wasn't possible.

01:33:49.820 | Right, I mean, just go down the line.

01:33:50.740 | Like all these companies that weren't possible before,

01:33:53.620 | when the digital technologies

01:33:55.100 | are kind of adopted on a global scale,

01:33:57.220 | I think that we all, myself included,

01:33:59.100 | drastically underestimate how fast

01:34:02.180 | and how big innovation can be,

01:34:04.700 | 'cause it's just hard, right?

01:34:06.140 | Like we like to think linearly

01:34:07.420 | and that's not how the world works.

01:34:08.620 | - Yeah, I do find it kind of interesting.

01:34:12.580 | It is NFT-based, but I don't think it has to be.

01:34:16.100 | (laughs)

01:34:18.140 | This idea of, I think, BitClout, it's called, or whatever.

01:34:22.560 | The idea of sort of investing in individuals,

01:34:25.140 | it makes me immediately think about investing in ideas.

01:34:29.860 | So even just the words you speak having value.

01:34:32.960 | And sort of, if you have a frictionless,

01:34:37.140 | like automated financial system,

01:34:41.020 | then you could do a bunch of interesting things

01:34:42.960 | about what it means to add value to the world.

01:34:46.420 | I mean, I don't know if BitClout

01:34:49.380 | is currently an efficient representation of that,

01:34:52.260 | but I am truly happy that,

01:34:56.160 | however that thing works,

01:34:59.580 | I'm just one notch above Vladimir Putin,

01:35:02.820 | which is one of the,

01:35:03.780 | that's like one of the bucket list items for me,

01:35:06.100 | to have a list where I'm one notch above Putin.

01:35:09.460 | - What I think you're talking about here is important

01:35:11.380 | because there's historical examples.

01:35:14.580 | You could invest in a patent in some situations.

01:35:18.020 | You could invest in an organization that has an idea, right?

01:35:21.380 | So these are super inefficient,

01:35:23.100 | given kind of the vision that you're painting

01:35:25.060 | in terms of like investing directly in an idea

01:35:26.700 | in a super efficient automated fashion.

01:35:29.040 | But that's how the technology evolution works, right?

01:35:31.980 | Is it's really hard to do at first,

01:35:34.300 | and then it slowly kind of becomes easier and easier

01:35:36.340 | as technology is more prevalent.

01:35:39.040 | The other thing that I think is interesting

01:35:40.260 | is this whole idea of investing in people.

01:35:42.300 | If you really think about the origination of that

01:35:45.020 | is I would hire somebody, right?

01:35:47.820 | I pay you money,

01:35:48.820 | and then you're gonna create production,

01:35:50.420 | but I take the lion's share and you don't.

01:35:53.180 | Now there's things like these ISAs,

01:35:55.700 | these income sharing agreements,

01:35:57.300 | where basically I will educate you on something,

01:35:59.780 | train you on something.

01:36:01.140 | I'll put up capital, right?

01:36:03.340 | And then over time you'll pay me back

01:36:05.020 | plus profits as some version.

01:36:08.120 | Eventually, I don't know what it looks like,

01:36:10.500 | but being able to get upside in somebody's success

01:36:15.220 | for having risk capital early on,

01:36:17.260 | doesn't seem that far off.

01:36:18.980 | You see it in professional sports,

01:36:20.260 | you see it in a lot of these things.

01:36:21.780 | And so I just think that a lot of the focus right now

01:36:25.940 | is on the technology,

01:36:28.100 | but ultimately these are ideas that are very old

01:36:32.180 | and have had lots of success and traction,

01:36:34.260 | and we're just merely standing in the way

01:36:36.000 | of the evolution of these ideas with new technology.

01:36:39.220 | And so it's easy to get caught up in the technology,

01:36:42.620 | but when you really zoom out

01:36:43.820 | and look at it from the ideological standpoint

01:36:46.100 | and kind of the progress of humanity,

01:36:48.500 | it's a foregone conclusion this stuff's gonna happen,

01:36:50.900 | which is how?

01:36:51.820 | - I think the world is waiting

01:36:53.060 | and some of us are trying to create that future world,

01:36:56.620 | which is like, what are the applications of this technology

01:36:59.400 | that will transform the world?

01:37:01.100 | And then, I hate the term, but killer apps,

01:37:04.420 | like cool ideas that are implemented effectively at scale

01:37:09.180 | that transform the world.

01:37:10.220 | And there's been a lot of different ideas popping up.

01:37:14.900 | Like there's a lot of ideas about social networks

01:37:17.600 | that are built on top of the technology

01:37:19.220 | and all that kind of stuff.

01:37:20.740 | So, but let me actually drag us back down

01:37:23.420 | to something basic.

01:37:24.700 | If a person wanted to buy Bitcoin, store Bitcoin,

01:37:29.700 | how do they actually do it?

01:37:34.020 | - Yeah, so there's a couple of different ways

01:37:36.420 | to kind of acquire Bitcoin.

01:37:38.620 | And in every way you've got to exchange

01:37:41.220 | some form of value for Bitcoin, right?

01:37:43.500 | Which is part of why it has value

01:37:45.300 | 'cause you're giving up value.

01:37:46.560 | So, in one way is to exchange energy

01:37:51.560 | and computational power for Bitcoin.

01:37:54.900 | So you can mine it.

01:37:56.060 | You can literally take a computer power that you have,

01:37:58.720 | you can rent it to the network and run that software

01:38:02.940 | and then it will pay you a portion

01:38:05.180 | of the kind of daily revenue off that system.

01:38:08.500 | And you can acquire Bitcoin in exchange for your power

01:38:11.340 | and your computational kind of contribution.

01:38:14.060 | - And that's the fundamental principle behind Bitcoin

01:38:16.180 | is the proof of work.

01:38:17.660 | So I got a hundred bucks, like I use Cash App.

01:38:21.780 | There's Coinbase, there's all these exchanges.

01:38:27.440 | Like how do I convert my a hundred dollars to Bitcoin?

01:38:32.440 | Is there something, disclaimer,

01:38:34.540 | this is not financial advice.

01:38:36.420 | And this is just us talking and just your opinions.

01:38:39.780 | This do not use this to invest

01:38:41.620 | or take as financial expertise.

01:38:45.840 | That said, is there something you recommend

01:38:49.660 | that's an easy entry point for somebody that's like,

01:38:52.380 | hmm, I wonder if I can convert this hundred dollars

01:38:55.300 | into whatever amount of Bitcoin.

01:38:57.780 | What do you recommend?

01:38:58.620 | What are the options?

01:38:59.900 | - So there's a lot of options.

01:39:01.100 | I'm heavily biased.

01:39:02.540 | I went out and I scoured the market, looked at all of them.

01:39:04.980 | I've invested a lot of money in a company called BlockFi

01:39:07.100 | that basically has financial products for crypto investors.

01:39:10.740 | So you can go, you can take dollars

01:39:12.740 | or other currency you have,

01:39:14.220 | you can convert it through an exchange.

01:39:16.480 | You can leave it on these interest bearing accounts.

01:39:19.140 | You can earn interest just like you would earn

01:39:20.560 | in a traditional account,

01:39:21.840 | but higher levels of interest 'cause it's this new thing.

01:39:25.060 | Or you can withdraw it and you can put it into cold storage

01:39:28.460 | on a hardware device.

01:39:29.520 | You can leave it in a software wallet.

01:39:30.700 | There's kind of all these storage options.

01:39:32.680 | So BlockFi is kind of the one that I'm biased towards

01:39:35.120 | because I- - So BlockFi,

01:39:36.440 | sorry to interrupt.

01:39:37.360 | So BlockFi is Bitcoin only,

01:39:41.240 | or is it an exchange with other cryptocurrencies?

01:39:42.920 | - It's got a bunch of different ones, yeah.

01:39:44.200 | They basically are agnostic to what it is,

01:39:47.600 | but they provide kind of financial products

01:39:50.440 | to crypto investors.

01:39:51.680 | - Okay, so you mentioned a few interesting ideas

01:39:54.160 | that'd be nice for people who would not be familiar with it.

01:39:58.120 | Cold storage, hot storage, what does that mean?

01:40:00.980 | So like I go to a website and I convert dollars to Bitcoin.

01:40:05.980 | That's a kind of storage.

01:40:07.880 | That's like online banking, right?

01:40:10.560 | What else is there?

01:40:13.160 | - So there's a couple of different things

01:40:14.480 | that you can do, right?

01:40:15.360 | And let's use the legacy system as kind of an example.

01:40:17.880 | So if I want to get currency

01:40:22.200 | and I put it in my bank account, it sits there.

01:40:25.200 | I have to trust that the bank doesn't go under,

01:40:28.040 | nobody steals it, all this kind of stuff.

01:40:30.060 | There's insurance for it, right?

01:40:31.600 | There's all these kinds of benefits in the legacy system

01:40:34.120 | to make sure that as long as I don't have,

01:40:35.560 | you know, millions and millions of dollars there,

01:40:37.040 | I'm gonna be protected pretty much if anything happens

01:40:39.680 | through FDIC insurance.

01:40:41.900 | If I want to do that,

01:40:43.940 | I'm taking that counterparty risk though.

01:40:45.880 | So it's mitigated, but there's still counterparty risk.

01:40:47.820 | I'm counting on that bank.

01:40:49.240 | But it is easier to move it around, right?

01:40:50.860 | If all of a sudden you call me up and say,

01:40:51.980 | "Hey, send me some money."

01:40:52.800 | I can press a couple of buttons on my computer

01:40:54.780 | and it'll send it to you.

01:40:56.420 | If I want deeper level of security,

01:40:58.740 | I can go and I can get the physical dollars

01:41:01.700 | and I can go and I can, you know, put it under my mattress.

01:41:04.620 | Right?

01:41:05.460 | And I can say, "You know what?

01:41:06.460 | It's not gonna be as easy to send it to you immediately,

01:41:08.920 | but if I really want to,

01:41:09.860 | I can go underneath my mattress pretty quickly.

01:41:11.860 | I can grab it.

01:41:12.700 | I can get it back to the bank

01:41:13.980 | and then I can send you the money."

01:41:16.020 | The third thing I could do is I could basically

01:41:17.340 | take those physical dollars out of the bank

01:41:19.300 | and then I could go and I could go put it literally,

01:41:21.800 | you know, in a vault somewhere

01:41:23.080 | that I don't have control over

01:41:24.380 | that's behind 10 passwords and biometric scanning.

01:41:27.580 | And like, it's really difficult to even get to it.

01:41:29.500 | Right?

01:41:30.340 | So if you can almost look at it as like,

01:41:31.460 | there's three stages of security

01:41:33.600 | that you could have in the traditional world.

01:41:35.340 | The same thing is true in Bitcoin.

01:41:36.740 | So you could buy Bitcoin on any exchange.

01:41:38.620 | You can do it on BlockFi,

01:41:39.460 | but you also can do it on places like Coinbase,

01:41:41.180 | Gemini, Kraken, et cetera.

01:41:42.980 | - Also Cash App.

01:41:45.140 | - Cash App.

01:41:46.100 | You can do it on Cash App.

01:41:46.940 | - I think they're still sponsoring this podcast.

01:41:49.820 | (laughing)

01:41:50.820 | I'm not biased at all.

01:41:52.220 | - So once you get Bitcoin on any of these venues,

01:41:56.220 | you can leave it there on that venue.

01:41:58.940 | Now, the trade-off is you're taking counterparty risk.

01:42:02.500 | So somebody else is responsible for the security

01:42:05.020 | and the protection of it.

01:42:06.700 | In many cases, big, well-known companies

01:42:09.240 | who have billions and billions of dollars of assets,

01:42:11.320 | they have higher levels of security.

01:42:12.680 | That's why they're well-known.

01:42:13.800 | That's why people trust them, whatever.

01:42:14.880 | But you are taking counterparty risk.

01:42:17.360 | It is easier to quickly send to somebody.

01:42:19.440 | So the trade-off of like ease of use,

01:42:22.240 | but counterparty risk is big.

01:42:23.440 | And in the Bitcoin community specifically,

01:42:25.360 | there's a huge thing of,

01:42:27.400 | they really, really advocate

01:42:28.560 | for not leaving the Bitcoin there.

01:42:30.720 | Right?

01:42:31.560 | For the obvious counterparty.

01:42:32.860 | The second thing you can do

01:42:33.760 | is you can basically get it off of an exchange

01:42:36.600 | and you can put it in some level

01:42:38.400 | of kind of what I'll call a second layer of storage.

01:42:40.840 | That second layer of storage could be a hardware device

01:42:43.080 | that you can quickly just grab off your desk

01:42:45.120 | and plug into your computer and immediately use.

01:42:47.200 | - That's what they call like a hardware wallet.

01:42:48.640 | - Hardware wallet, yep.

01:42:49.680 | Or you can have some sort of software wallet, right?

01:42:51.760 | Where it's not on an exchange,

01:42:53.280 | but there is some level of in between,

01:42:55.680 | between the hardware wallet

01:42:56.760 | and the exchange and the software wallet.

01:42:58.720 | - But the software wallet is connected to the internet.

01:43:00.920 | - Yeah.

01:43:01.760 | And so if you kind of think of it as like the exchange,

01:43:04.760 | software wallet, hardware wallet,

01:43:06.760 | and then there's something called deep storage, right?

01:43:08.680 | Or cold storage.

01:43:09.800 | And this is, you know,

01:43:11.160 | literally there was a company called Zappo

01:43:14.640 | that would put things in deep cold storage

01:43:17.480 | and it was literally buried in a mountain.

01:43:19.800 | So like the odds that somebody's physically gonna go there,

01:43:23.760 | there's armed guards, there's, you know,

01:43:25.280 | kind of all of this type of stuff.

01:43:27.080 | But again, you're taking some level of counterparty risk

01:43:29.040 | because they have your Bitcoin.

01:43:30.720 | And so the saying or the phrase is not your keys,

01:43:34.760 | not your coins.

01:43:36.320 | Or as my buddy, Isaiah Jackson came up with,

01:43:38.720 | he said, not your keys, not your cheese, right?

01:43:42.360 | In terms of sovereignty is important, right?

01:43:45.960 | And ultimately this goes back

01:43:47.080 | to kind of the beginning of our conversation

01:43:48.360 | around Bitcoin's ethos, sovereignty, right?

01:43:51.760 | Giving the power back to people.

01:43:53.400 | You don't have to rely on this infrastructure

01:43:56.200 | in order to be able to participate

01:43:58.000 | in this monetary kind of economy.

01:44:00.440 | What you are now able to do

01:44:01.520 | is you're able to use digital sound money.

01:44:04.120 | You're able to keep control of it.

01:44:05.560 | You and you alone are responsible for it.

01:44:07.800 | So the idea of personal responsibility.

01:44:09.880 | And then also you and you alone make the decisions

01:44:12.600 | as to whether you hold onto it

01:44:14.520 | or you use it without censorship, right?

01:44:16.920 | No one can tell you what you can do with it

01:44:18.400 | or can't do with it.

01:44:19.240 | And so the purchase and the storage,

01:44:23.040 | what I find is depending on who you are,

01:44:26.480 | there's varying degrees of kind of concern

01:44:30.680 | or decisions that get made there.

01:44:32.480 | And a lot of it comes down to personal preference.

01:44:35.080 | The Bitcoin community though,

01:44:36.080 | absolutely will over-optimize for sovereignty

01:44:39.720 | and kind of hardware or cold storage.

01:44:42.440 | - I wonder if you can sort of comment on that,

01:44:44.640 | 'cause you have both sort of a cash app

01:44:49.560 | and a BlockFi and Coinbase.

01:44:51.560 | Like you can store it there,

01:44:54.120 | you can purchase and trade it there

01:44:56.200 | and store it there and so on.

01:44:57.880 | But ultimately they're saying,

01:44:59.760 | you wanna keep some of it there,

01:45:01.840 | but you wanna move it to the hardware wallet.

01:45:04.600 | And the cold storage of the hardware wallet

01:45:07.320 | is like you can disconnect it from the computer

01:45:09.360 | because ultimately stuff that's connected to the internet

01:45:12.960 | can be compromised, can be controlled by governments

01:45:16.320 | and other parties and so on.

01:45:18.040 | What are your thoughts about sort of practically speaking

01:45:21.560 | for maybe like a regular citizen,

01:45:25.480 | what should be the role of the hardware wallet

01:45:28.200 | in their lives?

01:45:29.280 | - Yeah, so at the highest level,

01:45:30.840 | I just think that like learning about it is important, right?

01:45:33.480 | So even if you only have $5 equivalent of Bitcoin,

01:45:36.840 | going and understanding here's how it works,

01:45:39.000 | here's why it's important,

01:45:40.040 | here's how I would actually withdraw from an exchange

01:45:42.840 | under the hardware wallet,

01:45:43.680 | like that alone just as an intellectual exercise

01:45:46.480 | is a worthwhile pursuit.

01:45:47.440 | I think people should go do that.

01:45:48.640 | - Actually go through the process of the steps

01:45:50.440 | so you feel like you can do it, yeah.

01:45:52.800 | - Yeah, it's kind of like if I said to you,

01:45:54.520 | hey, we're gonna go buy an asset

01:45:56.200 | and you never went and you looked at it,

01:45:57.480 | you never went and made a decision like,

01:45:59.720 | sure, maybe I did or I didn't do it,

01:46:01.640 | but like you didn't actually experience it, right?

01:46:03.680 | And so I think that that's an important part.

01:46:05.480 | The second thing is each person is different

01:46:08.200 | from how they view this asset.

01:46:10.560 | So there are some people who are speculating, right?

01:46:12.400 | There's three use cases for Bitcoin.

01:46:13.720 | There's store value, medium of exchange and speculation.

01:46:16.600 | And the people who are speculating,

01:46:17.880 | they can't put it in deep cold storage

01:46:19.680 | because they need to be able to trade it.

01:46:21.880 | So what ends up happening is they fall in the bucket

01:46:24.480 | of like high risk, high reward.

01:46:26.400 | They're trying to trade,

01:46:27.760 | they're trying to do all these things

01:46:29.080 | and sure, maybe there are profits that they can generate

01:46:31.040 | if they're good at it,

01:46:32.080 | but also they're introducing a lot of risk.

01:46:34.600 | And so that person is very different

01:46:35.920 | than the person who says, hey, I bought one Bitcoin

01:46:38.160 | and I'm gonna save it for my child, right?

01:46:40.320 | And I'm gonna give it to them on their 18th birthday.

01:46:42.640 | And so when you start to look at this,

01:46:44.280 | what you end up saying is,

01:46:46.200 | what are you actually purchasing this for?

01:46:48.760 | Kind of like, why are you doing it?

01:46:50.440 | And then what's your time horizon?

01:46:52.520 | And what ends up happening is more and more people

01:46:55.520 | in the Bitcoin community have longer time horizons.

01:46:57.640 | One of the advantages to this community, right?

01:47:00.560 | If you look at the on-chain metrics,

01:47:02.320 | 60% of Bitcoin haven't moved from the digital wallet

01:47:05.760 | in which they sit in the last 12 months.

01:47:08.440 | So even though it's appreciated hundreds of percent

01:47:10.720 | on the upside, there's been lots of volatility,

01:47:12.840 | a 50% drop in a single day in terms of the US dollar price,

01:47:16.640 | still doesn't move.

01:47:17.760 | And so these are the kind of long-term holders, right?

01:47:19.600 | These are the iron fist or as recently

01:47:22.360 | it's become popular, the diamond hands, right?

01:47:24.640 | - Diamond hands.

01:47:25.760 | - They're just, they're not going anywhere.

01:47:27.800 | And so I think that those people are much more likely

01:47:31.360 | to not have their Bitcoin on exchanges or in software walls.

01:47:35.520 | They've got it in some sort of like highly secure environment

01:47:39.040 | and one in which they have deep sovereignty

01:47:42.040 | or kind of a prevalent sovereignty.

01:47:44.880 | And the reason for that is because they have

01:47:47.000 | that long time horizon.

01:47:48.120 | They don't want to be kind of convicted around Bitcoin,

01:47:52.760 | sound money, macro environment, all this stuff.

01:47:55.800 | And then they make a mistake because they trusted,

01:47:58.280 | ABCD company and that counterparty risk

01:48:01.640 | that ends up actually being fatal or detrimental.

01:48:04.920 | - So again, this is not financial advice disclaimer,

01:48:09.380 | but let me ask, in terms of investment advice on Bitcoin,

01:48:14.380 | so you see Bitcoin as potentially not just the thing

01:48:17.640 | that you speculate over like buy and sell,

01:48:20.480 | buy and sell, buy and sell,

01:48:22.140 | but it's something that you can just buy only.

01:48:24.600 | I believe I've heard that you own quite a large percentage

01:48:28.960 | of your wealth in Bitcoin and you're basically buying only

01:48:33.840 | and storing long-term.

01:48:35.000 | So that's something that's a legitimate way

01:48:37.520 | to approach Bitcoin in your recommendation.

01:48:40.200 | - Go to other cultures.

01:48:41.160 | So if we remove ourselves from the Western world culture

01:48:44.400 | of investing in gamification of financial markets

01:48:47.840 | and the financialization of everything,

01:48:49.820 | let's say we go to the culture of India.

01:48:53.200 | For hundreds, if not thousands of years,

01:48:55.440 | families basically saved their wealth in gold

01:48:59.320 | and in jewelry and in these hard assets

01:49:02.220 | with the expectation to pass it on to the next generation.

01:49:06.520 | And so it would be blasphemous to sell the family's gold

01:49:10.960 | in that culture.

01:49:12.520 | Your great-grandfather gave it to your grandfather,

01:49:14.600 | your grandfather gave it to your father,

01:49:15.720 | your father gave it to you.

01:49:17.660 | And so in that culture, the long-term kind of holding

01:49:23.660 | is the default.

01:49:24.940 | I think that what Bitcoin has presented again

01:49:28.860 | is a digital application of the exact same thing,

01:49:32.460 | which is that while everything else in the world

01:49:34.380 | is being devalued, that is denominated in a currency

01:49:38.540 | that is being inflated away, whether it's quickly or not,

01:49:42.580 | this finite supply, this scarce asset ends up accruing

01:49:46.180 | more and more value over time.

01:49:48.260 | And so I think that for me personally,

01:49:52.060 | I've got over 95% of my net worth that's in this.

01:49:55.380 | - Over 95% of your net worth.

01:49:59.500 | - There's two important caveats to this.

01:50:01.940 | One is I didn't buy some Bitcoin in 2011 or '12, right?

01:50:06.940 | And then all of a sudden it appreciated a bunch

01:50:09.340 | and it grew into that, but from a cost basis perspective,

01:50:12.860 | I put $100 and now it's a ton of money.

01:50:15.660 | Instead, what I did was I basically in 2018

01:50:20.000 | saw Bitcoin from a US dollar price standpoint

01:50:22.760 | was falling and falling and falling.

01:50:24.400 | And in December of 2018, I said,

01:50:25.840 | take about 50% of my net worth and convert it

01:50:28.880 | from dollar denominated assets into Bitcoin.

01:50:31.600 | So it was a very kind of intentional decision

01:50:33.200 | with a very specific view on the world

01:50:34.640 | as to like why I was doing it.

01:50:36.920 | I then essentially just let it sit there, grow, whatever,

01:50:40.440 | until the spring of 2020.

01:50:43.800 | And when I saw the government step in and start to say,

01:50:46.360 | hey, we're going to really be aggressive

01:50:48.780 | in terms of interest rate manipulation

01:50:50.280 | and quantitative easing,

01:50:51.560 | I then decided to go ahead and take basically the remainder

01:50:54.440 | and start to convert it as well.

01:50:56.000 | And so it became very aggressive in doing that.

01:50:58.080 | And so the way that I look at it

01:51:00.200 | is that's actually my savings, right?

01:51:03.000 | And so in some weird way, if I said to you,

01:51:05.080 | what's the dollar worth?

01:51:06.080 | You'd say, well, a $1 bill is worth $1, right?

01:51:09.600 | Bitcoin to me, I denominate my wealth in Bitcoin.

01:51:12.400 | So I think of one Bitcoin is worth one Bitcoin,

01:51:14.960 | not one Bitcoin is worth 60,000 or 55,000 or 70,000, right?

01:51:18.360 | I denominate everything in Bitcoin.

01:51:19.600 | When I make a purchase in my head,

01:51:21.680 | I'm calculating how much Bitcoin am I spending right now?

01:51:24.360 | Right?

01:51:25.200 | Well, guess what happens?

01:51:26.240 | When you have a devaluing currency as the denominator,

01:51:29.520 | doesn't matter, right?

01:51:31.400 | Like you're financially incentivized to spend or invest,

01:51:33.880 | right, to consume.

01:51:35.740 | When you have an appreciating currency,

01:51:39.220 | all of a sudden you become much less consumptive

01:51:41.880 | in your behavior. - That's fascinating.

01:51:43.280 | Yeah.

01:51:44.120 | - Because you're actually trading off

01:51:46.480 | future purchasing power for the consumption today.

01:51:50.800 | - It's fascinating to think that

01:51:52.400 | when you move about this world,

01:51:56.320 | you think in Bitcoin, you behave differently

01:51:58.960 | as if you think in dollars.

01:52:01.800 | That's really fascinating.

01:52:03.320 | - People, but here's the thing is,

01:52:06.240 | the last 50 years or so is actually the outlier in history.

01:52:10.000 | Most people used to think this way.

01:52:13.200 | - Yeah.

01:52:14.080 | - It's only when a fiat currency got introduced

01:52:17.440 | that one argument, the positive argument or perspective,

01:52:21.040 | is there was an explosion in growth.

01:52:23.140 | But really it's because there was a financial incentive

01:52:25.880 | to consume.

01:52:26.720 | - Yeah.

01:52:27.560 | - Right?

01:52:28.380 | And there's nobody better in the world

01:52:29.560 | than the United States at consuming.

01:52:31.680 | And we consume anything and everything.

01:52:33.840 | And if you wanna see a great example,

01:52:35.660 | look at how big the Coca-Colas are at McDonald's, right?

01:52:39.360 | You go to other places, they don't serve them that big.

01:52:41.520 | And so the other example, or the negative argument,

01:52:46.040 | is we have to consume.

01:52:49.440 | Because if not, you end up being the bottom 45%

01:52:52.720 | of Americans that held no investable assets

01:52:55.680 | and actually are just having their wealth devalued away.

01:52:57.980 | So holding the dollars end up being

01:53:00.160 | a very bad economic decision.

01:53:03.040 | And so when you then switch to this sound money,

01:53:06.320 | you say, "Wait a second, why would I,

01:53:08.320 | if today I can trade one Bitcoin,

01:53:10.840 | back in October of last year,

01:53:12.640 | one Bitcoin for 10,000 US dollars,

01:53:15.440 | why would I spend that if at some point in the future,

01:53:18.360 | whether it's a month from now or 10 years from now,

01:53:21.720 | I could trade it for something much, much more than that?"

01:53:25.280 | You just become much more of a anti-consumer

01:53:30.280 | and much more of a long-term thinker.

01:53:32.160 | - Yeah, from the individual perspective,

01:53:33.600 | that's pretty powerful.

01:53:34.420 | I wonder, I mean, I think that's an interesting debate,

01:53:37.040 | what's better for the long-term economy,

01:53:40.000 | no, better for the growth of the civilization.

01:53:44.560 | Because capitalism is fascinating.

01:53:47.880 | It seems to work pretty well.

01:53:51.440 | There's this kind of, like Eric Weinstein says

01:53:55.160 | that one of the problems is for the past several decades,

01:53:59.480 | this whole economy, society is built on the idea

01:54:03.520 | that we have to keep growing.

01:54:05.120 | Like it depends on that idea.

01:54:07.680 | And it's a good question whether that's going to result

01:54:11.040 | in huge problems, or if like a college student

01:54:14.480 | on a deadline, the dependence on growth

01:54:19.480 | will mean that we'll have to grow.

01:54:21.920 | Like the fear of death will force us to grow.

01:54:25.440 | - But I think there's a false equivalency

01:54:27.000 | between we're dependent on growth,

01:54:30.080 | and then if the world was denominated in sound money,

01:54:32.760 | we don't grow.

01:54:34.200 | What I think ends up happening is we remove

01:54:37.040 | a lot of the society's bullshit.

01:54:39.520 | Because right now, when the money is free,

01:54:42.440 | or the currency is free, you can come up

01:54:44.840 | with all kinds of crazy stuff,

01:54:45.960 | and people will give it to you, right?

01:54:48.000 | When all of a sudden, it's really, really valued

01:54:51.420 | by the population.

01:54:53.000 | - The decisions are better.

01:54:54.440 | - Yeah, you have to provide real value

01:54:57.000 | in the goods and services you provide

01:54:58.320 | in order to get them to give it to you.

01:54:59.760 | - There's less room for corruption,

01:55:01.120 | less room for manipulation.

01:55:02.800 | That's not actually productive, yeah, definitely.

01:55:07.160 | So you said you moved a lot of your investment

01:55:11.120 | into Bitcoin.

01:55:12.240 | So you're a special human being in many ways.

01:55:19.040 | So you're like a strategic thinker,

01:55:21.680 | but you're also a deep thinker about this whole thing.

01:55:24.080 | But when you look at a regular pleb like me,

01:55:27.360 | in terms of just investing and moving

01:55:29.160 | into thinking about cryptocurrency,

01:55:32.600 | is there a strategy that you recommend?

01:55:34.920 | What are the different options about investing into Bitcoin?

01:55:38.520 | - Yeah, so I think that there's just kind of timeless advice

01:55:42.040 | when it comes to investing or acquiring an asset in general.

01:55:46.400 | Dollar cost averaging is usually the best way

01:55:48.720 | to think about it.

01:55:49.560 | And what I mean by that is most people

01:55:52.400 | don't just have a pile of currency sitting there, right?

01:55:55.640 | It's not like they have a million dollars

01:55:56.960 | sitting in their bank.

01:55:57.800 | It's like, what do I do with it?

01:55:59.240 | That situation aside, what happens is

01:56:01.680 | they trade their hours and their effort for currency.

01:56:06.160 | And so as they get paid every two weeks, let's say,

01:56:09.240 | the best way to acquire Bitcoin

01:56:11.160 | without having to worry about timing markets

01:56:13.200 | and being a professional trader

01:56:14.800 | is to simply take whatever the percentages that you want

01:56:17.640 | and to buy Bitcoin when you get your paycheck.

01:56:20.440 | So if you get paid on the 1st and 15th of every month

01:56:22.960 | on that day, you should go take,

01:56:24.960 | let's say it's 3% of your paycheck.

01:56:26.840 | Take 3%, go buy Bitcoin.

01:56:28.320 | Don't worry about what the price is.

01:56:29.560 | You should do that over time.

01:56:30.880 | And the reason why that's important is

01:56:32.920 | if in December of 2017, when Bitcoin was at $20,000,

01:56:36.600 | it was the height of kind of this last big upwards movement,

01:56:40.240 | you had taken all of your money

01:56:41.880 | and you had put it into Bitcoin,

01:56:43.920 | you would have had to wait almost three years

01:56:46.040 | just to get back to quote unquote break even

01:56:48.360 | in US dollar terms.

01:56:50.240 | If at the same time you had simply bought then

01:56:54.360 | and over the next three years bought every two weeks,

01:56:57.120 | you would have been up hundreds of percent three years later

01:57:01.000 | because what ended up happening

01:57:02.000 | was you bought a bunch of Bitcoin

01:57:03.080 | when it was at 15, 12, 10, nine, eight, three, four,

01:57:07.200 | five, five, five, all the way back up on the other side.

01:57:11.120 | And so dollar cost averaging is one of these weird things

01:57:13.940 | that it almost sounds too easy.

01:57:15.740 | But what we find is in America,

01:57:18.600 | we have a lack of financial education.

01:57:20.600 | And so rather than try to be smarter than markets,

01:57:24.200 | what most people are better off doing is just saying,

01:57:25.680 | hey, set your what's called an asset allocation plan.

01:57:29.120 | I want 30% in stocks, I want 10% in real estate,

01:57:32.560 | I want this, this, whatever.

01:57:33.800 | And every time you get your paycheck,

01:57:35.460 | just think of it as a savings account, right?

01:57:37.680 | Just put it in based on those percentages

01:57:40.160 | and don't think about it.

01:57:41.880 | And over a long enough period of time,

01:57:43.440 | what we find is almost anyone in the United States,

01:57:46.600 | right, there's exceptions,

01:57:47.440 | but almost anyone in the United States

01:57:49.080 | can become a millionaire in their lifetime

01:57:51.480 | if they follow these plans and have that long-term view

01:57:53.840 | and they allow compounding to work for them.

01:57:56.000 | - And so don't look at the price of Bitcoin

01:57:58.000 | and all that kind of stuff,

01:57:58.960 | just pick a specific time, specific day that you just buy,

01:58:03.960 | and you just keep buying.

01:58:05.600 | That's probably good investment advice

01:58:07.000 | across any kind of assets.

01:58:08.560 | - If you don't believe in Bitcoin and you just wanted,

01:58:11.520 | let's say you just want to do the S&P 500.

01:58:14.020 | You shouldn't try to time the market

01:58:15.200 | of the S&P 500 either, right?

01:58:16.440 | You should just, every two weeks,

01:58:17.780 | you should just buy some and over a 20-year period,

01:58:20.460 | you're gonna end up buying it

01:58:21.640 | at all kinds of different prices,

01:58:22.920 | but you're gonna get kind of a blended average.

01:58:24.800 | And the more important thing is the compounding

01:58:27.400 | and the time in the market

01:58:28.520 | than did you buy it at 2% higher or lower

01:58:31.980 | than where you bought it.

01:58:32.820 | It doesn't really matter.

01:58:33.660 | - And buying often makes you, I guess,

01:58:35.840 | resistant, robust to the volatility of the market

01:58:39.920 | or the volatility of the Bitcoin price and so on.

01:58:42.440 | That said, Bitcoin price is volatile.

01:58:48.640 | And again, the argument I've heard is like

01:58:53.640 | everything that's going to be a lot more valuable

01:58:59.080 | in the future, like if you look at the history,

01:59:01.920 | like companies like Apple, like Tesla is now,

01:59:05.480 | I mean, but let's look at companies

01:59:08.480 | that have now stabilized, right?

01:59:10.360 | Apple is a good example.

01:59:12.800 | It's like volatile in the beginning.

01:59:15.000 | And so the argument for Bitcoin is like,

01:59:17.200 | yeah, this is the early stages

01:59:18.760 | because it's going to be a lot more valuable.

01:59:21.600 | Right now it's volatile.

01:59:23.000 | And this is why you have to have these kinds of strategies

01:59:25.080 | to ride out the volatility.

01:59:26.740 | Of course, everything that goes to zero is also volatile.

01:59:29.880 | Like the early days are volatile.

01:59:32.300 | Do you see like this volatility is like a feature or a bug,

01:59:36.860 | or is this just like a way of life?

01:59:38.840 | - So Amazon is the one that I know the numbers on

01:59:41.080 | in terms of the early volatility.

01:59:43.040 | Every year since it has gone public,

01:59:45.600 | it's had a double digit drawdown in that year.

01:59:49.360 | The average is over 30%.

01:59:52.080 | And one time it drew down over 95%.

01:59:55.320 | Sounds a lot like Bitcoin, right?

01:59:56.800 | Like, oh, wow, this is crazy.

01:59:58.280 | But it's one of the best performing stocks

02:00:00.880 | in the last 20 years, if not the best performing stock.

02:00:03.520 | And so volatility is not positive or negative.

02:00:06.920 | It's positive or negative compared to the position you're in.

02:00:10.320 | So if you're long and it's volatile to the upside,

02:00:13.560 | it's positive.

02:00:14.680 | If you're long holding something

02:00:16.440 | and it's volatile to the downside,

02:00:18.240 | you see it as a negative.

02:00:19.200 | It's all about perspective.

02:00:20.720 | With that said, another way that I look at this

02:00:24.400 | is every asset priced in Bitcoin is down significantly.

02:00:29.400 | So over the last one, three, five years,

02:00:34.140 | the dollar priced in Bitcoin has crashed 99%.

02:00:39.140 | If you denominate stocks, it's down like 80%, 85%.

02:00:43.760 | If you denominate gold, if you denominate bonds,

02:00:46.000 | if you just go down the line, real estate, et cetera,

02:00:47.840 | it's all down massively against Bitcoin.

02:00:51.120 | Now, you could argue that that's because Bitcoin

02:00:53.560 | is appreciating in US dollar terms.

02:00:55.840 | Or you could actually argue

02:00:57.680 | that the world is repricing this asset.

02:01:00.400 | It's doing price discovery on this asset.

02:01:02.280 | And it's essentially comparing.

02:01:03.680 | It's saying, hey, Bitcoin versus this stock,

02:01:06.100 | or Bitcoin versus this ounce of gold,

02:01:07.640 | or Bitcoin versus this dollar, which is more valuable.

02:01:10.480 | And it continues to move up in the rankings

02:01:12.280 | in terms of the value that the world ascribes to this.

02:01:15.040 | Some of that's based on Lindy effect,

02:01:16.400 | just the longer it persists,

02:01:17.640 | the more likely it is to survive.

02:01:19.540 | Some of that's based on the underlying fundamentals

02:01:22.000 | of how much computing power, the usage,

02:01:23.940 | transaction volume, things like that.

02:01:26.160 | But some of it also is that as more and more people

02:01:29.100 | wake up to the fact that it's a finite supply asset

02:01:31.520 | that has a place in the world and demand increases,

02:01:34.640 | people just naturally compete and ascribe more value to it.

02:01:38.360 | And so the volatility, I think, all comes back to like,

02:01:41.760 | what do you price your life in?

02:01:44.360 | For majority of people, that's dollars.

02:01:46.000 | And so you look at the US dollar price,

02:01:47.200 | you get all this volatility.

02:01:49.380 | The beauty of this is that 60% that doesn't move,

02:01:52.280 | regardless of price upward or downward in movement,

02:01:56.220 | those people aren't looking at the day-to-day price.

02:01:58.760 | What they've basically said is,

02:01:59.640 | I've acquired X amount of Bitcoin,

02:02:01.960 | and I'm just gonna hold it for years.

02:02:04.160 | And every time somebody has done that, right?

02:02:05.760 | If you bought Bitcoin at any point in the last 12 years

02:02:08.960 | and you held it till today,

02:02:11.240 | you are up in US dollar terms.

02:02:13.840 | Now, if we had this conversation 18 months ago,

02:02:16.800 | couldn't say that.

02:02:18.240 | So it's all about not only the acquisition price,

02:02:21.600 | if you will, it's also when are you looking at it, right?

02:02:24.940 | Because there was a point in 2017,

02:02:26.360 | you could have said the same thing,

02:02:27.400 | but in 18, you couldn't.

02:02:28.840 | And so I tend to think a lot about,

02:02:30.960 | humans are really, really bad at short-term decision-making

02:02:35.480 | because we're so emotional,

02:02:36.640 | especially when something has a price tied to it.

02:02:38.760 | - And so in terms of our strategies and decision-making,

02:02:42.200 | we should be long-term and have like a regular,

02:02:44.440 | almost think like an algorithm in that kind of way.

02:02:48.040 | So I think you've tweeted that you believe

02:02:50.840 | that Bitcoin has a chance of reaching 1 million.

02:02:53.240 | I don't know what it is currently.

02:02:54.440 | I think it's 60, which is incredible.

02:02:58.300 | I think I remember when it was,

02:03:01.880 | at least in the double digits,

02:03:03.200 | I think I remember it was in the single digits of a dollar.

02:03:05.940 | So the fact that it's cross 50 is crazy,

02:03:09.620 | but you're even crazier apparently,

02:03:13.340 | thinking that it can reach a million.

02:03:15.380 | So do you think it's possible for it to reach a million?

02:03:17.780 | Is there some kind of transformative effects

02:03:19.740 | we'll have to see first?

02:03:21.160 | When might it reach a million?

02:03:22.900 | Like what are the signs that we would look for,

02:03:25.660 | what's required for it to reach a million?

02:03:28.100 | - So let's just look at it from a macro perspective.

02:03:31.220 | Gold is a $10 trillion asset.

02:03:33.740 | And when you compare the technology of gold

02:03:36.100 | to the technology of Bitcoin,

02:03:38.140 | Bitcoin is superior in every single way, right?

02:03:40.260 | It's more portable, it's more divisible,

02:03:42.940 | it's more verifiable, it's more scarce on everything.

02:03:46.260 | And so some people would argue it's a 10X improvement.

02:03:49.020 | Some people argue it's a 100X improvement

02:03:50.660 | from a technology standpoint.

02:03:52.500 | And so we don't need Bitcoin to actually

02:03:57.340 | kind of capture the full 10X or 100X improvement

02:04:00.780 | from a market cap standpoint.

02:04:02.840 | If Bitcoin simply captures 2X the value,

02:04:06.420 | it'd be a $20 trillion market cap,

02:04:08.420 | which would put Bitcoin at about a million dollars, right?

02:04:10.580 | So kind of just from a macro perspective,

02:04:12.420 | if you have a 10X or 100X improvement

02:04:14.180 | from a technology standpoint,

02:04:15.700 | and you directionally get some value capture

02:04:18.440 | in that direction, you're hitting around

02:04:20.900 | a million or more dollar price point.

02:04:23.220 | - Can I ask a quick question,

02:04:24.580 | which is what's the current market cap for Bitcoin?

02:04:28.100 | - The current market cap's right around a trillion,

02:04:29.640 | just over a trillion dollars.

02:04:30.820 | - And you're saying gold is 10 trillion.

02:04:32.860 | Sorry, where did you get the 20 trillion?

02:04:36.860 | - 20 trillion would just be 2X gold's market cap.

02:04:39.760 | - Got it.

02:04:40.600 | - Right, so if it's a 10X technology improvement,

02:04:42.160 | let's just say it only captures 2X the market cap.

02:04:44.400 | - Got it. - Right?

02:04:45.300 | And so again, if it was to capture just gold's market cap,

02:04:48.360 | kind of the equivalent, puts you around $500,000, right?

02:04:51.340 | So you can kind of see there's-

02:04:52.180 | - For a single Bitcoin.

02:04:53.020 | So if you capture the entirety of the gold market,

02:04:56.360 | then it would be value of a single Bitcoin.

02:04:59.220 | The price of a single Bitcoin would be $500,000.

02:05:03.960 | Okay, to reach a million, it would be double that.

02:05:07.000 | That's where the 20 trillion comes from.

02:05:08.760 | - Correct. - Got it.

02:05:10.120 | - So if you then say to yourself,

02:05:11.920 | okay, how does the pricing kind of cycles work, right?

02:05:16.920 | Or the boom and bust cycles?

02:05:19.660 | Gold is a very kind of linear type supply schedule,

02:05:26.320 | meaning that there is a certain amount of gold

02:05:29.340 | that comes out of the ground each year.

02:05:30.740 | The inter-year variation in that incoming supply

02:05:35.460 | is not much, right?

02:05:36.300 | Maybe there's an extra mining company that gets set up

02:05:38.540 | or a couple of them, or maybe one goes out of business.

02:05:40.780 | But for the most part, the kind of inflationary increase

02:05:44.660 | to the supply of gold is pretty stagnant year over year.

02:05:48.880 | Bitcoin has a very unique feature, which every four years,

02:05:53.900 | there is a programmatic supply shock,

02:05:56.720 | meaning that in the beginning,

02:05:58.560 | 50 Bitcoin every 10 minutes was introduced into the supply.

02:06:01.840 | After four years of that happening every 10 minutes,

02:06:04.440 | it was cut in half.

02:06:05.600 | So in a single moment, it went from 50 to now it was 25.

02:06:09.440 | Four years, every 10 minutes, 25,

02:06:11.700 | got cut in half again to 12 and a half.

02:06:13.440 | And then recently in May 2020, it got cut to 6.25.

02:06:16.000 | When you have an asset that is determined,

02:06:19.960 | the price based on supply and demand,

02:06:22.560 | you normally have two inputs to the equation.

02:06:25.140 | What is the supply and what is the demand?

02:06:27.700 | In an asset like gold or a stock or anything else,

02:06:31.200 | we have to do our best guess at the supply,

02:06:34.320 | both the existing supply and the incoming supply,

02:06:36.880 | and then do our best guess at the demand.

02:06:38.700 | And we're actually pretty good at this a lot of times

02:06:40.360 | in terms of directionally saying it's gonna go up or down,

02:06:43.300 | and here's kind of some price point milestones.

02:06:45.800 | Bitcoin's unique in that there's 100% verifiable proof

02:06:50.400 | of the existing supply, the total supply,

02:06:54.280 | and the incoming daily supply.

02:06:56.280 | So we know 100% I can show you on the actual blockchain

02:06:59.760 | or in the code that there's 21 million Bitcoin.

02:07:02.440 | Oh, and that's all there will ever be.

02:07:04.480 | I can show you that there's 18.6 million, give or take,

02:07:08.040 | Bitcoin that actually are in circulation today, right?

02:07:10.680 | And I can go all the way back to every single transaction

02:07:12.400 | that's ever occurred since January 2009.

02:07:14.240 | And then I can show you on a daily basis

02:07:15.760 | that 900 Bitcoin a day are coming into the circulating supply.

02:07:18.920 | And so when you have 100% confidence

02:07:21.360 | because you can prove the supply side of this equation,

02:07:24.960 | you can hold it constant.

02:07:26.320 | I know with 100% accuracy, the supply side.

02:07:29.360 | So now I've reduced the mathematical equation

02:07:32.520 | that I need to do to determine price movements

02:07:34.920 | to a 50% reduction.

02:07:36.760 | I only have to worry about demand.

02:07:37.760 | I don't have to worry about supply.

02:07:39.680 | And so when I look at demand, I can do all kinds of things.

02:07:42.060 | I can take the demand over the last 10 years and the growth

02:07:45.120 | and just extrapolate it out.

02:07:46.320 | I can increase it, I can decrease it, whatever.

02:07:49.120 | But what you find is that the supply shocks

02:07:52.880 | lead to significant price appreciation

02:07:55.800 | as the asset gets repriced

02:07:57.520 | because there's a supply shock to them.

02:08:00.000 | And so probably the best thing that I've done

02:08:02.640 | over the last couple of years was in 2019,

02:08:05.360 | I started to talk about the idea

02:08:06.960 | that we were gonna have both the supply shock

02:08:09.160 | and the demand shock in 2021.

02:08:12.260 | Or I'm sorry, in 2020.

02:08:15.280 | I didn't know when this bull market that we were in

02:08:17.640 | was gonna end, nobody knows, right?

02:08:19.200 | It's impossible to time these things.

02:08:21.200 | But you could tell that we were kind of

02:08:22.320 | at late stages of a cycle.

02:08:23.840 | There was inverted yield curves,

02:08:25.320 | there was rejugerations in the repo markets,

02:08:28.160 | a lot of CEOs leaving their jobs,

02:08:30.000 | you know, all this kind of stuff.

02:08:31.880 | And all I said was at some point when the market turns over,

02:08:35.120 | the government's gonna have to step in.

02:08:36.360 | We were addicted to stimulus.

02:08:38.000 | They're gonna have to manipulate interest rates down

02:08:39.680 | and they're gonna have to print money.

02:08:41.280 | I had no clue that there was gonna be a global pandemic,

02:08:44.600 | that they were gonna have to step in

02:08:45.880 | in such an aggressive way and move rates,

02:08:47.760 | not down, but down to zero.

02:08:49.800 | And that they not only were gonna print

02:08:51.320 | hundreds of billions,

02:08:52.160 | but they could print trillions of dollars.

02:08:54.640 | But the framework that I used to think about this

02:08:57.080 | was when they do that,

02:08:59.360 | everyone is gonna run to store value assets.

02:09:02.720 | They're gonna run to gold,

02:09:03.560 | they're gonna run to Bitcoin, et cetera.

02:09:05.480 | And right as they do that,

02:09:06.960 | it appears at the same time,

02:09:08.440 | there's gonna be this supply shock.

02:09:09.740 | So you're gonna get a supply shock and a demand shock

02:09:11.660 | that are both positive for the price.

02:09:13.200 | And I called it rocket fuel for Bitcoin.

02:09:16.120 | Well, it happened and here we are.

02:09:17.820 | I now look forward and I say, okay,

02:09:20.760 | we are likely going to see a hundred thousand Bitcoin,

02:09:23.080 | a hundred thousand dollar Bitcoin this year,

02:09:24.800 | or at some point, I don't know when it happens,

02:09:26.240 | but we're moving in that direction.

02:09:27.080 | - So you think in 2021, we'll see a hundred thousand?

02:09:30.520 | - That would be my most conservative view.

02:09:33.560 | I've said a hundred thousand dollars since 2019

02:09:36.960 | and people thought that was insane and crazy and all this stuff

02:09:40.480 | now I'm the conservative guy in the room

02:09:41.960 | 'cause I stick with a hundred thousand dollars

02:09:43.520 | and people are saying multiples of that number.

02:09:47.680 | So we'll see what happens.

02:09:49.000 | But I think that there's still a lot of room

02:09:50.800 | kind of to run from a US dollar price standpoint.

02:09:53.200 | What is on the horizon is in 2024,

02:09:56.160 | we will have another supply shock.

02:09:57.860 | And so that's what I think will carry us

02:10:00.240 | to the million dollar Bitcoin price.

02:10:01.080 | - From the 625 to whatever.

02:10:03.360 | - 50% reduction.

02:10:04.400 | - Yeah. - Yeah.

02:10:05.240 | And so that's what I think will basically,

02:10:07.480 | when we get that next supply shock,

02:10:09.200 | that'll carry us up over a hundred,

02:10:10.600 | or over a $1 million Bitcoin price,

02:10:13.320 | which if historical examples persist,

02:10:17.280 | and again, sometimes it's hard to use historical examples

02:10:19.600 | to look at future events.

02:10:22.760 | But if that happens, we would see a million dollars

02:10:24.800 | of Bitcoin by the end of 2026.

02:10:27.440 | - After that wave.

02:10:29.160 | - So 2024 basically is the supply shock.

02:10:31.840 | And within 18 to 24 months,

02:10:34.460 | you would see the kind of top of the next market.

02:10:37.440 | - Hopefully without a coupling to another pandemic.

02:10:41.120 | - Yes, we would like to do all of this

02:10:43.040 | without a public health crisis.

02:10:45.840 | - So that would take it to 20 trillion.

02:10:49.740 | You don't have to compare it to the dollar,

02:10:51.640 | essentially, in some sense,

02:10:53.560 | that the dollar could also lose value.

02:10:55.600 | I mean, there's a lot of kind of dynamics at play here.

02:10:58.600 | Now, but like fundamentally,

02:11:00.080 | there's going to be a huge move

02:11:03.020 | in your prediction of value into Bitcoin.

02:11:06.600 | I mean, that's a fascinating world to think about.

02:11:10.920 | I mean, but I do have to kind of ask you

02:11:14.800 | about the whole space of technology there,

02:11:17.080 | 'cause we're talking about the value of security,

02:11:19.080 | we're talking about the future,

02:11:21.240 | which Bitcoin will be at the center of.

02:11:24.040 | But from my perspective of thinking how like I

02:11:28.960 | and others can build technologies

02:11:30.360 | on top of this kind of decentralized world,

02:11:33.480 | I'm thinking about different technologies out there,

02:11:36.440 | different cryptocurrencies out there,

02:11:38.440 | Ethereum being one,

02:11:40.080 | but there's a lot of others.

02:11:42.200 | So I'd love to get your sort of ideas about some of these.

02:11:44.680 | But so first let me ask you about what the hell is shitcoin?

02:11:49.000 | Is this connected to our previous discussion of the meme?

02:11:55.280 | Does shitcoin cover basically all coins that are not Bitcoin?

02:12:00.280 | Is it mean?

02:12:03.440 | Is it a beautiful?

02:12:04.800 | Is it some mixture of both?

02:12:06.800 | - As with most things in life,

02:12:08.400 | depends who you ask,

02:12:09.600 | the most kind of enthusiastic

02:12:15.920 | and parts of the Bitcoin community,

02:12:18.960 | shitcoin is anything else, right?

02:12:21.320 | Kind of if you ascribe to kind of a maximalistic view

02:12:24.560 | of the world, shitcoin would be anything.

02:12:26.560 | If you look at people who I would say are Bitcoin proponents

02:12:30.320 | yet see value in other things,

02:12:33.240 | shitcoin may be the bottom half of the other things, right?

02:12:37.640 | So I think, again, it's really important

02:12:39.200 | kind of who you ask is how you'll get that answer.

02:12:42.120 | - So there's tiers and the way you divide those tiers

02:12:44.840 | might be different depending on who you ask.

02:12:46.680 | - Ultimately what it is is it's a meme

02:12:49.120 | and it's used to articulate the idea

02:12:52.960 | that whatever you wanna put in that bucket has no value.

02:12:56.320 | So shitcoin, right, are coins that have no value.

02:12:59.640 | What is fascinating about it,

02:13:02.160 | and I think that again,

02:13:03.000 | speaks to the power of the Bitcoin community,

02:13:05.120 | is there was congressional hearings a couple of years ago.

02:13:08.800 | - Oh no.

02:13:09.640 | - And at one point, a congressman from Ohio,

02:13:12.120 | Warren Davidson, who was definitely open-minded

02:13:15.640 | and excited about Bitcoin,

02:13:17.960 | asked an individual on the Congress floor during testimony

02:13:22.880 | to talk about these other coins.

02:13:25.840 | And at one point basically read into the record

02:13:29.400 | the terminology of shitcoin.

02:13:31.440 | - He said the word shitcoin.

02:13:33.080 | - I can't remember if he said it first

02:13:35.120 | or if the other person did, and then he repeated it.

02:13:39.400 | - That's awesome.

02:13:40.360 | - But he definitely,

02:13:41.200 | he was trying to get that read into the record for sure.

02:13:44.720 | And so you can imagine one, again,

02:13:48.360 | the meme speaking insolently to the Bitcoin community

02:13:52.200 | was made him very well liked.

02:13:55.280 | But also two was, it does go back to this idea almost of,

02:14:00.640 | if you and I sat down with 10 CEOs

02:14:03.400 | and we interviewed each one of them,

02:14:05.560 | and then we went in a room and we deliberated,

02:14:07.040 | and we said, we have to pick the person

02:14:08.720 | who's gonna be the most successful.

02:14:10.920 | One of the inputs, not all of the inputs,

02:14:12.480 | but one of the inputs would be,

02:14:13.680 | who's the person who we believe has the best ability

02:14:16.320 | to raise capital, recruit people,

02:14:19.080 | and tell a story to the world that will get them to follow?

02:14:24.080 | And so somebody like Elon

02:14:26.120 | would probably be the best example of this.

02:14:28.480 | When you have decentralized products,

02:14:30.720 | you have no kind of leader, right?

02:14:32.840 | In the sense of somebody who is financially ascribed

02:14:36.120 | to be that leader and kind of the executive decision maker.

02:14:39.460 | So what you have to do is you have to look

02:14:40.560 | at these technologies in these communities and say,

02:14:43.280 | well, which volunteer teams or which technologies

02:14:47.040 | have been able to coalesce these groups around it

02:14:50.080 | and in some way build the same level of engagement

02:14:54.160 | and protection and things like that?

02:14:56.440 | And so you naturally get tribalism,

02:14:59.520 | but you also get things like shitcoin,

02:15:01.680 | because what it does is it's not only a kind of verbal attack

02:15:06.680 | towards others, it's a rallying cry for internal.

02:15:12.120 | What's so funny is that it was started

02:15:15.200 | with the Bitcoin community talking about everybody,

02:15:17.920 | but now you've seen adoption in other communities

02:15:19.820 | who use it, basically say, well, we're not a shitcoin,

02:15:22.240 | it's the next guy.

02:15:23.760 | - Yeah, I mean, the meaning, to be honest,

02:15:26.000 | it's sometimes misused, I think, with anything.

02:15:31.000 | It's like people adopt memes that used to be brilliant

02:15:36.200 | or still brilliant, and they're just not good at using them

02:15:39.760 | so that they become mean.

02:15:41.720 | But when you do it with grace, it can tear down an argument

02:15:48.120 | and at the same time have love and respect underneath it.

02:15:52.480 | I mean, it's a beautiful dance they have to be good at.

02:15:55.880 | People just can suck at communication.

02:15:58.080 | And even a powerful weapon like a meme in the wrong hands

02:16:02.880 | just fires in a way that doesn't get anything done.

02:16:07.640 | But this is like a war of humor and memes.

02:16:10.880 | It's kind of fascinating, exactly like you formulated,

02:16:13.720 | that there's asymmetry of power,

02:16:16.280 | so you have to have guerrilla warfare

02:16:18.000 | in this internet game, especially when there's no leader,

02:16:22.880 | like you said, in a distributed culture.

02:16:23.720 | - The other thing I would say here that is really important,

02:16:28.240 | I think, is from a society standpoint,

02:16:30.280 | we've become very soft and very kind of coddling,

02:16:35.960 | and not in a way that's like,

02:16:38.920 | I think people take this argument too far sometimes,

02:16:41.320 | but what I mean by that is it's almost like

02:16:44.640 | if you're the person who holds somebody accountable,

02:16:47.160 | you become the bad person, right?

02:16:48.840 | If you're the person who says, "Hey, that's wrong,"

02:16:53.360 | you're the bad person, right?

02:16:54.760 | And so in a world where I think

02:16:56.320 | in this kind of influencery, all positive,

02:17:01.000 | if you have any negative feedback or constructive criticism,

02:17:04.560 | like you're the bad person,

02:17:05.920 | it's the ultimate echo chamber, right?

02:17:09.760 | And so I think that what the Bitcoin world does

02:17:13.240 | in some crazy, crazy way to look at it

02:17:16.320 | is Bitcoin is ultimately about truth,

02:17:20.280 | not about narrative, not about feelings or emotion.

02:17:24.960 | It's math.

02:17:26.520 | You look at a blockchain

02:17:28.560 | and you can prove something or you can't.

02:17:31.360 | And so naturally people who are attracted to that

02:17:34.680 | have a very similar approach in life, right?

02:17:36.800 | They say, "Hey, you made X claim, prove it."

02:17:40.200 | And as you can imagine, a great example is like

02:17:43.080 | the financial media meets Bitcoiners,

02:17:45.880 | and it's a bloodbath, right?

02:17:48.000 | In kind of the arena of ideas, because what do they do?

02:17:51.880 | The financial media is used to the soft opinion pieces,

02:17:55.520 | et cetera, and Bitcoiners show up and they're like,

02:17:58.160 | "Here's data point A, B, and C.

02:17:59.880 | Here's example one, two, and three, and you're wrong."

02:18:02.960 | And then all they yell and scream about is like,

02:18:05.840 | "I'm wrong, I'm wrong, I'm wrong."

02:18:06.920 | Like, "You can't say I'm wrong."

02:18:08.040 | And they're like, "No, no, no,

02:18:09.120 | disprove what I just said."

02:18:10.440 | And so you get in this very, very weird world.

02:18:12.480 | - It's fascinating, it's a fascinating battlefield.

02:18:14.160 | But I do wanna say, I've been watching this,

02:18:17.960 | it's kind of interesting.

02:18:19.960 | I think that the pursuit of truth,

02:18:22.320 | like tearing down bad ideas can be done with grace.

02:18:28.600 | And to do it with grace requires a lot of skill.

02:18:32.160 | Like what people don't realize about disagreement,

02:18:35.000 | they think that disagreement is easy.

02:18:39.000 | Like they see the lies or the inaccuracies in the statement,

02:18:45.920 | and they just think they can say wrong.

02:18:48.100 | Yes, you can say that, but if you wanna be effective,

02:18:53.200 | it requires great skill.

02:18:56.280 | Like you look at, I don't know,

02:18:58.240 | a beautiful verbal shit poster,

02:19:03.000 | which is Christopher Hitchens, right?

02:19:04.940 | It requires a lot of skill through your words

02:19:09.560 | to tear down an argument, to criticize,

02:19:13.700 | and to take a step towards truth.

02:19:16.720 | What I'm disheartened by internet culture,

02:19:19.400 | like the negative side is people don't put a lot of effort

02:19:23.680 | in their teardowns.

02:19:25.240 | Like into your shit posting, into your memes,

02:19:29.160 | you should put effort and see it as a skill

02:19:33.000 | that you wanna, if you want to be a part of this culture,

02:19:36.680 | you want to get good at it, like any skill.

02:19:40.640 | It's the 10,000 hours, like get improve,

02:19:44.180 | deliberate practice, self-criticism, all of those things.

02:19:48.460 | Just because you're anonymous doesn't mean

02:19:51.780 | you won't get deep joy and actually have an impact

02:19:54.580 | on the world if you get good at shit posting.

02:19:56.980 | - But I think this is really, really important, right?

02:20:00.220 | Because you're right in that it's all about

02:20:02.540 | intention versus action.

02:20:03.820 | If your intention is to tell somebody that they are wrong

02:20:07.460 | in an effort to get them to see the truth,

02:20:10.140 | that's very different than if your intention

02:20:12.400 | is to tell someone they're wrong and hurt their feelings.

02:20:14.520 | Right, and so when you can unpack intention and action,

02:20:18.860 | you really quickly can tell what somebody ultimately

02:20:21.600 | is trying to accomplish.

02:20:23.640 | I also think that one of the craziest things

02:20:26.020 | that I've seen play out is memes, when I use that term,

02:20:30.160 | I'm not just talking about like a static photo, right?

02:20:32.360 | When I'm talking about these elaborate kind of edited videos

02:20:35.600 | and kind of all this stuff, when done right,

02:20:40.600 | it is the most articulate way to deliver a blunt message.

02:20:45.720 | And it's done in such a way that is humorous

02:20:49.860 | and entertaining, yet really hammers the point home.

02:20:54.160 | And so it's a skill set that many people don't have.

02:20:57.820 | I don't make those, I'm assuming you don't make them either.

02:21:00.480 | I see them, I share the ones that I like, right?

02:21:04.480 | But it does take practice.

02:21:05.840 | And you can tell, look, there's people

02:21:07.200 | who are fantastic meme lords, right?

02:21:09.960 | And there are people who absolutely suck at it.

02:21:13.040 | And it's like anything, it's just how good

02:21:16.440 | are you at communicating?

02:21:18.160 | And I've heard the idea a bunch of times,

02:21:20.160 | so I don't know who to kind of credit for it,

02:21:22.240 | but whether it's emojis, it's GIFs, it's memes, whatever,

02:21:27.240 | this is the extension and evolution of just hieroglyphics.

02:21:30.780 | (laughing)

02:21:31.620 | Right? - Yeah.

02:21:32.740 | - Like we have been doing this for literally centuries.

02:21:35.740 | It's just that now we're doing it on the internet

02:21:37.420 | and you can press a button and you can go

02:21:38.580 | to millions and millions of people immediately.

02:21:41.660 | - But speaking of memes, what the heck do you think

02:21:44.340 | is up with Elon Musk talking about Dogecoin a lot?

02:21:48.300 | Sort of from the cryptocurrency community,

02:21:50.940 | I've been talking to a lot of sort of technologists,

02:21:55.340 | I guess, and reading papers on cryptocurrency.

02:21:58.860 | It's like nobody really sees Dogecoin

02:22:02.740 | as a revolutionary crypto technology.

02:22:05.500 | A lot of people talk about its security issues.

02:22:07.860 | There's a bunch of issues it has.

02:22:09.980 | Nevertheless, you did say that money

02:22:13.100 | is the kind of social construct, right?

02:22:16.400 | And Elon Musk's combination of humor

02:22:21.540 | and brilliant engineering in the various companies he runs

02:22:25.700 | combines to create a kind of value

02:22:29.300 | and excitement behind Dogecoin.

02:22:31.740 | It's like, what is it?

02:22:34.020 | He says that the most amusing outcome

02:22:37.460 | is the most likely kind of idea,

02:22:40.300 | which sounds silly, but there could be

02:22:43.020 | like profound truth to it.

02:22:45.180 | It's like, what do you make of Dogecoin

02:22:47.340 | philosophically or technically?

02:22:50.180 | Is it possible that Dogecoin will overtake Bitcoin

02:22:53.060 | and run the entire world?

02:22:56.780 | I can't even, 'cause it could happen.

02:22:59.460 | It could happen.

02:23:00.460 | But if there's any serious way to answer that question.

02:23:04.840 | - Well, we have to start with Techno King of Tesla

02:23:09.840 | and Master of Coin, as they are so articulately called

02:23:14.060 | in the latest SEC filing.

02:23:15.980 | - He officially changed his title to Techno King.

02:23:18.180 | - Techno King of Tesla.

02:23:19.580 | And the CFO's new title is Master of Coin.

02:23:24.100 | And so when you have a sense of humor,

02:23:28.180 | and frankly, a level of self-confidence

02:23:33.740 | and an element of an appreciation for irony in the world,

02:23:38.660 | Dogecoin is actually one of the least crazy things

02:23:42.940 | that you could talk about

02:23:44.580 | when you're willing to go to Techno King of Tesla,

02:23:46.980 | Master of Coin, and all this stuff.

02:23:49.540 | And so I think that Elon doesn't get enough credit,

02:23:53.820 | frankly, for his understanding of internet culture,

02:23:56.700 | understanding of memes, and understanding of,

02:23:59.380 | frankly, human psychology and marketing.

02:24:02.180 | And so in some crazy way,

02:24:04.500 | every time he talks about Dogecoin,

02:24:06.980 | it's a rallying cry for an entire generation of kids.

02:24:10.100 | It's a rallying cry for an entire industry

02:24:12.900 | in terms of cryptocurrencies and digital technologies.

02:24:16.000 | But this is the flag.

02:24:19.260 | And this is the thing that he can yell and scream about

02:24:22.260 | and tweet about without worry of punishment.

02:24:26.180 | - So he could be talking about Bitcoin,

02:24:27.740 | he could be talking about cryptocurrency,

02:24:29.860 | but that's not going to be as beautifully humorous

02:24:34.300 | in whatever the hell internet culture is as Dogecoin.

02:24:37.500 | He's finding the right language.

02:24:39.060 | He's speaking the language of the people

02:24:41.020 | in the digital age.

02:24:43.700 | - If you wanna reach weird people, you can't be serious.

02:24:47.060 | - And most people are weird.

02:24:49.140 | The masses are weird, so he's speaking to the masses.

02:24:52.940 | - Yeah. - The techno king.

02:24:54.180 | - And even further than that, I think,

02:24:55.940 | is he essentially is,

02:24:58.080 | he's using Dogecoin as a way to say,

02:25:04.260 | "I'm doing this because I can."

02:25:05.980 | - Yeah.

02:25:06.820 | - He couldn't do it with securities.

02:25:10.540 | He couldn't do it with certain types of other assets.

02:25:13.780 | I almost look at it as a Venn diagram.

02:25:15.180 | What's the thing that a bunch of people know about,

02:25:17.160 | care about, think are as funny, whatever.

02:25:19.620 | And also overlay that with the things

02:25:21.420 | that he could actually talk about

02:25:22.740 | that he won't get in trouble for.

02:25:24.420 | - That's a big F you to the SEC.

02:25:26.540 | I could see the people just freaking out.

02:25:29.420 | I mean, I love it,

02:25:30.860 | but I don't know if I would have the guts to do it myself,

02:25:34.740 | but I think he's an inspiration to a lot of us

02:25:38.100 | to be like, "Well, maybe you should grow the guts."

02:25:41.060 | - When you're the techno king,

02:25:42.220 | you can do whatever you want, right?

02:25:43.660 | (both laughing)

02:25:46.020 | And I mean, that's something to aspire to

02:25:48.040 | is to be the techno king in your own little world.

02:25:51.000 | - If you also think about it in the sense of

02:25:53.120 | when you're somebody on a mission

02:25:54.640 | to create interplanetary life,

02:25:59.340 | when you're trying to solve

02:26:01.640 | or put a dent in the climate crisis

02:26:05.400 | or create electric vehicles

02:26:06.920 | and be the first American company in however long,

02:26:09.660 | frankly, the SEC or other things in your life

02:26:16.060 | that you don't ascribe that much importance to

02:26:18.660 | compared to those things, they're almost nuisances.

02:26:23.340 | And that's scary, I think, for shareholders of a company

02:26:26.540 | when the person that you're trusting

02:26:28.680 | to lead you to the promised land

02:26:30.060 | and create shareholder value

02:26:31.760 | doesn't put value on certain things.

02:26:34.700 | But at the same time, I always look at it as a tug of war.

02:26:38.900 | How much of the actions of what he's doing

02:26:41.000 | and calling attention to actually change the way

02:26:44.240 | that regulators, lawmakers, politicians,

02:26:47.340 | countries, whatever, act.

02:26:49.980 | He may not be able to say, "Do X, I'm the techno king,"

02:26:53.460 | and they go do it, but with every step he makes,

02:26:58.060 | he changes some of their behavior.

02:27:01.380 | And so I think that it's a really kind of game

02:27:05.260 | of like 3D chess that frankly, I'm not privy to,

02:27:09.340 | right, and I'm kind of watching from the sidelines

02:27:11.100 | and figuring out alongside everybody else.

02:27:14.520 | But I also don't think that it's just Elon

02:27:18.600 | bought a bunch of Dogecoin and tweets about it

02:27:20.240 | 'cause he thinks it's going to a dollar

02:27:21.560 | and he's gonna make money, right?

02:27:23.120 | Like I don't think it's an economic argument

02:27:25.640 | as to why he's so interested in it.

02:27:27.000 | I think it's much more, it's almost like meta message

02:27:31.860 | for a lot of other stuff.

02:27:33.920 | - Yeah, he's kind of trying to break apart

02:27:36.280 | internet communication from first principles

02:27:38.780 | like he does so many other problems.

02:27:40.040 | It's kind of fascinating to watch.

02:27:41.320 | I know he's taught me quite a bit about communication

02:27:45.620 | and at least for me, it's been liberating

02:27:50.620 | to not give a fuck about the old school way of things.

02:27:56.140 | I've been always bothered by a place I deeply admire,

02:27:59.300 | which is MIT, but there's problems,

02:28:02.540 | the bureaucracies and hierarchies

02:28:04.300 | that hold back innovation, brilliant minds.

02:28:07.180 | And in that sense, Doge is a kind of FU to the system

02:28:12.180 | that's kind of positive, but also kind of,

02:28:17.180 | but it was also an FU.

02:28:19.240 | So in that sense, I think Elon has a perspective

02:28:23.760 | on the world that's similar to Bitcoin, folks,

02:28:26.360 | which I really like, which is like thinking long-term.

02:28:30.380 | It's how visionaries think.

02:28:31.520 | It's like, how will, if I take these ideas,

02:28:36.220 | and the ideas hold true, what will the world look like

02:28:40.880 | in 20, 30, 50 years?

02:28:43.520 | And think about everything in that way.

02:28:45.520 | - Yeah, I like Bezos's view, which is essentially,

02:28:50.060 | how do you minimize regret?

02:28:52.640 | How do you accelerate your life mentally

02:28:55.380 | and go to 80, 90, 100, 150 years,

02:28:57.880 | whatever we end up being fortunate enough to live to,

02:29:01.200 | and then look backwards and say,

02:29:03.140 | this decision that I'm gonna make,

02:29:05.360 | I have two options.

02:29:07.400 | Which one is gonna be the one that I least regret?

02:29:10.240 | And if you continue to make decisions that way,

02:29:13.160 | one, you have that long-term view kind of built in

02:29:15.400 | 'cause you're working backwards.

02:29:16.960 | Two, you are ultimately going to optimize

02:29:19.360 | for minimal regret.

02:29:21.920 | But also three is, even if you only look forward 10 years,

02:29:26.420 | that's much, much further than most people do.

02:29:28.320 | And so it gives you a significant advantage.

02:29:30.280 | And I think that Bitcoin has kind of this like,

02:29:33.800 | you know, proxy for time, as we talked about,

02:29:36.120 | interplanetary travel, where there's multiple steps

02:29:41.280 | from creating a reusable rocket to landing it

02:29:43.560 | to all this stuff, all the way to simple things

02:29:47.280 | just like if you're simply trying to figure out

02:29:50.040 | where the world's gonna be 30 years from now.

02:29:52.880 | Bill Gates says that we overestimate

02:29:55.200 | what we can do in one year,

02:29:56.160 | underestimate what we can do in 10.

02:29:58.760 | Well, to me, it's a kind of degree of mistake

02:30:04.360 | if you will, 10 years, maybe you're off by 10%.

02:30:08.140 | Well, if that line of progress continues,

02:30:10.240 | 20 years, you may be off by 100%.

02:30:13.480 | And 30 years, you may be off by 1000%, right?

02:30:16.080 | Like almost the further you go out,

02:30:18.120 | the more inaccurate you become.

02:30:20.640 | And so I think that people who want to iterate

02:30:24.800 | their way to success, right?

02:30:26.280 | That's a common thing in like the startup world,

02:30:29.240 | end up actually following kind of the breadcrumbs

02:30:33.440 | to where the world is taking them.

02:30:35.640 | But people like an Elon Musk, a Jeff Bezos, a Jack Dorsey,

02:30:40.080 | all the way down the line, all these innovators,

02:30:42.760 | they actually say to themselves,

02:30:44.800 | there is a point in time in the future

02:30:47.280 | where there's a world I want to construct.

02:30:50.240 | And then they go and they construct it,

02:30:52.560 | regardless of the short-term iterations and incentives,

02:30:56.440 | it is just they're driving towards that point.

02:30:58.240 | And I think that it's this whole idea of having this like,

02:31:01.080 | you know, kind of set vision and this refusal

02:31:04.960 | to kind of move or budge off of that.

02:31:08.000 | It's what makes them special.

02:31:09.460 | - One of the things that garnered a lot of excitement

02:31:13.280 | in the crypto community is NFTs.

02:31:17.040 | I have no idea really the depths,

02:31:21.320 | the fundamental technological philosophical depths

02:31:24.360 | of this technology,

02:31:26.560 | whether this is just like a little bit of a fad

02:31:28.680 | or if there's some deep lessons to learn,

02:31:30.640 | whether it's Bitcoin or cryptocurrency in general about it.

02:31:33.680 | Do you have thoughts about like the long lasting

02:31:36.120 | fundamental aspects of NFTs?

02:31:38.760 | - I think there's probably both things happening,

02:31:41.160 | fad and things to learn, right?

02:31:43.680 | And if we just start with like, what is an NFT?

02:31:47.800 | It's a non-fungible token,

02:31:49.440 | meaning that there's no fungibility.

02:31:52.240 | Fungibility is a fancy word.

02:31:55.320 | I always describe it as if I took a hundred dollar bill

02:31:57.260 | and I put it on the table with a bunch of other

02:31:58.720 | hundred dollar bills and we mixed them up

02:32:00.240 | and I just grabbed a hundred dollar bill and left.

02:32:02.520 | I'm no worse as long as they're all,

02:32:04.480 | you know, official hundred dollar bills

02:32:06.800 | because as long as I have a hundred dollars,

02:32:08.040 | I have a hundred dollars.

02:32:08.880 | I don't need that exact same bill back.

02:32:10.740 | So that means that those hundred dollar bills are fungible.

02:32:13.360 | Non-fungible would be like art.

02:32:15.400 | If I took a Picasso and I put it down on the table

02:32:17.680 | and you brought three artists that no one's ever heard of

02:32:19.600 | before and we mixed them up

02:32:20.920 | and I just took any random piece of art

02:32:22.240 | and it wasn't the Picasso,

02:32:23.720 | I lose 'cause the Picasso is really important there, right?

02:32:25.800 | So the non-fungibility is important in art.

02:32:28.640 | What these non-fungible tokens essentially are doing

02:32:30.920 | is they are creating scarcity and originality

02:32:35.920 | in a digital environment.

02:32:38.400 | And what I mean by that is take a music file.

02:32:42.120 | If I had a music file and you wanted it,

02:32:44.240 | you said, send it to me, I press send.

02:32:46.620 | It essentially creates a copy

02:32:48.140 | and you get one music file, I get another.

02:32:50.240 | We don't care.

02:32:51.080 | You can listen to music, I can listen to music,

02:32:52.320 | we're super happy.

02:32:53.980 | If I instead though, have a digital file

02:32:57.280 | that entire premise is based on scarcity

02:33:01.560 | and I hit send and you get a copy and I keep the original

02:33:03.960 | or you get the original and I get a copy, there's a problem.

02:33:07.440 | And so ultimately what I think is playing out with NFTs

02:33:11.200 | is it's a technology,

02:33:13.080 | regardless of where it plays out from blockchains

02:33:16.240 | or what communities or environments,

02:33:19.720 | that just brings true digital scarcity to the internet.

02:33:23.960 | And so naturally what do people do?

02:33:26.600 | They look at the legacy world and they say,

02:33:28.360 | well, what's scarce there that has value?

02:33:30.560 | How do we bring that to the digital world?

02:33:32.160 | So art is a perfect example.

02:33:33.640 | And frankly, last year I started to look at this

02:33:36.880 | 'cause it felt like this was gonna be really, really big.

02:33:40.400 | And the conclusion I came to was

02:33:43.880 | just as Bitcoin is gonna be bigger than gold,

02:33:47.120 | the digital application of something

02:33:49.080 | is gonna be bigger than the analog application,

02:33:51.120 | the same thing's gonna be true in art.

02:33:52.920 | The digital art world is gonna be bigger

02:33:54.520 | than the traditional art world.

02:33:56.200 | People think that sounds crazy at first

02:33:57.800 | until you start to realize it's very, very similar.

02:34:00.960 | The art is more portable.

02:34:02.560 | It can be divisible, right?

02:34:04.280 | It's got a larger demand market

02:34:05.920 | in terms of the internet rather than an auction, right?

02:34:08.240 | All this kind of stuff.

02:34:09.240 | When you display it, it can have motion and music

02:34:13.240 | and all of these aspects to it

02:34:15.120 | that are better than the traditional art.

02:34:17.480 | What the traditional art market has

02:34:18.720 | that the digital art market has not had is the narrative.

02:34:22.160 | Narrative-based world, scarcity kind of in digital sense.

02:34:27.040 | And so what I think the entire world

02:34:30.080 | is going through right now is an exploration

02:34:32.520 | of how do we use this technology to create new things?

02:34:36.520 | Frankly, we're not gonna be good at it for a while.

02:34:40.520 | And so the only place I've really focused on

02:34:43.160 | is digital art itself.

02:34:45.680 | And I've always been interested in art,

02:34:48.960 | but I wasn't gonna go buy a painting

02:34:51.200 | and hang it on the wall, right?

02:34:52.440 | In the sense of that's how I was gonna store value.

02:34:55.000 | What I find fascinating though is

02:34:57.880 | that I now can take that concept,

02:35:00.440 | which most of the wealthiest people in the world

02:35:03.000 | have a significant portion.

02:35:04.240 | Some people have 20% in terms of number of billionaires.

02:35:08.080 | 20% of their wealth is in art.

02:35:09.960 | And you can bring it to this digital realm,

02:35:12.240 | which is much more kind of natural to a digital native.

02:35:16.160 | And so the best way I know how to describe the importance

02:35:19.840 | is imagine a serial number being placed on something.

02:35:24.000 | Take the Eiffel Tower.

02:35:25.720 | The only Eiffel Tower that has value is the first one.

02:35:28.600 | Every replica of it, regardless of size, location,

02:35:32.320 | who made it, where they sent it, they have no value.

02:35:35.480 | Eiffel Tower 001 is the most important.

02:35:38.400 | And so I think that's ultimately

02:35:39.880 | what we're starting to see here.

02:35:41.360 | And what we're looking at is probably 1%

02:35:44.680 | of what it's gonna grow into.

02:35:46.120 | - So you're bullish on this.

02:35:48.760 | You're saying it could grow into something for 1%.

02:35:51.800 | It could grow into something significant,

02:35:53.280 | like all the kinds of different applications.

02:35:55.280 | - Strip away all of the applications right now

02:35:57.320 | and just think about is digital scarcity

02:35:59.600 | gonna be important on the internet?

02:36:00.920 | - Moving all the things that are scarce

02:36:02.440 | in the physical world into digital space,

02:36:04.400 | us trying to figure out which things can be moved and not.

02:36:07.320 | And also there is things in the digital space,

02:36:09.320 | just like you're saying,

02:36:10.160 | that don't exist in the physical world

02:36:11.920 | that might also benefit from gaining scarcity.

02:36:16.840 | People are, I guess, creating NFTs

02:36:18.680 | out of tweets or whatever.

02:36:20.320 | So you have a fun Twitter account.

02:36:23.840 | You could say you could put value to a single tweet

02:36:27.360 | and then be able to invest in it and trade it

02:36:29.320 | and buy parts of it and all those kinds of things.

02:36:32.640 | You can invest in people, you can invest in...

02:36:35.120 | Art can be defined broadly as any kind of creation.

02:36:41.120 | And in some sense, this whole idea of scarcity

02:36:45.520 | can overtake the entirety of the digital world.

02:36:49.320 | It can consume all of the markets

02:36:54.320 | we see as financial markets

02:36:56.120 | and just turn everything into a market.

02:36:58.400 | - Well, so if I take you on a 10-year fast forward

02:37:03.400 | and I paint a picture of something today

02:37:06.560 | that seems absolutely insane,

02:37:08.560 | but there's early signs that people are building this,

02:37:10.440 | and let's just give them the benefit of the doubt

02:37:12.640 | that some of the early iterations will work,

02:37:14.200 | and some of, or most of them won't.

02:37:15.960 | There's a world where you and I are participating

02:37:20.720 | in a digital economy, in a virtual world,

02:37:23.400 | where whether it is a piece of art,

02:37:26.480 | it is a digital sculpture,

02:37:28.400 | it is a digital skin from a video game,

02:37:31.640 | it is a digital good that we purchased somewhere online,

02:37:36.520 | and we bring it and we display it in a digital museum

02:37:40.920 | or a virtual museum.

02:37:42.840 | And so now all of a sudden,

02:37:44.400 | you can charge people for entry,

02:37:46.400 | you can consign digital goods.

02:37:48.840 | It's the replication of what happens in the analog world,

02:37:51.400 | now just in digital.

02:37:52.520 | And when you do that,

02:37:53.960 | what you do is you take the addressable markets

02:37:58.120 | of these assets or these mechanisms

02:38:00.600 | and they explode in the digital realm.

02:38:03.560 | And so now all of a sudden,

02:38:05.360 | how fast does the human race accelerate

02:38:09.440 | when it comes to human production, intelligence, learning?

02:38:13.600 | - All in the digital space. - Output.

02:38:16.120 | It's just if I said to you 20 years ago,

02:38:18.920 | I'm gonna give you a global education,

02:38:20.840 | it means I'm gonna take you

02:38:22.840 | and I'm gonna physically move you

02:38:25.200 | to geography after geography after geography.

02:38:27.960 | It's gonna take time, it's gonna take resources,

02:38:30.440 | and ultimately it's gonna take lots of effort.

02:38:32.920 | If I now said to you,

02:38:33.920 | hey, I'm gonna transport you in this virtual world

02:38:37.720 | to multiple geographies,

02:38:40.400 | but you're going to experience it in this virtual world

02:38:45.400 | and you're gonna have digital goods

02:38:47.000 | that you can take from economy to economy

02:38:49.920 | or from location to location,

02:38:52.520 | all of a sudden, maybe you get 90% of the value,

02:38:55.000 | you don't get 100% of the same value,

02:38:56.120 | we get 90% of the value,

02:38:58.200 | but you can do it at a much faster pace.

02:39:01.120 | And so in a six month period,

02:39:02.600 | you've actually made three times the progress

02:39:05.760 | than you would have if you had to do in the physical world.

02:39:08.640 | So that's where I think we're heading.

02:39:10.400 | - So there's digital art being displayed

02:39:13.560 | in the digital museum

02:39:15.800 | and people are being charged for access.

02:39:18.040 | And perhaps we plug in our senses,

02:39:20.120 | which means we start to operate more and more

02:39:22.080 | in a virtual reality, augmented reality,

02:39:24.520 | virtual reality way with this digital world

02:39:27.280 | and increasingly go into this world.

02:39:29.840 | Basically lived most of our productive

02:39:32.640 | and social lives in this digital world

02:39:35.760 | and increasingly essentially create a simulation

02:39:40.400 | where the biological basis is just there

02:39:44.560 | to sustain the brain that's used to operate

02:39:47.160 | in a virtual world.

02:39:48.800 | Taking us back to the original

02:39:51.360 | when we started talking about war,

02:39:53.520 | I wonder what conflict looks like in that world.

02:39:57.560 | That the people who are born today

02:39:59.640 | maybe will be fighting wars in the space,

02:40:03.320 | in that museum world, in that digital world.

02:40:06.640 | - Remember what I said,

02:40:07.880 | we're moving from a world of conflict

02:40:10.440 | surrounded and determined by bombs, bullets and soldiers

02:40:14.880 | to a battlefield that is determined by war of information

02:40:19.320 | and cyber capabilities.

02:40:21.960 | And so in that virtual world,

02:40:24.360 | is it about death and destruction of human life

02:40:28.960 | in the physical analog world

02:40:31.480 | or will it become more important to attack

02:40:34.400 | or defend virtual property and virtual life

02:40:38.400 | and some level of virtual sovereignty?

02:40:41.280 | In my opinion, the latter is more likely.

02:40:45.800 | And so what you start to understand is,

02:40:48.240 | well, what do you truly value in your life?

02:40:52.080 | Is it the physical analog, materialistic, consumptive goods

02:40:58.320 | or is it virtual?

02:40:59.440 | And in many cases, something as simple

02:41:03.000 | as the ability to connect with somebody

02:41:06.960 | is really important.

02:41:08.640 | And so one of the most disruptive, combative,

02:41:11.640 | violent things that a country may do

02:41:13.400 | to another country in the future,

02:41:15.120 | simply take down the internet

02:41:16.520 | and put people in isolation.

02:41:20.880 | - Yeah.

02:41:21.720 | - I don't need to physically harm you

02:41:23.000 | if I can psychologically harm you.

02:41:25.120 | I don't need to--

02:41:26.160 | - It's terrifying.

02:41:27.320 | - Yeah, I don't need to actually convince you

02:41:32.320 | through a monopoly on violence, on physical violence.

02:41:36.400 | What if I can psychologically change

02:41:38.160 | the way you see the world through misinformation,

02:41:41.040 | through all sorts of nefarious activities?

02:41:44.160 | And I think that the United States

02:41:45.920 | has been struggling with this idea

02:41:47.240 | over the last couple of years in the political arena.

02:41:49.920 | But what happens when it starts to come

02:41:51.320 | to other aspects of our life?

02:41:53.340 | - And I think it's very likely.

02:41:56.000 | It's almost obviously likely

02:41:57.760 | that we're moving into the digital world.

02:41:59.960 | One of the features of the digital world

02:42:05.360 | is that artificial intelligence systems

02:42:08.440 | can operate with much more power

02:42:10.960 | in a frictionless way in that world,

02:42:14.480 | currently as we understand it.

02:42:15.840 | It's hard to build robots that operate at scale

02:42:19.720 | and do arbitrary large amount of impact,

02:42:22.800 | damage or positive in the physical world.

02:42:26.200 | It's much easier to do in the digital world.

02:42:28.920 | Do you ever think about AI systems just swimming about,

02:42:33.660 | doing extraordinarily powerful,

02:42:37.680 | destructive things in the digital world?

02:42:40.280 | Is that something of a concern to you?

02:42:42.520 | Or is this something into a very distant future?

02:42:44.960 | - I think a lot of artificial intelligence is in the name.

02:42:52.040 | It's simply the replication of human intelligence

02:42:54.800 | at scale, automated and programmatic.

02:42:59.800 | Meaning that in the analog world,

02:43:03.920 | you could go hire a thousand employees

02:43:05.880 | or in an Amazon case, hire millions of employees

02:43:09.500 | and set a mission or a goal and push them to go do that.

02:43:13.520 | That requires recruiting, retention, training,

02:43:17.920 | resources, all that stuff.

02:43:20.720 | In the virtual world or in this digital economy,

02:43:23.840 | what if you can just program the resources

02:43:26.340 | and gain the same leverage and do it at scale

02:43:29.360 | and do it in a very programmatic way

02:43:32.080 | and then have them actually make decisions

02:43:35.680 | in a way that doesn't require you to have thought

02:43:38.440 | of every single potential scenario or edge case.

02:43:42.760 | That's ultimately what we're talking about

02:43:43.600 | when we talk about artificial intelligence.

02:43:45.920 | And so when you look at that,

02:43:48.000 | when technology's created,

02:43:49.760 | everyone uses it for good or bad,

02:43:52.400 | but both get used, right?

02:43:54.280 | And so whether we're talking about cell phones,

02:43:56.040 | beepers, the internet, guns, whatever,

02:43:59.520 | it's always used for good and bad.

02:44:01.880 | The big question is, and I think that yourself

02:44:04.200 | and many other people have rightfully said this,

02:44:07.040 | is the question really becomes,

02:44:10.120 | is the negative and nefarious uses of this

02:44:14.640 | inadvertent potentially?

02:44:17.000 | Or does it actually come from a malicious person?

02:44:19.760 | Is the intention malicious?

02:44:21.720 | And to me, that's what I, I don't know enough.

02:44:23.400 | You know much more about this

02:44:24.480 | and there's plenty of other people who do as well,

02:44:26.720 | but I do think that there will be nefarious actors

02:44:31.320 | and malicious people,

02:44:32.720 | but we're gonna treat them the same way

02:44:34.520 | we've always treated people who use technology poorly.

02:44:36.960 | Right?

02:44:37.800 | We're gonna understand it, we're gonna identify it,

02:44:39.720 | we're gonna control it,

02:44:40.560 | and then we're gonna end up reversing it

02:44:42.160 | or preventing them from doing that.

02:44:44.160 | It's the inadvertent things

02:44:45.720 | that I think are actually the most dangerous

02:44:47.800 | because when you have something that can think for itself

02:44:50.800 | and there is no way to leverage a monopoly on violence

02:44:56.200 | for control, it's a very scary thing.

02:45:00.280 | - It can, I mean, the thing that's scary to me

02:45:02.880 | is that it can scale arbitrarily.

02:45:05.160 | So it can outnumber humans very quickly,

02:45:07.680 | even if it's dumber than humans.

02:45:10.600 | And so I don't know if we're able to reason about a world

02:45:16.600 | like let's look at the physical analog

02:45:19.440 | where all of a sudden,

02:45:20.960 | let's talk about something kind of like humans

02:45:24.960 | but dumber than humans, like chimps, okay?

02:45:27.800 | Imagine that all of a sudden chimps could multiply

02:45:31.360 | arbitrarily quickly and you could have like a trillion

02:45:36.720 | chimps the next day when you only had maybe a million

02:45:41.200 | the day before.

02:45:42.640 | Like how does that world look different?

02:45:45.560 | Like where the fuck do all these chimps come from?

02:45:48.120 | - And then we can pretend to be like,

02:45:51.200 | well, let's hope the chimps don't get violent

02:45:54.120 | 'cause they don't seem to get violent

02:45:56.640 | when the resources aren't constrained.

02:45:59.400 | But we don't know.

02:46:01.400 | And the problem is it all starts by building

02:46:04.640 | that first chimp multiplier device.

02:46:07.880 | And everyone's like, okay, yeah,

02:46:09.240 | there's a lot of good applications.

02:46:10.640 | You want, you can make all kinds of arguments

02:46:15.440 | for why you have more chimps.

02:46:17.560 | Maybe they can help you out around the house

02:46:19.520 | or something like that in the physical space.

02:46:21.800 | But ultimately it's the unintended consequences

02:46:25.800 | that you're referring to.

02:46:27.000 | You don't know what's gonna happen.

02:46:28.880 | I'm really worried about dumb AI agents

02:46:33.280 | like having impact when they're multiplied

02:46:38.880 | to a million to a billion and are allowed to operate

02:46:42.680 | in the digital space, especially as we clearly

02:46:46.600 | are moving more and more of our lives

02:46:49.440 | into the digital space.

02:46:51.040 | So it's kind of terrifying 'cause a lot of people

02:46:54.960 | are terrified or concerned about superintelligent systems.

02:46:59.160 | I think I'm definitely much more concerned

02:47:02.640 | about super dumb systems at scale.

02:47:05.880 | That's terrifying.

02:47:07.560 | - I always think about the inadvertent,

02:47:10.040 | but as you were talking, what it made me think of

02:47:11.800 | is also the irreversible.

02:47:14.280 | - Irreversible, that's, yeah.

02:47:15.120 | - Right, so it's one thing if there's inadvertent

02:47:18.560 | negative impact, but we have reversibility

02:47:21.360 | built into a system and we can fix our mistakes.

02:47:24.160 | - Yeah.

02:47:25.000 | - I think the really scary part is when you overlay

02:47:27.120 | inadvertent mistakes with the irreversible aspect of it

02:47:31.080 | and therefore humans have no control.

02:47:34.160 | - Yeah, if you have the trillion chimps, you can't,

02:47:38.320 | they're not gonna like it when you try

02:47:39.960 | to start killing them off.

02:47:41.880 | (laughing)

02:47:44.680 | All right, but back to Bitcoin.

02:47:47.240 | (laughing)

02:47:48.720 | - Those chimps in the Bitcoin community.

02:47:50.560 | (laughing)

02:47:51.600 | - Anytime you bring up chimps, some people say,

02:47:53.920 | Joe Rogan entered the chat.

02:47:55.680 | Can I ask you about sort of learning about Bitcoin books

02:47:59.240 | and resources, you have an amazing podcast

02:48:02.280 | that's not just about Bitcoin or cryptocurrency,

02:48:05.440 | it's about everything, including life,

02:48:07.280 | but you do have a lot of really amazing conversations

02:48:10.360 | about this whole digital world,

02:48:14.320 | but obviously you also have a newsletter

02:48:17.400 | that's incredible on Substack,

02:48:19.440 | but do you have recommendations?

02:48:25.200 | Maybe it would be great if you could talk about,

02:48:27.560 | first of all, your podcast and the newsletter,

02:48:30.960 | but also other resources that you recommend

02:48:33.200 | people should check out in order to learn about Bitcoin.

02:48:36.600 | - Yeah, so the podcast and email

02:48:39.720 | are like the two most selfish things I do,

02:48:41.960 | because the podcast is a way for me

02:48:43.680 | to learn from other people.

02:48:44.800 | So I get them to come on and tell me

02:48:46.800 | all the things they're thinking about,

02:48:48.040 | and I get asked some questions.

02:48:49.280 | - What's it called, by the way?

02:48:50.520 | - Just the Pomp Podcast.

02:48:52.240 | And so in doing that, it really is informative for me,

02:48:57.240 | and I think that my whole goal is just like,

02:48:59.000 | if I'm learning, other people will be learning.

02:49:01.080 | And then the email, I read it every morning

02:49:03.560 | because it forces me to collect my thoughts

02:49:06.160 | and actually articulate them in somewhat of a coherent way.

02:49:09.840 | And so it's just something that is like a practice

02:49:13.040 | that I probably would do even if no one read it.

02:49:14.920 | And then by being able to publish it,

02:49:17.360 | what does it do?

02:49:18.200 | It elicits both the good and bad responses.

02:49:20.920 | And so people will let me know if they think I'm an idiot,

02:49:22.760 | and they'll usually not respond

02:49:24.400 | if they think that it's something smart.

02:49:25.560 | And so those two things are really educational for me,

02:49:30.160 | and I think kind of forced me

02:49:31.760 | to be able to articulate a lot of ideas.

02:49:34.760 | But a lot of what I share or learn on those things

02:49:37.200 | come from these other resources.

02:49:38.720 | - So I'm definitely subscribing, people should subscribe,

02:49:41.440 | but what are Bitcoin resources books that you recommend?

02:49:46.080 | - I think you gotta start with Bitcoin Standard.

02:49:48.120 | That one to me feels like

02:49:49.840 | it really lays out the picture nicely.

02:49:51.940 | There is Bitcoin Money You Can't Fuck With.

02:49:56.480 | It was written by our friend Jason Williams.

02:49:58.560 | As you can imagine, it's basically what it talks about.

02:50:01.840 | There's another book, Layered Money.

02:50:03.600 | It was written by Nick who's done a great job

02:50:07.040 | kind of laying it out.

02:50:08.680 | There's a book called Bitcoin in Black America

02:50:11.080 | written by a guy, Isaiah Jackson.

02:50:13.120 | And he basically lays out the argument

02:50:14.920 | for why the black community can benefit

02:50:18.440 | in a asymmetric way from something like Bitcoin.

02:50:21.360 | And there's a whole bunch more,

02:50:22.800 | I'm gonna forget them all.

02:50:24.480 | There's the, I think it's called The Cost of Tomorrow.

02:50:27.000 | A guy, Jeff Booth wrote it.

02:50:31.000 | And just, if you get on Twitter, basically,

02:50:32.720 | you're gonna see all these books flying around.

02:50:35.400 | But I do have to say that from a psychological concept

02:50:40.400 | or philosophical concept,

02:50:42.520 | the number one book that I've ever read

02:50:45.040 | that aligns with Bitcoin ethos

02:50:46.440 | but doesn't say a word about Bitcoin

02:50:48.000 | is a book called The Dow of Capital by Mark Spitznagel.

02:50:51.440 | And so what he essentially does

02:50:53.300 | is he just reiterates over and over and over again

02:50:56.060 | long-term thinking, outliers, disruption, all this stuff.

02:51:00.120 | And so he's a guy who, he runs a fund

02:51:02.800 | that essentially they just do a tail risk hedging.

02:51:06.200 | And so in March or February of 2020,

02:51:10.000 | they're up like 4,000%, right?

02:51:13.520 | By the way, they pretty much lose money

02:51:15.480 | for eight, nine years, then that happens.

02:51:18.360 | And so, but they're still one of the best performing funds

02:51:21.880 | if you look at it over years and years.

02:51:23.800 | And so it's just this mindset of

02:51:26.240 | everyone is so short-term focused.

02:51:28.280 | And so I think it's just a great reminder

02:51:29.640 | of long-term thinking.

02:51:30.700 | - And also, I mean, I've gotten quite a bit of value

02:51:35.120 | just reading the papers.

02:51:36.240 | And that's perhaps more like for technical folks.

02:51:38.520 | There's quite an active research community.

02:51:41.120 | And also going back to the original white paper

02:51:43.320 | and just original documents, old school.

02:51:46.400 | Old school is still, like a few years ago,

02:51:50.360 | it's still really interesting to think about,

02:51:54.320 | to look at what people were thinking about

02:51:56.960 | because the principles are carried through

02:52:00.520 | with other cryptocurrencies as well.

02:52:02.600 | Like it's all there, even in the early documents.

02:52:06.880 | So that's kind of fascinating to see that whole history

02:52:09.600 | from if you're more like tech savvy.

02:52:12.000 | And like you said, Twitter is actually an interesting place.

02:52:14.480 | If you can look up past all the shit coin talk,

02:52:17.100 | it's a fascinating place for news and resources.

02:52:21.680 | Is there books outside of all of this cryptocurrency

02:52:24.560 | sort of technical fiction philosophical

02:52:26.880 | that impact on your life?

02:52:29.200 | Because you have interests that are all over the place.

02:52:32.060 | Is there something that you would recommend to others?

02:52:36.440 | - So "Dow of Capital" is definitely probably

02:52:37.960 | my favorite book.

02:52:39.180 | Books that have been impactful.

02:52:41.960 | I read when I was 20, actually,

02:52:43.520 | "Sitting in the Desert of Iraq,"

02:52:45.760 | "Rich Dad, Poor Dad," "Thinking Grow Rich,"

02:52:47.680 | and "The Richest Man in Babylon."

02:52:49.440 | And I don't think I took a single thing

02:52:52.080 | and implemented it from an execution standpoint,

02:52:55.880 | but it was a complete shift in mentality

02:52:59.200 | and understanding and relationship with money

02:53:01.520 | and just kind of what I wanted to do with my life

02:53:04.440 | and stuff like that.

02:53:05.280 | So I think those three books,

02:53:06.100 | and I read them in succession, were really impactful.

02:53:09.360 | And then I think one of the best books

02:53:11.000 | probably ever written is,

02:53:12.280 | I think it's called "When Breath Becomes Air,"

02:53:15.000 | or "Air Becomes Breath," I can't remember.

02:53:17.400 | But it's basically a doctor or a medical professional

02:53:20.620 | who's dying, and he essentially writes

02:53:23.480 | about the experience and thoughts

02:53:25.640 | and kind of all the stuff.

02:53:26.680 | And I think that it's just one of these things

02:53:30.240 | where if you said to me,

02:53:31.200 | "What's the number one thing I took out

02:53:32.760 | "of my experience in Iraq?"

02:53:35.240 | That's a book like that also gives you

02:53:36.920 | is we're all gonna die, right?

02:53:39.120 | And you and I can wanna be as immortal as we want,

02:53:41.620 | but at some point we're gonna die.

02:53:42.800 | And so it really does kind of focus you

02:53:45.600 | on time being that scarce asset

02:53:48.120 | and use it for enjoyment and happiness

02:53:51.720 | more so than anything else.

02:53:52.800 | And I think that's part of your message,

02:53:54.080 | and it's a great one.

02:53:55.280 | - Do you think you literally meditate

02:53:58.600 | on your own mortality?

02:53:59.840 | - I don't necessarily think I meditate on it

02:54:02.800 | as much as--

02:54:04.120 | - Are you afraid of death?

02:54:05.840 | Were you afraid of death when you were in Iraq?

02:54:07.600 | I mean, coming face to face with it,

02:54:09.640 | are you afraid of death today?

02:54:11.200 | - No, I think that it was just one of these things

02:54:13.120 | where if you fixate on something

02:54:16.600 | and you worry about it,

02:54:18.360 | then, at least to me, you become uneasy about it.

02:54:23.140 | And so after an experience like going to war,

02:54:28.140 | I think that everything is just so not important

02:54:31.360 | compared to that, right?

02:54:32.600 | Like when I came back,

02:54:33.840 | I remember going back into the college environment

02:54:36.760 | and things people were worried about,

02:54:38.480 | I was like, "Listen, let me explain to you

02:54:41.240 | "what the real world's like," right?

02:54:44.000 | But I think even today, right,

02:54:45.560 | if you talk to people who know me really well,

02:54:47.560 | I don't get worked up about a lot of stuff.

02:54:49.120 | I don't get in either direction, good or bad, anything,

02:54:53.000 | because ultimately it just comes down to

02:54:55.360 | if that's the final result, let's enjoy it.

02:54:59.340 | - It's fascinating to ask you,

02:55:01.540 | because this reformulation of money essentially buying time,

02:55:06.540 | and there's the old question of does money buy happiness?

02:55:13.260 | Do you think money can buy happiness

02:55:20.540 | in the context of money being able to buy time,

02:55:23.780 | or is happiness something else that is beyond all of this?

02:55:28.040 | - When people talk about this question,

02:55:30.940 | I think that they really focus on money

02:55:33.800 | as a means to getting materialistic things.

02:55:36.980 | So they want a big house, they want a boat,

02:55:39.160 | they want a fast car, they want whatever.

02:55:42.660 | They think that's the stuff that will make them happy.

02:55:45.780 | What I think about it is if you have resources,

02:55:49.420 | you can have time, and if you have time,

02:55:51.660 | and you spend it the way that you want to spend it,

02:55:54.540 | then that's ultimately happiness.

02:55:55.620 | So I always say to people,

02:55:56.460 | if you think that money doesn't buy you happiness,

02:55:59.420 | what if I told you that if you had more money

02:56:01.220 | you could spend more time with your family?

02:56:03.220 | It reframes it.

02:56:05.660 | And now it's all about I want to do certain things in life,

02:56:09.540 | but there's a lot of people who spend their life

02:56:11.700 | not doing those things because they feel the need

02:56:15.420 | to pursue economic means as a way to provide a living

02:56:20.420 | or whatever.

02:56:21.540 | And so I explain that, I say, listen, in my opinion,

02:56:23.940 | again, it's my opinion, it's what makes me happy,

02:56:26.820 | if I can leverage financial resources to create more time

02:56:30.420 | to do the things I like, I'm happier.

02:56:32.520 | Might not work for everybody,

02:56:35.340 | but that's what works for me.

02:56:36.860 | And so there's this element of,

02:56:38.720 | I don't care what other people think

02:56:39.860 | if they like that or not, because they're not me.

02:56:42.260 | There's almost this element of you gotta figure out

02:56:45.140 | what works for you, and if it works for me, then like--

02:56:48.220 | - No, I think that will resonate with a lot of people.

02:56:51.540 | I think that's a brilliant reframing of it.

02:56:53.980 | That said, you kind of imply there's a reason

02:56:58.900 | behind this whole existence of ours, there's a meaning to it.

02:57:02.020 | So let me ask, what is the meaning of life, Anthony?

02:57:06.380 | Do you think about these ridiculous big questions

02:57:09.480 | that have no answer every once in a while,

02:57:11.540 | or do you just enjoy the shit out of every day?

02:57:14.620 | - I answer it in a way that isn't meant to be accurate.

02:57:18.900 | It's meant to be the right answer for me,

02:57:23.900 | which is ultimately, and I talk to a lot of people

02:57:27.140 | who always ask, what are you doing?

02:57:29.020 | Why are you doing this?

02:57:29.860 | I say, it's to be happy.

02:57:31.180 | And the reason why I think of it that way

02:57:34.580 | is I've got a friend, Jonathan Geller,

02:57:35.780 | who talks about enough being enough.

02:57:39.780 | And recently he talked about it in the context of Bitcoin.

02:57:43.420 | And so Bitcoiners have two things.

02:57:45.300 | Any Bitcoiner, if you talk to them,

02:57:46.460 | they believe the same two things.

02:57:47.500 | One, they don't want the US dollar price to go up

02:57:50.140 | because they actually wanna acquire more Bitcoin, right?

02:57:52.020 | And then let it go once they feel like they've got enough.

02:57:54.260 | But two is, no matter how much they own,

02:57:55.460 | they think that they don't own enough

02:57:57.060 | and they wanna acquire more.

02:57:58.700 | And so at some point, you say to yourself, what is enough?

02:58:03.700 | And I think that the whole meaning of life

02:58:06.740 | is to understand kind of what your level of satisfaction is.

02:58:12.420 | And for some people, that's a monetary thing.

02:58:14.020 | Some people, that's a freedom of time thing.

02:58:16.100 | For some people, it's an impact thing, whatever.

02:58:18.420 | But just understanding that's important

02:58:20.380 | and then going and accomplishing it.

02:58:22.540 | And what I've found is that the people who I know

02:58:25.540 | who have done this and been intentional about it,

02:58:27.940 | they accomplish it on a much shorter timeline

02:58:30.060 | than people who don't.

02:58:31.420 | There's some people who start thinking about this

02:58:32.260 | when they're 60.

02:58:33.140 | Naturally, you're not gonna accomplish it before you're 60

02:58:35.900 | if you just start thinking about it at 60.

02:58:37.820 | People who start thinking about it earlier can do it.

02:58:39.420 | And so I think that's really it.

02:58:40.620 | For me, it's just like the meaning of life

02:58:42.140 | is to enjoy it.

02:58:43.340 | - The way I think about it,

02:58:44.580 | that's 'cause this is a really nice formulation.

02:58:46.420 | I almost like to sort of oscillate back and forth.

02:58:49.100 | So majority of the time is spent

02:58:52.180 | in the mode of enough is enough, of gratitude,

02:58:56.020 | of basically being content with where you're at,

02:58:58.620 | like deeply appreciative of every moment

02:59:01.220 | and all the Bitcoin, whatever Bitcoin you have,

02:59:03.820 | being deeply appreciative of it and that being enough.

02:59:06.900 | And then some fraction of time,

02:59:09.100 | perhaps it shrinks as you get older.

02:59:10.860 | That's maybe there's an optimal trajectory there,

02:59:13.020 | but some fraction of time is spent being

02:59:15.620 | deeply self-critical and nothing is enough.

02:59:19.420 | Nothing you've ever done is worth anything.

02:59:21.940 | It's the Marvin Minsky said,

02:59:23.620 | the secret to success is hating everything you've ever done.

02:59:28.000 | So that mode of just hating everything you've ever done

02:59:31.540 | and just trying to improve, trying to make stuff better,

02:59:34.860 | nothing is enough, it's never enough, that kind of stuff.

02:59:37.940 | And then oscillating back and forth.

02:59:39.960 | You don't have to have the same algorithm

02:59:41.780 | operating throughout the day.

02:59:42.940 | You could just like oscillate back and forth

02:59:45.100 | and maybe reserve that gratitude part,

02:59:48.220 | the chill part to when you're hanging out with family

02:59:50.780 | and friends and loved ones.

02:59:52.100 | And then when you're like alone or maybe at work,

02:59:55.540 | that's the madman comes out kind of thing.

02:59:58.260 | - I also think it's kind of purpose-driven

03:00:00.860 | in the sense of there's a lot of people who have the,

03:00:04.020 | I need to do more, but in a somewhat altruistic way.

03:00:08.420 | So take Elon as an example.

03:00:10.980 | The idea of colonizing Mars,

03:00:15.560 | sure, if he is successful, he will be very rich.

03:00:18.800 | I don't think you or I or many people

03:00:20.540 | believe he's doing it for the money.

03:00:22.560 | There's a lot of other things he could do

03:00:23.640 | that would be much easier that would make him tons of money.

03:00:26.880 | And so in some weird way, he has enough

03:00:31.120 | because he's able to free himself from the constraints of,

03:00:35.960 | I need to acquire more resources

03:00:37.760 | and he can focus on what is the thing

03:00:39.200 | that I wanna work on regardless of money.

03:00:41.840 | And so in that pursuit, that is non-economic,

03:00:45.880 | you can be as selfish as you want

03:00:47.860 | because ultimately you're not tied back

03:00:49.820 | to this like measurement tool.

03:00:53.360 | And so it's this, again,

03:00:55.320 | like altruistic non-monetary purpose.

03:00:58.940 | And I think that there's a lot of people

03:00:59.960 | who spend their whole life looking for that

03:01:01.160 | and they don't know what it is.

03:01:02.980 | And so again, some people may not think of it that way,

03:01:06.400 | but if you can find something to do that, you win.

03:01:10.520 | - I don't think there's a better way to end it, Anthony.

03:01:12.600 | I'm a huge fan.

03:01:13.760 | It's a huge honor that you waste all this time with me today.

03:01:16.960 | I thank you for just educating the world,

03:01:20.800 | for teaching me, inspire me to learn more

03:01:24.240 | about this new set of technologies

03:01:26.060 | that look like they have a potential to change,

03:01:29.320 | transform all of human civilization.

03:01:31.280 | So thank you for coming today

03:01:32.960 | and thank you for being who you are.

03:01:34.640 | - Absolutely, thank you so much for having me.

03:01:37.040 | - Thanks for listening to this conversation

03:01:38.840 | with Anthony Pompliano and thank you to our sponsors,

03:01:42.480 | Theragun Muscle Recovery Device,

03:01:44.520 | Sun Basket Meal Delivery Service, ExpressVPN

03:01:48.400 | and Indeed Hiring website.

03:01:50.960 | Click their links to support this podcast.

03:01:54.160 | And now let me leave you with some words from Mahatma Gandhi.

03:01:58.080 | Freedom is not worth having

03:01:59.960 | if it doesn't include the freedom to make mistakes.

03:02:04.440 | Thank you for listening and hope to see you next time.

03:02:07.360 | (upbeat music)

03:02:09.940 | (upbeat music)

03:02:12.520 | [BLANK_AUDIO]

Anthony Pompliano: Bitcoin | Lex Fridman Podcast #171

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