BTC Sessions - Somebody Has To Eat The 40 Trillion Dollar Loss | Jack Mallers

Episode Date: September 24, 2026

Mentor Sessions Ep 098: Jack Mallers explains monetizing chaos, dollar debasement, the ColdCard incident, El Salvador and why Bitcoin is the most American technology.Jack Mallers argues the entire fiat system forces everyone into speculation whether they know it or not — and Bitcoin is how you take the other side of the chaos. In a wide-ranging sit-down, the Strike CEO breaks down monetizing chaos, the $40 trillion debt bill nobody wants to foot, and why he's never been more bullish.You'll hear why Jack calls debt a form of "time travel" that already spent your future, how the dollar's world-reserve status structurally forces deficits, and why a severe debasement against gold and Bitcoin may be the only mathematical exit for the US balance sheet. You'll get his blunt read on the ColdCard incident and why "open source doesn't mean secure" in the age of AI — the most incentivized person to understand that code base was the attacker. You'll also learn why he thinks 2026 was never a real bull run, why prediction markets are just regulatory arbitrage on sports betting, and what El Salvador got right (and wrong) five years in.⏱️ Timestamps:0:00 - Intro0:48 - Why Jack Is Bullish on Bitcoin1:47 - Monetizing Chaos by Shorting Fiat2:04 - Debt as Time Travel and Future Bills4:43 - Why Public Adoption of Bitcoin Lags5:17 - Strike Growing Despite Bear Market6:21 - Why 2026 Was Not a Real Bull Run7:52 - Why Younger Generations Resist Bitcoin8:44 - Bitcoin as a Massive Wealth Transfer11:26 - Savings Culture Versus Gambling Culture13:07 - Gambling Ads, OnlyFans, and Robot Jobs17:58 - Hunger for Savings Culture Emerging18:10 - Family, Low Time Preference, and Bitcoin21:43 - Robinhood, Meme Coins, and Marginal Speculators24:23 - Prediction Markets as Sports Betting Arbitrage26:52 - Why Self-Custody Efforts Often Fail28:27 - El Salvador Bitcoin Adoption Wins and Losses34:07 - Why Nations Avoid Copying El Salvador38:06 - Bitcoin as America's Most American Tech40:17 - Dollar's Structural Deficit Trap Explained41:12 - China's Gold and Bitcoin Dollar Debasement45:49 - Why Jack Glad Clarity Act Failed47:53 - Fix: End World Reserve Currency Status49:18 - Bitcoin Not Medium of Exchange First55:20 - AI Threat to Open Source Security57:33 - Open Source Alone Does Not Secure1:02:09 - Just Use Bitcoin Core for Security1:08:37 - Jack on Leaving Twenty One and Authenticity1:14:47 - What Strike Is Building Now1:20:04 - Closing Message to BitcoinersGuest: Jack Mallers of Strike🔗 Links & Resources:- Jack Mallers on X: https://x.com/jackmallers- Strike: https://strike.me⚡Previous Episode:Zack Shapiro: https://youtu.be/iZ7e0hY0WL8🔔 Subscribe for weekly Bitcoin Podcasts🐦 Follow on X: https://x.com/BTCSessions🐦 Follow on X: https://x.com/theBTCmentor⚡Sovereign Sessions — AI, Privacy, and Bitcoin education: http://youtube.com/@SovereignSessions?sub_confirmation=1⚡ Sponsored by Trezor - Get Your Safe 7 Today: https://affil.trezor.io/aff_c?offer_id=352&aff_id=1088⚡ POWERED by Abundant Mines: Fully managed Bitcoin mining. Learn more at https://qrco.de/bgYKPB⚡ Sponsored by BITCOIN WELL: Best Place to BUY & SELL BITCOINhttps://qrco.de/bfiDC6💡BOOK Private Sessions with Nathan, Ben and the BTC Mentor Team: Master self-custody, hardware, multisig, Lightning, privacy, and more. 👉 Visit btcmentor.io If this conversation gave you a new way to see the macro picture, join the regulars — subscribe for more long-form Bitcoin interviews and reply with your take on "monetizing chaos." Catch the previous episode with James Lavish and Doomberg linked in the cards.#JackMallers #Bitcoin #BTCSessions #Strike #BTC #BitcoinMacro #DollarDebasement #MonetizingChaos #SoundMoney #BitcoinBearMarket #WorldReserveCurrency #PredictionMarkets #ElSalvadorBitcoin #Coldcard #OpenSourceSecurity #BitcoinCore #LightningNetwork #SelfCustody #TwentyOne

Here's the problem. These kids are being asked to take out six figures worth of debt to compete for a job against Elon Musk's robots. You don't get to say, I don't like this system. And one of the things that's very clear is zoomers and Gen Alpha don't give a shit about Bitcoin. By borrowing $40 trillion from our future, you're pulling forward a lot of human labor and time and energy. Somebody has to realize that loss. By owning Bitcoin, I'm saying it's not going to be my time in energy.

there might actually be a hunger for the new Bitcoin culture. There's a division of culture. You can try and get lucky and gamble your way out. And then there's a different culture that's being built. How do I take the other side of this clown world? I genuinely don't know if I've ever been more bullish in my life. All right. Good morning, Jack.

Thank you so much for joining today. Very excited to have this conversation because I know it's going to be an absolute banger. So, Bitcoin prices down. Hash rate has been falling for months. We had a contentious fork where a bunch of people walked off with their own shitcoin and now AI is tearing through the open source software. This whole ecosystem runs on. Hundreds of millions lost to the cold card vulnerability. There is core lightning, liquid,

BTC pay. The Bitcoin Red Team is turning up thousands of vulnerabilities left, right and center, to the point where I feel like I'm actually getting hack fatigue. So, Jack, is it time to pack it in? Is Bitcoin over? No, come on. I genuinely don't know if I've ever been more bullish in my life. And I think Bitcoin in many ways is a way to monetize chaos. It's how do I short the dollar? How do I monetize chaos? How do I take the other side of a lot of this clown world? So no, I think quite the opposite, put simply, and we can explore any version of that you want.

But I'm emphatic. Absolutely not. Good. I love to hear it. Okay, tell me why exactly are you so bullish right now. And also, this idea of monetizing chaos, I've never heard it frame that way, but I quite like it. So let's impact that a little bit.

Yeah, listen, you know, I'm famously college dropout, right? So I come with you without this. So is Steve Jobs. Yeah, but point being without this very sophisticated mathematical lens as to how the carry trade and this and that, which we can all get into. But the reality of the situation is there's been malinvestment. There's been a lot of money borrowed from our future. So you can think of debt from government as a form of time travel almost. They've pulled forward. our future, our kids' future, because money at the end of the day is just human, time, energy, effort, labor. It's, you know, the market good that allows us to exchange the value that we create, right? And so by borrowing $40 trillion from our future, you're pulling forward a lot of human labor and time and energy. And so it's not something on an Excel sheet that you can just delete

or skip that slide. Let's just start over. That's physical human effort that you've spent. and if you've misused that and misallocated that and not done productive things with that, somebody has to realize that loss. Plain and simple. Now, we can argue all day, well, is it going to be the bondholders or real rates going to be negative for those guys and they're going to get screwed? Is it going to be the people because the currency is going to get to base and everything in their life is going to be inflated?

Is Trump going to make Putin and China foot the bill? You can argue all which way. But, you know, by owning Bitcoin, I'm saying it's not going to be. going to be my time and energy. It's not going to be mine. I don't know who is going to have to foot the 40 trillion dollar bill, which by the way is only the like current indebted amount, but there's future promises on top of that. But to me, you know, my dad always told me it was always so as soon as they divorced from the gold standard, it was always so hard. How do I short the dollar? How do I take the other side of this? How do I bet that this thing's never going to work out?

And it was hard, you know, real estate because like land has some scarcity elements, but it turns out they'll always build another floor on top of the penthouse as long as Ken Griffin's willing to pay for it, right? And so it's always hard to kind of find ways to do, how do I monetize the chaos that this system is embedded with? How do I take the other side of Fiat? How do I say no? And participate in the deflationary tendencies of technology.

And Bitcoin, you know, Satoshi out of nowhere just dropped the gem. That's how I like to think of it is that, you know, there's a massive loss. that has to be realized by someone. And instead of trying to participate and argue and figure out who's going to realize that loss, I just very simply say, it's not going to be me. I'm just going to save Bitcoin. My stats are going to stay in cold storage.

And I'm going to benefit from all of the mistakes that are being made by both elected and unelected officials. God, I love it. Why do you think it is right now? At least it feels, could you be just classic kind of, I don't know if the cycle has any standing whatsoever. But why down the moment, why the lack of incitement in the broader public? Like, how is it that we recapture the imagination?

Because I completely agree with everything that you're saying there. And I think even back to the COVID times, my biggest worry is that even at $40 trillion, a war in Iran, everything going on, like the left and right tearing each other apart, that the pain is still not enough to get a lot of people to turn their focus to the actual problem. So it feels to me like adoption slowed down, but maybe you've got some better data on the back end. How do we get more people into this thing? Why are we not seeing people come to the solution? Yeah, I mean, listen, like Bitcoin's such a broad industry at this point. It's over a trillion dollar asset. I can sell you on data.

I mean, strikes business is going to grow year every year despite the bear market. That's impressive. As the CEO and founder of the company, I'm stoked. That's awesome. So I can sell you on a version of Bitcoin that's optimistic and exciting. And I think the industry is maturing. I think the participants, ETF, I mean, listen, you can argue on both sides of the line on whether Trump and this administration has been beneficial or not.

Like, you know, we have a strategic reserve. It's been part of the geopolitical conversation. They also launched a shit coin and have violated all sense of ethical human code. So my point being, I think I can please your ears in whichever way you want to be tickled. You know what I mean? Now, the reality of the situation, though, I agree with you is that this has been one of the more prolonged, the culture, the energy, the enthusiasm. It feels low. And I would co-sign. I would agree with that. I don't think 2025 was a real bull run. I think that measuring

Bitcoin in dollar terms is sometimes incredibly misleading because the amount of debasement that's happening making new highs in dollars is implied. I mean, my water bottle right here should make new highs and dollar terms every other year as well. So like that's not necessarily the greatest achievement. And so I think 2025 was a little bit of a letdown. It wasn't as euphoric and bull market. I think as market participants in this industry are used to. And so if you kind of discount that, it's been since COVID. I think since this industry has experienced the type of euphoric, visionary, product market, fit, attention that we're accustomed to or that newer entrance to Bitcoin have heard of.

And that's a long time. I think there are reasons for that. I think if you look at monetary policy and specifically from the Federal Reserve, I think that's played into it. I think AI's played into it. So we can get into that. But I would, if that is that what you're saying, I would agree that it's, it's been a bit of a time since we felt like, oh, man, like we are winning.

Because even when we were kind of winning in 2025, we weren't winning as much as other people that were winning. And then that makes our winning not feel more like losing than winning. Yeah. We're used to winning the most winning, having the huge awesome winning. And we didn't quite get that excitement. So I do want to get into kind of the monetary policy in the AI. actors that you think we're at play there. But the other one they want to tag in there is this idea

that's been kind of haunting me for a while now. So, uh, you know, a little behind the curtain. I can see a lot of information with regards to demographics in terms of like the channel and everybody who's hanging out. And one of the things that's very clear is zoomers and Gen Alpha don't give a shit about Bitcoin, at least from what I'm looking at. And I was trying to figure out like how is it that we can possibly attract the younger generation? What is the reason that they don't want to necessarily participate? Because I don't know. Like I grew up as a punk rock kid. I love the cypher punk ethos. I think it's fun. And I'm looking at everything that. that's happening in there while looking at like Mom Doni and then we had like the Luigi Mangione

shooting and stuff as well. And I'm almost wondering if it's like, and it's a little bit of a darker term, but I don't think the idea of the Bitcoin Renaissance has any sort of a attractive appeal for them. If they do come, I wonder if it's going to be kind of for the revolutionary aspect where they're looking to just basically flip the table. So lots to unpack there, reasons for downturn. And how do we get the other generations to come play with us? It's a really good question. I will share also that. on the strike side of our business, you'd be shocked that a majority of our business is serving wealthier folks, older generations. And you're like, oh, man, I assume that empty closet and aren't you

the guy that wears hoodies? Surely you've got a million 18 year olds on your app. I don't. I actually don't. And, and, you know, a few thoughts. One thing I've learned is Bitcoin at the end of the day is a giant wealth transfer. Amongst many other things, Bitcoin is not any one single. single thing, and it's not any one single person to define what Bitcoin is. So amongst all of the things that Bitcoin is and is becoming is a wealth transfer. I mean, you have this thing that is actively being monetized, and then you have other analog assets that are actively being demonetized. And all of that implies a wealth transfer implies existing wealth is monetizing new wealth. So in order to be a core adopter of Bitcoin, you have to already have wealth. And the unfortunate

reality is as if you're 18 years old, it's impossible to have any wealth to monetize. And so that is what I think, that's a reality that I've learned at strike is I, to your point, philosophically and as an energy and as someone who I got into Bitcoin when I was 18 years old and I want the 18 year olds that look at my podcast and look at me on stage to be like me, but they don't have any money. And that's, and as a business, it's hard to monetize those people. like, I can't charge you fees. Charge fees for what? You can't do anything on my app

because you don't have a million dollars of fine art that you need help liquidating and turning into Bitcoin into cold storage. You just don't, you know, like we're issuing hundreds of millions of dollars of loans against Bitcoin. And like, that implies that you have billions of dollars worth of Bitcoin sitting around to take out cash against. So anyways, I think that that's an insight

that the community should just be aware of. I think that that's okay, and that's almost like a science of like if we're going, if a new money is going to be monetized, a new market good where, you know, money is just a decision of what's the market good that you want to exchange, not to consume, not to eat it, live in it, fly it, drive it, but to save it and later exchange it. You could use art. You could use real estate. You could use dollars.

You could use bonds. You can use Bitcoin. You can use gold. Which one do you want to use? And more people are choosing this Bitcoin thing, but implied in that is that they have wealth. So that's one point that to me, and it sounds obvious. in hindsight that I say it, but at the time, it doesn't feel obvious because to your point, Bitcoin, cypherpunk and culture, it is a little bit of punk rock or, you know, like 90s, early

2000s, hip hop. It had that type of edge. And then as in regards to, have I lost all hope on the youth? No. So my and I, I do invest probably more time than I should and just, I think, I mean, by definition, kids of the future. And I resonate more with the youth than I do with boomers. I consider myself more a part of the youth than I do the generation that built the world we're living in. And I feel very strongly that you control what you can control. I can't control the world I was born into.

There's unfortunately nothing I can do about it. But I do get to control the world that comes after and the world that my kids get to be born into. And I take that responsibility seriously. And so I do invest a decent amount of my time trying to understand. the younger demographic. And a lot of them are my friends. And I'm still young.

I'm third two. And I would say the problem, the world is dividing into these two strike, Bitcoiners. We are much more savings culture, very principled, very hard money, Austrian economics, earn more than you spend, and then be able to save that wealth, compound, save. over time, be earnest, be honest, be proof of work. There's a dividing culture, which is gambling. A lot of Western culture is becoming pornographic and gambling. Dude, I just even quickly, like every ad I see, like,

wife's watching Amazon the other day, and it's just like casino ads, sports betting over and over again, polymarket, it's just gamble, gamble, gamble. Correct. And that's, you know, like how much of Western culture is turning to only fans, and Robin Hood, only fans, and steak. And that is becoming like dominant youthful culture. And that is my way and not ranting for hours, but trying to condense my point of what the youth is up against because they don't have wealth.

These kids are being asked to take out six figures worth of debt to compete for a job against Elon Musk's robots. imagine that there's no place in this world for you you take on debt and compete against Elon Musk's robot for a job you're never going to own a home you're never going to own anything and so it's a it's a like there's a division of culture of you can try and and get lucky and gamble your way out and fill your life with like dopamine bouts of satisfaction through you know, only fans and the fantasies created on your phone and gambling on sports. And then there's a different culture that's being built, which is, hey, we can build something

that does work for you. And let's just start by earn more than you spend. End the month with excess cash. And then learn how to save it and take care of your body. You know, don't get lost in these women scandal sites online. Take care of your body, value relationship, have kids, family. And that's, you know, when strike says we're Bitcoin only, there's a variety of reasons for that. But one of the reasons is I don't think I wouldn't want my family and my friends to use these gambling apps, to use a Coinbase, to use a Robin Hood. I wouldn't feel comfortable. I mean, the house always wins.

It's a lose-lose proposition. You know, you look at the polymarket comes out with data. Like less than 2% of the winnings are going to like a tiny, you know, group of the users. The rest of the users are just funding. So point being, I think that there's a cultural division and it's a really difficult battle to fight. I, it's, but that's the over the coming decades, I think that that's the cultural war. And I try and invest a lot of my time and making educational content. I know you do too to make the proof of work and family and love and work hard and save

and not like slog and gamble. Culturally cool and relevant. And at the end of the day, I think that will win. But that's the battle we're up against. And it's very difficult because allowing kids to gamble is a much better business. model when it comes to profit than getting them to DCA. But the problem with having kids gamble nonstop is eventually if your monetization of your customers is just consistently making them poor, then one day they leave the platform.

Like a lot of strike customers are like shit-cointers and degenerate gamblers that, you know, have reached the lows of lows and I have now realized like the life that, they want to live and that Bitcoin can be a part of that. That's a lot of our customer base. So I think it's a long game. We have to stay the course. But it's my dead honest opinion of the cultural battle. These kids don't have any money. And there's a cultural divide, I think, that is created. Like, Coinbase used to be a competitor of strike nowadays. Couldn't be more different companies. Yeah. No, 100%. There's a few things I want to happen. One, I do want to come back to kind of monetary policy and AI and macro a little bit. But there was something that jumped out of me. And I just want to throw out there and kind of

get your take. So there's this idea that like on the kind of more the degenerate side, I was reminded of like, have heard the acronym like ski like spend kids inheritance? Like you've got this, you got this younger population that cannot get on the ladder that is completely indebted. They're not even necessarily getting inheritance, but that kicks out the whole, like almost feels accelerationist because that's what's funding all the, the, the excess spending from the government side. So in terms of the unfunded liabilities. So it's like you need them working in order to fund all the crap that you have and you've even taken and kicked that out from underneath them. But I did, there was funny, there was something that jumped into my mind as you were going there.

And it was actually another podcast. I was thinking about the popularity of financial audit. And the other reason it jumped out of him is like, oh, okay, maybe there is a bit of a hunger in the youth culture for savings. Like, it's basically just Dave Ramsey and Jerry Springer combined into one. But I wonder if it's gotten to the point where there might actually be a hunger for the new culture that you're talking about, the savings culture, the Austrian culture, the Bitcoin culture. Listen, at the end of the day, what do these kids want?

What do all of us want? I think fundamentally as a human being, you want two things. One, you want to be part of something bigger than yourself. And the best expression of that is family, right? Like no man wants to live and experience this life alone. And the greatest way to experience, I think, what is naturally human is family. And that is numerically, literally, being part of something bigger than yourself, family can't be one. And then the second is being part of something that lasts longer than you will.

And I think that that is, again, very naturally. human is that our individual lives have a scarcity element to it. We can't live forever, but the human race will go on. And that's having offspring. That's another natural expression of this is having children and allowing your bloodline to extend far beyond your own life. And so I think, you know, embedded in these experiences of connection, of family, of being part of something bigger than yourself, which is in a sense a death of ego, is an experience that isn't centered around you and your interpretation of value of self. And then being part of something that will last longer than you will is also this idea of ego

death and contribution and working on self something that exceeds oneself. Bitcoin falls in there. And that allows you to be very hopeful. It allows you to be very optimistic. It allows you to be future oriented. It allows you to lower your time preference. These are all very naturally and innately human things. This is the human condition.

And I think that is where that's ultimately what these kids want. I mean, they're gambling on sports, not for any other reason. Then they want to own a home. They want to have a future. They want to get married. They want to have kids. That's at the end of the day, like, what they're using these products for. And ultimately, I believe Bitcoin is a core technology that enables everything that I just described.

I mean, Bitcoin's given me that experience. I'll speak for myself. Bitcoin's allowed me to be a part of something far bigger than me. You know, part of becoming a bitcoyer is an ego death. Bitcoin's actually not about me. Bitcoin doesn't give a shit about my time preference, what I care about, what my business needs are, Bitcoin just is. And I got to deal with that.

I'm on Bitcoin's time. Bitcoin's not on my time. And it allows me to work on something that'll be here after I'm gone. And there's like a very, very like deep emotional connection in that. Like when I'm, you know, making a presentation on stage, like the El Salvador one, I mean, the emotions felt in understanding that, you know, this is bigger than me and this is going to be lasting longer than me. And this impacts people far larger than I.

that is so innately human and so that carries such more depth and and that's all people are looking for and they go about their ways of searching for it and unfortunately whether it's government or corporations you know have marketing departments that sell them a solution to these problems that I don't I don't think are real and I don't think solve them but yeah I think that you know the success that I've had with the youth is is exactly that. Is financial education and this literacy and understanding like, hey, I understand your guys' problems. I relate and understand what you're going through. And have you thought about solving it this way? Have you considered that this is a practical, you know, you don't have to pick

a perfect March Madness bracket. You can earn more than you spend. You can save in Bitcoin, fall in love. And that's the success I've had with the youth. Granted, less success than draft kings has had as a business, but I do ultimately think at the end of the day, we'll win out because, you know, yeah, the future financing plan of the next generation is not going to be betting on LeBron James. Like, that's just, it's just a, it doesn't need to be explained. No, I agree. And there's something, you know, there's this interesting parallel. I'm almost thinking about, like, sports betting was the inevitable conclusion of, like, Robin Hood. Like, you started out with, like, pretending you had, like, some legitimacy and we're, like, we're trading stocks on an app

from our phone. It just goes to straight outright betting on events in the same way that like the shit coin space like, no, we have some utility. And at the end of the day, it's like, no, it's just straight meme coins. It has no utility. It's just pure gambling. It's, it's speculation. It's, you know, and this is the result of currency debasement. Here's the problem. Everybody is a speculator, whether you know it or not. It's, this is not an opt-in thing. If you're listening to this, you're like, well, I get Jack's point, but I'm not a speculator. Yes, you are. If you are, if you You, listen, what ultimately backs Fiat? Violence.

You don't get to say, I don't like this system. If you don't like the system and you don't pay taxes in this system, you spend the rest of your life in a box without windows and without food and you get your ass beat and the people that are supposed to be paying attention, turn their blind eye. That's a violent threat. Someone shows up to your house with a gun on their hip and says, come with me if you don't participate. So you're in the system. That's what backs this stuff. And if you're in this system, you're innately a speculator. You're a speculator because the thing that you are obligated to use by threats of violence

is actively being debased. And so you must speculate on what else to use and own, period. And so a very natural, let me tell you, tie it back to my father. So my father say, you know, being short dollar is very difficult. how do I do that? One of the businesses my grandfather was in and my dad was in was the exchange business. And he's always said exchanges became popular, especially after the severance between the dollar and gold, because what's the best way to monetize forcing the human population to be speculators? Well, be the house, be the exchange. And so he's like one of the ways you could,

you know, 30, 40 years ago, what was the debasement trade? The debasement trade was maybe owning equity in the CME because, you know, the CME's business has just been up and to the right forever because everyone's needs a derivative on top of a derivative. And now we need a volatility index because volatility is embedded and baked in everything. And now there's hedges. And we've hyper financialized everything. And this is all a result of this core problem of if you break the currency and everyone becomes a speculator, then yeah, if I'm Robin Hood, I can't afford someone else to do prediction markets or someone else. Coinbase was a crypto company that needs to do equities and prediction markets.

Robin Hood was an equities company that needs to do crypto and prediction markets. Now, the prediction markets need to find a way to get into equities and enlisting crypto. And now, Draft Kings needs to find a way to sell Dogecoin. At the end of the day, it's who's able to win the marginal speculator. On tomorrow, Saturday, a bunch of 18 to 30-year-olds need to bet on college football. How are they going to do that? The reality of prediction markets, by the way, Nathan, these businesses, if you look under the hood at Kalshi. Over 80% of their volume is sports betting. So they have this mythical story of, oh,

this is democratizing access to markets and we're actually bringing efficiencies to things like, you know, voting on politics and elections. You know, that could be partially true, but the reality is it's a regulatory arbitrage on sports betting. They are packaging sports betting and advocating for it to be regulated by the CFTC. And draft Kings is, you know, obviously it's a totally different business, and they've just found a way to distribute sports betting to the general population without having to abide by traditional gambling law. And that's one of the reasons these things are ungodly popular is they're using like decentralized blockchain. It's just a regulatory arbitrage. It's just taking advantage of different inefficiencies of Washington,

D.C.'s ability to govern law, which that, like that understanding this is like these businesses aren't interesting in that they're not, you know, you, a lot of these businesses taglines are democratizing finance or, you know, financial inclusion. It's bullshit. I call absolute, utter and complete bullshit. These are regulatory arbitrages to win the marginal speculator, which is a function of just destructive monetary policy, like government destroying our lives by debasing the currency. And that's all that is. And why someone like strike and myself or Bitcoin only is like take an active stance against that. It's like, this isn't financial inclusion or financial empowerment whatsoever. Like, what about sending customers to push notification?

Like, hey, just a reminder, college footballs tomorrow. Make sure you place a bet. On what planet is that helping 18 year olds? It's not. So, yeah, I digress. The number of people that I talk to that haven't taken Bitcoin off the exchange is honestly quite frightening. And those that do, a lot of them by one device, get it set up and never look at it again. Their security ends up becoming a snapshot of whatever the hell they knew that day. Bitcoin is not a set-it-and-forget an asset. Hoddling is an active process. I've helped a lot of people build their way to multi-vender multi-six setups.

And almost every time, Trezer was one of those devices. Intuitive, secure, Bitcoin-only firmware available and open source. And that last one is really important. They've always been open source since the very beginning, since 2014, when they built the very first hardware wallet. And those recovery words, they got stamped into metal, that standard was co-authored by Treasor's founders. This is a company that the industry has literally been building on for over a decade.

But there's one thing that nobody could open up, the secure element, the place where you actually store your keys. The Treasersafe 7 has two of them, and TropicO1 is the first open source secure element that security researchers can actually audit. So, if you're taking self-custy for the first time or you're building something a little bit more robust, level up, get a Treasor Safe 7 today. Use promo code BTC Sessions 10 for 10% off any model. Scan the QR code on the screen or click the link in the description down below. No, that was, I'm just locked in on this idea of the marginal speculator. ever heard it put that way before. I think it's just a fantastic idea. Everybody became a speculator. So if you've become the house, you're in a better position there. And now we're

trying to attract the marginal specular. Also, going for like financial inclusion also. It just reminds me of the way that bills, like the naming convention of bill, right? It could be Democratic Freedom Bill, whatever, 103. And that's what they're going to get it pushed through. But we mentioned it earlier. Speaking of financial inclusion as well, too, I think your announcement of El Salvador was August of 2021, if I'm not mistaken, somewhere around there. It was Miami of 2021 for the Bitcoin Conference. It's been basically five. years since that announcement, looking back, wins, losses, how do you think that experiment is continuing to play out? Great. On net. Like, if I summarized in one word, like, good or bad, good.

I mean, I could tell you wins. I could tell you losses. I mean, I'm on record. One of the things I violently disagreed with was that they needed to create their own wallet. But I've told this story. Like, they were fearful to have this, like, white American waltz into Central America and then start calling the shots. They're like, we need to brand this. Like, this is our thing. And people are going to think that you're, like, extorting, like, you know, Central American labor for your pet startup. And, like, fair. Sure.

Whatever. But, like, you guys really, you know, government, I'd much rather use a wallet built by, like, Jack Dorsey. No offense. Like, I don't think you guys are in the business of building software. I think you should create an environment where the Jack Dorsey's and the Michael Saylars and the Googles and everyone comes to your country and competes in an open and fair market to build products. And that's going to be the best outcome for the people and open competition. And as long as it's regulated properly and I'm sure that they'd be interested in investing locally in building offices and stuff. I don't think that you want to be a competitor.

I don't think you want to tell Jack Dorsey, hey, you're welcome to come here, but you're going to have to compete with the government wallet named Chevo. So there were little bouts like that, which are solved are gone. Lessons were learned and we move on from that. But besides that, I mean, what more can you ask? I mean, this was like the most dangerous place that no one had ever heard of. And they saw Bitcoin as like we were talking about earlier to the youth, hopeful opportunity as a way to achieve what we all consider a life worth living. Nobody wants to live alone.

Nobody wants to have zero kids. Nobody wants to not get married. Nobody wants to live in a shoebox apartment for the rest of their life. Nobody wants to, you know, if you want to live a life with no inflation, you could, but you have to like consume Netflix all day and just eat Caesar salad, which is just leaves off a tree with dressing on top of it. Nobody wants that. People want rib-eyes. People want to live on water. People want to get married.

People want to have kids. People want to travel and see the world. And, you know, that equivalent for a country, El Salvador experienced the same thing. Like, they want to be prosperous. They want to develop. They want to have trade. They want to have a bond market of their own. And they've achieved all of these things since adopting Bitcoin.

GDP is up, tourism is up. I mean, the airport, you know, little things, which is impossible to quantifiably measure. But they have a nicer airport than ours here in Chicago. Yeah, probably. It's crazy, man. It's impressive. It's amazing. Now, could they have done that without Bitcoin?

Sure, maybe. But I think plugging into this open network, You're on the team. Like, you know who's on El Salvador's team? Larry Finkin BlackRock. The Trump administration. Jack Dorsey, Michael Saylor, I am, just by holding this asset and contributing to it positively and defending the network. And when the IMF talks shit, saying, no, you're wrong.

Like, they gained teammates globally around the world for standing for hard money in an open network that they can't control. And I think they've benefited greatly for that. So anyway, yeah, I'm very proud of them. And I don't know. I've also, I did a show recently about, you know, looking back and stuff. And I think it was important, too. Like, to be clear, I played like a small role. But their point was well taken and I agree with it.

Like, it's not a me thing, you know? So I have an opinion that's just about as valuable as yours, Nathan. And like, I'd be curious your opinion on there. No, seriously. Like, you know, strike still operates products there. And we have a license there. But so do other companies. And, you know, I was very clear that I advised as a bitcoiner who has an opinion.

I have strong opinions about free markets and Bitcoin and Austrian theory and hard money and all of those things. But, you know, I never, ever wanted to be a centerpiece. and I never ever wanted to have advantages or, right, like, market benefits or anything like that. So, you know, I watch from the sidelines just like you proudly, basically. Beautiful. Although I've got my thoughts, but they're relatively uninformed. I've never been. I need to make my trip to El Salvador at some point in time.

I've heard, I've got a buddy, actually, that I was, I'm sure he'll watch this. He was helping me prep a little bit that wants to head down there. So that would be a wonderful trip. I wonder even just like on what's necessary for nation state adoption in terms of is it just a matter of get out of the way. Like we had the legal tender laws that were then taken away as part of the terms, I believe, with the IMF. But even just in reflections, like, was a legal tender ever necessary? Like can it be as simple as just like no capital gains? Get the fuck out of the way.

Maybe try to encourage education, businesses. Again, just like it feels like there doesn't need to be an active participation from the state as much as a we won't screw with you. Have at it. I just invite everybody in with open arms. I'm curious your view of if you have any information on the boots of ground kind of adoption of Bitcoin still in El Salvador. And then on top of that, I wonder, again, it could just be my own impatience, right? We live in such a short news cycle. Why we haven't seen many, especially with the clear example of the winds that I do have,

why any of the neighboring countries haven't picking up the same strategy? Why is it still see just them? Yeah. Well, I'll answer that one first. I think in the same way, my analogy will be Sailor and strategy. Everyone was like, well, since Saylor adopted it and proved it to be successful, it's only a matter of time until Zuckerberg comes out on an earnings call and announced that he bought a million Bitcoins.

And we're still waiting. Yeah. And you're like, well, what the hell? What's going on? Why isn't everyone copying Sailor? He's clearly taken over the world. And I think El Salvador was such a unique situation where you had, it was the perfect country and the perfect president and the perfect environment is very rare. I don't know of many other environments in countries.

Like, for example, El Salvador didn't have their own currency. So a lot of these other countries have their own currency. And if you think of money as time and energy in an abstracted form, you're asking someone to forgive the superpower. I mean, it's as close to we have as, like I said, time travel or having a superpower to be able to print human time and energy. It's like I could either work hard for this currency or I can click a button. That's like as close as we've gotten to like superpower, like Superman, being able to like lift the building up. It's like I could just print a building out of thin air or I can print the human labor time and energy. And so asking government to forgive that superpower is a tall task.

El Salvador didn't have to do that. They were using the dollar. They had lost their currency in a civil war. Having a government that could be so convicted and so decisive. Like, obviously in the United States, there's going to be people listening to this that think it's a good thing or a bad thing, but you've got to go through Congress. And there's a democratic process. And Bukeli was able to say, I really believe in this.

And this is the direction the country needs to go in. And you've seen that in his. I mean, when they initially sat down and gave me the vision for the country, Bitcoin was a small part. They wanted hard money, technologically progressive. So they wanted all, you wanted Google here. Engineering is the future. The story of humanity is engineering a better world. They're very forward about that.

They also want to be really tough on crime. They think cleanliness is like a core principle of an aesthetically pleasing place. Like just being in a dirty place is gross and it doesn't matter what properties you have. If it's dirty, then people won't want to spend their time there and they won't enjoy it. So it had to be really, really clean. There are all these things. And the fact that they, Bukeli was able to say, say like, this is where we're going and that's final.

Very unique. Not all governments work that way. And so I think it was, and that's the same thing with strategy and sailor. It was like, well, why did that guy in that company adopt it? Well, they were admittedly a failing business that were like backs against the wall. They needed a halmerry. They had a guy that could be convicted and not that he made the decision on his own. He was very open.

Like, I'm going to convince the board. The board needs to sign off here. But like, we're going this way, guys. Like, you know, the first offer to shareholders was, we'll buy your stock back at a premium if you don't like this strategy. And so I think for the same reasons, why hasn't any other like bigger companies copied Sailor? Very similar. Unique situation, unique circumstances. I think it's just a time thing.

But I've been on record saying, I've always thought that the, you know, the second country to follow El Salvador might be the United States, to be honest. only because now that's maybe a transition into macro and the debt problem. But yeah, the most natural adopter of a hard asset, you know, assets, liabilities on a balance sheet, buying something that, you know, can grow on your balance sheet to offset all the liabilities you're creating. You know, it might make sense for the U.S. And they're pro-technology. And we've always been leaders in China's history.

story with gold. So anyways. Well, let's go there. Let's see. Let's get your macro ticket. I want to know why the U.S. is maybe going to be the next big adopter of Bitcoin. Even just immediately kind of coming to mind is the idea. Like one, I think it'd be interesting and strategic if the rest of the, maybe China is accumulating a lot of gold. If you want to have a sound money, maybe go the other side and kind of pull the rug out from under them. But I'm curious, yeah, Bitcoin, US. What are you thinking here? What's the macro forecast? Well, I just, I think, I think Bitcoin is the most American technology, maybe in the history of this country. I mean, listen, well, first of all, it's far more American than the dollar. We could start there. But I think America is one of the

greatest startups ever invented. It's an idea above anything else. You know, an idea materializes into a place, and a place materializes into it, into a, but America started as an idea, and people migrated to this land and pioneered this land and took over this land. And took over this and ran this land and governed this land based on like very foundational principles, freedom of speech, freedom of coming and going, you know, property rights, like very core ideals. And I think like I think Bitcoin embodies these American ideals and these properties far better than maybe any other technology. So I would say America has a history of being very technologically forward, pioneering, freedom fighting, where the kings and leaders of democracy.

We govern and embody freedom throughout the world. Now, supposedly, now we happen to do that by killing people and we don't need to get into the, this shouldn't be a war podcast. But, you know, I'm talking just specifically the ideals. Like, why am I proud to be an American? I'm proud to be American because of these ideals and these ideas, not necessarily what's expressed actively in the current government or, right? And so I think Bitcoin is very American in that sense.

And so as a technology and as an idea, I think it's very American. And then on top of that, well, America has to, America has a very unique macro problem. You know, they're the, the dollars, the world reserve currency. And so, you know, they structurally have to run these deficits. Their major export is inflation is the dollar itself. And so, you know, people need, people need the currency. That's how you do, you know, if you need to go from Ghanaian Settis to Nigerian Naira, maybe that's a bad example, but just broadly, if you need to go,

from currency to currency, you know, many currency exchange is first through the dollar. You go from Geney and Setti to the dollar, then to the British pound, because there's not enough liquidity against the two currencies themselves. So people need it for currency exchange. People have debt against it. People need it to finance and pay interest on their debt. People need it for global trade and settlement. People need it, you know, the petro dollar. People need it for fossil fuels and for oil. And so there's constant demand for the dollar. We have to be running these structural deficit. So naturally, people say, oh, how do we get into this debt decision? This was, this policy. This is how the system is designed. This is structural. Like, don't let people think, oh,

this was a mistake and this was Biden's fault. This was decided. Like, this is how this system has to work. And in order for America to get out of this, well, one way you could do it, like I tell you this, China's importing all this gold, right? Now, China ran almost a trillion dollar surplus last year. That's unbelievable. And obviously, like, the majority of that is against the United States. You can match set against our $2 trillion deficit, and so half of our deficit is just specifically the China. China is the world factory. Now, if gold, so really what the United States is trying to do is balance out these massive trade imbalances where can China, because then, you know, so basically, let me cut myself short here, can China not run such a massive surplus? Well, of the gold they're importing,

they're importing this gold if gold is worth, you know, $3,000 an ounce at the time. Well, what if gold is worth $20,000 an ounce? Well, then China doesn't run a surplus at all. Does that make sense, Nathan? Yeah. Because they're paying, because gold is worth so much more when converted to dollars. That's another way of saying severely debasing the dollar, like severely, severely, severely, severely, severely debasing the dollar. And you have to ask against what?

Like, what on the United States balance sheet can they severely debase the dollar against, which then de facto kind of rebalances trade globally and makes it so that they're isn't much like such massive deficit surpluses. And you can pick gold and Bitcoin as these hard assets to effectively inflate on your balance sheet against the dollar and debase the dollar against these things. And all of a sudden of gold is $20,000, $25,000 an ounce. And Bitcoin is $1 to $2 million per coin. And the United States has positions in each. Then all of a sudden, you know, the deficit's not as big. That's GDP can be can be remediated and fixed. China's not running this massive surplus anymore. And if the dollar is that weak,

then the United States can re-industrialize. Like, why is the iPhone not made in Manhattan and it's made in Shishuan, China, or whatever? Well, it's because in order to employ someone to build the iPhone in Manhattan, the rent starts at $5,500 for a one bedroom. So it's just uneconomical. The dollar and dollar-based assets are,

there's a premium to them. They're too expensive. And so anyways, that, like, for all of these reasons, the United States has to now, there's this geopolitical tension, the United States going to allow gold to run, knowing that China's built such a position, is that actually advancing China's ideology and agenda can Bitcoin be kind of like an ace in the hand? And also Bitcoin's just better and Bitcoin's American ideals and Bitcoin's more forward technologically.

That's where America has historically been good. I mean, we have Facebook, we have Apple, we have Amazon, we have Google. Big Tech has been fairly dominant. That's one of our other major exports. We now have Nvidia, which is a massive geopolitical hand to play. So anyways, that's kind of like my high-level ranting. And I see Bitcoin playing a role here, if not at nation state, at least for the individual. But I think it's very natural that some administration adopted it, you know, happened to be the Trump one.

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that very independent driven person and how that fits with the overall kind of Bitcoin culture. Honestly, like, we just had the failure, the cloture, they lost the cloture vote for the Clarity Act, which, you know, there's some for Bitcoin, but a lot of other crap as well, too. But even with the example that you're laying out there, like I don't think necessarily even mass US adoption

to Bitcoin maybe as a medium of exchange is going to come from government regulation. I think about everything that you just laid out there in terms of debasement of the dollar and we've been so de-industrialized for so long that I wonder if it's going to end up kind of being like the marijuana industry where people are just going to start using Bitcoin. Like it's just they're going to, they're going to have a need for it. And then eventually they'll keep a policy will catch them

and go, yeah, yeah, it's totally fine. No cap gains on your transactions there. This was my problem with the whole Clarity Act. I'm glad that they rejected it. First of all, it was never a Bitcoin bill to begin with. It was always, you know, big crypto. Coinbase was looking for their moat and their regulatory moat and finding new growth and finding new revenue and yada, yada. And it had nothing to do with the Bitcoin. And by the way, Satoshi never asked the White House if you could release the white paper. So who cares? To tell those guys, we don't need them. I don't think we do. And what? Bitcoin's up, what? We're recording this on Friday the 18th. Bitcoin's up 5%, like days after the Clarity Act and a rate hike. And Bitcoin's up 5%. So there go all your narratives out the window,

right? Everybody that was freaking out, Bitcoin sticking it right in your face and telling you, we never need, we had plenty of clarity before the Clarity Act. So I'm glad. And I agree with you. in that Bitcoin's always been a bottoms up movement. It will continue to be because, yeah, it solves real problems. Nation-state adoption for me in America is very simple. I'll tell you what, Nathan, I can solve, and so can you, and so can anyone, the United States problem in five seconds. Don't be the world reserve currency.

That's it. It gives a premium to the currency that it doesn't deserve. So the dollar is artificially strong, which forces you, you know, to, hyper financialize and globalism and export everything and run these structural deficits and create this pile of debt. Like it is a policy decision. It is a structural decision. Say, we want to be the world reserve currency. That implies all of the problems is just a function of that one decision. Now, the problem is, is that politically palatable? Like, can you win an election on that agenda. Are people going to be okay with if we're not the world reserve currency, a severely

weaker dollar that has implications on all sorts of things that Americans expect and vote into office for? But that is the honest, dead truth. And that, to your point, has nothing to do with medium of exchange or how merchants accept payments and where visa belongs in our lives or doesn't belong. That is everything. That is like just a very simple, the United States has a balance sheet problem. it needs to de-lever. Debt to GDP has to go down from 120, 100, 30% down to like 20 to 30%. And that's just a de-levering. And that's just a, that's just a weaker dollar.

And how they're going to achieve that whilst remaining politically popular and winning elections and getting things through Congress as so uninteresting to me. I don't care. But that's where Bitcoin will slot in to the United States of America. It's never going to be medium-term exchange. That's going to be we the people. that's going to be merchants saying, sure, I'll accept your visa and MasterCard and Amex,

but I'll also accept this one. And by the way, this one is better for me because it settles instantly and I don't get charged 3%. And then slowly but surely, you know, the problem with the medium of exchange thing and I have experienced this firsthand is these card networks have a,

have, they're basically bribing consumers to use them, So the way the card networks work is the 3% that they're charging the merchants, that gets, that's interchange and that gets kicked back to, so what funds the cash back on your card? What funds the free flight? What funds the Napa Valley Wine? What funds the access to the airport lounge when you go check in early and you're, oh, my flight

doesn't take off for an hour. I'm going to go get a massage and there's a bar of food. What finances all of that? Well, the merchant's 3% fee does. So as soon as they charge a 3% fee, you know, as soon as they charge a 3% of, fee. They all split that. And like some of the banks that get that, they say, hey, in order to make sure that the consumer picks my card, I'm going to take the fee that I'm collecting from the merchant, and I'm going to incentivize the consumer by giving them cash back, by giving them free wine,

by giving them free NFL tickets or whatever they're interested in. And that's where Bitcoin's going to have a really tough time. It's actually not on the merchant side. Every single merchant I've ever talked to them. Like, because I can, as soon as the Bitcoin comes in, I can convert it to dollars instantly if you don't want to touch the Bitcoin yet or whatever. That's not the problem. It's do you want to accept cash final payment for less than fucking 3%? And no merchants ever been like, no, no, I'm not really interested. Of course everyone. But the problem is none of the consumers are willing to use it because they're like, well, why? You know, if I swipe this one, I get 2% cash back or I get a free flight to New York. And if I use Bitcoin or if I use this network,

no one's, no one's giving me free shit. And so it's like, how do you, that's a very, deeply embedded network effect, kind of duopoly problem that will just take time to en route. I never even thought it from that perspective. And I'm even just thinking about like the 3% on cards and how thin like grocery store margins are.

It's like, yeah, of course they jump at that, right? Of course. But it's like it's hard to sell somebody. It's like it's trying to get somebody to eat like good food, right? Get out the junk food, stop eating the goddamn Doritos. It's like, look, look, you're not going to get that free flight, but your kids are going to have a, future. So just trust me, go ahead and start spending Bitcoin instead. And people, and the problem with that

is people aren't able to even connect that. So what we see at strike is we even have, we have these Bitcoin back loans and we have this line of credit product, which is exactly what it sounds like. You have Bitcoin on the platform. And if you want to go pay a bill, we dynamically extend credit against your Bitcoin. And we just, oh, your credit card bill is three grand paid and like extend a credit facility against it. So what people do is they swipe their credit cards, collect all. all these points, collect all these free flights, and they're just hoarding Bitcoin, and they're paying their credit card bill with a credit facility against the Bitcoins. Then the Bitcoin appreciates, they refinance it, and they're just running like a massive short dollar trade.

Short dollar position with some free flights. It's unbelievable. Right. And then I'm getting free flights and I'm getting cash back. And I'm sitting here, well, you know, you should look up what square merchants except Bitcoin and you know, you know, strike. We have this feature. Like, yeah, yeah, yeah. I know. And I hope, you know, everyone adopts it. But not me. I kind of want to fly to New York for free. And I don't want to spend my Bitcoin. And, you know, I kind of like the way that I'm using strike right now. But yeah, totally. Like, I'm sure, you know, I hope my neighbor does it. And it's like, well, so that's the tough, you know, the reality is the world doesn't change charitably. Like, I think, you know, you solve people's problems. And so I've always thought

of Bitcoin as this, Bitcoin's a combination of fiat liquidity and technology. And that, to me, Fiat liquidity plus technology equals Bitcoin. So part of Bitcoin's story is this technology piece. It dematerializes Visa. It is an open source visa. Like we don't need visa because we have open source software that achieves transaction finality. We don't need a protocol business. We have like the protocol itself can.

But so that technology piece and you can argue like that's going to compete in remittances. And Bitcoin's technology can compete. and it'll slowly dematerialize these things. The other thing that pushes Bitcoin adoption is the Fiat liquidity piece. Like largely Fiat, like Bitcoin is priced on future expectations of Fiat currency. And, you know, there's turns of like which is driving narrative and which is that the technology or the Fiat liquidity piece is driving narrative and driving price. And right now we're just in this hyperdominant Fiat liquidity is the narrative.

And it's the ultimate driver. like the biggest way to slow Bitcoin down right now is if the U.S. government came out and said, we're never going to print another dollar, we're never going to govern what you can and can't put in your bodies. Like think about the Silk Road market and stuff. You guys can take any drug you want, experiment with your bodies however you want.

We're never going to print another dollar. In fact, the government's going to cease to exist. Bitcoin would adopt slower. We wouldn't have these hockey stick green candles because they're not creating a market environment where if you want to act as a sovereign free person, sometimes you need a currency that doesn't restrict and censor you and can't be confiscated. And if you want to keep your purchasing power and actually afford things in your future,

you know, you need something with a fixed supply. So Bitcoin right now, and this is especially post-COVID, you know, the technology feats have definitely been a second place to adoption drivers and narrative drivers because the biggest problem people have is purchasing power. So that's, I think, just the chapter of Bitcoin we're living in, unfortunately. I agree. The biggest concern is having fun staying poor, right? So I want to kind of, the idea of open source visa, I love that framing.

And speaking of that and talking about strike, in my estimation, strike very much started off as a lightning company. And what I want to kind of get your take on, because it's a bit of a weird time here, like Core Lightning had a bug that was found. I saw Get Elby was taken down at one point as well, too. We had liquid come down. I'm worried that we're going to have to retreat into basically everything on chain for the time being. Like it feels like our higher level abstractions and our layer two are being pulled away from us.

But this is directly your vein. So I want to get your thoughts on basically AI's impact on open source. How long are we going to go through this where we're constantly finding vulnerabilities all the time? And do you think there's concerns about even using things like lightning in the interim mode? We have to like, again, retreat to on chain. I mean, fees aren't bad. It's not the end of the world right now. No, I don't.

I think AI is very clearly, it's changing the security landscape and software, by the way, not just Bitcoin broadly. You know, Bitcoin very naturally. And Bitcoin has this tendency of like, you know, Bitcoin is the biggest bounty in the world because of all the software, it's bearer money. And so it is always somehow first. Like I always found it fascinating that FTX and Sandbank, Freed blew up before Silicon Valley Bank. It was almost like the freer market, the open source

software, somehow it's so free that it leads the world. So I think actually all these Bitcoin hacks are a leading indicator as to like what I think we should expect in other industries to come. Like it wouldn't surprise me if banks were getting hacked just like some of these Bitcoin products in three to six months. In the similar way, as soon as FTCS went down because of liquidity issues and the rate hikes and a balance sheet mismatch, I remember tapping my chief of staff and being, uh, it's only a matter of time until, you know, all these banks have the same balance sheet. As Sam Bankman freed, his only got caught because Bitcoin is just a far freer market than these banks.

Um, anyways, I digress. To answer your question literally, no, the lightning works. Lightning's fine. Like at strike, we've never had any issues, any security concerns. And like L&D, you know, knock on wood, obviously. For example, like we've had no issues. What I think is much more interesting conversation to have that I think Bitcoiners should be having is I think that there's been an idea that open source implies security.

Oh, it's open source. It's like, yeah, but open source doesn't guarantee security. In fact, in the AI age, open source is, I mean, people need to think critically about when to open source their project because you're giving an attacker all necessary information they need to attack. And it used to be very expensive to do this. You'd have to hire a team, spend a ton of time understanding the business, understanding the source code.

Nowadays, you can understand the source code in 60 seconds just by having an agent run against it. I can tell you even just super quick, Jack is going to throw this. Ben was literally recording a tutorial yesterday, and there was a bug in the software, and it was annoying him for recording. And so he just asked his, please go in and fix it. And it did. And it was done. Right.

And so the point I'm, I'm going to make here, I'll land this plane is open source doesn't make it secure. What makes it secure is the amount of developers and researchers that maintain and are interested in the repository itself, the incentive structure for people to care about it being secure. Bitcoin Core is secure because it effectively is the underpin to over a trillion dollars of wealth. And so whether you're MIT researchers or strategy or BlackRock, we all have a vested interest in Bitcoin core being secure. So I'd be hard pressed to know that there's another open source library that has more eyeballs, more of an incentive structure, more researchers,

more hard tested, moves at an appropriate pace. Now you take cold card, for example, the bug lived for four or five years. No one, not enough, but it was open source. Oh, because it was open source, it was secure. Clearly not. And it wasn't because nobody cared. They didn't allow other people to use the software for commercial benefit. So no one had an incentive to care.

No one was clearly no one was auditing the code. Clearly no one cared. Clearly no researchers were inclined to dig in. And it's similar with liquid. Why would I care about, whether the Liquid Network's last release is secure. It doesn't matter like liquid can get hacked and Bitcoin Network is totally fine. It's an adjacent network. It's a separate layer. So now something like the Lightning Network, I actually think enough people care. And the Lightning Network has

achieved a level of adoption where there's a lot of eyeballs on now, not nearly enough. And I still think it's in its infancy and it's still in its adoption phase. And it's not something to compare to Bitcoin Core. But I think that this is a very important conversation that, and I tweeted something about this that Bitcoiners need to be having is open source doesn't imply security. And in fact, having an open source library out to the public that not enough people actually are reviewing and care about is extremely dangerous. Because as we've seen, an agent can become familiar in two seconds. And all of a sudden, something that's storing thousands of Bitcoin that no one's really reviewing or caring about.

Because to be that secure, you know, either make it close source and make it a corporate enterprise software that is closed source and that you guys secure yourself. But if you make it open to the public, open source software needs an incentive structure and an economy for people to review and care about it. Or else I think it works to the advantage of an attacker equipped with AI. So that's the conversation I think we're having. And I think it's very difficult. Like not every project is going to achieve that level of scale. Like, you know, you, if you're a project with two developers and working on an open source lightning thing and like not that many people care about it, I don't feel comfortable putting a lot of Bitcoin on there. No offense to these, you know, founders and these projects. But in the world of AI, like, if I know that your open source project doesn't have an economy of researchers and developers and incentive for people to truly care and ensure it's secure, I'm not depositing money that I'm not comfortable losing on to that. project. And that's just the world of AI we're living in. Like, I don't think that everybody can run

niche, tiny two contributors to an open source project and achieve scale. That's dangerous in this world. Is that resonate? It makes sense. That's the conversation I think we need to be having. Like when people say, man, now I'm really scared about self-custody. I don't know what to do. Yo, push comes to shove. Just use Bitcoin Core. Like, you know, you know what? You know, like we're seeing Treasor and the email leaks and like their, whether it's their email or their supplier, leaking addresses and stuff, guess what? If I go buy a laptop from Best Buy and my intent purpose is to keep it offline and use Bitcoin Core to generate a really large random number, Bitcoin Core is secure. It has the most eyeballs in the world. It underpins this entire industry. So it has achieved the economies of scale

and the network effect as an open source project that I'm looking for to store life savings on. And then what? Like is Best Buy is going to get hacked and everyone's going to say, know that Jack bought a laptop? That's far less dangerous than knowing Jack bought two treasors to this address or whatever. And so, you know, I think that there's a serious conversation that needs to be had of like the more niche, like, you know, cold card turned out to be open source firmware that no one else was allowed to care about it. Like the open source license was like, you're not allowed to care about this. Well, that's a problem in the world. of AI because no one cared enough to realize that there was a critical issue. The person that was the most incentivized to care was the person that ethically and morally was willing to steal hardworking people's money. And that's an incentive problem, right? Like, does that make sense? Anyway, I'll cut myself off. No, no, no. I love it. And you're absolutely right. What I'm trying to toy with the idea is like, okay, so what do we change moving forward? Does that mean that experimental stuff, it goes closed source at launch? Do people start referring back to

close source until there's enough of a network, in fact, enough monetary incentive to go open source And on the other side of as well, too, is like, what if this, the idea that I had is this, the concern would be that this results in centralization. Like, only the stuff that's been open source and been out there for a long time, are the ones that people kind of trust and then put their money in, but that means there's fewer options out there in the market. But the flip side of that is, like, it also just call that centralization, like protocol development, right? Like, maybe there is only one kind of lightning implementation, but that's, that's totally fine in the same way that we just got the one core that we're building off as well, too. Any thoughts on that? Yeah. Listen, I think people tend to gravitate towards the extreme of like, oh, so what you're saying, Jack, is there's one Bitcoin implementation, there's one Lightning implementation, and all of us just need to sit and bow down to whoever maintains those repositories.

It's not necessarily what I'm saying. What I'm saying is in the future, if there's a hardware wallet whose firmware is maintained by two people and is actively telling everyone, like, get away, you're not allowed to care about this. I'd rather use Bitcoin Core. So I think open source software needs to care more in this world of AI because you're only as secure as the advantage the attacker has. Security is nothing that you can achieve in like a finite state. You cannot achieve security every single day. You're actively working to be secure against whatever tools the attacker has.

And in this day of AI, the danger is exactly what happened with. cold card is that the most incentivized person to care the most about that code base was someone that was willing to steal all that money. That's not true for Bitcoin Core. I'm deathly incentivized to make sure that repository is secure. Nathan, you are too. There is a massive industry that is like, now the U.S. government is incentivized to ensure that that repository is secure. And so that that's a world of a difference. That's a huge deal. And so all I'm saying is that if you are running a Bitcoin project, which by the way, not every Bitcoin project wants to store people's life savings. It's perfectly fine. Hey, hey, disclaimer. You know, this project's in its infancy. Don't put your

life savings on it. That's also totally reasonable. But yeah, should projects run closed source initially? Should there be more upfront disclaimers? But ultimately, an open source project needs to achieve an economy of researchers and reviewers and an incentive structure for people to care. That's where the security of an open source project comes from. It's not just because everything's public implied security. And so, yeah, like when do these projects open source or what's the right level of you, whatever, network effect and an economy is a scale to be deemed secure? I mean, this is all subjective, right? I'm not going to have an answer on the podcast. But I don't think it's as simple as gravitating towards, you know, two libraries and that's all Bitcoin can do.

But yeah, I mean, I also think that the cold cards are phenomenal example of it was open source, like the source was available. But unfortunately, the most incentivized person to deeply understand the code base was an attacker. And that's unbelievably dangerous. which we've unfortunately had to live that. Yeah, I think source viewable is going to be off the table going forward. I think I'd rather have close source than source viewable for that exact reason. Yeah, and obviously, though, like I don't want to use closed source hardware wallets. And so all of these, these are really important questions that the community will inevitably work through.

And everything's good for Bitcoin, unfortunately. But all of these, you know, terrible things make us better. exchange hacks, bear markets, now these AI-related attacks, Bitcoin hardens through this. Anything that doesn't kill it makes it stronger, genuinely. So I think this is all good for Bitcoin and these are healthy conversations. But these are some of the more nuanced conversations that I'm having behind the scenes as, is, you know, listen, having an open source project maintained by one dude, I would say that in the age of AI, that might be the least secure thing I've ever heard, especially if there's a lot of people that put a lot of Bitcoin on it.

Obviously, it helps security if there's not money on it. It's all about incentive structures. But yeah, I think, you know, listen, Nathan, I created ZAP, which was an open source lightning network wallet. If I were to create ZAP today in this world of AI, it would have to be wildly different. Wildly different. So. No, fair enough. I do want to ask you a little bit more about if there's anything else cool going on at strike. But before that, I want to take a bit of a weird turn. And feel free to just tell me to fuck off, right? I was just wanted to, I was curious.

So I was like, I wanted to ask. So I used to work in immunology research. I used to work in a university environment before I came and was working with Ben and doing this full time. And I've never been happier here. The bureaucracy being in the university environment drove me up the damn wall. So I just wanted to ask you, like, since leaving 21, on the personal level, we talked about family and health and all this stuff too.

I imagine being in that sort of world came with a lot more restrictions than running your own company. How does it feel to be back? Is there anything cool to report? How is Jack doing? I'm great, man. Yeah, listen, I, like,

I've been on record. The tether guy, I love the tether guys, good friends of mine. And, I mean, like, brass tax, I'm an entrepreneur, they're entrepreneurs, like what they've achieved

is, like, unbelievable. And, you know, maybe someday the world can truly, understand their story, but like very cool. And I wish them the best. And I wish 21 the best, but, you know, like all things considered, yeah, I'm great. I'm great. Married soon too, right? Or has that already happened? I remember the engagement photo. I'm getting married in July. Hell yeah. 27. So yeah, it's funny. You know, the one thing I'm not the CEO of is that, you know, my fiancee runs that show. No, but listen, man, I, I went back and forth with someone on Twitter.

I don't remember a few days ago. They're like, oh, I think I understand, you know, Jack got pushed out of 21 for this reason. And this is the, and it's like, I don't think people genuinely appreciate when I say, like, I want to build tools. for Bitcoiners. It's what I want to spend my time doing. If I wanted to, like, etch out the most money I could ever possibly make, I would have launched a shit coin 14 years ago.

Like, I was around when Vitalik was building Ethereum. Like, I could have built my version of Ethereum and just shitcoin my way to riches. That's never what it's been about for me. And I just wasn't, I'm not very interested in financial engineering. It might have its place. It's not interesting to me personally. and when it came to, you know, putting together 21 and some of the core business decisions,

I just disagreed with the board. And at the end of the day, that's not acceptable, especially for a public company. I have a fiduciary duty to shareholders. And either I needed to compromise and build someone else's vision, or I needed to be comfortable with who I am and what I stand for and what I believe in and pursue that. and be unapologetic on, I'm not sure which version of my life would have made me more money or which version of my life would have gotten me on the cover of more magazines. Because I just don't care.

And it's never been what I've been about. And at some point, Jack, the closet's big enough. We probably can just focus on more meaning and other things. Yeah, but I, you know, listen, I think at the end of the day, you know, why the closet is empty and why I'm wearing this T-shirt instead of a button up, I think people want. authenticity. I think they want raw. I think they want real. And that's what I've always stood for and who I've always been. And that's what I want to build. And it's not going to resonate with everyone. And there's going to be a group of people that are like, man, I really wish Jack was this

like financial engineer that put Goldman Sachs and Harvard plaques on these walls and wore a button up. And that's fine. And maybe there are people out there building that. That is just not going to be me and I'm not interested in that. So that's, I'm, I'm happy, but I've always been, I've always been good because I've always been myself. Um, um, so yeah. I love it. I love it. I for one, um, incredibly was a optimistic and looking forward to, uh, assuming, you know, life goes well, get married. Uh, I've never seen people get more fired up than when they have kids. So should that ever be in your card? Should that ever happen to you? I can't imagine what the hell you're going to accomplish once you got that fire underneath you? It's my dream.

I joke all the time. Investors will ask, you know, what do you think strike's biggest competitor? My firstborn child. Yeah. 100%. My dream is to be a dad. It really is. So, no, I'm unbelievably excited. And I mean, to be clear, too, I think what we're building at strike, I could be crazy. I could be wrong. I'm obviously biased, but I do genuinely think it's the most important thing to work on is a Bitcoin institution that's genuinely an institution. Not sending you push notifications about betting on basketball

and we're also not generating value through financial engineering. We want to be productive members of society by building tools that benefit our customers and push the world in Bitcoin and what we think is right direction. And that sounds like cliche. Like, oh, yeah, doesn't everyone want that? No. Coinbase doesn't want that. Robinna doesn't want that. Draft Kings doesn't want that. Polymarket doesn't want that. Bitcoin treasuries aren't, companies aren't necessarily like spending their days, how I spend my days. And so, no, it's actually like a fairly scarce,

you know, ideas and tweets and words are of abundance. Execution and proof of work is the scarcity. in actually getting up and saying like who's going to build the trusted global Bitcoin financial institution. That is the rarity. And so yeah, I also just, I'm very inspired to be able to focus more on that. Do podcasts like this. I, you know, as a public company officer, this wasn't the easiest thing to do at the time, do more education, just be out there and champion it and be myself. Yeah. So, hell yeah. All right. We touched on it a few times there. So what exactly are you then building, sir? What should I be looking out for? What, what problem are we getting out there and solving? What's next on the agenda? Strike had a funny story. You mentioned it. We were this lightning company or like

deeply inspired by lightning at the time and the block size wars and all this stuff. And, and the branding. It was all very much, it was very front and center. 100%. And I mean, I'll just say like a very vulnerable story. So around that FTX crash in time, like strike was failing. I mean, lightning were, well, Listen, lightning works, but I mean, it wasn't paying my bills. And, you know, El Salvador and you get VCs around, but then VCs are like, well, like, was the return of our capital? And are you hitting these metrics? I was like, man, I'm surrounded by people that I don't necessarily relate with.

I was very young. And, you know, lightning I have a grand vision for, but whether I was early, whether I was wrong, unclear, but it didn't really matter. Like, I needed to build business. And at the end of the day, this is a business. I believe almost ethically in being profitable. I think that, you know, the way that you and I view money, you know, being profitable is in a financial expression of making the world a better place, right? So we sat as a company and said, okay, how can we benefit our vision and our customers?

And all our customers were saying, and this is in the wake of FTCS and stuff, is Jack, we love lightning, but I don't scan that many lightning QR codes in my life. I tell you what I do every day. I buy Bitcoin every day. I need a place to store my Bitcoin. I want to borrow against my Bitcoin. And we were like, yeah, but can't you do that on at the time BlockFi or can't you do that at Coinbase?

Like, yeah, but these issues and, you know, you guys are focused. And what we had is we had licenses. We had a brand in relationship with the community. And we've always been incredible at building technology. And so then we went on this, you know, you can call it a pivot. We were like, okay, well, let's allow people to buy Bitcoin. explosive business. Let's allow people to borrow against their Bitcoin. Now probably the biggest business that we have. And so we've almost very naturally turned into a Bitcoin institution,

or like a Bitcoin. People think of it as like a Bitcoin bank. Like a lot of people use this for their primary financial account. You can get your paycheck deposit in into strike. You can pay bills with strike. There's lines of credit, fixed term loans, different ways to buy. We now have a private division, strike private, because the more that we've invested, in core financial services, the higher ticket like clients we attract, we're attracting institutions, high net worth individuals, family offices. And what we've become naturally is like the trusted Bitcoin institution where if what you're looking for is to speculate or what you're looking for is to hold a basket of shit, you're

never going to be a customer of mine. But if what you're looking for is high quality, cheap Bitcoin financial services, we're probably at this point, like the best in the world at that, and that has afforded us to become a successful business. And lightning for us continues to grow, but I would say it's definitely a smaller marginal piece of this grand pie now. And I think everyone, all Bitcoiners have the same vision. Like I think if you were to ask, where strike going to be in 10 years? And then you ask other Bitcoin companies, where are you going to be in 10 years? We probably all have the same features, right? It is buy, sell, lending, payments, remittances, we're going to be in Europe. We're

to be in the UK. And it's the journey to get there. That's the challenge. And so, albeit it was tough and choppy it sometimes. I think we learned the right things when we had to. And now we're this Bitcoin financial institution that, you know, we're interested in maybe getting a literal bank. We have this private division working on some custody products that in the next evolution as people want things from us like insurance. So I think our future is very naturally. One of the biggest lessons I learned as an entrepreneur is as a kid, I thought my job, you watched the Steve Jobs documentaries and I thought my job was to predict the future.

I was like, oh, my job is to predict the future and then tell the world what they're supposed to do. And what a humbling lesson it is is like, no, your job is to shut up and listen to your customers. And like, you work for them and you build for them. And so our roadmap is really driven by bitcoinsers. And right now, things like custody are top of mind, things like borrowing against your Bitcoin or top of mind. And we build core financial services for bitcoins. Love it.

Jack, was there anything that we didn't touch on today that you want to make sure you leave the audience with? There's anything we missed? You tell me, you're the expert, man. I love listening to your interviews. So you tell me. Thank you, sir. No, I think we covered the bulk of it.

I think we covered the most important things. I'll just say, like, again, it's very excited about the space. moving forward. Very excited to see you back in this sort of a role where you may not necessarily have the restrictions of perhaps like a PR team or somebody else behind a publicly traded company. That means you got to kind of, you will say, watch our language from time to time. So I'm super optimistic. And then even just on like the personal level, like me and the guys from the live stream Walker and Brandon and Ben and Joey, we're all dads. And like in the backchats, that's one thing that we talk about all the time. And so I can't wait for for you one day

to be this badass base Bitcoin dad as well, sir. Yeah, I appreciate. that. And to the Bitcoiners out there that we open the show, Bitcoin's been a bit of a lulldrum, I really am incredibly bullish. I would just hang in there. In hindsight, everyone will say you're lucky, but you got to earn the upside. And this is what it feels like. So I would hang in there, but there is no doubt in my mind this thing's repricing way higher, just given the macro and fiscal situation that we're living through. So to the Bitcoiners that we're looking for some hope, you know, that's what I'll leave you with. I really genuinely think that we're in for some very, very good times in the coming years and just hang in there.

Agreed. Jack, where can everybody go to follow you, find strike, all that fun stuff? Jack. Jack Mallor is my real name. So you can find that's my name everywhere online and shoot me a DM. I'm open and not a stranger. If you guys have questions or comments or need anything from me, just DM me. And we look forward to serving you financial services at strike. Let us know how we can help. If you enjoyed this episode with Jack Mallors, and I know that you did. Hit that like and subscribe button and check out the previous episode with James Lavish and Duneberg.