TFTC: A Bitcoin Podcast - #230: Layered Money, Complexity of USD, and a New Financial Stack with Nik Bhatia

Episode Date: February 16, 2021

Join Marty as he sits down with Nik Bhatia, Author of Layered Money: From Gold and Dollars to Bitcoin and CBDCs, to discuss: - Writing the book - Fed money printing - History of layered money systems - Different reserves - How complicated the current USD reserve system is - A new financial stack emanating from nonces - much more Follow Nik on Twitter Buy Layered Money today Shoutout to this week's sponsors. Cash App. Start #stackingsats today. Use the promo code: "stackingsats" to receive $10 and contribute $10 to OWLS Lacrosse when you download the app.

what is up freaks it's your boy marty ben here to introduce this episode of tales from the crypt at the immense pleasure of sitting back down with our good friend nick batia it's time to discuss discuss we discussed what did we discuss no we discussed his new book layered money from gold and dollars to bitcoin and cbdc's very incredible book you'll hear we talk about it in the episode and layered money in Bitcoin, how it's a revolution, how we borked the monetary system, we fucked up the money, we need to fix the money, we're going to fix the world, I think you guys are going to enjoy this ep, it was brought to you by our good friends at the motherfucking Cash

Shop, Cash Shop, help me stack, sats, cents, sats, sell sats, and receive sats, we're saying sats sats sats sats sats sats sats because sats are the standard for you freaks who are new to bitcoin new to this podcast new to the world what are sats you may be asking sats are the smallest unit of a bitcoin one bitcoin can be broken into 100 million satoshis or sats as we call them like to say we're stacking sats you're you're constantly purchasing sats and dcaing into sats and using sats as a standard savings account if you will cash app allows you to do that i mentioned dca that's dollar cost average if you just want to set it and forget it and buy a set amount of bitcoin on a set cadence cash app allows you to do that daily bi-weekly or weekly mix it up there

should be daily weekly bi-weekly but you get the point okay cash apps allowing stack sats send sats receive sats you've got their boost program which sometimes allows you to get sats back uh on top of this uh cash app can be your bank account or offering account numbers and routing numbers so you get your paychecks direct deposit into the app and start stacking sats sooner let's get some alliteration here stacking sats sooner that doesn't sound great we'll work on it um if you haven't downloaded the cash app yet make sure you do so when you do use the code stacking sats that's s-t-a-c-k-i-n-g-s-a-t-s you're going to get ten dollars and ten dollars going to go to our good friends at Owl's Lacrosse. Owl's Lacrosse.

Woo! Woo! Woo! Woo! Ka-ka-ka-ka! Enjoy this episode with Nick. Go get his book. Grow your nail. Understand what we're doing here with this Bitcoin revolution. Enjoy. you've had a dynamic where money's become freer than free when you talk about a fed just gone nuts all all the central banks going nuts so it's all acting like safe haven i believe that in a world where central bankers are tripping over themselves to

devalue their currency bitcoin wins in the world of fiat currencies bitcoin is the victor i mean that's part of the bull case for bitcoin if you're not paying attention you probably should be probably should be probably should be sup freaks just ninja launched on our on our guest nick batia nick welcome back to the podcast what's up marty what's up freaks nothing man we're just reminiscing about our children this is why we're in it right absolutely congrats on uh your son about to turn one year old that's awesome my daughter's three and uh we gotta enjoy it it's the best it's the best time it really is no you're saying it goes by fast like i'm like astonished and he's going to be one year old it's like holy crap man slow down run around he got

teeth starting to talk a little bit it's like oh my gosh just gotta enjoy every moment right and try to make a better world for them right and that's what uh i try to do with this podcast and you're trying to do with your education about bitcoin and its potential to create a new financial stack right layered money shout out to you for for writing and publishing this book it's fucking incredible um and that's what we were just chatting about like how do we want to structure this this conversation i think let's start with layered money obviously uh from gold and dollars to bitcoin and central bank digital currencies uh i love this book particularly um uh just from the like quick skimming that i've done over the last couple weeks when i've had time because

again you get into very deep historical context to to sort of uh highlight the evolution that that monetary systems have had throughout history um and setting that up for a potential future monetary system layered money monetary system that could be built on bitcoin so i know you've been working on this for a while how's it feel to finally have it out there it feels awesome uh you know it's it's uh three years in the making for sure um but i didn't actually start writing the book until april so about you know a month into the pandemic where you know i sat down and it's just like the time is now for bitcoin it had just had that uh complete capitulation uh below 4k and um you know i i knew that the pandemic world would bring about this awareness

and the urgency you know just fully took hold and uh i had already quit my job uh in the bond market i was writing for open node and i was um you know writing my own articles and exploring this knew you know what a bitcoin profession would look like for me and um you know when the world shut down it it was just like this is the time the book has to be written uh i had set up this layered concept uh just a few months before and um then i just hunkered down and uh basically you know but we bet we bet you know my family we bet our life on this book that this is a message that needs to be told it's a story that needs to be written i'm the one to do it and um you know we'll sacrifice everything around us to put this out uh and and uh and here we are and i i'm really

happy that we did it. And I say we, because, you know, it's a family effort. My wife and I, it's a joint effort when you're trying to do something like this. And she actually has published two children's books already. You can see them right here and right here above mine, because mine's the third one in the family here. But yeah, so she published two children's bilingual books in English and Hindi, her native tongue. And, you know, my daughter is growing up in this household where I speak English, and my wife speaks English first, but then she speaks Hindi with her parents and, you know, Hindi when she goes back home to India so it's a way it was a way for her to teach her language to her daughter and um you know this

is a way for me to teach money to my daughter too and so we're both so you know she's the first author in the family I'm the second and she had you know inspired me to do this and um so it's it's it's a joy and it's it and it is a joint effort and the whole last month um after the book was pretty much done uh she took over the editing process and um helped me really refine it oh yeah i love the family effort and so she's teaching your daughter hindi which is a language arguable that money is language right the money uh language that helps you define and describe value right in the markets i think that's like a perfect segue into like the time value of money and how these layered money systems have evolved over time again you get to a historical context going back

to uh the medici bank uh in in florida in italy uh and the way that layered money system worked with with gold and silver reserves in the bank in the middle and then you have these bills of exchange and then um you go into the the antwerp bankers and their bills of exchange and notes and how this evolved and so did you know this history before going to the book or did you sort of find a deeper understanding through research and what was most illuminating to you yeah so what happened the first thing that um inspired this concept of layered money um in terms of not bitcoin and lightning, because that is something that I had written about already in 2018. But this idea that the dollar is a hierarchy itself, that reading that paper in financial academia, and building

on that thesis, that the dollar is a layered system too. And so where does Bitcoin fit into the future of layers of money and money hierarchy in the future, I decided to tell the story of the hierarchy of money, you know, based on this academic concept that credit systems are inherently hierarchical because they come from balance sheets. So if a financial institution owns something, it's their asset and they issue something, it's their liability. And that itself creates a hierarchy between the bank's assets and the bank's liabilities. The assets are senior to the liabilities. And this is what layers of money is trying to tell the story that balance sheets and a hierarchy of balance sheets itself, it dictates the way that our

monetary system works. So I didn't know the history of Antwerp or even the history of renaissance florence and their um their coinage but when i decided to tell this story of layered money i had to figure out where to start the story and so i thought about coins versus gold that itself and you know thought that this idea of a denomination a coin uh that we could also name our wealth in not just gold but the gold florin because it was one unit and that unit ended up being constant for over 300 years so people actually started to denominate their lives their businesses in florin and i read a book called the economy of renaissance florence that was foundational to the start of the story of layered money and you know if you guys want

to geek out on it. It's an awesome read. Some of it is, you know, it's a long book, but there's so much on the monetary system and how it evolved in the 1100s, 1200s, 1300s. And so that book was the first book that I dove into and decided to start the story in Renaissance Florence, because actually the title of the book when I wrote it was The Renaissance of Money, because bitcoin is the rebirth of money and the story started in renaissance foreign so i thought that the renaissance of money would be a poetic title and a way to um describe what i'm trying to talk about it ended up being the title of chapter seven only um and of course my wife named it layered money which is genius uh she helped me figure out that name but

the history of renaissance florence and then the history of antwerp like where it went from there so the economy of renaissance florence the book led me to antwerp because there were passages in there that said you know as florence faded away in its importance the money market basically was born and transferred into antwerp and then i read about antwerp and then when antwerp concluded in the 1500s as the center of commerce in europe the story transitioned to amsterdam and so then i went and did the amsterdam research and it transitioned to england and the bank of england and then i knew where it was going right because i had the fed story and the bitcoin story figured out in terms of how i was going to try to tell it but the entire first uh three to four

chapters of the book was, um, you know, a full immersive research process. And I fell down a bunch of individual rabbit holes there. Um, not all of which, you know, make it into the book. Uh, but that's, that's part of research. You've got to filter out. Um, and I made the book as short as possible, um, because I didn't want to waste anybody's time. Um, the book can be read in one or two days, based on what I'm hearing. And I just didn't have the patience to write this 500 page book and tell all these side stories. This is an urgent message. Like red alert, everybody out there, Bitcoin is here and it is taking over. It's eating the whole monetary system in front of our eyes like imagine if i had waited for elon musk to buy 1.5 billion of bitcoin

to start writing a book on it no it it was urgent as shit and so that's why you know we just have to you know dedicate 2020 to putting this message out and the timing couldn't have been better when i was literally putting the last few words on it we struck bitcoin's price at 34k on its 12th birthday and and um and it actually reached like 40k by the end of that week and i had to figure out where i was gonna because you know i quote the price a few times and i wanted to make it consistent throughout so we picked 34k uh the 12th birthday price boss well again it's an incredible book because setting the historical context and then really setting the alarm bells off like bitcoins here probably look into it going to be very important moving forward not only that the

fact that bitcoin exists that it's better uh and that it will probably be widely adopted moving forward and you should probably get in while you can but uh alternatively like the dollars industry's pair and that's like the one thing i love about the book is there's this visual aspect to it throughout where you have these pyramids that sort of break down the the layered money systems over time and you get to the dollar system and just the the amount of of crap in that particular pyramid is like it just looks extremely complex and just really highlights very succinctly and straightforward straightforwardly like how the dollar is in disrepair and how complex the dollar system has become. Yeah. And that's the drive home message

about chapters five and six and the dollar being in disrepair is that trying to actually understand every complexity of the dollar system and the Fed and offshore banking is not something that I was willing to do in terms of education. And a lot of it is still above my head. And I've spent 10 years researching the Fed in an intensive way. And so trying to translate that into a book for the masses, which I did try to write a book for the masses, not for financial people necessarily, or even for Bitcoiners, but for anybody that's interested in what is happening with money today and then to try to detail what the fed is doing i'm going to lose the reader and i even did i had to simplify it because i had helpful people in my circle that helped me say hey you know what

you lost me a little bit here um this is too dense and so i had to back up back up and just drive home a couple points number one it's incredibly complex number two it kept breaking It keeps breaking over the last 14 years now. It keeps periodically breaking. And each time it breaks, the Fed has to put more and more band-aids on the whole thing. And it's incredibly fragile today. And so that's all you need to know. You know, getting into the weeds on how exactly each part of the pyramid is broken, you know, there are hundreds of Fed papers, BIS papers, and, you know, even books written on these individual ideas of the euro dollar system being broken, repo being a broken mechanism now. interbank lending has been broken in some ways for 14 years uh and other insurance mechanisms like credit default swaps or interest rate swaps and how all of that counterparty risk had to be transferred off the books of each bank into clearing houses because otherwise uh you know any bank that broke could break the whole system.

It just compounds the risk. That's right. And so you don't have to get into the weeds to drive home the point that the dollar is in disrepair. And I don't want to claim that the dollar is going to break in the next couple of years and Bitcoin just comes in and fixes every problem. No, it's going to be a longer transition.

Bitcoin is positioning itself perfectly today. And people are naturally leaving the dollar for Bitcoin as we speak every day. So we don't need to mark the end of the dollar and mark the beginning of Bitcoin at any certain point in time. The end of the dollar arguably started in 07. It's not ending tomorrow. It is in disrepair. And the beginning of Bitcoin happened in 09. It hasn't taken over, but we're clearly past the first few steps on the way to a Bitcoin-centric financial system, or at least a situation where Bitcoin is a dominant force in the monetary system. yeah and again freaks like the you got to go get the book and again you didn't have to get into

the weeds and actually the writing content of of the book when describing the fed again these pyramid visualizations really drive the the point home of how complex the system is and you mentioned the repo markets right and in 2009 it's something i've been harping on the last few weeks after the wall street bets thing it's because uh the repo markets had their spasm in september 2019 because there was some unexpected liquidity crunch because one bank wanted to move out of cash and into treasuries and that caused a systemic like contagion uh in the overnight repo markets the fed had to step in again the band-aid they they added was expanding the list of primary dealers that have access to their window they added the ficc and the ficc was used as a proxy to bail out hedge

funds like citadel 0.72 the millennium who do a couple uh turned out to be like at the center of of the wall street bet story a couple weeks ago that was like one of my theories it's still one of my running theories with the whole wall street bets thing is that the system is so systemically fragile that these reddit these redditors this reddit army the tendy army almost pulled forward a systemic collapse with this one stock. It's insane. It is insane. And it's really fascinating. And we can actually draw a parallel to the crisis in long-term capital management, the hedge fund 20 years ago. And that one hedge fund going under had the potential to break the entire system. And Alan Greenspan actually admitted to Congress that had they not bailed out LTCM via the investment banking counterparties of that hedge fund, there was a, you know, 50% chance that the whole thing would come down.

And that was a decade before the great financial crisis of 07 to 09. And so each, if basically, here's the way to think about it. If the Fed doesn't come in and put the bandaid on when the crisis is happening, the house of cards comes down. and therefore we have to assume now that every time there is a crisis it's not even a question whether or not the fed is going to come in they're no longer the lender of last resort they are the lender of only resort yeah it's crazy because you mentioned ltcm alan green span economy could collapse 20 2007 2007 2008 and paulson goes to ben bernanke and president obama or excuse me president bush at the time uh and basically warned bush like hey if we don't fix this right now americans aren't gonna be able to get cash at the atm on monday morning like that's how bad it was there like again they've only been compounding these these issues over time with these band-aids

and again like you had in 2019 one bank transition from cash to treasuries that had a systemic risk And then a couple of weeks ago, a bunch of individuals decided to buy one stock. And there's a good argument to be made that that could have triggered a systemic collapse, which is extremely scary. But thank God we have Bitcoin, right? So transitioning this into like a optimistic view of the future where we're not sort of beholden to the fragility of the U.S. dollar system and the Federal Reserve system. Like, what type of hope does Bitcoin provide? And what do you envision this transition looking like? Well, the problem with the current system is I don't see the Fed being able to naturally let banks or hedge funds that are fragile fail. they'll keep putting band-aids and papering over and bailing out uh to keep the the zombie system

going to keep it alive so the progression to a bitcoin-based system happens in parallel it happens it happens at the same time and so that's why i don't see some big collapse of the dollar and bitcoin stepping in to replace it people know the dollar is broken so they're going to bitcoin today and so that transition is is underway and that's how i see it unfolding is that it's going we're going to a world of dual denomination where people people companies countries are going to think both in dollars and bitcoin terms they're going to have to um we already see corporations now doing this and i guarantee you marty countries are already long they just haven't announced it we you guys have talked about this a lot you and matt talk about

this a lot who is long already and it's a game theory on who's going to say that they're long first, but countries, central banks, commercial banks, investment banks, they're already very long Bitcoin, certain ones. And so they're mentally already dual denominated. At least the ones that are buying Bitcoin for the dollar hedge reason, not purely the speculation, but we think that the whole denomination is in jeopardy. So we have to have a parallel backup. It is an insurance policy. It is a hedge because it's an independent denomination. And also, this is also part of the reason why I wrote layered money, because in the layers of money, Bitcoin isn't underneath anything else. It is a numerical commodity.

it's a commodity that that comes from energy this is a topic that you are very passionate about is the link between energy and bitcoin it's a form of energy it's a form it's a numerical commodity it's a virtual commodity and therefore it's nobody's liability and that gives bitcoin the opportunity to become an entire denomination because it's not subject to anything else right and so bitcoin is the first layer of money of the future right and it's crazy the layer below that is energy right like you said there's no liability on your bitcoin because you expended the energy or miners did to to bring it to market and that was again proof of work to to imbue some sort of value i mean obviously the market participants who use bitcoin for its properties

and view the value on it but the energy expended to bring those bitcoins to market again shows proof of work and that something was done that you're you're switching one good for another and energy into bitcoin and that's like been i'd really love to pick your brain about this and i think this is a great discussion a great segue into the discussion of how this layered new layered monetary system may evolve is like so i've been saying this pretty frequently on the podcast for last couple months is like i i just have this nagging thought in my head that that we're going to transition like the the financial stack of the future the monetary stack of the future uh right is going to transition from the fed window so that where money is produced and distributed right now

begins at the fed window and are you in conjunction with the treasury in some regards that work together um and then you have the financial stack built on that you have reserves and the commercial banking system and the investment banking system and they use those reserves to give out loans and create these financial products whatever they may be and so that financial stack starts at the fed window and goes up from there we're going to transition again i love that you brought energy into this into a a new layered monetary system that that begins at like the bitcoin mining level the mining pool level and then you have these stacks built from there whether it be you have to start out with bitcoin mining let's say you get bitcoin let's say you quote unquote produce it or

have it distributed via the protocol and then the miners distribute it to the market now with sophisticated derivatives products coming out like hash rate derivatives and and now that the lightning network exists you can start to see the beginnings of this layered monetary system budding from from the bitcoin mining industry up and that's what we're going to transition to like i've been saying the energy producers who i believe will be the largest miners in the world are going to be the central banks of the future and not in the sense that they get to decide the supplier the interest rate tied to bitcoin but they they are the uh the base from which the new money is is produced and distributed to the market and the base from which that new monetary stack

has built on yes uh and it brings up an interesting um word that I on purpose left out of the book but for months and months I I wrote you know I wrote passages and passages about that one word and the word is nonce and the reason why I was so hyper focused on the word nonce in the book is because of exactly what you're saying is that the origin of bitcoin is the ability to find a number only used once by a mining algorithm and that fundamentally is where bitcoin comes from it comes from this random numbers game that the miners play um trillions of times a second and And I did end up leaving out the word nonce and, you know, more just trying to illustrate the idea that a tidal wave of energy is required to discover Bitcoin today. and 10 years ago it only took a laptop and that growth in the energy dedicated to

finding bitcoin and protecting the network from attack um is a vital concept to understand so in the book i call it a tidal wave of energy um but you and i know and the freaks know that it it comes from the hashing algorithm. It comes from the proof of work that you have to put in to originate this new form of money. And yeah, I mean, on, on down goes the stack in terms of, you know, the most basic way to think about it is that when people buy and sell Bitcoin on exchanges, they are owning in the interim, just a Bitcoin balance. They're owning a second layer form of bitcoin until they withdraw the coins and so no matter how much they want self-custody they are willing to make that trade-off to get utility out of it uh and so they will hold

second layer bitcoin meaning exchange deposits completely counterparty based money now because you have 100% exposure to the exchange. Forget insurance, forget all that. If the exchange goes away tomorrow, you'll lose your money. You don't have it. But people do make this trade every day by the billions now. And so we know that just like money is inherently hierarchical, Bitcoin is inherently hierarchical. The proof is in the pudding. People keep Bitcoin on exchanges. And so, but the ability to go between the first and the second layer in Bitcoin far exceeds anything in the traditional system, where you can actually get all the way up to the first layer, take custody, have no counterparty exposure, and be on par with any dominant financial force on the planet that also owns Bitcoin and has self-custody of it. and so i do see the system and that that's why i told the story of gold a multi-century story of gold because you know a bitcoin system might unfold in a similar way and i think it already

has started yeah i think so too and then and i keep i can't stop thinking about our first conversation right like we talked about the reference rate real rate of return or um the risk-free rate of return on Bitcoin, once that starts developing, then you'll see some real financialization around the protocol. And the Lightning Network has advanced significantly since our last discussion and Lightning Pool specifically. How does that ability to limit counterparty risk in a two-to-two multi-sig hash time lock contract, eventually a point time lock contract to get yield on your Bitcoin by loaning it out to people looking for liquidity on the Lightning Network. Does it throw a wrench in the cycle of how these monetary systems have developed

in the future or in the past? Excuse me. So potentially, yes. And it is why I wrote the time value of bitcoin to explore that very idea that income can happen in a non-counterparty way and that's very powerful um but you know not to burst the bubble of the brilliant people at lightning labs and their product but it's only one component of a bitcoin based capital market And let's be honest, the size that you can put into the Lightning Network and actually earn the yield, it doesn't compare to some of the exchange lending or deposit lending that you can do with counterparties now in Bitcoin. And I don't want to pump any particular lending platform in Bitcoin terms in particular, but think of it in this way. you have now two different ways to earn money in Bitcoin. One has theoretically no counterparty risk and more has this channel management risk and technical risk like lightning. And the other

is custodian lending, deposit lending, like these companies that are growing in size and are sponsoring a bunch of your podcast competitors and whatnot in the industry. So, but these types of companies, these deposit-based companies, are also forming ways where they have degrees of proof of reserves, insurance mechanisms, transparency to the custodian level, and they're putting an architecture in their counterparty risk that minimizes the risk of the counterparty exposure itself. So I'm not saying that if you put your money on a deposit scenario that you don't have counterparty risk, but there is a technological innovation in the minimization of counterparty risk in the new system. Because we have Bitcoin, we have a blockchain where we have transparency, and we have signatures, and we can do proof of reserves and things of that nature. So that is just as powerful as the Lightning stuff. The lighting stuff is great because it's non-counterparty and it's a total game changer, but that doesn't mean that we should ignore these other advancements, even within the counterparty exposed arena, if that makes sense. no it does definitely does especially when you consider the the ltv ratios that are floating

around too a lot of these like some of that risk is significantly reduced by over collateralizing i know unchanged just uh disclaimer sponsored the pod i know they uh like recently like up their their collateralization uh threshold minimum because they don't want to liquidate their customers and the again the ability to have like a two or three multi-sig in which you hold one key and you can track to make sure your bitcoin is not being re-hypothecated is great but then even if they do want to re-hypothecate you can have them the service provider provide a proof of reserves at some point in the future right yeah it's very powerful shout out to unchained shout to parker druve um they're doing a great job and i chatted with parker this week and uh

just to hear what they're up to and um in the context of how do i explain um certain bitcoin companies to uh members of the asset management industry investment management when they're thinking about their clients and the way that unchained is doing things they're thinking about uh the whole picture and they're thinking about counterparty exposure from the ground up and that's what multi-sig is all about it's about this idea that we can diversify our risk of in bitcoin and the risk in bitcoin is the management of private keys and so if you can mitigate the management of private key risk uh that is an advance and that is a service and companies like unchained are are working on that and doing a great job yeah

and again comparing it to to layered monetary systems of the past like i mean technically at some points you could go to a bank and ask them to show you the gold but you never know who else had claims on that gold right and like how does this affect capital allocation in your mind and like Like, is it, like, rehypothecation arguably could be reduced significantly if customers and consumers demand these type of proof of reserve systems and demand to hold a key when interacting with these counterparties? Is the stack very conservative? Yeah, there's only one way to answer this question, Marty, is that people aren't bullish enough, man. let me let me tell you why that's the only way i can answer this the fact that you're answering asking this question today and that we're talking about this idea that the idea of

re-hypothecation and proof of reserves and is the collateral there every company now on the planet post elon is like it's a post elon era now is going to be asking these exact questions and many of them will come to the conclusion that unless we have self-custody multi-state custody or custody with proof of reserves we don't own the bitcoin and then the scramble intensifies so you literally can't be bullish enough um when when thinking about the fact that the world is going to ask this question for the first time in 2021 at a price above 45 000 bitcoin like at a at a trillion dollars now they're finally asking the question at a trillion so um yeah people just aren't bullish enough man

you get me all bullish now but stay humble but stay humble let's stay humble let's stay humble but it's true right like the you think of again the domino effect is simply like elon just bought 1.5 billion dollars worth of bitcoin you know like 300 million dollars more than sailor did but he's got like like almost half the bitcoin that he was able to get and you think like that understanding starts to to permeate throughout boardrooms across america across the world and you have this mad dash and the free flow to bitcoin is decreasing obviously more bitcoin are being produced every block but still even with that you look at the charts on glass nodes of people pulling their coins off exchange and sucking out liquidity from the order books and you think

about that's why the memes are so powerful because uh you know if if someone asks you today oh is it too late am i too late to bitcoin the only answer is you obviously haven't run the numbers you just haven't run them because if you have you know that the answer to that question is no it's not too late it's just starting um and the numbers the the and when people say run the numbers there are several numbers that you have to run to give yourself the context one of them is the 21 million one of them is the 18 and a half million coins that are currently there one is the several million bitcoin that will never be spoken for again that have been lost etc one is the stock of dollar debt on the planet 300 trillion one is the stock of gold in dollar

terms which is 10 trillion and you have to run all of these numbers to reach this conclusion that no it's not too late it's actually just at the beginning yeah there's a negative yielding debt in there like a bunch of other stuff and it's crazy and another thing like so they were only talking in the context of sucking float out of the market in terms of store value like i think freston pish had a really good thread the other day included in the newsletter right like even if you don't if some of these corporate entities or not even corporate but some of these funds want to take advantage of bitcoin's price volatility and trade the futures markets like at the end of the day those are cash settled and you have to buy bitcoin to trade those markets

both ways too so you have this compounding effect of entities using it as a store value and pulling pulling that liquidity off the market and then other entities uh just using it as a speculative vehicle and needing to to pull more supply off the market as well like like you said people aren't bullish enough and you think of the compounding effects of those two things alone let alone like retail getting in and a bunch of other things it's so it's almost impossible to fathom like i've been saying today's newsletter i'm actually going to throw some cold water on everybody and be like hey just like let's let's take a step back like think adversarial a little bit but like still like it's just like so posterity i could be hey look uh i was i was like saying hey

let's uh let's keep all the options on the table but when you think of all this stuff it's like hard not to be like oh my god this is gonna go super high super fast cultural aspect of it too like there's been a tipping point culturally where it's it's almost seems like a foregone conclusion to a bunch of people it has been a tipping point culturally um the last six months in the last two months in the last two weeks um for sure and that's very exciting and you know The other point is that there's just not that much Bitcoin available. And this is why the Bitcoin Standard and Saifedean's book were so – it's why so many people identified with it is because the point that he drove home, the point that everybody took home is there is no supply response like in Econ 101. want there is no supply response in bitcoin and that completely inelastic yeah it's completely

inelastic and uh safe hitting illustrated this um to everybody and i actually hadn't even read his book when we went to dallas uh for bit block boom in in 2018 and so when i saw him speak on stage about this um obviously it was i had to run the numbers already so i knew that right but i knew that there was no supply response because i had studied the algorithm and how it worked but when he illustrated that it was um it was a game changer for millions around the world i think and um you know part of the reason why uh hodlers are so strong today it's part it's partly because of that that uh illustration from safe yeah and again like similar similarly to layer money like going to the history of money and how it's evolved it's crazy to think how ignorant most the world is

to to this evolution and to the properties of money and the function of money and and why it works the way it does and how it works the way it does and how you should want your money to work yeah and say Fadeen um you know he taught a lot of people about money with his book and so I wanted to um do something similar where I wanted to teach people about money with my book so I wanted to write something very different from his his and his is an econ book mine is a capital markets type of book it's written through the lens of a bond trader um not the lens of an economist and uh i thought that it could be a compliment to his for people that want to think of money again uh from the beginning but from a from a price perspective

from uh a security perspective from a trading perspective and um and so you know it's a it definitely the Bitcoin standard show showed us that, um, a book about Bitcoin can have demand and like it can sell and it's even a career option for me. So, you know, there's a lot that, uh, the book, uh, you know, helped inspire and I hope to one day replace safe, uh, with layer, you know, as with layered money, as the book that everyone recommends about Bitcoin. Um, I, that was the goal um it's i'm you know there's no shame in telling everyone that that you know the goal was to write the best book ever written about bitcoin and um i hope that i hope that the book lives on and that people will use it as an educational resource around the world a lot of

languages are coming down um this year i've already sold the rights to translations in a couple Asian countries already um and uh Spanish is something that I might be heavily involved in myself um with some help I might self-publish the Spanish one as well um or I might uh you know use a third party for that but um this book is going to go around the world uh this year and I'm just really pumped go check it out layered money um i'm just really excited for it yeah i am as well and like safe tweeted out last week like he's had the three best months of sales ever and the book's been out for for quite a while now like it's phenomenal it's phenomenal the the it's inspiring also to know how many human beings read books still it's like wow okay people really

actually are still reading and um you know if you are on social media or other mainstream media um you know sometimes it's tough to remember that that's not that's not most of the world what they're doing most of the world is doing their own thing and trying to work on themselves and make themselves better and the demand for the audiobook has been the most insane thing ever now that i study the amazon charts i know that um you know the audiobook when it comes out will outsell the paperback and the kindle um easily the demand is insane guy swan has finished recording him going over it right now um it'll be out soon guys i promise it'll be out really soon oh yeah i was gonna say guy got that smooth sudden draw it's so good it's so good i'm listening this

morning and just taking some notes here there but he he killed it um it was a no-brainer too like i knew six months ago that i would ask guy to read the book when it was done so uh it's been a fun partnership and it's been cool working with him and we can't wait to put it out together we are co-producing it um so you know the way that it works on audibles you you split the you have the potential to split the royalties with your narrator so we are 50 50 partners in it and it's uh happy to be in business with guy oh yeah yeah obligatory is clubhouse going to disrupt books probably yeah i found myself on clubhouse for the first couple times this week uh interesting platform i like it interesting i think that i think it's a honeymoon phase

i think everybody's over hyping a little bit i was hyping it it might be um it also seems like it's more of like a quarantine like people are just have a little bit more time to do that kind thing but um and also a longing right for for interaction with people there's a longing for interaction yeah that that's really what it is like people just really wanting to just chat again but um cool platform we'll see yeah i'm liking books i got some old books downstairs i have to read uh yeah dude we've got better part of eight billion people to educate about money the history of money and the future of money so i'm pretty bullish on layered money uh the again again the the context and the the direction that you take the book starting from

a historical perspective and again the visuals like really highlighting how complex the money system has gotten under the federal reserve and the euro dollar system euro dollars still blows my mind like how how it even operates it's a very big black black pool dark pool in my mind um i think that's actually what it's defined as but yeah man i i'm pumped for you i am excited that you wrote this book and happy that people are going to be able to learn about money it's important i think and that's what i say on this podcast all the time fix the money fix the world bitcoin is here to do that layered money explains how it does that and comparing it to monetary system we have today and systems we've had throughout throughout the centuries so

props to you thank you man and i do acknowledge the freaks in the book uh if you guys read the acknowledgements um i thank everybody that read the time value bitcoin and the reason why i thank everybody that read the time value bitcoin is because it was you all that uh helped me find my path to becoming a writer about bitcoin and a writer just in general because i was only a bond trader at that time and i thought of myself as a researcher but never thought of myself as a writer until that article dropped you had me on the pod we met in dallas um people started reading it and said you know when when are you going to write more about bitcoin and the lightning network so shout out to all the freaks and um you know really everybody that read the time value of

bitcoin in 2018 so i didn't get to the acknowledgments yet the freaks man it's strong it's a strong contingent it's uh the i mean it like that i think again like at that point in time when you put out the time value of bitcoin people are like all right how does this how does this evolve from here and i think that piece particularly really sort of set a a flag in the ground it's like sort of start marching towards and be like all right this is this is probably how it's going to develop and so there's a cap there was a capital market vision for bitcoin back then that i had and others shared um and the the mission was world reserve currency the mission was world reserve currency before that but um then it was like

okay how do we progress toward their using their game against them uh using their language using their structure and architecture and how can we define bitcoin in this new way that basically steals the important stuff and and rids um and rids the system of everything else yeah i love the shout out to nas too just looking at the acknowledgments now hey listen hip-hop hip-hop made me um and uh it's funny like when people ask me oh who's your favorite um author or like who's your favorite writer it's all mcs it's like naz and jay-z and tupac and talib kweli it's not mf doom man rest in peace doom um you know it's not um it's not other authors so I take a lot of inspiration from hip-hop. I gave up pretty much everything in my life during 2020

to write this book in terms of my hobbies, except for hip-hop. I needed 30 to 45 minutes in my car listening to my music every day in order to get the creative juices going so that I could come home and continue writing this story for everybody. So yeah, you know, Nas is my favorite rapper and my favorite writer and poet so that's why he got one oh yeah yeah you know i think um jay rock and kendrick's wow freestyle really is is a song that describes bitcoin fuck your plan i'm gonna burn that castle sick murder when i say go hey listen marty we could have done the whole pot on hip-hop dude i could we just could have talked hip-hop the whole time just not even talked about bitcoin so yeah well next time next time there's gonna be plenty more

times to do this uh you have a wide open invitation to tales from the crypt whenever thank you brother you feel uh you need to say something so again thank you for coming on taking some time to walk to layered money today thank you for writing the book freaks if you haven't already go check it out like nick mentioned uh guy swan's smooth southern draw is going to be going to be hitting the airwaves reading reading this book to whoever wants to get the audiobook what else should we know before we part here nick any any final thoughts any any words of wisdom for the freaks out there uh i'm excited to hear all of your feedback on the book truly so leave a review on amazon um send me a dm contact me at layeredmoney.com let me know what you think of the

book um let me know what i should write next uh in two three years when that time comes um and uh and and just uh yeah go go check out the book uh it's uh it's a life's work so um you know it would make me it would make me happy to know that there are more and more readers out there yeah well speaking of next book i'd love to help you out with some bitcoin native financial products and stack that's like something that gets my my juices flowing um so nick thank you it's morning where you are i hope you have a great rest of your morning great rest of your day um tell your wife i said what's up and uh we'll do this again at some point next year next six months whatever absolutely thanks a lot marty i appreciate it man thank you peace and love freaks