TFTC: A Bitcoin Podcast - #254: Bitcoin 101, inflation, and surfing with Bethany Hamilton and Adam Dirks

Episode Date: May 21, 2021

Join Marty as he sits down with pro surfer Bethany Hamilton and Adam Dirks to discuss: - Bitcoin 101 - Inflation - Hyperinflation rhyming - much more Follow Bethany on Twitter Check out Bethany's website 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. Lend at Hodl Hodl is a new non-custodial bitcoin backed lending platform, that allows peer to peer lending and borrowing between users, globally, anonymously & on your own terms. Create you offers & set your own terms on lend.hodlhodl.com Compass Mining. Compass wants to democratize bitcoins hashrate and give everyone the ability to strengthen the network while mining bitcoin profitably. Thanks to Compass, it’s never been easier to mine bitcoin. Check them out at compassmining.io Braiins. Braiins are leaders in the mining industry; running Slush Pool, creating firmware to make miners more profitable (Braiins OS+), and building out Stratum V2 to help further decentralize mining and make Bitcoin more robust. Check out their mining profitability calculator.

what's up freaks it's your boy marty bent here to introduce this episode of tales from the crypt had an incredible incredible time sitting down with bethany hamilton her husband adam dirks pro surfer bethany hamilton inspiration bethany hamilton to talk about bitcoin a little bit of surfing i thought it was going to be like hey let's talk surfing uh and how it relates to bitcoin we did a little bit of that towards the end of the episode but it turned into uh bethany and adam turning the tables on me and asking me bitcoin 101 questions let me know how i did freaks uh it was it was a fun episode i think you guys are gonna like it let me know how my pitch is whether or not i need to work on it simplify it did my best my wife's still not

happy this app was brought to you by our good friends at the motherfucking cash up somebody stack sats send sats receive sats sell sats if you so please we're saying sats sats Sats, sats, sats, because sats are the standard. 100 million sats in one whole Bitcoin. You don't have to buy a whole Bitcoin. You don't have to buy a fraction of Bitcoin. You can buy whole sats as little as $1 on the Cash App. DCA in the sats.

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We actually have a specific link in the show notes if you want to support the show and you're thinking about using Compass. compass if you use the link in the show notes um that would that would help us out and help us stack some sets uh last but not least this rip was brought to you by our good friends at brains brains brains is the team behind slush pool slush pool is pretty dope first ever mining pool ever heard of it mining pools ever heard of them pretty important for the bitcoin industry but here we're here to talk about the brains os plus manager which is an online platform that allows miners to remotely monitor and manage all their ASICs running Brains OS+.

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double i don't forget the double i.com slash blog and check out the brains os plus manager launch article brains b-r-a-i-i-n-s.com blog brains os plus manager launch slush pool is also getting its first major update soon we've been saying this for like weeks now what's happening slush pool the update hasn't been launched just yet but i can tell you that it's going to include ultra flexible payout systems uh customizable mining reward splitting and best of all dark theme for 24 7 hash rate monitoring that's easy on the eyes protect your eyes follow slush underscore pool on twitter to see the announcement when the pool update goes live and enjoy this episode with bethany and adam again i had a lot of fun doing this uh being put on the spot to do

Bitcoin 101. Not easy, but you got to practice. Enjoy. 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. And now we're recording. What is up, freaks? Welcome back to Tales from the Crypt. Very excited for this episode. Sitting down with Bethany Hamilton and Adam Dirks to talk about Bitcoin surfing, whatever it may be. I'm fanboying a bit right now. We're just talking before we hit record.

uh the hat i'm wearing surfer supplies is uh from your dad's hometown which is pretty crazy bethany yeah so my dad grew up we're kind of near where you live um ocean city new jersey and the hat you're wearing is um probably one of his first jobs i'm not exactly sure but he definitely worked there at some point so did ding repair there yeah he's still a ding repair man yeah he does minding repair now what kind of repair what kind of repair yes yeah yeah so i mean the reason we're here is because you've got laser eyes on twitter and you wrote an incredible piece called the silver lining explaining how you fell down the bitcoin rabbit hole uh last year with the lockdowns forced to say i'm not able to travel um the world to find waves and then you saw the money printing

going on and we're like what the hell's going on here and sort of discovered bitcoin that way and one of the books that stuck out to you was thank god for bitcoin and you're sort of on this journey so definitely want to talk about that experience but also i understand you guys have some questions want to go over some bitcoin 101 stuff so we can definitely do that as well so i'm very excited for this yeah thanks yeah we're stoked to be here um it's been a cool year of like learning about bitcoin and going down that that just trying to grasp and understand it and i think my brother has actually been a fan for like five years he's been like he said he's been telling us about it he's been telling us but we had no idea we never heard what he said we just went in one ear out

the other and i think it's like he's my older brother it's just like who like you're crazy yeah you know or a younger sister rebellion um i'm that older brother so i but now i'm in his shoes of like trying to communicate and i'm realizing like oh my gosh i just sound like my older brother right now just like telling trying to tell people that they just it goes in when you're out the other and they just think they just tell me like all the things that are kind of like the base the most basic understanding or lack of understanding um or is like the common responses so I was I just yeah it'd be really cool to kind of go back and forth like you can share some of your knowledge we'll just share a little bit of our journey and Adam's definitely

been at the forefront and yeah I've been trying to learn yeah I feel like this last year I mean before this last year happened it i feel like with most things in life especially with like faith and it like it's funny how like faith and bitcoin kind of intertwine because it almost takes a rock bottom moment in your life to kind of like realize like you know it's all butterflies and rainbows everything's going really good and then it took something really gnarly to happen and to realize like well everything's really not okay like there needs there's just so much going on in the world that we're not seeing and then like when your eyes are open you're like okay we need to do something about this and where where can we go what can we do to like not only help our situation but how can

we help others as well in their times of times of need and trouble so that's kind of like the beginning of what what began our journey um into looking into bitcoin kind of like how we talked about that in the silver lining it probably should have been the orange lining after i was like oh gosh people are probably cringing on silver right now yeah it's whatever and the message was uh just as good no matter the uh title yeah of the post but was there like a particular event that happened last year i mean obviously the lockdowns happened but were you noticing the fed printing all this money or was this the money the stimulus checks was there anything particular that yeah like personally our financial like um well-being went like basically

all our income got cut in maybe half or less at one point and that was like we weren't ready for that we weren't like prepared necessarily we were okay but it kind of was like whoa what if something like this happens and continues you know then then what do we do so we started to just kind of feel from a personal standpoint like how can we get out of this situation um or prepare in the future for just being in a healthier place um and then seeing the amount of money being printed I think it was like 25% of all the money ever printed in the last like 18 months and I don't know if everyone understands like what that does to the U.S. dollar in particular and so we started to kind of run down that and try to figure that out and how that looks and I'm still like I keep

telling my friends like your money is not like your savings in particular are not safe in the us dollar but they keep saying like the opposite yeah well it's one of those things right one of the i guess adages that people fall back on when they're trying to describe bitcoin and more particularly money specifically as people we just go through life we were born and you're running and you're you're just going on you never stop to think about wait what is money like you just take it for granted right and i think it's safe to say that that around the more i don't want to around the world there's definitely a place like that as well argentina turkey lebanon where people are like all right like we really need to figure out what's money but particularly here in the

western world for for quite a while we've had the privilege of being able to be complacent not really have to question what money is or or its purpose or more importantly what a good money should look like and being able to identify that so i think last year with the the m2 money stock going up by 25 what took literally 108 years um to to get to one point then it was uh you had a 25 of that 108 year effort in the course of 12 months it's it's pretty jarring where it begins to shake people like oh maybe we should be paying attention to this and it's a good sign that more and more people are um it's pretty pretty heavy what's going on but to solve a problem you first have to identify it and seems like more and more people are starting

to identify it yeah and it's something that i feel like in the in our schools and education system like it's not something that's being taught and i i like jimmy in his book um thank god for bitcoin and we recently met up with robert breedlove and talking to him and he brought up a good point like you can go to college and all these financial classes and they don't talk about like you almost talk about how the current financial system is like a deity you don't question it like it what it is it is but it's like oh man there's a lot to learn yeah i made it in economics in college and didn't learn a thing about money or like how it was just the monetary policy. It was Keynesian monetary policy specifically. It was what we were taught,

but we never got down to talking about actual monetary goods and the properties they should have, saleability, fungibility, divisibility, and relative scarcity. That was never mentioned in my four year. That's so interesting. What's your take on that? Why do you think i try not to like be pessimistic but like there's like a there's like a a concerted effort to make sure that people don't know what's going on i think right and the way the current monetary system set up is like cash and money doesn't really uh isn't really important to the academic economists that are in charge they're more worried about like manipulate interest rate targeting and stuff like that and uh supply side um factors that um they they don't think it's

important so they don't in terms of uh being integral for an economy they think the ability to manipulate that stuff uh makes the the actual monetary good or relevant and so they don't focus on it at all so you don't learn about it until you graduate college and you fall down the bitcoin rabbit hole and you're like wait a second this makes a lot more sense yeah so i don't know yeah it just like all the qualities of bitcoin just seem to like check mark check mark like check off everything that that monetary um a financial system should have and should be and yeah yeah yeah at the same time it's so mind-stretching because it's like why do we find value in in this digital mathematical I don't even know how to like it's a solution in a sense but like

and I get why we find value in it but someone might be like whoa well what if I had a huge slab of gold like in my backyard like I could like chip away at that or something it's very like unsustainable but I'm just saying like I could look at gold and think like wow gold is so beautiful i can like tangibly feel it um and look at it and see its beauty or like wear it you know as jewelry um whereas like and then at the same time there's so much movement towards modern technology so it's like we should be embracing some aspects of modern technology right yeah like that's why like for my parents or even my friends like they just they don't get it like because it's so tech and mathematically driven and hard to even comprehend like why

would you put you know your life savings in that or sorry maybe not life savings maybe the one percent you're not willing to lose that life savings for me at least i'm kidding i figured life savings but when uh i'm trying to describe bitcoin i like to break it down into two parts you have bitcoin the network and then you have bitcoin the asset the token right and bitcoin the network uh is what enables bitcoin the token to accrue value right because bitcoin the network is distributed individuals running nodes around the world allows you to act and appear to be the fashion and that uh in and of itself the network and the distributed nature of it is uh has incredible value in terms of being able to actually move money across the world

because it allows you to make transactions that they don't want you to make who is they like the entrenched financial uh system global financial system across the world and so and so not focusing on like drug dealers or people trying to buy assassinations on the internet but like focusing on which bitcoin certainly enables that use case but it also enables people in venezuela and argentina Lebanon to escape hyperinflation. So I like to tell a personal story. My wife, when we were living in New York City, she had a very good friend at work who was from Venezuela and her mother was back in Caracas and had no access to money. She didn't have enough money to pay for some medical supplies. And my wife's friend wasn't able to actually wire her money

because there's sanctions against Venezuela from the U.S. government. So the only way she could actually get money to her mother in a timely matter was to use Bitcoin in the network, to actually use the rails of Bitcoin in a peer-to-peer fashion and send it from herself to her parents in Venezuela so that they can then liquidate it locally to buy medical goods. So that network aspect of it has extreme value in terms of peers being able to interact without a third-party intermediary in the middle, somebody with subjective sanctions there's a good argument to be made that a lot of the

regulations and sanctions that are thrust on the traditional monetary system from corrupt governments aren't really just and so bitcoin allows you to route around that so that network property has extreme value in the sense that is an innovation of a protocol that allows you to exchange value where the internet's an open protocol that allows you to exchange information bitcoin's a similar protocol that allows you to exchange value um let me know if i'm getting too far into the weeds here no no do you think that did a good job was that basically answering how does bitcoin work that was one of the questions i got from my friends so yeah well that that explains the value proposition how that um how that networking actually happens

or how that peer-to-peer uh value prop is enabled is again individuals like myself right down here next to my computer i have my node running um so i have the rules of bitcoin i have the full ledger the history of the bitcoin's ledger on my computer so i save that as a file on my computer and i have a copy of it and tens of thousands of people across the world are similar are doing similar things where they have their computer they have their copy of the ledger and so that makes bitcoin extremely robust and where if somebody were to come to my house and throw out my computer and a policeman or something like that like bitcoin would survive because there's thousands of other people with the state of the network around the world geographically

dispersed so they can't uh it's extremely hard to kill bitcoin the peer-to-peer network people will be able to broadcast transactions whether or not my node um gets destroyed or confiscated from somebody um so the way it works is these nodes basically have the rules of bitcoin they have the the history of the bitcoin ledger um and when somebody broadcasts a transaction so i broadcast a transaction from my node it goes out to another node it says hey marty's trying to send a bitcoin transaction to bethany the node checks to make sure that transaction is within the rules of bitcoin at any given point in time and that i actually have the bitcoin to send to you it says all right this is uh this is a good transaction it's following the rules and then it propagates

it to other nodes and then those nodes basically uh signal to miners who are mining bitcoin we'll get into mining later but we'll keep it 101 right now say hey these people are trying to send transactions um if you they're they're playing by the rules they actually have the bitcoin so if you make a block you could include these transactions in that block and so the miners as they're building blocks will gather those transactions and then that and say all right these guys are playing by the rules their transaction gets added on the block and then they start building another block again no it's like the peer-to-peer is like crucial and like so like life-giving and freeing i feel like like what we've heard about recently what's happening

in el salvador we've we've surfed down there a couple times kind of like similar stories what you're talking about like hearing about bitcoin beach happening in el salvador where that community is able to transact and like kind of come out from underneath the inflationary currency that they're like stuck under and they they're able to i mean it's like i had my mind thinking with like all these like big market corrections happening now like oh man those poor people like their value but if everyone is using the same currency they're all using the same bitcoin they're all like it doesn't matter i guess you'd say because they're still transacting in bitcoin i don't know what what are your thoughts on that like like communities that are like bitcoin based

like that in el salvador no i think it's really like what they're doing in el zante is really cool we've had mike who started bitcoin beach on the podcast before and the way he's explaining what they're doing down there and the way they're experimenting is incredible to see it proves that that bitcoin works for people who need it um in terms of like volatile and like uh explain this on the podcast like people um using bitcoin in places like el zante understand that it has the volatility of price volatility when priced uh in in fiat currency mainly us dollars so they'll they'll act accordingly no having that in mind like hey this bitcoin's going to be volatile so i'll scrape off uh a bit into cash for what i need um to make sure that i don't go bust but

other than that i'm gonna hold as much as possible and speaking to bitcoin's volatility it makes sense like the world is trying to uh accurately price a new monetary good for the digital age in real time it's only 12 years old you're not going to get perfect usability distribution and price stability out of the box it's going to take time so like the price is like an index on people's confidence in bitcoin and at any given point in time but if you've been paying it if you look at a chart over 12 years that confidence has been going up and to the right but there obviously there are um steep uh rises and declines uh along the way but that's just due to that's due to the nature that people are trying to accurately accurately price this and the fact that it's

really scarce so the scarcity of the token itself creates these liquidity crunch situations particularly because a lot of people like to trade bitcoin on margin so they'll overextend themselves and when the price drops between a certain point it'll it'll trigger what are known as cascading margins so people who are making outrageous bets on whether or not bitcoin will go up um they get they get margin called and that makes the price go down a little bit quicker but as we're seeing today like that's that's what probably happened today a bunch of people were trading on margin and got called down to thirty thousand dollars now we're stabilizing around 40 it seems nice i wanted to go back kind of like to so why we need or why bitcoin could become like

or it already is really beautiful but it could become and grow to be even more like essential for life. And I guess kind of going back to, you know, a lot of my friends aren't necessarily questioning the financial system. And we haven't been taught that. I mean, I knew nothing about finances at 19 years old, let alone 25. By the time I turned 30 was when we started to start like really figuring things out more because of necessity and responsibilities to be taken care of. But a lot of my friends, they're not, like, thinking saving long term or, you know, trying to get out from underneath that, like, I don't know. No, it's like people are, like, living day to day. It's normal to have debt.

It's normal to just kind of go with the flow of what's happening around us. So, like, is that what you're saying? Yeah, I just, like, I want to answer some of the questions that people have that, you know. like i have my friends they ask like why is bitcoin better than altcoins um you know because a lot of altcoins can move a lot faster um one friend asked why is it better than stocks i was like well that's going back to like understanding what's wrong with the u.s dollar to begin with um and how much is i don't know i don't want to be so negative but there is some truth in that like the root of all evil comes from money in a sense a lot of it at least um from a christian

perspective the love of yeah the love of money yeah the love of money yeah yeah so i think getting everyone to just like start like trying to pay attention like where's the money coming from and where is it going and like why and how has that changed over the last 50 years and just to really question and not just accept everything as like necessity or normal or okay or you know I just feel like the government's doing a lot of things and I don't want to like hate on the government so much but i also feel like in five ten years from now all the money printing and today all the money printing that went on in the last 18 months is going to hugely affect everyone yeah no i think it's important that you said 50 years particularly because that's

going back to 1971 when we and richard nixon officially separated uh the u.s from the gold standard any remnants that that we had to the gold standard and so i would argue yes the money printing has been pretty aggressive over the last year but the effects of money printing since 1971 have actually been pretty pervasive throughout society there's a great site out there to anybody who wants to learn about the effects of money printing um there are potential effects of money printing you can't exactly say it was the exact cause but i have a very strong inclination that it was that caused it. WTF happened in 1971, which is when we broke off the gold standard. What you'll see since then is it's forced. You can't raise a family off a single income

anymore, so you need both parents working, being away from their kids to actually be able to provide a life for them for most people. You had the cost going up pretty considerably over time particularly in education um health care um and real estate uh three uh not real estate so much but uh education health care strongly subsidized by the government money printing i mean education specifically a university system um the the fact that the government just gives out very low cost loans for to anybody who wants them and naturally gonna make the the price of of university go up because the schools are just like all right the government's giving out these loans we can raise our prices and that prices people out of the market so and this has

been a slow like death by a thousand slices over the course of five decades slowly but surely they're printing more and more money um and backing themselves into a corner where they're crewing a bunch of debt and to get themselves out of that corner they have to print more and more money so we're seeing uh them have to print 25 percent of the total monetary base um and then to uh money stock in in one year so how does bitcoin compare to that and so under that system where the government and the central bank in conjunction so i would say the treasury and the central bank federal reserve work together to expand the monetary base and when they do that they're basically expanding the pie so if you have a a wage an hourly wage where you're making 15 bucks

an hour 20 bucks an hour if they're printing more and more money you're still making 15 bucks an hour and the more money that enters the system devalues your twenty dollars an hour and decreases the purchasing power of that twenty dollars yeah so that was interesting this year they didn't raise the um minimum wage price along with the all the printing so people are really gonna be getting pushed down and down and more down yeah and i thought yeah and with like jimmy and that that group of authors would thank god for bitcoin like they did such an incredible job like going all the way back they didn't even talk about bitcoin to like the last couple chapters but like going back to the history of like of how the government from the time of history was

essentially manipulating and debasing currencies whether that was like through by minting it and and smelting down different types of metals into their into their coins and then and it just it continually happens it's like it's inevitable like and so yeah i i know bethany doesn't want like bash government but it's like too big we see through it all like we've seen it through like not only we've been on the journey like years ago seeing through like we take our health into our own hands like we we don't we have government intervention into our into our health should just shouldn't happen and so like when we see like when it clicked for us to see like the government intervention in the financial realm it was like oh of course of course this is happening there too

because it's already it was already in our minds with everything else but um yeah anyway i don't where i was going with that it's like yeah there's just a lot it's it's the intervention it has unequal effects across society right so there's there's this idea called the kantian effect in uh monetary economics where the people closest to the spigot of money creation which is the federal reserve and then the way they distribute their money is they have what's called the fed window where all the primary uh members which are commercial banks like jp morgan wells fargo bank of america and other entities get access to the newly printed money first and so the way money's created the fed goes um the treasury will issue treasuries and the fed will buy and then

the banks will buy those treasuries or simplify more treasury issues treasuries and then ends up on the fed's balance sheet and they create dollars to get those treasuries and they give those dollars to the banks and when that happens at that point basically the the banks have first access to the money so they have unequal access to the the information flow particularly around money where they get the money and then this is why you're seeing like stock prices at all times they're able they're able to put it into assets financial assets particularly that mostly only wealthy people owned or more well-off people hired upper middle class to to extreme extremely wealthy people. They get the money and then they put it to these financial assets and those

financial assets go up in value on paper, making those people rich and they can cash that out for cash. And the money doesn't percolate to the middle class, lower class. And by the time it does, prices have gone up because there's more dollars in the system. And so the money printing, the way it actually happens, the mechanism of how it flows from the Fed through the Fed window to the primary dealers that have access to that window, it gives them undue advantage compared to the little man who's working for $20 an hour and doesn't have that type of financial access. So those people, that would actually argue that's an immoral monetary system because it favors those closest to the spigot of money creation and really drives inequality at the lower end of society,

where again, people are in the hamster wheel making $20 an hour, and yet the people at the top are getting free access at very low interest rates to newly printed money and then they can just drive it into assets and use those assets as collateral to to buy other things um and more bitcoin it's different right it's it's there's no federal reserve that's that's actually deciding whether to expand the the monetary base of manipulate interest rates like it's written in stone and anybody can participate in it anybody has the ability to plug a miner in and contribute to the addition of blocks to the Bitcoin ledger and therefore access to newly distributed Bitcoin

via the protocol. So that completely changes the game where instead of having one very centralized entity controlling when money is created, you have theoretically the ability for anybody in the world to participate in the production of new Bitcoin blocks and therefore the distribution of Bitcoin

throughout the the bitcoin monetary network if you will i think that's beautiful because like bitcoin can become that tool where like the problem is like we have it seems like it wants to have like too big of a government and like the original intention of government was like serve to serve us and be like a tool for us like you know help us build roads and put an infrastructure structure, but then it just got an avalanche of power and wealth. And I feel like Bitcoin is kind of like that tool for the everyday man to come and kind of gain some of that sovereignty back. Yeah. Yeah. No, it's calling back civil liberties and autonomy from the government

in the digital age. And that's the other thing, like money should be a market-driven good, driven asset like you should have the market coalesce on what is a good monetary good for thousands of years gold and sometimes silver where those goods the market just said hey this this gold it's scarce it's divisible it's transportable um it doesn't tarnish like this is a good money and the market decided that there was no government that said gold is the money there were obviously governments that issued gold tokens and silver tokens um but they always coalesced on this market-driven commodity in gold as a good money, where today it's just literally trust us. We're going to print these US dollars and it's backed by the full faith of the US

government. And so how much faith do people have in the US government is a very big question that have to come to grips with right now and um and as they print more and more money they're they're they're losing uh credibility if you will it's like all right like you're printing all this money yeah i wonder like how do you think the us dollar will fare and like you know it's kind of been the front runner for a long time now do you think it will continue to be uh i mean i think so for the foreseeable future. I don't know. Bethany, you're asking. It's hard. It's really interesting to think about. I mean, that's going down a whole nother... So I read a lot of monetary history, particularly around hyperflationary events and what scares me.

So I wrote a newsletter in April of last year. I read daily newsletter about Bitcoin and macroeconomics. In a prior life, I worked for managed futures fund as an analyst and we traded currencies and so i've been pretty involved in in the macro economic uh news scene just following it for for over a decade now which is hard to believe um but uh where was i going with this the i completely forgot where i was going with this we have your newsletter by the way i don't read it very often but you know i get the emails sometimes if the headline catches me i thank you i remember i was going though it's like it's a monetary history and last year i wrote a newsletter and i said hey um what the u.s government is doing well the global

the governments in conjunction around the world we're doing right now they're based well let's focus on the u.s what the u.s government did forced lockdowns um and then promised everybody they're going to print money and put it in their bank accounts uh and and noticing that so like april 17th the last year every newsletter like history is beginning to rhyme because it's very similar to what they did in the weimar republic right before they had their hyperinflationary event so in the weimar republic it wasn't exactly the same wait was that england no germany germany okay okay yeah so right after world war one germany lost the war and they owed the allied forces reparations and the allied forces said you can't pay us in marks like you

need to pay us in gold or good currency um and the weimar republic was falling behind on their payments and as a result um france came and occupied a part of their republic and said we're going to stay here until you pay us back and the leaders of the weimar republic at that time went to their factory workers and said don't go to work we're not we're not working for these guys like what we're going to do is we're just going to print money and give it to you um and it's not the exact same thing. We don't have an occupying force in America and the government saying, don't go to work because we don't want to pay these guys. But we had COVID happen and you shut down all the businesses and you don't let people go to work. And then you print money and

put it in their bank accounts. Not exactly the same, but it's very similar. And at that point last year, I said, there's probably going to be some inflation over the next 12 months. And fast forward to today, you had the April inflation print well above the Fed's expectations at 4.2%. And that's using the CPI, which is a manipulated metric and doesn't really capture real inflation. You just look at the price of lumber, the price of... That's why it's hard because I think a lot of people, you know, it's hard to discover how the inflation is actually playing out. so let's think of like some easy examples like that's why i like i really like michael saylor like he he busts out these like uh what do you call analogies analogies that are like metaphors

that are really common day like i think of like my parents they brought a property um down the road for forty thousand dollars um 35 years ago or so and today that property without the house would probably be worth like you know 600 000 at least 20 x it's 2 000 like yeah so i just think like trying to help people like stretch their mind and that what how does it look like in every day like how does that affect us in the every day your your grocery bills go up your the cost of energy goes to look at gas prices right now so what we did is we shut down the economy and we basically borked the supply chain and economies are very complex you can't just turn them on and off they're not a light switch this is a good analogy the economy

is not a light switch you can't turn it on and then turn it off and then just expect to turn it on everything to go back to the way it was these are very complex systems with very granular processes that happen at different parts of the economy to make the end products that we use today So like housing being one of them, like when you shut down the economy last year and the lumber mill shut down, they sent all their workers home and that creates a supply crunch for lumber. And then you have people want to buy homes, renovate homes, and they're getting money airdropped into their bank accounts. And so they're competing for scarcer goods and we're not cutting out as many trees and making as many two by fours with more and more money. So that's naturally, as they compete for that good that's becoming scarcer because people aren't in the mills to actually make more, it's going to make the price skyrocket. And lumber prices at their peak were up like 2,000% since last July, I think as early as this month.

So that's why you could buy like a stack of two by fours beginning of last year, I believe for like $279. today it's like 13 which is like oh my gosh that's that's like inflation and you're seeing this a lot like at the grocery store um beef prices are going up uh wheat soybean prices are going up um and so that that makes cereal bread more expensive yeah so i think it's like this just gets my mind thinking of like i think a lot of people are on one hand they're scared for their health because of the way they've been communicated to um in particular so the fear is like building up building up building up so yes like let's close down the economy let's roll with it like this sounds like a great idea for the sake of our health but then you look at the other end of the

spectrum and a lot of the people who are living month to month um dollar to dollar like they're literally living off their next paycheck so they get their their money the stimulus but then they're never gonna be able to get on the other side of that because now everything costs that much more so they're pushing them down pushing them down pushing them down and that's what like makes me so sad is it's just it's forcing people into desperate situation like really and then on top of that like like the past week we've seen all this fud around bitcoin where fear and misunderstanding and doubt about yeah so like why would there's all this from higher up authorities are saying like bitcoin is like it's it's nothing like you're not going to be able to get it

so like people i feel like they almost trust too much of what these higher up people are saying so it's so i like these podcasts and things like this need to get out there and be like inform people and let people know like this is a tool for you that is going to help you you can access very easily right and that's so that's the other thing the critical this may seem harsh but critical thinking is lacking these days people allocate decision making to authorities and just take what they say at face value but like again and so this is i'm i turned 30 in a couple weeks which is hard to believe so i was uh i was 10 when 9-11 happened i was a senior in high school when 2008 happened and um i'm growing up in in the era in a very

particular era and very crucial parts of my life these uh these um it's a word to describe them um very pivotal pivotal yeah pivotal moments but like even more like very like societal moving like crazy events have happened to very impressional points of my life when i was 10 i remember how emotional uh everybody was around 9-11 and then like i remember i was going to middle school and like and they were like get drilling up ginning us all up is like 10 11 12 year old kids go to war with iraq and then fast forward eight years and it's like oh maybe the pretenses for going to that war were were false like there were no weapons of mass destruction like uh saddam was saying had nothing to do with 9-11 and we completely went over and bombed a foreign land

and killed millions of people under false pretenses then you fast forward to 2008 and the financial system collapse collapses and then you see the the stimulus after that the tarp bill you just had politicians politicking and trying to get favors that they want to pass for for their localities in at a crucial time uh in in the in america like when the financial system was potentially collapsing everybody was politicizing some these things and then going on to college and studying economics and then working at a fund a trade a currency market the part of that job was following central banks the federal reserve bank of japan ecb you name it around the world and doing that for a few years and hearing these these people who were supposed to have

very fine control over the monetary system of the world the monetary systems of the world and just taking what they say year after year and they're never they're making these projections they're never hitting them they're they're kicking the can down the road they're they're proving to to actually not be competent at what they're supposed to be achieving so for me personally i've been uh very jaded by the traditional system whether it be the government that wants to go to war um or the financial dimension we're still in war in the middle east and like still killing millions of innocent people yeah and so that's what that should not be happening yeah and they and they masquerade everything now everything's very hush hush under the table um don't worry

we've got this under control you can't audit anything that's going on you don't know where any of the money's going you don't know what's being done in in your name as a taxpayer um and So that's one of the reasons I've been drawn to Bitcoin. Bitcoin is very transparent. You can audit the rules for yourself. You can literally go into the code and read it for yourself and understand how it works and have certainty of how it will work. So juxtaposed with the system that's consistently lied to me and doesn't allow me to audit it

growing up, Bitcoin is the exact opposite. That's what draws me to it. And that's what I think the world needs personally, is something, a more open system like that that is fair for everybody. i like that fairness and money is like gonna bring so much more freedom for everyone too and just be able to allow people to get out from underneath that financial suppression yeah and it opens up for people globally so another episode i recorded a couple months ago gentleman named paul toy is building an app called sphinx chat actually people will be

listening to this podcast on sphinx chat you can listen to the podcast and stream sats as you're listening per minute people listen if they they want to provide me value because i'm providing them value in terms of this interview they can stream me sats and they'll listen via this app that paul's building called sphinx chat and he has another company called stack work and this is basically trying to give people um right now argentina and the philippines particularly people um of of basically who are not well off at all or uh who are living in places where they don't have access to to good jobs he's trying to give them a job in a digital world so stack work what what he does is he sends them phones pre-loaded with like a bitcoin wallet and the

stack work technology stack and they basically do these mechanical turk um function where they so they you know captcha where you have to go on a website you have to point out the the cone the walkway the bus you have to like find the bus when you go on the internet before you go yeah on a website so instead of like those types of companies will actually pay people to do that so he gets them these cell phones uh loaded with lightning wallets that accept bitcoin and they can do this work and they get paid in bitcoin and so they're actually getting paid um and being introduced to the digital economy in places where they would have no opportunities for jobs locally so the fact that he can send them bitcoin from the united states to the philippines and argentina

he's basically creating uh a digital workforce that can access a monetary system um from their phones and they don't have access to their phones or jobs at the very least and so not he wouldn't be able to send uh a wire over over banks because they don't have bank accounts he wouldn't be able to send Western Union because they don't have bank accounts. The fact that it's software and you can just download an app on your phone and literally have a bank account in your hand really opens up the potential, human

potential around the world. All you need is a smartphone, which is becoming more prevalent, and the ability to download one of these wallets. And then I imagine and hope they would have a backup for their phone because if they lose their phone... Yeah, so you could

back up your Bitcoin wallet, right? Yeah, maybe. write down your phrase and um keep that to your phone i was already stressing over their cell phones i'm like don't rely on your cell phone you're losing it all that's so cool i feel like there's a natural overlay like you're a surfer we're surfers i i feel like the surfing community and bitcoin community like fit naturally but maybe it's because like we travel to all these third world countries and we see we see um the poverty we see the the need for something like bitcoin in the world and it's like it's for everybody yeah yeah it's particularly what

paul's doing at stack work right you get that phone you get a job but then you get access to like social media and the internet so you're able to actually teach yourself things like on the side like after work like you're you're opening up incredible possibilities to these people just because we live in the internet age the information age and so that's another way to describe bitcoin right it is just another layer a missing layer that's been missing on the internet stack again we described earlier the internet's an open system that allows you to exchange information bitcoin's an open system and allows you to exchange value the internet was actually designed when it was originally designed like the 70s and 80s there was intention to have a

native payments layer in the internet but there was never a technology to make it possible So if you go to a website, you know the 404 error. When you go, it's like 404 error, this server does not have this piece of information. I go back to it. So that's a HTTPS error that they don't have the files that you're requesting from the browser. There's something known as a 402 error, which is a payments error. It's never been utilized because there's never been a native payment layer of the internet until Bitcoin, since Bitcoin is an open system.

So it actually fills in a part of the internet stack that's been missing for decades, but was originally thought of when they were first designing the internet. And that native payments layer opens up the possibility for crazy things. Again, like you're talking about for your blog, for instance, if you wanted to monetize your blog, you could literally put a half a penny paywall on it that's Lightning Network enabled, Bitcoin enabled. and says, you can't access this content unless you give me five cents worth of Bitcoin or half a penny worth of Bitcoin. Not a lot of money in one go, but in aggregate, if you get thousands of people reading your blogs, tens of thousands, hundreds of thousands, millions, that adds up. So it also incentivizes people to make good content and allow people to access it very cheaply. And you can do that over the internet. But you have to get everyone doing that though,

or to be able to enter that in right yeah um and it takes time um so it actually will be like really rad but for now patience patience is key like i remember uh gosh i was like i had to be like seven or eight years old downloading aol for my family uh got like a free aol disc on the back of the backstreet boys millennium album and uh and we had to download aol and it was dial up and thing so that was what 99 2000 uh 22 years ago look what we're doing now like we're video conferencing um from halfway around the world bitcoin's 12 years old i think yeah you'll be surprised with how quickly it happens i'm not going to say it's going to happen tomorrow or next year or five years from now but um the the ability to build on top of bitcoin's protocol

and extend the protocol to just inject it into things that we do in our everyday lives, like content, is becoming more and more apparent to more and more people. So it's just going to take time. Like I said earlier, it's not all going to come out of the box. The potential is there. The software is there.

It's just going to take time for people to find it and start building it out. Exciting. Well, we got to jump off here in a minute, but it's been awesome chatting with you and marty i'm sorry i'm sorry if i get in the weeds i've actually been told i'm a bad bitcoin 101 my wife she gets disappointed no i was talking with a girlfriend of a bitcoiner the other day and i was like yeah we should do like a basic basic like have you come on the podcast with me and just get real like basic for everyone

but yeah i feel like we didn't answer all the questions but maybe we spark some interest and that's like where it has to start you gotta like just get some interest going and then people can go on their own journey totally and i think to distill it bitcoin is freedom in the digital age this is what i like to tell people like we either get a digital panopticon where all of our financial tracks at transactions are tracked you can only spend money where the authorities want you just spend money you can they're allowed to print the money at at will you have no control or or say in the matter or you get a system built on on bitcoin which is free and open source and bitcoin is about freedom at the end of the day freedom in the digital age we either get

the chinese digital panopticon exported to the rest of the world or we get to fight and build this actually free and open source monetary financial system that that respects human dignity and um and really is actually true to the ideals that america and free democracies were founded on that was a perfect ending we shall huddle and we shall keep spreading the word if anybody has any questions they want to ask me my dms are open thank you guys for joining me thank you for doing what you do i mean you're a huge inspiration we didn't even get into surfing But that's another thing. If you're trying to sell it to a surfing crowd, it's like Bitcoin and the ocean are both humbling experiences. Bitcoin forces you to learn and ask these hard

questions about money and the ocean forces you to ask these hard questions about life and really helps you realize that you're a human and your mother nature is a strong beast that should be respected. Similarly, Bitcoin is a humbling experience. It changes you more than you're ever going to change it similar to how the ocean changes you when you when you surf a lot and you understand its power and the intricacies of that 100 yeah it's they're both very humbling even after 30 years of surfing i'm still like humbled by the ocean and i feel like i got a lot to learn still and i'm like still so much to learn about bitcoin but i'm stoked i'm finally going down the realm now i've got like the juice bitcoin and energy too bitcoin is the

currency of energy which is a good thing um it takes scarce energy resources and turns them into a scarce digital good which is memorial memorialized on this ledger which is actually beautiful from a conservationist perspective. You're conserving these scarce energy resources in this digital asset that holds value in a perpetuity. So you're respecting the Earth's

natural resources as well. But you two have to go. I can't keep rambling. Thank you. This was I thought I was going to be asking all the questions. Now you left everyone with questions about the environmental side, which the mainstream news is pushing heavily lately.

um maybe you should finish with a quick time on that all right here's the spiel so i i work for a bitcoin mining company we use natural gas as our um source or energy source but the natural gas that we use is typically flared or wasted on oil fields so when you poke a hole in the ground oil comes out gas comes out you can't always get that gas to market to a pipeline you literally just set it on fire and send it to the atmosphere there's a lot of methane leak which is the stronger greenhouse gas and CO2. You can't control the leak because of the wind. And so we show up and we say, hey, you're just going to waste that gas. Sell to us for dirt cheap. We're going to pipe it to these EPA certified generators and use it to mine Bitcoin. We're going to take that gas

that's wasted and we're going to turn it into the scarce digital good in Bitcoin. So we're helping to conserve pollution and waste upstream in the oil and gas market. But around the world too, So Bitcoin miners are incentivized to find the lowest cost electricity, which happens to be stranded or wasted electricity a lot. So Bitcoin is actually helping us become extremely energy efficient. And so that's just the first order effect. Second order effect is Bitcoin mining. It ushers in a sound digital monetary system, which severely reduces the amount of misallocation of capital. So the fact that the Fed and the governments can print all this money and just send it to the banks and then the banks can go give the loans out to new businesses, there's no opportunity cost for spending money.

And so you can just print money, give it to people, and then they'll go take that money and use it on things that take energy and hurt the environment. So under a Bitcoin standard, you can't just do that. You have to weigh the opportunity cost of investing in something that may be wasteful, may not pan out, versus something that's actually advantageous and additive to society. So the first order effect is it finds wasted energy and uses that to secure the network. And then the second is it secures this sound digital, excuse me, the sound monetary system in the digital world that actually will reduce waste by reducing capital misallocation that's enabled by the fact that they can just print money and give it to people to do things that probably otherwise wouldn't be invested in. Boom.

i practiced that was awesome right on all right we gotta run but okay thanks good maybe we'll hit you up if we're in ocean city area sometime i would love that we can uh we can serve definitely all right take care of me have a good one you too bye