TFTC: A Bitcoin Podcast - #593: Bitcoin is Money (&) Currency with Parker Lewis

Episode Date: March 5, 2025

Marty sits down with Parker Lewis to discuss his latest article on bitcoin as a unit of exchange. Parker on Twitter: https://x.com/parkeralewis Parker's aritcle: https://www.tftc.io/bitcoin-is-money-currency/ Zaprite: https://zaprite.com/tftc Bitcoin Takeover: https://bitcointakeover.org/ Clip Parker mentions: https://x.com/collision/status/1783559623511011535 0:00 - Intro 0:36- Bitcoin Takeover 10:28 - Parker's paper 19:33 - fold & Bitkey 21:16 - Stablecoin legislation & distinguishing money/currency 29:52 - Triple entry accounting 35:58 - Unchained event announcement 36:28 - The details are important 42:31 - Bitcoin inherently competes with dollar 50:51 - Choosing bitcoin over the dollar 1:00:57 - Capital gains 1:08:45 - Bitcoin has value in utility 1:18:13 - All In Collison brothers - fiat premiums 1:21:38 - Logan takes notes 1:23:52 - More on utility 1:33:55 - Go to Bitcoin Takeover! Shoutout to our sponsors: Fold https://tftc.io/fold Bitkey https://bitkey.world/ Unchained https://unchained.com/tftc/ Join the TFTC Movement: Main YT Channel https://www.youtube.com/c/TFTC21/videos Clips YT Channel https://www.youtube.com/channel/UCUQcW3jxfQfEUS8kqR5pJtQ Website https://tftc.io/ Twitter https://twitter.com/tftc21 Instagram https://www.instagram.com/tftc.io/ Nostr https://primal.net/tftc Follow Marty Bent: Twitter https://twitter.com/martybent Nostr https://primal.net/martybent Newsletter https://tftc.io/martys-bent/ Podcast https://www.tftc.io/tag/podcasts/

You've had a dynamic where money's become freer than free. When you talk about a Fed just gone nuts, 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. Matt's El Rancho.

Most impressive restaurant in all the world. It's wonderful. I can't believe my brother thought. What did he think? Were you part of this conversation? Yeah, it was Matt. He called you, didn't he? He called me in or he texted me and my brother.

I think he was asking about Matt's, Buford's. I think it was Buford's. There was another one. But then Matt's was second. Yeah. It rakes. It rakes. Incredible service.

You know exactly what you're going to get. The place was a zoo. We got there at 4.30. We had to swim out. Yeah. Navigate. That's why you go at 4.30, especially if you have kids. You bring them.

My boys were running wild. Yeah. it was uh it was jack's first uh first mats yeah hopefully he slept most of the time he did it was uh it was a great night great night stoked you being on the show today but we're going to talk about something different we're going to do a longer series at some point so look out for that freaks but we're going to talk about the article that you just wrote i think it's very prescient considering the narrative in the space right now particularly around the reserve and all that but first we have to get a proper shillin for next week yeah fourth annual bitcoin takeover fourth

annual bitcoin takeover uh next week it's going to be uh here at the commons there's a few events or there's an event at university of austin across the way just count it catty corner of the commons but looking forward to it a lot going on i think we have seven bitcoin events or actually eight bitcoin events in six days five or six days so um i think you were part of the you were here already in austin for the first takeover but um bitcoin takeover is something that we really started when we launched the commons and historically south by southwest despite being a big technology in addition to film and music festival doesn't ever include bitcoin as a track and given the absence of bitcoin at south by southwest here in austin it was

appropriate for us to host a bitcoin takeover of south by southwest to give bitcoin its due and so the first one was in 2022 and we've hosted it every year since continues to get better and continue to expand it so it'll be next week march 11th to the 15th 15th 15th well we added on a screening a film screening so in south by south in honor of south by southwest which is a technology film and music festival we've got a whole series of events so the 11th nifty and bitcoin plus plus are hosting a hackathon here at the commons and then the evening of the 11th we are hosting a bitcoin not blockchain event myself and drew bonsol will be giving a presentation to help educate all of the people that either believe that crypto is valuable or blockchain is valuable to

help understand what bitcoin is why it's blockchain it's the only blockchain of relevance and why blockchain is not tech and then so that's the 11th tuesday wednesday we're hosting an event here with hrf called the great divide bitcoin versus cbdc is really highlighting that there are two paths forward either a panopticon with mass surveillance of cbdc's that's the the natural way that the fiat world is going or the open monetary system closed versus open centralized versus decentralized so that'll be with hrf on wednesday the 12th and then thursday the 13th club labs hosting their startup day that has their top builder finale on the 13th and then we'll have awesome bit devs that evening where the the winner of uh club labs top builder will be announced and then on friday we'll

have our main event which is our full day of speakers people can find out about it at bitcoin takeover.org if they're interested in coming it's a high signal day we have 10 founder ceos giving presentations on what they're building around bitcoin covering education custody financial services insurance payments lightning infrastructure mining mining infrastructure demand response and oil field mining so we'll have representation from upstream data steve barber's going to be there speaking michael goldstein from satoshi nakamoto institute on the open source side we'll have mike schmidt founder and executive director of brink i'll be giving a talk on zap right and payments we have the co-founder and cto from light spark kevin hurley coming to talk about

lightning and what they're building at light spark drew bonsol will be giving a talk becca rubenfeld from anchor watch will be giving a talk mark suman from open secret um we'll give be giving a talk a few others so that'll be friday that's the main event it's a full day each speaker will give a presentation which i i think it worked really well last year which is why we're replicating the format this year of being able to hear from 10 different founders and CEOs talking about what they're actually building followed by 10 minutes of Q&A. And then on Saturday, we're actually doing a film screening. It was a late addition to the program, but we're doing a film screening of Elena Mediavia's Dirty Coin, talking about Bitcoin mining and how it can help fix energy problems all

over the world so i've only seen an extended kind of 17 minute clip of it so i'm excited for that but yeah it's going to be great whole week and really showcase uh not just the bitcoin community but what's actually being built on and around bitcoin so anybody that's interested with all the crypto stuff that's going on dc now and over the coming weeks uh the bitcoin takeover week in austin will be a full high signal series of events what's your view i mean you've been to each of the takeovers you're a big part of the takeover i left out one big part which is we're going to be doing a live tftc after the speakers which we did last year let's get danny the props live tftc what bitcoin did crossover yeah that's gonna be exciting it is

talking to danny behind the scenes no i mean it's my favorite event of the year it's high signal it's a long day but it's a high signal jam-packed day and the caliber of people we get in the commons on that day has been high and i think the bar has been set high and we're keeping it high and i think juxtaposed to south by southwest it's really important that we do this here because bitcoin does not get the lips not even lips lip service isn't doesn't it don't include it no i mean and you you were looking through for the headliners the headliner this year is like chelsea clinton like it's completely it's like david ducovny chelsea clinton and three people that you've never heard of yeah i like david ducovny well i mean it's not it's not like i

don't like david ducovny but but it's it's gotten far away from its roots of uh supporting like twitter was announced at south by southwest back in 2005 2006 whenever that was and today it's like chelsea clinton's lead yeah i'm actually writing a piece a short piece on takeover that i'll get out tomorrow but that talks about the roots of south by really being a creative you know an indie music festival originally austin's live music capital world kind of expanded out to film and it was a music and film festival very you know indie focus and creative focus and then it shifted to technology and i don't say shifted but it expanded to technology and it used to do cool things and then that technology piece started to dominate and overshadow all of the really

soulful things about south by southwest and now we kind of live in a world where that technology piece still tends to dominate south by southwest but even that has lacked it has lost its luster because you know it's one thing to launch twitter at south by it's another thing for just big tech companies that can pay large yeah checks did you walk down congress yet today no like the UAA city state

of Dubai has their own space that they're setting up it's literally just Dubai on it on I think like third in Congress

I'm hopeful that South by will find its way back to its to its roots and in the interim and it's also that it's purposeful

that they don't include Bitcoin people submit Bitcoin tracks the way it works people submit talk ideas and then south by southwest selects it and people always submit bitcoin talks and they always pass it by and so their losses are gained and you know i have you know vision that maybe for south by to make it they'll have to turn it into a bitcoin conference yeah well we're going

to do that yeah we have been doing it we're going to continue to do it but really it is i i consistently get that it's the the highest signal single day that people attend and that and because we've each of the past three bar continue or each of the past three years continue to raise the bar creates a little stress to continue to raise it higher and higher but there is no ceiling there is no ceiling there's no top because there is no bottom to fiat there's no top there's no top to take over so check it out bitcoin takeover.org for anybody interested or if you're following me on twitter you've probably seen but get your tickets because we're going to sell out this week they're going fast and i think a lot of what we try to do at the takeover is shift the overton

window towards the signal in bitcoin like what's actually happening what are people building a lot of the topics that don't get tick in the mainstream and may not be the mainstream narratives that are being put forth by many who are viewed by the public as the the supreme advocates of bitcoin i think that's why we're here to talk mainly today is this recent piece that you wrote bitcoin is money and currency from first principles logic like you like to do just get down identify a hang-up somebody has with bitcoin and then you spend the time really digging into your mind and getting back to the base layer of an argument and then building up from first principles explaining why bitcoin is or is not a certain thing and i think i texted

you and we talked about it on saturday when we were at matt's this is one of the best pieces you've read in some time because it's a problem that i didn't even realize like the distinction between commodity money and currency never really thought through who actually defines that or what defines that distinction and how has it been recognized in the market to date and you were explaining that you've run into this question a couple of times and that you had the same sort of i've never thought about this before and so that's what set you out to write this paper yeah it um you know and i didn't intend it to i guess when i started writing i didn't really think that it was gonna be as fundamental as it was but i had recorded a podcast i think

it was with daniel prince and he had asked me i can't remember how long ago it was but he had asked me you know what's what's the difference between currency and money and i didn't really understand the question but i'm on a podcast so i have to answer it and and at that time i didn't really understand the distinction i kind of understood the broader distinction in the context of money and currency and history but i hadn't thought very deeply about the distinction in the context of bitcoin or why it was a subject of debate really and so however i answered the question is probably ridiculous and in hindsight because it wasn't really getting at the true nature of the question and then since then from a policy discussion standpoint and while somebody

that's always vocal and advocating for bitcoin and contributing where i can in the background of providing advice i have resisted being part of an advocacy formal advocacy part uh group just because there's so much noise particularly in dc that it just feels like you're swimming upstream so much and that there's this concerted effort from crypto and blockchain special interests to to lump everything together and you know some of the context which got me thinking about it more was michael saylor who's somebody that i have a you know a lot of respect and appreciation for you know he's a great advocate of of bitcoin he would describe bitcoin as money and property but then he would expressly say that it's not currency and i was trying to

understand what his view was of of around those definitions and as i started thinking about it more and then as the trump administration came in and appointed david sacks as as cryptos are i had written a piece about a month ago talking about how it feels like the crypto blockchain craze was dying at slow death and was on the brink of fading away and this just reinvigorated this ultimate negative consequence to bitcoin everything's good for bitcoin in the long term but there can be negative consequences in the short term of recharging this conflation of everything and the confusion around that completion the confusion because 100 if people get sold a narrative around blockchain tech or crypto or all the utility all these

crypto scams are going to bring it is definitionally harder for them to understand bitcoin and if i were to take somebody from zero and help help them understand build them up from zero to help them understand bitcoin i can help i can get them there fairly quickly but if somebody's wrapped their head around and become convinced of some blockchain narrative or some crypto there's going to be a thousand different currencies it is definitionally quantitatively qualitatively harder to help that person understand bitcoin it's 10x harder to refute bullshit than it is to don't put it out in the world yeah and especially once somebody has become convinced of something and then has taken a bunch of different actions with those incentives they actually have an

incentive not to understand and it's it's not the same as whatever the quote is where something you know somebody's job is dependent on it so therefore they don't understand it's not It's not the same way as the Cantillon effect, but if somebody's become convinced that all this crypto nonsense is tech and blockchain's tech, and they've gone out and started speaking about that, then they don't want to be wrong. There's an inherent bias to not want to hear an opinion that runs counter or logic and reasoning that runs counter. And so as the conversation in D.C. has, quote, heated up, and as that has recharged this conflation of the two, there is a lot of people trying to influence policy in D.C. and i think that it in the long term i think you know certainly michael saylor means well um but there are other people that don't mean well that want to define you know bitcoin a certain way and create a market structure to allow for basically to codify and legitimize

what what i view is detrimental and i don't come at this from a perspective that the free market It shouldn't sort itself out, but it's also better for somebody to be able to be clear minded around Bitcoin and not set policy for Bitcoin conflating all these things together. Because what happens in that world, from my perspective, is that if you lump Bitcoin in with everything else, then the snake oil is always snake oil. And when it becomes clear to everyone that it's snake oil, they're going to associate it with bitcoin and then they're going to over regulate bitcoin or they're going to put bitcoin in a regulatory box that it shouldn't be in and that you know again while everything is good for

bitcoin in the end it can make people's lives harder in the united states it can certainly make people's lives harder that are working on bitcoin and so i think it's important that people get it right and that's that's what prompted like i think there's a i guess i wrote it before trump came out with his shit coin stockpile but there's a an event in dc at the white house that david sacks is organizing on crypto like a crypto i don't know what they're calling it crypto summit or crypto working group on friday and then there's another event on monday and so i do think that it's important not just to get ahead of it but to to frame bitcoin correctly we've had podcasts before where we talked about the importance of framing bitcoin correctly and not seeding the

ground because if it turns out if you're just kind of towing the line then eventually people are going to figure out what it is and it's better to set good policy on the front end and not to run away from it so in the piece bitcoin is current or money and currency i specifically laid out the case for why it's both and why just from a fundamental economic perspective because of the way that bitcoin works it can't not be currency such that if it were to be put tried if people try to put it in a regulatory box or bucket that doesn't fit the substance of what it is that will ultimately um be detrimental at least to the people that are here in the united states what's up freaks do you have a credit card are you getting cash back or airline points

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If you have friends and family on the exchanges who haven't moved it off, tell them to pick up a BitKey. Go to BitKey.world, use the key TFTC20 at checkout for 20% off your order. That's BitKey.world, code TFTC20. That is the frustrating thing about the framing of Bitcoin by many people trying to, that's the word I'm looking for, to mold policy around Bitcoin. It's just this pussyfooting around the fact that Bitcoin is money, number one, and is currency as well. And I think as an industry, we need to rip the bandaid off, particularly with the Trump administration, the way they're posturing and the way the broader lobbying from the broader crypto industry is towards creating a distinction between Bitcoin and stable coins. and really trying to say that Bitcoin is this digital gold store value asset that is a reserve asset for companies, individuals, countries, potentially even.

And it helps embolden stable coins, which they play together. And I'm still trying to understand the logic of that connection, but this is how it's being framed. I can certainly see how many people think that. tether's involved with bitcoin and cryptocurrency they're stacking bitcoin and the demand for stable coins drives demand for treasuries and i guess the logic is that people are using the stable coins to trade bitcoin but that's like the extent of the connection there's this weird i'm not sure if you're you feel this way too but it feels like the way stable coins juxtaposed to bitcoin are

being framed from the big crypto lobbyist is they they're sort of symbiotic and i think there is a clear delineation between them yeah so i think the because one one of the big competing priorities in washington dc or there's three big competing priorities there's stable coins there's this concept of market structure that will try to create regulatory clarity of locking up tokens not just stable coins but all the crypto grift and and bitcoin and then there's another priority which is the Strategic Bitcoin Reserve that Cynthia Lummis, Senator from Wyoming, has a proposed bill for and is trying to work that through the legislative process.

And so there's constituents that really want stablecoins to be the priority. There's other constituents that really want market structure to basically legitimize crypto altcoin scam world. and then there's a constituency that's that's trying to focus on bitcoin and within the three buckets it's generally saying trying to label okay bitcoin's a commodity there's this thing called a digital assets which is all the crypto grift and then there's stable coins which are currency um and or digital currencies and the distinction just for for people's context and this was something that i i didn't from a definitional standpoint have as

great of appreciation for say a year ago that i do now because most most people and i talk about this in the piece i wrote most people if you were to ask them what's the difference between money and currency they would look at you kind of cross-eyed they think that you're being pedantic and saying what do you mean the dollar is money and its currency money and currency are two interchangeable words and from a practical perspective that's true from a legal and regulatory perspective and in the context of the history of money there there is a distinction and the distinction matters from a regulatory perspective and so just to kind of spell out that distinction for folks it is that historically say if you had a commodity money like gold

gold was money and gold needed some currency to sit on top of it and that currency came in the form of coinage typically tied to the state or the crown and then in the fiat world similarly initially when the dollar emerged gold was money and the dollar was a paper note that essentially served as a contract that was convertible to gold and so prior to bitcoin every and money historically wasn't always commodities but but commodities emerged as the best form of money but then the currency sat on top and the currency always had an issuer that was typically the state now history of the united states there were private monies and banks could issue private dollars and script companies would would issue money yeah but that

distinction between money and currency is is distinguishing between the underlying say commodity money like gold and then the the formal currency that needed to set a weight and measure and actually issue um convert or you know if you if you were thinking about it from a coinage perspective the process of refining gold into a coin served an actual tangible valuable process in converting the commodity into a currency to make it a utility in trade not only setting a weight and measure putting it into a standardized unit validating it enforcing against counterfeit and so so historically there's a there's a good reason to distinguish between the two the thing about bitcoin that makes it so unique in the history of money is that

it is a commodity in the sense that a commodity would be traditionally defined but it's also useful as money and because bitcoin the network itself is able to collectively as i would frame it issue money like issue the 21 million control the supply schedule control how how that 21 million is issued enforce the fixed supply of 21 million validate all currency transactions transmit currency transactions like you do not need the u.s dollar system to transmit bitcoin transactions the bitcoin network facilitates all of that in a closed loop and because bitcoin has a baked in native unit it can do all of the things that any other currency that would otherwise need an issuer to do without an

issuer and so bringing back that to this bucket of what's a commodity and what's a digital asset and what's a digital currency it's like yes bitcoin is a commodity but it's also money and it's also viable as a currency and trying to distinguish and say this is a commodity but not a currency is swimming upstream for fundamentally what it is from an economic standpoint and the economic gravity will dictate that it will be used as such and the only i mean kind of like go into some of those specifics of kind of what the roles that issuers have played and how bitcoin helps eliminate it but the really the consequence if you follow logic through is that the only reason to have a another currency sitting on top of bitcoin when bitcoin can operate

perfectly functionally as a currency system is to restrict its use and i'm not saying like absolutely i don't believe that that anyone who understands bitcoin most notably michael seller that things that should be defined as commodity and not as a currency i don't think he's you know he doesn't have that incentive at all nor do i think that is what his aim is i'm saying that the consequence of creating these two distinctions that that's the logical end game and so that's not only the logical end game but it creates a consequence for anybody who's interacting with bitcoin not just as money in a store of value but but as currency yeah me and it's funny as i read the piece and as i'm listening to you describe it now i'm thinking

back to one of the big memes particularly in the early years that people would run with to try to define bitcoin as this incredibly innovative technology that represents a breakthrough in human history in this triple entry accounting it feels like particularly going back to the issuer and trying to account for the validation of transfers of the currency within the system like this explanation that you're describing should be an add-on to that meme of triple entry accounting it allows us to have this enclosed system that does everything from issue the money control the issuance validate what's being sent where when um and then act as a unit of account as well yeah so you know if i if i just frame say the the role of an issuer

historically in money thinking about well you know in the context of gold and i always try to reinforce people that you don't have to understand why gold was money to understand bitcoin but the dollar's origin was gold and even if people don't understand gold they can at least appreciate that gold the gold standard existed and that the entire world whether they understand why or not the entire world conversion gold is a monetary standard but in order for gold to be functional as money gold is an element it's a rock in the ground you got to get it out of the ground you got to actually get the gold ore out of larger rock then in order to turn it into a coin there's or there's a metallurgical process to get gold out of the

the rock ore but then there's another chemical process and a refining process to turn this raw material into a shiny gold coin that isn't a standard weight and measure that says that this is a one ounce gold coin and one ounce might have emerged on the market but it was set by an issuer it was set by somebody who's doing the refining and for money to be viable as currency you need standard weights and measures and it's no it's of no small consequence that that bitcoin removes that need for setting standard weights and measures not only did gold need some issuer to set standard weights and measures but the dollar also needed someone to set standard units measures a penny a nickel a dollar a five dollar bill a twenty dollar bill a ten dollar bill a hundred

dollar bill now in the digital world the dollar less so needs a standard unit but it but it does need an issuer of currency and somebody to validate currencies and that that idea of you know triple entry accounting however you might want to think about it it's that there's this closed loop truly autonomous system that can validate all currency transactions and that you don't have to trust another third party in the current iteration of fiat currencies and the reason why an issuer is necessary in the context of all digital fiat currencies whether it's a stable coin or you know that sits on top of the u.s dollar or the fed's system itself the fed is ultimately the one that validates all currency transactions the treasury is one that

prints dollars and ensures that someone's not running around with a counterfeit bill or printing counterfeit bills and getting them into the currency supply that is 100 a system that's based on trust dependent on trust to work dependent on trust and issuer to work and the thing that allows bitcoin to operate without the issuer is this record system that is immutable that relies on no third party to be a source of truth that anybody can validate the currency and anybody can send it because the process of actually sending if you think about if you think about a bank transfer from one bank to the next banks can't do that one-to-one now a bank could take a hundred dollar bill and walk it over to

the other bank without a central third party but they're dependent on ultimately the fed from for clearing those transactions that's another place where you know it's like there is this autonomous accounting system that's that tracks all these records and forces all these records and when someone's ready to transmit the bitcoin network handles that directly it doesn't need to trans transmit quote through a massive third-party intermediary or any third-party intermediary so that is you know kind of on kind of like the unit level in terms of the unit of measure the the sats or the bitcoin as well as this open record that again oftentimes for people that are new i like to qualify that there's not just one bitcoin blockchain every everyone's maintaining the

records themselves everyone's validating records themselves when when transactions are transmitted it's passing around to every node that exists and that all nodes need to to maintain their own independent record and that they're able to get to the consistent state of ownership because of the way that the bitcoin network works but that through that process will also is what allows for the elimination of an issuer entirely from the process so i do agree and it's an extension of this idea and it's part of what allows it to operate perfectly from a technical perspective as a currency system without an issuer. That kind of idea of a triple entry accounting.

Register now at Unchained.com slash TFTC. That's Unchained.com slash TFTC. March 17th. Be there. Again, it's a shame that your explanation of Bitcoin as currency, and again, going back to people who really don't understand this. You didn't even understand it. I didn't understand it until you wrote the piece.

And then it's like, oh, crap, there are these very minute details that matter for definitions, particularly when people are trying to put Bitcoin into a bucket at the government layer of society and erect regulatory frameworks around it. And I think it's crucial that we are as clear as possible when it comes to defining Bitcoin at the government level, particularly here in the United States. It's obviously we're Americans. This is what we care about. And I do worry that the noise that exists in D.C. could create a situation where it gets wrongly defined because people don't understand it or others are trying to muddy the waters about what Bitcoin actually is for their own incentives and their own gain in the long run. And I think that extension of triple entry accounting is a good way to frame it to people that are trying to understand this or trying to pitch it to others out there.

As well as the significance of it, the significance of this entirely autonomous system that isn't dependent on a central third party to coordinate any of the functions that have historically been necessary to have a... There's been a division of labor amongst all these. To make a currency system work, and that doesn't exist in Bitcoin, and there are consequences to that. And yeah, one other thing that I want to make clear is that Bitcoin doesn't need any advantages to succeed. People building Bitcoin companies don't need any advantages to have there. We don't need special treatment. Bitcoin is what it is fundamentally. and the regulation is going to need to fit it otherwise it's like governments can create bad

policies and constituents can be harmed by those bad policies eventually the quote regulation is going to fit the economic reality because it's a gravitational force but in the intervening period a lot of pain can be created and that that's what i think is important to avoid and that the what i believe is logical not i think it is an indirect consequence if you if you define the consequence of incorrectly defining bitcoin if you if you define it as a commodity and say it's expressly not as a currency and then it is not you know we don't need the government to have an sbr for bitcoin to succeed in all the individuals who are owning bitcoin to have their number go up we also don't need all capital gains to be removed from bitcoin

from like good economic policy would be that all governments should hold bitcoin and you should remove capital gains from bitcoin but bitcoin doesn't need that um it doesn't need that advantage to succeed by having bad policy again you can slow things down and make certain people's lives harder that that's fine and well the big risk is as soon as you define it as it is this thing and it's not that thing it is commodity and it is not currency and then the dollar continues to degrade as a currency system price of beef at the grocery store when i went last week was up another 10 that is happening because of gravitational force as people begin to realize that the economic reality is that and i'll walk through the logic not because i want this to

happen just because it it is again the economic reality it is it either is or isn't this isn't my opinion is that bitcoin is competing with the dollar i don't believe that's a bad thing i can understand people's perspective that it is my my view is that it's not and we made that case on another podcast but it is competing with the dollar and people are sending currency transactions i'm working on bitcoin payments i'm helping everyday people every day you know ranchers doctors lawyers shop owners not just people working on bitcoin people run media empires yeah people that run media empires like gftc except bitcoin's payment and so if you define this as a commodity and not a currency and then there's increasingly this trend of people using as currency and at the

same time that the dollar is losing its value which is one of the basis for bitcoin to be a store of value and that as everyone's doing that then it becomes natural for them just to move the money between each other because it's the best form of money somebody comes along and says i don't want you doing that i don't want you transacting in bitcoin that's a commodity it's not a currency we were told it's not a currency you can't use it as such and so just reinforcing for people it's not this isn't important to try to get a policy that advantages of bitcoin it's important not to make a misstep that can come back to haunt you later on let's just call it what it is today let's call a spade a spade and let's have a direct conversation about

it and hopefully create good policy that does allow bitcoin to flourish and doesn't slow it down and i think we went over this when we recorded the episode about combating the fed that bitcoin does not compete with the u.s dollar it does compete with the dollar and yeah and let me let me let me yeah let me explain this because i also i have this lot i lay out the logic in the piece and you can find it at gradually then suddenly dot xyz it's also on twitter twitter article ntftc ntftc thank you for helping syndicate as the media empire in the room but i'll walk through all of logic but i'll start at this point because it's where we were which is you can't store the same value in two different currencies at once

you can store different value in different currencies you can choose what percentage of your value you store in one versus the other but you have to choose which you're storing value and that that is the there's no fundamental way around those like when you're when when you get paid either for your good or service directly or if your employee gets your paycheck you have to decide say you get five thousand dollars a month you have to decide do i want to save a thousand of that in bitcoin 2500 in bitcoin 5000 in bitcoin and then you have to decide what you want to do with the rest of it. But you can't store the $5,000 in Bitcoin and fiat currency at the same time. And this idea of having kind of a fiat currency sitting on top of Bitcoin, even in that

world, you have to choose because there is something fundamentally different. Even if you're using a custodian, it would be fundamentally different if you were to deposit $5,000 into the Bitcoin exchange and have a liability of the exchange, like a deposit that's denominated in dollars versus having a contract and a liability that's denominated in Bitcoin. If you deposited $5,000 into the crypto slash Bitcoin exchange, and it was a $5,000 dollar denominated liability, that is fundamentally different than you have x sats from a contractual perspective and so like if you think about the history of gold gold was convertible to dollars you would put your gold in the bank and the bank would give you twenty dollars the goal the gold in the bank

was the banks you now had the dollars and there was a contract that said you could convert those dollars back to one ounce of gold that contract was later broken in 1934 when the government devalued the dollar to 35 to one but it's this distinction of if you're trying to like you know have this idea that you're going to save in bitcoin and spend your dollars well the first thing is you know as an example right now with the etf you don't actually have bitcoin you have stock or some security in an exchange traded fund that has a claim on bitcoin but your asset is the claim on bitcoin not the bitcoin itself and even though ibit's working on being able to allow you to take bitcoin in kind it's drawing this distinction that if you had this fiat currency

sitting on top of bitcoin you could either live in a world where you actually own the bitcoin directly and it's titled to you or you could have a fiat currency that's convertible or you could just hold a fiat currency that's free floating but in any of those cases you have to decide what percentage of the value you're saving in bitcoin and what percentage you're saving in dollars and bitcoin kind of like working back from the beginning of the logic it's that bitcoin has a credibly enforced fixed supply it represents money that can't be printed it's only credibly enforced because it operates entirely decentralized and not decentralization theater decentralization is not trivial bitcoin as a function of that

decentralization is as at the network level is resistant to all forms of censorship that's what allows it to be global and permissionless and it's what allows the bitcoin network to credibly enforce its fixed supply without the need of trust the basis of bitcoin storing value is its fixed supply but again its fixed supply is only credible because it's resistant to censorship that's what allows you to permissionly if you want to to be able to plug directly into bitcoin and transmit the currency without going through some outside system and everyone in the world is incentivized to hold a form of money that can't be printed versus one that can. So if you think that you're just going to store your value and spend your dollars, that reality itself is

predicated on you making a decision of storing a certain percentage of your wealth in one versus a certain percentage in the other, even just for that moment where you want to convert into it to send it it was predicated on somebody else holding the dollars and that's where it gets to well everyone will be in the future is today but just by the reality of it very few people still understand bitcoin but in a world where everyone understands bitcoin who who are all these dollar holders like everyone every time they're getting paid and taking dollars as currency are having to decide what percentage stays in that in that versus not and and what might be converted to bitcoin and in the end everyone like to a person is incentivized to hold bitcoin and everyone is

incentivized to hold a maximum amount of bitcoin such that the only reason in that world where bitcoin adoption grows and there's more people if there's two two bitcoin holders on each side of a transaction that are willing to transact in bitcoin directly for goods and services the only reason why another currency system would need to sit on top would be because bitcoin wasn't capable of facilitating the exchange on a direct basis which it is capable of technically facilitating that which then comes back to well if everyone's maximally incentivized to hold bitcoin and it's capable of sending and transmitting currency transactions and processing for final settlement without a third party the only reason to add a fiat currency into that equation would be unsolving

the problem of why you originally opted into the form of money that can't be printed and from a practical standpoint the only reason for that to exist again would be to ban the transactional use to police and exert control over who has access and the other thing that i mentioned i'll pause those those long rant but nothing about bitcoin from a regulatory perspective from a fundamental economic perspective being money and being currency prevents say the u.s government from regulating its financial system those those those two statements are not incongruent um so and that that's one of the reasons why it's like hey just recognize that treat it as currency

and it doesn't prevent you from regulating jp morgan the way you want to regulate jp morgan it's a u.s company that services u.s individuals and if they're interacting with bitcoin you want to regulate how an individual interacts with a financial institution or what obligations a financial institution has that's fair game um but that sits at a different level than the regulatory treatment of bitcoin itself yeah and this is the question i was at one of the questions i was asked at bitcoin investor week in new york pom's conference on stage and it was this whole debate about um what is actually happening in bitcoin the question is the question he put forth was does bitcoin compete with the dollar and i said yes and leaning exactly into

this example that you're describing we'll just give a tangible example with tftc as a business like we and before you even wrote the piece this is how i described like does bitcoin compete with the dollar yes every day as a business owner i make the conscious decision do i want i look at the dollars in my bank account that come in through ad revenue and other revenue streams that we have and i look at it like how much money do we have how much fiat expenses do we have in the next 15 to 30 days how much cash do i want to keep in my bank account and then i've run that calculation and anything above that and that is excess cash in our bank account i immediately sweep the bitcoin that example right there is the dollar competing with bitcoin i am making

a conscious decision of do i want to hold these dollars in my bank account or convert them to yeah and that and that's what people just have to accept at basically an atomic level that they're they're making they're every every single person in the world whether they're conscious of bitcoin or not is having to make a decision about what they store in dollars versus other assets just so happens that bitcoin is actually money and viable as a currency system so this dilemma becomes more of consequence right because people in the traditional world will look at that same dilemma and say well i don't want to hold these dollars because i know that they're engineered to lose value so i'm going to hold stocks or i'm going to hold real estate it's just that stocks and

real estate aren't also money and so the consequence of or the perceived consequence of bitcoin quote competing with the dollar is more significant because it's competing on a more direct level it's competing as money and that if people just accept at that atomic level each time they're just deciding whether to convert x percentage into bitcoin that allocation whether it's 5 or 10 or 20 or 50 or 100 into bitcoin they're being forced into that decision they're making it they're making the decision by their actions every day and if they ascribe or understand this path to why incrementally they're storing more of the value in bitcoin and making that progressive decision to store less than the dollar and as and if everyone around

them is having to make that decision as more people figure out Bitcoin and it does have this fixed supply and that's better than the dollars that are losing their money, then what happens when everyone has figured that out? And you're going to love this to extend the example further using TFTC. As an example, I told you Saturday when we were at dinner that I paid three ZapRite invoices that week i got my fourth yesterday yesterday morning i'm drinking my coffee getting the news bing email comes zap right invoice and for this particular expense it was the first zap writing invoice that gave the option to pay in fiat using card or ach or bitcoin and so going back to that thought experiment of how i run the business earlier of i keep i look at my

fiat expenses um what i think i'm gonna have to pay how much cash i should keep in the bank account how much fiat and put the rest in the bitcoin this was the first of this particular expense that gave me the option to pay in bitcoin or um fiat and the fiat had a four percent premium on it if i want to pay fiat it's four percent more so i made the conscious decision there where i had the cash in my bank account expecting it to be a fiat expense at some point uh in the month but the bitcoin payment option was there and i was like i'm not going to pay four percent so i just paid in bitcoin and immediately bought the same amount because i was going to use that cash anyway to pay this expense yeah and so so let's walk through that example because that gets to

another part of the the the logic that i articulate and sometimes it can be hard for for somebody to grasp it that is thinking about capital gains is thinking about their own decision to store value in bitcoin versus dollars and and and one thing i would say to certain people for you and before anybody calls bullshit on this i have the receipts i will share them if people want to ask for them yeah but um that for people that have say five percent of their money in bitcoin and 95 percent in fiat yeah just spend the fiat you've got more fiat than you have bitcoin what that also means is you're storing more of your value in the form of money that's losing its purchasing power than the form of money that's gaining in purchasing power and that you're probably just

underexposed to Bitcoin. But in your example, and this is something that I explained in the piece, that if there's two, and I showed a diagram to this, if there's two people, there's a holder of Bitcoin A and a holder of Bitcoin B, and they're actually trading partners, somebody issuing you an invoice if you both have bitcoin and you are both willing to transact in bitcoin the cost of that transaction irrespective of the capital gains is cheaper the transaction itself is cheaper if you just send that person bitcoin because it's just one transaction you had bitcoin they wanted bitcoin even if you didn't use the dollars but you you're you know running low on your working capital and occasionally you have to convert bitcoin back to dollars to

facilitate the dollar currency transaction in that case had you done that you would have had to convert bitcoin to fiat you would have that's transaction one you would have had to then send the fiat that's transaction two and the person on the other side wanted the bitcoin so they would have to convert the fiat to bitcoin so it's three currency transactions when one could have sufficed it's three set of transaction fees and fiat transaction fees or more it's by definition inefficient and so that is i don't say fewer and far between but given the fact that there are still few people say one in a hundred that understand bitcoin i would gather that it's less than one in a hundred that really get it but that's the prime example where that person on the other side wanted bitcoin

They were able to communicate it to you by putting a 4% premium on Bitcoin. Or on cash. Yeah. On dollars. On dollars. Sorry, 4% premium on fiat. That you were able to affect one currency transaction rather than three. And that's the definition of efficiency.

You're affecting the same work for less work. The same transaction for less work. And a direct example that these two things compete. Yeah. not only that i paid the invoice over the lightning network on a sunday morning so that immediately settled in their account yeah because even if you had sent your dollars you would have had to replenish it so you like and they would have had to say you sent the dollars to them it was at minimum two because they were going to convert it to bitcoin they had expressed their

you know they had expressed their preference that they wanted the bitcoin and so helping people understand that that is a perfect example of two bitcoin holders one that has bitcoin one that wants to be paid in bitcoin and that it was used as currency it is currency that is the economic reality you can't deny it um and that if you were to by some regulatory or legal decree try to prevent that behavior from happening not only are you introducing an inherent economic inefficiency but you're also trying to stop water from moving downhill it's capable of being sent between peers and in this dilemma where you know one out of a hundred people understand bitcoin there's going to be naturally fewer instances relative to the fiat world where there's a bitcoin holder on

either side of a real commerce transaction but as that one out of a hundred goes to two out of a hundred goes to three out of a hundred gets to 60 out of a hundred and ultimately a hundred out of a hundred then it becomes very clear to everyone what the same economic reality is that you just described um and so even though it's not common every day now when i say that it's like people are facilitating bitcoins more and more every day so for them it is functionally operating as currency transactions but for people who can't understand that because they're not participating in it it still doesn't change the economic reality it's just harder for them to gather because of the adoption dynamics but that will necessarily change as more people figure out

the bitcoin as a fixed supply and as fiat currency gets to base more and more yeah and i i think that last that last point is really important i tried to drive that home last week on the stage at at the conference is that it may not seem like it like you may not experience these types of economic transactions in your daily life but they are happening and there more will happen over time and to your point the fact that they are happening is a validation that bitcoin is currency yes and i think narrative wise it's something we need to brainstorm in the industry because that's one of nobody uses bitcoin uh for money as money it's speculative asset blah blah blah roger burr it's too expensive on chain like which isn't even true today but like bad example

yesterday morning sitting at my coffee table paid a three thousand dollar transaction over the lightning network instantly settled immediately re-bought the bitcoin plus a little bit because i was like you know what let's buy a little bit more um and i paid an invoice i'm good to go Yeah, and it's actually easier and it's particularly easier if you can envision this future world where you're not constantly having to go in and out of currency transactions and exchange, but in a world where there's two Bitcoin holders on either side that are willing to trade in Bitcoin, going in and out of the fiat currency necessarily just makes a ton more friction. And so with that perspective, that is how the Bitcoin network itself operates and is able to coordinate trade between two counterparties without a currency issue or sitting in between. there can be intermediaries like you might have used a non-custodial wallet or you might have used a custodian but the bitcoin went from address a to address b and there was no third party that needed to say that currency transaction is good it can it can now move on and be validated the

bitcoin network itself did that on its own that the because that's the economic reality the best policy would be to match what bitcoin is with the appropriate regulatory framework and that would incentivize innovation it just doesn't need that to succeed and for the people that you know get hung up on the the tax treatment it's like that if the real thing that's holding bitcoin back from being used day to day as a currency is more so that people don't understand bitcoin it's that dilemma of one out of 100 people understand it if 20 out of 100 people understand it there would be more than 20x the amount of bitcoin payments because there's a certain reality that you need density of bitcoin adoption to allow for overlaps of i'm individual a paying individual b

i have bitcoin and individual b wants to receive bitcoin it's just a law of small numbers and the law of large numbers will dictate greater density and more, more natural trade. So the, the tax treatment, the capital gains is a source of friction, but Jack Mallers made this great point on one of his money matters podcasts where he articulated that if you, if you have a capital gain on a transaction it just means that your money didn't get destroyed so imagine if i got compensated in bitcoin when it was 16 000 and say i got one bitcoin and i did and i decided for some irrational reason to convert those two dollars at the time i wouldn't have had any tax consequences I would have just gotten $16,000 and then Bitcoin goes to $100,000 and I'm sitting on

16,000 and I have some good or service last year. I needed to get my transmission fixed, which was $10,000. Okay. I just spent 10,000 out of my 16,000. So now I've got $6,000 left. well if i had saved it in bitcoin and bitcoin went to a hundred thousand and even if i needed to sell it back to fiat but say let's say the example was the guy was willing to take bitcoin ten thousand dollars worth of bitcoin

i have to sell 0.1 of a bitcoin i have to pay capital gains tax 20 on the difference of ten thousand dollars um the percentage that's between sixteen thousand and um a hundred thousand a hundred thousand so i need to pay twenty percent on eighty percent something like two thousand dollars rough math well how much money do i have left yeah eighty eighty eight thousand yeah so 80 87 5.8 75 of a bitcoin versus 6 000 divided by 100.06 of a bitcoin that that that's functionally the dilemma so so if people are hung up on that capital gains it yes it is a friction but it's more of a i'd say it's a luxury friction it's a luxury friction yeah and so once somebody understands that and also i'm not this is not tax advice but i i did not know this there's a there's

a sixty thousand dollar exemption of uncapped gains it's good to know double check that but i've had multiple tax advisors and financial advisors tell me that but that none of that changes the fact that that economic reality is the same that you're still you're still incentivized to store more of your wealth in bitcoin and spend the bitcoin than you would be and pay the capital gains than you would be just being the bag holder dollars yeah um but that that's not really the thing that's holding back bitcoin payments it's more just needing more people holding it and as more people hold it then there will by the density alone be more natural occurrences of bitcoin holders being on either side of a of a transaction and so um that that's

the reality now if they were to remove capital gains as a policy which in the piece i basically said like you don't need to define this is a commodity this is a digital asset which by the way digital asset itself is a grift um and stable coins is like call bitcoin currency if you want to make the best policy call it currency and take away the capital gains and yes the government should buy it but just don't try to define it or put it into a box it doesn't fit i think that's hard for people and it's fascinating to me that it is hard for people because particularly in the industry and particularly the people that are really hitting the pavement and beating the drum that bitcoin is in currency doesn't compete with the dollar it's like you're also saying it's this

incredibly innovative new technology and you're trying to put it into these these buckets of pre-existing frameworks where it's sort of those two ideas conflict directly right yes and there's just this natural thing that's left on and people just like don't don't poke the bear too well that's part of it but people on cnbc will ask michael so there's an interview today but It was asked in a little bit of a different way. It's like, but what do you do with it? You just sit, it just sits there. Like, you know, if you describe this as the best store of value,

that it's just this digital thing, it's a very esoteric point to just end at. Like, oh, everyone's just going to store value in this thing and everyone's just going to store more value. and the logical connection of it is well no because it's money and that's currency and then you're going to use that thing called bitcoin to buy food at the grocery store gas at the gas station on a direct basis that that's the end state if you don't have that logical end state none of it makes sense so we're all just holding this bitcoin it's all going up in value but to

what end the currency piece of it is actually what helps it become more logical yeah and this was the piece you wrote right before this one right is the um um it's like schrodinger's money like bitcoin only has value the exchange theory of value oh yeah that was two yeah two ago yeah yeah um different that that's a little bit of a different point but my point i'm making here is more than it confuses people because people in the public you're like you're not going to do anything with it right it confuses people if you and it's not to say create a story for the sake of creating a story but it's i just told you a real life example right this happening if you don't connect the logic we're like if your logic is and we're all just going to hold bitcoin and

it's just going to exist and it's going to go up in value and there's going to be fiat currency it's like how how does it just keep going up in value it's like well it's going up in value because it's actually money and money is used to coordinate trade and in the end people are actually going to be using this money to pay each other directly that is actually logically coherent whether or not someone accepts it as the reality that is at least logically coherent to to paint a vision otherwise it's just kind of the logic of everyone's going to hold bitcoin and no one's ever going to spend it but it's just going to keep storing value for everybody and that it's it's particularly confusing because it's not a lot like the logic it's not that the logic breaks down

it doesn't end at the point that it actually ends at which is it's used as money to leave people confused because they can't draw that yeah since you're not drawing that distinction for that or not even drawing it for them but highlighting it to them they get they get lost at that sort of this sounds like a ponzi scheme because everybody's going to buy it store their value in it right yeah there's something missing there's something very logically that is the true reality that's missing from the end of the and it fascinates me people are so afraid to admit it like yeah but i i don't think it's so much afraid to admit it i think that it's it's actually believing it and that that world can exist where you're just the world can exist where you're just storing

value and spend or you're just storing value in bitcoin and spending your dollars since you since you ran with this beam last week too right um next time i see her i'll you know i'll explain this directly but that world can only exist where very few people hold bitcoin and the majority of people hold dollars but if for the same reason that you started hold bitcoin if everybody figures that out and everybody's holding bitcoin then that reality can't exist yeah well it's it's fascinating observing it as a business owner that obviously we're a bitcoin company are a lot of our counter parties in the space where there's advertisers the commons are bitcoiners but

it's been like the last six months like we just we're doing the design collab with skylar from finite supply he sent me his upright invoice like the the amount of counter parties in this business both sending invoices to and receiving invoices from that have the option to pay um in bitcoin is increasing every month satoshi pacioli when i go to pay my monthly bookkeeping and accounting services zap right invoice bitcoin boom like and i can see it here personally and this is obviously this is a bit of anomaly to the broader public because we are a bitcoin company but you you see it every day what you're doing it's not just bitcoin companies doing this right And that's a, I mean, that's a good point to help connect people just on seeing this future vision. And I think it's important to articulate that Bitcoin is currency today, like from an economic atomic level, it's currency today. It's, it's not objectively, objectively, by every definition, historical or otherwise.

you know historical in terms of the context of how people have defined money practically just in terms of how people interact with money bitcoin eliminates the issuer entirely from all the functions that an issuer previously played in the function of money what it what it doesn't eliminate is you still need tools to interact with bitcoin um you still need a computer you need a hardware wallet you know those tools you know just because you need other tools to make the money a greater utility and a more effective currency doesn't mean that any of those tools that you need are reinserting an

issuer into the equation which is the critical piece between money and currency on the payment side the other thing that it needs is tools to help people facilitate bitcoin payments that zap right you know like you said an invoice well we created an invoice to make it easy not just to accept bitcoin but to accept fiat and bitcoin side by side but then we have a lot of things in that piece of software that help provide for you and for the person who sent you the invoice the business context you have the records what you paid not just the amount but what you paid for so that you can then do your accounting we provide the bitcoin to fiat accounting cost basis all of those pieces just in the context of the invoice and we you know have an api that does

the same thing and a virtual point of sale and different payment templates those are building out bitcoin as a currency system putting tools in merchants and entrepreneurs and ultimately consumers hands that allow them to functionally like anybody can send bitcoin to anybody else But the world of payments necessitates combination of business context and the fulfillment of goods and services. Each one of those type of payments needs infrastructure to be built around it to make it not technically possible because it's technically possible today, but functionally easy for a consumer and a business as more of those tools exist. The tools have to exist for people to use them. People adopt the tools, and then more people use them. It's an iterative cycle. And that's another reality. If people don't use Bitcoin as currency, then the tools won't get built to make it better. it is currency so the economic gravity of the situation will will dictate it that it will regardless of the economic friction that might be created by some regulatory apparatus but the point

remains that those tools still you know even if you've removed the issuer from the core of the currency system you still need tools to be built to make payments practically adoptable for individuals and businesses and in the future bitcoin is going to have to be built into every payment system every bank every you know again every type of transaction a real estate transaction on a oil transaction a gas transaction a grocery store transaction a gas station transaction that is actual work that has to be done in order you know if you want to pay for gas the gas station some people have to get together to build bitcoin payments into the gas meter meter yeah right um so just understanding that it's it's a process but but none of that changes the fact that in

the background money is moving between counterparties without a central issue or not needing a central issue yeah did you uh did you listen to the all-in podcast with the the collison brothers yet that we were talking about saturday i've heard multiple people have reached out to tell me about it but it's hilarious because you have and the reason i bring it up is because f right after i told you to listen to that because i'd listened to it the week before and they still have a fundamental misunderstanding of bitcoin they use the old tired trope like we implemented bitcoin a while ago back then it was on chains before lightning existed nobody's really using it it was slow and expensive and we believe that stable coins are going to be the currency

of choice in the digital economy bitcoin really isn't a currency um and it's hilarious because going back to that invoice i received yesterday morning and they had four percent premium on fiat payments and i paid in bitcoin um and then just uh spent and replaced immediately and i talked to the person who sent me the invoice and that's anybody who's sending zap right invoices i haven't really done it yet but it really was the kick in the ass just experiencing it yesterday in person put a premium on fiat because i saw that four percent it was only four percent and i was like i'm paying in bitcoins i don't want to pay that and i talked to the person who issued the invoice and you're saying yeah because it goes to stripe and that's like

around like the fee that they would charge us to to process this transaction and so you have the collison brothers out there saying bitcoin uh isn't really good for payments and then yesterday i consciously decided to use it because the friction they introduced with their the fees that they charge was enough in particular if you're sending large amounts yeah like i was it was a three thousand dollar invoice right yeah they they add up i get paid you know five hundred dollars wire i get a five hundred dollar wire from a sponsor the houston meetup and it i believe i get four hundred and sixty five dollars oh shit my bank takes a fifteen dollar wire fee and their bank takes a twenty dollar it's like seven seven percent i think yeah um but an interesting point

about that just connecting this idea is that when we built that invoice for zap right you can you can put a discount on it you can put a you can put a discount on bitcoin or you can put a premium on fiat that itself is a tool that had to be built you know a part of what allowed whoever sent you that invoice without having to have a discussion with you to say you can pay me in either but i want bitcoin and they didn't have to have a conversation they just could put a premium on it that the premium the four percent premium is like if you want to pay me three thousand dollars you can either pay me three thousand dollars worth of bitcoin or you can pay me three three thousand 120 right yeah i think yeah is that right yeah yeah um without having to have a conversation

that is a combination of power software but then also a tool building built that allowed economic incentives to eliminate a conversation between two peers to affect the transaction and i haven't seen the all-in podcast with with the collison brothers but i there was this um i don't know if you guys put notes in the show notes it might not be worth it but there was this funny um if if this was logan take notes take notes i'm listening i'm waiting there was a one of those steve job like um you know steve jobs used to be great for all the zoomers out there that don't remember steve jobs great product pitches he would you know deliver this beautiful new phone you know and it's in this auditorium and and it worked because he was steve jobs

but all these tech founders try to replicate it and they try to to integrate his showmanship but for products that just aren't nearly as significant and and anyway so one of the hollison brothers is up there talking about how they're integrating stable coins and he it's almost like a humiliation ritual obviously he doesn't understand it but um he's talking about um we're going to use solana and i'm going to open up my uniswap wallet and you know has to reference all these different weird things about the shit coin world and he's like and i know i send it and watch it's done it's like bro like these networks are like ephemeral things sitting on top of the dollar the whole thing here is that fiat's getting debased you're called people call them stable

coins but they're just losing the same value that the dollar is losing and eventually they're going to be worthless and but just the way he like went through the transaction and was like so he's like and now it's just instant done like done it's like man when this guy figures out bitcoin he's gonna be so embarrassed right by you're standing there like i don't even know how to use uniswap like i've how would like so you're he's explaining that that use case and as an end user i'm like okay i've got to download uniswap and well i mean not even that i just thought it was like uniswap you're fucking fucking around with that shit you know yeah like well think about this There were others that he mentioned, but it was just like thinking that that was the innovation.

And in my mind, not only do I know that the real innovation is Bitcoin, and again, people can think that the friction to Bitcoin payments is capital gains taxes. It is to an extent it ranks like a distant third. The payment tools need to be created. the biggest thing limiting adoption of bitcoin payments is bitcoin adoption as a store of value as more people have it um but that the way i also think about all the like why the stable coin stuff is noise and people use them so i'm not not saying it's invalid people in the bitcoin mining space use it i don't think it's interesting it's going to have the same fate as fiat currency but it's like a worse venmo where if you send venmo if you spent money on venmo money's not actually

moving if you send stable coins like the only way that dollars actually move through the u.s banking system is through the fed and dollars aren't moving through the fed they're just it's the equivalent of a venmo transaction just within another closed network you can think of it as open because you know different wallets can connect to it but the actual dollars if you want to get them into the banking system and then say go spend them um at all the retailers except because like literally they're no they're they're they're functionally a worse form of dollars today the best you can do is make them as good as the dollar you know basically the dollar equivalent which they're not today but then what you do between here and now is spend all this time in

investment and they bought one of my friends companies so good for zach you know i'm happy for him but you basically have to do all this work to make stable coins equal to the dollar which is in the process of degrading and failing and i'm i'm not being rude having my phone out i want to check the transaction of the invoice i paid three thousand dollars yesterday when i paid it was before the market pumps so it was like three and a half three three point five two four million sats and the fee was 4400 sats so and i just was doing math like a 12 basis point did you pay on chain no lightning okay lighting 12 basis point fee going through the lightning network yeah and you you you got a three thousand dollar lightning transaction that went through like immediately

yeah and settled in their wallet immediately that's the definition of economic efficiency yeah instead of paying 120 i paid and part of this also to connect for people is because it is multi-layered that the if you have two people that want bitcoin on either side there's an efficiency because it's just one transaction versus three but also the reason why there's this gravitational force that will force bitcoin to be used as currency is that that transaction and transaction fees will fluctuate as more value is delivered by parties they're going to need to be paid for that but the transaction itself is trustless and evil lightning let's call it trust minimized but

even in that context between you and and your period functionally speaking you couldn't get that bitcoin back it was gone and there didn't need to be a central third party in between so the the transaction is not just more efficient because there was one transaction that was effective versus three it was more efficient because bitcoin's a trustless system that itself is able to move value between parties more efficiently than introducing trust and then that trust is a more arcane process of validation that requires more infrastructure and work and more risk because the the strike fees are so high because they're taking credit risk there's risk of chargebacks there's risks of fraud and somebody's paying for that the system's paying for that

in a currency system that's 100 built on trust everything is credit but when you can push a payment that is funded and that can't be taken back that's also part of this efficiency game um the other side of it that people might be thinking about wondering is like well then the price of bitcoin went up it's like it's not just such as life it's that imagine a world where you had a hundred percent of your savings in bitcoin that you were maximally um exposed to bitcoin going back to that example like if i had taken payment in dollars at sixteen thousand and just sat in dollars versus converted all to bitcoin and then had to deal with the the currency consequences imagine you only in that same example imagine i only had bitcoin i only had that one

bitcoin the hundred thousand i had to spend the ten thousand dollars because i need to fix the transmission of my car which was necessary to my life if bitcoin doubled it doesn't matter i needed i needed the car fixed and i still have 90 percent of my savings you know and in reality when you're spending your bitcoin if you have virtually all of your savings in bitcoin which is someone like myself does and you not to out you but i know you well enough is that it doesn't matter if it goes up because when you're spending bitcoin you're spending like a very very small fraction and then you're working to get more bitcoin you know like it's just that that that's trade reality of of economics you have certain needs and wants and it doesn't matter if the price goes up if you have

virtually all your money in it because you're spending a small fraction of it yeah does it it doesn't make sense if you only have five percent of your money in bitcoin and 95 percent in fiat yeah sure spend some of your fiat but you have too much fiat too yeah in this example it'd be better if the price didn't crash down to where it was before the pump yesterday oh that's the time of recording yeah no but i mean for the same the same example i just described would have been better but like you're just for like a period of 20 hours like i paid that invoice and then it was literally i paid that invoice immediately re-bought plus um what i would have saved on what i did save by not paying a fiat and having to stomach those strike fees like i paid in rebought

so i was back to i was back above where my bitcoin balance was before i did the payment and the person received the payment i for a period of time in the last 24 hours they were up 10 on that so they had 3300 worth of value at one point yeah and what i would say is like none of that really matters no right like if again imagine illustriously you have a hundred percent of your savings in bitcoin it's like you had an invoice to pay and you're gonna get paid in bitcoin in the future and if you're endeavoring in your business as you should be it's like i gotta be spending fewer bitcoin than i'm making for this economic activity to make sense and the the part that ties it together because someone might be sitting there thinking like well if it goes up certainly there

was a consequence to that and like yeah you know you have to make economic decisions do you want to consume or do you want to save and maybe not all good you know consumption decisions are good and you should have saved rather than consumed and in business you can endeavor to make investments that don't pay off if you're minded to consume on only the things that you really need and if in business you're endeavoring to produce things of value then as you're spending bitcoin as it's going up you should be doing that with the mind that you would only pursue that activity to make more bitcoin and this and the piece that you mentioned that i had written before on the exchange theory of money it's that value is actually created through exchange so in that

example it's less so um that the you know between you and your peer someone has the bitcoin you know someone has the how many sets 3.5 million so the value went up the value went down for one of you it's up for the other one you went down but you paid someone to do a service it's vital to my business that's vital to your business he got paid as compensation and your business is generating bitcoin that's how value is created value is created through trade you needed somebody with some specialized skill to do a part of your value chain so that you can deliver services to all of your consumers the the podcast listeners the readers of the tftc media empire that uh we shouldn't laugh at it is it is it is but um that that's how that's how

value is created through money money is coordinating trade it's not zero sum the guy who got the bitcoin that you paid he he got the money you got the service you sell that service to people you get more bitcoin yeah you know that that's not zero sum is the point the more that that happens the more that bitcoin is used as currency that is how it derives value doesn't mean that is every every value transfer the bitcoin helps affect is how that is great even if you're using dollars and intermediaries i'm just connecting for people that it's not zero sum like the same sats exists one person has it you don't but you're destined to get more sats by delivering a great service and through that operation more value is created for for more

More like, what's the term, more economic benefit. It actually expands. It doesn't remain static. Positive EV. Yeah. And we'll be able to talk about this more openly at the Bitcoin Takeover. Wonderful. Cliffhanger.

Cliffhanger. Yeah. So go get your tickets, freaks. Yeah, get the tickets to Bitcoin Takeover. BitcoinTakeover.org. Yeah, it's going to be an amazing day. capped off by the live tftc what bitcoin did but really spans across every you know every facet of bitcoin i don't think i don't think i missed any or we missed any in the program so

um i hope this real world example helped to articulate this point i thought about that on the go i think it's important too yeah it is to help some because i i can on the currency and money question i i hope people kind of come away with a better understanding of the distinction And from a practical perspective, it can seem pedantic, but it's currently being debated in Washington, D.C., and there will be consequences. So I hope people come away with just a better distinction of that. But then I can also appreciate how people can get hung up on not necessarily what's the point, but there seems to be so much friction. So why even elevate this as something that needs to be debated? and it's because of what bitcoin is at its nature and because people are really using this and that

the more that people use it the more effective the tools will get the greater the economic efficiency and then you know in the end the bitcoin will be able to be a working economic system for more people and help end this fiat calamity you know it doesn't it doesn't end without tools to exist to affect commerce and the more people that use those tools the more people that get a zap right invoice and pay it or you know pay somebody with btc pay or um any service um that the more people that use those tools and understand like this this layered thinking of like don't get hung up by the capital gains don't get hung up on the accounting it's like use it the more that you do the better the tools will get and that's how we actually get out of this

conundrum well thank you for building the tools and honestly exaggerate you for delivering the podcast i listened to two last week on my way out to marble falls i listened to the um kevin mccernan one that was phenomenal you're bringing in people from kind of outside the traditional bitcoin voices and then kevin dolan so those are two great podcasts i'm a consumer of the pod obviously thank you thank you for uh helping us on both ends of the business no and honestly like the tools are getting better like i mentioned satoshi patcholi like since we run our business on i think it's patcholi patcholi hey so let's get around patcholi that's on me sorry joe joe um i got your back but zap right like since we invoice via zap right and

has fiat and bitcoin it makes accounting very easy i don't stress as much as i was two years ago three years ago yeah it's all right in this business like exchange accounts if you have there's whether it's strike river they have business accounts they do good accounting like if you're using combination of self-custody bitcoin like zap right for big invoices that we receive load up an xpub associated with one of my cold storage wallets and that's where we receive it to if we need to get cash with bitcoin i have the ability to move that bitcoin from that wallet to an exchange to sell i typically try not to do that keep a balance on the exchange keep a balance and cold storage keep about some cash it's the the ability to run a business on a bitcoin standard

has never been better and it's only getting better by the day yeah and there's a lot left to do but the more people that engage in that and use the tools the better the tools get by reps and feedback and working out kinks and getting great ideas from customers as well as just more customers means more revenue means more capital to build more things so positive ev it's not zero sum it's not zero sun we used a modern day example we'll talk about it more on stage at the bitcoin takeover next week yeah um bitcoin takeover.org if you're interested in zap right zap right.com if you're interested in the piece it's on tftc.io it's on my blog rather than suddenly.xyz it's on my x x um parker a lewis i feel like i'm forgetting something but uh dot com slash ftc if you want

40 dollars off yeah there you go yeah uh it's a good deal best deal in the market um no i think that it's um there's other events during bitcoin takeover so if you find us on meetup uh bitcoin commons austin all the events that i mentioned at this at the start um are on the meetup page oh yeah come see us next week there's gonna be a lot more of this we've got we got some ideas for some evergreen content we're gonna work on so stay tuned for the series yeah peace and love freaks