TFTC: A Bitcoin Podcast - #601: The Bitcoinization of Finance with Pierre Rochard

Episode Date: March 26, 2025

Marty sits down with Pierre Rochard to discuss bitcoin rewriting the financial industry. Pierre on Twitter: https://x.com/BitcoinPierrePierre on Nostr: https://primal.net/pierre 0:00 - Intro 0:36- Casinos, burrito financing and defi 12:20 - Fold & Coinkite 13:57 - Recapitalizing with better collateral 24:01 - Can bitcoin cure the degens? 32:30 - Unchained 33:31 - Smoothing volatility and lending against bitcoin 42:23 - Inter-operability for the smoothbrains 47:48 - Political engagement 58:27 - Trump's crypto EO & President Kamala 1:05:09 - Leaving crypto behind 1:15:42 - Letting people touch the stove Shoutout to our sponsors: Fold https://tftc.io/fold Coinkite https://coinkite.com 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 probably should be our casino is the pinnacle of the high velocity trash economy uh they can be uh i think that if you're able to enjoy them in moderation like anything else right that

can have a role and if you go back and look at like golden ages you've got yeah good good culture around it uh but if it just turns into like me mod the you know slot machine like pushing the button robotically that's grim yeah we used to travel a lot to the midwest for lacrosse in college club lacrosse so we would caravan i would drive the van and every year we'd end up in st louis in the st louis the greater st louis area and one night we would go to the casinos and that's exactly what it was was grandmas and grandpas smoking cigarettes just mindlessly clicking the slot machine very depressing yeah they should be uh raising their grandkids well unfortunately their their grandkids had to move out of town because the

jobs left you know their kids industrialization yeah that's the uh it's funny we've had like an hour of prep we talked about saving philadelphia for like an hour lewis roberts came in we won't we won't um reveal his plan but i think it was an interesting thought experiment of how to reinvigorate a city that i don't want to call philly down on its dumps but probably needs a shock of life um a lot of a lot of cities do uh i mean obviously austin's like good and vibrant uh but uh even here we could use a new mayor yeah and that's you know i'm at the casino that we talked about the casinos in philly i'm hand up any philadelphians listen to this i'm in favor of shutting the casinos down and getting them out of town because

i don't think they'd be good for for the city um so it's it's being debated in texas of whether to bring casinos to texas uh in size or not and uh yeah i've heard conservatives speak on both sides of the issue well that's the rumor with the big trade the mavericks made earlier this year with luka donich was that they needed to get his salary off of the off of the the cap table or not the cap table but off of the roster the roster so that they can make room to buy a new stadium with the casino at the heart of it yeah i don't know about that yeah the uh yeah and it's i think it's a really interesting jumping off point for the broader conversation on the bitcoinization of finance because if you look out there it seems like we're at a crossroads society

particularly in the u.s i was talking about this yesterday like the the headline that hit the tape last at the end of last week was the partnership between doordash and clarna clarna providing payday loans to doordash users to get food quickly delivered to their house it's not a good sign it's not no people had strong reactions to that lots of funny memes came out of that uh mashups with the big short uh you know burrito collateralized obligations all this yeah well but it speaks to like this um yeah the the financialization of like everyday life uh that everything now has a monetary premium everything has to be financed uh can't afford food yeah and that's i i think

trying to figure out how to i mean bitcoin's already doing it in a way like i've noticed it's happening at individual level i've noticed in my life incorporating bitcoin as a savings technology over a decade ago has really benefited my life helped me lower my time preference reinvest in this business my family reinvest in my family but support my family um but still you have a large part of the economy that's on this hamster wheel that really needs this hyper financialized suite of products to just subsist at this point and we were discussing

over an hour ago before we hit record but this idea of the juxtaposition of DeFi and this theme that I think we're both very interested in moving forward which is the Bitcoinization of finance which I think if I were

to lay out the way I see the distinction is DeFi is really leaning into the hyper financialization of the world we're going to put every asset in a token and allow you to cross collateralize and get access to yield producing products whereas i believe what parker wrote many years ago bitcoin is the great de-financialization we actually need to just inject better money into the pre-existing system which is built up with layers and layers of credit which is getting out of hand yeah i i definitely think that there's that so that's true and and

then when we also think about who's involved uh and to me like defy is a very almost like a closed community uh that is separatist uh of oh well you know we're just going to uh have our own uh in the worst form the the ponzi's right that are uh or the rugs and all of this um but then if you look at, OK, well, what about normal people? Where are they? Are they in DeFi? No, they're not at all. They're in the regular financial system. And that's where it's like, OK, to me, like the Bitcoinization of finance is how do you get Bitcoin into someone's portfolio without them even having to consciously think about it or have to have even particularly strong conviction on it beyond just, yeah, you know, Bitcoin's fine. It's it's

here to stay, we'll continue growing, but they're not, oh, how do I set up my cold card with my node? And there's, I think, like a no man's land that exists between where we are in the funnel of being hardcore Bitcoiners and where the normal person is of, they're not anti-Bitcoin, but they're also not really like clued in onto figuring this out. Yeah. And we were talking about, so you have this chart and basically mapped the risk appetite of particular types of individuals or subsects of investor types and their allocation or conviction in Bitcoin. And it's a big U. Yeah. And on the other side of that, you, of who's most risk-seeking, that's where I think

that, yeah, there's the DeFi guys, right? And their mentality is always, how do I outperform Bitcoin? And so when they're trading meme coins, they have to compare that to the benchmark, which is just Bitcoin. And at some point, it kind of exhausts itself. So the meme coin craze, It gets self-dilutive because everyone's launching a meme coin. We even saw it with Trump, right? Trump comes out with Trump coin. And then hours later, Melania coins out, right? And it's like, and then Trump coin crash.

Yeah, because, you know, if you just step on it enough times, it has diminishing marginal returns. And beyond even wondering about the long-term economics of it, which are zero, in terms of the short-term extraction, I've seen so many people who are in the crypto sphere or in the Ethereum camp point out that they're tired of Ethereum going down 50% over the past year versus Bitcoin. They're looking at ETHBTC. They're not just looking at ETHUSC. They want to be outperforming Bitcoin. yeah and it's very hard to do what's the stat something like two percent of traders have actually ever outperformed the benchmark historically and that is benchmarks that are not bitcoin so now we have a benchmark what was the five-year category it was a 50 yeah it's north of 50 so so currently the five-year category is 65 percent um if you look at the

four-year CAGR though, it's 11%. So it just depends on kind of what timeframe you're looking at. Yeah. You know, wildly different result. It's a different chart. But it does, I think both charts show something which is interesting as well, is this question of, does Bitcoin have diminishing marginal returns? As you have more Bitcoin adoption, it gets harder to push the price like you know from 2011 obviously to 2017 yeah bitcoin can go up you know hundreds even a thousand percent uh but then have we reached a point where it's it's saturated and i think that's a like a really uh important economic question i've got my answers to it which i don't think so i think that that's such a limited amount of data that you can't really draw that conclusion from

there um but the i i look at it from like a top down or you could actually say it's more bottom up well the global assets right bitcoin's still less than one percent of all the global assets we think bitcoin's going to demonetize all these global assets then the the cagger is going to yeah it's going to oscillate it's going to go up and down depending on what's going on i think what's been going on is the tightened monetary policy after the coded inflation I think that immediately puts the brakes on Bitcoin CAGR because the end game is Bitcoin versus the dollar. It's not Bitcoin versus Ethereum or Bitcoin versus gold. It's Bitcoin versus the dollar.

Are you saying Bitcoin competes with the dollar? I heard it doesn't. I heard it's complimentary. Look, I've seen people present both perspectives in one presentation. right so uh you know one slide will say uh stable coins are here to stay and then the next slide will say uh the dollar is going to zero uh so you know i think that it's a matter of time frames right like i think that you could say like short term the dynamic is that stable coin dollars are going to replace foreign fiats because the dollar is the least worst stable coin uh but long term

that uh it's inevitable that you know we're not going to have a state of barter between two different currencies um and then it's a debate of like what does long term mean does that mean 10 years does that mean 30 years when i was first learning about bitcoin i thought it meant one year i thought i thought hyper bitcoinization would happen in a matter of months uh and then as i rolled or i'm like okay so it's going to be two years oh okay so it's going to be so now it just keeps extending yeah it's almost like the concept of lindy but uh this is the negative stuff yeah but at the same time like bitcoin is growing so it's not like uh it's not like we lost and like bitcoin somehow shrinking what's up freaks do you have a credit card are you getting cash back

or airline points or points for some other service guess what those are shit coins you want to be stacking bitcoin i have some groundbreaking news for you the team at fold has finally released the bitcoin rewards credit card they have a wait list i'm going to be distributing the cards later this year so you want to get on the wait list full plus members are going to get unlimited two percent bitcoin back on this credit card if you get on the wait list they're up to two hundred thousand dollars in prizes they're going to be given out so get on it as quickly as possible go to tftc.io slash fold and get on the wait list there if you're on the wait list you have the potential to win some of the prizes check it out sup freaks this rip of

tftc was brought to you by our good friends at coin kite they make the cold card queue my favorite hardware wallet the most secure hardware wallet on the market as you can see it's got the blackberry form factor full keyboard it's got two secure enclaves you create your private public keys offline the device never has to go online never does go online so you keep your bitcoin secure if you have your bitcoin on exchanges and you're looking to get it off secure it in the best way possible pick up a cold card queue go to coin kite.com find the cold card queue use the code tftc for five percent off if you're a power user of bitcoin like i am if you're running a business on a bitcoin standard if you're just a bitcoin or wants to secure your bitcoin get the most secure

hardware wallet on the market go get the cold card queue it's a beautiful thing again going back to the bitcoinization of finance i think there was a period of time there particularly between 2017 and 2022 where you had the meme of the archetype of the person who was looking at what was happening in ethereum and solana and other chains and saying they're doing interesting things in defy like we'd let them go experiment and we'll be inevitably be able to uh implement that in bitcoin which may be true but is it worthwhile is it advantageous is it something that we should be striving for and i think over the last two years particularly i might have been sympathetic towards that idea and like a hand wave like yeah maybe if they can do it maybe we can

implement it on bitcoin but now i think i'm more wholly convinced on this idea of bitcoin is a very boring asset in a sense and a very boring asset can lead to exciting things in terms of literally recapitalizing this credit system that's been built up hundreds of trillions of dollars needs to be recapitalized with better collateral and it's not flashy it's not fun a lot of people will say why do you want to help out trad five well it's like you mentioned uh most people are stuck in the traditional financial system and the only way they're going to get off the hamster wheel as you begin introducing this better collateral and going back to the graph the u-shaped graph you're telling me what the 1.5 trillion dollars worth of value is is that small

you know very thin sliver uh in the middle of bitcoiners who are happy with the risk return profile of just spot bitcoin um and and so i i think that like when we look at okay what is bitcoin's purpose right we always got to go to back to the white paper right uh peer-to-peer electronic cash uh able to send a transaction uh without a financial institution and i actually um now now i'm thinking like okay that is very valuable in a low trust society where you don't have rule of law and the the financial system is broken but it's also i think that like when we look at Hal Finney's post on Bitcoin banks and all of this. Um, what, what part of our financial system is low trust? And I think that it's basically just the money printer. It's the

federal reserve. Everything else like is actually pretty functional. Uh, and you know, there's some caveats, obviously you got Bernie Madoff and the occasional fraud that gets uncovered, but Bernie made off you know he's in prison uh like so the rule of law kind of did work in the end that um but uh if you look at what the the fed has done or what they did you know going off the the gold standard nobody went to prison for that uh and that to me is okay so here's the uh it's like the one shot thing that bitcoin solves in the context of the united states i get that like in other countries they might not even have a functioning financial system at all and so bitcoin has almost like a wider aperture to operate of yeah you definitely you need lightning there because

there's not any way of having a payment system because everybody's a scammer they're like for real um so i think that uh when we look at the traditional financial system and everybody's got these uh stocks and bonds and they maybe like the most advanced financial advisor not speaking of my wife because she's way more advanced than this but you know they're like talking like oh okay you should have like a two percent allocation to bitcoin um but even there like a lot of these platforms they don't even have the bitcoin etfs approved listed of a product that a financial advisor could even put their client into and sadly most financial advisors still think bitcoin's like tulips and you know beanie babies so they're not even on board with it just from first principles

and they're still at a zero percent so it's for them okay if for example let's take the example of microstrategy if that gets included in the s&p 500 now by default everybody has bitcoin exposure in their portfolio whether they want it or not maybe there is some debate about oh are you imposing bitcoin on people but same thing with the strategic bitcoin reserve right like trump coming out and saying we the people who you know that's the federal government at the end of the day that's supposed to be we the people uh are going to hold bitcoin now all the voters have bitcoin exposure whether they like it or not and that's that's where i think that uh as bitcoiners i'm actually i'm okay with that i'm okay with um saying hey look like we actually do know better

than a lot of people uh and that in that sense somebody who has a completely erroneous understanding of bitcoin and is unwilling to advise their clients to have some kind of exposure um it's good that their client gets exposure through uh layer 21 scaling technology of micro strategy being included in the s&p 500 yeah and i think micro strategies is the tip of the iceberg like obviously sailor really going for it attacking it's a signal capital markets a signal but they're like what is the progression the next iteration of this derivative passive exposure that financial advisors and their clients um will ultimately have in their portfolios whether they like it or not i think it bifurcates into uh on one hand you have like let's say apple decided to put bitcoin

on their balance sheet like they wouldn't become a 99 bitcoin treasury company like like micro strategy is where you know he's really sailors leaning into okay we're going to be focused on bitcoin as a treasury operations like um almost a quasi bank right it's an investment bank that's going to be focused on creating new securities um so if if apple put or even tesla right but tesla has bitcoin on their balance sheet they don't really get valued in the or evaluated in the same way that strategy does of a bitcoin pure play it's really about okay how do we have kind of a hybrid uh business that is yes has bitcoin a part of the treasury strategy of it's going to expand the capital base provides that permanent capital that's going to you know have a offsetting

effect on other business trends for example how many how many more iphones can uh apple actually sell uh that there's kind of like a growth cap story there of okay do they just buy back stocks or do they buy bitcoin because in the future there's going to be m&a opportunities and you're going to need bitcoin to be able to you know acquire another company all of that aspect of it um and so i think that the hybrid approach is going to continue to grow and then on the other end the pure bitcoin approach is going to continue to grow as well so we're seeing uh sailor coming out most recently with strife uh i like the names of these uh strike was uh before that it didn't like that he was stepping on jack mauler's toes there but i'll let them you know beef it out

uh but uh you know always looking for okay what's a gap in the financial system where if we create a bitcoin bank security uh that that's actually going to uh you know be able to address a need among portfolio managers asset managers i also so on the hybrid side uh andrew hans and battery refinance of saying okay well you know take a traditional real estate investment add bitcoin to it and then lend against that um i think that makes a ton of sense as well his bit bonds proposal that i got to hear about in dc same kind of concept at the sovereign level makes a lot of sense too of saying okay uh because of the mismanagement of the previous administration we have this interest cost that is blowing out of proportion because like Janet Yellen and the

Bidens what they were doing was in interest rates were very low and instead of refinancing to a longer term of saying okay well let's go from a five year to a 30 year to take advantage of these lock in these low interest rates they actually went shorter to even drive down the interest cost even further which is like great short term but financially irresponsible long term and then with covid inflation and raising interest rates suddenly they've got to refinance trillions of dollars on the short end of the curve that the interest cost exceeds the pentagon budget like overnight and so uh andrew's proposal makes a ton of sense of saying how do we how do we get But how do we refinance in a way that lowers the interest costs long term?

Well, you do what Saylor's doing. You have basically an embedded call option on Bitcoin and say, OK, we're going to have a hybrid instrument that is, you know, the principal is still protected by the full faith and credit of the United States. And then the kicker is that you've got Bitcoin on top of that. yeah and do you think that's honestly a feasible uh feasible path to solve the debt the debt situation there's been a lot of people yeah uh in my mentions on twitter saying it's asinine well i i used to be cynical about politics uh and then i got a taste of winning and i realized like oh uh actually we can meme it into reality like truth is on our side uh so i i think they we have to advocate for it uh and and we've you know as trump put it we got to fight uh that's that's what

it's all about if we start uh negotiating our cell against ourselves and you know kind of having a defeatist attitude of nothing ever changes uh i think that's the bad approach i think the right approach is we can just do things and if we if we lose the fight that's fine we'll we've got you know andrew's a brilliant guy he's probably got 10 more ideas that you know we can go fight for as well great agree and i think whether it's bit bonds or the commercial real estate structure that that battery has created i think and andrew and i discussed this in new york when we did that event for unchained going back to your u-shaped curve on the left side you have the risk averse financial advisor who is afraid of bitcoin's volatility you have the middle of

the curve which is long-term hodlers to understand what they own then the right side which is the d5 degenerates want to outperform bitcoin the left side of that curve like trying to de-risk bitcoin particularly its volatility i think products like this are important because what drives volatility it is the uncertainty of each individual hobbler and whether or not they want to sell or hold at any given price point in time and creating products that pull bitcoin off the market similar to what micro strategy is doing but in structured products with durations that can be public that gives that left side of the curve more certainty like all right we have a subset of Bitcoin that is in these products for this duration. And so I know that this Bitcoin is

most likely not going to be sold outside of some extreme event where the borrower gets offsides. Yeah. And I think we also have to have empathy for the people who are afraid of volatility because they've been raised and conditioned in a world where essentially volatility is, you know there's the fed put and so it's constantly dampened this volatility uh the most recent volatile experience was 2008 for them and so for us bitcoiners like we've been through like four cycles since 2008 you know we're we've got battle scars um and we're not but we're not going to get new adoption by telling people that like they're you know i can't say the word but you know if they're afraid of volatility that, you know, that they are cowards.

And like, that's not going to persuade anyone. Instead, they'll just be like, okay, well, Bitcoin's not for me. We also have to look at the other side of the equation, which is the degents. And I think they have actually been contributing to the volatility, right? It's not just like going long meme coins. they also take advantage of all of the leverage that they can take trading bitcoin and so if you look at march 12th 2020 with that covid liquidation where uh it gapped down uh and like bitmex went

offline you know it's like uh offline they pulled the plug yeah yeah you hit the circuit breakers the unofficial you know circuit breakers um and it's you know every i think almost every crypto exchange has leveraged products where um there's a liquidation mechanism that liquidates you at the worst possible time when it's going down and it has cascading liquidations and so we always seem to hit these volatility pockets where or liquidity pockets that cause the volatility and that it's like okay how do we get a product for the degens that does not yeah it's not self-harm uh that like you know it crosses that chasm uh that's that's where i think that there's also an opportunity of like okay we got to bridge this gap uh and develop things that are

more responsible and more mature uh that exist in traditional finance uh but that are not like a hundred X bit max, you know, yeah. Liquidations. What is, what is something like, what is a product that bridges that chasm look like? Well, so it's, it's about like, it goes back to what you just said, the duration, right? So, uh, if people who are, who are, uh, wanting Bitcoin exposure on the de-risk side, um, if they are so risk averse that they will only lend to a degen if they liquidate if the price drops then essentially you know they're getting paid interest to not take any risk because the liquidation happens before uh there's any risk to the principal um and so it's like okay well how about you take on some risk of uh principal risk but you do it

on a time frame that is longer than the bitcoin cycle and so then that way for on the dgen side It's like lower time preference degen and then lower time preference lending so that you're not in this situation where you're liquidating at the worst possible time, which is bad for everyone, because it's actually it's also bad for the lender because then the lender has to reinvest. Right. And so is there somebody to reinvest in after everybody's been liquidated? No. So you're earning zero percent at that point. um and and so it's like okay if you had a higher utilization rate of your capital then your total return would actually be greater than if you're just constantly liquidating people and then stopping them out and then having no utilization and so for my caveman brain explain to me how the dgen is satisfied with this product like what is the structure of this product look like well so

So it's that they still have leverage. Right. And so if if the lender is still thinking in dollar denominated terms because they want something that's more stable, they're afraid of volatility. And so they have, you know, let's say 15 percent or 10 percent rate of return in dollar terms. and the degen expects bitcoin's kager to be 50 then you have that that that uh you know let's call it a spread that is what accrues to the degen uh and that uh for for the person who's risk averse it's that their downside was protected because if things didn't work out and for the duration of the product then the capital of the degen does get wiped out to pay off the loan uh and so it's like okay how do we go from breaking out of bitcoin's volatile periods which you know is that time frame of less than one year uh into a longer time frame of four five

six years uh to get out onto the risk curve of okay now we're no longer talking about bitcoin's day-to-day volatility instead we're talking about is what's bitcoin's long-term growth rate um and that from a degen perspective you're still you know making a gamble in the sense that you think that bitcoin is going to outgrow your cost of capital which might be you know between 10 and 20 percent um and so that's i think uh the the more responsible way of instead of going long solana and saying oh solana is going to outgrow bitcoin or ethereum is going to outgrow bitcoin um or I'm going to hold a leverage long Bitcoin position that can get liquidated if Bitcoin, you know, flash crashes. That's where they are getting ahead in terms of what their objective

was, which was to try to outperform Bitcoin. This rep was brought to you by our great friends at Unchained. As Bitcoin's role in the global financial landscape evolves, understanding its potential impact on your wealth becomes increasingly crucial. Whether we see measured adoption or accelerated hyper Bitcoinization, being prepared for various scenarios can make the difference between merely participating and truly optimizing your position. This is important freaks. This is why Unchained developed the Bitcoin Calculator, a sophisticated modeling tool that helps you visualize and prepare for multiple Bitcoin futures. Beyond traditional retirement planning, it offers deep insights into how different adoption scenarios could

transform your wealth trajectory. What sets this tool apart is the integration with the Unchained IRA, the only solution that combines the tax advantages of a retirement account with the security of self-custody in any future state maintaining direct control of your keys remains fundamental to your bitcoin strategy go explore the potential futures at unchained.com slash tftc bitcoin is going up make sure you're protecting it the right way make sure you have a good partner that is unchained go to unchained.com slash tftc and so i imagine if we're able to cross that chasm volatility actually becomes more suppressed i think so i think so because then you've got Bitcoin that are going to be sold, not based on where the Bitcoin price is, but just based on the

fact that the term of the product has elapsed. And so at that point, they're paying off the debt or they're refinancing it. Right. Which is like how every other market works of, you know, if you look at mortgages, mortgages get refinanced or when you sell your house, somebody else is taking out a new mortgage to buy the house and you know we we look at that as bitcoiners we're like oh well is this the financialization of bitcoin and as we're saying like it's kind of the opposite you're bitcoinizing finance because now from the financial side the collateral is no longer you know you look at a house okay what's a house it's a long-term consumer good it's depreciating your your house from a physical perspective is constantly falling apart i've experienced this

firsthand. Entropy exists. Yes. And so you're using up your house and you've got to constantly do repairs. You've got to constantly maintain it, renovate it, et cetera, and then eventually knock it down. And so this is the collateral that is backing a very large percentage of the financial system is something that's falling apart. And on the commercial real estate side, arguably it's even worse right of uh people don't want to return to the office now you've got all of these uh over invested you know commercial real estate deals right outside the windows of this this building yeah empty office space yeah i mean it was the one down the street facebook built and then backed out of the lease before it was even finished being built so that's the collateral for

these loans yeah uh and so i think that from a traditional financial perspective it's like they they want to be lending out dollars against good collateral that is long-term going to increase in value uh not long-term have lots of question marks about okay are people actually going to want to live here or are they going to want to work here um and so there's there's that part of course there's the corporate bond market as well uh where hey look like if you're doing you know leveraged buyouts with drunk bonds or even these like private equity rollups of dentistry practices. It's like that's your collateral. And so, you know, as Bitcoiners, I think we've got to like take the win and accept that.

Yeah, Bitcoin actually, by virtue of being the superior asset, it's a superior asset in any context, including from a traditional financial perspective. And then people are like, well, this is a big question. Are you perpetuating the traditional financial system? You know, to Parker Lewis's question, are you actually definancializing if you are Bitcoinizing the financial system? And I think that it's long term, yes. Short term, no. And so, you know, there was a cabinet meeting just a couple of days ago and Treasury Secretary Besson said, we're going to re-leverage the banking system. because after the financial crisis you know they put in place all of these regulations to kind of try to reduce the risk right and limit yeah but changing reserve requirements what assets

can be held as reserve right yeah uh limit the risk taking on banks uh which i think you know might make sense uh but uh it also it does stymie economic growth because the economic growth is you know there's no stopping this train as our friend linaldin says right like it's a debt-based system that the debt if you start limiting its growth then you're limiting the growth of the economic system yeah and like bringing this back to bit applying the bit bonds idea i thought the way andrew framed it was incredible because you um bring these bonds to auction let's say you his example was you raised 200 uh or you raised 2 trillion you take 10 of that put it in the bitcoin but because you have that back end bitcoin kicker you're able to lower the interest rate and

this is something that has blown my mind when you look at what unchained is doing and others in the space um in terms of just simple vanilla bitcoin collateralized debt you put bitcoin up you get in return over collateralized pretty significantly in most of the products on the market and when you think about the risk to the lender or the individual providing liquidity to that desk it's very low because bitcoin is this incredible collateral asset not only from the sense that it's extremely scarce or perfectly scarce but it runs 24 7 365 can be liquidated at a moment's notice and it's fungible yeah right like real estate like every building is different you know they say location location location like bitcoin doesn't have that so utxo set as a utxo yeah and

we need that's another chasm we need to cross um i think to really throw fuel on the fire of this bitcoinization of finance is getting inappropriate cost of capital for the risk that lenders are actually taking on with these bitcoin collateralized products because if you understand bitcoin and obviously it's expensive now because there's information asymmetry most the market doesn't understand this yet but you have to imagine over time it will become obvious and imbuing bitcoin into these products with what i would deem to be an appropriate cost of capital is a way to create economic growth because people can access cheaper credit so i think that there's the information asymmetry but i also think there was a regulatory problem which was that uh under

under biden and arguably under prior administrations as well there was this um essentially capital controls on on bitcoin uh where you know especially if we look at operation chokepoint 2.0 the fdic sending out these letters of like oh you can't even enable buying and selling bitcoin through your bank because they i think had this chartlist ideological view of hey look like currency money should always be issued by the state and and then they also had this reputational view of bitcoin's used by criminals you know it's for libertarians all this like they don't like it and so if they didn't even allow banks to offer to their clients just basic buy sell right like the most uncontroversial product you could have for bitcoin um i think that if they had enabled

that before you know it then banks would have been lending against bitcoin and if the commercial banking system is lending against bitcoin that's i think ultimately what really gets interest rates down because they're the closest to the money printer, right? In terms of the Cantillon effect, it's like Federal Reserve, commercial banks, wider financial system, and then us plebs on the other end of that, right? And so I think that now with this new administration, they're going to enable banks to actually work with Bitcoin directly. And they're going to work with it, yes, on buy-sell, but also on collateral side, and that's going to push rates down. And they're going to be able to not just like lend against Bitcoin themselves, but also obviously they're

going to be using platforms like Unchained, you know, lots of different vehicles, being able to underwrite a mortgage that has Bitcoin as part of the collateral, right? All of this is how we get Bitcoin to essentially take over the financial system and get the holding period. The median Bitcoin held is two years. So, you know, I ran the numbers using my own node, like the median sat is held for two years. And if you look at Bitcoin's history, like that number has been going up. It's eventually like I think that number is going to continue to go up, especially if we have products that allow people to actually use Bitcoin, you know, as as as an asset that they can borrow dollars against, because then I mean, that's how you get a speculative attack, right? Like that's

how you get the ability to say we're going to have hyper bitcoinization because we're going to create so many dollars through the financial system that are going to be backed by good collateral that you're able to uh you know get to a point where now we can all live off bitcoin because the dollar has hyperinflated yeah and so that's how you said is you've somebody framed the question is the bitcoinization of finance enabling the traditional finance financial system said yes in the short term no in the long term so that's the long term that's the long term yeah because it's it's that basic arbitrage right of saying okay the dollar system let's say uh interest rates are at four percent and then bitcoin let's say interest rates are between 10 and 60 percent

The four-year CAGR is 11% currently, although I think that that's temporary. I think it'll kick back up five-year at 60%. So, you know, it's some greater number than the dollar's CAGR. And as long as there is that gap, then Bitcoin is going to grow more quickly than the dollar. The only way to close that gap would be for the dollar to increase interest rates, which they can't do because that just would crash the financial system. they're trying to lower interest rates right like trump's out there saying we're gonna push the 10 year down um or capital controls they tried that i think it did have some effect of slowing bitcoin's growth down uh but now you know we're in a freedom economy everything's legal now so capital controls

are gone um and i think that you know the third is just accept it and i think that's that's where at like the strategic bitcoin reserve i think is so important is okay do you really want to get into a situation where everybody who resisted bitcoin uh or ignored it or didn't understand it um they don't have anything to show for it because the dollar is worthless and they only had dollar denominated assets or do you want to set it up such that that you're going to essentially buy bitcoin on their behalf you know without their you know uh conscious decision to do so and then you get to a point where the strategic bitcoin reserve let's say it had one satoshi for every dollar out there and it was like 100 reserve fully backed unlike unlike the dollar ever was

with gold you know with the with the uh federal reserve when when um 6102 came out i was kind of doing some digging on this the federal reserve was 40 percent backing the dollar with gold so for every dollar out there there was like 40 of it was in gold at the federal reserve i think like what what we should want as a policy outcome would be that every dollar out there is 100 backed by one satoshi and that it's fully redeemable fully redeemable um the uh the real bitcoiners reaction to that is yeah but then you have to like trust them right like and they went off the gold standard and aren't we just repeating history uh maybe unless we're actually lobbying and involved in the policy making process and actually influencing decisions

right it's like if you look at why did the gold standard fall apart i think it fell apart due to a lack of political engagement right like there's no other explanation for it and civilization is only held together by people with high agency doing things uh if we all just like kick back and say oh you know we're no better than our incentives and their incentive is to dominate us so i'm gonna let myself get dominated it's like what you masochist yeah the and you could do this right like you could hypothetically have a proof of reserves and you could just amend verify by yourself the what the government is proving they have in reserve versus the amount of dollars floating in the system yeah and it should be fully opt-in or out right so it's like

if you want to hold dollars that are backed by satoshi so basically you know if you look at one usd that's one set right because it's just you know as long as the that that that that reserve is maintained and then if you don't then you should be free to uh you know receive a lightning payment of sats by saying you know putting your 20 bill into an atm uh and it's it's you know the interoperability should be complete between the traditional financial system and the fiat system and bitcoin and that if if we get to that then i think that it's to the benefit of everyone In particular, it's to the benefit of people who are really vulnerable in the sense that they're they can't wrap their minds around Bitcoin and they're just like stuck in. And this is something I've thought about, like with hyperinflation of like, why do people keep using like Zim dollars when, you know, it's losing half its value in two hours?

It's because they can't like conceive of a different world. it's uh it's like a mental fixedness and we can yell at them and tell them hey you should be using gold or you should be using you know packs of cigarettes uh but that's not what happens in practice so how do we like gracefully transition the monetary system to everyone's benefit and upgrade it to bitcoin yeah and this is why it was funny like nick carter and others coming at andrew's presentation for bit bonds and maybe not his presentation specifically but the whole concept of a strategic reserve and how to acquire that saying why would the u.s government ever do that and i think to your point like we need high agency people the problem is uh pretty systemic

and i don't want to call it dire but if we continue down this path it's pretty obvious that it's not going to end well we have plenty of examples uh throughout history of similar societies doing similar things and ending up in a terrible situation so i think we need to get creative i think we need to think creatively and if i'm in the government seat um or the federal reserve seat the the whole meme of the soft landing was big uh post covid and printed all that money we're gonna begin to raise rates hopefully bring down inflation and manufacture the soft landing in the bitcoinization of finance in my mind i have become wholly convinced is the only way long term that you could ever think to manufacture a soft landing because again you need

to recapitalize all that bad debt with all that inferior collateral with better collateral get bitcoin into the hands of people unknowingly via these products and you wake up at some point in the future and it's like okay we've we've sort of fixed the problem to an extent yeah and it gets I think the biggest mischaracterization of Bitcoin is like, oh, it's for the apocalypse. It's like prepper technology versus, you know, Saylor highlighting this of like hope. Bitcoin's hope. Like if you think about it more positively, then you can think about it as being a solution to the problem rather than just saying, oh, well, the fiat system is going to collapse. And that, you know, this is essentially just the backup system for the 0.1% of people who had it figured out beforehand.

And so, you know, being actively engaged on it. So I think the other point on the Bitponds and the strategic Bitcoin reserve is like the deficit, right? People are like, how can you, you can't accumulate Bitcoin if you have a deficit. because you should be a net producer as Preston Pitch puts it. And I agree with that. The thing is that this is where I'm going to blend in some Stephanie Kelton.

Never thought I'd see the day. Yes. The government is a net producer because they print dollars, okay? So I have no objection to them printing dollars to buy Bitcoin. that's the only way we get to sats dollar parity and that you know as as as as that that sounds like to us of like oh well we don't want you know the the inflation i don't think it would be

particularly inflationary first of all because uh it's essentially you know it's it's not going into goods and services it's going into a monetary asset which is exactly where you want the money printing to be going to monetize an asset that is a money uh you know instead of over the past 50 years of monetizing assets that are not money like homes uh like the stock market um or uh like beanie babies literally right um so that i think is is the correct avenue to go down um that and obviously you know bit bonds and and the um the debt issuance you know as long as they're monetizing the debt we're talking about the same thing you know by a kind of just a different pathway yeah and like with the bit bonds idea like if you can actually issue that bond with a one a 10-year bond

with a one percent coupon right like we're talking about having to roll over and refinance all this debt at four and a half percent four point three percent whatever it is right now much preferable to do it at one percent and as you said the interest expense on the debt uh is costing the united states more than we spend on on defense at the pentagon so that is something if you want to begin like how amazing would that be as an american citizen having seen this chart pop up over the last two years uh two years ago was look the interest expense on the debt is approaching military spending and last year was look at past military spending imagine we could manufacture a scenario where the interest expense of the debt started to come down and peak back below military

spending how encouraging would that be it would be very encouraging and it also would reduce the deficit right like that that's that's the other part of it is that you know people kind of miss that uh what we're on right now is a death spiral right like it is this feedback loop that is very negative and that the only way to break out of it is with bold action it's not by like getting budget experts in a room and forming a committee to you know evaluate how to extend the social security age to 67 like that's you know a complete distraction from what needs to get done yeah people have been so stuck in this losing mindset i think millennials particularly in 9-11 the wars of the middle east 2008 covid or the european credit crisis whatever you want to

do in there there's a lot of losing for our generation embrace winning embrace engagement that's what i i'm honestly proud of people in the industry have decided to go and engage dc because i was guilty of it i was don't even engage the state it's not worth it but at some point you come to realize that you may not care about political power but it cares about you and if that is the case you might as well engage because there is no benefit to not engaging i i think that's right and that um with social media with x now i think that now it's like the best time to engage with the state because now we have uh an ability to speak directly to the people that and to have that voice be amplified on a national stage unlike any other time throughout

human history um and so in a way it's like it it's it really is like a golden age of being able to get good ideas out there, have a thriving marketplace of ideas. And so during my time at Riot, I saw this, for example, with the New York Times. The New York Times, under the Biden administration, was just an extension of the state. And so they had their marching orders to make Bitcoin mining look bad, focus on the environmental impact. and so they they they notified us that they were going to run an article about the carbon emissions that are supposedly coming from bitcoin mining uh so you know i go out there with my co2 monitor

do a quick two minute video of hey look there's no carbon emissions uh and a few months later when the new york times runs their article we replied with that video and we ratioed them and so by virtue like that would have been impossible 50 years ago because what would have happened 50 years ago is that they would have run the article in the new york times everybody would have read it they would have had this like weird misconception that somehow uh rockdale has hazy air which it doesn't they actually they manipulated the picture that was photoshopped the picture make it make it look bad uh you know put a chart showing our carbon emissions which you know it's just extremely uh obviously false uh and then uh two

weeks later you know we would run an op-ed you know replying to the editor and saying oh actually you know explaining our side of the story like nobody would have read that um and now with social media it's like you can ratio them and you can get your message out and you can actually get your message out further than they got theirs uh despite them being you know this giant media organization Um, and so, you know, that was really instructive to me of like, we live in a completely different world than, uh, than we thought we did or that I thought I did, you know, only 10 years ago. Um, I, I would have thought that that would be impossible to reply to mainstream media

like that. Um, and then from a political perspective, something else that was also very instructive, during my time at Riot was when the Department of Energy came after the Bitcoin miners and said, hey, look, we're going to dox your energy providers. That way the activists can come and hound them and try to cancel your energy contracts. Just taking them to federal court and suing the government and then winning. It's like, okay, so the state is not like this omnipotent leviathan that we as libertarians have often caricatured it as it can be that for sure but it's not

necessarily that all the time in every context um and so now with with elon musk and doge it's like we're we're seeing kind of a um and i i think bitcoin has uh uh uh has had an effect in this of saying oh uh there's a it's it's like if you're going to walk across a wire and the nervousness you have of doing that if you're wearing a harness versus if you're not like i i feel like bitcoin's like this harness where it's like oh okay this this will catch me if i just like go out here and take this risk and like you know actually talk back to the man right and challenge the authorities um that there's this decentralized system that i can just like bail out and you know fly to el salvador with my bitcoin uh or uh you know uh the the if you get your bank account

canceled like you'll be okay um the the uh that that i think is is has shifted a mentality i also think covet played a role in this obviously right like i think code broke a lot of authority figures and their credibility yeah and you can just do things and i think the the administration that's in there right now i'm thinking of like the executive order like in the lead up to that you had the crypto council you had that truth social post that trump sent out about ripple cardano solana and then he was like oh we care about bitcoin and eth2 i'm still trying to discern whether or not i think that was just classic trump sort of anchoring an extreme waiting to hear a reaction and then ultimately settling where he wanted to which was an executive order

that clearly defined and made a distinction between bitcoin and broader crypto and sort of said bitcoin's what we're gonna we're gonna keep the bitcoin try to accumulate more the crypto we'll just keep it and not really care about it but i think that's one thing i'm interested to moving forward when you look at the crypto council obviously a lot of pack money has been raised packs have been funded by ripple coinbase a16z and they are pretty close to the ear of the trump administration and are obviously pushing initiatives and potential policy that i don't think we would agree with but i think gang of the social media the ability to get the message out there very clearly and put good ideas out there that's why thank you to the bitcoin policy

institute and senator lemus for for throwing the bitcoin for america event because i think that high signal focused event is very important particularly at this juncture when the trump administration is is crafting policy around this um that that's what i'm curious like do you think that's something we have to worry about moving forward is the the influence of the crypto grifters on this admin well so uh i think that first of all trump's success is a testament to his ability to build coalitions right so uh you know we're the the america first mega coalition that included people like rfk and tulsi gabbard like that there's obviously going to forever be tensions whether it's about foreign policy or about bitcoin and crypto and uh that

you know there's the coalition building there's also like okay we've got to make sure that the crypto people feel like they are being included uh into kind of the policy making process and that they're being heard because they did contribute money and they do at the margin contribute a few votes here and there um the and there's midterms coming up right like that was not the last election ever uh the democrats if they have any sense at all are going to try to build bridges instead of you know uh burn cars burning cars yes uh and so i don't know it seems like they're really not going down that path of building bridges at all um but the so all that to say that um there's the coalition building where yeah it's important to be diplomatic and politically savvy

and then there's like let's make sure we have good policy uh and threading that needle is in a good day hard um but when i look at the executive order i thought the the end result was masterful of saying why not both right we're gonna have a strategic bitcoin reserve and we're gonna have a crypto stockpile they're going to have different policies right the strategic bitcoin reserve that is an asset that we want to go out and accumulate and not sell the crypto stockpile that has to be managed and so some of those you know the part of that management might be selling some of those now part of it might be selling some of those later uh but you know it's not uh the accumulation is only going to be done uh by by seizing it from criminals so you know if

brad garlinghouse goes out and commits crimes and you know he gets his xrp seized it could go in the crypto stockpile uh i don't think that any xrp has actually been seized so it seems like either uh no criminals use xrp or the criminals that do use xrp are getting away with it i don't know which what's the better narrative i don't think many people are using it i think i saw a stat that they had like forty thousand dollars worth of transaction volume in a single day at some point last week on that blockchain yeah uh although i've also seen stats that kind of seem like you know they're targeting some vanity metrics of uh you know making sure there's some circulation to keep the xrp army happy on uh social media uh but uh i definitely think that

they are more engaged on social media than they are engaged on uh actually you know uh using their their so they correct me all the time it's not a blockchain uh it's not it's a ledger that actually doesn't have blocks and they've lost a lot of ledgers uh the in the early days um but okay to get back to your point about uh policy going forward i think that as bitcoiners we got to continue to be engaged we've got to make sure that our voices are heard that we clearly communicate what we think is good policy um and then also kind of realize that there's a political process and that the outcome is not going to be 100 bitcoin it's going to be uh you know so some kind of uh political outcome that at the end of the day is much better than what we would have had

with president kamala uh where you know today we would be forced to use the ripple cbdc uh or uh or something worse you know we would all be in her re-education camps where we're learning about charlatanism how to get drunk before 2 p.m well that was that ever confirmed i think i think the i don't know i don't know well you know uh yeah i don't know what was i saw some videos i don't know which ones were fake or not the first picture of her post losing the election was her and i was happy she was with her family she was their niece and uh right next to her was a wine glass filled to the top we called it and nancy poor in my family wow yeah yeah well good for her but uh the in terms of like policy

moving forward what was i gonna say the um oh the like first step you were first ever guest on the show yeah and back then that was october late september october 2017 eth was full-on ico craze we're going to flip in bitcoin bitcoin is the myspace of crypto and since then eight years ago almost hard to believe had cycles but it seems like bitcoin is beginning to disconnect from broader crypto and i know nobody wants to make proclamations in one way or maybe i don't want to put words in your mouth like are we seeing a true dislocation between bitcoin and crypto where it will be obvious in hindsight that there was a point in recent years where the idea of a flippening or these things actually competing with bitcoin um just left the equation uh yeah i think

that we'll we'll look in hindsight at the uh ethereum phenomenon as kind of being a an abnormality and that the normal is fragmentation uh and so solana i think proves that where not only is has saw gained market share versus ethereum and essentially driven ethereum down um but then within saw massive fragmentation on the meme coins where new new adoption of let's say crypto or of meme coin trading can't keep up with the new supply of tokens and so uh you know even someone like brian armstrong was like hey look like we can't list the millions of tokens that are being issued every week so uh we got to figure out a different uh a solution so i think that there's like that massive fragmentation from a liquidity perspective on on that side of the ledger and then

on the utility side of the ledger uh there's a realization that um all all of the advertised use cases can just either like don't need crypto tokens at all and you just need a sql database and some good cryptography, just like, for example, Nostr. You know, it's like, yeah, you don't need a Nostr token. You can just use cryptography and WebSockets and databases like any other web technology before it. But while still having an ethos of permissionless innovation and that anybody can run a server, anybody can run a client,

having an open protocol, open source. So, you know, I think that that's fantastic. um and then on on kind of the the utility of um like all these other things like deepin uh decentralized identity like you were just listening to a podcast about deepin yeah yeah from one of the deepin thought leaders uh it was uh horrifying um let's and what was he saying well so i mean the the you know you've got to have a different token for every wi-fi hotspot that you go to uh where it descends into a state of barter right of okay well now you've got to have a wallet of tremendous complexity where uh you've got 15 different assets that you're trying

to flip between to to be able to access the wi-fi which is already hard enough without any tokens involved well there's bridges you can just bridge assets atomic swaps yes lots of opportunities there because then you've got a token for the swap you know yeah um so that i think is leading to an exhaustion among the crypto vcs of realizing oh okay so there's not going to be a token for every use case um and especially you know now with the sec saying okay well you know you can actually come in and register and you can legitimize your your token here with this new sec see it's really a moment where it's like put up or shut up right like okay you guys have been complaining about the need for regulatory clarity and that's holding you back is that actually

holding you back or is it the fact that your product doesn't need a token uh and that's a bigger issue it's a solution looking for a problem no yeah not the web 3.0 meme of last cycle nostrils a perfect example like that is web 3.0 you just have an open source communications protocol and if you need to monetize something on that protocol you just add bitcoin to it it's like not even natively but you're just like making people uh giving people the ability to find your lightning network address to your ellen address to send you bitcoin if need be um deep and similarly i think i saw somebody the combination of cashew and lightning creates a payment portal for public wi-fi like you don't need helium token for that it's combined bitcoin with a land protocol whatever

it is wi-fi protocol yeah um and i think that like their their last resort now is tokenizing real world assets yes we were talking about this as well i told you i had a phone call with somebody yeah yesterday i had to explain to them that it doesn't make sense to put gold on the blockchain a tokenized asset and then well let's let's say even if you did do that and you take you know ten thousand dollars worth of gold and you tokenize it and you put it on the blockchain the gold is still worth ten thousand dollars right and so that's where like i think there's like this disconnect of they think that like magically now the gold is worth like a hundred thousand dollars and that you've 10x your money right um they you can see you know they're like

oh well you know you tokenized bitcoin and that that did 100x and so obviously if we it's like no we didn't that's not tokenizing bitcoin isn't what you know uh caused bitcoin's value to increase uh it's the the value accrual uh understanding i think that's the biggest gap and they they think it's true for you know apple shares right like okay apple let's say is a two trillion dollar market cap company if you tokenize their equity it's still a two trillion dollar company yeah and the again going into like high velocity trash economy the seek for yield degeneracy like i've been thinking about this too like does creating these new avenues actually create efficiency or just create the ability for people to trade faster and like introduce that high time preference

sort of day trader and give them the ability to do this more efficiently which could lead to more volatility and underlying value the asset i mean i look like ron hood you can already do that stuff right so i think the steel man case for tokenizing apple shares is that there is somebody in a foreign country that does not have access to a brokerage account and that has 30 dollars and wants to buy a fraction of an apple share and you know more power to them i think that's that's great that they are wanting to invest in apple um it does that mean that the liquidity of apple shares is increased thirty dollars isn't going to do it you know uh if they have 30 million dollars they already have access to your brokerage account uh a lot of americans think that you know a a

millionaire in africa does not have access to a broker account yes they do uh they absolutely do it's actually you know pretty bad that you think they don't yeah well now that they're tokenized you can cross collateralize them these d5 protocols and rip the yield from the combined dividends or whatever i think uh yeah uh so you know also something that traditional finance does really efficiently um and i think that there's like there's uh always the uh tension the dichotomy between efficiency and decentralization this is something when when i was doing a deep dive on lightning like people would would concern troll about oh you're gonna have these lightning routers that are very centralized um because that's actually the efficient outcome and that

the only way you have a decentralized lightning network is if it's illegal to run a routing node because that way you know uh the government would crack down on any centralized actor and so that's how you keep it decentralized same thing with bitcoin mining right saying like oh uh the i even hear bitcoiners say like the state should ban large-scale bitcoin mining that way it decentralizes and to me like confuses the equality of opportunity and the equality of outcome right being permissionless is just that it's permissionless it shouldn't be that uh it's a guarantee of equality that oh everybody's going to be able to you know mine at home profitably so the same thing on the finance side right like this society is dysfunctional if you need

decentralized finance if you actually need it right because you actually can't operate a efficient centralized financial system no there's a lot of people that are confused by this which is like it's frustrating at times like a 1031 talking to prospective investors who like the flashy thing the d-pin the defy whatever the the buzzword of the cycle is and it's frustrating and you try to rewire people's brains and help them realize that there's actually inefficiencies and there's just use the sql database and internal ledger it's much more efficient divisional labor exists for a reason when it comes to things outside of making sure that you have a neutral distributed reserve asset like a blockchain or a distributed system doesn't make much sense noster maybe it makes sense if

the western governments of the world become so censorious that you can't get your message out on social media without it getting banned right now that seems okay but that future could arise in the future and noster is a good fail safe for that but just twitter was down recently i went on to noster to to be able to get my message out um so in a way it's like if you want more noster adoption you have to start uh not vandalizing tesla cars but vandalizing x you know it's like to all the angry libs out there just saying like maybe we could push noster adoption along here unplug some uh x servers obviously illegal okay you will go to jail i'm not saying you should commit a crime i'm just saying that in terms of it being a fail safe uh you know that's that

ultimately is like the use case yeah yeah but going back to like it's frustrating that you have to like rewire these brains which also like from our perspective is an opportunity like i we at 10 30 when me personally running a business here building a bitcoin treasury in the private markets like the longer those people are confused the better opportunities i get as an individual business owner and two businesses tftc and 1031 but i try to always have this back and forth in my mind of uh how selfish is that versus how how much we actually put a concerted effort towards making sure that people understand the distinction and the misunderstandings that exist out there and i've come to the conclusion that you just can't do it most people like the shiny thing

you got to find your tribe they're going to touch the stove yeah and they'll come around to it eventually uh because ultimately you know you can judge a tree by its fruit and so if they're just uh getting rotten fruit from the crypto tree and seeing that bitcoin keeps growing and growing and value then it's like okay maybe marty was right maybe you know but i also think i mean look you're doing a great job with on the education side right like this podcast uh tftc you know that's i think critical uh and it's not necessarily going to persuade somebody who is hardcore uh on the crypto uh camp but there's this there's this big middle right the silent majority that uh they're they're listening and they're taking into account people's arguments

yeah thank you for that well thank you for being the first guest too i think you uh you set this show off on the right on the right path being the first guest and it's funny i feel much uh i like to think i feel much more stable much more much less stressed out than somebody like the bankless guys who were pushing the ethereum meme on people um well now they have bitcoiners on their podcast i don't know if you saw it yeah yeah they've started to realize that the writing's on the wall yeah so they had lynn on recently are you going on would you go on bankless i i would go on yeah yeah if they want to invite me on uh happy happy to do it i think i have to rage quit bitcoin first and dye my hair uh and uh yeah shave my beard keep the mustache

um so yeah maybe but you know hey uh i've listened to bankless myself you know they've uh i'm always open-minded trying to you know take in other perspectives um but uh yeah it's a struggle in eastland yeah a lot of existential crisis going on going on over there we tried to warn them for many years for many years better part of the decades yeah and you know it's funny like some of them are just still like that you know the japanese guy on the island who's like the war's been over for 20 years uh that's you know gonna be them of like flippening next year it's like no this is not happening yeah yeah they shot themselves in the foot if they were going to compete they should have never uh i mean that you think the proof of stake is what did

them in i mean did them in earlier than i think ultimately they would have would have lost to bitcoin too but um and who knows with the emergence of ai the gpus probably would have gotten uh bought up by perhaps i mean i really think what did them in with solana and that it raised i think there was a greg maxwell quote or somebody in bitcoin talk forums very early on when there was a discussion about like oh let's build something better than bitcoin and the response was like yeah but if you go down that path then somebody else is gonna like build something better than you build and then you know it's like do we really want to have this constant churn of technologies that are resetting kind of the monetary network effects um and the essentially

the question was did ethereum accrue enough network effects you know by the time solana came out, which was like five years ago, which I think it was like five years after Ethereum came out, that it would be able to resist a challenger. And I think the answer now is no, that all you needed was somebody with better marketing savvy than kind of the cat purse, you know, approach Ethereum to get the mindshare. But also, you know, just being more pragmatic about saying, OK, we really don't care about decentralization, guys. It's like, why, you know, whereas the Ethereum people

were kind of still trying to LARP on the decentralization. Yeah. You have Vitalik, CatPurse, Wunderkin. It worked for a while. Well, yeah. Then you have, like, the Austin, like, VCBacks, HOTS, Lonicor, we got a phone. We got a phone.

Go-to-market strategy, yes. Lots of hype. And also, you know, the focus on the developers. because it's like once you're focused on developers you have to realize that the the the tool chain and the developer ecosystem that's constantly reinventing itself they're constantly reinventing the wheel they're coming out with like new programming languages new frameworks all the time and you've got to be like young and hip to like be to be chasing that shiny object and so if you're designing a decentralized system that inevitably ossifies not you know obviously bitcoin's like

always king of ossification uh for better for worse uh and uh that you know lots of people trying to uh create uh straw man arguments of oh you know you don't want to ever change anything no no what i mean is that uh if you look at ethereum it's become very hard for them to change because they're you know the the airplanes already took off and they're trying to like change the motor and all this uh and so same thing with solana like there's going to be a another thing that's going to come up and challenge solana because it's going to be using the latest programming language and the latest tooling and all this it's going to attract the developer attention it's going to attract the new meta right whatever that is uh after meme coins um

assuming that the whole thing hasn't played itself out yeah and this is you're getting at the core of what many in crypto have completely misunderstood about what bitcoin represents which yes it is a distributed system it is an open source software project there is tech there is software development necessary but it's really a monetary revolution at the end of the day and as you mentioned like greg maxwell saying do we want to sort of move the monetary network effect from chain to chain in a perpetuity no you want a shelling point around a particular network and that network effect creates more peer-to-peer nodes and meet space where people can exchange goods

for the value that is Bitcoin. And the whole misconception of Bitcoin as a tech phenomena instead of a monetary phenomena has driven people crazy. And when it comes to Ethereum in particular, there's people who have wasted like half their lives working on this. Some of the brightest minds got caught up in the utility narrative.

And recently, Jason Calacanis was making waves on Twitter, X, saying, you know, if you were to start your own coin today, how would you reset things? My reaction to that is like, that's the core of the problem, the resetting. You're, you know, you're walking away from all these network effects. And his problem is that Saylor owns, you know, what is it, like 2% of the supply? It's like, Jason, you've had years. You should own 2% of the supply. what happened man uh it's kind of a bad uh unhealthy envy uh there on his part really is particularly when you're drawing like straw man like look at what the hump brother what happened

to the hump brothers like well they had 50 of the silver supply and silver is a commodity that can easily be mined uh yeah supply increased whenever somebody sees that there's a supply crunch that that is the crux of it is that they're gonna mine more silver okay uh bitcoin they're going to mind less of it they're going to it's going to get cut in half every four years no matter what and uh i guess you know for for jason it's like that's that he that has even if he might know it intellectually it hasn't fully internalized uh for him so hopefully it does and then he can start investing in bitcoin startups and you know i don't want him to compete with 1031 but we love the competition grow the pie there's a lot of great companies great founders out there

that need funding and it is again going back to the internal back and forth it is a great shame that a lot of the incredible companies within the bitcoin industry have been overlooked by the vcs the broader vc community because bitcoin is not a shiny however i think it's also worked into uh the benefit of the founders and the companies in the space because they've been forced to sort of really hone in on running efficient profitable businesses and providing good services due to that relative lack of capital focused on the industry and the industry is better off for it everything happens for a reason yeah pierre i'm happy for you uh you left riot taking some time taking some time uh you know i i always take time with family

but uh you know why why not take more time with family uh and uh you know thinking about uh what comes next uh there's lots of exciting things going on obviously well i'm excited to see what is next for you i'll come back on the show well thank you for uh thank you for your support of the show over the almost eight years now it's been a tremendous pleasure uh i'm a long-time listener peace love freaks