TFTC: A Bitcoin Podcast - Tales from the Crypt #115: Dan Tapiero

Episode Date: November 12, 2019

Join Marty as he sits down with Dan Tapiero, Founder of DTAP Capital and Gold Bullion International, to discuss: - Ray Dalio's recent note - Dan's views on the current macro landscape - Why Bitcoin is already established - Why it's hard for institutional investors to approach - Bitcoin + The American Revoultion - Critical thinking - much more Follow Dan on Twitter: https://twitter.com/DTAPCAP Shoutout to this week's sponsors. Cash App. Head over to the App Store or Google Play Store, download cash.app and start #stackingsats today. Use the promo code: "stackingsats" to receive $10 and contribute $10 to OWLS Lacrosse you download the app. Casa. Use promo code “TFTC” to get up to $250 off your Casa membership … or hit their team up [e-mail] for a free demo, or to put them to the test with your hardest OpSec questions! Subscribe to our YouTube channel: tftc.tv Contribute to the show: https://tftc.io/contribute/

What is up, freaks? It's your boy Marty Bent here to introduce this week's episode of Tales from the Crypt. I had the immense pleasure of sitting down with Dan Tapiero from DTAP Capital and Gold Bullion International last week to get his views on Bitcoin, how he sort of came around to it, why he thinks it's already established, how Wall Street's viewing it, and how Bitcoin compares to the values of the Founding Fathers. It's a very good conversation. I think if you take one nugget from this episode, it should be that people need to think critically more. We need more critical thought in this world. It's something that is lacking.

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come over here often i'm very appreciative of the trek that he made i'd like to introduce you to dan tapiero co-founder of d-tap capital and gold bullion international dan welcome to the podcast marty thank you for having me well thank you for coming on again thank you for making the trek i know you don't make it over to brooklyn often what's you got no no i'm in greenwich in the city but no it's beautiful here it's beautiful and i'm sure it's a lot of fun too it is it is it is fun and uh new york new york is fun i have a big love hate uh relationship with new york but we're not here to talk about new york we were just chatting about ray dalio's and you said he skimmed through it this is something i want to uh really get into with you is not necessarily the note

that ray wrote in particular but the themes he talked about and like we were just chatting about These are themes we've been talking about for a while. So you basically came out to there are many factors that are at play here. You have pension and health care crises on the horizon with demographic shifts. You have debt-fueled economy and easy money asset bubbles everywhere. And I noticed you were talking about WeWork maybe being an end-of-cycle sort of tremor earlier this week. I think just from a macro perspective, do you think Ray is accurate in his description? Well, you know, I think he's sort of been on this theme for a little while.

I mean, he published something, I don't know if it was six months ago or another missive on LinkedIn. And he's had this framework for a few years. The fund seems to navigate relatively well. his fund you know even in periods where that framework is not operative so you know I this may be a big-picture concern you know not clear how he's positioned exactly except I do know he has I mean he's been quite public about this he has about 10% of his portfolio in gold which for the institutional money management world is a is is quite big and is a statement so you know for people who are out there saying well

you know is Ray really investing this way again I don't I don't know what his exposures are generally but to have a 10% weighting in gold I think is is a statement that that that he is playing you know that that idea is in his portfolio yeah especially at the AUM that he's operating with too yeah that's quite a position right yeah so you're you're a big gold guy let's uh sort of get into your your path towards gold why why you like gold and and how you had this epiphany with bitcoin recently it seems like yeah i mean well that there's there's a lot to unpack there in a way um you know but just just to go back for a second on the on the ray um piece i think that you know that framework can be the right one but it may not be super operative at this moment

um you know you could you could be in a situation where and i i i've said this a little bit recently on on twitter and then also on on real vision which we mentioned that you know i think this cycle unlike anyone I've ever seen is dominated by the president and we've never really had this before you know uh you know it's almost you know they I guess they call it direct democracy and he's tweeting his opinions and people are tweeting them back and so you know I see his ability to influence and I just don't see how he's going to put himself in a position to lose this election and part of that based on the way that he's been managing things is to have the stock market right up on the highs right into the election so um you know if you start with that

thought that he will i don't want to say it's not manipulate the news but he will you know um You know, he will make sure that the macro backdrop is favorable for the market. You could have a situation like the one Ray describes be postponed for, you know, perhaps after the election, maybe, or maybe further into the future, because, you know, Trump, as we've seen, he's had quite good success. The market is at an all-time high. He was telling everybody to go take their profits and spend wisely the other day. Oh, did he?

Yeah. Well, so then, you know what, then maybe he's going to come out and say no deal with China and, you know, the market drops down 10% and then he comes out and he says, oh, well, actually, you know, we will have a deal and we will have more fiscal stimulus. I'm going to cut taxes or whatever, you know, whatever. He's definitely watching this market like no president in the history of the country. um well yeah and and he's you know i don't want to say he's trading it but in a way he is it's like he's trying to manipulate algos with his tweets right because they'll just take words

in either speeches or tweets that he puts out there and and move markets with it essentially right well i don't i don't know that it's a day for day tick for tick thing like he comes in and He's like, oh, the market's falling. I'm going to come in with something. I don't know that it's that specific, but he's definitely aware of where it is. And I think he releases data points, positive and negative, based on where the market is, which is totally crazy in a way. But it's been relatively effective. yeah and uh howard marks wrote a letter a couple weeks ago that actually hit on this as well because

he's in a rock and a hard place right because you have eu you know the banking sector and the ecb going negative everybody going negative against the dollar so everybody's pouring in the dollar to make the dollar stronger at the same time trump's screaming a pal to lower interest rates and do you see a scenario in which trump or not trump wow it's actually funny that was Freudian slip there, the Fed follows other central banks below the x-axis. Yeah, I mean... Just because they're forced to? See, that's also a longer-term issue, meaning that, you know, at the moment, the Fed has

cut and they've paused, and the payroll number that came out recently was okay. I think a lot of the data globally has been soft and softening as a result of previous Fed hikes and also the tension between China and the U.S. I think has had a lot of business people and corporations holding off on investment plans and maybe rejiggering their supply chains to move out of China. Just, you know, there's been disruption. so you know macro macro is a medium term for for macro investing macro trading to be effective you have to have a medium term outlook and so unless you're going to trade you know day-to-day kind of thing and there are people who do that but you know I think there is a scenario certainly under the Ray Dalio view but there is a scenario where they they have to keep cutting rates doesn't

But it could be pushed off again for a few more months. If I'm right about Trump and the market into the election, it's probably, you know, the economy will stay OK enough and the market will be OK enough. And, you know, I don't. So it may not happen for a year or two. but if you're saying to me is it possible you know can we get down to 50 basis points or closer to zero on the Fed funds rate I would say yes and you know medium term you know the thing that's been driving this is that there's just no inflation at all and in fact inflation has been dropping and is very

low so what is actually going to get prices to start increasing you know we had this whole up cycle in the last few years and the Fed was raising rates from zero and they still didn't hit their inflation target so from my perspective a lot of those rate rises were not needed and I think that's what Trump you know no matter what what you think about the guy or his character or whatever it is he was he was right on last year when the Fed raised you know for the last time and shouldn't have and then of course in december we had a total meltdown in the stock market but you know we never hit their inflation target they were not supposed to raise that much

and so once again you know they've stopped what may have been an up cycle by hiking too much and the fed does that often and i think it wasn't the absolute level i mean this is all history and i I don't know how interesting or not, but it was the rate of change. They went from zero to two in an 18-month period or whatever it was, a short period of time. So it was that that was more of the break than, you know, that it was 2%, which is not that much. Yeah, but what does that say about the, I don't want to say the validity of the system, but like the structural foundation of the system if it can be manipulated by tweets from Trump? And he's not, his mindset isn't to do what's best for the economy of the country in general. It's basically to get the stock market to a place where he can get reelected.

No, but that's OK, because he does believe in that feedback loop, and as do old-time hedge fund guys like me and other investors, it is positive. The market goes up 20%, people feel better than when it's down 20%. That's maybe very simplistic, but it's true. But I think that goes back to the Dalio question, because the underlying structure of the world, let's just call it monetary system, is problematic. $17 trillion of debt is negative yielding. And Ray goes on about this, and it's never happened before.

We've never seen it. It is a problem. And it's driven, I think, partly by structural deflation out of Europe, which started a long time ago with initially the ERM crisis in the early 90s, but then the coming together of the currencies was super deflationary in 2000 into the euro, because you straightjacketed a lot of these countries into a fixed exchange rate. And you've prevented them from fiscally expanding. And now we've had discussion about, well, can we expand fiscally in Europe?

And the Germans at one point say yes, and then they say no. But then it's very hard to see Germany from the elites who are managing policy, very hard to see them actually agreeing that it's OK to expand fiscally beyond the limit. And I think you might even need, like, a new generation before, you know, before that becomes okay. So I just wanted to answer your point. I do think the underpinnings right now are problematic, you know. Yeah, because, I mean, that's what Paranoid Bull Dal said when he was on this podcast a few months ago. Because actually in the ECB, it's getting to the point, excuse me, in Europe, it's getting to the point where the ECB may not legally be able to buy more German buns because they have portfolio limits on how much sovereign debt they can buy.

So they're buying up so much, they're hitting the limits. Will they extend those limits? Who knows? But it does seem like something's afoot here, at least. And that's why I mean, that's why I'm fascinated with Bitcoin. When I was an analyst at the fund I was working for, I was tasked with following tea leaves, central bank tea leaves and writing commentaries on why the fund performed against currency market movements. It is, or did they say the? Exactly. And I was one of those tea leaf hawks for a few years there.

And after a few years, I was like, this doesn't make any sense to me. And at the same time, I was falling into Bitcoin. And so I'm a believer in Bitcoin, that Bitcoin can at least help provide a transitionary parallel system if the incumbent system that we're used to is rickety at its foundation. Do you think that Bitcoin can grow into a parallel and then a dominant system? Yeah, I think it is growing into that now. I think it's interesting, Bitcoin, and I've said this before, it's just so many different things.

But in the first five or six years of its existence, I would not have thought that even with it growing, I would not have thought that it could be. But now, when you look at the entire ecosystem of the value of the companies in the space, the equity value, plus the value of the tokens, plus the value of Bitcoin, and I know some people just only want to look absolutely only at Bitcoin. But if you look at the entire ecosystem, as I do as a macro guy, and looking at the value of that, the whole thing, you're looking at $350 to $400 billion worth of value, of dollars stuck there.

Even if you adjust the valuation of some of the companies lower, it's still a huge number. And it's holding there. And interestingly, most people probably aren't aware of this, but Bitcoin peaked and went down and is still down about 50% from the highs. But you have many companies in the space working on all sorts of different projects that have continued to grow, that have continued to make money through a pretty harsh down cycle in Bitcoin, but much more harsh in the tokens. Some of them are down 98% and a majority of them won't come back. But there are some projects that valid they're working on different things in the ecosystem that you know I

think will be supportive I think you're gonna have businesses grow up around the you know the network and I understand that the thing of greatest value is Bitcoin but you know if we're just gonna say okay the Bitcoin network greatest as I've said, security truth machine that's ever been built, 10-year track record, hasn't been hacked, who knows if that has ever existed before, the best track record of any asset in the history of the world, 10-year track record, 300% annualized. To me, it's proven itself. And the fact that even people in the space, some people and guys who I've spoken with

within the last week or two who have been in for seven, eight years, still question whether, you know, a guy said to me, a very well-known guy in the space said to me, he's still concerned about the code, and he knows a lot more than I do about that. But I thought, well, you know, haven't we played that game already? Haven't we? So, you know, hasn't that been traded?

Hasn't that, you know, we've survived, you know, a hundred near deaths, right? so it's almost like well so i think um you know yeah there's huge value there but also in all of the you know intellectual talent all the time that people put into the entire space to me i think is is very valuable and not to be ignored and i don't know if you i'm sort of against this term the shit coin that people use because you've got geniuses who are working on some of these projects and maybe those projects don't work and maybe they maybe eventually everyone is just doing things related to bitcoin if that's what happens but maybe not and and i don't think that takes away from bitcoin i just think that all of us who believe in bitcoin we really adoption and

understanding and education are are the key things and we don't at this stage want to be pushing people away because you know they think it's fraudulent or because oh it's it just filled with a bunch of 28 year olds running around you know who you know those crazy millennial whatever it is we don't want to I'm saying we don't we you know that's not a very good strategy if you're a Bitcoin and you believe in you know that this is one of the great inventions of the last you know hundred years if you believe that then someone looking from the outside and I think this is where like my you know I see myself in this role a

lot explaining to guys like me who've been in the investment world for 30 years who are older this is what you're missing and you know um and doing it in a legitimate way that they understand um that's i think what i'm bringing to the party at the moment and having to explain like so why is there this group always yelling out at uh i i just have to say look you know it's just a little bit of an alternative world there they're you know a bunch of young guys with a lot of energy born on the internet born in chat rooms love to troll i like a bitcoin sign guys description of all coins the best that they uh they provide cover for bitcoin uh via confusion and uh people seeking out other ideas that they have good ideas could be adopted by

bitcoin but i too agree that uh especially trying to educate outsiders uh even though i do love participating in some of the the schadenfreude when when these all coin projects do mess up So as outsiders looking in, maybe like, what the hell are these idiots talking about? But this is a great segue into the next question I wanted to ask you. What is it like pitching to others, like other men like yourself who are investing money? How are you finding success pitching it? Do you pitch it from different angles depending on who it is? Do you have many pitches when you go to it?

Yeah, I mean, this has been a really, you know, embryonic type of process because I sort of fell down that rabbit hole pretty hardcore earlier in the year. And I mentioned in the Real Vision interview that the thing that really brought me to it was price, I have to say. I mean, looking at lots of markets around the world, I went down 85%, looks cheap, I liked it to begin with, start buying and you buy more and more and then all of a sudden you have a significant position and you're really drawn into it. And I started finding things out about Bitcoin that I had no idea. I mean, I just hadn't done that deep dive.

And so my process is, all right, this is really big. And in my career, I've done this several times before. In 2006, I got the idea that we're going to have a massive bull market in agriculture. and I went from trading currencies and bonds like almost overnight to moving my all my analysts from their areas emerging markets currencies bonds like everyone into ag and within three months you know we were limit long in corn soy and wheat and we published we published uh you know eight page pieces uh explaining why this was in late 06 and then 07 why we thought prices were going to double. And then when I was working with Stan Druckenmiller at Duquesne, he and I launched

a farmland REIT together with other partners as well that ended up becoming AGCOA, which became probably the largest farmland, private farmland REIT in the United States. And so I remember speaking, I'll get back to your question, but I remember speaking to, you know, some of the established older guys in the space saying to me you know like you're just some guy from greenwich what do you think you're like what do you think you know about farm traders talking what's that cbot traders talking shit on you well more like you know the farmland uh the the the five farmland aggregators in the space and we had just come at it from a different perspective and we built our own models and we said, wow, this, you know, we really want to own this. We want to aggregate a

lot of, of land because based on our models, it's trading at a 70% discount to where we think it's going to be worth in a few years. So, um, my point is that, is that sort of that, and I did the same thing with gold bullion international. It just, I had had this concept. I wanted to own physical bars outside of the banking system fully allocated in a specific way and you know we then built that but i hadn't done that before and so the the sharp break for me um from not sort of having fallen down the rabbit hole and then falling down it was a process that i had gone through in other areas with other things before so it wasn't you know you know it wasn't uh you know it's always an uncomfortable in a way in the beginning and then like the light bulb goes off but i i've gone

through that and um so in a way i know i know how to um explain that process which i did on that interview but also um how to explain to other people who have a similar investment perspective So what am I saying to them? I mean, I think, well, what is the bet? And I think there's just, there are only two bets in my mind, investments, just long Bitcoin, very simple, hold it in any wallet you want. I mean, preferably, you know, in cold storage, but you can, I think that, you know, an exchange like coinbase for retail people or you know kraken or any of the top ones is is okay you know it's

um so i i think that's one bet and then the other bet i think is a bet on um the i think the the larger companies in the space who are going to be there um whether they're doing what they're doing now or whether they pivot so in a sense you're betting on some of the you know the talent almost you have a company with a thousand people that's well organized that's making money in the in the sector as a macro guy i want to have a sector bed as well um and that can take a bunch of different forms not not early stage vc type stuff i i'm not qualified to to you know you know to to make a bet on that and you have very well-known VCS in the valley Andreessen and you know Dan Warhead etc they they

they have real expertise there and again I I you I think we want to include that that and talk about it as the ecosystem because that talent pool is very valuable and whether you think ten years from now it's just Bitcoin or not they they will help the process it'll help achieve a tipping point well that's that's exactly right and we we don't want to you know we don't want to push them away it's already very hard to explain to people what Bitcoin is and and why it's something that's going to be a part of everybody's future. And so if you, you know, if you get that far

and you're able to put it in terms that older guys can understand, you just, you don't want to create the uncertainty or extra complexity or the possibility of, you know, all these questions like, um you know shit coin what is that and are those guys kidding and you know what i'm saying no i know exactly what you're saying and as uh and somebody who's definitely been uh one of the people attributing to that that noise in the past i think uh to come to the defense of bitcoiners and their view viewpoint is that they've seen so many people get scammed throughout the years just because it's so easy with this open source technology that's the past yeah no no and i and

And I also want to make it clear that I am somebody who's confident in Bitcoin's long-term success. That I think, yes, it is okay in certain instances. I mean, it is good to warn people about scams that happen. And we just have to reside ourselves to the fact that people are going to have to touch the stove first. And it's going to happen. I touched the stove many times before I figured out what was going on with Bitcoin. I haven't yet. I mean, so I and I'm not coming with a lot of the baggage in that sense.

And I and I and I get that, you know, it's funny, though, coming to a strong view later on in this process. You know, I already think Bitcoin is established. It's already you know, it's super legitimate from my perspective. so when when you have the confidence of something that's that's already won you don't even need to bother with the rest of like beating up on the little guy you you know they've won this is it the bitcoin has and i think some of the the narrative for instance we were talking before about safa dean amos's book the bitcoin standard i think the narrative that comes out of that book uh is really interesting and i think it started to i don't know five years ago that wasn't the

narrative that i understood no it's and i love that safe didn't really focus on bitcoin at all till the end of the book or and for a very little section of the book it was more about monetary history and that's the mission of this podcast to help people realize that we live in an anomaly of monetary history and things may be hitting ahead and trying to that's one thing i think our society today with all the technology, just the pace of change that we're experiencing as a human species. It's hard for people to take a step back and put our current condition in the context of a bigger history.

And I think that's maybe the folly of our modern day right now, especially with monetary economics. Yeah. And it's complicated, you know, and Bitcoin is certainly the most complicated or the most complex let's just say thing that i've probably ever had to analyze really yeah by far um just because it's so interdisciplinary and you have to push through in the beginning not understanding a lot of things i mean even if you're reading antinopolis's book the internet of uh the internet of money that volume two it's super enlightening but there are big chunks of it that you're not

going to get if you're just new to it and i like this john i said on twitter i like this john pritzker book i think uh inventing bitcoin yeah inventing bitcoin i i suggest that as a starter but even as a starter it's you know there there are lots of concepts in there that are going to be hard for people especially around the mining process the actual you know the the the verification process that when you get into the weeds can be more complicated than you'd think well actually brings up a interesting topic we can dive on you mentioned earlier putting bitcoin in cold storage i'm very happy you said that uh as somebody a 28 year old bitcoiner it's one of the biggest worries is ux especially with the custody of private keys will be such that uh most people

leave their coins on exchanges especially in older generations but uh as we have a demographic shift here too like do you notice uh your kids generation or generations behind them getting this more innately and speeding up the process over like it actually just hit me a couple weeks ago that gen z is entering the workforce now which blows my mind like all the 23 year olds graduating and going into college are technically gen z not millennials anymore um yeah but you know what um So I have three kids, one's 19, 17, and 15. And they, until I engaged with them, they didn't know what Bitcoin was. Really?

So it's not, you know, the education, and they'd heard about it, but they just had no idea. And at school, there isn't a lot of discussion about it. i'm trying to encourage one of my kids to start a bitcoin a club and i could have you know certainly some well-known speakers come to the school and talk about it and we might we might do that but there isn't any formal way so i just i made you know made my my son you know anyway i we we we're now at a place where we understand it and we own some i mean they do so that they can get used to it and maybe following it and reading news about it but um it's not coming from i mean the peer group um on the other hand there are some kids my son did does have a friend who

is really very hardcore in his um super i mean he's i guess he's 18 but he's a computer science major and he's hardcore into Bitcoin but what I'm saying is is that don't think that there's a natural adoption just because they're younger what one of one of my kids said I said oh what about Bitcoin and one of them said oh wait isn't that what that's what the kids use to buy their fake IDs that's what my sister did so that's it yeah and then there it stops there so like that's not good in a way that's not you know that continues the narrative that actually bitcoin has conquered which is that it's illegitimate right bitcoin isn't anything but illegitimate and so yet here we have these 16 and 17 year olds

again not understanding that it's a network that's been built and has incredible security characteristics and one day will be the rails for all the payment systems globally so that's important and I think education and getting that message out to the younger ones who are all digital native. They'll be able to get this, but it's gotta get out there a little bit. And as we know, Bitcoin has no marketing department

and Bitcoin has, and a lot of people say, well, who cares? The ones that will say, well, who cares about it? Who cares about all that? It'll just happen. And that's probably right, But what I've realized being in markets all these years is that nothing ever really has to happen. There is a path where it doesn't happen.

Now, that's not my view, and I don't think it's a low probability. And I think the way we increase the odds that it does happen is by doing things like encouraging our kids to understand it and follow it. And through that, they can then understand about monetary affairs, global monetary affairs within that context. So they'll start with Bitcoin and then on the other way, as opposed to, you know, a guy like me, I started from, you know, traditional macro. So that would be interesting if they, right, if they learned about the world through Bitcoin first, right? And we can only hope. Well, that actually brings up a good segue. So how much of a black swan is Bitcoin on the international payments and money settlement layer?

Well, what do you mean by black swan? So especially if you're talking about Russia and China stockpiling gold for the last two decades, like crazy. Maybe they had an idea that they were going to do a decades-long attack on the U.S. as the reserve currency. And while doing that, they did a stockpile of gold, and Bitcoin comes out of nowhere and sort of blows up that plan. Oh, I think that's all very sort of theoretical stuff because, I mean, over, yes, they've been accumulating gold, but to no specific effect. I don't see, maybe there's a very slow erosion in the dollar's hegemony, but they could stockpile gold for the next 20 years and not necessarily change anything. So I'm not I'm not sure. Yeah, it wasn't the best exam So just in terms of being able to control the system and not focusing on China and Russia in particular just maybe the US

I think so. So recently rumors have been coming out that The Maduro has been buying goods directly with Bitcoin due to sanctions can't buy with US dollar or other currencies So he's been forced to use Bitcoin so geopolitical stage it seems a lot of assumptions that that could fit into models a decade ago sort of have to be reworked and rethought about. So you're saying, to what degree can Bitcoin disrupt the existing system? Yes.

And I think it is. It doesn't have to be in a bad way. And there are tremendous inefficiencies within the global monetary system. And so even this very simple concept of store of value, and this is, again, Dalio sort of gets into this and all the Bitcoiners are like, Ray, Bitcoin solves this. I do think that, yeah, I do think that you could have a period now over the next just, let's say, 10 years where I don't think fiat is every, you know, now comfortably talks about fiat goes away. Okay. I don't think it's, I think there's a, you know, these things happen a little more slowly. I mean, there's a transition.

It could be like in the old days where you have all these different currencies trading around Bitcoin. Bitcoin is in the center and then everyone's value is versus Bitcoin, right? So you could have those pairs trading a lot. Yeah. I could see that happening. That'd be Nash's equilibrium. I'm sorry? That'd be Nash's dream of the equilibrium currency. I'm not sure. No, I can totally see that. And benchmarking their currencies against Bitcoin as a transitionary period. Stable coins are a good example of that as well.

Yeah, it could be. I mean, you know, and this is where Libra or Calibra can come in. And there's lots of debate about this. But, I mean, you've signed up. That's, as everyone says, that's two billion people. They could very easily introduce Bitcoin into that ecosystem. And every person who has never heard of it, and there still are people who've never heard of Bitcoin, or who don't know how to use it or whatever it is, if all of a sudden they have access to it, it's a big deal.

And, you know, the characteristics of Bitcoin, the store of value versus the other currencies as a store of value is something I think that will catch on. The next piece of it, though, for me, and I say this often, is that, you know, if Bitcoin is 20 things, one of them is a store of value but bitcoin is so much bigger than that and that's when you know you that's when you start thinking about you know the programmable aspects and all these other problems that it can solve you start to think you know you get into the super hyperbole of you know it can go to a million dollars or you know it can go to two hundred thousand And have you met Bitcoin Tina? What's that? Right. Bitcoin Tina, you know, you know, but it's not just that. It's even guys who are, you know, who have, you know, as I've mentioned before, Tim Draper and Winklevoss brothers, they've been talking about 200,000, 500,000 Bitcoin for quite a while.

and you know that doesn't do that doesn't do it any service because people then back away from it so I try not to get into that hyperbole but the truth of it is that you know there's this narrative that it's digital gold right but again that's only one aspect of bitcoin that that you that's not leveraging the insane security aspect of it, right? And that, in theory, could be worth as much as the sovereign value aspect, right? How long of a trip have you taken down the Bitcoin can make us more energy efficient rabbit hole? I mean, it's not impossible. I mean, you have to extrapolate things out.

But I also like the rabbit hole that I like a little more is, you know, the one that says that somehow the U.S. figures out that the entire Bitcoin ecosystem can bring tremendous value and growth in GDP and employment. and you know it just could could be a super boon for the country um and some people very well oh that's legacy thinking countries we're not going to have countries and anyway the point is i i i live here and i think america is a pretty good place and i like to see people who aren't doing well do better and if i were um you know in dc i would be trying to think of ways how do we get the entire bitcoin uh uh world eco but the ecosystem here and you know mining is a perfect example right we've got lots of uh resources here in this trap gas dan i got the pitch for you exactly pitch in dc there's a lot of there's a lot of flack out there about global warming it's

a big topic out there we're wasting a lot of uh vented gas in these basins that could be captured to mind for bitcoin and just putting it out there and tons of renewable possibilities yeah oh and renew this we're getting all the hydroelectric the geothermal too and the fact that we're finally going out and consuming these resources means that we'll be tinkering around with them and innovating around with them which is naturally good and then natural gas and oil their problem is transportation they can't transport the supply from the basins to the cities they can't build the the pipes and it's a lot better when your pipes go from hundreds of miles to feet on site and look canada should be a canada should today be a uh a bitcoin powerhouse with all that hydro

power up there quebec messed it up they kept all the bitcoiners out yeah but they can change their mind also i i wouldn't rule i i wouldn't rule them out of the game just yet um you know it just it takes some it takes some time for people to see the value so i like i like going down that rabbit hole people think oh bitcoin's not because it's all in china like well it's not going to be all in china with the you know within five to seven years no not going to be that we should start a dan tapiero marty bent campaign to uh get dc to uh incentivize oil and gas producers to mine Bitcoin with their flared gas if you get a certain amount of your vented gas

that would have otherwise been vented and you mine Bitcoin with it and instead you get a tax break? I think we can do this. Well, I mean, I almost have a better idea, which is just to maybe just go out and do it. Oh. Right?

So, I mean, there are some projects that I'm looking at right now. Yeah, yeah. I can guarantee you it's happening. You know, it's all good. Yeah. Right? And that's the crazy thing.

Again, going back to how geopolitical it gets. China has owned the mining for the first decade, for most of the first decade. It seems to be getting more distributed now. But could it become a national security risk in the long run, do you think, if we don't get on top of this? I think it's moving away from that. And so I think that's yesterday's narrative. Really? Why? Because I think that it will become much more decentralized.

I think there will be places in the next five years where it will be cheaper to secure the network. Because that's what's going on, right? We're just securing the network. Yeah. Securing the network, yeah, batching transactions, and not wasting energy, which is something that naturally people in this country should be getting behind now, especially with all the climate climate change stuff we want to be as efficient as possible and then become as efficient as possible as we can on the planet then we move to the stars we take this

to space this is something else that you were tweeting about the other week is china going to beat us to space look that that that that tweet i was just what what blew me away was is the the the chinese ability to just plan not just so far into the future but like into totally abstract esoteric things um you know to plan uh what was it a space uh a space land like a space colony or space that they'll call uh commercialization of you know oh it was a like a free trade zone in space you know i i mean they still have 500 million people living on you know 50 a year um you know vast underclass in china and yet still and again a huge middle class now too um but you know they're they're having plans like this and it's interesting i don't know

you know it's probably you know on a 50 year view it's probably the right thing to do but it's in just stark contrast to what goes on here and i think that's what struck me about that story and why I retweeted it and wrote that comment because you know we really could use a bit of space race well a little no more more long-term planning yeah and you know in a way and I think Dan said this at the Pantera conference Dan Warhead that you know this is This is a Sputnik moment for us in Bitcoin, meaning China does a lot of the mining. They've just talked about a stable coin the central bank did. BCEP or something like that.

Right. That's exactly right. And so where are we in all this? Why are we behind them, especially with so much talent here? and not just in the valley but you know you're getting all you know all sorts of different places are popping up as i don't want to call them bitcoin hubs but you know now you go in into new york and you go down to the flat iron that whole area lots of bitcoin uh bitcoiners down there austin's got a great austin scene yeah all over the place uh la's got a scene now

right right so it just uh unfortunately it just taking a little longer um maybe it's also because the chinese tend to be super facile with technology and computing and video games and math and you know you have alipay over there and everyone uses it all the cabs and i think it's Shanghai, they're all, you know, you can't even, you can't pay cash anymore. It's Alipay or WeChat, right? Right, yeah. And so, you know, the U.S. is a democracy and is more fractured, and it takes time for things to catch hold here.

But it's going to happen. It's going to happen. So I'm saying, you know, that story about space, it would be nice if we had somebody with some vision and a little bit of a long-term plan. I mean, it feels like here in America, we're just stuck in these two year election cycles, you go from the midterms to the presidential elections, and it's just people screaming back and forth. And honestly, Obama's Obamacare was the last big, I guess, altruistic effort you can I can think of, but it doesn't Yeah, it doesn't seem like we're thinking big right now in America in particular. no and I'm not thinking that we should be thinking like project but I mean no not but you're right we've been able to get around that but you know usually I

mean the historians would say that the u.s. really only is galvanized when there's an external threat or people come together when you know a threat or there's something bigger going on but i think that's why calling it the us's sputnik moment is pretty that wasn't a specific external threat but it sort of was right like the next step after them uh getting to being in space is dropping bombs and i i don't think we're we're there uh the meaning that the result of being behind in bitcoin is not that we're going to get bombed But I think if you can get people to believe that we're losing a hold of part of the future and people's quality of life and the quality of life of our kids is going to be reduced because we're not adopting new technologies that are right in front of us because we're not doing the work. This is one thing where it's very, very clear.

I'm talking about Bitcoin, that it is very hard to do the work. You need to take the time. You need to dive in and do it and to read thoroughly. And this is not, you can't just figure this out in a 30-minute blurb. And, you know, Americans' attention span is pretty small. And I don't know how it improves, but I'll tell you something. There are a lot of guys in this space in their 20s who are super bright and really like thinkers, not just math and programmer types.

I mean, real big picture thinkers reminds me a little bit of, you know, some of the talent that was in Wall Street in the late 80s and 90s and my business 90s, 2000s, where you really had the smartest guys coming out of whatever schools, you know, wanting to just, you know, figure things out and looking around and seeing where the biggest opportunity was. And I think that this group of 20-year-olds, their attention span, it's there, okay? It's there. Just we have to somehow encourage. Harness that energy. Yeah, you got to harness it. And maybe it's what the Bitcoin people say, that price go up. right that encourages that encourages more more people and i think that's part of it but you know

the price is up 300 percent annualized for 10 years and we're not quite where i think we could be well that's because so it's more than that yeah and i think it's beyond like the interdisciplinary nature and having to put the time and people don't understand oh maybe you can't understand the gravity of it until you put the time in so but like it's ironic that here in america in particular uh people aren't big on bitcoin considering i would consider it's probably one of the the bitcoin source code is very analogous to the declaration of independence in a way and it's very american i mean the white paper was in english it wasn't in you know uh whatever russian right yeah yeah and it it just it vibes with americans uh values of freedom and liberty it

really does it really it really does especially in the middle of the country maybe not so much on the coasts and in some of the cities but this is it really is american you know that independence that free spirit that belief in you know that there is some truth that you know it's not corruptible that i mean these are things that you know the founders uh all had innately innately in them you know the the moving the move away from i mean centralized corruption if you think about it um i mean was imbued in the king right i mean there can't be any more a centralized uh um you know political i mean maybe there is but i'm just saying that you know the the the rejection of that talk about that legacy system right we rejected that yes and

you know i think you know i think you know the crisis in 08 and some of the developments in the last 15 years maybe lay the groundwork for this it's almost like an intellectual possible for like an intellectual renaissance yeah it could be american renaissance like just as everyone ray thinks it's the end of the world and all these guys are gloom and doom and bitcoin is a fraud but really the ideology behind it is a very positive uh very positive one I agree 100%. Shout out to Neil Woodfein, who one of my favorite Bitcoin tweets of all time is Bitcoin, if successful, will bring about the next renaissance because you have to learn about so much stuff and force to think critically about the system with which you live under. So that's very important. I mean, critical thinking, you know, the high school I went to was very, I mean, really, that was the most important thing coming out of that place. Not being some sort of ideologue, understanding both sides in a deep way, staking out your position based on, you know, having gone through the arguments, careful, thoughtful contemplation about both, discussion around a round table, which is what we had, you know, eight, ten kids talking back and forth, vetting your ideas.

um you know some people might say oh well that's old-fashioned and you know platonic or whatever it is but to be honest um you know that is sort of what's going on uh in twitter and you have people around certain concepts certain threads certain themes and you have a lot of people chiming in and the guys who are kind of like off their rocker, I think get pushed out a little bit. I mean, at least, or you just block them, right? I have a mute policy. If you come in my mentions too many times,

not making sense, you get muted. Yeah, and I think someone who's too emotional about what should not be, if you're trying to have a concerted discussion to understand something, And you don't need like a ton of, I mean, crazy excessive emotion in it. You can have enthusiasm. So it's interesting.

I think this, the Twitter is an unbelievably powerful tool. I don't know if it's necessarily an invention, but it's a, it's. It's like, it's like the bars during the revolutions where people. Yeah, or those old taverns. You're talking about those old taverns where they used to... Yeah. Yeah, I think that's right. No, and I think...

Yeah. No, and I think it is funny that people would call out Socratic debate in this form. It's too antiquated. It's too old. This style of debate exists and has been taught throughout millennia for a reason. It's the way to think logically

to get down to the essence of truth at the end of the day, which is what we're all striving for. And there are lots of nuggets, truth nuggets, on Twitter. And again, people have said to me, my older guys are like, Dan, how do you follow all of that? I'm like, well, you don't. And there are days where I'm too busy and you don't check in. But then there are periods of time where you're in a car for an hour

and you're looking, I mean, you have some time on your hands or you're reading about, you're trying to find out about some piece of news and it leads to a thread that's interesting, I mean, it's amazingly powerful. And I think even when I mentioned to some people, like, you know, I didn't do anything on Twitter before the Raul interview. Yeah, I mean, like zero.

And then there are all these people asking me questions, and then I thought hey like let's try this This is kind of neat well every day we'll post one thing or two things on macro or gold or Bitcoin or just interesting things and I found it Absolutely phenomenal the quality and level of intelligence and debate Most most of my peers think it's just like nonsense content you know you have to filter i've been filtering a list for like five years now it takes

yeah it takes twitter doesn't twitter doesn't make it easy either yeah but there are you know there are a few hundred people who who are real and thoughtful and i mean i don't know what the number is but i'm just thinking that you you know who are consistently and you know you everyone knows who they are yeah right i mean they're because when they post things they're interesting and you tend to read them yeah you know so that does take time that's it yeah and bitcoiners are good at taking things things viral too uh they really like to pump uh good news about bitcoin yeah look i mean that's that's great and you know pomp i think is great and uh you know i and on the more fun side i love that you know that guy who does that you dress up in a space suit and sings

those songs yeah what's i mean how funny is that that's great a little crypto or something right yeah i mean my god so i mean it's a real like living breathing community and it's becoming ingrained in our culture overall as a society right like bitcoin you mean twitter or bitcoin well i don't know about that i think maybe maybe in the in the world in the small world uh that you're inhabiting but like in my world up in greenwich uh it's it's not in ingrained anywhere I mean, it's not, no one, you know, it's more of a sort of old school type of, there's no adoption. Well, if you ever need somebody to come help you get people to adopt up there, let me know. Come pitch.

Yeah, I mean, you know, out on the golf course, you have a host of Bitcoin studying, teaching. I think it'll just, it'll come naturally. And the more people who, you know, the early guys from my space, the global macro investment world. So we're talking, you know, Dan Moorhead and Mike Novogratz and John Burbank and Pete Brigger. I mean, those those guys do a lot for the space in terms of having a little bit of an outside view on it. but that's just a handful of guys around my age the guys who are older are no are not really they can't they're not there and i think you know we don't really have i mean there's there's been some floating over from the traditional financial world but it's still you know not super duper

high profile people that are are saying you know this is the future yeah um it'll take some time but yeah and i guess we can end it on this like it seems almost natural though right the way things have played out the last three decades in particular with the emergence of the internet the emergence of social media and this sort of digital layer that we're building on top of earth it seems that it's only natural there will be a digital monetary good too going forward at least in my mind i don't know if you share that same view yeah yeah no i i agree it's um You know, we all need to, you know, do whatever, you know, contribute in the way that we think is best because this is a good, right? It's a natural, what I would call a natural good.

Yeah, yeah. And this conversation has been very good. I really appreciate you making the trip. Yeah, it's been fun. No problem. Thank you. Come on. Nice to do it.

Thank you for coming over. I really appreciate you taking the trip, your insights. we can find you on Twitter at DTapCap yes still not quite I like that that's the name of the firm

it's easy to remember Dan really appreciate your time thank you for doing what you're doing spreading the word of Bitcoin and I'll be getting more involved in this space now and I have some

projects that I'm engaged with and about to to engage with so but nothing to discuss at this time but well if you ever want to come back and discuss let me know we're here the invite is open yep thank you very much that's all we got this week freaks peace and love