TFTC: A Bitcoin Podcast - Tales from the Crypt #86: Ben Hunt

Episode Date: July 19, 2019

Join Marty as he sits down with Ben Hunt (with a guest appearance from James O'Beirne) to discuss some of the running themes from Epsilon Theory, how they relate to Bitcoin, and why Bitcoiners may be fighting a losing battle. Follow Ben on Twitter: https://twitter.com/EpsilonTheory Follow James on Twitter: https://twitter.com/jamesob Follow Marty on Twitter: https://twitter.com/MartyBent Shoutout to our 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 $5 and contribute $5 to OWLS Lacrosse you download the app.

Well, hey there, freaks. It's your boy, Marty, here to introduce this week's sponsor. You already know all about them. This week's episode of Tales from the Crypt is brought to you by the Cash App, the number one app in the finance store, excuse me, in the finance section of the App Store for the last two years. The first P2P payments app to let you freaks buy Bitcoin. And now they're also letting you withdraw and deposit Bitcoin on their app. On top of that, they're rolling out BEC 32 compatibility. So if you're looking to send straight to Wasabi or to another BEC 32 address, you can do that. It's starting to happen for users.

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this episode of tales from the crypt with ben hunt from epsilon theory uh and james o'burn from chain code joined us temporarily or he was there the whole time but he hops on the recording temporarily uh after the hour mark this was a great conversation very humbling uh very thought-provoking and i think uh this is a very interesting one that you guys are gonna love so enjoy what is up freaks welcome back to tales from the crypt it's your boy marty bent coming from the most beautiful studio we've ever seen we're looking at downtown manhattan from Midtown. We're in Chaincode Labs offices right now. They're gracious enough to let me and my guest join them today in a conference room. I'm very excited for this

conversation. Let's jump right into it. I'm sitting down with the creator of Epsilon Theory, a newsletter and site that views markets through the lens of game theory and history. I'd like to introduce you freaks to Ben Hunt. Ben, welcome to the podcast. Thank you, Marty. It's great to be here. It really is. Well, thank you for coming. I'm flattered that you would agree to come sit down on me. I'm flattered that you invited me. Are you kidding? This is, this is super. Well, this is super for me because, uh, as a writer, um, I, I really admire your writing in particular. It's, uh, you have an incredible way of drawing parallels between nature and markets and other things as well. Thank you. Um, and yeah, so you've been talking more and more

about Bitcoin and cryptocurrency, uh, last few months in particular in my observation and, uh, I just sort of want to jump into your thoughts on the space. I know we have an announcement to make at the end of the episode. We'll talk about that as well. But, yeah, so today the conversation I'm sort of looking to jump into is I want to map out the metagame with you. Sure. Talk about too clever by half. Are Bitcoiners too clever by half?

Who are the raccoons in the space? And what is the battle we have against the state? And can it be won? Just little stuff like that. Yeah, little stuff. Fantastic. Well, no, thanks again for having me, Marty. And, you know, I've done a lot of things in my, you know, a series of careers, right?

My wife, kids, I can't keep a job, and I guess that's kind of true. You know, I started as a, you know, a professor of political science, of all oxymorons, you know, way back in the day. and my my passion though and so just step back a second you know political science is this bastard child of history and economics right and so I was very much on what I call the science side of political science when I was in grad school and when I started teaching very much on that economics and econometric side of of of the great academic divide in that discipline And as I've gotten older, I'm 55 now, right, just to date myself a little bit, and I've done different things in the actual world,

started a couple of software companies, then got into the investing world. I've come to appreciate the history side of the equation that I started off with a long time ago. And it's that history side, particularly recent history and the history of science, the history of technology and the way that that is co-opted and frankly more often than not used against us over, you know, really any period of time. You know, that's what has really gotten me interested in my latest career incarnation, you know, writing about markets and politics to really focus on, I'll call it the Bitcoin community and whether it's the coding, the elegant code that's embedded in this flavor of cryptocurrency or the social movement around it. And so I come at this both from a perspective of, and I don't mean to be, you know, this isn't supposed to be condescending, it's like kind of one of you, right? So I am a coder, right, and this was how I started my career. and I have lived through first hand experiences of seeing these

both social movements and technology movements I'll say subverted and so what I'm writing about these topics I'm so glad to be on your podcast is to get a chance to talk about this Not, again, to be condescending or to pat anybody on the head, but say in my experience, both lived experience and the jobs I've had, I think these are the pitfalls to watch for as this community moves forward. yes and it's um it's been incredible to see you dive deeper into it because

specifically with your articles too clever by half and what you talk about uh your your property and it's set up with uh electric fence for your dogs and the coyotes are almost they're leaving their scat around the uh the borders and uh yeah yeah so look i'm i'm i i met my wife here in Manhattan right and so I was I was teaching at NYU at the time and we were you know we had our first baby in a studio apartment in the the faculty ghetto down there at a you know the Washington Square Village and it was it was literally for the three of us it was a 250 foot 250 square foot studio right So my wife's from Texas, I'm from Alabama.

We're not urban people by nature, right? So we started looking for ways to get out of the city, right? And we've got four kids now, and we ended up really kind of out in the woods in Fairfield County, Connecticut. And look, I mean, when I say out in the woods, you know, it is Fairfield County, Connecticut, right? So, I mean, it's not the Jodes or, you know, when I talk about my farm, right, yeah. So, you know, if I have a bad day on the farm, meaning that I, you know, can't get my tractor running that day, You know, I can drown my sorrows with an artisanal mezcal and a mousse bouche at the local, you know, farm-to-plate, you know, cafe just down the street. So I don't want to overplay this, right, like that I'm, you know, working the fields here.

But we have made a decision to try to move not to the suburbs, but I'll call it the exurbs, right? And where we can't have animals that my daughters take care of, I take care of the bees and I drive the tractor, right? Those are my jobs. But all the other animals we have, the chickens, the sheep, the goats, the horses, that's all on my kids. And it really does allow us to, I'll say, instill these lessons that I think are so important, you know, as part of anyone's education. And part of my education was also learning about these animals. and in particular to the point of your the the article you're the note you're you're referring to it was the the coyotes that live out in the woods around our farm and we do have this enormous

electric fence you know the the invisible fence for our dogs it covers about five acres so it's the best life you can imagine for the dogs right but the the truth is is that domesticated dogs are nowhere near as smart as the the the wild coyotes and so you know my my dogs i'm i'm convinced don't even know that the coyotes are there the coyotes though they they know where the electric fence boundary is every bit as well as as my dogs do without having to have suffered any sort of shock or beeping noise or whatever the you know approach to the to the fence does for for the dogs they know it through smell they know it through behavior and for the coyotes it's a constant game of of territorial aggression against the dogs again my dogs don't even know that this

thing's going on right it's like pinky in the brain was the example i used in the note where The coyotes are, they want to rule the world, right? But, you know, my dogs, they're just, you know, they don't know anything going on. And you can tell that the coyotes know the demarcation line because occasionally they'll leave their scat just over the line, you know, as a provocation to the dogs. My dogs don't care. And to me, that illustrates so much of what you see about coyotes, which is that they are incredibly smart animals. right? And that's why I call, and I think of myself as a coyote, right? And so many of the people in this Bitcoin community are coyotes. They're smart, right? And if there's an immediate

game to be played, like, okay, I'm going to do some territory game with this puppy dog over here, they're going to win. They're going to win. The problem for coyotes, though, is that they are often not seeing the larger game that they are immersed in so what happens a lot in our community is that people will move out from the city out to the woods because they want to be close to nature but then when they and it's usually their you know small child and i i get this when they actually confront nature a coyote is walking you know along the the the outskirts of their of their property you know they freak out they freak out nature is something to be observed and something to be safe but when nature has you know red fangs and claws you know then that that's a

no no that that's not what i meant by nature right so so what what what always happens in these these circumstances is that the homeowner will try to scare away the the coyote and the the prescribed course of action is to get an old coffee can fill it with coins and shake it vigorously at the at the coyote that'll scare it off right nonsense total total nonsense right so the the coyote and we've had this experience or my wife had this experience the coyote and the the pack and there'll be it was i think this was a female looked up at my wife this weird biped with some clanking noise coming off the end of one of her paws and and looked up and said are you what what are you kidding you know you know that that's this is supposed to be

a threat what are you are you joking and and the coyotes left but but not because they were scared right they they they they won the game they they exercised their dominance basically the coyote basically stared down my wife and you could almost you know you know smfh right you know just kind of sauntered off saying you know i'm leaving because you bore me you know not because you're scaring me and the problem with that is is that the the human also realizes they lost that game of dominance and the next step is not to shake that coffee can full of coins but is to call the animal control officer of the town and and i know the animal control officers of the towns around us and they're without exception they're really good people the last thing in

the world they want to do is to to to kill a coyote but that's their job when the townspeople with their pitchforks and you know their domesticated visions of nature say nope the coyote's got to go and and that to me is i've seen that process play out so you know twice in my lifetime now when it comes to what i'll call coyotes in the financial world what uh what examples in particular well the best example is is around uh mortgage-backed securities right so the the the the proximate cause of the the great financial crisis of 2008 early part of 2009 was the popping of a bubble in mortgage-backed securities It was a $10 trillion asset class comprised of what are called non-agency mortgage-backed securities.

So the agencies are Fannie Mae, right? But Fannie Mae is the big one, meaning that an agency mortgage is also called a conforming mortgage, right? So it's a, you get a loan from Fannie Mae, it's for a small amount, you've got very standardized, you know, requirements, you've got to put down 20% or get, you know, mortgage insurance if you put down less than that, but it's got very set rules to it. But what happened, the innovation that occurred in this country and then spread out to other countries, but like Ireland is a good example, but it's particularly found in the United States, was that banks realized, you know,

maybe we can kind of lighten up the rules a little bit. So this got into the category of what we would call the Alt-A loans, often called liar loans, right, Which is basically, you know, just tell us how much money you make and what you qualify for. And the reason this worked, right, was the invention of a very clever piece of math, right, called the Gaussian Copula. And it's used in portfolio construction and it's basically used as the proof that you can slice up these pools of mortgages. And if you slice them up in the proper way, I'll describe that in a second, then the actual risk of failure in your slice of that pool of mortgages is actually pretty small, right? Or at least that we can price it effectively, such that the return you get from owning a particular slice of that pool of mortgages

reflects the fairly minimal risk that you're taking on, right? So this allowed then banks to do two things. One, it allowed them to lend out money to make mortgages, right, that weren't conforming, that didn't have to go through Fannie Mae, that didn't have to go through the agencies. But then that's not enough, right? Because if a bank just makes the loan, then it's on the bank's balance sheet, right?

What then the bank has to do is you have to pool them together and then sell those loans to the big institutional investors, right? And so that's what we mean by a mortgage-backed security. So the securitization of these loans became that $10 trillion asset class. And would you say particularly the tranching of the securities, too? That's right, because you've got different buyers for these pool, these securities, right?

You've got an insurance company, let's say, might want to have, oh, I want the safest possible, you know, tranche or cut of this, the triple-A rated tranche of this, right? and i'm willing to take less of a you know coupon or interest rate for that but but i want the safest and other people have different risk appetites and the more risk you have that the more uh interest it pays right yeah but but here's the problem it goes back to that piece of math right the gaussian copula it wasn't that the math was wrong right the math is right the math is exactly right behaviorally though it was applied in a way that had one fundamental assumption

and that fundamental assumption was that it was impossible to have a nationwide decline in home prices in the united states right now now that assumption you would never know it it's not like the all caps boilerplate that you get at the in small print at the bottom of a contract right it's embedded in the construction of the securities around this and and you have to speak the language of math right to and have the experience of how it's being applied by the the banks who are doing this to say oh wait so this this entire edifice 10 trillion dollars worth of stuff is like i like to call it like an inverted pyramid an upside down pyramid where the point of the pyramid rests on this one assumption that you cannot have a nationwide decline in home prices

and if that assumption is violated it all comes undone it all comes undone and that's exactly what happened that's exactly what happened how do you think why do you think that assumption slipped in there is just because the environment that the fed was that that assumption was there because that assumption was absolutely correct in the last 70 years right you you would have to go back to the great depression and even then even then is it's it's hard to really know because you we really didn't keep the sort of records right but since we started keeping records of this stuff really after world war ii and you you see this throughout the investment world that we believe that there are these permanent essentially laws of market behavior based not on a perfect knowledge

of the history of finance but based on oh we started measuring this stuff in the 1950s so if it's been this way since the 1950s then it must be true forever and ever amen right so that's why it was there it wasn't that again it was wrong it was that it was this embedded belief simply because that's the way it's been for the last few decades and and again you see this happen all the time throughout the world of money right that we assume something is is like a natural law of behavior only because we've measured it for some period of time it's as if it doesn't exist or behavior didn't exist before you were able actually to measure it and it's part of this again i'll call it the the over scientificization of investments that really took root

after world war ii in the 1950s and it's it's the sort of thing that is now it's become what i like to call the zeitgeist or the water in which we swim we don't even know that we're doing it because it just it's it's it's what we've always known so it's it's imperceptible to us yeah no that's um a huge theme on this podcast in particular is the fact that we're born in potentially uh historical time that will be looked back as an anomaly in monetary history in particular um and well but see here's here's what's not an anomaly here's what is constant and eternal and that is fear and greed right fear and greed are the eternal truths of anything to do with money right that and power right the the the state because because here's

the here's the punch line of this story about the the financial market and the collapse of mortgage-backed securities in 2008 and 2009 the punch line is that most of the coyotes i knew who were involved in that they got taken out and shot they got taken out and shot so bear stearns in particular bear stearns was the first one right so so so bear stearns which frankly you know what they were involved in the the i'll call it the the the fund side the investing side They weren't really a mortgage originator. They weren't like Wells Fargo, right? So Wells Fargo would make the loans, and then they would securitize them.

You know, they would turn them into these pools of mortgages, and they'd sell them off. Bear Stearns was involved in the selling back and forth, and they ran a couple of funds that, you know, invested in these things. But Bear Stearns was essentially an investment bank made up of coyotes. smart guys right you know any investment bank and I'll talk about what a raccoon is in a second any investment bank is going to have

a few raccoons scattered around but basically Bear Stearns was a group of coyotes kind of think of them as like cowboys and they got in March of 2008 well April of 2008

late March early April of 2008 Bear Stearns was taken out into the street and shot in the head as an example for everyone uh the the the narrative at the time was that bear stearns was essentially a rogue actor that in the the phrase that the catch phrase after bear stearns was eliminated and you know sold for parts to to jp morgan literally sold for parts right so the the bear stearns office building which is like two blocks from us here right on the other side of grand central that was the crown jewel when when when jp morgan when jp morgan quote-unquote bought you know for for a song bear stearns

the building they bought which is now jp morgan's main building right over here was worth far more than than than what you know jamie dimon and jp morgan paid but the but the this it was they were they were the the sacrificial lamb right and and the mantra at the time was systemic risk is off the table of course the systemic risk was there from the nationwide decline in home prices from from the the puncturing of this bubble the the collapse of that upside down 10 trillion dollar pyramid but the the effort is always made to do a few show trials and executions of clever coyotes and that's the the first step in in government trying to get control over a a technology in this case gaussian copulas and mortgage-backed securitization that threatens to uh not dismantle

but but but but threatens the stability of a political order right as the great recession clearly did you know later they had to have more coyotes taken out in the street and shot so you had to have Lehman taken out in the street and shot. And believe me, there were, again, raccoons, right, people who were not, I would say, well-meaning like most coyotes are, but were really just, and we could talk about some of those people, right, particularly at the helm of Lehman. But the crushing of Lehman Brothers and then the bailing out of other firms,

like goldman sachs like morgan stanley it's all part and process of both the co-opting of coyotes it's all part of coyote control you've got to take some out in the street and shoot them in the head you've got to relocate others you've got to domesticate others into puppy dogs right but but that is what happens and and if you are one of those coyotes who as most coyotes are where we're independent where we we want to do our own thing you're likely to get shot in the head and you won't see it coming but it'll happen and the the survivors and this is true for for so many of the i call it the hucksters and the con men around mortgage backed securities people i call raccoons another farm animal you know i respect the coyotes i can't

stand raccoons the raccoons are not shot in the head by the government right the the state really doesn't care about raccoons because they're not that clever right right what the state cares about is coyote control uh and and the they honest to god i think intentionally allow a number of raccoons to stick around, right? So they don't really care about that. You saw that in the mortgage-backed security collapse. Honest to God, you see some of the same raccoons, right, who were hawking mortgage funds

and then come back, who were there trying to take people's money around mortgage-backed securities. They're here in the crypto world, too. it's the same guys and yes they're always guys I have a couple on the top of my mind that I'm thinking of right now yeah and it's so

important I think for any community like the bitcoin the crypto community to recognize that there are raccoons and to speak out yeah so I'm not sure

how abreast you are of the intricacies of so you have like the overarching quote-unquote crypto landscape and then uh i would say let's just de-alienate and buy for k by two you have uh quote-unquote crypto and then you have bitcoiners i would argue is that did you say that's fair there's probably some room in between too but bitcoiners i would say or recognize this crypto funds in particular something that um don't make sense to me you have a perverse incentive to do thing invest in things like icos and things that may not have value at the end of the day and it it is um there is definitely a divide in

the overarching community that sort of separates it into bitcoin versus crypto so this is a good topic for conversation because like i said so i want to push back on that a little bit right because i'll say from my perspective from not being in the you know the internal wars in in the community when when i when i look at it from a and i am a sympathetic outsider right i am sympathetic to what i would characterize as the positive energy i'm sympathetic of of the of the larger crypto community i i am sympathetic to coyotes right very very sympathetic i despise raccoons right and and and my my my feeling about crypto and and bitcoin and bitcoin has been colored by the fact that as an outsider

i see the the the the raccoons who have glommed on to to to to bitcoin right i i hear you on the whole ico thing right and and this this gets actually at the the underlying thread of my concern is is is is too weak of a word my anyway let me back up one more second so i'm a big comic book fan right and and uh one of my favorite characters is is one of the the the inhumans right so this is you know black bolt and you know medusa they've been around for forever and they were kind of in the uh really in the link with the fantastic four uh that that's where the inhumans you first saw them and and the like but there there is one of the inhumans so the inhumans are that they they're exposed to this chemical and you've got this this you know gene that when

you're exposed to this chemical gas it releases some power right so so so every each member of the end humans has a power and they can be weird powers you know or they can be a single you know amazing power right so the end human that i always uh i think it's the most powerful and and and i always had the most interest in was his name was karnak right so so so karnak's power is to see the flaw in all things right that's his that's his great that's his superpower what's his superpower he can see the flaw in all things and and I will tell you that that I think the flaw in Bitcoin and I've been out there talking about this is is is the same flaw that you see with coin offerings

and alt coins and the like. It is the contesting with the state for control over money. I know why it's there, right? Because here's the other thing about coyotes, right? We're smart. We're smart. We're problem solvers.

We're game players. We're also all a little on the make. mm-hmm we are we are right I want to make money yeah I don't mind saying anyone that no and every coyote I've ever met that same feeling so so I get it right you've got this clever and again I'm not being disparaging when I say clever I mean to me this is high praise right I call Bitcoin art right it's it's it's it's elegant art I would agree and and and here is the opportunity oh you know it's not just cool it can be money and i can make money with it right and

and when you start dealing in the business of money right you are going to a attract every raccoon in a thousand mile radius they are going to come running at you right and you're also going to attract the state the government and the the wheels of government grind slow but they grind exceedingly well there may not be as many clever coyotes in government but they will outlast you right they are the animal control officer and and and and so i hear you on the the divide right between bitcoin and other coins i hear you right and and the but from an outsider i see enormous cleverness in some of the alternative coins and the and the the problems they are trying to solve and they share with bitcoin i think the fatal flaw that they are expressing

these clever solutions in the form of money so you think bitcoiners almost abrupt confrontation with the state and its control over money is the biggest flaw of the system um and what so what would an alternative be to uh attacking this problem this way because a big quote that goes around the bitcoiner circles is hyax we're never going to fix money until we find a sly roundabout way to take it from the hands of the government and bitcoiners would be uh i'm a strong believer in that bitcoin is the first opportunity that we see in a while to do that and um if done correctly could could be done successfully as well well i would say that there are first of all you know i'll back up a second right so so when i say that i am sympathetic to the goals of

self-sovereignty and autonomy particularly on autonomy of mind saying i'm sympathetic to that doesn't do it justice right that is what i'm all about it's visceral in you that's that's right But I do want to focus on that notion of an autonomy of mind, right, of my identity, right? Now, is money and the medium of exchange for my commercial transactions in the world, is that part of my identity? Sure. Sure, it is. it's it's not a big part of my identity though right it's really not when i when i think about what my my my autonomy of mind means it is my independence to think what i want to think

to say what i want to say to say it to who i want to say it to uh to not to not just be censored directly and I love the fact that Bitcoin is a censorship resistant technology and it is frankly my biggest gripe

gripe is too weak a word it's the Trojan horse that Libra and its kin provide they're not censorship resistant they are censorship embracing right yes it's it's a to me this is a means of again the state co-opting the clever coyotes

right but but but but hear me out on this i i think that when i think about what are the important problems of distributed trust to solve because that that's those are the if there's a common thread amongst the problems that bitcoin all kinds are trying to solve are problems of distributed trust, right? There are so many problems of distributed trust that I want to solve that have nothing to do with money, right? That have to do with taking back my data, right? From everything from where I travel, right? Who I speak to, you know, what I speak about. Because right now we're in a world where it's not just the censorship of you know the corporations or the state it's the self-censorship that i find to be the most

pernicious and widespread aspect we we censor ourselves because in the same way we talked about how we can't imagine a world where we're not measuring something and that that's the end all and be all of of what we see in financial world it's the same way in our in our individual world we can't imagine a world right where we um where we don't cheer where the zeitgeist is not for what i like to call kind of yay capitalism right or or um you know well of course we have you know thousands of soldiers in afghanistan right you know when have we not had that right it's just we we take this as again the water in which we swim and and and and i want to use these distributed trust solving technologies to find a way to to weave together

humans in what i'd call packs so that we can have these conversations so that we don't self-censor ourselves i when i think about what is possible in this world because i am still a believer in the the the small l liberal virtues of of of you know of freedom and liberty right and the freedom to express ourselves and create these things when when i see what's possible in these these these grassroots uncensored and unself-censored movements like like uh maker fairs right where you get kids and you know anyone kind of coming out there and just building shit right that that right that's the engine for a healthy society and and and and that's where i want to see these these these technologies applied uh rather than on the creation of

money what uh so i would argue that money would be the first thing that you need to be distributed if you're going to so if you're talking like a course of action to get um to the future that you're describing where you're distributed you're holding your own data and actually all this stuff's going on in parallel like uh people are working on private data servers that you control and stuff like that and can uh basically release data on your behalf or when you when you please and they're not pulling it from you it's a push system like bitcoin you're pushing your data out it's not being pulled from you um but like in a lot of bitcoiners would argue too you need to take control of money to to help almost defund the the expansion of these let's focus on surveillance

tech and then yeah um and so that's a big so so what all coyotes tell themselves is that they can do well by doing good okay right so so and this isn't just for bitcoin right everywhere i go in finance and investing the the the and it's not necessarily a lie right but it's not the whole truth right we we tell ourselves oh yeah this is going to be accomplishing this good thing and and look as a as an extra bonus there's a pot of gold here for me right i'm gonna i'm gonna do well by doing good and the the the big good that that that i i i hear and again don't just sympathize with I believe in the positive energy of this community

is the notion of, I'll call it resistance against the seeping control over our, not just our transactions, but literally our minds, right, that governments and corporations have. I get that, right? and i think that there is possible to have a revolution but but but let me let me give you the stories my favorite story about about revolution and i say this it's it's a bible

story and i'm telling you this i'm not religious at all not at all right um bible still good book i'm just not i'm just not but but you want to read about resistance right so so so read the new testament right so that that is a book of resistance right and and so this revolutionary this guy you know jesus christ right he was there and and the and the narrative was okay he's he's going to overthrow the king right so so he's there to to do the revolution and and so you know these i don't know the counterpart of this would be be to be today right but but the the these bankers come to him the pharisees come to him and and they say they basically ask jesus a question about about taxes right they they hand him a gold coin and say hey you know i i hear you're gonna

you know overthrow the government you know what what should we do about you know maybe we just pay our taxes right and and so jesus sees the trap right so so he sees you know the meta game here is to overthrow right but if you play that the game that's right there in front of you if you say yeah hell yeah you know you know stop paying your taxes right you know forget that right then you're you're going to be and this is what always happens right some of you are going to be taken down the street and shot in the head others of you are going to be co-opted with some sort of bailout right and and the whole thing is just going to end up empowering the state it's going to become a state religion and a state revolution right and so jesus said is of course render unto

caesar that which is caesar render unto god that which is god's because what what jesus was saying and again i'm not saying this as a religious story because i'm not right what he's saying is that the revolution doesn't come from storming the treasury and refusing to pay your taxes right you can go that route if you want to but he's saying the real revolution comes in your heart and my heart and that other guy's heart over there that's where the revolution is and that was true 2 000 years ago it is true today the way we make a revolution right is not to take up arms against a warring state the way we make a revolution is bird by bird person by person group by group pack by pack family by family child by child and you work

on yourself you work in your community and and that's that is how these things start it's it's very frustrating to hear that message because this is the work not of a few years this is the work of a few lifetimes right this change isn't going to happen in my lifetime and i'm okay with that because this is how one makes lasting change and it's the only thing that ever has no and i i would agree that's um bitcoin in particular talk about this on the podcast a lot like i have like a seven generation mindset when you think of it like what can you do today to make the seventh generation ahead of you better off and i think bitcoin i think we're talking about revolution i think it's a necessary maybe not bitcoin in particular but we need a revolution

of some sorts to take back the power of the individual because again we were born in this anomaly we were born at an inflection point right with the internet the onset of the internet and the exchange of information and values and uh the last big inflection point before the internet was probably the printing press 500 years ago and and so we um and i can argue the industrial revolution and stuff like that but in terms of information sharing the printing press was probably the last big one and just trying to react to being born in this inflection point and sort of applying anarchisms of the industrial age to the digital age um we're sort of fighting out in the first iteration of the internet the first 30 40 years of the internet maybe it's not architected correctly

and it may be necessary to have a revolution to take back our power before the whole chinese surveillance state is is uh sort of exported to the rest of the world well i tell you marty i think there are absolutely ways to use and i'll i'll i'll call it more just distributed ledger technology the the notion of of these technologies to solve distributed trust questions i i think are are absolutely at the heart of where we should all be working again to preserve what i'm going to call the the small l liberal virtues right what what what i will tell you now from from this most recent career and and in a lifetime of studying this stuff when it comes to the world of financial innovation is that outside of finance i'm i'm with you a thousand percent on on on the

The power, both for good and for bad, and so let's make it for good, of technological innovation. When it comes to the business of money, there are only two innovations, right? There are new ways of securitizing something. And I know people get upset about this, but it's true. So Bitcoin as money is a securitization of code. I'm going to make that argument, and we can all argue about it, and everybody can look at me weird, but I'm going to stick with that, right? Hang on a second.

The other innovation in finance is a new way to lever something, a new way to borrow money on something, right? So it's securitization and it's leverage. There's nothing new in the financial world, right? It really is the eternals of fear and greed, state control over money, and new ways of securitizing something or new ways of leveraging something. So that's why I want to take the money part, the finance part, out of these elegant technologies to solve problems of distributed trust.

Because so long as it is embedded within questions of money and finance, it's going to be fear and greed. it's going to be raccoons as far as i can see and it's going to be whoever caesar's men are at the time right up your ass all the time right and and there there are such important i think it's important existential issues for our own autonomy and the autonomy of our children that need to be solved you know you mentioned about the surveillance state in ways of finding censorship resistant self-censorship resistant means of expressing ourselves and knowing our identity and expressing our autonomy that have nothing to do with money and that's why i'm so

karnak like right when i say that the flaw here is the insistence that it has to be focused on money well what would you say to the fact that money may be needed to create the incentive to create these distributed systems because bitcoin the token is the incentive that makes the distributed system work in this case so so so i'd i'd point you to other uh i'll call them distributed networks so so my best example would be like wikipedia right so so to to me wikipedia which which works which which has to solve a distributed trust problem right right How do you edit? How do you keep adding to the wiki here?

I think Wikipedia has done more to advance humanity, frankly, and an autonomy of mind and spirit. Then I'm hard-pressed to think of anything that comes close. Hard-pressed to think of anything that comes close, right? Wikipedia is not based on a coin, right? right the the incentive structure for for for adding to for using it and the like is not based on a coin theoretically it could be shut down right it's not distributed in the sense that there's different nodes creating that information somebody i'm i'm with you right but so so but but

you don't one of the reasons why you have to i believe why you have to have so much precautions over like uh you know 50 plus one hack or something like that is because you are dealing with money right that's why i think that that i'll call it kind of not anyone wants weak security right in in forms of kind of distribution of and sharing of of of nodes so that becomes resistant but so much of the protections you have to build in to the the bitcoin infrastructure are because it's about money if you want to steal money somebody wants to steal you know a wiki article about you know the you know justinian reforms i i don't think so right right there your point about incentives is exactly right but but but in the sense that

incentives also work both ways right they're incentives to break into steel right they're incentives for the raccoons that get immersed in something that are not there if it's extracted for money so so all i'm saying is that is that we have such a again existential need for our children for ourselves to to to build these forms of resistance in things that frankly are much more important to my autonomy and identity than money and transactions but because we go down a path of like all coyotes do oh hey i can make a lot of money here right we we get immersed in this world of money and then we we tell ourselves oh no no it's going to be okay we're actually doing good by making money with this and and what i'm saying is you got to separate it it's a hard thing to say

right and i know it doesn't make anybody happy but it it has been true for not just 2 000 years you know but for forever that to to achieve real revolution right it it can't come when it's embedded in money i'm sorry i feel sorry when i say this no no i'm not i'm just trying to think here like so trying to extract money away from bitcoin james o'byrne is is uh in the studio with us and i'm looking at him uh to bounce stuff off but so if we abstract money away from bitcoin at the end of the day it's just a distributed system that lets you know what happened when um and it and it works yes doing that it's it's it's beautiful it's it's it's so like i say uh elegant that that

that that i'm just i'm in awe of it and and and i and i love that i say this this has been the change in in my personal i'll call it evolution around around bitcoin in particular and in crypto more generally is that i've come to appreciate that creative positive energy that exists here Because these are people, most of whom are younger than I am, right? And they really want to change the freaking world. So let's change the freaking world. And all I am saying is that if you insist on doing it through a means of money, you are going to be thwarted. You just are.

So let's get into that. How is the state going to co-opt Bitcoin? like you think so you talk about the nudging state right so they don't do it with a jackboot right i mean you could right i mean i guess if you're in the case of china you can right and and so okay we can't get at the code so we're going to you know shut down exchanges right so we're going to make it impossible to if you stay you know physically in our country we're going to make it impossible for you to do anything with it it's just going to sit there and no we can't touch it and it's safe and it's yours right but go ahead it's like it's like burying a gold bar

in your backyard all right go ahead knock yourself out well so that that's one way right but but i say the far more effective way and and it's the way that is i see happening right now is not with the the jackboot right not with the the overtly authoritarian control but again it's the control over narrative and it's the ability to to to literally force people to self-censor themselves to create a narrative and we all know it's coming we all know it's coming that oh you you you're a proponent of bitcoin you will i mean you support white supremacists that's what all the people are saying when when so have you have you stopped supporting isis you know when did you stop beating your wife right because we all know right we all know that drug lords and terrorists

that they're the users of of these coins you know that right oh i know that but they're they also use the u.s dollar as well and oh of course they do but but that but that's not the story right those aren't the show trials well that's so that's the battle that's your story that's the battles that bitcoiners against the the nudging state are in right now and i would argue bitcoiners are better at framing the narrative um or you're in you're in your echo chamber that's true say that that's true in your echo chamber when you say that and and again it's bullshit right it is a bullshit narrative right and what is in particular oh that that that that that that bitcoin and crypto in particular are are like a you know the tool right that they they they they are criminal

because it can be used by criminals. To your point, so can cash, right? But also to the point, that's why governments want to get rid of paper currency as well. Oh, yes. But see, and this is where it's going, and this is why I see Libra as this Trojan horse. I call it the Spanish prisoner con in the note I wrote,

which is that the alternative that's going to be presented, the stick is the narrative, oh, if you're for crypto, you must be for terrorists, right? you must be a terrorist supporter that's the stick the carrot is oh look over here here's a here's here's an electronic you know cryptocurrency quote-unquote that is in partnership with government right it's it it'll feel like oh i'm you know i'm mod i'm you know using you know crypto when it's when it's just a an electronic form of fiat currency yeah but you still can't so one of my favorite stories that i like to tell people when explaining bitcoin to help them get

an understanding is my wife works here in midtown and she works with a bunch of venezuelans actually she's in advertising and a lot of her co-workers are venezuelan and uh one of her co-workers in particular uh her dad was back in caracas and fell ill with cancer and they couldn't get money So like in a world where Libra takes over and wanted to send money from Manhattan to Caracas, probably wouldn't be able to do that with Libra, but she did it with Bitcoin. She wasn't able to PayPal or send money down there, so she bought some Bitcoin, sent it to a personal wallet, and then sent it to her family in Venezuela. And so what I see in that is like the market routing around these sanctions and sort of the nudging state trying to clamp down on this. And do you see that use case? So Marty, here's what's happening.

here's what's happening and and again i'm just i'm just telling you this as a as a sympathetic outsider looking at this right you are being put in the same position that i'll use this phrase gold bugs have been put in for the last 50 years right this is you are being given a role you you are being it's like it's like the it's like the united states government is the um you know the casting director for a play right and they say oh mr bitcoin you know we we've heard a lot about you and we'd love to have you come in and read for a role in the in the in the play we're producing it's a long-running play you're going to love it you'll be on stage when you like to read for this role you'll be one of us and you'll say well of course i'll read for the role you're reading for

the role that gold has played for the last 60 years right this quote-unquote store of value right which is which is outside of the the fiat system and i am telling you right now that is a miserable place to live oh believe i don't want to turn into the gold bugs of the digital age even though it's easy to see how that can happen right because because you know it's not sorry you know i'm old enough to remember when i'm old enough to remember when right the the notion of Bitcoin was, oh, I'm going to buy my, you know, cold brew coffee at, you know, Starbucks or whatever, you know, frou-frou place I bought my cold brew coffee from here in Manhattan this morning with Bitcoin. And I know it's like, oh, we can't do Bitcoin, we'll do BCH or we'll do

whatever, right? But that old narrative around Bitcoin, that's gone, right? So now the narrative around Bitcoin is, oh, it's digital gold. It's a store of value. Tell me you don't hear that everywhere you go right and and it's right it's correct but what i am telling you is you are being and and i was god this is intentional pigeonhole pigeonhole is way too kind right you are being ghettoized you in in the in the original meaning the true and terrible meaning of the word ghetto right look over here we've built these wonderful apartment complexes for you this is the neighborhood you're going to live in from now on right oh come on in it's wonderful you're going to love it right and you're going to hate it right because because you're you're you're never getting out

and that's that's that's the way in which you get again co-opted right and there'll be occasional show trials like i say of the the coyote that has to get taken out in the street and shot from time of time you'll have a lot of raccoons who just as they have in gold world have just stolen stolen from you right will you be able to make money trading bitcoin absolutely just like you know there are a lot of people who trade you know commodities and you know precious metals right it's a living it's a living and you'll have these these kind of stories like oh this is you know this helped you know you know the the uncle of my friend survived in some country right but but you are you are being you're being ghettoized when this is happening well

i love that phrase being ghettoized and i i would agree i would we're deaf the the state is definitely starting to frame the narrative, especially the last week in particular with Trump, Powell, and Mnuchin coming out and talking about this. Obviously, they want to have an opinion or getting ahead of it with a certain narrative. But with that being said,

we have confidence in governments at all-time low. We have a lot of inequality in the world that I would argue is driven by monetary policy largely, and I believe you would agree with that to an extent. Of course I would. Of course I would. But, Marty, revolution of the type you're talking about doesn't come from, you know, blogs and an op-ed post, right? It comes from, and this is awful, but this is true in Venezuela and true in any place where you have real revolutions, right?

It comes from freaking guns and bullets and people dying, right? And, you know, if you think that that's what, you know, the Bitcoin community has signed up for, right? It ain't. It just ain't, right? And instead, you end up being the grumpy old man, like you see in Gold World, right? You say, oh, we'll be right eventually. And then you spend your life with that sort of negative energy. And I swear to God, it is literally fatal.

it it it is the most soul-crushing thing in the world to find yourself and you will find yourself and i and i speak from experience here you find yourself rooting for bad things to happen because that's going to prove you right uh and it's it's just a it's just a crappy way to live yeah well is there a timeline in which you see bitcoin succeeding at all like what like what i'm trying to what do you mean succeeding do you mean that i can trade it and i can make money from it it's now you know i mean hell yeah you can you can make money not even well i'm talking about route around the state and successfully route around the state by taking possession of your own utxos and sending them without any being able to be censored so the

scenario which you laid out a little bit earlier was taking it taking control of exchanges and basically creating uh a derivative that people have access to so so i i what i would say is that i do not see any scenario in which what you are describing can be achieved without also the use of guns and bullets and blood why is that and because the the whole reason that governments exist this the whole reason that governments exist is to tax right and and it and and that that that is the existential it is it is it is existential to governments to control the money the form in which those those those taxes are paid and can be can be can be levied and and if you are saying i am opting out of that system i am routing around

you the government says you are my enemy which government though uh the the government of of whatever piece of land in which you are living so yeah so do you do you see a future in which governments around the world have swift coordination to do this at the same time because that is probably what's what's needed if you want to shut down and neuter bitcoin to the to the extent that you're you're talking about so i and that's i get people to say that and it's just like what what what world are you living in what do you mean what world so so so so you're going to you know pick up and move to belize i mean i mean i know lots of guys you know you know one of the the great when i look back at my life i think thank god internet gambling didn't exist

when i was in college right because because my life would have gone down a very different path a very different and i'd probably be in belize right now and and and making sure that when i get a connecting flight to europe i don't you know i don't land i'm not on a plane that might touch down in miami right honest to god that's that i think that's where my life would have gone but when you talk about oh we're going to be kind of sovereign man right and and and i'm and i i don't need the the nation state and i can go from here to over there it's like this that that's the that's the the belief of someone who grows up in a in a in a in a in a that's the belief of an orchid right who believes that the that the greenhouse they've grown up in is is is the world right that

ain't the world uh it doesn't require coordination it just requires one big country it requires the united states saying nope no we're going to we're going to do a little more stick i think they're going to go with the carrot route right whether it's libra or something else you'll you'll come up with basically state-sponsored quote-unquote coins that are just electronic cash right and and And you don't need, and they will reject anything that's censorship resistant. The whole goal is for it to be censorship embracing. So I don't get this. Oh, I'm just going to pick up stakes and I'm going to move to, you're going to move somewhere?

No, I'm not going to move anywhere. The argument would be that the U.S. is clamping down would be an opportunity for some other jurisdiction that is not happy with the state of maybe the U.S. dollar being the reserve currency of the world or the petrodollar being... No, no, no, there's no jurisdiction in the world other than Iran, right, which is also launching their own state-sponsored coin,

I hear, right? You know, how did that work out for Switzerland, right? So Switzerland used to be that place, right? Switzerland used to be that place. And the fact is there is no... yeah switzerland got the message pretty quickly right over the last 10 years is that okay those days are just gone they're they're just gone i wish i wish they still existed the coyote in me wishes there was there was this still existed but they don't that's what disheartens me a little bit

i know is that bitcoin is specifically the code part of it and the distributed nature of it make it so that it is almost impossible to clamp down due to yes you can bury it in your backyard you can not even that but like you can't go house to house and stop people from running nodes it would be logistically very arduous and no need to and so you think it could just be complete completely neutered with a carrot and a stick carrot or a stick mostly carrot right because because it'll become part i really think in five years is this a future we want though like do we of course not then how do we not the future we want then how do we how do we get about it like this seems very stop playing in the world of money stop playing in the world of money and

apply this positive energy in this technology right to applying problems of distributed trust for identity away from money oh that's again you can't separate it from money that's the incentive that makes it run i know you keep using this word incentive like you like why why would people there are lots of incentives in this world other than money are there though and so yeah it's a secure yeah and james james is jumping in here too but yeah so the argument bitcoiners would make is to have this distributed system you need people to be incentivized to run the code to plug in a miner and the incentive for that is the token is the money and then from there you can um you can so i'll go back i'll go back and use wikipedia as my example right but wikipedia

can be shut down at any moment so no my point is going to be is it's not that wikipedia today is i i think you could absolutely run wikipedia on a on a distributed network that was that was censorship resistant how how would you how would you how would you incentivize miners to secure that network i i'm not going to pay them or i'm going to i'm going to to to ask people to donate money to pay the miners and what currency are you going to pay them in i'll pay them in dollars i'll pay them in anything what if that gets sanctioned what if that gets neutered what it like or let's let's go to another uh uh wiki uh wiki leaks so that's a perfect example this is what i've tried to build the this epsilon theory community around right which is that

i believe right in the same way that that that you've that i'll call it a civic religion right What incentivizes people to build churches or to spread a creed and a faith, right? It's not the incentivization of, oh, I'm going to make money from this. It's just not. And my belief is that the civic religion, the civic faith that I have, again in these small l liberal virtues right the virtues of an autonomy of mind a freedom of association and speech for myself and my children i think that there is a motivating spirit around promulgating and securing those liberties which is absolutely as strong

as the desire to make money right so you so you ask how am i going to incentivize this i'm incentivizing it in the same thing that is driving this hundred thousand person strong community i've got in epsilon theory now which is that it's like-minded people who care about that autonomy of mind and recognize that we are besieged by what I like to call the nudging oligarchy

and the nudging state. A community of people who want to exercise clear eyes and full hearts and that's incentive enough. That's my belief. Drop the mic. I believe that.

I would like that as well too but again like who's going to build these systems like and and why are they going to build it and how are they going to fund it and that's and again you talk about like don't do finance don't go money don't go after money and do you think this could possibly be a bias of your experience and maybe uh like your your previous experience in mortgage-backed securities and observing that and other financial phenomenons in your lifetime may have jaded you to the opportunity i mean look one man's bias is another man's belief right and i it but it but it is my belief right it it and and all i can do is is is say it to you as

as uh authentically as i can because it's an authentic belief i'm not i'm not telling you this because I think there's something in it for me I'm telling you this as as like you someone who's thought about this a lot and I'm not saying that I'm the

sole repository of knowledge on any of these subjects what I am saying is that this is my true and authentic belief which I'm presenting to you without um um you know ulterior motive no no i love that we're having like i love this conversation and

it's no it's something bitcoiners need to hear am i jaded absolutely i'm jaded because i have seen so many coyotes have their lives freaking ruined ruined seeing their their their their their their families ruined and you say oh he's a first world problems yeah i get that but we're in the first world we're in the freaking first world so let's get over that right especially in this i've seen lives ruined and and i feel that the the the the powers of nudging are growing are growing and and and they're suffocating and and and and it And it feels, I feel Cassandra-like, right? To say, okay, I think I see where this is going, guys.

And nobody's believing me. And I understand why you don't believe me because we're coyotes and we want to make money. And I wish it were true. But I really don't think it is. Yeah. Are we ever going to turn, Ben Hunt? No, it's...

It's not a matter of turning, right? It's that I don't believe that the end-all and be-all of human behavioral incentives are based on making money. I don't either. It's a strong incentive, I would argue. Yes, of course. So earlier you said money is not part of your identity. It is absolutely part of my identity. It's a small part.

Small part of my identity. Small part of your identity. Yep. and so here's another thing that bitcoin is arguing sound money and bitcoin being a sound money in particular is that it would help us get back to sort of a quasi metric system for money and value and having uh under the the why why are you embracing right the the this again the the role of the the the gold person right why because again going back to representing your identity I think it is imperative because it may not represent be as big a part of your identity as you think, but it represents time that you have expended in energy that you have expended money does in particular.

And it represents that may not be identity, but it represents the amount of work that you have expended in your life at some point. And that's what I like. That's what's drawn me to Bitcoin is not. Yes, obviously, we want to make money on top of it being censorship resistant, freedom enabling. I do think what yeah you don't want to be stolen from you essentially in the form of inflation exactly yeah and that's your so you're having part of your past identity stolen from you diluted if you will in this current system I'm with you and I and I and I don't mean to make fun of gold world you know I said earlier you know I speak from experience right I should I believe

in gold too right not I don't want to go back to a gold standard right you talk about the kind of metricization but but i but i think the search for uh behaviorally inflation resistant things whether it's gold or bitcoin again i get it i i really i really do there is a place for it i've i've never been one of those oh bitcoin goes to zero bitcoins beanie babies you know you know that's give me give me a fucking break right uh what what i am saying though is that that ship has sailed people right the the ship of fiat currency and and governments controlling money in this in this in this this framework of fiat and soon going now to electronic fiat in electronic cash the ship has sailed right so so the the our our our goal here right is not to

you know storm the the bridge of the ship and you know take it by force and and and you know turn the ship back around and let's go back into that port of sound money no our our goal here is we're on this ship right and so our goal is to keep those principles of freedom and sovereignty and autonomy alive in ourselves and our pack this is what i mean that we have the ability to to to to join together it's a civic religion right and it is not relying on any you know old man with a beard up in the sky it's relying on us and and it is something that we can then keep and maintain for our pack and our children and their children and that's it's the power of a movement as opposed to the power of a of a of a

political party right this this is a bottoms up thing not a top down thing and and it's the most powerful thing in the world and there's an energy and a technology and a you know brain power and money in this community to make it happen which is why i like being on podcasts like this so you think we can make it happen absolutely of course i do so wouldn't be here so let's get to this so you just talk about the ship we're on a ship it's not turning around is the ship is the ship the titanic though um and so let's talk about the macro landscape do we need bitcoin as sort of a uh a steam valve that can release some of the pressure of what looks to be the inevitability see see unfortunately i think you've got it right in terms of the steam valve but but

but but it's not a steam valve the way you think it is so the the road you are going down and again I say this from an outsider's perspective is the same to take on the same steam valve role that gold has played, right? So that, so that if, if gold bugs did not exist, government would have to invent them, right? It gives a place for disgruntlement to exist, right? It's a, it's a, it's again, you are pegged, you're in a safe place. it's a safe place to warehouse the disgruntled right if you're in the government so it's a

steam valve in the sense that it's safe you're not going to be taking up guns right against it's the government and and we're going to put you in a role where you say yeah we're a store of value and and and that's fine you get you'll get you'll get a pat on the head and and you know as soon as you go you leave the room everyone who's left in the room will go right which is what what is the attitude towards gold today that's going to be the attitude towards bitcoin so it's a steam valve but not in the way you think well would you agree that bitcoin and bitcoiners are better equipped to to bring their vision of the world into fruition than gold bugs because gold has literally been neutered by centralization physical centralization of supply and bitcoin

sort of avoids that inherent centralization uh risk that exists with physical gold so so yes and know what what i would tell you though is that um what i call gold true believers have been fighting this fight for a lot longer than you have oh i know and and and gold true believers when i talk to them about this about the way they've been ghettoized the way they've been relegated into a socially acceptable role of disgruntlement right they get it they they they get it and and and i don't think bitcoiners get it yet they're they're so excited that oh we're a store of value we're like digital gold and it's like don't be excited about this really don't don't be because there's there's so much more that this technology could be achieving than trading it

which i get it we all want to make money trade it fine good go right just like you can trade gold but but the but but but bearing putting gold in your safe deposit box by the way did you know they're there that some banks are no longer allowing you to keep gold in your safe deposit box well italy's raiding the safety deposit box aren't they so yeah this is all towards a move towards central towards electronic cash yes censorship embracing cash and what i'm telling you is this is caesar's business render unto caesar that which is caesar's and and we we have there's so much we can accomplish by resisting caesar outside of what is his because we we we have let caesar take over so much that doesn't belong to caesar's money belongs to caesar all

right good fine have it there's a lot that we've given up to caesar and i damn well want to take that back yeah you're i mean we're you're preaching to the choir here i think money money i am and i'm not right because because because you i i and i know that it's so hard to let go of this notion of i can have the money too and and and and the and the and the the tough love i'm i'm i'm giving to you here i love the tough love is you can't have the money i'm sorry but uh you you you can't have the money the problem with this conversation there james thank you uh hi freaks um ben um And Marty's pack goes by freak. So sort of equivalent there.

One of the frustrating parts about this conversation, at least this part of the conversation for me, is that I think the substrates of Bitcoin and gold are fundamentally different. You talk about the government saying, OK, yeah, bury it in your backyard. I think for me, the big difference is that Bitcoin can be teleported to somebody else's backyard immediately. and so there's that feature makes it into sort of a substrate for value transmission that gold could never even have I get it you know you're right

you're right it's better it's better it's better than gold right for it for that reason I can think of other reasons too right but you're in the same you're you're it's it that's a difference that's a that's a difference of

degree or attribute not a not a not a difference in in category right so so so what i what i think is is that is that the the way in which bitcoin is co-opted is to a introduce a more narrative friendly censorship embracing coin i think that's coming i think libra is the first of many right that are coming down the back the pike and then i think the the second piece of this is to uh relegate bitcoin and any sort of censorship resistant store of value into this category to tell you who you are right i know who you want to be right you want to be the the way to route around the state and the state's money and and you are by being told oh you're a store of value you are being relegated to a category that does not allow

you to route around instead it's a category that that creates of you a socially acceptable disgruntlement yes and so the store of value narrative and framing uh in particular i think that's just a product of the timeline of bitcoin and where we are right now so i'd say this a lot in the newsletter and on the podcast is like if Bitcoin is to be money it should be a store value like eventually it'll be a store value medium of exchange a unit of count and a unit of account

and just you're not going to get that out of the box at once like you're not going to have a perfect money because money you have to come to agree that it is a particular monetary good is good for the double coincidence of once problem so yes while Bitcoin may be a store it may be

marketed and rightfully so is better use cases of store of value than a medium of exchange now because uh it sending sending out the protocol once you go into the store of value world it's a one-way street you can't come back from that into why well there's there's because i'll tell you why because i'll tell you why if you think i am i am preserving and saving value here in in gold or what have you and and now i'm going to turn around i'm going to i'm going to spend that on a cup of coffee what what well what what what why would i do that because you need to you need to drink coffee you need to eat so but but my point is that is that my my investments the things that i that i am

investing in because i think that they are going to so so invite investing in the stock market is another way to try to uh preserve value to do something where okay uh if there's an inflation if there if that's hitting at my my cash right i'm going to buy a a cash flowing real world company i want to buy you know a fractional ownership share in those cash flows because i believe if i pick the right companies that that company they can grow their cash flows at least as fast as and if they've got pricing power more quickly than the the the the hit that my currency takes in the form of inflation right so when i make an investment like that then that that's its purpose its purpose there is to preserve my wealth like you're talking before i've i've worked

my whole freaking life for this and spent you know years and years and i'll be damned if i'm going to let you know just some printing press and you know go around take that away from me well all right if i've got to cash in my investment because i've got to freaking live i've got to pay the rent i get it right but you're not going to go to to you know a store of value to become a medium of exchange any more than somebody who's got you know a couple of you know gold bars in the safe deposit box goes in and says oh well i you know i need to you know pay the rent this way i'm going to shave off some gold trade it in and get some and trade that in for for what i'm doing going into that that that store of value world it says impossible let's just say it makes it

extremely extremely difficult right to move it back to a medium of exchange because the purpose is very different yes the purpose is different but it could be both right if the if the monetary supply is not being expanded and the ability to be both is again unique against gold like nobody's going to bring a gold bar and start shaving it off that's that's not practical bitcoin on like layer two like lightning you can you can send satoshis you can send a fraction of of a bitcoin i know i know there's a practicalness to is is like james was saying yes it's also easier to you know move it from one yard to another it's easier to to shave little bits of it off so stipulated right my point's again a category differential right what about monetary history

gold was used as a medium of exchange and a store of value throughout history for 4 000 years why are we you're why are you doing this why are you doing that so so that again that ship has freaking sailed right and and and if if there was some risk that the government perceived that oh my god this could be an alternative to the people start taking the cash right so so that's you know people start taking this as an alternative or or worse preferring it to taking dollars right well that's when you get the jackboot right that's when you get all right sorry the all these exchanges are shut down yeah and he's like just like you did with gold just like you did with gold and this is something bitcoin is very upfront about and very this is on the top of at least some

of the most uh sort of thoroughly thinking bitcoiners that i know is everybody's thinking of state actor everybody's thinking of the final boss and how to fortify the system and get to a level of decentralization think about what you're saying here what you are saying is gosh i'm going to be sitting pretty when the world freaking ends this is what i mean by i don't want the world to end well well you want it to end enough right so that dollars so we have to go back to some you know quote unquote sound money standard well right it and when when you think about the deflationary shock that would be required for that, right? It means that, you know, the average house price in America would be, you know, $5,000, right? That's what you're talking about. And that is a deflationary

shock of unparalleled proportions, right? But that's what you're saying, okay, if that happens, i win and and again i'm telling you that it's such a miserable way to go through life it is such a miserable way to go through life well this is where i get so i don't i'm not praying for the end of the world or the end of the financial system having worked in it and looking at it and looking at you know where it seems that it's going with modern monetary theory like more money printing it's like what like i think this is bitcoin is completely necessary in our day and age because without it we are just going to drift on this ship towards a dystopian future that nobody wants and um it's okay so so we're in complete agreement about where

the ship is going yeah and and and what i'm asking for so and it's hard it is a hard ask it's a tough ask i'm saying that there are ways to change the our society on the ship right that we're that we're not going to storm the bridge and get the captains to to to stop sailing us in particular direction but if we can change the way we think and hear the captain's announcements over the loudspeaker right that that is what changes everything right there there's so this this you know when i talk about these small l principles of liberalism it's talking about basically the scottish enlightenment you know it's guys like adam smith and and guys like that who weren't you know laissez-faire you know call of the wild you know kind of guys there's a role

for government and and you and you you need all that right but but one of those those scottish enlightenment guys a real patriotic guy right he said you know i'd rather i'd rather i care not who writes the laws of a country if i can write the songs and what i'm saying is let's write the songs i like that let's write let's write the songs let's let's let's let's change our society in the way that a civic religion can change the society uh in a way that has i think a lot of historical examples of success in a way that challenging caesar over money does not okay all right the last question on bitcoin and money like what is the future of money then i think is money just destined to be the state controlled

tool that steals from you over time yes yes ah that's so pessimistic i like i say it's it's it's it's it's it's tough love right and and and i wish it were otherwise but for it to be otherwise requires you to to do something i don't want to wish on anybody which is the guns and bullets route yeah no it's heavy no this has been great um getting this contrary i mean as bitcoiners somebody writes about every day talks about it every week it's uh it's important to have these tough conversations i am still optimistic that it's possible good i'm glad i wouldn't have it any other way honestly marty it's been fantastic being here thanks for giving me

the opportunity to come on i really well i have one more topic to talk about uh if you if you are willing to indulge um another way that you took back your autonomy is something i'm just fascinated about because you shared this re-shared this article on the fourth of july is you decided to homeschool your kids and uh one thing that really stuck out to me out to me in that article in particular that newsletter in particular uh was the fact that you said the amount of stress that was lifted off your shoulders immediately just because the time you were able to save each day so what off my shoulders right right off my off my shoulders yes off my children's shoulders And first of all, let me say, when I say we decided to homeschool, that's entirely a royal we, right?

I do so little of the actual work around this. It's my wife doing a lot of the work. And it's a work, again, that is shared in a community, right? It's finding like-minded families. So we're not religious wackos, right? We're not, you know, unschoolers, right? it's a belief in a I'll call it a classical education and you pool your resources and you hire the chemistry teacher right it's a it's a movable feast where you're playing this sort of

active role it's it's it's where you are acting in partnership with your local school they're not the enemy that your local schools are great right and I don't begrudge a thing about public education right i don't begrudge the taxes i pay hell i'd pay more don't tell anyone i'd pay more right and and we had a luxury of being able to go down this path it was the best thing we ever did right it's a luxury because of the just the the my my kids were up for it you know we had a family situation that allowed us to do it it's not for everybody right either by aptitude or just you just can't swing it you just can't make it work but what everyone can do is play an active participatory role in their children's education and realize you're not sharing responsibility

with the state when you send your kids off to school it this is not a a joint venture in child raising between you and the government right it's your responsibility all the time all the time and playing that sort of active role and understanding, yeah, you know what? It's tough. It's difficult. This is your job. That changes everything. It changes everything.

How do you even go about, like, structuring a curriculum? Do you see what your kids are interested in and sort of push them in a certain direction? Well, it's a couple of things. First of all, there are so many resources available online today that make this possible. Second, and this is really I found only true in the United States, there is much less of a look askance and a social penalty that you pay from homeschooling in the U.S. than you do in other countries. You can homeschool in other countries. It's not, there is a path, though, where your homeschooling can absolutely be, in my view, should be a college preparatory path, right? So colleges today, it's not weird, it's not looked at so unusually, it's part of the road there, right?

so it's it is it is so much easier today than you know any decade or you know in the past to to homeschool your kids and look you can go back and forth we know lots of parents who you know the homeschool for a couple years say middle school because middle school is a crappy experience for everyone that's terrible imagine moving to a new town it's oh my god right it's terrible and then you you know you you you go back to the local school for high school you can go back and forth like i say the the local public schools are not the enemy right they're an ally in this they really are and and so it's it's it's a matter of of taking that active involvement in your child's education all the time not just when they're home right but but all the time and structuring that

mix and that curriculum that works for your family that's what that's all it is and so if you don't mind me asking like what what were your your daughters drawn towards to learn about each have different interests it's it it is a a class again i'll call it a classical education right right meaning that it is you know the it's it's it's it's all the usual subjects right and and yet you take all the ap classes you you you but you're doing it in a participatory way you're doing it in a way that allows the families and these cooperatives right there's a series of co-ops that you can you join and you find get like-minded families you either higher teachers in certain subjects families have have a bill so so so my wife is a lawyer

right so she teaches the debate class of these homeschoolers and you know as i was high school i didn't think anything about debate that just seemed like you know just just something weird to do man it's been just fantastic they've won the you know the state championships and the these teams and i find it so useful particularly for uh for for young women for girls right to to to learn critical thinking and critical speaking right the ability to get up and you know argue with you know these kind of mansplainer boys in training and and and hold their own of this so so what you end up with in these classes these debate classes for homeschoolers are children of different ages because that's the other thing you get a homeschooling experience

it's not let's warehouse you know 30 or 40 13 year olds all together one group and kind of heard them from room to room for most of the day right it's it's it's children of different ages right boys and girls all working together to argue with each other and develop their critical thinking abilities i mean people always ask you know homeschooling well you know how do they get socialized you know aren't don't you worry about socialization of your kids and my answer is you know don't you right right right and and and the socialization that happens in in a in a in a group of you know multiple ages boys girls different backgrounds because you also get a lot of different class backgrounds in in homeschooling you you get people who got a lot of money you

got people who've got no money right and and and you you put that group together and they're all there to develop critical thinking and reading abilities you know that's the kind of socialization that i sure get get get get can get behind that's somewhere like the montessori uh sort of structure just allocated yeah there are a lot of elements around this and again this is you know nobody's inventing cold fusion here right these are ideas that whether i'm talking about it when it comes to investing in finance or whether i'm talking about you know our families and our political lives you know shit man we're not we're not smarter than socrates and we're not wiser than jesus right and and so you've got you know the the core thing of socrates was know thyself

yeah right on brother i mean know thyself right and and and and keep that that that north star of your own autonomy and your own identity right and jesus is the golden rule right do it do unto others as they would do unto you right think cooperatively right yeah yeah that that's that's how society is made you yeah just apply those two rules it's like what i call you know from friday night lights right it's clear eyes know yourself full hearts do unto others as they would do unto you can't lose clear eyes full hearts can't lose it's true for high school football in texas and it's true for our lives today it really is it's a good motto to live by it's uh i've blown through that series many times in the past now it's true it's it is and that's what i

think draws us to bitcoin pointing the james here next to me is that bitcoin really does force you to know who you are in many aspects because you have to take control of it and you have to make that decision. Am I willing to take control of this? I think... Yeah, look, look, I love it. So make money with it.

I'm not saying don't make money. I'm not saying live like a freaking monk and give up your money. Make some money with it. I don't want to make some money. I want to make money. We want to make new money. And that's where we disagree.

That's where we disagree. If you make money, You're getting into Caesar's business, and you are going to be either taken out on the street and shot, or you're going to be co-opted, or you're going to be turned into the safe, grumpy old man yelling at clouds. And what I'm saying is make money. Don't make the money, but make yourself some money. Make some profit, right? Trade it. Do all this.

And use that for good, right? Use it to develop this technology in a modern way, right, that we can really change the culture of this ship we're sailing on. Yeah. This is poetic that we're in Chain Co. Labs, a company started by two men who made a lot of money. Absolutely. God bless them. Yeah. Yeah.

It's been a pleasure. Should we end on your announcement about the site moving away from ads? Yes. So, you know, like I say, it's been an evolution for me, not in my views about, again, the Karnak fatal flaw in Bitcoin. It's been absolutely an evolution for me to get to know the people in this community and just be in awe of that positive energy and that, you know, shared coyote spirit, frankly. And so, you know, we're making some changes on Epsilon Theory. we're getting rid of the ads on the website right we're we're going to move even more in the direction of you know pay what you can it's a and we're going to build this community right and and

you know we want to live we want to make a good living so so we're going to charge subscriptions but we're not going to you know put up a total wall on this content but part of what we're doing is we will start taking bitcoin right for for subscriptions and for for moving forward in in our mission, right? So we're going to set up a node, whether you know, some BTC pay server thing, and we'll have that up and running

in a week or two. Well, it's great to hear. You're using it as a medium of exchange, you crazy, crazy guy. I know, right? Exactly, exactly. Ben, shave off your bar of gold. It's been a pleasure. Thank you so much for coming in. Anytime, Marty. Thank you for what you're doing.

it's it's extremely flattering to hear that from you again your writing is is profound in my mind and it it really helps develop a perspective of how the world works and thank you for doing what you do as well you got it man peace and love freaks