The Breakdown - The Breakdown Weekly Recap | March 21 2020

Episode Date: March 21, 2020

The week's episode, in one convenient file. Also including short clips from CoinShares CEO Jean-Marie Mognetti and SwanBitcoin CEO Cory Klippsten.  Monday | Can $700B in Quantitative Easing Calm The Markets? Feat. CoinDesk’s Michael Casey and Noelle Acheson Tuesday | Gov't Stimulus Goes BIG and Why Bitcoin Is the Only Truly Free Market, Feat. Dan Tapiero Wednesday | Is the COVID19 Fiscal & Monetary Response An Overreaction? Feat. Bruce Fenton Thursday | Off Friday | State Power & Authoritarianism After Coronavirus featuring Peter McCormack

Welcome back to The Breakdown, an everyday analysis breaking down the most important stories in Bitcoin, crypto, and beyond, with your host, NLW. The Breakdown is distributed by CoinDesk. Welcome back to The Breakdown. It is Saturday, March 21st. And as with every Saturday, I'm bringing you an extended episode that has all of the week's episodes cut together for your errands, your long runs. Although I guess most of us aren't really going out for errands right now. Now, before we get into those episodes, I think that if I had to say the theme of the week from the Bitcoin community perspective is the emergence of a new narrative, right? Over the last couple of weeks, as Bitcoin has largely mirrored equities, as everything has been sold off, there are many who called for the end of the Safe Haven narrative. Now, this week, Bitcoin has not only stayed flat, it has actually risen a little bit to over 6,000. Now, my general belief is that we're too quick to throw narratives out the window or adapt

narratives at the slightest evidence. And so I'm not saying that we need to now tell a story of uncoupling or decoupling as the major narrative. However, I will say that there is something going on, I do believe, in wider circles where as governments get ready to inject and print huge, huge amounts of money, right? The stimulus bill just keeps getting more and more expensive as it's proposed. people are looking around to say, well, what else offers some different sort of monetary dynamics than that? This is mostly anecdotal evidence at this point, but Michael Casey, the chief content officer at CoinDesk,

actually noted on Twitter that CoinDesk had seen a major uptick in its Bitcoin 101 pages. So there is, I think, something going on that's not just in our community. And I think that narrative is going to be really interesting to watch unfold. Now, in terms of this week's episodes, we started on, Monday, actually with a discussion with Michael Casey as well as Noel Atchison from CoinDesk about the government's emergency stimulus plan, right? We saw extraordinary Fed action last Sunday, and Noel and Michael came on to help break it down and really question whether it was going to calm the markets down. Spoiler alert, it did not. On Tuesday, I had on Dan Tapiero. Dan is a super interesting macro thinker.

He runs a digital asset fund. He also has been involved with gold for a long time. He's been involved in a huge number of different parts of the market. And he talked about why Bitcoin is really the only truly free market left. So that's one that is, I highly recommend you check it out. On Wednesday, we had Bruce Fenton join. Bruce was one of the original canaries in the coal mine for the crypto community around COVID. And he talked about basically whether we were overreacting with this financial stimulus, but also about an open source approach to trying to solve the ventilator problem. So it's a really interesting conversation. that is pretty wide-ranging. Thursday we were off and then Friday we had what I jokingly call

the like podcasters social distancing happy hour with Peter McCormick. It's it was originally going to be an episode that was just about Peter sharing what he'd learned on his travels to South America and to Turkey and Greece recently and it ended up being a much wider and honestly kind of more raw conversation about politics and belief systems in the era of coronavirus. So there'll be a lot of you who don't particularly love that episode, not because you necessarily disagree or anything. It's just something a little bit different than what you maybe come here for in terms of Bitcoin analysis and macro analysis. But I did want to share it.

I think it certainly reflects where both of our heads were. So that's it for this week. Before I turn over to the episodes, I want to share two more things. So last week, as we were coming off really the market starting to grok the horror stimulus and we saw Bitcoin's major crash, I asked a couple people to share their things. thoughts. And there were two folks who responded who I wasn't able to get their comments into last week's episode. And I think that even a week on, they're really worth listening to. The first is from Jean-Marie Magnetti, who is the CEO of CoinShare's group. And he

discusses why CoinShare still believes that Bitcoin is a risk-off asset temporarily trading as a risk-on asset. So let's listen in. Since last summer, the team at Coinshare have been discussing in our macro research pieces, what could be the catalyst of the next downturn? A week ago, the condition for the perfect storm were taking shape. The opaque cartel announced the decision by both Russia and Saudi to go after the shale gas industry in the US. This was followed by an inefficient Fed intervention and then the news of an escalating pandemic. News catalysts were added progressively during the week. Coronavirus spreading in Europe, the US decision,

to ban inbound flight from Europe, CME closing the pit, several central banks attempt to bring stability, albeit in an uncoordinated manner, and finally, a lot of political interference. This led to a third session, which, if I'm correct, was the first time the nine circuit breakers were used since September 1987. So when the global repricing of everything happens,

from oil to stocks, bond, treasuries, and even gold, seeing Bitcoin in pricing is not really a surprise. More a consequence of what is looking and feeling like a fire sale. At coin shares, this doesn't change our investment narrative. We still believe Bitcoin is a risk of asset trading momentarily as a risk on one. The key word here is momentarily. The sharp decline that we have seen in Bitcoin

price has been facilitated and amplified by the amount of leverage available in the ecosystem versus size and maturity. It creates a lot of pressure on exchanges, but also off exchanges with the landing desk and OTC desk facing an unprecedented amount of margin call to serve. This brought the Defi programs to the limit of their models with some never heard of intervention from the foundations. Before that said, we are most likely at eve of a new financial paradigm. As we look at the negative interest rate environment and significant levels of quantitative easing across the globe,

the months and years ahead will be Bitcoin proving where. Now our second clip comes from Corey Clipstein, who is the CEO of Swan Bitcoin, which is a new forthcoming Bitcoin-only financial institution. He also has similar feelings. where he discusses the bright orange future that is still ahead of us. And especially after we've seen what happened this week with the Bitcoin price and this new narrative emerging, he was prophetic, basically. So let's give that a listen to.

Hey, Nathaniel and friends, this is Corey Clipson, founder of Swan Bitcoin and Give Bitcoin, just contributing a few thoughts to what's gone down this past week and what we have to look forward to over the next few months and years. It remains a bright orange future for Bitcoin when I think about the implications for people in our situation starting Bitcoin infrastructure companies, companies in and around Bitcoin. You know, this is really the time when great stories are started, right? We know that some of the best, probably most of the best companies in Silicon Valley from the last cohort were really forward. in the fires of the great financial crisis.

And I think it's probably similar here. You know, there's less competition. There's more availability of talent that wants to work on companies that are already standing up. And I think you can, you know, as has always been the advice among CEOs and consultants in the legacy system. And, you know, you use market downturns to take share from competitors competitors and to solidify your brand in the hearts and minds of consumers. And I think,

you know, the cohort of Bitcoin companies that exist today absolutely have that opportunity to double down to, you know, continue to go hard through the downturn and really, you know, thrive when we come out the other side of this. So that's how we're looking at it. You know, I and my teammates, Jan Pritzker, Brady Swenson, and the rest of the crew, we're doubling down. working really hard and we're excited to launch here on March 25th to 49 states. Sorry, New York, but we think it's a great opportunity to give people who are going to be stacking stats automatically a low starting point and we expect to have some very, very, very happy customers in the coming months and years if they start their stacking now with Bitcoin down here in the mid-four

digits. So that's it. Hit us up on Twitter if you have any thoughts for us. Now, as you can see, and this might not surprise you, there is clearly conviction on the part of Bitcoiners around the long-term potential of this asset. And one of the things that's been really fascinating to see is just how strong the bottom is, right, for Bitcoin. We've seen consistently for the last couple weeks that the predominance of transactions on platforms like Coinbase are buy orders, right? People are scooping up all of this cheap Bitcoin that was liquidated by institutions who had to flee to cash. This is an incredibly bullish sign. I believe in the long term, it shows how strong that base of belief is. And frankly, right now, governments around the

world and central banks around the world are walking right into one of Bitcoin's most unassailable narrative. So it's going to be an interesting time, no matter what. And hopefully the breakdown can help you make sense of it all. But without further ado, let's turn now to the actual episodes. Thanks for hanging out, guys. Stay safe. And I will catch you on Monday. Peace.

Welcome back to the breakdown. An everyday analysis breaking down the most important stories in Bitcoin, crypto, and beyond with your host, NLW. The breakdown is distributed by CoinDesk. All right. Welcome back to the breakdown. It is Monday, March 16th. And today we're going to do something a little bit different. A week ago, we woke up to tweets from the U.S. President that this was just a bad flu, effectively. A week later, we are seeing shutdowns across states and municipalities around the country. We're seeing a massive ratcheting up of financial intervention. And so to just help make sense of it, I have Michael Casey and Noel Atchison from Coindesk here to talk. talk through really everything that's been going on. And so where I think I want to start is overnight the Fed took a much more significant and more dramatic action. So, Noel, maybe if you

could just kind of bring us up to speed with what is happening in terms of regulators or policymakers' response to this crisis that we have. Sure. And I'll start with what happened yesterday, and the reason the markets are crashing so much today. Yesterday, the Fed did the only thing it knows how to do, but it so in a way that ended up having the opposite effect of the desired outcome. Yesterday, the Fed cut rates by a full point, and it announced significant support for the markets in terms of liquidity, and also it made it cheaper and more convenient for banks to borrow directly, etc. A bunch of measures that on the surface make a lot of sense, but we have to look at the way in which it did it. The Fed does not normally break its habit of its pre-scheduled meetings, but yesterday it made a very

drastic announcement on a Sunday, and if any of you are classics scholars, actually on the aides of March, which may have some portents there, but on a Sunday, that is in itself kind of extraordinary, and also just a few days after another extraordinary intervention from the Fed. It emptied its bazook onto the markets by lowering rates to zero, and in doing so totally spooked the markets that know it doesn't have any more bullets to spend. Not only bad, but we also know that the markets are worried about the economy. We're pretty certain that there's a lot more bad news coming. And what will the Fed do? That's a great question. What will they do? Because the point that you're making, I think, which is quite acute, is that in the context of having no more bullets,

where do you go from here? So, I mean, Michael, how are you watching this new phase of the Fed's response to the corona crisis? Well, it only needs to be understood in the context of the, the, the type of problem that it's up against, right? So 2008 was a financial crisis. The source of the crisis emanated from the plumbing of finance. And so when you had sheer liquidity problems within the payment system and therefore we had things like the commercial paper market breaking down, then the thing that perhaps you could do is throw a lot of money at that to bring liquidity to it because you're resolving that problem. The real problem here is a supply side economic shock. It's how the markets are digesting the actual state of the world, which is going into, yeah, like an epileptic shock.

It's just everything is being shut down. You're opening it to this session, Nathaniel, just laid it all out. It's a rolling impact on the global planet. That's a supply side problem. It's also a demand problem. It's about the fact that conferences are shifting like consensus is from a big event to a virtual one. this has a sort of rolling impact on the real economy. It's not clear that throwing a lot of liquidity at financial assets

is necessarily going to have anything to do to fix either of those problems. To Noel's point, it's the signaling that actually may be part of the problem here. Very, very nervous environment. You know, markets are not necessarily efficient managers of greed and fear, the two forces that happen simultaneously in the market, and they can become herd-like. And if you send the wrong signal, the herd, you'll, go in the wrong direction. So yeah, there's maybe a problem of calibrating the weaponry to the actual

task at hand here. And then that raises interesting questions about, okay, if the Fed can do nothing, if it has no bullets, what is it? And I tend to think there's a lot more that could and should be being done on the fiscal side. That's another discussion. Well, so I think that's actually a great point of discussion. And Noel, I want to kick it back over to you just a second. But the point that I want to kind of reinforce that you just made is that they're using a 2008 era toolkit for a crisis that is very different, right? Noelle, is that accurate? And if so, what might be a better or different response? No, totally. And to further Mike's weapons analogy, it's actually not even so much have they run out of bullets. As in, were those the right bullets to be using

in the first place? I mean, Mike's right. This is very, very different from 2008. In 2008, we had a situation where you had the markets that were threatening to run the economy into the wall. Here we have the economy threatening to run the markets into the wall. The same weapons are just not going to be appropriate. The Fed did do a couple of things that I thought was very interesting on Sunday. And one is the swap lines. I mean, it's unusual. They haven't been using swap lines really, effectively for some time. But now with the swap lines, they are basically telling other central banks that we will lend you dollars. And this for a lot of global companies is going to be a lot of comfort. It really is. There's probably some debt being called in as we speak,

but this is going to mitigate that. Another thing we have to bear in mind is why the Fed did this on a Sunday, because the main things that they did, the lowering rates and the lines and the repo facilities and the interbank lending, that could have waited until their scheduled meeting on windy. What couldn't wait? That's an interesting question. What could not wait until Sunday? What could not wait on Sunday is alarming signs of liquidity just drying up in the market. We saw last week moments where you had bond prices and stock prices going in the same direction. That does not happen. When that happens, you know something is seriously broken in the market. And so they felt that they couldn't wait, not even just a couple more days, to step in and say this.

Because if we thought the market was spooked by the Fed dropping rates to zero, nothing compared to how spooked the market would be when it noticed that bond prices and stock prices were both heading down together. The question then becomes, what is it spooked about, right? And this is where what we're seeing is a cascading effect of concerns. So the original concern was supply-side shock. That was a very real economy concern. Then it's like a demand-side impact of all these events being shut down. So it's two-sided impact on the economy. The reason why the Fed may or may not, I don't want to speculate necessarily what it's concerned about, that's to Noel's point. That's what the market's worried about. It typically worries about a breakdown of the payment system,

which is essentially a breakdown of the banking system. So are there banks about to go under? are, you know, is there an insolvency concern? But if that's the case, then it is an interesting manifestation of the problem because it's not as if the solvency of banks itself was the cause of the concern of the first place. It's that people are seeing the multitude of impacts and that there is actually a fear factor in the economy that could bring banks down. So we've heard stories about people decamping from New, decamping from New York to the

Hamptons and taking out massive wads of cash to take with them, right? So is there a lot on the banks happening? It doesn't seem like that would make a lot of sense because we've now got digital payment systems and we've now got other things to use. And on top of that, again, it's not that banks were the cause of the problem here. But it can be self-fulfilling, right? And that is where this stuff gets into dangerous territory and where really innovative thinking about how to solve the problem, how to solve the problem in a targeted way to tackle

what the society needs most right this instant, which is essentially as far as I'm concerned, to make sure that as many people as possible do not crowd hospitals. That is the priority. We need to think smart about how do we enable that? And some of that is money. It is about making sure that they can live on what they can do by not going to work or whatever. But it's not necessarily throwing a chunk of money at the markets. Nonetheless, markets are real, market's important, fear is a factor.

And as I said, it can be a cascading, self-fulfilling prophecy. I wouldn't want to be a policymaker in this situation. My goodness, what a difficult. difficult call it is for them. You talk about earning your place in the history books, right? One thing we need to remember, though, is that banks are now much, much healthier than they were going into the 2008 crisis. The Basel Accords are shored up the capital reserves. So the chances of any bank going under now, even with rates at zero, is actually a lot less than it used to be. And we were talking earlier about what else can the Fed do. We should be thinking about that.

What else can they do? Of course, they can take rates negative. That has happened in another are rather important economic areas. I live in one. But nobody expects them to do that. So the next logical step is going to end up being something probably along the lines of helicopter money, which is in itself kind of alarming for what it could do for inflation. But it highlights what you mentioned, Michael, that this is a payments crisis. This is a payments crisis more than anything else. And helicopter money can keep some of the pipes flowing. And the repos, we should keep an eye on them coming up. There'll probably be some intervention there, as you said before, that is going to be kept going. However, this does, as you hinted, also open up the opportunity,

almost the obligation to think of what other systems out there could help alleviate some of the clogging of the plumbing that is no doubt coming, and at the same time can perhaps reassure some of the population that are being affected by the dislocation that are lockdowns and other constrictive policies that are going to just freeze up supply and demand. and then also the economy through all of that. One of the great ironies and frustrations for those of us who have been watching this for a while is that you had a scenario where for the first month, six weeks of this coming in every single day from China and seeing markets not react, right, and actually hitting all-time highs in mid-February.

So you had this complete non-response, this complete ignoring of everything going on, to shift to today where the only man. mass-scale intervention we're seeing is in the context of markets rather than actually dealing with economic implications, right? Not just kind of the financial asset price implications, but real disruption and dislocation to people's lives, and not large-scale attempts around the actual health implications. You still, even as Trump was speaking at the end of last week, acknowledging at least more than we had at the beginning of the week, you're still not seeing him say this is a national health crisis and actually doing anything about the health aspect of it.

It's hard to imagine that there's not going to continue to be this wide-scale fear and growing without addressing all parts of it. Even holding aside entirely what we think is the right or wrong policy from the Fed, the fact that it's the only thing that we're really talking about. It's basically, you know, governors of individual states shutting things down and Jerome Powell trying to fix it with rates, there's this almost like schizophrenia of how we've switched from the markets being insane because they're ignoring it to the markets being. insane because the only intervention is in that context.

Well, I think that for those of us who have spent the last five, six years thinking hard about how the structure of the financial system might be different with different technological solutions and so forth, you know, this is a really interesting time, right? Because it's precisely the possibility that we've actually framed the set of solutions around a structure that is sort of set in stone and doesn't necessarily, need to be that way. But the way you put it, like, either it is, you know, shut everything down, that's what governors can do, or it is the Fed. But in fact, you know, some of these plumbing problems, you know, these are globalization problems, right? I mean, how do we deal with supply chains

that are jammed up because of shutdowns around the world? How do we deal with the interconnectivity of the payments and good delivery systems? And how do we become nimble around that? How do we build a resiliency into our supply chains. And so if one shuts down, we can go somewhere else. What policy maker concern should there be for that? I think, you know, whether or not we are all for central bank digital currency or or Bitcoin or whatever, it certainly is an interesting conversation around, you know, central bankers who have looked at the role that central banks might play in having a more targeted approach to money management if there were to be a digital solution in play. You know, you've got the idea that it can be a targeted tool. So this is all very speculative.

We don't have any of these mechanisms in place. So it's not, it's all rather hypothetical. But it's useful to talk about to show where the limits of policymaking lie. So for example, I have a registered wallet of some sort that is recognized as somebody who has been laid off because of a shutdown or who really should be at home looking after the kids, but I can't afford to or whatever, the distribution of funds directly to that person through some sort of digital account. Even if it is helicopter money, it's almost like targeted helicopter money, right? Rather than fiscal handouts, you know, could actually be effective. The questions about what is inflationary and what is not kind of become different when we look

at the marketplace of recipients of those funds from that differentiated perspective, right? It's going to be used differently for different purposes for different people. you know, and yes, it feeds itself back into the economy and there may or may not be inflation impacts. I think that to my view, that's not something to worry about right now, not saying that the Fed's doing the right thing, but that I do think this is a supply shock. It may not last and therefore the impact could be quite different. But nonetheless, thinking about how in a moment of crisis we deliver what is needed to people and just approach this from that perspective and then kind of deal with all the economic fallout

later, I think is the right thing to do given how desperate things are. When it comes to policy makers being reluctant to change anything, we have to remember that sentiment, as we've seen over the past couple of weeks, sentiment can change hard and fast. I think we can't deny that sentiment has changed really hard and really fast. And policy makers are an extension of sentiment. When public sentiment changes, policy changes as well. That's how finance has always worked. It takes a bit of time. But first, the sentiment has to be there, and I think we can agree it is. Yeah, right before we jumped on this conversation, the newswires had Mitt Romney coming out and saying that we should give thousands of dollars to people affected, right? Yeah. Which obviously, immediately the Yang memes started after that.

Is there a Romney-Dang ticket? Somebody joked about a Romney-Dang ticket. Yeah, I joked last weekend, I guess, that Yang got on CNN for his new role. And instead of, you know, talking about the debates, he just announced that he was coming back in. You could see a crazy uptick and excitement. But I think, Michael, to your point, that the Overton window around the conversation about every kind of direct government interventionist thing, whether it's UBI or MMT or, you know, pick your acronym, right?

Like it feels like it is shifting right in front of our eyes and it feels hard to imagine a world in which those things are off the table. And I think to your point, the greater the precision of the tools by which we could deploy those things and the more sophisticated, the more able to actually have that conversation in precise terms rather than kind of broadly and philosophically, right? Like, is it good, is it bad? It's like, we'll model it out on the basis of being able to actually deploy it in a different way. And I do think that's going to be an important conversation. But maybe just to wrap up, I want to steer us back

to implications for Bitcoin implications for the crypto markets themselves. I know for me personally, it's honestly, it's kind of felt hard to spend that much focus on it when we're still, like I said, this is the first Monday where everyone's finally taking this seriously. But at the same time, obviously, one of the notable hallmarks is that Bitcoin has never been more correlated with equities than it has for the last two weeks. And there's a lot of conversation around what are the narrative implications of that? Are there people who are, does this diminish or does this reject out of hand the idea of Bitcoin as a safe haven in some way or as a store of value or any of the narratives that there are out there?

And I'm interested in your take on that. And I guess one kind of a context is I was watching Pomp interview Mike Novogratz this morning. And Novogratz was kind of, he's been public about how he was surprised at how correlated Bitcoin has behaved. And he actually thinks that we're going to see at least a 12 to 18 month delay in the narrative of the crypto market as a whole when all is said and done. Because he just, for him, he can't imagine the new buyers wanting to come in when this asset just kind of seems to not be doing what some people, least thought it would do. Now, there's a bunch of different takes on that, but I wanted to see what your guy's reaction over the last couple weeks has been. The narrative around Bitcoin itself, if you think about where it's gone over the last five or six years, has always been a shifting concept, right? We went from it being a payments vehicle to then being sort of digital gold and a safe haven. Now what is it? I have always thought that, you know, in risk off moments, that is where, you know, everything is sell, sell, sell, and the problems of leverage, you've got institutions who are borrowing, not necessarily to buy crypto, but to buy something else,

have to sell whatever they can to repay those loans, this mass margin call kind of problem. It was inevitable that crypto would fall in sync with everything else. But I think that then, you know, I had thought that at some point what would happen is, you know, the dust would settle and then the narrative would arise that, okay, now that everything's sold, what I want to own as a hedge against, you know, the potential kind of fallout, fall out and breakdown in the way that gold has traditionally been. And it's been interesting to watch the fact that gold has fallen as well, right? So it's just an indication of how scared everybody is.

But I do think that whether we call it a safe haven or a kind of a bet on a different world, you know, this is going to be an absolutely transformative event. I think the best analogy is not the financial crisis in 2008. I hate to be dramatic, but it truly is close. to World War II, hopefully not in terms of the violence that might ensue from. I don't think that's necessarily the point, but the decoupling of countries, the sort of breakdown of globalization, the sort of disharmony in the world and the absolutely massive all over the close shock to the supply chain systems, all of that is going to just leave

the world wondering what the hell to do next. And I think in that environment, the dollar as the sort of the fulcrum of the global financial system is really put into question. precisely because of the combination, if you like, of that problem with the fact that there are technological alternatives to that model. At some point, in this moment when the world says, all right, what next, Bitcoin starts to look really interesting, right, as a digital alternative, as something that cannot be shut down, as something that stands in contrast to the national structures that we're dealing with. It doesn't mean it becomes the world's reserve currency or the world's payment currency.

anything, but that it stands there as an alternative to that. Does that mean it's a safe haven? Or does that mean that it is a different kind of depoliticized version for what our monetary world is going to look like? When does that happen? I don't know. That's the way I think that we can imagine it. I'm sure there's all sorts of other competing feces out there. I have an article coming out on CoinDest today in which I looked at the last time Bitcoin fell by this much. And I compared it to this. time, and it's actually really informing. It tells us that it's the market evolution that has led us to where we are today. The last time Bitcoin fell by more than 35% was in April 2013. And back then,

it fell by 50%, almost 49% in one day. And that was because it had gone up by three times the previous two weeks or something like that. There was a profit-taking story. Everyone in the market back in 2013 believed in the story. They cared about the narrative. Sure, maybe some of them were sellers, but they all had taken time to understand what Bitcoin was all about. And it was an entirely Bitcoin isolated crash. S&P did absolutely nothing that day. The gold's the same. Also flat. But, you know, fast forward to now. And it's not about Bitcoin at all. It's about the markets. It's about panic. And Bitcoin was caught up in the general exit of investors from anything that could be redeemed for fear. That shows that Bitcoin has grown up. That shows that Bitcoin is now part of the

broader financial market, and that's what we wanted. That's what we wanted all along. And this is what happens when it becomes part of mainstream finance. I'm not saying it's part of mainstream finance yet, but that is kind of what we've all been working towards to get this accepted by the bigger funds, to get this accepted by mainstream finance. And so it is going to be caught up in big mainstream events now that it is part of the grown-up world. I think that's a great way of putting it. Is it part of the natural fallout of two years of evangelizing this is something that ever, if you believe get off zero or, you know, 1% allocation or whatever, that's going to be one of the things to go to. So I agree with that entirely. So I won't ask you guys for any predictions.

Obviously, we are all in uncharted territories, but what are you watching for this week? What signals are you looking at? I'm worried about the funds in the crypto sector and funds broadly. I'm worried about funds because when we start to see big fund liquidations, that sends an entirely different signal, it also does change market dynamics. Yeah, I mean, I'm looking for, you know, the classic signs of capitulation you often see in these environments. I'm not sure that that term is as easy to apply to something that is just so multifaceted,

and therefore there are constant cascading effects. But in theory, right, everything has its price. And, you know, looking whether it is at Bitcoin or looking at just markets in general, There are going to be people saying, is this the time to get in? Like, is this where there is enough blood in the streets to use that horrible analogy to buy? Because, you know, how bad can it get? And because as a society, we will come together and resolve this. I think this is what's interesting about this question.

It used to be, don't worry about it, the Fed will solve this. And therefore, that would be the trigger for people to come in and buy. The fact that they knew that the authorities would be behind it. To our original point, we're not sure that's the signal. I'm seeing an incredibly more cohesive understanding. The world is cutting to understand the actual nature of the problem. We're seeing social distancing actions and all sorts of things that may well have significant impact on improving the actual outlook for this epidemic.

And that in itself, not Fed actions per se or anything like that to rescue the market, but literally good news around the potential trajectory that this thing might go on, that's the sort of thing that could just be a trigger, you know, that we are actually coming together and figuring these things out, that it'll be a by signal, not that it's the worst is behind us per se, but there's just even an understanding that we do have the resources, that we have the ingenuity, we have the willpower, we have,

you know, could go for ages on that issue, but who's going to get in by right now and what are the signals? I suppose that's the ultimate question. Listen, it's a terrible and kind of cold comfort, but I do think that you can't solve a problem until you admit having one and at least we're starting this week off admitting we have one. So all right guys, thank you so much for your time today. We'll keep checking in on this. I'm sure as it's not going anywhere. Welcome back to the breakdown. An everyday analysis breaking down the most important

stories in Bitcoin, crypto and beyond with your host, NLW. The breakdown is distributed by Coin desk. Welcome back to the breakdown. It is Tuesday, March 17th, St. Patrick's Day and we're all inside because the bars and restaurants are closed, which is a good thing. We are as a country finally taking this coronavirus seriously. Yesterday was the day. It seems that we acknowledge that from a medical perspective today was a big market stay. Just before we recorded this special interview episode with Dan Tapiero, President Trump and Steve Mnuchin got on TV to discuss a raft of different stimulus. And this includes a delay on IRS. payments that are going to come do. This includes an attempt to get direct stimulus into the hands

of Americans within the next two weeks, according to Mnuchin. The summary of this all was Trump saying they want this to go big. They don't want to have the same conversation every couple of days. They want to go big. So big time stimulus in coming, which sets up a pretty perfect segue for my guest. My guest today is Dan Tapiero. He is the CEO and managing partner of 10T Holdings, which is a new fund designed to own private equity in companies operating in the digital asset ecosystem. He's a managing partner at DTAP Capital Advisors, which is a global macro investment fund that he launched in 2004. And he's also the co-founder and board member of Gold Bullion International. So he's been around this ecosystem for a while. He's been around the macro ecosystem for much longer.

And interestingly, Dan's perspective is as someone who has had a number of different encounters with Bitcoin, but really over the last year, has come to be a stalwart supporter of its long-term potential. So in our conversation, we talk about his reaction to the most recent announcements from the administration around coronavirus. We talk about the long-term potential of bond markets and how they might be seeding some of their safe haven role and what that could mean for both gold and Bitcoin. and we talk a lot about just what has and hasn't changed in the context of this crisis. And if I had to sum it up, I would say that Dan thinks in a lot of ways that the things that he was scared about before in terms of the long-term health of the economy haven't gone away. They're just being kicked down the road a little bit to potentially after the election and after a massive wave of stimulus.

In the same way, the things that get him excited about Bitcoin as a differentiated new monetary system for the world haven't changed it all either. And in fact, a lot of his mantra is that Bitcoin remains the only true free market in the world. It's a really interesting interview that I hope you enjoy as much as I had fun recording it. Now, a couple notes. One, the quality isn't the best on this one. We had some issues with the recording software. So just know that going into it. I apologize. I always try to have a little bit higher quality, but hopefully you can deal with it. And like I said, my apologies. Second, as always with interviews, these are minimally edited to better capture the flow and cadence of our conversation. And third and finally, as always, nothing that we discuss

should be taken as any sort of financial advice. But if all that said, let's dive into this conversation. All right. We are here with Dan Tapiero. Dan, thank you so much for joining today. My pleasure. We were going to do this conversation and kick it off basically to talk about what we've seen over the last couple weeks, you know, in the markets, particularly in the context of this safe haven narrative around Bitcoin, which was obviously a speculative narrative around gold. But, you know, sitting from where you sit, what has surprised you or not surprised you about the last couple weeks as the market have finally really responded to the threat of coronavirus? Well, I mean, as we were just talking about before a little bit, I would have preferred, of course, Bitcoin not to have gone down to where it is.

I don't think it's violated anything in having done so. And I would say the same thing about gold, you know, at 1530 right now. Again, it touched up at 1700. But within the context of things, okay, it's down from the high, but it's still, if you've been long as a hedge in your portfolio, So if you're, let's just say, a traditional, you have a traditional institutional allocation and you have equities and you have bonds and you have some gold in there as well. I think that the gold from a few months ago is held up quite well. I think it might even still be up on the year or close to it. And Bitcoin, I think Bitcoin is an early, it's an early asset or an immature asset or a developing asset.

But I don't really believe that it trades closely in a tick-for-tick way. That's something like golds or bonds would with the stock market. There are so many different developing narratives. And sometimes people think that they're developed. And they're not. Bitcoin, yes, there's one aspect to Bitcoin that it, acts as a hedge, but it's a hedge to, you know, a complete breakdown of the existing system led by a debasement of the currency.

You know, if we entered a period where the dollar, for instance, had started to lose, people had started to lose faith in the dollar, you know, maybe then you'd have some sort of knock-on effect. But I don't think, you know, I don't, and then there's that, that digital. gold narrative as well. You know, I don't think Bitcoin trades tightly with any of those things. It's its own thing in its own world. And, you know, it develops over time on its own pace, its own rhythm. And if those are just two of the narratives, and I've said this before about Bitcoin, you know, there are probably 18 others that are supportive of Bitcoin, that people are

not focusing on right now. Look, this was clearly a margin, you know, a liquidation, and we've seen this, and I've seen this many times before, 97, 98, 01, 02, you know, 07, 08, 11, you know, where it's, you know, risk off everybody, you know, someone, some of the big hedge funds get margin calls, they're over-exposed, they're leverage, they're trying to make money for their investors on a week-by-week, month-by-month basis, and, you know, they get stopped out, and sometimes these stop-outs are severe. And in this case, you know, I think it probably impacted Bitcoin a little bit. But I don't, you know, I think it's just temporary, that these are not, you know, these are not the dominant narratives that drive and have driven Bitcoin over time.

So it's just that there are periods where, you know, the panic and liquidity and the lack of liquidity and the VIX up at 90, where people will say, you know, I'm nervous about all my exposure and indiscriminately sell. So it's your question about hedges, et cetera. I think the bonds obviously worked well, but I think we're entering a new period where bonds probably are not going to act as a hedge for your portfolio in a period where you have a protracted slowdown. And that is because I do believe that the bonds, and I mean five years and 10 years and 30 years will have a problem getting below zero if we ever get down to lower levels, even 30, 40, 50 basis points. I think is strong resistance for bonds. Getting yields below there just becomes a non-economic, I would call it, it's not a business proposition

to buy 10 years at 30 basis points. The risk reward is dramatically skewed against you. And I think that that's one of the things over the next few years that we will have to grapple with us, you know, investors in the marketplace, especially people who have more traditional portfolios where they have a 70% let's say equity rating, a weighting and a 30% bond waiting. You know, in a protracted slowdown where equities do not return what they have for the last 10 years, your bonds will not act as the hedge that they have.

Because when we get close to that zero yield, they will have a hard time going up anymore. And I think that plays into a new narrative that's developing around gold, which is to say that once we recover from this, you know, the virus spike down, which I think will be sooner than most think in terms of a knee-jerk back up, I think you start to have this discussion about, Well, if things slow over a longer period and the Fed continues to pump and we continue to get fiscal spending, what can act as the hedge in my portfolio? And I think gold, in theory, has an unlimited upside. And bonds do not. The upside for bonds from here is capped.

And so I think that's an interesting new narrative. Bitcoin probably benefits a little bit from that too. But, you know, we're both on Twitter and you read a lot about, you know, people complaining about why isn't, you know, Bitcoin acting as a better head. This is a, it was supposed to perform now and it's not performing, so it's failed. I mean, all of that is just total nonsense. Bitcoin, as I said, it's getting impacted by this stuff. but what's happened, what's transpired by no means, frankly to me, changes anything about the much bigger picture thesis that Bitcoin is part of in emerging new value protocol, value layer for the internet, that the ecosystem that's been building up around Bitcoin will continue to grow. it's a very vibrant space.

I don't think anything's changed. You know, I mean, I could go on more about that. But I think that's to your answers, your question about the hedge aspect. Yeah, I agree. I mean, I think that a couple interesting things that I want to tease out from what you said. First is when we have these conversations about safe havens, we kind of use this term as though it had a single, specific meaning that we all knew understood and agreed upon, rather than having inherently both a

context, safe haven against what, and to a time scale, right, on what time scale? And I think this is a lot of what the frustrated conversation has been, I thought that this narrative meant that stocks go down, you know, orange coin number go up. And, you know, in fact, the only thing I think in some ways that has slowed that, that narrative rebound or relash and ask people to take a deeper look has been the fact that other things like gold as well have gone out, although clearly not as much as Bitcoin. And obviously, that's opened up a conversation about, you know, just the dynamics of this particular crash and what it means when everyone has to go to liquidity. I think another point that

some have made is that, you know, a lot of folks have been out there for the last couple years evangelizing the idea that big institutions and big holders should have, you know, they should get off zero, right, to use the Morgan Creek phrase, to get that 1% allocation. Well, guess what? In a, in a difficult time, if that worked and those people got bought in, even if, and this is, I think, a really important piece, too. Even if they have incredible conviction, you know, sometimes your conviction doesn't matter, and you just have to be able to cover your obligation, right? Obligation outweighs conviction in the short term. And so I feel like in the one narrative upshot is that in the same way that this may be shaking out kind of some short-termism in the market of Bitcoin holders,

it's also just allowing us to get to a slightly more sophisticated conversation about what these narratives actually mean, which I think is important for the long-term development of this asset. But then the question comes, and this, I guess, is the other piece of what you were discussing is what happens on the other side of this, right? Because that's really what you're talking about when you talk about a new narrative emerging around gold or other safe havens. when bonds can't act in that way any further. You know, so just before we recorded this, President Trump and Stephen Nuchin came onto and did a press conference about their, you know, they literally used the phrase over and over and over again. We want to go big on the stimulus, right?

We don't want to have the same conversation every couple of days. We want to go big. It seems to me that that's sort of what you're discussing when you're saying there's going to be, there is going to be this other side. And on the other side, there's going to be a new set of narratives emerging that potentially position these assets in a pretty different way. Yeah. Look, I will say one thing about your comment about short term.

I think that attempting to trade Bitcoin in the short term is impossible. And, you know, people who do it well, that's wonderful, and I'm happy for them. I've traded hundreds of assets over the last 30 years on every time frame you can imagine. And I just think Bitcoin at this point is, you know, as the narratives are still developing, it's not clear what it trades off of on a short-term basis. And so I think it's just hard to know. I think most people will end up losing. I think the only strategy is to get off zero, make your allocation.

in the case of that narrative, get off zero to go to 1%. I think institutions should be doing that now. I think 5,000 is a fine price. I think looking at this and trying to figure out why it moves moment to moment and who's pushing it or this guy who runs this exchange is driving this or that, I think that's pointless. So having that stepping back and having that medium-term perspective, that to me, is the only way that you can have a successful allocation here. In terms of going forward, look, the one thing that's very clear to me is that, you know, Trump does not want to lose this election.

I saw it even a month or two ago. And on Real Vision, September or October, I did a short little interview for Raul, not the Bitcoin one, but another one on macro, where I said, look, you know, the market may have some bumps early in the year. But I think going to the election, Trump will throw everything at it. So now that's what's going on. And they have a lot of levers to pull people who say, oh, the Fed's out. of bullets. That's complete nonsense. They went to zero, but there are many things that they could do. One helpful thing would be if they, for instance, were able to peg the mortgage rate, let's say the 30-year mortgage rate down at one and a half or two percent. The spreads of

mortgage mortgages to treasuries have blown out back to the levels of 08. That's clearly inappropriate. I think, you know, a one and a half or two percent pegged mortgage rate would do wonders for the population. You know, there's so many things they could do. As you said, they just came out and they say they're going big with all sorts of, you know, fiscal pulling all sorts of fiscal levers. I just, I think it's bad now. You know, things are shut.

I'm here in Greenwich, Connecticut. And, you know, I was in the city recently and it is closed. And there's a curfew in New Jersey, which seems crazy to me. you know, activity is really stopping. On the other hand, my friends in Hong Kong are all back to work, and the same thing on the mainland, more or less. And we've gotten through this virus in China with, let me just say, only 3,000 deaths. That's out of 80,000 cases in a population of 1.3 billion.

People say, oh, well, they were very quick to handle things. Well, regardless, a month ago, everyone was thinking there would be 100,000, hundreds of thousands of Chinese who were going to die. Well, the number ended up being 3,000, and the cases now are very small. So I understand we're still sort of in the early part of this, but there are a lot of things that Trump will do to hit the system in the short to medium term.

So I would not be surprised if the markets were to stabilize and do significantly better, maybe not as of today, but potentially, you know, there's a chance that the low is in for Bitcoin at 3,800, for the S&P. I don't really, I don't think there's much value for me in, you know, making a call. I don't get anything out of it. You know, I manage money. And, you know, I don't need to do that. But certainly over the next few weeks, I think there will be enough pipelines.

stimulus, monitoring fiscal, that things could stabilize, and Trump will have as, I think, will have as good a backdrop into the election as he's going to need and want. Look, he's the first president that I know of, that I remember, who, you know, actually knows where the S&P 500 is, who has an actual view on interest rate settings. you know, people hate this guy. I get they don't like his character. I get all that. But, you know, put that to the side.

And if you look at his comments about, you know, the Fed, he's been right on. Powell has been asleep at the wheel. I think he's been one of the weaker Fed chairman that we've had. Not really that sensitive to the markets on a live real-time basis. He doesn't really – he didn't really have a macro. a strong macro markets background. I mean, people can argue about that. And you see Trump pressuring him. In most cases, he's been right on. He may not like his delivery, but he's been right on. So I think that, you know, my bet is he's going to make sure things are humming into the election.

I'm more worried about after the election and next year, and I have been. Remember, a lot of the market action was happening before the virus hit, right? And I think what made this doubly bad was the oil shock. And, you know, it may not have been as bad as it was. I mean, to have the second worst day in the history of the Dow, right, that down 13% day, VIX at 90, that's, you know, that's destruction of wealth, that's destruction in liquidity, the credit markets more or less seized up. Things were not trading.

That's bad. It might not have been as bad without, you know, without that one-two whammy. And then as we know from last year, you know, things were already starting to slow down. China was slowing down as a result of the, you know, the trade games being played back and forth. Europe was slowing. It's just this was a catalyst to really create a panic. And so I think, you know, we will be through this more quickly. And you know what?

If they've overdone the stimulus in the next few weeks, that's just fine, right? You need short-term measures to offset what will be a massive contraction in GDP. The central bank, you know, should be doing, and I think right now more or less is doing what it should be doing. It can be more aggressive. But I think it is, the central banks really, this is one of the main reasons that a central bank was invented, which is to lean against, you know, exogenous, non-economic bolts out of the blue. And this is one. So I'm a little more positive, you know, on like a three and six-month view.

I think, you know, potentially a little more turbulence here. And if things, if I'm wrong in the short term and things get a lot worse, you know, there's still levers that we can pull. And I floated something yesterday on Twitter that I always think that the officials have in their back pocket. and Trump has mentioned this, and he mentioned it last year, is that, you know, they could make an explicit policy change on the dollar. The dollar has been too strong. It's been overvalued for a while based on any metric. And, you know, I think if you – if Trump and he's mentioned this before, I tweeted this article that came out last year that went into, you know, his view about, and how it would work.

But, you know, not that difficult, not that long ago, well, maybe, I guess it is long ago now, but in the 90s and 2000s, there used to be intervention in the currency markets all the time. You know, if it's really bad and, you know, the strong dollar is, you know, is a reflection of deflationary pressure. And if it's really continuing to go up, I'm. I think they could reverse and make a strong statement and even intervene in the dollar and sell dollars and they could sterilize them or unsterilize them. I only mention that just to say that there are a lot of tools out there and they weren't on it,

let's say, a month or two ago, and they are on it now. So I think that changes the risk-reward dynamic of owning assets generally. So for those who haven't kind of gameed this way out the way you have, tell me just a little bit more about why your worry is, it sounds like more fundamental, right? After the election, when this has passed or at least, you know, mostly past or has become contained, what makes you nervous in that longer term horizon? Well, I think that because I have, I've had a strong belief and I still do that Trump pulls forward. a lot of stimulus into the election. And we sort of have a hangover afterwards. Like, you know, it's, and look, you see it with the Fed too.

The Fed is doing a lot. And I think the pressure will be on for them to continue doing it. You know, let me just say one thing about the dollar again. I mean, a year ago, if you'd said to me, okay, the Fed is going to cut to zero. And again, in that interview, I suggested that two years could probably get down to 40, 50, basis points. This is in October, okay, October, November. And, you know, I was sort of on a similar scene, but not as cataclysmic as Raul. But, you know, still pretty, pretty focused on the slowdown. You know, I would have said the dollar would have started to weaken with a zero-fed

funds rate. I think the fact that it hasn't weakened, just tells you that there isn't enough liquidity out there. So for me, I will know that policy is weak and that liquidity is plentiful and that dollars are plentiful when the price starts to go down of the dollar. And so I'm still kind of nervous about that. That's how we'll know that stimulus is hitting the system. Do you follow what I'm saying there, vis-a-vis the dollar? Yeah, yeah, but let's play it out the little bit.

I want to make sure one of the things that I'm trying really hard to do with this podcast is, you know, one of the things I love about Bitcoin is that the audience comes from every different background, right? And so there's a lot of folks who are not from a financial or a market's background. So I don't think you can over-explain for our purposes. Okay. You know, what would that mean vis-vis Bitcoin? I mean, look, it should be generally positive, but, you know, I hate to try to link macro action or activity or event or price action directly with Bitcoin. Bitcoin is good for many, many different reasons that have nothing to do with any of this stuff.

and trying to trade Bitcoin off of Fed easing or, you know, the dollar or all this stuff on a shorter-term basis, I just don't think works. I do think that there is some connection with gold in a way, and I think gold is entering the next phase of a big bull run. Yeah. And part of it will be that I think bonds, again, in a way, they're in the next year or two, I think, cease to become an acid class in the way that we've known it. That they're losing their function as a hedge, but also, you know, the acid class will become unproductive. right like no one no one is buying bun's tenure buns at minus 50 basis points expecting to make money so you know at 30 basis points i just don't know who's going to be buying bonds government bonds at those yields and um i think you know that's that's a that's a that's a that's a place where big point potentially i don't think you know look gold is a trillion dollar asset class, you have almost 16, 17 trillion dollars of negative yielding debt.

If gold prices were to double, you have a 20 trillion dollar asset class. Bitcoin is just too small right now to matter in that framework, in that world. But look, I think, you know, I think we can get to a price of $200,000, on Bitcoin in, you know, 10 years from now. Long term, I'm super bullish. And, you know, sometimes it will trade off of these macro things. And sometimes it'll trade off of other things. You know, look, I think, for instance, Bitcoin has tremendous value as a security network.

You know, and I talked about this in that interview, a truth machine. You know, there's nothing like this that has ever existed before. How do you put a value on that, you know, vis-a-vis bonds or gold or these are traditional assets that, you know, where cash is deposited? Bitcoin is the future. It's, you know, I mean, as I said, I think there are probably 20 different things that go into. to that could go into valuing or in trying to come up with what Bitcoin is worth, I think there are 20 things you could add up to equal that value. And those 20 things have nothing to do with all the other assets, right?

So, you know, the first really, truly global asset, you know, with rails across the entire world, the ability for it to replace Swift, which is a free internet payment system. I mean, it's a joke that we still use Swift, ACH, all that stuff. You know, the Bitcoin network, I think, eventually replaces all of that. That's worth trillions of dollars, right? I mean, imagining building something from scratch

that is going to replace the existing payment system. I mean, it would cost trillions of dollars. So that kind of proposition has nothing to do with the macro. It's just that it's early, right? And it just at some point, Bitcoin trades off of certain things, and other times it trades off of other things. And I think trying to figure out what that is in the very short term is nearly impossible. It sounds like if I had to sum up your feelings almost kind of across the board about the different

things that we've talked about today. A lot of it has to do with this. The fundamental things that you had been worried about before this coronavirus crash are still in place just as incorporating more of a stimulus hangover. And the fundamentals of what gets you excited about, the assets that you're excited about, including Bitcoin, are also still in place, even if they're, you know, now have to wade through this from a narrative and a real perspective as well. Yeah, I think that's exactly right. And, you know, if we hadn't had the virus, we still would have had the oil shock. And I'll tell you, I mean, I don't know, you don't hear more about this, but the combination of it, I mean, that oil basically had in a matter of weeks.

And, you know, we might have had maybe not quite as much destruction, but we would have had a wipeout. regardless. I mean, if there had been no virus, just on that. I mean, it was a direct attack by Russia and Saudi to put our frackers out of business. I mean, it's, you know, and look, if there hadn't been the virus to focus on, we would have been hearing a lot more about that. The fact of the matter is the two together was certainly enough to create this wipeout. But I think There are offsets, right? We are doing things now. The Fed was delayed.

The U.S., the Treasury and Trump were a little delayed with stimulus measures. But again, in the short and median term, policy action can really work. So, you know, maybe all of this was just pulled forward. You know, we were slowing. Things would have corrected. It just became more severe. and our response will become more severe. And so I think that we're right in the teeth of the most panicky, most panicked moment.

And look, the VIX at 90 says that. I'm not, you know, I'm not, that's as as panicked as everyone was at the bottom in 08. You know, could it go higher? Sure. It could go a little higher. You know, would I bet on that? No. I wouldn't bet on that.

And I think from here, the authorities are, you know, they're on top of it. You saw Mnuchin in that press conference just now. He was, you know, itching to get off to go do his work. And I'm sure he's on the phone with all the relevant players on Wall Street, you know, all the relevant players at the Fed and around the world. And they get it. This is the time. when a centralized government response is needed and is actually valid.

You know, I'm a small government guy. You know, I'm a less is better. And but this is, you know, if there ever were a valid reason for big government, this is it. Right. So I think we're going to be all right. All right. Now, one final question that I had for you or one final point that I wanted to discuss, you had a tweet the other day that absolutely popped off that was about why Bitcoin is so different in the fact that it was going to just continue on, regardless of, you know, it didn't need government intervention continue. Could you share a little bit about what inspired that tweet and maybe just a little bit more on it? Yeah, I mean, look, I think, again, I've been involved in the markets for 30 years.

And I remember when markets more or less traded freely or as much as they could, certainly in the 90s, when there wasn't as much intervention. I think there's tremendous government intervention in the traditional markets all the time, all over the place, whether it's directly or whether it's stealthily. and Bitcoin to me, and I said, is only truly free, you know, a free market, the only asset class that trades freely without government intervention. And, you know, some people said, oh, well, you know, so-and-so, you know, manipulates Bitcoin. and there's a whole group of people out there, the whales, they manipulated. That's not the point. There are always bigger players in markets that can move markets. What I was saying was that you have something like Bitcoin goes down 50% in two days,

and it's stabilized. And I think that was probably it. The fact that it could stabilize and still be, what, 30% above. below from last year? I mean, where did it trade last year? Three thousand? It's got down to three four hundred or something. It's still what, 40, 50% above where it was without any government intervention. It just shows you how powerful it is. And it is the, I think, the only truly free trading market. I think that's important. If the markets were to close, the other markets, now I don't see this now, but if things got

really bad and they decided to shut the markets for a few days, Bitcoin would not close. You know, Bitcoin will be 24-7. I think that would be a very powerful indicator to people around the world to show its strength. So anyway, I just, you know, a lot of people, especially the short-term people complaining that Bitcoin had failed, that it hadn't, you know, it hadn't achieved its function, which was to act as a hedge. All of that. I think is nonsense. It's a free trading asset. It will trade to the price that it wants to trade based on what players in the market want to do. And there aren't, there aren't markets like that in the world anymore. So people should be aware that, you know, its stability and its recovery,

even at this price are a positive sign. So that was my son. I couldn't agree more. I think it's another really powerful reminder of the same theme that we discussed before of fundamentals, right? And what short-term shifts make you think about fundamentals? And fundamentals are different than narratives, right? It's not a narrative that Bitcoin changes all the trades all the time.

It's just the truth. And in fact, the fact of it itself in some way provides, it's resiliency against narratives, right? I saw a bunch of people pop up right away and said, hey, maybe crypto needs circuit breakers the other day. And that's a terrible idea. Let me tell you that is a terrible idea. And I saw the guy who suggested that,

he probably had a horrible mark-to-market in his fund. But you know what? That's the old world. That's the old legacy fiat, mark-to-market week-to-week nonsense. This is a much bigger structural once-in, a generation, if more, type of asset and type of development. So I think that would be a horrible idea to start imposing, you know,

limitations on Bitcoin from the legacy world. I tend to agree, and I think a lot of folks do as well. Well, Dan, thanks again so much for your time. It's been a really great conversation, tons of food for thought for our listeners. where can people find you online if they want to hear more about your thoughts on all this? Twitter, where the Bitcoin, you know, where the Bitcoin crypto world lives, right? I mean, that's where it is. It's all on Twitter.

And this man is at DTAPCAP, and we'll share this in the post as well. So thanks again, Dan. I really appreciate the time. Great chatting. As I mentioned in the beginning, I think Dan has a very different perspective than many of the commentators I see watching the markets right now, not least of which in the fact that it's a much longer duration sort of opinion. I think it's informed by a longer longitudinal look at things than just what's happening right now. The same time, I think that we might find that depending on how markets

react to this raft of stimulus, he might end up looking more like a leading indicator of some of the narratives we're about to see. So in any case, really interesting stuff, and I really appreciate Dan's time and him taking the time to be here. That's it for today's episode of The Breakdown, guys. I'm going to continue to be breaking down what I see as the larger context in which not just crypto and not just Bitcoin, but everything is operating. So until tomorrow, I hope that you are having a great time social distancing. Happy St. Paddies. Catch you soon. Welcome back to the breakdown. An everyday analysis breaking down the most important stories in Bitcoin, crypto, and beyond.

with your host, NLW. The Breakdown is distributed by CoinDesk. Welcome back to The Breakdown. It is Wednesday, March 18th, and yesterday, as we discussed on my show with Dan Tapiero, was a huge day in terms of government announcing stimulus. President Trump and Treasury Secretary Steve Mnuchin basically said that they wanted to go big.

And that meant huge amounts of direct intervention in terms of both saving business, as well as in terms of getting money into the hands of regular people. Now, this has had a fascinating effect of blurring previously unholy alliances when it comes to political positions. There has been huge blowbacks in terms of the idea of bailing out companies that spent a huge amount of their cash over the last few years on corporate buybacks. And for a lot of Bitcoiners, this validates a prophecy that when times got tough, we were

going to turn to the government money printing machine to hopefully help. Now, there are a huge variety of perspectives on what the government should be doing and how. But on this show, I wanted to have a conversation that wasn't just about the hot takes on that, although there's plenty of that in the next coming few minutes, but also about what alternatives are. I asked Bruce Fenton to join as someone who has been both sounding the alarm on coronavirus for a while, as well as someone who is taking action through open source networks to address specific problems in the larger context. In his non-corona life, Bruce is the CEO of Chainstone Labs. He's the founder of the Satoshi Roundtable. But in his corona life, he is leading the ventilator subgroup of the n-coronavirus.org

organization, which is an effort of the New England Complex Systems Institute. So an open source network of scientists and thinkers and lots of different folks from lots of different walks of life. This conversation is about a few things. First, we do discuss a voluntarist alternative to government intervention. Second, we talk about just where in our awareness cycle we are and what we might be able to expect next. Third, though, we talk about this work around ventilators and trying to address a potential and likely shortage of ventilators that will be needed to actually address the health side of this dynamic. Bruce makes a pretty impassioned case

for how open source networks can address this type of challenge. And when I ask him at the end of the interview where in his pessimist or optimist cycle he is, the optimistic side of him is that these types of open source networks might have a more privileged, important place in the society and the economy

that comes out with us on the other side. As usual, we've only edited this podcast very slightly, and so I hope you enjoy. All right, we are here with Bruce Fenton. Bruce, thanks so much for joining. Thanks for having me. So as we were just talking about, you know, I'm trying to kind of use the show to look at the, obviously the economic impacts of coronavirus, you know, not just in the context of Bitcoin,

but more broadly as well, but also just try to keep abreast of the situation as it is moving, right? Because we're dealing with a situation or a crisis that is a health crisis, a financial markets crisis and a real lived economic crisis all at the same time, which is part of what makes it so challenging. And increasingly a foreign policy crisis, I think, too. So where I wanted to start is you were one of the voices, you know, leading the crypto community earlier in saying that, hey, this is a real thing, and you should be thinking about it. You should be paying attention to it, and you should be preparing for it. How do you see, where do you think we are in general now

in America in terms of that response in preparation? Well, as I sort of feared, we tend to have an overreaction a lot of times in America. I did see this coming. I saw it coming as a crisis because the way that the virus works is that it tends to overload health care systems. And there's just, and the number of deaths, the number of severe cases, all of these kind of factors made me realize pretty early on. that this isn't something people are just going to let continue.

There's no way people are going to have cities, you know, hospitals in their cities that are collapsing, doctors getting sick, loved ones getting sick without, you know, really demanding, you know, the kind of widespread actions that we've just seen recently. So unfortunately, I'm afraid now that the government is probably in a position where they're overreacting, and that can cause even worse problems than the virus itself. So we really want to be careful about that. But clearly everybody knows it's serious now for whatever reason, whether they're concerned about government or concerned about the health or concerned about the economy or all of the above. Like you said, you know, there's now increasing foreign policy issues and

other things. So it is very serious and it's unfortunate to be sure for a lot of people. So when you say that you think now the government is overreacting, which context specifically? Well, mostly with the radical printing of new money. I kind of saw that coming. I think two weeks ago, I predicted $100 billion. And a lot of people thought I was nuts. They said, $100 billion. You know, that's crazy. That's crazy. That's crazy. That's never going to be enough. Yeah, right around then, I said, well, I predict $100 billion in a month. I predict a trillion in the year. year. Well, now we're past, we're at something like three trillion already. Two, two and a half. I mean, they're talking about another two and a half. Fed has said that they're going to do

500 billion in repos a day. You know, they basically already printed, you know, something like 10 times the equivalent of the total market cap of all cryptocurrencies. So it's really radical. And, you know, as I said a few times lately, bad economics don't make a problem better. You know, bad economics don't make a problem better. It's like somebody losing their job and saying, well, all right, I lost my job. I have no choice but to go do some online poker. No, that's a bad decision. It's a bad decision. Before you lose your job, it's a worse decision after you lose your job. Things like UBI and all these corporate bailouts and printing new money. It's bad economics. We need a strong dollar more than anything right now. We need it more than ever. We need strong economics. good economic policy. And I'm afraid that, you know, maybe your listeners will listen to me, but I think people will ignore me even more than when I was claiming warnings about the COVID virus crisis. I was worried about this. And, you know, some people listen to me, but I don't think any, I don't think I have any hope of getting, you know, the real decision makers to listen to me

on sound economic policy because they didn't understand economics before the crisis. And now they're scared, so they're going to be doing even worse things. So I am worried about the economics for sure. This feels in some ways inevitable. It's just kind of the end conclusion of the nature of politics right now. And it's interesting because there is total across the board consensus so much so that it's now almost a competition of who gets to claim credit for it from the political scorecard perspective. You know, like that's what I've been noticing. Yeah, we've got it. The White House and Romney supporting it right along with AOC.

It's crazy. Yeah, it's interesting. I mean, you know, the best hope is that there's some amount of interesting conversation, at least, that arises from it that we kind of advance. But, you know, I don't think that there are most people who think that there's any reality other than something like this through, especially because of the impact on, well, I think two things. One, politicians are seeing that they feel like they have to not allow these companies to fail. And they also watched the way that 2002, 2008 bailouts created the entire kind of political context that they're operating in, you know, from Occupy Wall Street to, you know, to Trump, to you name it. and there's no way that they can bail out businesses

without feeling like they're doing something that they can claim as a bailout of Main Street as well. Right, right, exactly. And we did create this moral hazard in 2008 and other times where we said, hey, if you're in trouble, the government and come and save you. And I knew the government was going to come save. And even as a free market economist type of person

who is very against these, I was never in favor of it. But in the darkest days, you know, a week ago or so, I was, you know, there was some little piece saying, you know, maybe the government, you know, could help. That's sort of the bargaining stage of grief. And, you know, fortunately for me, I understand economics, so I never actually embraced those ideas. But a lot of people just don't get the economics. So in times of fear, they just scream, you know, do something, do something. And, you know, the politicians right along with the companies and the citizens all think that these,

You know, bailouts, you know, where did it, anyone ever get the idea that we should be doing a bailout, you know, to say, well, you know, Boeing's in trouble. We need to help them. Why? Why do we need to help them? Is giving them money a good idea. Why not go if you really, I mean, I still wouldn't probably support this. But if the government really wanted to help the better way to do it would be to increase purchases. Just go and start buying things. And then you've, then you get the wheels of the economy greased. But to just give money away to either companies or even individuals is just, it's just unfortunately bad economics. So I think that there's a lot of folks who are against bailouts for corporates, but who are more open to the idea of temporary economic relief, right? Like there's a couple different problems for folks that are nervous about this. One is how is the possibility of temporary economic relief.

in the form of direct checks to Americans becoming permanent expectation. But the second question, I guess, is just what is, what's the right approach to, you know, potentially 20% unemployment almost overnight, if not something like that? You know, what are the counter policies that are just not being discussed because we've gone so quickly to this sort of direct intervention model? Right. Well, there's, Thomas Sowell said, you know, who's a great economist for those who don't know him. He said there's no, there's no good, something like no good solutions, there's only tradeoffs. And so there is certainly, I have no magical answer, but I do know that

better economic policies would make sense. And it sounds cruel to say the government shouldn't do anything because people say, well, you know, hey, well, how do people pay their rents and so on? But giving everybody $1,000 actually makes everybody $1,000 poorer because we're taking that in aggregate from everybody else. So the country is basically $1,000 poorer per person, and we're weakening our economy. So we're making bad economic tradeoffs and sort of a shell game to put imaginary money from here to here. Sort of makes you feel good a little bit. And if you're on the lower end, certainly paycheck to paycheck, you know, you're working as a busboy in a, restaurant, your wages just went from 15 bucks an hour to zero. Yeah, of course, it seems like

it hurts you, but we have to think longer term than that. It doesn't help you because it gives less of a chance of the restaurant becoming able to rebound. It becomes more of a chance of people trying to extend these things, you know, just very, very bad economic. So the way that economics are supposed to work, and it does sound cruel because, like I said, it's all tradeoffs. There's no great solution. But the way that economics are supposed to work in times like this is that it trickles down and up from the individual. So the individuals say, you know, hey, landlord, I don't know if you've seen the news, but we're in a little bit of a mess here. And I'm not able to pay my rent this month. And the landlord says, I kick you out? No, not likely. Most landlords would say,

oh, man, I know. And the building, you know, there's 80 other people in the building like you. and the building manager's on my case about it, because I'm not giving him the money that we were supposed to. And then the building manager goes to the bank and says, hey, bank, we're not paying our mortgage this month. And in the old days, the bank would say, all right, I got you. This is a problem. We get it.

We're going to add those payments on. We're going to give you three months off. You add those payments on the end. And everybody works it out in voluntary agreement, the landlords, the tenants, the bank, the workers. That's the way that these things work. And those are fairer ways because there's more people with skin in the game. There's more people making tradeoffs.

It's more voluntary agreements. Those agreements can be one-offs rather than just blanket statements. You know, wealthy people don't need the $1,000. You know, I'm fortunate enough that I'm not facing an issue with my immediate rent in my house. So I wouldn't, I'm going to continue to pay my rent. I'm going to continue to pay my employees. for as long as I'm able to. So that kind of socializes the risk a little bit more.

You know, I'm going to my landlords. You know, I have a lot of, you know, between businesses and stuff, I have a few different landlords I deal with. I'm going to go and say, hey, you know, I get the times are tough. I'm going to keep paying kind of thing. You know what I'm saying? It should be negotiated out by people. And that goes for work and everything else.

And what government should do is really get out of the way of anybody who needs to make money doing anything. Anything that doesn't harm others or violate others' rights, we should get out of the way. So if we're telling people they can't go to work at their restaurant, we should have, you know, no rules about, you know, can they deliver food from there, you know, can they make a meal outside somebody's door and, you know, go to a large apartment and set up a table and do a food truck, whatever. Anything that people can do to make a living, government's got to get the heck out of the way because those people need jobs. And the more people that do it

who are providing goods and services that people want, that's what's going to make the economy healthy and that's what's going to rebuild us. Yeah, I would say that some of the most encouraging actions have been those restriction loosening in terms of which restaurants can deliver and things like that.

Yeah, absolutely. And from a free market standpoint, there's probably not a lot of silver linings to this, but one hopeful benefit that comes out of it is that they tear. down some of the, you know, dumb laws that make it so, you know, there's just so many different things, you know, oh, you can't deliver milk unless you have a milk license and you got to do this separate and you, you know, a lot of those things are coming down. And, you know, you see

some of the announcements and they're sort of almost silly. You see these regulations like, you know, here now a month into this crisis, the FDA and its in its benevolence is finally allowing state health boards to administer tests. I mean, come on. What? The state health board isn't allowed to, wasn't allowed to deliver, you know, administer a test. That's crazy. Your local doctor should be able to give a test. In fact, your crazy cousin who's a chemist should be able to give a test, and it should be your judgment whether you trust that test or not. But to have, you know, even state health boards and even major, you know, these are major hospitals we're talking about, huge, huge medical systems with thousands of doctors, not allowed to give tests

until, you know, supposedly yesterday, but we've heard that a couple times, you know. So, even the most basic and obvious kind of restrictions, when you have just piles and piles and piles of laws, it really becomes obvious now because you have lives at stake and things that, you know, all these zoning boards and you're so many things that are bottlenecks in the way that the world works. It's one thing if you're a millionaire landlord fighting with a zoning board for six months because you want to, you know, add an extra toilet. it's another thing entirely if you need that extra toilet because somebody is in need and they desperately need an apartment. So I think people aren't going to have much tolerance for these kind of rules. And hopefully, you know, even the citizens, you know, even the people in government, generally, hopefully will kind of move towards those solutions and look for ways to help people

rather than get in the way. There is a couple percent of people who are bad apples and who really want authoritarianism and they want to use this as an opportunity for that. So you really got to watch out for those people. I mean, I think this is one of the most challenging things for me with this is figuring out where in the cycle of the conversation we are and being able to try to get people to have all the conversations at once, right? To kind of sift through their own fear and the feeling of playing catch up with their own fear to also still have a conversation about what the right kind of limits of government intervention are. Let's hold aside any sort of monetary intervention for just a second. There is obviously a glowing global trend of using data to track citizens under the guise of

kind of health results, right? I think Israel today just signed a law allowing them to do this officially. Meanwhile, you've got bills around ending encryption that are kind of, you know, this is being jammed through in Congress right now. And it's difficult to get, I mean, basically, this is a classic historical challenge, but the crisis times are when creeping authoritarianism happens. And this is not a, you know, I am not a chicken little sky's falling type. It's more just about like, can we have the consciousness and the compartmentalization almost to have, to defray almost our general kind of philiproarer our general kind of philisional. philosophical opinions and look at the nuance of the situation and say, this is a thing we're okay with the government doing. This is not and this is a line. And we can have that conversation without it being

about just the standard political rancor. Absolutely. Absolutely. And really looking at what ideas are good ideas or bad ideas. And unfortunately, so few people, we knew this for years and years going back, very few people understand economics. They don't understand how money works, where it comes from. They don't understand the principles or properties of money. They don't really understand economics. I mean, people don't even understand the stock market. I mean, AOC clearly many, many, many times, as indicated, she just does not understand the stock market or how business works, pretty much any better than any of her counterparts. Why would she? She doesn't have a background in it. She never worked in it. You certainly don't learn it automatically by becoming a member of

Congress. They don't give you some briefing. I wish I could give those briefings, you know, even 10 hours would be better than zero hours. And I'm not trying to pick on her particularly. It is a time for us to all come together. But there are just bad economic policies and people who just don't get it who are pushing for these things because they just don't know better. Their heart might be in the right place. I followed a lot of doctors and a lot of, you know, medical experts going back about six weeks and they still continue to follow them. And a lot of them are liberal-leaning and they don't know anything about economics. So the same people who were saying, we've got to test and know what we're dealing with.

We've got to do this. We've got to do this. We've got to take this virus seriously. They're now saying, we've got to do this stimulus. And I'm like, whoa, whoa, whoa, wait a minute. You know, hold on. You're a doctor. You probably don't know much about this.

And, you know, same thing they said about me a month ago. about the virus. But yeah, I mean, sound economic principles make sense, and it's unfortunate people just don't know those. So I think you're going to have a lot of mania and rushing into things, you know, thinking about how, you know, how things will work. Elizabeth Warren had a multi-point memo about what she would require if companies get bailout. And for one thing, they shouldn't even be getting the bailout. But even if you did, it's a bad idea to give the bailout, But then she adds all these restrictions, you know, you must have this minimum wage, you must do this. And managers are required by law to do this, or they can go to jail and blah, blah, blah.

That means that you're going to have a nanny state micromanaging. So you have bad decision given to generally bad businesses, because these are typically businesses who squandered their cash on buybacks. So you're taking our money in a bad economic decision, giving it to bad businesses, and then settling them with bad management. ideas on top of that. It's just a pure recipe for failure, unfortunately. Yeah, buybacks, by the way, are absolutely going to be this crisis too big to fail type of, you know, rally and cry. You're seeing it from everyone. I think Vortex, for those of you who follow him on crypto Twitter, retweeted AOC yesterday, and he said, you want to know how crazy a time it is? I agree with AOC on something, and it was about buyback. So I

I think that's one of the interesting dimensions of this conversation that are, that's starting to come up now as well. But, Bruce, so one of the things that I, that you mentioned in terms of things that government can do is, is where it can reduce restrictions in certain ways. And that, I think, is a, as a nice segue into the ventilator question. So you've kind of, it seems to me, transitioned from signaling the warning signs to trying to more pursuously and kind of surgically go after problems that you're anticipating and that others are anticipating coming forward.

So tell me about the kind of ventilator project that has seen kind of an explosion of interest over the last 24 hours or so. Yeah, that's exactly right. I did sort of shift, you know, a week ago or, I don't know, probably just a few days. It seems like a week. You know, there's no need to call alarm anymore. And there's a lot more qualified than me, people than me talk. about the virus itself. I was talking about it really, really early. I put hashtag COVID-19 on my

tweets because it was so rare. People were following that hashtag, a few of them in our community, Belaghi, Ryan Selkis, and a few others. But now everybody knows about it. Now that, you know, COVID-19 is not a topic anymore. It's just subtopics of the topic. And so I'm going to try, I'm going to probably talk about it less, although I would, for those still following the virus itself, I would exercise a lot of caution. There's now a lot more people with a vested interest in shaping a narrative. So I don't really trust data anymore. I was always skeptical of it, but you've got to be even more skeptical now because

there are people using this as an opportunity to do bad things. But I did try and figure out something I could do to help, which was looking at this ventilator issue. And I simultaneously heard two things. is we need a lot more ventilators and the manufacturers aren't even really up to capacity. And two, there are ways to make ventilators from, you know, you can kind of patch together solutions. There's open source ventilators.

They've been used in other countries. There's a lot of doctors, even in modern hospitals where they've doubled up ventilators and there's stories of people making 3D parts and things like that. So I said, well, hey, there's something. I don't know anything about ventilators. but I do know about open source, and I know the power of open source. And I was already in this group, New England Complex Systems Institute, which is a very decentralized, you know, it feels like a Bitcoin or an Ethereum project.

It's just a whole bunch of people jumping in doing their thing, and you get some real brilliant people, and they start their own teams, and that kind of thing. So I asked the head of that what he thought about the ventilators, he says, sure, go for it. you know, typical open source kind of decentralized fashion, just, you know, go, go ahead, be a leader. And so I wrote an article about it. And very, very quickly, we got a lot of response, which is great. It's great for me also because I really looking forward to kind of turning it over to other people, not that I want to abdicate responsibility, but it's just, I don't even know that much about ventilators.

I just try and create an environment that people can, you know, I think I did have confidence enough in myself that I know enough about open source from Bitcoin and other projects that I could foster an environment that helps with that. I've been out in Bitcoin saying, you know, hey, be a leader. You know, that famous line Gavin Andreessen said, what, probably six years ago, hey, don't wait for permission, just go do it. So I figure I could do that. And so far that's worked. And so, you know, we've got some really good team leaders and other people. There's some very experienced medical doctors and, you know, credential people who dealt with regulatory approvals and issues like that.

There's practitioners, designers, medical device people. So we've developed a pretty good group of subteams and people are able to volunteer and help in the way that they can. We have everything from, you know, just people with a 3D printer at home. We're saying, hey, I don't know anything about ventilators, but I can print a part if you want to people saying, you know, hey, I was head FDA. liaison for XYZ giant biomed company for years. I can I can tell you exactly what we need on the specs. We've got just today there was doctors giving spec saying, you know, here's what you need,

here's what it needs to basically be legal and safe. And then we got lawyers working on, you know, going to FDA or other authorities in other countries. This is a global effort and saying, hey, we need emergency approval to do this. In practice, it really is driven by the medical professionals and the doctors, you know, pretty much doctors, one of the ER docs, and this, I'm not a lawyer and I'm not, this isn't legal advice, and it really depends on what country you are. But one of the ER docs said, hey, look, we're going to do what we do to save lives. And we're going to use this, we're going to use what we need to use. And I think he's mainly talking about, you know, when they 3D manufacture apart or they jerry rig two hoses together to make it serve two people instead of one people or

one person, you know, those kind of solutions are something that we're seeing right now. And hopefully a combination of all of this. And again, a main effort pressuring the regular manufacturers, if we can help them get capacity up. And I've gone to several manufacturers. And I say, hey, you know, you've got an opportunity now here that you have activists willing to help you. Is there any regulatory issue that you want torn down? Is there, you know, some, you know, 60-day waiting period requirement for a new factory search? certification, something like that, that we can get torn down. Because if somebody is already a legal, compliant manufacturer or ventilators, they're the best position.

They're by far the best position to say, hey, you know, I've got this factory. I can now expand the factory. Maybe there's a factory down the street that makes, you know, car hoses or car vacuums or something. And we can retool the vacuum factory to make ventilators because, you know, whatever, 50% of the equipment is the same. So those are the kind of things we're working on. I don't know what results will have. It's certainly I'm optimistic based on the number and quality of people that have jumped into this and the publicity we've gotten so far. So maybe that's just some little piece that we can do.

And there's a lot of interesting things like this that people can do on their own. Yeah, that's what I was going to ask. So basically you saw this scenario where one of the particular accusation, likely issues is this particular medical part that was, you know, likely to have a shortage. And the response was kind of dealing 360 with it, right? Like, a news story blew up over the last couple days about 3D printing, but that doesn't take into account all of the regulatory issues, all the legal issues, you know, whatever, all the patent issues, like these things that are not grinding to a halt, even if it maybe

feels like they should in some way. And so, you know, your approach was this open source network, are there, for people who are listening and who are like, I want to be able to do more, are there other issues like that that, you know, you haven't taken up because there's not enough time or just places that they should be looking or where they should be paying attention? I think, you know, one thing I was going to do, I should probably go, I was going to do like a Q&A or an AMA or something. Just say, tell me your skills and I'll tell you how you can help. That's something I'm pretty good at, you know, I think anybody can help. I mean, if you're an op-sec or infosec person, if you're a pen tester, you say, well, what can a pen tester do? Yeah, I tell you what you do. Go to your local hospital because they're getting attacked right now and figure out where they're vulnerable and don't make more work because they're all overwhelmed. But you can go in there, go ahead, do a free report for your local hospital or for, you know, any of these companies or groups that are getting hammered.

you know, you could, and I can make an example like that for anybody, whether your graphics design or whatever, there's Fold app, which is, they're the ones who did the SETI research, crunching data from SETI for years and years. You could do it on your home computer. That enables you to take a GPU and crunch, I don't even know what kind, some kind of data that is apparently useful in the analysis of the virus that may help with, you know, finding, you know, finding data that people need. So you can go ahead and turn it, turn on your computer and run, you know, run it at home on a GPU. There's some things that are tied with a coin. I'm not really sure about that. I thought about that. That was something I was thinking about a couple weeks ago.

Like, hey, maybe you make a coin that does this. But for the coin to be any good at all, you know, useful proof of work doesn't really jive with, you know, a proof of work algorithm that needs a coin to be strong. And also, you know, there's all the other issues that every alt coin has. You know, why do you need it? Is it worth anything? I thought of it more like a, you know, like a gold sticker. Like, hey, good job. You know, good job. You know, sort of bragging rights.

Like, hey, I got, I accumulated 150,000 COVID foldap coins, which showed that I really put a lot of computer power. I don't think that would have economic values. Anyway, I didn't pursue that. If somebody wants to, go for it. That would be a really, you know, I don't know if it would be a good coin at all. If I was going to write a white paper on that, I would caution that it's probably a horrible investment. But that's not the goal. The goal is just if you can incentivize people somehow to turn on their machine when they wouldn't have, you know, great.

And if somebody's real smart out there, you have a lot of smart, you know, listeners. If they can tie it to Bitcoin or something like that, even better. I don't want to get too much into letting economics ride it because it's more like, this is a problem we've got to solve first. So I would encourage people just forget the coin part and just turn on your app. You don't need to have any coin affiliate. You just do this folding app, use your GPUs for free and don't get anything in return, but what you are doing is potentially helping solve it.

So there's a lot of things like that. There's every kind of equipment there's shortage of. I saw a video of a guy. he made his own mask manufacturer machine in his house, and apparently he could make like 100,000 masks in a weekend or something. He had this very fast spinning, you could probably find it, very fast spinning kind of makeshift sewing machine thing, and it would cut. And, you know, there's all kinds of interesting things people can do.

And what I've seen with New England Complex Systems Institute, which is now over a thousand volunteers, not just on the ventilator project, but across all kinds of projects, is that, you know, we know the power of open source. A lot of real smart people jumping in and they're all very motivated. And you have quality of people that just, you know, wouldn't normally, you know, I mean, a lot of, I mean, I'm busy. I wouldn't, there's no way I would be jumping in doing free volunteer work for yet another organization. If you would have asked me a month ago, I get invited all the time to be on nice, prestigious boards and things like that.

I usually say no. But with this, I, nobody even had to ask me. I just jumped in because I said, well, I got. I got a couple slow weeks of work right now. I don't think a lot of people are beating down the door to do our conventional services. And frankly, as a CEO, I've got to adjust for how we're evolving anyway. So, yeah, I think there's a lot that a lot of people can do. So, Bruce, one last question for you, I guess.

That's a little bit zoom out. Where in the pessimism optimism cycle are you now today as we're recording this? Hmm, tough to say. A little of both, you know, I want to be positive but also realistic. You know, the realistic part is that we are in a real unprecedented economic mess. And the stoppage is going to cause things to grind to a halt, which may be hard to restart. Airlines, tourism, restaurants, you know, as you mentioned, these are 20% of our jobs. And that's a big, big deal. And a lot of people, I think, are going to have a rude awakening to how the economy actually works. We need everybody. We need the people working as waiters and waitresses because everything is helped by this overall economic movement. So I'm very concerned about that, and that is very, you know, that creates a lot of pessimism. And I don't think the markets even reflected it yet. And I think that the bad decisions by ours and other governments to print new money is going to be economically disastrous. maybe to the point where it's so bad, it doesn't, you know, kind of everything suffers.

You know, there's some argument to say, oh, this could be good for Bitcoin, is sort of. I hope so. I actually bought some more Bitcoin today. But when it's real, real, real bad, it's not good for anybody. I mean, nobody wants to be a Bitcoin holder if half their city is out of work. I mean, look what happened to Detroit. You know, when things implode, it's bad. on the positive side, you know, hopefully the, you know, people have sort of overreacted.

You say, wow, there's this panic. It's bad. But these things do pass. The Spanish flu passed. There's been quarantines of, you know, mass quarantines of people many times in history. I use the example of the Blitz in World War II where, you know, two million people in London lost their homes or in the UK lost their homes. 40,000 died, and I think 40 to 100,000 were injured. You know, you had these 9-11 scale bombings again and again and again.

So people get through stuff. And typically when a war is over or a major crisis is over, the economy just booms. So we could be in for a great decade. We could be in for a great decade, a great decade where old broken systems and weak ideas and companies and economic plans and politicians are, are irrelevant and a new breed of smarter, more logical people and policies take place. Businesses go back to the good old basics of providing goods and services that people want and maybe new paradigms and new systems in Bitcoin and healthcare and decentralization and these kind of things, you know, do well.

That's my optimistic hope. Humans are strong. Humans are hard to kill. You know, somebody, I try to. and listen to everything, even conspiracy theorists who think the whole thing's fake. I think it's wise to listen to everybody because you want to have good data and there are people who will lie. And it does look, you know, to a conspiracy theorist, this looks a lot like a big giant sigh off. I don't think so because for the simple reason that even if it was, whoever created

it, wouldn't be able to control it. Nobody can control or predict something this complex. So if it was some sinister plot, it would be kind of the equivalent of like, hey, I'm going to, you know, burn down my whole block because I want to burn one set of papers in one person's office. It wouldn't be a good plan. So in any event, I don't think, you know, again, I don't think that somebody created this or this was intentional. I think a lot of the fuel behind it is people with bad motivations. But either way, it's out of their hands now. It's a big complex thing and it's in the world's hands. And the world, I think, may make a lot of mistakes, but generally we're going to gravitate towards what's true. We're going to find the truth in an age of internet. Even if there's

censorship or stuff, we're going to figure out what's true, and we're going to figure out solutions to whatever it is. And then human ingenuity, good old-fashioned economic principles are going to come to the forefront. So, you know, hopefully the bad period that we're in isn't as bad as a lot of people are talking about people are already kind of saying you know a year you know hopefully we can keep this much shorter get good diagnostics um you know and and keep this to a short period and then come out of this much much stronger than ever that's my hope it's a hope i share well thank you bruce so much for taking a little time today i know everyone who's listening appreciates it and uh we'll keep checking in with you as things progress thank you and thanks for all you do we've talked a lot about

the Bitcoin price response to the coronavirus crisis. We've discussed it as recently as yesterday in the context of what this new era of helicopter money might mean for a non-debassable asset like Bitcoin. We talked about it last week with Preston Pish around the idea of a coming bond crisis and a currency crisis that might ensue. What we haven't talked about as much is the idea of a shift from centralized to decentralize systems more broadly. Times of crisis tend to lead to consolidation of power at the center. Yet at the same time, as we're seeing in America, the response has to be inherently decentralized

and a cooperation between central actors and decentralized actors to make this work. The massive campaigns to get people to take individual voluntary action to support the health outcomes not just of themselves, but of those around them is great example of this. I don't know how this ends, but I do know that flexing and growing and developing this open source model and muscle feels important and relevant for the times that we'll face

even once we've conquered the coronavirus or gotten it under control. So I hope you enjoyed this episode, guys. We will be back not tomorrow. Tomorrow we're off, but we'll be back on Friday for another episode of The Breakdown. Until then, peace. Welcome back to The Breakdown, an everyday analysis breaking down the most important stories in Bitcoin, crypto, and beyond with your host, NLW. The breakdown is distributed by CoinDesk.

All right, so I am here with the infamous Peter McCormick. How are you doing, man? I'm doing very well. How are you, Nathaniel? Very strange times right now. It is strange times. Like, man, I feel like our younger selves talked about strange. times last year probably and you know whatever like it's it's it's officially crazy times and it seems like it's been especially crazy for you lately well yeah but well i think it's strange for everyone now and i think the situation that we all feared i don't know actually i kind of get the feeling some people i'm gonna i'm gonna try and pick my words carefully but some people are watching this situation and seeing things they expected to play out in terms of governments and the centralized control play out exactly as they've always said it would.

And I'm very fearful right now of getting into the whole extended reach of the state that this is going to be used by the government to exert bigger control over us. They're going to put the army on the streets and reduce our civil liberties and take control of our money, blah, blah, blah, blah. All those things that people in our field have been talking about for quite a long time that's been happening anyway that seems to be accelerating right now. My view is that I understand why some of this is accelerating now in terms of the armies on the streets. And I'd like to unwrap that with you actually and go into that. And I think it's a natural reaction by the government. And I just think we need to be very careful to hold them to an account that when we come out at the end of this, this doesn't change the way we are treated as humans. and it doesn't change our relationship between us and the government.

Yeah, I mean, you and I were starting to chat about this the other day, but this is not good for Twitter engagement, but this is a time that really, really calls for nuance in the way that we, because there's so many things that are not mutually exclusive. You can believe that it is a time for extraordinary measures while also wanting very ardently to ensure that those extraordinary measures in those extraordinary times aren't just kind of casually filtered to normal, right? And the problem is that a lot of the dialogue around those things is going to be totally binary.

Either a fear, panic-based reaction of, you know, we'll give away all our liberty for the sake of security, or on the other hand, a dismissive almost, you know, like the government shouldn't be helping at all, because it's going to just lead to this. It's also the slippery slope, right? This slippery slope argument. And there is a big, big middle space that is about specifics. And I think that's what I keep coming back to. It's like, let's not, for me, what I'm watching personally is specific instances of, you know,

even to the granularity of like what is the nature of the conversation that the U.S. government is having right now with Facebook, Google. What's the type of data? What are they looking in aggregate data? Is there personal? Like, you know, these things, these nuanced. are important, even if you're coming from a position of a very strong kind of personal privacy and personal liberty. And unfortunately, I think that it's hard to have nuanced calm discussions

in a time where, honestly, the volume is, you know, this time goes to 11, but it's actually like 13, you know, or 14 right now. I think nuance is important here, like you said. I saw something on Twitter the other day where somebody, or even today, somebody said, and I think it might have been in San Francisco, certainly California, that somebody was fined $400 for walking their dog or being with a friend or something. And again, I don't know if that's true.

It sounds believable, and if it hasn't happened, sounds like the type of thing that is going to happen, but I think it's a bit unnecessary. I think it's one of those situations where the person, the police officers, could have said, look, we need people off the streets and this is why.

But where I get really stuck at the moment is I've been led down the road, a new road in my life with libertarians and anarcho-capitalists who talk about personal freedom and nobody should tell anyone what to do, etc, etc. And I fully understand that. And there's a lot I agree with. I talked to Jack and Mozuka about this other day. I agree with a lot of it. But also at the same time, we don't have anywhere in anarcho-capitalist society. We don't have anywhere have a libertarian government.

So we are in a world where we have the state. and the state is going to respond to a situation like this. And watching the footage in Italy, which is quite frankly terrifying, I've watched the footage in the hospital today. We've also just had a news announcement from in London where, listen to this. This is a critical incident at London Hospital after surge in coronavirus cases. Basically, they've hit capacity. Their ICU has hit capacity.

So if the ICU is at capacity, they're going to have to be at that point where they choose who to treat. If you don't have enough ventilators, you're going to have to give somebody another option. Perhaps that's some kind of hand ventilator. Or perhaps you don't have a machine. Or perhaps you have to turn around to a 92-year-old and give their machine to a 46-year-old because they've got more chance of survival. And that's the decisions they're going to have to be making. And I've got a friend who works at an ICU in Australia, and he said we're very early now,

but we are preparing for wartime triage where we are going to have to be choosing about who to give machines to and who we help survive and who we may have to let go. And he says he's terrified. So we are at this situation where we've seen something expand rapidly, globally, and the space of a few months has gone from patient zero in China to thousands of people dying now per 24 hours. I think we've hit that point. Infection rates are obscene. So if the government is going to respond, whilst we don't want infringements on our civil liberties

and we want everyone to have personal freedom, personal choice, I can still understand why the government is thinking, well, we perhaps need to put the army on the streets and say to people stay home. And this is why, because you're going to get sick and you might make other people sick. And I guess a tough nuance in that is, well somebody who's a libertarian might say well I I observe the non-aggression principle I'm not going to go near anybody else and I'm not going to spread this because I don't want to make anyone sick and I'm just going to keep myself to myself but what happens if they get on a bus or go somewhere and they leave you know they are infected and they infecting they leave you know the virus on the surface for three days and infect somebody else so I'm very much want to support civil liberties and freedom and not have an extension of the state but right now I really understand why

that some of the governments are doing what they're doing. Does that make sense? Listen, absolutely. I think, too, again, since I've already screwed myself by saying that the theme of the conversation is going to be nuanced, let's keep going with this theme, right? Like, there is a very strong argument if you are kind of a small government-oriented person that one of the functions of the state should be to be able to exert power in this sort of situation, right, to be able to have effective state power deployed. In fact, Tyler Cowen,

who is one of probably the most widely read, you know, popular libertarians, right, marginal revolution. He's not on the fringes of intellectual society. He's right in the mainstream, right? He's interviewed everyone. He wrote about this, he has a term for it that I'll pull up at some point when you're talking because it's worth looking. But this is part of his argument is that it's not a it's not mutually exclusive to be a small L. Libertarian, but also think that this sort of, the state being able to deploy the right type of power

in these situations is correct. Now, the interesting thing is what does it look like to be correct? One thing that's been really fascinating for me to watch over the last week, so I'm in New York, right? I'm in the Hudson Valley. So I'm outside of New York City. There's been a huge kind of disagreement

between Cuomo and de Blasio. De Blasio keeps talking about shelter in place. He wants shelter in place. And Cuomo has been aggressive about that. In every press conference, he said, words matter. And he's, you know, so basically New York, for those who haven't been paying attention, has decreased. On Wednesday, they said that only 50% of the workforce of non-essential businesses could go into work, right?

So, you know, this is, and this is after restaurants had gone take out only, and certain types of businesses have been closed down where there's a lot of, you know, interaction and things like that. But even deciding all that, any other business, Wednesday it was 50%, Thursday it was 75%, today it went to 100%. And he said, this is the most severe thing. And he was like, you know, basically the point that he was making is that shelter in place is a specific term that now refers to an active shooter. It came from the nuclear era, when it meant literally go to the center of your house and stay there until you hear clear. what he's his point was that when we say shelter in place it scares people like we're not in the business of imprisoning people in their homes what we're saying is that what we can do and there's plenty of people who argue that this is still too extreme in from a business perspective but he's like what we can do is say businesses can't operate right now and what we can do is we can say please don't leave your home for anything other than essential but like a walk is essential for some people's mental health walking your dog, you're not going to be fine for that, right? And so it's an interesting little tightrope

where he's trying to get as much voluntary contribution from people so that there doesn't have to be draconian measures, you know? But at the same time, he kind of went off on young people who aren't taking this seriously. Like, so there's this tightrope act, but there is a possibility of getting that tightrope act right. I think one thing that I haven't seen from the conversation that's been frustrating me is, okay, so. So let's play this out. We're talking about what are the real economic impacts of this, and we're talking about how does the state retreat from that authority later. And it seems very clear to me that the reason that this thing is so deadly is the overwhelming

of the health care system, right? It is not just that, you know, like, it is about the way that the health care system gets overwhelmed. I just heard of a friend right before this call who lost her 99-year-old mother or grandmother, not because of coronavirus, but because, the hospital wouldn't let her in they didn't have any space for her so like that is it's a hospital capacity question the we need a friggin like a very fast Marshall plan right now for getting all of the medical supplies for getting the field hospitals for deploying that full might so that because we will have to resume life but we need this new infrastructure and guess what like we could be

potentially putting people to work building that infrastructure like that's that is the key thing and that's the point at which how do we get to transition back to a different life? We have the infrastructure to be able to deal with this as what it is, which is a very virulent but addressable virus. It's a very, very complicated situation. I mean, and you know what? The other thing, are we the same age?

I can remember if I'm a bit older. I'm 41. I'm 35. You're 35, so you're a bit younger, but like similarish. It's such a strange situation. It's almost overwhelming in that, I, about two weeks ago, two and a half weeks ago, I called my father because he's 72 and he's a smoker and has bronchitis. So he is prime candidate for contracting, if he contracts coronavirus, that he would almost certainly need a ventilator and possibly die.

You know, he's a prime candidate because it's a respiratory virus. So I phoned in two weeks ago, two and a half weeks ago. Actually, I phoned my brother first. I said, I think we need to put dad into lockdown. And my brother wasn't sure and then about two days later he agreed and I said dad now's the time And he said I can't I've got all my golf stuff on I was like hold on dad You need to really understand this and I took him through it and then I also find my ex-wife's parents and did the same And I think I think I realized how serious this was probably a little bit ahead of my friends because of the world we live and work in

Yeah, yeah We're attached to the news a bit more we follow a bit more But it's this kind of weird kind of spectrum of wanting to take it seriously as possible without looking ridiculous to other people who think you're panicking and I think everybody's eventually going to get on the spectrum to the to the extreme end where they realize how serious this is it's just going to take them a lot of time but as we get there we've got to make some serious decisions and I don't know if I don't want to be the person who stands there and says why

I think the state should take control of us and put the army on the streets and tell us what to do. Because we live in this Bitcoin world, whereas if you ever show any form of statism, it's used as an insult against you. Oh, you're a bloody status. You're a stateist. You're a bootlicker. You're a government-loving status. Any kind of insult. So you're almost questioning yourself saying, well, I am. I'm thinking, fuck, I think there's a lot the state can do right now. I think there's certain things the state can do better than individuals can do on their own, right? because I believe they just put some enforcement in place and it's gross and it's scary and it's terrifying and you made a really good use of language

when you said how does the state retract from this position which is very I think you've articulated that perfectly but right now if we were to just give advice to people and tell them what to do we saw what happened in Nashville or on the beaches in Florida people ignoring it I just feel like I almost don't want to have the the state argument now, the libertarian argument now. I want to say, what is the best thing we can do?

And I'm not going to get over-upset by certain actions of the state. Because just because so many fucking people are going to die. And I think, and then I try and measure it. And I try and question it to myself. And I think, all right, well, if freedom's the most important thing to me, in civil liberties, then we should give everyone the advice, but let everyone have free will to choose,

what they will do. But does that ultimately lead to many more people dying? Jacobo Zucco will come and give a very good nuanced argument about why I'm wrong. My gut feel thinks that this is a situation where we have no choice but the state to put into some draconian measures. But I say it with this kind of Bitcoin of guilt thinking, I'm not meant to stand for this. I'm meant to be against this. I'm meant to say, no, this isn't right.

And almost certainly a lot of the stuff they're going to do is right. wrong. I think the UK government's initial decision seemed brave and within two days I was like, no, you got this wrong, you fuck that up. I think almost certainly Trump has got an awful lot wrong and I really don't like his rebranding of the virus

as the Chinese virus. I think he's running every press conference like a PR exercise with the 2020 election. I don't like that and that doesn't mean I support China or I'm a CCC bootlicker. I just don't like that. So I think the governments are going to make a lot of fucking mistakes because they're dealing with something. I'm

precedented and it's really really hard but at the same time i don't know i don't feel like i'm in this place that i can give some i don't know i don't think now is the time to be arguing over civil liberties in terms of some of the decisions the states making now i think now's the time to say how do we ensure when this is over that they do retract from these positions that we don't lose a bunch of freedoms well the limited freedoms we already have we don't lose them and i think that's a more practical place to approach it from Yeah, I mean, listen, I think my feeling is almost always, and certainly in this case, is that everyone gets to have a different voice and a different importance. One of the things that I've always loved about Bitcoiners much more extreme than I am, whether it's about the crypto industry or whether it's about libertarian politics or anything like that, is that they provide an unflaping, an unflapably,

pull of the discourse, right? That is that is an anchor point that you can go to. And I think that a free, open society only works if you can have perspectives at both extremes, screaming at each other. Now, where I usually find myself is wanting, I tend by nature to be radically more pragmatic than I would like to be even. Like, I have this very strong and weird combination of, of incredibly kind of frustrated and passionate, but then like want to hone in on the thing that can be addressed. So right now, for example, I'm looking at this bill that was happening before coronavirus that is trying to get end-to-end encryption out of the way, right? And this has been, Attorney General Barr has been fighting this fight since a while ago, right? It's been him versus Apple.

And Apple has been fighting, but they've, you know, they've kowtowed in certain ways at certain points. but that is a specific discrete thing, right? That doesn't really necessarily have to do. I think smart people can argue about how much tracking and surveillance is really necessary for this, you know? And although in some ways, I'm much more worried about the tracking and surveilling of every citizen via their mobile app than I am about local police forces enforcing a curfew, even if I think like, you know, curfews seem like a, weird, you know, choice to me, right? Like, in some ways, those are different things. So I'm going to be flying the flag of and screaming about that, that other thing, that specific thing. But, you know, I also think that right now there is a little bit of a pick your battles situation in the sense

of there are some things that have left the station. Like no one, like, we have gone from, there is no longer any political space for not direct intervention in people's bank accounts in this. And I think there's a lot of reasons for that. I think that the biggest reason is that there's also no political will in Congress or the Senate to not bail out companies, but they also, having lived through 2008, know that they can't not bail out regular people and bail out companies as well. Or they can't bail out companies and not bail out regular people as well. There's no way that anyone will get voted. But perhaps they can, you know, they're very scared to let industries, to let companies die, right?

Like this is a system that feels fragile to everyone that they're going to try to preserve with whatever they can. So like us screaming about UBI and things like this or whatever, you know, or quantitative easing and the money printer, like these are the new narratives, the new memes. But the reality is that this is a situation where we already had an answer to that, which is Bitcoin and participation in the Bitcoin ecosystem. And for the first time, this crisis is the first one that's happened where there's a voluntary opt-out mechanism, at least on some level. Now, we all live in society, so I think it's overstated to say that we're opting out entirely. But there is this other thing, right? So I feel like a lot of this has to do with one picking your battles, two, figuring out where there's actually levers of change to pull.

And the reality is that when people are dying, when hospitals are being overwhelmed and when people are losing their jobs, you're not going to win most arguments. arguments about not intervening. So I go far, I go right to the other side of that conversation and say there will be a time at which this has gotten more under control, right? Where the healthcare system has gotten more under control. What are we, what can we not give up on the way? Yeah. Do you know, can I talk about something as well that I still haven't seen the answer for?

Because, so we're at this point now where we're having to put every almost country is going through the same steps just at a different time and I'm seeing the US is doing it if you think each state is more like a country they're going through a similar process whereby it's okay we've got some infections okay the infections are going up we've had a death oh now we've had double figures deaths now now the uptick's starting to happen so the UK is in the real uptick right now Italy is way ahead of everybody France and Spain Germany aren't looking great. You know, US is starting to pick up. And during that process, they go through a, you have concerns from the politicians that initially they start talking about perhaps we

won't have enough ventilators, there's enough machines. And then they start talking about, okay, we're probably going to have to consider social distancing. And people start to make some of their own choices, a little bit of panic buying, you know, maybe telling their parents to lock themselves down. And then the government comes in and says, okay, we need to enforce some social distance in we're going to close down the schools okay now you can't go to work everyone should work from home and now it's full lockdown every every country appears to be following a very similar trajectory with all of this which is and the reason they're following that trajectory is because of the the infection rates

are so rapid that as you said earlier the health systems are coming under so much pressure what I don't understand is and what any nobody is explained is how do we come out of this? Because even if in say the UK can reduce the flatten the curve, we've heard this to flatten the curve, say they can do it in 12 weeks or even 16, we've got three to four months of lockdown. Suppose they flatten the curve. Then what? What do you do there? If we're talking about not having a vaccine for say 18 months, even a year, let's say even a year. What happens between months? three and four and month 12 are a handful of people allowed to go to work are is specific towns

allowed to go to work do we have to have in some place some way of tracking who has an infection and who they're coming to touch with and if a new infection happens then then anyone who's coming to touch that person has to be locked down again if you do that we're going to have schizophrenic businesses that pop up and shut down very quickly so that's not going to be operational we're never going to get children back to school. So it feels like, realistically, we're in this until there's a vaccine. I can't see how we come out of it. And I'll be honest, this is the first time in my life.

I've actually been really scared, not personally, just more scared generally for people. And what's going to happen over the next 12 months? Because you've got entire industries of, I mean, the airline industry is done right now. Pretty much. Nobody's going to go on a cruise right now. Hotels are screwed. And then all the knock on businesses from there. What about the restaurants in the hotels? What about the companies that supply the parts to the airlines? What about the engineers who work for the airlines? What about the airports themselves? What about the taxi drivers that take people from the airport home? The knock on

effect from this, I think is frightening. And I don't know the answer, but I just don't see, are we in this? So we all locked down now for a year? Well, I do think, so a couple of thoughts. First is that there is going to be some precedent, right? We can watch how Asia is trying to manage this and see what works. And the thing that's clear is that they redesigned, I mean, they were already way ahead of us on this, but you don't go into a building right now in Singapore without having your temperature checked, right?

It is just a totally different experience of life. where everything is about controlling potential outbreaks, right, and being able to get that cluster. I think there's still really good questions about school and how that's working and everything else. But I think that it's going to be an extreme amount of vigilant data gathering and information. So that's kind of like part one.

I mean, but at least if nothing else, there will be some, we have a couple months of, we're behind by enough time to see, what's working, right? They, I mean, for better or worse, they get to be the guinea pigs, you know, in this. I think the second part is, you know, we've largely, because it's really, I mean, let's be clear about what our timeline is. It has really only been a few weeks since the U.S. started to take this seriously. February 24th was literally the first day that markets

reacted to this at all in the U.S. I know because it was the day that Caitlin Long announced Devonty and I interviewed her and we were talking about how the markets had just started to react for the first time. February 12th, meanwhile, was all-time highs, right? So 12 days between that and less trading days, obviously. And now we're only, we are only, we're at the end right now of the first full week where the U.S. president acknowledged the severity of this thing and wasn't just calling it another flu, right? If you go back not to two Mondays ago, right? So four days ago and then seven days before that, he put out a tweet about how the flu kills so many more people, right? It wasn't until Wednesday of that week that Tom Hanks got it, the NBA shut down, and Trump got on TV and said

we actually have to do something about this. So we're really still like in the U.S. we're like seven working days, you know, nine days total into the leadership of the country, not being totally insane about this thing. And we've done, it's almost like I'm watching this weird thing. Like this is a, to me, this is a health issue that creates a financial markets issue, that creates an economic issue, that potentially creates a geopolitical issue. And it's almost like we're watching these things, like, you know, the people are finally taking the health issue seriously. However, we're dealing right now with the, with the still testing dimension of it, right? Not the, not the, not the, the overwhelmed health care system yet, which is what's right around the corner,

which is why people are so scared and they should be from an infrastructure perspective. With the financial markets, obviously we've seen a huge sell-off, but the Fed is using every tool that it has. The federal government is obviously using every tool that it has to try to keep this in check. What we haven't experienced yet is the economic knock-on, really, right? Because, again, people haven't been out of work for long. You know, again, if you go back to Cuomo, he went from 50% of the workforce to 75% of the workforce to 100% over three days. He knew the math. He knew exactly how much this was going to go.

he used that time, I believe, to get people more and more used to the idea, right, rather than going zero to 100 and scaring the shit out of people. That was a specific psychological tactic, you know, which honestly I applaud him for. I think in some ways it's the correct call, although maybe a week earlier or whatever, right? So you've got just the beginnings of the economic hardship that this is going to represent. And we have never had anything this fast, you know. And like the only hope is that it's, you know, someone called it World War II. World War III for 90 days. And that would be the best case scenario where by July 15th,

when U.S. taxes are due and, you know, that we actually have gotten the health care system under control, people can start to go back to work. And the big money printing machine, you know, has helped people get through that part or whatever it is, right? People have done it together. I'm more worried because I see, like you, I think that it's everything, that it's so much more than just the 20% of, the 20% of people are in the service industry, right? already got that. But there's a million more things that aren't accounted for that. And I think that you come across this, like you just think for a little bit, right? Like, you know, we've joked about this before, but our family's favorite hobby is Magic the Gathering.

There are thousands and thousands of local game stores all around the country who are for tons of different games, but they're anchored around that, who are just cooked. There's no, they're already hanging on by a thread because they're from a different time, right? Where we went to stores and, you know, played games together rather than doing it online, which is so much more convenient. Like the number of that that companies in that space, small businesses that are going to shut down is going to be enormous. And like, I don't know, card stores, like your local bath and body shop that's just someone who had a dream, like florists, you name it. You know what I mean? Like I think we haven't even begun to grapple with what that might mean. Now, the thing that I think

that we're extra not grappling with, though, is the what might happen geopolitically globally, right like we are already at the the tail end of the u.s designed post-world war two order where we are retreating we are aggressively retreating from the world you know i mean this has been uh trump you know he's continuing things he's accelerated certainly but this has been uh going on for a while is a retreat from the world and one of the few things i actually like i was going to say that's one of the few things actually like about what trump's been doing he seems to want to get a away from wars and intervention, which is one of the few things I actually admire about him. Well, I agree. I am no fan of war. But I do think, too, that there is a, there are untold

consequences, right? In terms of like when you start to unwind an order where everything is interconnected from a global shipping, what you do is you create a scenario where all of a sudden there are really rich countries and really poor countries, not based on where they sit in the global order, but based on their actual resources. And it does not look, I mean, this is, I'm literally just a parrot for Peter Zahon right now, who just wrote Disunited Nations. But this is my background, too. This is where, like, when I first, you know, I was in global change systems and things like that. I thought I was going to spend my life working in Israel, Palestine, or Uganda and Rwanda. And I think that we haven't grappled that except maybe a little in the, like, even the Chinese

virus thing, which I feel very similar to you about, the, the, the, the, the, the, the, The cynical brilliance of this guy when it comes to manipulating the news cycle is unfathomable. And this is, I thought for sure, the incalculably bad response that he has had to coronavirus was going to be his undoing. But I think the ability to shift it to a us versus them at a time when everyone's angry, it plays right into the rights narrative that liberals are just, you know, social justice warriors who are concerned about racism. Like this is a thing that is basically definitionally racist, but that's not the point. He's not doing it as a dog whistle racism thing. That's just a fun byproduct, right? The reason that he's doing this is two things.

One is that the CCP is in a fight for their life because the Chinese citizens have never been as closer to rebelling as they are now after this situation. And so they are desperately trying to put that narrative of the U.S. actually starting it, right? So there's a geopolitical brinksmanship being played there signals the rest of the world. That's one thing that's going on. Now, I think that there's a lot of very smart, savvy geopolitical thinkers who think that like responding to that in kind is a really stupid strategy. So I'm not commenting on the quality of the strategy.

I'm just saying that's part of it. The second part of it is this fucker has to, excuse me, listeners, but he has to, he has to shift the narrative from literally like I said two Mondays ago he was saying it was as bad as the flu to I've always taken this seriously and in fact if you go back the one thing he did do is close the borders to china real fast because that was fine with him right that was played played into what he did he wants everyone to say like it was a Chinese virus I closed the borders to China we did everything you know like that and it plays perfectly to his political base it's an easier narrative you know it's an easier narrative than me in October going back and showing well like this

was the death toll at this time and this is what they said and this was the death toll like no one's going to care they're just going to like when the other option is chinese virus it was their fault right so i find ben shapiro an interesting character i disagree with a lot of what he says i think he his delivery sometimes is a little bit sinister and i think he likes to be angry about things but i also admire some of the things he does and the way the things he explains and one of the things i like he does with trump is he will say about the things he thinks he's done well and he'll criticize him. One of the real problems I have with politics right now is the,

I said it on Twitter the other day, somebody who was like Trump derangement syndrome, but there is a Trump defensive syndrome whereby anything he does, however agrarious can be defended. And I think the most interesting people who are able to politically observe and criticize and compliments and give credit we're due to both sides. rather than just say always like

oh that's just the liberal left wing way or just say or just that unilateral hate for Trump neither work for me and the reason they don't work because it's just completely intellectually dishonest

there is no world which suits there is no world where everything is correct right or everything's correct left because it doesn't account for different personality types and different economic positions

and I think the most intellectually honest thing you can ever do is be fair and be critical. And I was, I've defended Trump sometimes, which by the way, in the UK is a really hard thing to do. It's really hard. You're not talking about 50% of the nation. You're talking about 5% of the nation who will agree with you. Everyone thinks he's a fucking moron. Honestly, everyone thinks he's a moron.

I tried it with my brother and my dad over Christmas and my brother refused to talk to me. And I said to him, well, the thing about Trump is I don't love him, but I think he would, I'd rather him as the leader of the U.S. less than Hillary if I had to choose just because I think Hillary is crooked and evil, whereas I think Trump is just at times stupid. But so I said the other day when he called it the China virus, I said the rebranding. I think I think it's a disgrace. And the reason I think it's a disgrace is for a couple of reasons. I think firstly, it's, I think all his press conferences are run as PR exercises.

For him to be calling. That's for sure. Yeah. You know, partway through one of them, somebody, said something about Joe Biden, he said, yeah, sleepy Joe this. I just think it's so immature, pathetic, a time when he's addressing the nation, and the biggest crisis the US may ever face, the world may ever have faced. At a time where he needs to be addressing the nation, he's putting his little childish dix in

about Joe Biden. And I think that was pathetic. I think calling it the China virus was totally a deflection exercise. And the really important thing for me, and I would have been equally critical if this had been a UK leader, is that during the biggest crisis a country has ever faced, or one of the top crisis a country has ever faced, that you are still entirely focused on your personal reputation. That right now, all you are clearly thinking about is, will I win the 2020 election? Firstly, if it goes ahead. Let's just assume it's going to go ahead. And by the way, three months ago, it was a slam dunk. I think even a month ago, it was a slam dunk.

He was winning the next election. I don't think even Biden or Bernie Sanders would have the ability to remove him. I think this, I think this coronavirus and what happens puts under threat. I think it makes it more debatable about whether he'll win the next election because he's going to be judged entirely on this. And it might be out of his hands. He might have done the best things possible. he might have put in the best policies possible straight away. Either way, a lot of people are going to die,

and there's going to be an economic crisis. And because of that, people might hold him accountable, even though he couldn't have done anything anyone else had done. But for him at this time to be using the most important time in the country as a continual and very obvious PR exercise, I think that's disgraceful because I understand a small amount of it's going to happen. But for each time for him to come out and said, we've done a perfect job.

We've got these people, they're amazing. They're tremendous. They're doing a perfect job. I think it's great to talk people up. But every time he refers back to himself, he said, well, I did the best job possible here. He's got universal belief that everything he does is perfect and right without any self-awareness.

And I just think it's a dangerous time to be starting a war of words with the Chinese. And just in response, because if people listen to this, they might give some of the response I got on Twitter. Firstly, they said, no you just want to you're just a typical liberal left focus on on racism okay firstly i'm not lefty secondly i never even want to mention racism this to me was never about racism this to me was about leadership and i just thought it demonstrated weak leadership also people who were saying well such and such at the CCP had blamed the u.s i said fine then turn around and say

there's been accusations in the press from from x who said this is a u.s engine I've engineered virus. This is obviously ridiculous. We won't entertain such knowledge, and we will be speaking to their ambassador. I think there's more mature and better ways to deal with in it than just not start going, the China virus. Like, he runs his every single policy and every decision is like, how can he meme it? And I don't know, dude.

I just personally, it's actually, where is he grown in my estimation as somebody where I just, I thought it was an idiot when he first came in. And after four years, I thought, do you know what? He's not as bad as I thought. He's done some good things there. And I can understand what people like him. Right now, he's lost some credibility with me, which I know some people to go, we don't fucking matter.

Who cares? You're a Brit and you're a nobody. At the same time, I can imagine others will be feeling this as well. No, I mean, listen, I think that the hard thing in American politics right now, which spills into politics everywhere, is that it is internecine warfare. There are religious cults on both sides. And if you are someone who feels, like, can, likes people from both sides,

has different opinions from both sides, it's not even center. Unfortunately, center is not a really good term. It's more like a bouncer, right? Like, you're like a ping pong ball because there's got, like, people are big and diverse and their experiences make them feel different things, you know?

And it is, you know, I think that's the challenge for people is that when when everything becomes politicized, but how can it not be, you know? Let me ask you a question, actually, because I want to touch on this a little bit. You just spent, you just had a big trip where you went to places that were having a hard time of it

even before the coronavirus. How have the last couple weeks, well, one, like, you know, what was that trip about and what were some of your takeaways? But how has the last couple weeks of seeing the world respond to coronavirus re-contextualized it for you? Like that's the type of thing where I had trips that I took that I thought meant one thing, but in retrospect, the thing that I learned was very different, you know? Yeah, yeah, good question.

So the transitions from having a Bitcoin podcast, having two podcasts, was very much about wanting to expand outside of just being able to talk to people about Bitcoin. I did it a few times on the Bitcoin podcast, but there were subjects I wanted to touch on. And so I launched the other one, Defiance. And really, that was just to, for me to learn, you know, as an education process for me, but also, yeah, just to expand outside of the Bitcoin. And what I found very quickly in doing Defiance and traveling, because I used to travel to cities where I could cover Bitcoin and Defiance.

And what I realized traveling was that actually the Defiance stuff is, sometimes more visual. It's things you need to see. You know, you need to visually see what is. Hong Kong, I can do an interview with somebody about Hong Kong, but really what's going to be much more effective and much more powerful is a video of people protesting and maybe short, snappier interviews with people there. So I realize that actually Defiance needs to be a, at least a film brand alongside it, potentially only a film brand. Perhaps it isn't a podcast in the future. That I don't know. So I just, and I also just wanted to become a filmmaker myself, just ambition-wise.

I really enjoyed doing the podcast. I've really enjoyed doing the specials like the one of Mount Gox. And in doing Mount Gox, I realize, so I'm going off on a tangent, but bear with me, it all comes back together. Doing the Mount Gox, I realize. You know what we're doing, you know what we're doing right now? We're basically doing the thing that, like, you know, all of our elected leaders are now advising us to, which is like, the way that you deal with social distancing is you just like call up your friends, do a video chat and talk about things that you wouldn't have known. normally talked about. So for anyone, anyone who's listening, like, treat it as such.

When I do my intro for the show, I'll make sure to make that point that it's not like, we're going to go over the recent price action and what it all means. It's definitely not that. So go off on any tangent is my point. But yeah, so when I did the Mount Gok series, straight away afterwards, I wanted to do it again because it was just a sequential set of interviews. It was six interviews. Actually, what I really wanted to do was research the story,

create a narrative and an arc do the interviews knit them together and run it like a documentary and I've been working on one about Bitcoin as well which I'm deep into and the natural progression

is I can produce audio documentaries that's fine but I'd like to produce video documentaries just a personal personal ambition so I bought all the equipment all the camera equipment and I decided I was going to head back to South America

because I really wanted to go to Venezuela because I could do two things I could cover Bitcoin because it's always seen as a Bitcoin and use case and I could cover the economic crisis but as I was going there I was like right I'll go to Colombia I'll go to Bolivia and I'll go to Chile I'll do them all together so I went out there with this intention of just starting filming and making some film work and then I've been

talking to this producer slash camera operator for a while and he said look I'll come out with you so I was like fine I'll pay for you and it was really just meant to be a test go out to these four countries film a bunch of stuff see what we've got at the end of it we struck gold a few times. We got very lucky with what we stumbled across and the content we were able to make. But what resonated for me was like two things that came together at the same point. Somebody had said to me, you're going to really have to figure out what it is your making, Pete, and why you're making it, what's your angle, you know, what is it about you that people should watch your videos and what you care about? And that was really stuck with me. I was like,

yeah, you're right. I can't just film shit and put it out there. You know, what is it I do care about. And I know, like in my heart, I know it's human stories. Whenever this shit's going off, I just care about the human stories at the back of it. And to give a good example of that, it's just having been out to Turkey in Greece with the border. I think in that situation, everyone's

got a valid argument. The Turkish government got a valid argument that they've got 3.7 million migrants in the country. That's a lot of pressure. How many can they take? And I think the Greek government are right when they turn around and say, look, we've already taken a million in. We can't take any more. And I think the people who live in Germany or Sweden

who've experienced mass social unrest from the integration of migrants have got a valid argument saying, this hasn't worked out well for us. Yet, it doesn't matter who is right. In the middle of all this, there are a bunch of people who are fearful or don't want to live in their homes.

Let's move away from the economic migrants. Let's just deal with the people who want to leave Iraq because the country is a basket, case since the US war. Or let's talk about the people who've left Somalia, which is a very dangerous country. Or let's talk about the people who've left maybe Burundi or just all these different countries. Whoever's right about their economic argument, there is a group of people here that were all stuck on the border between Greece and Turkey living in a field where

women have no access to sanitary products, they've got babies they're feeding, they're all living on one or two meals handed out a day, they're trying to leave a country that doesn't want them, trying to get into another country that is firing tear gas at them, but these are just people, right? And that's the point I'm trying to get to. I wanted to make films about people, just the real struggles that some people will go through. But what I found is it doesn't matter where I go, Nathaniel, the pattern is the same and the stories are the same in that there's this ongoing battle of left, v. right, rich, v. Porn. And this is where I end up questioning some of the libertarian staff.

When people say Bitcoin fixes this, because I don't believe in every single scenario, Bitcoin does fix everything. There is certainly a situation right now where if there is too much inequality and too much corruption, you will see the poorer people tend to rise up, who tend to be a little bit more left wing because they tend to look at the world and say it's a bit unfair. It's a bit unfair because because we're poor, we don't have healthcare and we don't have education. So we think that should be provided because that's how they feel. And we somehow got to try and find a way and getting this balance right because if we continue to have unequal societies, it doesn't matter what you politically think is right here. It doesn't matter if you think these people are socialists and socialism is bad.

You are still going to have violent uprisings and people are still going to die. And I'm seeing this pattern, the same argument, It doesn't matter if I'm in Santiago, Chile, in Venezuela or in San Francisco. You have got the same problem of inequality leading to problems, and you've got people feeling left out by society, or feeling that it's just a bit unfair because all the leaders are corrupt, and, you know, what are they meant to have? And that pattern I'm seeing everywhere.

Like, everywhere I go, and it's just a different story, told in a different way. In Venezuela it is because Maduro is essentially a ruthless dictator who took over from Chavez who himself slipped into authoritarianism after his social program started to fail. But you've still got a rich for you poor corruption problem there. It's the same in Chile. And I think we have very similar situations in Europe and the US. And I don't know. It's just it's what I'm and everywhere. Oh, and I think that the... Sorry, sorry, I've gone on there a bit.

I can't fully articulate it always because I'm still trying to figure it out in my head. But you also ask, how does what's happening now re-contextualize that? I'm not sure it does, but what I'm expecting is those situations or those countries with the highest inequality and the poorest countries are going to suffer even worse through this situation because what's going to happen is their health care systems are going to be overrun quicker. They're going to have higher numbers of people who can't get access to the health care system. They're going to have people whose health is maybe slightly worse because those who are poorer tend to have poorer health generally.

And I know it's a massive generalisation. And ultimately, I think in all of these situations, the more wealthy you are, the more wealthy you are, the easier coronavirus is going to be few to survive because you're going to be able to get food, you're going to be able to get excess of health, and I just think it's going to disproportionately affect poorer people. So if anything, that's what I'm observing. So in 2010, Haiti had the huge, it was a magnitude 7.0 earthquake that was hugely devastating, right? And the reason that an earthquake like that is so much more devastating for Haiti than it would be in, say, San Francisco now, right?

Who's due for one is that what kills in an earthquake isn't the earth shaking. It's buildings falling down and fire starting, right? And in a place where there is immense infrastructure, even if you're dealing with the same magnitude of earthquake, two wildly different outcomes. And I tend to agree that my fear with one of my fears, geopolitically with the coronavirus, is that, like, I just saw that there was a big increase in South Africa overnight. And, you know, South Africa has more infrastructure than most parts of the continent. But it's still, it's not most of Europe, right? It's certainly not Lombardi, Italy, which has one of the best health systems, you know, in the world. it is a very different thing.

And I think that if the equivalent of buildings falling down in this case is the health system coming under more pressure than it can, and the ripple effects, not just from people who die from coronavirus, but other people who can't get treatment for other things, you know, the death rate doesn't stop because of coronavirus, you know? The birth rate doesn't stop because of coronavirus. I think it does have the potential to disproportionately, impact people. And I think that what you're feeling and seeing around the world, certainly I've

observed this as well. Like one of the, so the reason that I thought that I was going to go spend my life doing conflict or post-conflict reconstruction was the jarring disconnect between the feeling that everything was fine in the 90s and the Cold War was over and it was great. And the fact that it was it was the bloodiest decade since the 40s when it comes to violent conflict, right? in terms of numbers of people who were actually killed. And how could those two narratives didn't exist, right? But most of the world post-Soviet war has been in this very, we are in a very weird liminal in-between scenario and have been for a while.

And the challenge is that, and going back to your left versus right point, the problem in situations of desperation and inequality is power. and power seizes whatever narrative works based on that, you know, what does left authoritarianism and socialist fascism? How does that look practically different than right authoritarianism and fascism? The answer is that it doesn't, really. It's just what's the narrative that's useful on the way. And I think, again, having that sort of, having that sort of nuance and the ability to, the ability to, the ability to to speak in those terms rather than just throw around. I mean, the problem is that we've, we've almost, we've lionized political words, right?

We've made them capitals instead of lower cases. And they come with a preset of expectations that limit our ability to understand, right? It's easier to write off an entire country for being socialist than understanding the context in which people lived that made seed. seeding authority to people over their lives. Like most people want to live their lives uninterrupted. This was my experience. And I, you know, so my, my formative years were spent basically between the Middle East and in East Africa.

And the number one thing over and over again is that if you get into people that have lived with conflict for a long time, they don't speak in these same generic political terms. They speak in terms of, you know, what allows them to live and move on with their lives, right? And that can be a dangerous situation. That's why Mubarak was in power in Egypt for 25 years, is that he was unbelievably good at more or less people were fine. They just didn't have autonomy over this one part of their life, right? I was in Egypt when George Bush was elected.

And I was in a program basically because I was studying there. We had two types of kids, like the lefties save the world kids and going into the CIA, you got to study my enemy while I learn Arabic kids. And all of us were friends because we're human beings, and human beings can be friends with people who disenfranchis. agree, even though the media tells us differently now. And on the way home, we had gotten a hotel suite to watch the election results. People couldn't believe that this guy was going to get elected again, and he did, obviously. And it was really, really late. We saw those results at like 4 a.m. or 5 a.m. And we were taking a cab home, and the taxi driver was going out of his way to tell us that he understood that we didn't have any control over this and not to feel about. Meanwhile, we actually did, right? But the experience of having any actual hand in electing your leader was so foreign to them. Now this is obviously, this is seven years before Tahrir Square and the Arab Spring. So it's different. It changed a little bit, although

the legacy of that is still playing out. But the point of this is to say that everywhere I've ever been, what people care most about is, do I get to live my life? Am I scared for my kids? Like, full stop and everything else. And that's why, the danger in that comes when people can come with promises and say seed this authority see this control to me and I will give you more of that you know yeah I think the I mean I don't want to say the one good thing that can come out of this what I hope is when we come out of this I think we've got two choices right as people nations politicians we've got a chance to to reassess how we got here and the mistakes we've made and try and learn from this and have a better world

or it just gets worse. My fear is it will actually get worse. But can we learn from this? Because I'm disenfranchised from the political process because it's so divisive. It's like you either agree with me or you agree with everything they agree with and you're bad.

I didn't vote in the election because I couldn't vote for either Boris or Corbyn't. Because they were just so poles apart. But there were so many things in the world I'm also questioning. And I think as a parent, you question it more, especially as your kids can ask questions. Yeah, and you can influence them.

Like, my son says things now that he only says because he's my son. Like, when the government recently, a few days ago, announced their massive spending plans, he was like, but dad, if they keep printing money like that, it just, the money's going to be worth less, right? And I was like, yeah. And he's like, well, you buy more Bitcoin. Like that's all come from him hearing me talk about it

But it also makes me realize that if I talk to him about politics I can really influence him If I just sit there and say you need to be conservative And the conservatives are better Because they focus more on hard work Whereas the laborer are more socialist And they want to help everyone and make everyone's life easy He's going to come out thinking

Potentially that poor people are lazy And we just stop helping them And that worries me as well And I don't know I'm not really articulate. This is the kind of thing I wish I had some time to articulate and think about exactly what I wanted to say. But all I know is that if I used to have a certain way of view in the world

when I used to sit on my couch, sit at home, and live in Bedford and follow the news and talk to my friends. And I would almost pick aside like a football team that I would want to be on. And now as I've traveled the world and met, I've been so fortunate to do this. I've met so many amazing people and people in difficult situations. I don't now. I don't want to be on a side because I realize most of the time the side of Iran is a lot of it's got to do with where you were born. You know, the fortune of being born in a country like the UK versus being born in Iraq, I don't know, pre-Golf War II. I mean, that's what a fortunate position to be in.

and a lot of what we have is just down to just pure luck and chance and I think we're in a world now where we've got too much about I want and me and focus on me and not enough about not enough about the empathy for others and enough regard for human life enough regard for the really shitty situations people have to live through God I'm probably sounding like a really soft left wing liberal now I'm not I mean but is it a really shitty situations people have to live through I mean But isn't that a problem when wanting to encourage, like, empathy and understanding the lived experience of people is relegated to one side or another? By the way, that used to be a small C conservative position. If you look back, right, like historically before the, you know, whatever, that was a traditionally conservative position, you know.

So this is the problem is that these things, there is inherently a dynamic between, you know, leaders and the people who need to back them where it's a process of narrative making and freeing yourself from that. And I think there's a, there's a liberation to existing in a way where you're not afraid to not know things and you're not afraid to change your opinion. And unfortunately, nothing, nothing in society really rewards you for that. But I'm, I'm interested at least, and part of the reason that I spend so much time creating these media spaces is like, I feel like I had a choice when it comes to, the crypto space or political space or whatever.

Like, it is very clear. The path to engagement is picking a tribe always and just being the best at shouting that tribe's message. And this is all, by the way, this is not a Bitcoin or Ethereum thing, although that, it plays out a little bit like that. But honestly, crypto is, I think, light years ahead of most industries when it comes to this stuff. It just feels intense because we're in it.

But like, if you think, like, left versus right identity politics and shit makes Bitcoiners versus Ethereum kids look like absolutely nothing. And, you know, for me, though, like, I was, you know, I just, I am firmly committed to this, to creating spaces where you get to say, like, this is, this is my incredibly strong, intense opinion based on what I know now. But if you got something else, whether it's new facts or a new way of looking at things, like, bring it on. And I'm not scared of that conversation because you disagreeing doesn't fuck with who I am. It doesn't hurt my soul. it is an interesting thing where maybe I'll learn from that, you know, or maybe I'll think you're terrible.

But you're just talking about the Roger Ailes playbook, right? Fox News, Roger Ailes, when he came in and he formed Fox News, his strategy, he said, let's just be conservative. Let's be conservative, let's focus on Republican issues, and then we get 60% of the population. Because if we do what CNN is doing and MSNBC is doing, then we're fighting for the same audience. We can have all of this audience.

And therefore, and Fox News, for me it's an embarrassment. It's an embarrassment of a TV channel because it is never impartial in any way at all about any decision of Trump or the Republicans. It can never step back and go, do you know what? This is wrong. We shouldn't be speaking like this or these kinds of policies are wrong. It's every single thing he does, they support. And that for me is a really sad reflection on the world because what it does, it does divide us. all and it puts us all in separate camps of hate.

You know, it's not, it's not, it's not, what are the, what are the, what are the, what are the, what are the reasons that Trump should be president ahead of Joe Biden? What, what can he do better? What, what can we learn from? It's, no, let's hate Joe, sleepy Joe, let's, let's, let's humiliate him, and, and, and, and, let's create hate the liberals, and let's get the liberals, and, by the way, they do it the other way, and let's all just fucking hate each other, and go to war, and then want to win our election, and then for four years, we're just going to laugh at you and create memes about you.

Honestly, it's not how I want to live in the world anymore. In some ways, it's why I'm rejecting politics and stepping away from it. Or I'm setting a new standard what I expect from politicians. And you're right. We're in the content space. I could very easily be a bitconer who's like, I'm Bitcoin and I'm Bitcoin only. Fuck the stay. I'm all about freedom, civil liberties.

But I can't do that because, you know, I, firstly, not everyone. I don't believe anarcho-capitalism. I'm not convinced that creates a better world, a nicer world or a safer world. It potentially creates a crazier world where it's all for himself and everyone has to own a gun. And I don't want guns in the UK. I just don't. I appreciate why you have them in the US and I've come to learn about it, but I don't want that situation. So I don't know.

I tend to get in a lot of fights or shout out on Twitter because I don't follow the Bitcoin narrative all the time. I don't. I just don't always agree with everything. this kind of narrative where you have to be this anarcho-capitalist. I think it's immature, actually, and I think it's impractical. I think it's much more mature to just try and say, look, we do live in a world with the state. How do we make it better?

Like what Eric Voorhe said to me when I said about, I can't see this world of libertarianism. He said, we don't need to. The starting point is less government. Let's just try and have 5% less government and see where we get. And then another 5%. And does that make it a world? And that, I think that's a much more mature and practical place to go.

But just to sit there and, you know, we're going to have the armies on the streets in the UK, probably within a week. I don't want to just go, it's just bad because it's authoritarianism. I want to just have a fair debate and say, hold on, is this a good thing? Could this actually save lives and can we retract from it? And will this be a good short-term measure? And that's something I'm really struggling with right now. And if anything, people are going to go, oh, you're a snowflake. you've got no bollocks you're not going to you're not you're not really willing to take a side you're just sitting on the fence and i don't think it's that i'm sitting on the fence i think i'm genuinely concerned about how we've got to where we've got to and and how we debate these issues yeah funny times man yeah i also it's it's no it's weird times i mean that i like i am uh i'm like unfortunately the question i ask uh every person

person I've had on for the last couple weeks has been, you know, where are you kind of in an optimism or pessimism cycle? And for me, you know, my answer is I'm, like the short-term optimism is that like at least literally this is, we're at the end of the first week where everyone was acknowledging this is a real thing, right? It's literally been only, we have one full week on our, on our docket of actually acknowledging it. That's short-term optimistic. Short-term pessimistic is that I think that it's, I think that we're accepting, we're in the acceptance phase that there's going to be some disruption. We haven't yet accepted for how long it's going to be disrupted. And we haven't probably really dealt with the economic ramifications for just regular people, not just stock markets.

And I also think that we haven't even begun to experience or understand the long-term geopolitical issues that come out of this. If there is a cause for some amount of long-term optimism, it's that when you have, when the world gets turned upside down, you can either reconstruct it exactly as it was, or you can try to find new narratives, new stories, new tribes, new ways to organize tribes that don't match the old way of thinking. And, you know, it's not a nothing signal I actually, I joked on Twitter this morning. I said, one of my top five thoughts during this crisis is, wait, I agree with who? And it was actually in the context of Ben Shapiro and Tucker Carlson going hard on,

on Burr and Kelly Loughler and a couple others about the potential that they use privilege information about, to get out of the stock market, you know, when they were publicly talking. Did Kelly do it as well? She's been fighting for her whole life. This is a very complicated, so here's the nuance side. Men's a mentally complicated question because you have to figure out. out, like, does she actually have any control over her money? And there's a much larger question about how politics should deal with having assets that are outside the market, because politicians

are going to have advanced information on almost every scenario. Secondly, like, look back at all of our conversations on Bitcoin Twitter since the end of January. It wasn't like this was only politicians who knew how bad this thing could be. We all made decisions in our personal finances. So those are the sides that are kind of like it's overblown and people are looking for someone to blame. And I do think people are looking for someone to be angry on. The flip side and why people are angry and I believe legitimately angry is that when you spend six weeks telling people publicly that it's just the flu and that it's nothing and that we're doing a great job and it's all contained and it's not a thing to worry about and keep going to work and then meanwhile you are making an

entirely different set of decisions for your life if that's actually the case that's just it's not just hypocrisy it's lying and in the and underlying all of this is the endangerment of the public right which is I think is for me the biggest issue like I don't care that $3 million was moved, although I think it is a little fucked and hypocritical. What I care about is that you spent six weeks endangering the lives of people because I just heard from a friend that they lost their 99-year-old grandmother because she couldn't get in. And maybe that would have happened no matter what. But if we'd started building field hospitals and gotten ventilators and all the third of things that we needed six weeks ago, like maybe it wouldn't. And so I think, but anyways, like I said, two people who I basically disagree with on almost everything, Ben Shapiro and Tucker Carlson, were both very, like, hardcore about this, you know?

Now, I don't pay attention to them enough to know if they have other beef with these people, and this is just a convenient media thing either. So it's not so much that I'm like, go those guys now, you know, although you're, you know, you had some, some interesting things to say about Ben Shapiro, at least. It's more just that I think that living in a world where you're not going to cut off something that someone says because you think in advance that you don't agree with them is a weirdly healthy place to be, I think, if one that is also can feel destabilizing sometimes because you're out of the path. So I don't know how to as we reconstruct and re-architect the new world, which I do believe that this is like a fucking forest fire for us. But I hope that we can, my fear is that it just does the same thing that happens in power vacuums, which is authoritarianism. My hope is that we have a chance to kind of organize it differently. Yeah. I think that's a really good place to end it, to be honest, because I don't want to add to that.

I think you've just given a summary that. you've kind of re-articulated my point that is and I'm just going to repeat what you said earlier is I think it's only natural

that we're going to see an overreach of the government by now right now and we're going to see this globally and back to what you said is how do they retract

from that position because it might be hard for them through the temptations of power and corruption but rather than try and fight what they're doing now

because we can't. How do we make it vocal? How do we ensure, as we come out the back end of this, that we don't lose our civil liberties? Because if they're using our phones to track us right now, because on the track the movement of the virus, fine. It's not that I like it, but if it happens, it happens. How do we ensure when we come out the back of this that they don't continue doing that? And that's, you've actually shifted my thinking here in that that's almost why I think my personal focus would be is acceptance of what's going to happen because I can't change it, but what we can do is influence how we come out of this. That's kind of where I am.

Yeah. I don't know if we can, but I, yeah, it's a, you know, when the going gets weird, the weird turn pro. Yeah. You know. Well, dude, listen, it's always a pleasure. We should do this more often. I don't know why we don't.

We should talk more often. Yeah. I always enjoy our conversations. You make me rethink. things you make me reconsider my firmly held position sometimes and look it's a strange world all i'm going to say to you is i'll say to everyone stay safe bro it's um yeah concerning times stay safe in terms of personal health but also mental health i think somebody i won't name them because they might not have want me to say it but somebody also shifted my thinking yesterday they said

why isn't anyone talked about the mental health impacts of this at a level where we need to come to an acceptance, we are going to see a higher level of suicide through this process. It's only natural that that will happen. We have suicide rates. The suicide rate is almost certainly going to go up through this as people face very, very tough situations. So that's something we need to be aware of. But just as a friend, just stay safe, stay healthy and stay mentally healthy and everyone listening. If anyone who's struggling, my DMs are always open.

My phone's always available. If someone wants to talk and if I can help in any way, please let me know. But yeah, stay safe, bro. You too, man. Dude, I'm into, hold on. Why am I doing it? I'm concluding your interview like this is mine. I felt like this is the end of mine.

No, I like it. I like it. You didn't really mean. That's what happens. You could put two podcasters in a room. What happens? Yeah.