The Breakdown - Why Bitcoin Is Freedom Money, Feat. Yan Pritzker

Episode Date: April 24, 2020

Yan Pritzker is the CTO and cofounder of Swan Bitcoin, an automated bitcoin only investing app aiming to be the best onramp to bitcoin. He is also the author of Inventing Bitcoin.  On this episode, he and NLW discuss: How immigrating from the Soviet Union taught Yan about capital controls  Buying bitcoin at $30 in 2011  Why the type of capital available shapes what type of startups entrepreneurs found Why venture capitals focused investments away from bitcoin  The emergence of a bitcoin only startup scene  Starting a startup during the COVID-19 crisis  Why bitcoin’s scarcity is its most important property

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's Friday, guys, April 24th, and today I am joined by Jan Pritzker. Jan was previously the CTO and co-founder of Reverb.com. He was the author, he is the author of inventing Bitcoin, which is all about the technology behind Bitcoin.

And he is most recently and currently the CTO and co-founder of Swan Bitcoin, which is a Bitcoin-only startup for onramping people into the Bitcoin world. This conversation is really about that emergence of a Bitcoin-only industry, how it came to be, why venture capital and just capital in general creates. the industries around it based on what type of capital is available. We also talk a little bit about Yon's personal journey, immigrating from the Soviet Union, understanding and learning about capital controls. We talk about how capital controls and freedom of money is such an important issue for so many

places around the world. So this is a fun conversation to end the weekend, really, really focused on the Bitcoin ecosystem and the why of it from a founder of a company trying to build. in the context of a huge crisis. I had a great time with this conversation. I know you'll enjoy it too, so let's dive in. One quick note, as with all of our long interviews, this is edited ever so lightly to preserve the natural flow of the conversation.

All right, I am here with Jan Prisker, Jan. How are you doing? I'm great. Thanks for having me on. So you are doing a crazy thing right now, which is starting a Bitcoin business, but you're doing it in an extra crazy way, or at least in an extra crazy time. For those who don't know, tell us a little bit about Swan and why you're launching now,

although I guess you couldn't have known that this was coming down the pipe, right? Yeah, I don't know. I actually heard about the virus probably back in January. I've been listening to a lot of macro voices recently. For those of you don't know, it's a great podcast, not Bitcoin-related.

It's just macroeconomics. But, you know, I kind of had a hint that this was coming, but, you know, nobody obviously knew the magnitude. Why am I doing Swan? What is Swan? Swan is a Bitcoin on-ramp. It's just a very simple way to buy Bitcoin. It starts with a connection to your bank account. And then whether it's weekly, monthly, or every paycheck, and hopefully we'll have some daily buys coming soon. It'll just withdraw from your bank account, buy some Bitcoin for you, and then you can do an auto withdrawal to your Bitcoin wallet.

Or you can keep it with us in custody. We actually use a licensed and regulated custodian on the background. So if you don't, if you're not ready to take custody of your own keys, that's fine. And if you are, great. And we combine that with education. So a lot of our team are podcasters, authors, both in the team as well as an advisory. Brady from Citizen Bitcoin runs up our heads up our education. We also have folks like Stefan Lavera advising us, Samadol, people who really care about, you know, what's the right way to do Bitcoin. And that's our mission is really just to be a really good Bitcoin on ramp, something that

you can send your friends or loved ones to and you'll know that they'll be taken care of and that will hold their hand and we'll help them out. It's that simple. And the fees are very low, right? I think a lot of people in this industry, I mean, there's obviously a lot of trading platforms out there. And if you're trading, that's one thing. But most people just want to save a little bit of Bitcoin.

And for that, the fees tends to be quite high at a lot of these other places that are focused on being trading platforms. So we decided to focus on one thing and one thing only, recurring purchases and recurring withdrawals. And for that, we've been able to lower our fees tremendously. So that's kind of the Swan pitch. before I get into Y. Yeah, I love it.

I mean, I think there's a couple things that are interesting about it that maybe you can kind of incorporate into the Y. So one is there's an emergent trend of Bitcoin-only businesses, right? Which is, I think, a product of a maturation of the space such that it is, you know, you actually have the ability to start actually focusing. I feel like for a while there, you know, money and capital availability often leads what type of companies get built. And so if all of the kind of startup capital is only available to companies that are doing

big kind of crypto things or trying to do no token projects, that's obviously what's going to kind of arise. And we're sufficiently past, I think, the first wave of VCs getting involved in, you know, 2016, 2017, to the point of actually having people who have capital who are interested in Bitcoin specifically in building this ecosystem and see the total. addressable market of the Bitcoin ecosystem as more than enough to justify actual venture investment. So is that something, I mean, obviously, you guys are part of that. That's very well put.

And, you know, my own history kind of mirrors that. And, you know, I first heard about Bitcoin in 2011 and didn't understand what it was. I actually ended up buying some at 30 bucks and then watched to go down at $2, which was absolutely devastating and sold out of the market because I didn't understand what I had got myself into. And I repeated that exercise in 2013 as well. It wasn't until 2016 that I actually finally got into Bitcoin proper. And when I say Bitcoin, obviously, you know, there was a lot of a lot of noise at that time. The Ethereum was looking. You had all that going on. And as a developer myself, somebody who has a lot of technical background, I spent the last 20 years

building startups. Coming out of that background, I looked at, you know, Ethereum and I looked at all these different projects that were developed at the time. And it looked very attractive. And I spent a lot of time researching that stuff. And it probably took me a year of studying the entire crypto blockchain space to understand the difference between Bitcoin on these other things. And that difference is that Bitcoin is money. And that use case is the biggest total addressable market on the planet.

That's every human being in one way or another interacts with money. and money is one half of every transaction in the world pretty much. So at that point, I started to understand Bitcoin as money rather than Bitcoin as a technology. And I don't think that this thesis was obvious in 2016. I think a lot of VCs and Silicon Valley types really believed that this idea of blockchain technology, distributed computing, and myself included. It took me a long time and I invested in some of these early ICOs. I didn't understand what they what they were trying to create and what what sort of

ramifications were in 2018 so in 2016 when I got into Bitcoin I was I was really still working at my full-time job I was the CTO at reverb.com reverb was a marketplace for musicians we were selling guitars and drums and things like that and it was a startup that I helped start in 2012 and 2018 rolled around we were about 150 employees and doing about half a billion dollars of sales a year. And I felt that the company had been very, you know, had grown to a mature stage and I could actually leave and do something else. And to me, what was the most important thing I could work on, right? I wanted to do something that was important for the world. Up to that point, Reaver felt like it was very

important. It was bringing music to people and that's something I love very much. But what was the most important thing is money? And why? Why is money so important? Money is the root of all evil, but it's also the root of everything that really happens in this world. It's a root of freedom, in a sense, right? If you don't have freedom of money, then you don't really have freedom of speech. You don't have really freedom of movement. All of these other freedoms come from your ability to spend money. And why do I say that?

Well, if you live in an oppressive regime where the government won't let you do something, you can always bribe somebody. But you can only bribe somebody if you have money that is actually free and can move around. And as we go to a digital world, we're losing that freedom very quickly. So after thinking about this for a long time and studying all the sort of Bitcoin podcasts and videos by Andreas Stantonopoulos and reading tons of books, I just felt like the most important thing I could work on was Bitcoin. And that's really why I left Reverb in 2018 to pursue this. And again, it took me a while to really figure that out. And as I'm sure, it is taking other people in the space as well.

but now I feel very, very confident that building a Bitcoin-only business is the way to go. Because we are, you know, we're building an on-ramp to the future of money. That's really what it is. And nothing else is money except for Bitcoin, in my humble opinion. You know, it's interesting. So I was a similar kind of interaction or early interactions and flirtations with Bitcoin that led to later coming together with it. I was in San Francisco during this whole period. I advised a company that was going through

why I accommodated the same class as Coinbase and remember when they got like their one Bitcoin or whatever on their little thumb drive or something like that that they all hand it out from Coinbase and and you know we even the company that I was working on for a while taught other big brands about new technology right so it worked with Coca-Cola and Samsung and companies like this

and told them which new tech they should be paying attention to and why and we even made videos about blockchain and Bitcoin in like late 2014, early 2015. And it's interesting because I didn't really get into the space until later or after that. And it wasn't until I left San Francisco. And at the time, the narrative was so much about either the technology idea and some of the underlying blockchain things or just as a payment system, right? It was coming up at the same time as like Square's first apps were being built, right? So Bitcoin was like another thing that you use for your investor meeting at Coupa Cafe in Palo Alto, you know?

And that kind of framing was, it wasn't sufficiently interesting for me personally to go down the rabbit hole, right? It didn't have that hook. And it wasn't until later that I came at it from the standpoint of, again, as you put it, not as a technology, but as a kind of actual disruptive, you know, sort of power systems changing force that got me really excited and back into the industry. And I think in some ways, again, so much goes back to capital availability. And, you know, I think that in a lot of ways, the interest that venture capitalists had in all these different potential applications is it's understandable both from an imagination standpoint and from an incentive standpoint. From an imagination standpoint, like frankly, disrupting and changing the way that we think about money fundamentally is somehow much more, much more almost insane, right? And high-minded that even than most VCs, right? You know, like most of you see you find out that they're interested in disruption that's like a perfect patternicity to a trend that's already accelerated versus a thing that has like that scale.

predictable destruction. Yeah, they want de-risk disruption, right? Exactly. They want 100x gains, but they want them de-risked. Exactly. Exactly. It's why it's often a very good model, at least from a getting funding standpoint to, you know, be the second player in a new space that people have agreed is a really good space. But then from an incentive standpoint, too, obviously, you know, one of the challenges always with Bitcoin is that you're not going to, you're like the gains from just holding Bitcoin are likely going to be better at least for a long time in the history than just actually, then going out and building some company around it or something, right?

Now, I think different people debate at where that might have shifted and what, you know, which, which of these kind of investments would have been better. but for a long period there, certainly back in like, you know, 2015, 2016 or whatever, it just made sense for their models. I mean, they're a carry model, right? Like, they have to have, they have to have a reason for them to be involved in the process versus just buying Bitcoin, you know? Yeah, just buying Bitcoin is outright speculation, which I don't think is a bad thing. But it is speculation, and that's a very, you know, that leaves a bad taste in people's

mouth because you're speculating on the future of money, and it's not something you can control. It doesn't give off dividends. You can't direct it in any way. A lot of people were mistaken in those ideas when they looked at Bitcoin as such a, you know, as a startup and not as a, you know, as a living organism, if you will, that has a life of its own and the mind of its own. It moves in the direction that it wants to move in.

And it does that because of the efforts of, you know, thousands of people all over the world, if not millions. But, yeah, it's not a typical venture capital investment. So you try to invest in something else that is adjacent. And you're right that the availability, of capital can be extremely disruptive. Look at what happened with Ethereum. I know Ethereum wasn't the first ICO,

but essentially it was the first one that really caught everybody's attention outside of the crypto kind of inner circle. And all of a sudden it became a model for funding, right? And as it did that, and all of a sudden people saw these crazy gains, well, you had people following VCs and token fund people into these projects that were just complete retail investors

had no idea what they were doing, dumping billions of dollars into these projects. And that creates a very strong distortion in the market. Look at Ethereum, right? You have hundreds, if not thousands of projects that now have coffers worth tens, even hundreds of millions of dollars. In certain cases, we have projects that have billions of dollars in their coffers. Now, look at that as a traditional venture capitalists and say, okay, you know, there's a new startup.

Would I give it a billion dollars on day one? That's completely insane, right? That's just completely misalines the incentive. of that project. And yet in the crypto space, that's exactly what we saw. And so because of that, it created this massive distortion in all these other, you know, crypto networks where they were able to go out and fund other projects. And then those projects funded other projects.

They created an entire ecosystem that have almost no users, where there's like an entire ecosystem of companies that exists to support a user base of 100 people. And it's, it's frankly very, I mean, it's sad in a way because all this capital is misallocated, in my opinion, and it will meet a very, very sad fate. But it will take like a decade to shake out just because of the amount of money that's actually floating around in there. So that's, you know, that's what happened. With Bitcoin, I see, you know, I grew up on the internet.

I got my first internet connection in 1993. I grew up with Linux. I installed my first Linux Slackware on floppy disks in 1995-96. and, you know, I saw that that same ethos in Bitcoin. It's like very scrappy. People are just hacking on open source software. There's not a lot of money in it. Well, there's money in holding it, I suppose.

But if you go three or four years ago, it wasn't obvious that was the case. And a lot of people are just working on it as a passion project, just like they did on Linux. And now Linux powers, you know, I don't know what percentage, definitely more than half of the internet and what percentage of mobile phones. I see that same ethos in Bitcoin where people are building something that's much, much bigger than themselves. And it's not going to matter if there's funding or not. They're doing it because it's the most important thing they could be working on. And that's why people work on Bitcoin. So that's what drew me to Bitcoin overall as I started really digging and understanding who's involved and why are they doing the things they're doing. Yeah, I remember going to like Apple enthusiast meetings with my dad in the late

80s. He was transitioning from his first career to learning how to program in like 85, 86, 87, and I was like three, four, five the next couple years. And he would go to these meetings and I would just kind of like sit around as they talked about their computers. And it does actually, I often have like these weird moments where it feels similar to these like very impressionistic pictures of that in my head that I have from being a kid. You know, it's interesting though. As you were talking about it, I've never really thought about it this way, but this idea of capital availability and what it does to particular types of ecosystems is really interesting in the context of Bitcoin, especially in comparison to crypto, but even just Bitcoin on its own, because, you know, the model of the employee model

of startups is, you know, reduce cash salary to where you'd be able to get, you know, on the open market in a comparative established business, but with equity upside, right? So you have some ownership of the upside potential of the business that you're building. And in a weird way, Bitcoin sort of functions as equity for the entire ecosystem of people building on Bitcoin, where if you're invested in this asset and you believe that it has four, five, 10, 100, 200 X to grow from where it is, then you have this incentive to build out the capacity for it to grow, for it to do new things. But it's like a pool of equity that you can keep growing and building and expanding on as well. So weird a little analogy, but I think that's absolutely right.

it's very interesting because it's like the first successful way to fund open source development that doesn't involve a corporation coming in and basically hiring the open source developers. Although that does happen as well in Bitcoin, obviously, you have bigger companies that hire open source, the higher Bitcoin developers that just still contribute to open source Bitcoin. You can be in some slum somewhere where you have basic internet connection. You can be working on Bitcoin. And I think that's a very interesting phenomenon that's going to unite a lot of the world in ways that we haven't been able to do.

because, you know, let's keep in mind that money does not really travel freely between borders. Like if I wanted to hire somebody in Afghanistan, I don't know how it paid them or in Iran, right? With Bitcoin, these things are possible. So it really does create this interesting incentive to build decentralized companies that are all over the world that have, you know, employees in the far reaches of the world that are just, you know, where the talent is and doesn't limit you to the United States anymore or, you know, if you will, European, you know, or Asian democracies or something like that. Yeah. Or like upworkers, right, that are kind of worked through

that have a very specific set of constraints. Although, you know, that's a great system, but it's not kind of a, you can't have an entire way of working mediated by a single, a single company. I say as we, as we record this on Zoom. I mean,

you use what you can, right? I mean, if Zoom is available and it's not censoring us, then that's fine. If it starts to do that, then we're going to have to look at some alternatives. But, you know, that's one of the things that actually drew me to Bitcoin initially is when I read this story about a startup in Afghanistan where they were teaching

girls or young ladies to code and to earn Bitcoin because apparently in Afghanistan it's very difficult to get a bank account if you're a woman without like male supervision. So, you know, this is just literally freedom money for them. They're able to earn their own money that is theirs alone. It will never be touched by anybody. It will be in their head. They can walk out of the country and carry that wealth with them. That was a very powerful story for me because I actually come from.

from the Soviet Union. I immigrated to the United States in 1989 when I was a kid with my parents and my sister. So when we came to the U.S., we came with like four suitcases and $400. And I didn't know what the story was with our money until recently after I got into Bitcoin and asked my parents what happened with our money when we left the Soviet Union. And I knew it was illegal to own U.S. dollars. I knew that foreign currencies were basically considered. speculation, you couldn't own foreign currencies in the Soviet Union. And the reason for that was because

the government had to have complete control of the economy. They couldn't have a free floating currency. They had their artificial currency rate that made the economy function because they fixed the prices of everything. So they wouldn't let us, they wouldn't let us keep our money. They allowed us to exchange $100 per person of Soviet rubles to dollars when we left. And that really solidified for me this idea that Bitcoin is important because Bitcoin is, it is, designed to defeat this notion of capital controls, the ability for the government to tell you what you can or cannot take with you if you have to leave, or if you even have to send money abroad to your loved ones that are still in your former country after you have left.

I think this is a very underestimated feature of Bitcoin that a lot of Americans don't have, you know, a visceral grasp on. They may have read in the papers that there's the Venezuel economy is crashing, or they might think that's a one-off. They might not realize that half the world lives in some type of authoritarian environment or an environment with capital controls where people are literally unable to leave their country because they can't take their money with them. They would have to start completely from scratch. Or if they do get out, they have no way to send money back home. And Bitcoin literally exists to defeat that horrible and evil concept.

Your money should be yours alone. Money is freedom and Bitcoin is freedom money. And that's why it's so important for us to be working on it. You know, it's interesting. I have a personal anecdote related to that as well, or that that use case helping people understand. So my father-in-law is a dentist from upstate New York, built out his practice. In the 90s and early 2000s, he started investing in real estate globally, which basically gave him an excuse to travel, fell in love with Argentina, has been going down to Buenos Aires for, you know, 17, 18 years now, bought a house in Uruguay about 12 years ago. And he was, he was, So, you know, I talked to him a lot about Bitcoin and this whole space. And it didn't really click for him until he was down in Argentina. This was probably like 18 months ago now, a year and a half ago maybe. And all of a sudden, all the combios, all the places where you change money had Bitcoin.

They had the Bitcoin prices too. Oh, nice. And there was a window in Argentina. Argentina historically has had capital controls. President came in as a, you know, kind of economic reformer or whatever, got rid of some of those capital controls. And it obviously, you know, Argentina, the peso has lost a huge amount of its value. Something 40 or 50% of its value over the last, you know, a couple years, which would have been for anyone who just has their money, like,

the normal people there, right? Like normal kind of middle class, white collar. Like Argentina is not like a, it's not a Venezuela type hyperinflationationary situation, right? And just half of your, the value of your money, gone, you know? Yeah. And so he saw this and he was like, oh, okay, I get it. Like people want to get out of this local currency. It's a way to opt out of the local monetary regime.

Now, interestingly, you know, Argentina, I think is particularly interesting right now because you're seeing, we're in this really interesting moment where one of the byproducts of the COVID-19 economic crisis is this massive dollarization, this massive flood into dollars, right? You're seeing stable coins, which have risen a huge amount. Like I was reading Circle, USC was up 65% in their supply from the beginning of March. Tether is over $7 billion now. The total market is over $9 billion. And it's very clearly not just people who are, you know, not dry powder for crypto exchanges, basically, right? It's not people moving out of EOS so they can, you know, reinvest later or something like

that. It's very clearly people who are entering the system, which is interesting. I think, you know, I don't think that a lot of us necessarily thought that, demand for some synthetic version of dollars might be an on-ramp that would get people into this space. But I do think it is. And I think, frankly, the bridge from, you know, holding Tether or USDC or one of these things to getting into Bitcoin is a lot lower than kind of than we think. So that's been a really interesting kind of byproduct. But speaking of COVID, I wanted to ask you, how has it been starting a company in this time? Have you felt impact?

I mean, you know, obviously there's the practical stuff of how you work, but, you know, I guess talk to me first maybe about what you expected is you guys started to see this coming down the pipeline. Kind of what did you steal or steal yourself for or resolve? And then how was it actually played out? Yeah. So, I mean, we started off as a full-year-moat company. I actually have known Corey for probably about a year now. Corey Clipson and the other co-founder of Swan. Corey was formerly the founder of, or not formally, but still is the founder of Give Bitcoin, which we essentially pivoted into Swan. Give Bitcoin still exists as a separate product. And I was an advisor to give Bitcoin from the beginning and kind of was helping out until it became obvious that we should just partner up and do this thing, right?

So as we kind of got into the idea of Swan, which is probably born towards the end of last year, I would want to say November, December. We, you know, we were already working remotely. We already had a couple of folks all over the world helping on this thing. We got a couple more people on board. And we built up a remote team. We were on Slack. We have people all over the United States.

We also have a designer who's in Germany. We just came out of the woodwork and said, his name is Yorn. He's a great, great guy. He said he wanted to work on this concept. He was really excited about it. And, you know, we hired him. So we have this fully distributed team.

We work on Slack. We have Zoom, all the usual suspects. So as the crisis started nearing, it became obvious that this was happening. We were lucky enough to raise. a little bit of seat capital early on. So we have enough money to kind of get us through this. We obviously, you know, continuing to do that as needed.

But we cut some costs. We cut some frivolous costs right away as soon as we saw this thing coming. Definitely preparing ourselves for the worst. But we believe that this is a business that is positioned perfectly. You know, this is the time, right? There's so many factors that are coalescing. One, we have the collapse of the current financial system. I mean, I don't know if this is the final collapse.

It's probably not. I'm sure we'll reinflate this bubble and be right back on track. It might take a few years. But in either case, this is a nice wake-up call for people to be reminded of, you know, what is happening? Why? What's wrong with our money? Why are we suffering these problems?

Why does nobody have any cash reserves? Why are we settled with all this debt? How do we run a society on this? A society that's so fragile that, like, a little bit of a shutdown, you know, It takes us out completely, right? We can't live in that kind of society. We need to have some antifragility. And I see it on Twitter every day.

I see people waking up to Bitcoin. So, and I'm talking about people from, you know, from traditional finance, hedge fund people, macro investors, your everyday people, my friends who have not been interested in Bitcoin for a few years now, I've just forgotten about it, or asking questions again. So I think we're positioned correctly time-wise.

We're at a point where Bitcoin is going to enter into public consciousness. We already saw it. discussed in Congress last year, which was way earlier than I ever expected somebody in Congress to talk about Bitcoin. And, you know, I think we're positioned to take advantage of that. And of course, we have the having coming up, which is going to be another event for the media to talk about, you know, a good educational point for people to start asking questions around what does it mean? What is it having? How does it impact, you know, the inflation of Bitcoin versus the inflation of other currencies? Because, you know, people don't.

understand inflation, generally speaking, they don't really think about it. They believe the numbers they've been fed by the government that we have 2% inflation, which is, of course, absurdly false. You look at the price of housing, education, the stock market, even goods, to some degree have inflated really badly. So, you know, people are rising up to this, and I think we're positioned to the right place. And we just have to hunker down and survive and make sure that we can onboard our people and give them the best experience possible. So I think it would be okay. One of the interesting things that you guys are doing is,

it's almost kind of a narrative positioning thing where you're really talking about savings and trying to have this concept of savings. It's very clear that that's intentional. Talk to me a little bit about how you think about that, how you guys think about that. Yeah, so that's very, that's very a good observation. We are very much focused on saving.

And the reason is we think that saving as a concept has really left the public consciousness, right? People don't really save. We have people who are either very, you know, on the low end of the scale, they're living paycheck to paycheck and they have nothing to save. On the high end of the scale,

people are generally forced into very risky investments because yields are at historic lows. You can't like buy bonds and make anything on them. So you're going to be forced into investing into riskier and riskier assets, which of course causes asset bubbles, which we're seeing the result of that now. You know, I remember just going to the COVID,

right before the COVID crisis hit and Tesla was going from, you know, $400 to $900 in like a month. And I was looking at that vertical chart saying, this looks like Bitcoin 2017. This is not right. Something's not right with this market. There's people rushing into these risk assets that should have no business in them. We have people like trading on Robin Hood, right, for free. We have like Reddit communities like betting, same amounts of money,

they have no business doing. And we've created this culture. This is not a normal culture. This is a culture created by a money that inflates, a money that you can't save. So this is why we are taking on this massive challenge of creating new behaviors, right? We could have launched another crypto exchange and capitalizing people's gambling behavior because that behavior already exists. But we don't think that's good for people.

We don't want to capitalize on gambling behavior. We want to instill a new type of behavior, which is saving. Because when you have savings, then you're prepared for the future and you have optionality. At the end of the day, that's what Bitcoin is. coin as its optionality on making an investment or spending it into something else in the future at a time where it's going to be more worth it for you to spend that money than to keep it. People have no concept of this anymore. They have no concept of keeping a cash balance for the future, right?

So that's why we talk about saving. We want people to really think about it as a way to save their wealth for the future. I'm talking about not just for yourself. I'm talking about for your children and your grandchildren. I'm talking about multi-generational savings vehicles. And if there is something that is so important, then you need to spend your money on like a house or, you know, something like that, then go ahead and do that.

But if it's a decision between buying, you know, a new pair of jeans or stacking some stats, absolutely stack those sets and wait for the price to go up as other people wise up to the same idea. You know, it's interesting. I think that there's two kind of obviously interrelated things with this discussion that are important. One is, and you alluded to this,

there are structural reasons that people get forced into speculative. of speculative assets, right? Because people have, I mean, you have a system that is predicated on continued growth of asset prices, basically, right? An entire generation of baby boomers who are, have built all of their plans around these investments spitting out the same rate of return forever, right? Yeah, like 7% or something that's completely unreasonable as well. Yeah.

And I know, I mean, I think all of us who have parents who are older who, like, you know, unless they're in a really good position, are looking at that with some amount of trepidation stress. In fact, I tweeted something really simply about that a couple, I don't know, maybe a month ago now, and it had like a thousand retweets because everyone is scared for their parents, right? You know, at least we have more time to adapt to a different reality. So you have, on the one hand, just structurally the kind of the way that the setup of the economy forces people into this, but then you do have a narrative challenge too, right? You do have a marketing challenge where the fomo of losing out on kind of short-term opportunities in terms of.

terms of the growth assets is marketed more and not kind of necessarily, I mean, sometimes intentionally, but even just in the way that media is structured, right, versus all the different ways to frame savings. And in fact, we don't really have a lexicon that makes that cool or sexy or anything, right? Like, you know, like the best thing that way, like the last time there was ever something interesting around savings in my life, pre-Bitcoin in any way, was like when KeyBank offered like a dinosaur for a savings account when you were a kid, like every time you made a deposit or whatever. Yeah. But the the challenge is that it just needs a different language. And I think one of the potentially positive byproducts of COVID-19 is a shift in some people's sentiment about

prioritization when it comes to, I think actually fragility and anti-fragility is in, for many people, a more resonant language, right? Like, it's not that savings are cool. It's that having optionality in the future, having kind of preserving freedom, even as other people have their options shut down, is a really powerful thing. This is something that I see a lot of people who are actually having this conversation with themselves about the place of savings and kind of that in their lives. I had this conversation with Jared Dillian even on the podcast last week, where he noticed you're just spending so much less on his credit card and part just mandated by by by look what there's less things to spend money on right now but but also I think it's once people start to do that

it's a it becomes good and also I mean certainly for for people who are going into this and who don't have to feel the same sort of fear that a lot of other people are far there's a lot of gratitude in that you know so I do think that it often takes these sort of moments of of huge crisis to shift behaviors in any meaningful way. But it was a language that I noticed across all of, you know, how you position things that I think is important for. Yeah. And, you know, I think we're,

it's almost like a humanitarian educational thing where we have to educate people on savings. And you're right that the virus, it does help you reframe that. And, you know, a lot of people have lost their jobs and they find themselves with no, no cushion to fall on, you know. And if you think $1,200 from the government is a cushion,

I mean, that's a joke. You can't, you can't live on that. And I know it's tough. I know there are a lot of people living, paycheck, paycheck that have a very hard time saving. But it is a cultural shift. And we're hoping that that cultural shift happens. I do think that it's, you know, obviously some of it's on us to be good at marketing that concept. But some of it's also on Bitcoin because as Bitcoin's number goes up, as they say, right,

the Bitcoin price will go up and that does attract people and does attract FOMO and does make people realize that had they had some Bitcoin, that they would have been a lot better off. And, you know, I like to say that there's Bitcoin in America, it's like almost like a luxury good. I don't think even the most hardcore Bitcoiners, maybe they think hyperinflation is coming tomorrow. But even myself, you know, I don't believe in that. I think America's got a long way to go to maintain this empire. We are in a unique position in that we do control pretty much the world's only true settlement currency, at least for now. And we have big guns to enforce that.

And we have sanctions to enforce that. Keep this empire going for a long time. It could be hundreds of years. And so for Americans having some Bitcoin, it's like it's nice to have. I think it's becoming more and more important. But we have to not forget that all the world there are people that are literally living, you know, like for them, it's a life and death thing. They can't get out of their country if they don't have Bitcoin or they can't buy

food if they don't have Bitcoin. These are things that are going to drive the adoption of Bitcoin, higher outside of America, regardless of what we believe or don't believe or how well we market Bitcoin. And that makes the price go up. And as the price goes up, you know, Bitcoin markets itself. We just need to position ourselves as the simplest and easiest, you know, company to, to onboard with so that people have an easy time and understand what they're getting into. How has, what's your perception of how, what COVID-19 has done for the Bitcoin narrative?

I think it was, like the price, there was this early voluminous. little period when Bitcoin was selling off alongside everything else that everyone wanted to, there's a huge move to kind of dismiss the store of value digital gold narrative. But then simultaneously, a new meme emerged in terms of kind of money printing go burr, right? And the comparison of the halving coming right up or quantitative tightening or quantitative hardening as some people have been calling it now versus quantitative easing and unlimited money printing kind of gave it a new shape. But I guess, guess have you been surprised at all about anything about how the narrative of Bitcoin has shifted

or even about how the asset itself has performed over the last six weeks to eight weeks? Yeah, I mean, I think there are fundamentals and there are short-term movements, right? So when people say a store of value, right, and then they dismiss it as soon, because they say, okay, Bitcoin lost 60% of its value or 80% of its value, so that means it's not a store of value. I think those people are looking at short-term price moves and trying to draw an error from that that isn't really, I mean, that's not a reasonable thing to do, right? When we say store of value, gold, we call gold a store of value, real estate to some degrees of store of value, and an expensive painting, you know, a rare painting can be a store of value. All of these things have store of value properties. So store of value is a property.

It's not like, it doesn't mean the thing literally never goes down in price because that's impossible. If something can not go down a price, that means it's not a free market, right? And you're living in communist Russia and get that out of there. All prices fluctuate, right? When we say store of value, we're talking about how good is this thing at basically not being controlled by anybody? Because I know if I have a painting by Monet, which of course I do not, I'm not that rich. But if I have a painting by Monet, I know that another painting by Monet will never be produced, right? And so it's a good store of value.

Now, it might be maybe costs a million. million dollars today, maybe it costs $100 million tomorrow. Maybe it costs, maybe it goes down by 50%. I don't know. But I know that this thing is rare and scarce and that most likely I'll be able to sell it to somebody else for around the same amount of money, maybe more, maybe less. But we know that the U.S. dollar isn't a, well, it is a store of value for a lot of the world, right? I mean, compared to Argentinian pesos or Venezuelan Boulevard, it's a great store value. So it's all a matter of perspective. So stores of value is a property. It's not a, it's not a a thing you can dismiss just because the price of something goes down.

Otherwise, every currency in the world, including the US dollar, is not a store of value. Every object is not a store of value, right? So it's either a meaningless term or it means something, and to me it means a certain property, which is its inability to be artificially inflated, if you will. So, you know, the other thing to remember is we are so early in Bitcoin, and so many people have forgotten this because the media keeps hammering us over the head with Bitcoin going to the moon or Bitcoin going to zero. and it's a false narrative.

Bitcoin is a $150 billion market. I don't know, something like that. It's nothing. It's absolutely nothing. It's so tiny on the financial, you know, the scale of the world's financial system. There's like $8 trillion with a gold alone. I mean, real estate,

we're talking about hundreds of trillions of dollars of money floating around the world that's being used as store of value. So Bitcoin is nothing. And so if you have $10 million in your pocket, you can move the price of Bitcoin. So why? Why would you even look at short-term price movements as anything but, you know, games? There are games of the market. So I only look at the fundamentals and the fundamentals are unchanged.

Bitcoin is continuing to follow its release schedule as is enforced by the consensus of the network. Every currency in the world is, as you said, it's going into quantitative easing, aka we're printing more of them. With Bitcoin, we are printing less of them. And unlike every other currency, nobody can change that, right? Nobody can actually affect that release schedule. That's fundamental. It makes it the biggest lower value.

And I fully expect that, you know, 50 years or 25 years from now, they will become more and more stable as markets get deeper and deeper and deeper. It's interesting. So Bloomberg just put out a report called their crypto outlook, the Bitcoin maturation leap. And they kick it off. It's extremely bullish. They kick it off. This just came out, I think, like a couple days ago. I just saw it on Twitter, but I haven't read it yet.

Yeah. Yeah, the first line is the stock market's shakeout will temporarily drag on Bitcoin in our view, but with an outcome more reminiscent of golds after the 2008 financial crisis, which is where gold went down significantly, 30, 40 percent in the immediate months following, and then came up after it. Coming into existence in 2009, the firstborn crypto is faring relatively well, down less than a quarter as much as the S&P 500 in 2020, despite being almost 5x as risky on a volatility weighted basis.

Bitcoin's 24-7 price transparency, the lack of limits, interruptions, or third-party oversight is an accomplishment for an asset just a decade old. This year marks a key test for Bitcoin's transition towards a quasi-currency like gold, and we expect it to pass. Unlike the stock markets reset, but similar to gold's Bitcoin has its shakeout,

stabilizing the foundation and unprecedented global monetary stimulus and increasing adoption. So it's like, I mean, again, this is, yeah, this is not a, this is not the report that's, know, you and I got together to write, you know. I love that.

I think people are starting to understand in the mainstream that Bitcoin is that thing. And of course, it's going to sell off. It's a small market. And, you know, if people are literally panicking and they're selling every, they're hitting the sell button on everything they have, including Bitcoin, okay? Because as much as we want to talk about Bitcoin is money, it's still not that globally. It's still the US dollar. So if you have like, if you need to feed your kids, you're not going to feed them with

Bitcoin. Let's just be honest about that. Unless you're like in Venezuela and you're smuggling food over the border with Bitcoin, that's. That's a special circumstance, but that's not the circumstance of the most of the world. We have to be realistic about that. So of course, it's going to sell off. It's a risk asset.

The majority of Bitcoin owners are Americans and they're going to sell it like a risk asset. So that's fine. But again, that's not what Bitcoin is fundamentally just because it's being used that way and it's very nascent stages, just like if we go back to 2011 or something or 2013 where people thought the Bitcoin was for payments, it's very easy to look at a thing and mistake it for its current, you know, look at its current behavior and think it's that thing versus really, really understand the fundamentals. I mean, even, obviously, I don't, I don't have the ability to chime travel back to 2011 and, you know, read the white paper when I should have read it.

But I think if you look at it, like, I'm a technology person. And then when I read that Bitcoin is scarce block space, I immediately understood, okay, it's not going to be good for micropayments. It's obvious that it's not good for micropayments. Can we build other layers on top of that that do micropayments? Yeah, of course. I mean, that's lightning network. and even centralized services. But it's money. It's not good for micropayments. So if you look at short-term behaviors, you're going to be misled.

You have to look at fundamentals. You have to look at the structure of the thing, like the systemic structure, of how it's built and what is it for. And then you see what the outcome is. The outcome is it's the most scarce thing on the planet. And when everything else is abundant in terms of money, then you're going to try to get the thing that's scarce to protect your wealth. And that's an individual decision everybody makes for themselves a different

times. So we're talking about fundamentals and the difference between fundamentals and short-term narratives. What do you think is the, how do you think about the having in that context, right? Because the debate obviously is constantly, the fun kind of internecine warfare in Bitcoin is the having priced in or not. And then, you know, you've got, now you've got the people who are like, listen, guys, even if it's not priced in, you're likely not to see the impact for a while. It's like, I feel like we're gearing up for this moment where it's like, everyone's going to come with their party hats, like they're waiting for, you know, like a New Year's countdown and then nothing's going to happen, you know?

So how do you, I mean, again, going back to the fundamentals, like, how do you guys think about the having over there? What's the significance of it? You know, you're right. Like, first of all, what does price that mean? There's no way to actually prove or disprove this narrative because does that mean it has to go up on the day of the having or just why it makes an amazing, is why it makes it amazing social media feud, right?

Right. It's so great. It's absolutely no, it's just, it's, there's no way to disprove, but there's no way to really take a bet on it if you're not willing to have a time horizon. And most Bitcoiners, their time horizon is so long that they're not going to bet on Bitcoin's price being a certain price on the day of the having, right? The way that I think about it is, look, I'm not an economist. I came into Bitcoin having almost zero knowledge of economics. And I actually think that's a good thing. I came in with the knowledge of how supply and demand works. And because of that, you know,

when I read various economic ideas, both from, you know, the quote unquote Keynesian slash traditional economics world as well as Austrian economics became very clear to me that supply and demand is everything. It sets the price of all things, right? And we can wrap it in layers of complexity and pretend like it doesn't like it changes, but it doesn't. Right. So the supply of Bitcoin is going to become more scarce, right? There's going to be less new bitcoins being minted into existence after the having. If the demand stays the same or goes up, that necessitates the price going up. That's just how supply and demand works. Now, do we know that on the day of the having the demand for Bitcoin is going to be

the same or more? We don't know that. Obviously, we don't know that. So there's no way to know what the price is going to be. However, I think we know that where Bitcoin is on its adoption cycle is very, very early. Again, despite all the media hype, there's something like half a percent of the world having any Bitcoin right now. Maybe with Americans, it's a higher percentage, but still not enough to matter, especially if you talk about people who have more than like $100 of Bitcoin. And especially if you talk about people who don't have it on coin base who actually understood what they bought and have taken custody of it right nobody has bitcoin that's the reality so as the having happens it's going to go into the papers it'll be in all the media everybody's going to run out and

they're going to start understanding what supply curves mean they're going to start understanding what inflation means and it may take a while for that to sink in and when they do they're going to also look around and realize that the fed at that point printed 10 trillion or 20 trillion or 40 trillion to support the entire world economy through this crisis and they're going to draw their own conclusions. So, you know, do I think the price of Bitcoin is going up? Of course. I mean, that's why I'm building a business in Bitcoin. But do I think it's going to go up on that day? I have no idea. There's absolutely no way to time or know about Bitcoin's short-term price movements. And that's, that's silly to talk about. I mean, it makes for fun Twitter conversations, but it's silly.

Yeah. I think, I think, you know, I'm a fan of, I'm a fan of contextualized. ridiculous debates on Twitter, right? Where you know that it's like, this is the way that we're passing time, you know? Yeah, for sure. It's just a way to pass it time. Well, I've kept you here for almost an hour, but maybe as we wrap up, what have you seen,

you know, this has been a hard time for everyone, I think, on some level, right? Even if it's just the insecurity or worry for other people, you know? Have you seen anything over the last few weeks that has made you particularly optimistic for the future, whether it's in Bitcoin or beyond? I actually like that the virus has created this local movement almost. Like there's a bit of self-sufficiency, right?

Like we have a garden. We've always had a vegetable garden. My wife is really into it. And this year we're planting potatoes, for example. You know, now I don't know if I'm going to feed the entire neighborhood with that, but it's something. I think there's a movement back to self-sufficiency to being prepared. You know, I was never.

prepper. My wife thought I was crazy when like in February I started saying, you know, we should probably buy some stuff like people on Twitter are prepping. And usually that's like a good signal that like the mainstream is going to start prepping a few weeks. And I was like, you know, I was looked at ridiculous. And now who's the one who's prepping? You know, she's just making crazy shopping lists all the time. So it's like people are thinking more about the future and more about their local communities. They're relying less on the big state, right? Like, we know that the government, like the federal government,

screw this one up major. And like, should we expect them to be our, you know, our big daddy, our savior always? Or should we have better local versions of these response systems that are, you know, that actually impact our local communities? Because I could care less about what's going on across the country. I care about what's happening in my house and my local community. I'd rather pay more taxes locally than give all those that money to the federal government goes God knows where, right?

I would like to see that happening and I think it will. I think people are realizing that they can't rely on central entities to do anything. At the same time, these central entities are coming in and trying to like print all this money and do all this helicopter money and trying to basically make themselves relevant even though everybody knows or not. So I hope that people are realizing the power of local community and, uh, the power of being prepared and having their own stash of savings, of freedom money, if you will, for a rainy day or if you need to leave the country, hopefully you don't. But who knows? You know, I think these are all positives of corona that are helping people understand what's important

and how they can be prepared for things like this in the future. But I want to give a warning to people. Like, people are getting so authoritarian in this crisis. They're getting so caught up. and, you know, we should be policing this. We should be enforcing that. We should be reporting our neighbors. Like, that's just a bad way to go.

It's how we lose our liberty. And we're giving it away because we're scared of this invisible enemy. And it's, it's truly upsetting because this is how the United States turns into the Soviet Union, right? It's not because we elect Bernie. It's because we are going to voluntarily give away all these liberties. Let the government print as much money as they want. If we do that, it's game over. So we need to put a check on government.

separate money in state buy some Bitcoin. That's that's my message. All right. Well, I'll make sure that the Swan is linked. So if you want to go save your Bitcoin, you know where to go. Yeah, thanks so much for hanging out. Thanks. Oh, by the way, I just wanted to do one other Swan Shill, which is we're not just an on-ramp. We also have an educational component. We have a blog at swanbitcoin.com slash signal, the SwanSignil. And we also do weekly shows on Twitter at if you can find them a Twitter slash Swan Bitcoin. It's called Swan Signal Live, and we have all kinds of guests on there for macroeconomics, to Bitcoin to, you name it. So if you're interested in that kind of stuff or you want to learn more, please do follow us on Twitter and find out more. Thanks.

Love it. Thanks, Jan. I'm recording this intro a day after my conversation with Jan. And I think the thing that sticks with me most about that conversation is this idea of Bitcoin as freedom money, something that for some people has the luxury of being a luxury asset, a speculative asset, whereas for others, it actually addresses a key question in human freedom, which is who controls money and who controls what you do with your money. I think that there is such a different lived experience of Bitcoin all around the world. And it's important when we talk about this industry to understand that it may have very different context, depending on where you are and depending on where you're sitting. That's going to do it for the breakdown this week. I hope you

have enjoyed these episodes. I'll be back on Monday as usual. So until then, be safe and take care of each other, guys. Peace.