The Breakdown - Will Wall Street Ruin Bitcoin? Featuring Ben Hunt and Alex Gladstein

Episode Date: December 16, 2020

Ben Hunt is the founder of Second Foundation Partners and lead author of Epsilon Theory. Alex Gladstein is the chief strategy officer at the Human Rights Foundation.  In this conversation, they discuss one of the most important burgeoning topics of the year: In a world where bitcoin goes mainstream with traditional financial institutions, can it keep its more renegade spirit? More important, can it keep its more renegade features such as permissionless access and censorship resistance?  Ben and Alex join for a good faith, spirited discussion of whether the bitcoin we know today will be preserved or whether it is doomed to be co-opted by the financial powers that be.  Find our guests on social: Ben: @EpsilonTheory Alex: @Gladstein  The Breakdown is produced and distributed by CoinDesk.com   Follow on Twitter: NLW: https://twitter.com/nlw Breakdown: https://twitter.com/BreakdownNLW

If the U.S. becomes a bad business climate for Bitcoin, which I really, for various reasons, don't think it will be. But if it did, even in that instance, then people will just move elsewhere. What I'm describing is a bad business environment for you and your bitcoins is a great business environment for every number go up person. Welcome back to The Breakdown with me, NLW. It's a daily podcast on Macro, Bitcoin, and the Big Picture Power Shifts remake, our world. The breakdown is sponsored by crypto.com and nexo.io and produced and distributed by CoinDest. What's going on, guys? It is Tuesday, December 15th, and today we are asking an all-important question, will Wall Street ruin Bitcoin? When we look back, the defining Bitcoin story of 2020 will have been

the true emergence of institutional, traditional finance actors in this space. Many, including me, are excited about these actors coming in. And this is not only about number go up, although that's nice. It's about the fact that the narrative that is driving them in is this idea of an inflation hedge. It is focused on the scarcity of Bitcoin. And this is a core and fundamental narrative to Bitcoiners who have been here for years. Yet, as this emergence of institutional investors happens,

there are some who are sounding the alarm. The question is whether ultimately Wall Street, and by Wall Street, of course, I mean the entire traditional financial establishment, will share the same values that Bitcoiners do. There is evidence that they may not. A recent interview with Elaine O. and Michael Saylor started with this quote from Michael. Stop talking about regulatory arbitrage. Censorship resistance, privacy, and tax evasion are bad ideas.

We hate that. Now, I haven't spoken to Michael since this interview, and it was written not a full video interview, so we don't necessarily have the exact context. But the question of censorship resistance is important, and to the extent that Michael does think that we need to give up the censorship-resistant side of Bitcoin to get sound money, I don't think he's the only one. As part of this alarm sounding, there have been numerous Twitter dust-ups over whether Bitcoin is doomed to be ruined or somehow ghettoized by Wall Street. Ben Hunt, who has been on the show before

and writes the popular Epsilon Theory, tweeted the other day, Bitcoin is now just another game in the Wall Street casino. Congratulations. What a waste. The Human Rights Foundation, Alex Gladstein, engaged and said, folks, Bitcoin isn't a game to people who live under tyranny, 4.2 billion. Many who don't have the luxury of living in liberal democracies use it to save beyond government control or send, receive, earn money internationally. This kind of dismissal is very US-EU investor-centric. The discussion they started there was way bigger than Twitter, so I invited them both to the show, and luckily they accepted. Today's conversation between Ben Hunt and Alex Gladstein is one where really all I did is get the ball rolling, so enjoy, and I'll be back with the wrap-up after the

conversation. All right, Ben and Alex, welcome back, both of you to the breakdown. Great to be here. Thanks for having us. It should be a lot of fun. Thanks for having us. Yeah. So I was just mentioning this. You know, you guys were, you started a conversation on Twitter that deserved a lot more space than Twitter. And here I am with a podcast. That's exactly what podcasts are for. And I think it's important for two reasons. One, I think there is significance in the context of Bitcoin. As this wave of institutional money has come in, there is a major question emerging of what it means for Bitcoin. And more specifically, does that new set of money care about the same things that folks who have been invested in this technology for a long time who

potentially use this technology care about? And if not, is that reconcilable? But I think more broadly, it's an example of a larger question of power, the shifting way that power is attributed, allocated, seized, and what the role of finance, particularly tech-enabled finance is. And so I think that it's bigger than just Bitcoin as well. And it should be a really great conversation. By way of getting us started, I guess, Ben, let's talk about kind of this meta theme that you've been exploring. You know, with your content, you know, having to produce so much content, I feel like you almost operate in the kind of these waves and ideas that you're exploring. And one of them is this idea of whether Bitcoin can survive co-option by Wall Street or whether it's already been co-opted. First of all, thanks again for having me on it.

And before we start, let me just say, I respect Alex's work so much. You know, in fact, we published an interview with Alex on Epsilon Theory. Gosh, I guess it was maybe a year and a half, maybe two years ago. So I just want to, and I want to appreciate, I want to thank you for getting us together on this, because it is so important to have these conversations away from the constraints of 240 characters and in an environment where you can actually really say something and engage with someone else with a full heart, as I like to say.

So I really appreciate the opportunity to be here and really delighted to have a conversation with Alex. Ed, but to give to your question, directly, I don't, I've never thought that Bitcoin was going to go away. For me, it's not a question of Bitcoin going away, and it's certainly not a question of Bitcoin being banned. There's too much money to be made with Bitcoin, right? My entire point is not that Bitcoin is banned or goes away. My entire point is that, like, every other example of financial innovation that I'm aware of,

Bitcoin will be absorbed by Wall Street. And by Wall Street, I mean the financial services industry, broadly speaking. I mean, I mean the banks, I mean asset managers, I mean the exchanges and the mechanics of Wall Street itself. There's a lot of money to be made. There's so much money to be made in the product design. of Bitcoin, of turning it into a security that can be bought and sold. Because there's so much money to be made there, the obstacles to making that money, I think, will be run over roughshod. Those obstacles are not, and this is a difference that maybe makes a difference. I'd love to have this

this conversation. In the past, the obstacles to productizing the financial service and making a lot of money has been to deregulate it. What I see happening today is that the, and we talk about why these obstacles exist, the obstacle to making a lot of money with Bitcoin as a product is not the deregulation of it, but the re-regulation or the initial regulation of it. So that's what I see, Bitcoin's future. It doesn't eliminate it. It doesn't necessarily, and I think this is going to be Alex's major point, necessarily change its dynamics and the way it can be used outside of the United States or outside of the U.S. financial system, which is pretty, as Alex knows so well, it's so global and pervasive. But I do think it changes dramatically the

how to call it, the power, you know, the real value of Bitcoin, which I think is to do more than just be another product that Wall Street has to sell. So that's my position and, you know, looking forward to having a conversation. So, Alex, there's obviously a ton to dig into there, but I want to make sure that we kind of are having the conversation that you guys both want to have. So let's start with, again, then kind of your response in, you know, when you first saw it where you want to take the conversation. Yeah. So I think I totally agree with Ben that Wall Street's going to want to get in on this, is getting in on this. Governments are going to want to get on this. Corporations are going to want to get in on this. I think maybe the difference or area of

rich conversation we can have is does that impact in any way its tool as a revolutionary kind of human rights instruments. Does Wall Street getting into Bitcoin or does governments getting into Bitcoin prevent people from using it as this sort of cypherpunk mechanism, which has these really interesting attributes of permissionlessness, of pseudonymity, of programmability, of Caesarship resistance, censorship resistance, and arguably most importantly, scarcity. It cannot be debased, right? by others.

And I think what's important to point out is that Bitcoin is constructed with all of this in mind, with all of this greed in mind. It actually runs on greed. And I think the long term, long term case for Bitcoin actually does count on Wall Street adoption. It counts on governmental adoption. But really, it's kind of the opposite of Bitcoin being absorbed by Wall Street. I mean, Bitcoin will absorb Wall Street in a sense.

What I mean by that is that Michael Saylor and all these others, They can buy as much Bitcoin as they want and they can on top of it build all kinds of infrastructure, but they can't make more than 21 million Bitcoin. They can't change the rules of the system. They cannot prevent me from sending Ben Bitcoin and they can't prevent him from sending me Bitcoin. And they can't prevent the ongoing programmability of it, the ongoing upgrades that are happening to it, which point in a very pro-privacy, pro-human rights.

rights direction. So I do want to agree on the fact that it's kind of like interest in Bitcoin is sort of inevitable, agreed. But where I would want to like have the conversation is that I don't think that that necessarily hurts its ability to help people. I would agree that in countries like the United States, ironically, which is supposed to be the land of the free, the government will actually seek quite heavily to regulate on ramps, off ramps, and to make sure that there's all kinds of rules for using Bitcoin. So ironically, there is a chance that in 10 years, it's easier to use Bitcoin in Cuba, communist Cuba than it is in the United States. That is a possibility. You see the same thing in the EU, these crazy regulations about financial, that create financial

surveillance. Three, two? I mean, you know, arguably, you know, depending on who you are, it's already much tougher to use Bitcoin in the EU than it is in Nigeria. And you're seeing people flee that direction with this sort of brain drain, right? But anyway, just to sum up, I do agree that all these corporate entities are going to move in, but I don't think they can hurt the core value proposition that Bitcoin provides to people, which is primarily this tool of liberation. So look, I think that the scarcity of Bitcoin is absolutely a feature, not a bug, when it comes to productizing of Bitcoin by Wall Street. And what I mean by that is that the way it is being productized is as a inflation hedge.

Right. So there hasn't been much of a call for a product, for an inflation hedge product in Wall Street, really over the last 30 years. And to the degree you've had it, you've, you know, you've had gold. And so you set up, you know, ETFs and other. you know, gold minor proxies and, you know, all these other ways to play, I'll say, derivative attributes of gold. That was good enough. It's not, it's not enough anymore, right? The narrative around gold is old. That's, that's his biggest drawback, right? I mean, it's, it's, it's,

It's the old crotchety boomer. You know, I'm on the cusp of boomerdom, right? But I don't know for these guys, you know, it's a tired narrative. And the Bitcoin narrative is very fresh, and it's been redefined to fill that same role. From a Wall Street perspective. I'm totally leaving aside the revolutionary aspects that Alex is speaking about, and which I support. I support this wholeheartedly, right?

So the scarcity of Bitcoin, like I say, that's a feature, not a bug, for the way in which Bitcoin is being productized. The permissionless aspect of Bitcoin, however, is a fatal flaw. And that is what I think will be attacked by efforts to control or absorb a Bitcoin as as a source of flow. And what I mean by that is exactly as Alex was describing. You're absolutely right. It will be impossible for a government and a company to prevent

Alex and I from exchanging Bitcoin. You can't, I don't think governments will be able to do that. I don't think they have to. I think they just make it illegal. I think they say, do this tomorrow. If you're going to transact in Bitcoin, you're an American resident or you're subject to our laws, you have to do it through an unapproved account, and you have to do it through a federally chartered exchange. That's it.

I think that's what will happen. I think that's all that needs to happen to change the dynamics of the entire ecosystem into one that becomes a self-sustaining equilibrium where, you know, nobody really cares about the permissionlessness of the instrument itself. But so long as the ecosystem in which Bitcoin exists is heavily permissioned, that's good enough for Wall Street. And that's good enough for Wall Street to set up a a system where they can get in the middle of flow.

I think that's something that deserves some discussion because I think when people think about, well, what's Wall Street's interest or what's the financial system's interest in Bitcoin? They think, oh, well, they want to own it because it's going to be worth more in the future that is today. That ain't it. That's really not it.

Wall Street's interest in Bitcoin is in something that they can buy and sell, and something that they can get flow and take their pennies or dollars or what have you there, their piece of that flow. That's what Wall Street is made on. That's what our financial, the private financial system is made on, finding things you can buy and sell and get a piece of that flow.

So that's where I think it's going. And I think the dichotomy that Alex points out, this dichotomy between what I'm called strong states, U.S., EU, certainly China, and weak states, the Cubas of the world, right, the Nigerias of the world. I don't think that, you know, Nigeria is going to say, oh, yeah, sure, we love Bitcoin because they want to. is because they don't have a fiat system of their own, for all practical purposes. I think you know what I mean.

They're a weak state. And so that's where I'll call it old-school Bitcoin gets relegated. And that's a hard place to live. So I think, Alex, before you dive in, just one point that I want to extract because I think it's going to be a through line throughout the conversation is this question of the separability of the hard-capped scarcity argument for Bitcoin and the censorship resistance argument for Bitcoin. And this is something that I've noticed, well, two things.

One, it's actually been, I started to notice even last year, Joe Wisenthal from Bloomberg started talking about this a lot because he's much more interested in the censorship resistance side in some ways. And it was the first time that I had really noticed. I even, I think, did a Twitter poll, like which of these two attributes do you care most about? There's plenty of people who view them as inseparable and yad-y-y-y-y-y-y-y-y-y-a. but I think that that's a real question.

And it's made more of a question by the fact when you see folks like Michael Saylor, who has become a folk hero to this industry effectively arguing for the separability of these things in public statements and saying governments we hate, this was the term that he used. And he might have been being over kind of bombastic in this interview with Elaine for a Bloomberg column.

But he basically said, you know, we hate the censorship-resistant thing, the privacy thing. Like that's not for us. us, it can still be this great inflation hedge even if it's absorbed into the system. So I guess that's just an ongoing question is, are these things really separable? Yeah, I would say no. They're not separable. You can't have both things at once. Now, what the sailors of the world may want, and look, I don't know, you know, whether he was kind of taking the piss in that interview and whether he's trying to go Trojan horse and just trying to get people into Bitcoin,

because he believes in its freedom properties. I actually doubt it. I actually really doubt that, but given everything he said, I think he just cares about a number go up. But let's just give it the benefit of the doubt and say, we don't know what his intentions are. Maybe he is trying to sort of quietly just usher adoption of this thing for good reasons. The thing is you can't have both because what will happen is you're going to have

two bitcoins. This is called the two Bitcoin problem. You're going to have white Bitcoin, you know, white listed Bitcoin or whatever, which will be sort of like hosted credits on exchanges. Like, for example, right now, if you go buy Bitcoin on Cash app, you have, you know, whatever, $500 a Bitcoin you just bought. Well, that's not your Bitcoin. That's like credit in their system, right? Right now, you can withdraw that to your own wallet and you can achieve sovereignty over it.

And you can even use privacy technology to prevent people from knowing what you're doing with it. And that's why I'm very interested in Bitcoin as a human rights tool. So the question is in the United States or in the EU will, you know, the legal structures permit the prevention of withdrawals and self-hosting. And that's not clear. I would say it may end up happening in the EU, but there's going to be some very strong resistance in the United States from a legal perspective based on things like free speech and property rights.

So I think that case will go to the Supreme Court for sure in the next couple of years at some point or another. And I do think there's a good chance that the Supreme Court rules that people can actually own their own Bitcoin as, you know, as sort of an element or expression of free speech. But again, you know, you have to do that, Alex, because I have never understood, I have never for the life of you. You know, I mean, U.S. Supreme Court has held so for so long that, you know, commercial speech is not, you know, is not protected under the First Amendment. And I don't, for the life of me, I just, I just don't get this.

I don't get the argument that code or Bitcoin is speech. You don't get it. I don't get it. Well, you may, meaning, okay, so let's say there's two camps. The camp that doesn't get it and the camp that says it's not may end up winning. But if you read the history of cases in the United States with regard to financial privacy, I mean, there's always eloquent dissent against this increasing centralization and surveillance. of our payments. If you go back to the 70s, when the Bank Secrecy Act was being legalized,

the dissents are very eloquent, right? And over time, I think that tradition, which is obviously on the sort of the more conservative side, you know, might come out and say, you know, it would be harmful for Americans to have to give up all their rights and to have to have their assets treated in this way. We don't know what, what road that's going to take. I'm just saying that it, let's just say that happens, worst case scenario. And there's these two Bitcoins. I'm just trying to finish this thought on the two Bitcoin problem. Yeah, yeah, sorry. You would have, no, it's totally fine.

You're going to have this sort of like whitelisted Bitcoin, and then you're going to have like real Bitcoin like that, that I own and I can send around the world. That Bitcoin will be more valuable, right? So that's going to have a higher market price than whitelisted Bitcoin. And you're already starting to see this. So Bitcoin that's traded through peer-to-peer exchanges that hasn't been corrupted in that sort of manner, let's say, already sometimes has a little bit of a sort of a

premium, right? So in the future, there may be this market mechanism, which puts a price on privacy, basically. So we'll see how that goes. But it is something to fear, for sure. I mean, it's not like I'm like sitting here saying there's nothing to be concerned about. It's a terrifying prospect that Coinbase and Square and the three or four major ways that Americans buy Bitcoin could cease withdrawals and basically, again, sort of bifurcate the system and say we have the Bitcoin on side we have Bitcoin on the other. But the beauty of it in the end is that, again, it's open source code. And I mean, look, all it takes is like a handful of people working in those companies to say, screw this, I'm going to liberate this Bitcoin and get it out of here, like send it out of the cold

storage out into the market. So I just don't think it's something they can, it's like this genie that has come out of the bottle that is very difficult to keep in the bottle. So I am worried about the two Bitcoin problem. But I do think that free Bitcoin, or at least like, you know, liberated Bitcoin, let's say, that's not captured in the corporate system will be more valuable, and it will be like a very big global demand for it. So that's like one piece. You know, I'm increasingly thinking of because I got to tell you, I never really wrestled with this notion that at its core, the issue is the separation between the permissionlessness aspect of Bitcoin and the scarcity aspect of Bitcoin.

And I think it's pretty clear that they're not separable in the entity of Bitcoin itself. But on a higher level, as Alex is saying, they become separable, right? Yeah. If you set this up. You know, I wonder if it wouldn't be helpful in this conversation to talk about another situation that I'm really well aware of in which an instrument was, in fact, separated to create a Walsight product which generated massive flow and kind of changed the subject around, the conversation around from, oh, yeah, will this happen or won't it happen? Because, you know, who the hell is it? I think it will, you know, Alex,

it's maybe it won't, but it might. I think we can come up with some ideas to try to keep it from happening, Right, because I think that once it does become separated in the way that Alex is describing, then the usage and the market forces create an enormous ghettoization of the free Bitcoin, right? it becomes more and more, you know, constrained and limited to, oh, yeah, I guess I could go to Belize and, you know, start my business doing this, or, yeah, does Nigeria still allow me to do this? Okay, great. Maybe we can talk about ways maybe to think about preventing, you know, this separation from happening. And I say that because at the core of the great financial crisis, at the absolute core of

the economic, you know, near-death experience that the West experienced in 2008 and the first few months of a nine, was in fact the splitting of another store of value, and that being a housing, a residential mortgage. So a mortgage, when you have a mortgage on your house, it's two things. There are two parts to it that were forever, you know, going back to, the 1700s seen as two sides of the same coin that could not be split. And those two things were the note, the money you borrowed from the bank, and there are documents around that loan that you take for the bank, and then the deed or the title to the property that backed up that note that you took from the bank. And so forever, those two things, like I say, were two sides of the same coin. You could

not split them. And it was a Wall Street innovation to come in and say, no, no, no, we can separate the loan from the deed. The deed is a very individual thing. It's the real property. That deed sits in a county courthouse somewhere. The note, let's just set up like a database pointer to the, to the deed. And then we can take all the notes and we can pool them together and split them up and create cash strings from them in the life. So the whole idea of a mortgage-backed security, which became a $10 trillion asset class in the United States, just in a few years, from like, call it 03 to 08, it went from a couple hundred billion to $10 trillion in flow. It was all based on the splitting of two things that,

you know, for hundreds of years, I said, no, no, no, you can't split that. And common law was, no, no, no, you can't split that. It's, the law now hasn't changed to force those two together. But A, it seems to me that pointing this out, right, in any sort of legal arguments, is a pretty good argument for why you don't want to or allow a regulation that allows Bitcoin to be split like this. and B, the problem that evolved for Wall Street when they did the splitting was that supposedly there's this pointer back to the deed, right? Well, when the note goes bad, what's your recourse as the note holder to those actual

deeds where you just have this little pointer to it? It's one thing if the bank owns the entire note, right? they own the loan, they know exactly where that deed is, I stopped paying on the note, while then they know where the deed is and they can foreclose and do all this. Once it gets separated,

then it's a risk for the note holders, the people who were buying, who were playing that Wall Street casino game, that if anything ever went wrong, they didn't have recourse on the deed side, or they weren't able to pursue it. So I'm thinking out loud here, I'm wondering if there's not,

lessons from that Wall Street real world experience that can't somehow be used here to slow down or stop efforts to try to split Bitcoin in this way. Well, I think people are always going to seek yield. So I think, again, you're going to, you're always going to have two kinds of Bitcoin, that you're going to have verifiable Bitcoin that you custody, that you own and that no one else owns way better store of value and real. property rights compared to like a house, which the government can just come and take or kick you out of. I mean, there are ways to both even memorize your Bitcoin seed, essentially, your password

and stored in a multi-signature arrangement such that no violence can take it from you. I mean, you could have it basically arrange so that people on multiple continents control it and you have to get three of five or five of seven or whatever you want. I mean, you can make it very resistant to seizure, is my point. and that will always be, you know, quite different, but people will seek yield. People are already giving up their Bitcoin to third parties to get five, six percent interest. Okay, there's this company called BlockFi that does that. And in the future, I think this is just going to explode with people that want Bitcoin,

you know, want you to give them your Bitcoin and, you know, they'll promise something, you know, in return, right? But again, that's, we have the saying in the Bitcoin community, you know, not, your keys, not your coins. So whatever that is, it's not Bitcoin. And there will always be a high risk. But look, people will price that risk. Okay. So the interest that I have in Bitcoin is not in it as like a tool where, you know, you can loan it out for yield. I mean, although that is interesting. And there are actually things in Bitcoin which allow you to loan out your Bitcoin for yield where you don't have to give up custody, which I think is incredible and probably deserves,

a whole other podcast, but that's doable on the Lightning Network. You can essentially lock your Bitcoin into a smart contract and allow people to use it as a payment channel and you can make fees on it without giving up control of it, which is really interesting. But it's very nation. But we might be going into a world where we have both custodial and non-custodial ways to generate yield on your Bitcoin. But the point is there will always be kind of two ways to use Bitcoin. And one will be to give it up to somebody else. But as long as that first way to use Bitcoin remains, you know, germane for most people and doable and I think it always will, you know,

it remains this incredibly important tool. And again, just to get back to the main line here of thought, no matter, I mean, the more corporate interest in greed, the better. Because at the end of the day, the higher the interest, the higher the price, the more security for the network. And the stronger my tool is against whatever the state wants to do. This episode is brought to you by Crypto.com, the Crypto super app that lets you buy, earn, and spend crypto all in one place and earn up to 8.5% per year on your Bitcoin.

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Your passive income made simple. Get started at nexo.io. I think what's an interesting thing to also throw in here is this idea that the government will come in and ban it or regulate it. There's a lot of precedent, actually, that would say maybe the contrary. We look at the crypto wars of the 90s. I mean, the U.S. government feverishly tried to prevent citizens from being able to send peer-to-peer encrypted messages.

They threatened scientists in the late 70s to prevent the publication, public e cryptography. They hounded Phil Zimmerman and tried to put him in prison and failed. They tried to prevent export of cryptography as a sort of a punishable offense. But at the end of the day, it all failed and that gave birth to e-commerce essentially, as well as our ability today, of course, use signal to and other open source tools to communicate. So the government did fail to stop something they very much wanted to stop in the area of cryptography because of its open source on stopability. And there are parallels to Bitcoin here. Like, yes, they can make things very difficult on people, but that's not a very good business environment. And again, people will go somewhere else.

I mean, the beauty of Bitcoin, again, is it's a global phenomenon. So maybe Taiwan or South Korea or, you know, Nigeria decides to have a much less restrictive policy. Well, they're going to get a lot of brilliant coders, and they're going to get a lot of brilliant people overworking for them. So at the end of the day, also, just to finish that thought, if governments and corporations are stocking up on Bitcoin, they are spreading this, it's like a virus. Like, they're spreading the idea that there's this money that government and corporations don't control. And that leaks into the rest of their business. And that leaks into their staff. So, like, I'm paying attention to this because of North Korea, which is an area that the Human Rights Foundation has done a lot of work.

And the North Korean government has stolen huge amounts of Bitcoin from. South Korean cryptocurrency exchanges. So we know that like the dictatorship is like stealing this Bitcoin and then they're selling it in China on these Chinese exchanges. We can see this happening, right? But like what what you also need to know is that like at the same time, the people that the Kim regime has assigned to carry out these tasks are like learning about what Bitcoin is. And they're learning that there's this money that the government doesn't control.

And I just think it like over time, it does what in your interview with not so fast, you laid out, I think it provides the, the, it breaks this model that money is Caesar's, part of Caesar's world and using money against Caesar always fails. I think we might have something here that, that is the contrary. Anyway, that was a lot. I don't know, no, no. I thought that was really good. And there are two points I want to hone in on here, Alex. I'll work backwards. I think, and I appreciate the comparison to this to the, I'll call it, as you described, kind of the crypto wars of the 90s, right? Where the guy was absolutely trying to, you know, whether it was, oh, we've got to have a

backdoor into your clipper chips or, you know, we're going to ban the export of encryption technology and the like. And, you know, so you've got to, you know, I think I still have one. I think I've got my t-shirt that's got some of the, you know, Christian code, you know, kind of wear when I, you know, you know, you know, traveled out of the country. I think the big difference between today and that is that Wall Street was on the other side of the government

in terms of those crypto wars, right? Wall Street, Wall Street didn't want this technology banned or, you know, limited on exports or the like, man, they, that is what I think is the real difference day, because now Wall Street is wanting the regulation. They were, they want, but to clarify there, did wall street want encryption, or did they want encryption with right, with a back door at the time? To the degree that they wanted anything, they just wanted, they just wanted to be left alone.

They didn't have a big dog in the fight. The degree they had any dog in the fight, it was just leaving Christian alone. Because this is still at the age where you could have a Swiss bank account. The parallel you're drawing for me, though, is that at the time, they didn't necessarily oppose the free nature of it, and they weren't pushing a back door. But today, they're pushing, you're saying they're basically pushing the back door so they can make more money. Absolutely right. And that comes back to one of the first things you're describing about, the issue of custody. right, the issue of allowing a Bitcoin to be collateral,

seizable collateral for some, you know, derivative security. To be 6102. That's what we fear. That's the whole game. That's the whole game for Wall Street. And because what absolutely does not work is a situation where something could go wrong, and they can't get their hands on whatever that lateral is. That's the whole ballgame. So, you know, this is why I see that they'll require by law, right? If you're an American citizen resident subject to our swift regulations and the like,

you got to do this in a place where we can grab that thing. Right. We can grab the Bitcoin. Yeah, and if you look at 6102, the history of it, I mean, most of the gold in the 30s during the FDR administration was seized at points of custody, of course. I mean, most of it wasn't seized in people's homes. Right, right. Most of it was seized at banks. So here we have a different situation, though, right?

So mechanically, if we're to think about it, let's say the worst case happens. And we know that the corporations and governments have sort of figured out maybe this is giving them too much credit. But in 2017, essentially a alliance of Chinese and Wall Street and Silicon Valley corporations tried to sort of take over Bitcoin and bend it to their will and they failed at the protocol level. This is during the scaling wars with the failure of the New York agreement, et cetera, that the listeners should totally dive into. It's a very important chapter in Bitcoin history. So maybe they've said, okay, we can't take it over at the protocol level. So we're going to take it over at the custody level. We're just going to six one or two people.

So the difference here is that it's a little late for that. a huge number of people already custody their own Bitcoin. They do OTC trading. They don't use third party. Third parties. And if you actually think about the mechanics of what this would look like, I mean, I highly doubt. And it would be, I would imagine incredibly unconstitutional for the government to go around,

like knocking on doors, asking, are you running a node? I mean, you know, do you custody your own Bitcoin? What I think you were pointing at before is more likely is they try to create a chilling environment where they would, you know, establish fines and things like that. And again, that may happen, but that seems incredibly anti-American for a whole bunch of reasons. And I thought Neil Ferguson was interesting recently. And he talked on Stefan Levera's podcast and he had a Bloomberg column on this. But he was basically saying that look in the face of like the digital transformation of money where you're really going to have like no cash in the future and that privacy tool is going to be taken from us.

There's really kind of two models here. One is the Chinese model, which is the central bank digital currency, which is giving, you know, insane micro control to central bankers and governments over our payments and behaviors. Or there's this idea that maybe we follow this open source money down the rabbit hole and try to create a climate that's more based on that. And again, I think that's very optimistic. I think that our government is much more similar to the authoritarian ones when it comes to control of money than people might like to believe. But at least it's an idea. It's out there. And look, I don't have much faith that people can defend their, you know, they don't have legal rights in Russia or China or Saudi Arabia. But we have them here in the United States.

And I do think there are organizations like Coin Center that can put up a fight and that can make it difficult for governments to outlaw self-custody of Bitcoin. I just think it's going to be really difficult legally and basically impossible technologically. If you think about how hard it was for them to ban possession of marijuana, which is something that's large and smells and requires all this land to farm, I mean, Bitcoin can be memorized. So I just think that like, legally it may not happen and technically it's going to be really freaking hard to essentially ban you know self-custody of bitcoin and that's not even discussing the fact that like even an American ban on bitcoin I mean that doesn't affect the hundreds of millions and billions of users

that could potentially exist elsewhere in Lagos and Caracas and Moscow and etc. I don't think they have even have to ban the ownership of extraordinary what What they do is they just make it illegal to do a transaction. They're not going to catch it, right? They're not going to catch it, right? Wouldn't they just want to tax and just increase, you know, what about your take on that? Because this is the thing, because taxing, I want to use a great example. I think it's a great example.

And it's the passage of the unlawful Internet Gaming and Enforcement Act in 2006. And I was very involved, I mean, because this background was still running my hedge fund. And I had a, an enormous, you know, I had a big short position on the publicly traded internet gaming companies. Party gaming was the big one out of the UK. These were all UK registered companies because it was still, you didn't have any U.S. listed companies. But party gaming had a five billion. dollar market cap in 2005 going into 2006. A company called NetTeller, which is like the,

it's just a banking conduit. It was based in the Isle of Man or Guernsey or one of those, right? But it had like a billion and a half dollar market cap. And those are the companies that I had short positions on. And the short position was based on the premise that the United States would in fact pass legislate. not to criminalize the online poker players in the United States, not to make them criminals, but to criminalize the transfer of money into and out of these online gaming systems.

And the driving force behind this legislation, which was passed in 2006, and obliterated those publicly traded companies. Yeah. And forced the, you know, the operators, the people who did operate this in the United States to flee the country. And I knew this guy. I moved down to Belize. And, you know, I know another guy who also did the similar thing. And then he gets arrested when his plane has to make a, you know, a stop in Miami, right?

but the driving force behind this this legislation was Harris and Ballets and Wynn and the U.S. Casino Companies. They were the ones who absolutely were always lobbying to, A, wipe out the entrance into this market from the U.K., the party gaming and the net teller. And then over time, and that's what they've done over time, to set this up so that they control it. Right? So they control the flow of money. And gosh, I just see so many similarities with what can go down here. Right. But now it's different.

Now they don't have a monopoly of money and they can't control it. And there are sites today that use lightning, which is like a second layer use of Bitcoin, which is pseudonymous and instant and has none of your identity. stack attached to it. So you're going to start seeing this year, in a coming year, two years, three years, more and more content creators run their podcasts and allow monetization through lightning, essentially, as opposed to advertising. There's a, the guy who's known as the podfather has been talking about this quite a bit. And I think you're going to see a lot more of that in gaming, gambling, all sorts of this stuff online that requires small micro payments. The system is a bit nation, but the tech is there. And I mean, it's, I really think it's happening. And when it comes

to the government, again, currently a lot of that's being held back because like anytime you move from Bitcoin into another asset, it's a taxable event, right? And the thing is, though, if you stay in Bitcoin, it's not. So it's just sort of interesting. We'll have to see how it goes there. but I do I do fear of course, again, this idea that like it is really difficult to sell your Bitcoin $4 in the United States. That is already kind of happening. Like basically on the exchanges today, there's the with the sort of amounts you can sell and withdraw are like sort of small compared to the amounts you can buy.

And they make you wait like five, six days, whatever. You can only withdraw a certain amount per day, et cetera. So they've already made it kind of hard to do a lot. The question is, will that continue to get more repressive? And look, I know one thing that these companies, they want to fight it because they want to keep this business alive. They're making a killing. If you look at what Square's making on their earnings calls, et cetera, I mean, there are people in these companies that, and it doesn't matter if they're doing it for good or for some noble reason. I mean, some of them are, but some of them are definitely not.

They're just trying to make money. But they're going to fight it and they're going to lobby against it. And, you know, it's not just, it's different than the crypto wars, the 90s even, because it's not like there was like, I mean, there was not as much money at stake. It was a bunch of like kind of nerds and cypherpunks. I mean, here we've got people, we're talking hundreds of billions of dollars here. So it's a little different. I think you're going to have a lot of pushback against any sort of like strict ban. But see, I think you're right, Alex, to focus on the selling rather than the buying. And I mean that in a couple of different ways. Because what Wall Street has to have, they've really got to have two things. They've got to have what we were talking about before this. If it all goes to hell, they need to be able to take the collateral behind whatever the security is. And if they can't take the collateral, they need to know who you are and that you're good for it with some other sort of, you know, that you can make a margin call.

Put it that way. So this is the whole KYC thing. Yeah. Right, right. The whole KYC effort is, is not, oh, are you a terrorist, right? You know, the whole KYC is, we need to know where you live, and we need to know the assets you have, and we need to know you've got plenty of assets because we need to come grab them if, you know, you make a bad bet.

That's what KYC is. Yeah, of course. I mean, go ahead. So, there's the second thing. The second piece is Wall Street can't be involved. with violating one of their registration as a compliant financial player. And what will kill you in the United States is if you sell an unregistered security. It's the selling of the security that all these laws are built around, not the buying on it.

Wall Street would be happy to have it be completely unregulated if they're just getting a piece of you buying. Right, which is why all these other cryptocurrencies are, a lot of them are very doomed because they're unregistered securities. Bitcoin is not an unregistered security. Bitcoin is not a security. So this is why Sailor is able to do his like loophole thing where he's like, you know, getting people to pay him and then he's going off to buy Bitcoin. It's possible because of this loophole. And I don't think you're going to see a, there's no evidence we have at the moment that there's going to be any sort of, you know, motion there or movement there. right so the different but but Alex the different comes when you this is what I mean by productizing

there there there are a limited number of bitcoins the like that that doesn't phase wall street for a heartbeat right I mean it's then you create a security that's based on bitcoin yeah and it'll be worth sure and like great Bitcoin I owe you it won't be worth to me the same as as an actual Bitcoin that I can know and it wouldn't it wouldn't be a if unless you've got the, you're talking about the crypto keys. I'll talk about the keys to the safe for where that Bitcoin is kept. Correct.

So that's the KYC. We know who you are so that even if we can't seize your Bitcoin, we can see some other asset you have that's worth what you bet. That's what KYC is for. What I'm saying is that the laws around the sale of security based on Bitcoin. Yeah. that all of the infrastructure you're going to see that comes up,

all these different products that I believe you're going to be seeing launched. They will all require the same sort of KYC efforts, not because we have to come get your money if you make a bad bet, but because all of these institutions, if they sell an unregistered security, if they sell a security to a widow and an orphan, right, and security goes down, they're in trouble. Right? So they, it. Yeah.

And I think these are good, frankly, I think these are good laws. I think I'm in favor of these laws that limit or create the sort of restrictions on the securities that Wall Street can sell. Yeah. I mean, I would say it's less about KIC, especially globally and more about self-custody. Like, sure, like the U.S. government already. Like if you want to buy, if you want to use your cash app, you have to like scan your face and put your, great. but I can still withdraw that to my own wallet and I can make it so that, you know, especially in the next two, three years with the privacy technology that's coming to Bitcoin, it won't be possible to trace where that money goes if you are a savvy user. And, you know, as long as you have that ability to own the Bitcoin, it still satisfies all

of its revolutionary properties. And especially when you start to think about what's happening globally, like putting aside the U.S. for a second. I mean, in Nigeria, for example, again, a country that's going to be bigger than the United States by 2050 in population and is utmost importance to this conversation given its weak Fiat system, as you described earlier. I mean, most of the trading there, I mean, a huge amount of it, in fact, is on peer-to-peer marketplaces where none of it is run through a financial custodian.

And it's all done on WhatsApp or signal and in these message groups. And, you know, the money flows go back and forth from peer person to person. And this phenomenon is what's allowing, you know, for example, us at the Human Rights Fund, now to support protesters in Belarus through Bitcoin. Because the regime in Belarus can see, oh, you know, this European entity just wired 30,000 euros to this Belarusian account. All right, we're going to freeze that and seize it. But if all they see on their side is like little transactions going into people's bank accounts,

they don't know what's going on. In reality, that's us sending small amounts of euros, you know, essentially to Belarusans through Bitcoin. We're like, we say, you know, these groups send Bitcoin and then these, you know, traders from Russia and Ukraine are buying the Bitcoin that they want very much and giving rubles in exchange, right? So this phenomenon is just, I just don't see it's being stoppable. I think, and I think that like in terms of like at the end of this conversation, like what do we fear? Like, you know, at the end of the day, the more Wall Street adopt, you know, the more Wall Street's greed for Bitcoin,

they want to figure out a way to have it on their balance sheet or whatever because they really want it for completely self-interested reasons. They just want to like, have it as a hedge or whatever, they think it's going to be a good asset to invest in or whatever it is. You know, that really helps everybody else in the end. I mean, it's very different. It's not something you can just kind of stop, you know, period. Like it, if you try to, their whole game of trying to get into it is good for Bitcoin, I guess would be like my final argument. Let me ask you this, Alex. Your organization, which gets a lot of, I think there's such amazing work, right?

Where is it, you know, what, what, what, where is it domicile? What, what, I mean, obviously you've got to deal with the, the, the, the, the, yeah, in New York. I'm very, very aware of all the rules and regulations, yeah. Exactly, but, but so, so, so New York is, is, you know, your corporate, corporate, your, your, your, your organization's headquarters and where you guys are domicile. Mm-hmm. if the U.S. government said to you, you know, and they say, look, we're not, we're not looking to, you know, we think you guys are great, but the new rule is you've got Bitcoin and, you know, you need to tell us it needs to be known to us, right? We're not, we trust us. We're not going to interfere. that we have no interest in it, but, but, you know, if there's a transaction, it's got to go through our...

Well, for, right, for nonprofits, the cypherpunk and, you know, aspects of Bitcoin are not very relevant because as a nonprofit, we have to, everything's fully transparent. We have to tell the government everything we're doing. Understood, right? Like armies of auditors, you know? But I'm talking about your finances at all, at all. I'm saying that for your good works, the U.S. government says, you know what?

We can't have these kind of exceptions. I mean, it's all got to go through our swift system. Are you saying meaning if Ben Hunt wants to donate Bitcoin to HRF, they're going to basically make that not not legal for a nonprofit to accept directly to our own? No, no, no, no, no. It's still legal to accept directly.

Okay. But I'm saying that in the current work you're doing that where you're able to, as I understand as you've described, I'll say funnel money to people who are working for the advancement of human rights and, you know, as you say, Belarus. And, you know, it's, there's, there's no reason to think that the U.S. government would give up. In fact, I'm sure they would favor you giving money. Yeah, I mean, they've been, we don't take money from the U.S. government, but they've Certainly, let's just put it this way, they support efforts like trying to get class drives into North Korea, you know?

Sure, sure. Of course they do. Of course they do. So they come to you and say, look, wait, we're not saying doing this stuff to shut you down. But from now on, right, these sort of transactions, we need to be able to see them. Okay. We need to be able to see them. Interesting.

What would you do? What would you do? What would you do? Well, I mean, look, we're not going to do what's not like normal and easy. Like right now, it's quite simple. If someone donates Bitcoin to us and we sell it to spend on program or salary, we do it through Coinbase and we give it to our account. Understand.

I'm talking about sending this to, you know. Oh, yeah. Like, so if there's an organization in Europe, which is where the Belarusians are located, that we're not sending money into, HRF's not sending money to Belarus. Again, it's like a program expense. Like, oh, we organize a conference in Taiwan. Here's the bank wire we sent to pay for the caterer.

This case, it would be, you know, here's the Bitcoin that we sent, you know, to this organization in Netherlands. Here's the receipt, you know. I mean, they would literally have to say it's not kosher for a nonprofit to do such a thing. And I think we're in actually a moment Ben where we can actually make a big difference in this.

Like, we can actually achieve some real change in the next 18 months, like by normalizing this and by, I mean, look, there's one university in the United States that has like a Bitcoin related study center. I mean, in 10 years, every university worth of salt should have one. So there's a lot of work that can be done in the academic and nonprofit spaces to actually help move this thing from a kind of peripheral niche thing that people are debating to really understanding it as like a core part of our future. And I think now is a time for action where people can get involved and advocate and help normalize. Because all of that will also help fight what we

fear, of course, which is the 6102ing of people's Bitcoin. And I do appreciate your concern for that. I guess I just, we'll leave it at, I'm more optimistic we can avoid it, I guess, than you are, if that's fair. But it's a very fair debate to have. And you are absolutely, right to be worried about it. And that worry should be driving anybody who cares about Bitcoin to work both at the protocol level today to help Bitcoin become more private and decentralized, but also to work, I guess, at the policy level. I mean, look, for me, I'm jaded. There's not going to be any amount of policy that's going to help somebody like make Bitcoin, you know, use legal in, you know, Cuba. I mean, the government is a dictatorship. Human rights groups are

legal to begin with. So that's like off the table. But the United States, in Germany, many in Japan, I mean, we can create societies where it's legal, like, it's legal to have encryption, like, it's illegal to have encryption in Russia, right? So like there's, you know, we can, we can shape it, right? But see, I think this is exactly what I'm talking about. I think that it is so crucial to influence policy so that the separation doesn't occur so that it's not 6102, as you described. Yeah. Because so long as the dominant narrative, I use this word again, narrative,

so long as the dominant rationale for owning Bitcoin is number go up and we're going to be rich, yeah. The policy is not going to go the way you want it to go or that I want it to go. It's just not. It ain't. Right? There's just too much money to be made from the sailorization regulation. So what's a future in which it doesn't, and just lost here? What would a future be in which there's more awareness about Bitcoin, but the regulation is less, the government's

basically less interested in regulating it? Isn't that just sort of what needs to happen? Like if number goes up, the government's going to be more interested. And Satoshi knew this. Yeah, no, no, no. See, that's that's, that's, that's, that's, that's, that's, that's, Wall Street doesn't care about number go up. Well, it cares about flow, right? Wall Street cares

about creating a product, right, that they can get in the, that they can, that they could be regulated and so they can get in the middle of the flow,

right? This is what I have such a struggle kind of communicating with people, which is that it, Wall Street really doesn't care about number go up. I know a lot of Bitcoin owners do, right? And so they get the transfer of, oh,

we love the Michael sailors of the world because they're helping the number go up. And that may be true. I think the number probably does go up when it's highly regulated and is in the middle of flow. I think the volatility definitely goes down. Okay. Liquidity definitely goes up. Yeah. I guess, look, somebody's Bitcoin's, quote unquote, will be regulated, fine, but not mine.

You know what I mean? Like, as long as that, like, people have to understand this. Like this is open source code. It's global. There's only so much the U.S. government or even Wall Street can do here. I mean, the Chinese government, arguably, if you look at what they did in 2017, they saw this thing and they were like, hell no. And they were like, let's try to limit our citizens' ability to exchange R&B for Bitcoin.

That happened in October of 2017. Other restrictions happened a few months earlier. Guess what? The price skyrocketed and they ended up basically coming out and saying that Bitcoin is completely legally protected property. So they like tried to, you know, The world's largest police state tried to, you know, do something there. And they really, they couldn't.

So I would say that it's not possible to really put this genie back in the bottle. I do think we need to be hyper aware of our liberties and rights and fight for them. But if, you know, if we're fearing this near-term scenario where, like, all of a sudden, Bitcoin's going to be illegal and it's going to be impossible to sell, I just don't think that's going to happen. Yeah, not illegal, but it's not this illegal. bit, but let me press you on this. So let's say that there was a 6102 issue here in the United States. Okay. Would you move your organization out of the United States? Oh, man, there'd have to be so many things which would happen before that executive order would transpire. It's not an executive order. It's not the same, you know, these things,

they rhyme. They don't. You think it'll be a set, like a, a, like a piece of legislation? Absolutely. It'll be like the UIGE.A. It'll be like the unlawful internet gambling and enforcement. I would personally, I mean, my organization, again, focuses on authoritarianism. And you could argue that maybe that would be a form of it. But, you know, I would be using all of my personal capital to oppose that for sure. Of course. But at the end of the day, if the United States decided to just basically start running around all your Bitcoin on a federally registered exchange.

Yeah, I would consider moving elsewhere for sure. That would be terrible. But again, it doesn't stop Bitcoin, is my guess my argument. I agree. I agree. It wouldn't. But it would require people with sort of dedication and resolve that you've shown in your organization to continue with that resolve and the dedication. And it's a hard life, man.

It's a hard thing. Ben, I have the luxury of deciding at that point, should I move or not. But most people in the world, again, don't have the luxury. They already live under some government that's probably going to. Bolivia has banned Bitcoin for the last five years. Guess what? Nobody cares. There's an active peer-to-peer exchange on little bitcoins right now.

Like I say, they're a weak state. It's so different when you're talking about a weak state versus the freaking United States. But it connects us all, though. I mean, it doesn't. All I'm saying is that there's no global superpower alphabet super organization that can like issue decrees against this that that reduces its revolutionary ability. Like it really, you know, again, if the U.S. becomes a bad business climate for Bitcoin, which I really, for various reasons, don't think it will be.

But if it did, even in that instance, then people will just move elsewhere. So what I'm describing is a bad business environment for you and your bitcoins is a great business environment for every number go up person. It's a phenomenal business environment. It'll never be easier or more advertised to buy Bitcoin. You'll be treated as an idiot if you don't coin Bitcoin in your federally approved account. Yeah, I guess just good luck to the government if they think they're going to seize all of the populations, Bitcoin. I don't think that's going to happen.

We're not talking seizing. We're just talking about we're not talking about seizing. we're saying you want to borrow on it? We would call that and you know, you want to hypothesate your Bitcoin? Well, you know, you got to put it in custody over here. And so, you know, you got to share your keys. You don't want to share your keys? Well, okay, you've got to be an accredited investor with a net worth of XYZ

and we're going to put you on this margin account and you're going to have to have liquid assets over here if you're not going to do that. Fine, no problem. it is a great business environment. And nobody's banning anything. It just makes it then impossible. It just becomes just like saying.

There's a critical mass of people who are Bitcoiners who would not call that a friendly business environment, though. And I think they matter a lot. And they're very influential. And look, again, if the U.S. government or Germany or any one of these countries decides to go down this draconian path, I think it's going to be a net negative for them. You think it's draconian? To outlaw, to prevent people from-

Stop outlawing. It's not outlawing. Well, you're saying you would no longer be legal for people to custody their own Bitcoin. Is that what you're saying or no? Now, I'm saying it would no longer be legal to transact. You could custody it all you want. It's just if you ever wanted to do anything with it. Yeah.

Okay. So that's making use of Bitcoin. There's a difference. Sure, sure. But making use of it, making use of it illegal. If that kind of, I would absolutely call that draconian, and if the U.S. government tried to do that,

there'd be a lot of resistance first, foremost, and after that there'd be people who would leave. I mean, that's, you know, what I would say there. It's not something they can unfortunately just sort of control if they want, I guess is my final statement here. Wall Street getting into Bitcoin is very good for Bitcoin, because, again, it increases awareness. It increases, obviously, the price and the,

security of the network. But if they try to do things that are against, you know, the original use case for Bitcoin, those people will just go elsewhere. I mean, again, it's a global network. So I guess we'll have to see how this goes. But I look, I think all of your concern is important because we all need to have it right at the forefront of our mind over the next 18 months. Like, there are people right now who think. Not five years from now. No, no, no. People thought that last week, this would happen, literally. People thought that last week, you would no longer be able to withdraw your Bitcoin from exchanges. And although that didn't happen, it could happen at any moment.

So we need to really be present and mindful about this. And my recommendation, anyone listening is, you know, withdraw your Bitcoin while you can. This is, this is serious. I mean, this is, this is something to be taken very seriously. Well, and my recommendation would be that there was, there was a real opportunity when thinking again back to that internet gambling legislation. You know, there was a real opportunity to

change that legislation and all this stuff gets you know, it's all very particular to, you know, who's running for president. So they got, you know, the now this senator, you know, who was going to, you know, he wanted to

he, he was from Iowa And so there's going to be the caucus. Anyway, so it all boils down to politics and all boils down to the sausage making of this sort of legislation. But I think there are real opportunities to influence it and as it comes up, change it in a way that it's not debilitating as opposed to say, oh, you can't do that or, oh, we'll take it to the Supreme Court and, you know, fight it on free speech grounds. You know, that's the thing that kind of drives me nuts when I think there's a real opportunity to focus on the policy here. Okay. Rather than, not that I'll just say what somebody will do is just to kind of say, no, no, no, it's, it's, you can't do that. So I think there are three points of divergence, which are spaces for people who are listening and thinking about this to live within that aren't necessarily just.

agreement just kind of divergence. The first is how likely legislation is and how severe slash draconian it's likely to be. That's a spot where there's kind of space between your positions, you know, based on a variety of different factors. A second is the impact to the ecosystem, specifically to use Ben's heuristic of powerful nations versus weaker nations, that type of legislation is likely to be. What types of activities is likely to prevent that we find valuable, important, integral to the nature of Bitcoin? A third piece is how much and how we should be trying to advocate for different policy approaches that preserves the privacy and censorship resistance side. How passive versus active should it be? What are the right levers of power? We haven't spent as much time on that, but that's kind of the third piece.

And I think these are all really important questions because, you know, they, in some, they ask, up to, okay, what do we do next? If we, if rather than kind of just trying to predict the future, especially that third piece comes to what should our actions be, because, you know, you guys share a lot of values when it comes to, you know, the potential of this asset as a, as a freedom promotion tool. So, you know, that's, that's kind of my, my just summary, just having listened to you guys for the last hour. Yeah. And all I would add to that is I do think there's a possibility to create a narrative, a political narrative based on deregulation that can be very supportive of Bitcoin

and make it very difficult for the type of legislation that we all want to avoid to come to fruition. Because I do think that's the big difference between this effort at Wall Street Co-Option and prior efforts. In the past, it's been some heavily regulated thing like the deed to your house where there were a lot of legal protections around, it and they were successful in deregulating that. This is, I think they're looking for more regulations,

and I think that there's a strong political narrative to be created around, hey, don't add more government regulation. I think that's the sort of thing that can sell almost as well politically as number go up. So that's my recommendation for how to address this on the policy side, which is where I think the fight needs to take place. Yeah, I mean, look, it is going to be, again, very difficult for any government to, you know, bend Bitcoin to its, you know, bend Bitcoin to its will or make it something that it's not. So as we've discussed, they'll try and do that at the custodial level. And they will do that.

And Ben's fears are something that every Bitcoiners should keep in mind right now. However, what I'm describing is that sort of like legally in democracies, first of all, and everywhere technologically, it won't be possible for them to do what they want to do. This time's different. This money is not from Caesar. This money is not something that governments control. They will go down a series of rabbit holes trying to figure out what to do. But the interesting game theory here is that maybe one of the best things they can do for their own self-interest is, you know, not. be overly draconian and, you know, allow people to experiment on this thing and see what happens.

And that is something we have a chance of seeing blossom in open societies. Unfortunately, it's not going to happen in closed societies. There's no hope for people who live under authoritarian regimes. You know, things like Bitcoin will be certainly restricted if not banned and they'll live on the black market, but they'll still help people because there's no stopping, unstoppable code. So despite the sort of dreariness of our conversation today, I'm very optimistic about the future. Let's put it that way. I guess, Alex, maybe just to sum up in last word, you know, Ben, you kind of left with a specific thought. Narrative shift around the deregulation of this

versus just focusing on the number go up and that Wall Street interest capture. Alex, for that vision that you just talked about, kind of that makes you optimistic, what's the best way for Bitcoiners to advocate. And it doesn't have to be political advocacy, but what's the best way for people who want to see that, that version of reality come into being to help do so? Well, the first thing is to educate yourself and invest your time in learning about this thing and how it works. And then, you know, spread it to friends. I mean, the more the merrier. The work that I would like to do, again, is to inform people, again, who are struggling against authoritarianism about how to use this tool in the same way that I would want to inform them

about tools like Signal and open source encrypted messaging because these are really important, you know, arrows to have in the quiver against dictatorship. And regimes are slow that they don't, they haven't figured this thing out yet. And a lot of the ones I'm concerned with, even if they have figured it out, they don't have the tools of resources to stop it.

So for me, it's about just spreading the word and letting people educate themselves. But I think the most important thing that Americans should think about is custodying their own Bitcoin Because at the end of the day, if we do have this nightmare scenario where it's the early 1930s and the government is freaking out about citizens holding an asset that it wants and that it wants to control, that it can't modify at the protocol level, it can't just make more of it. It can't do alchemy, right? But it wants to have as much of it as possible to increase its own power. Then you're going to want to take custody of that because I just don't see our country descending to the point where there will be jackbooted thudy.

is coming to our houses. I just don't see us going that far. And maybe I'm wrong, but I just, I don't think we're going on. Alex, you're not wrong. And I think you're so right to focus on the custody aspect of this. But the way this is going to go down is not from, you know, jackbooted thugs or, you know, a knock on the door saying, give me your Bitcoin.

The way this goes down is with a smiley face saying, don't you want to make some money? Yeah. I guess what I'm saying is as long as it's not the jackbooted thugs, we can live with that. we can figure out ways around that, would be my argument. I hope you're right. And maybe that's, I think that's what is perhaps achievable with a lot of influence on the legislation.

Because my concern is that there will not be allowed a dual system, right? That, that, and this has been my experience with Wall Street forever is, you know, you say, okay, we'll give you, you know, almost all the money in the world. and the Wall Street's response is, no, no, that's not enough. I want all the money in the world. I want it all. And so, you know, not allow this, I'll say side-by-side system of individuals to take custody and do their own transactions and the like. I think that's perhaps a where I would want to focus in shaping policy and legislation, A, as you're describing,

tell people, hey, take the custody yourself. Because if you're leaving it in some institutions' custody, it loses all of the permissionless value that it has, right? So take it out, take custody, and let's work on whatever comes down the pike, preserving this carve out for private individuals, remain private freaking individuals. Yeah, well, there's already millions of us. There's already millions of us in America, it seems, who've already custodyed our own Bitcoin.

And, you know, we're going to say, come and take it if you want it. You know, come and take it. So we'll see. Maybe I won't have a smile on my face when I say that in 10 years. But for now, you know, it's something we can think about. But anyway, thanks for hosting this. It's been a lot of fun. Yeah, no, I appreciate both of you guys taking the time.

I think it's a hugely important conversation, one that's certainly bigger than and needs more than the 280 characters. Right on. It was a real pleasure. There is obviously a huge amount to consider and unpack from that show. As I mentioned, I think there were three points of divergence that might be useful as you figure out where you stand. The first is how likely legislation is to come and how severe it's likely to be. Alex's position is effectively that it's not a foregone conclusion that there's going to be strict legislation of Bitcoin because there are such strong business interests in

the current version of Bitcoin we have. Ben, on the other hand, thinks that strict legislation is pretty inevitable because Wall Street wants the version of Bitcoin that fits the surveillance model without threatening its scarcity, which is the key part to its price appreciation. The second point of divergence is the impact of any potential legislation to the ecosystem. We didn't have as much time to explore this, but I believe the central thing here is Ben is thinking about how Bitcoin may be limited in its utility in the U.S. and in the markets of powerful nations, as he put it, while Alex cares less about that because his focus is on whether it remains viable in authoritarian contexts. And effectively, in that light, nothing that Wall Street or legislators

can do in America actually stops the ability for people to use this as an anti-authoritarian technology. A third point of divergence or potential divergence was the right way to advocate for the version of Bitcoin we want to see. And to be clear, both Ben and Alex want the censorship-resistant version of Bitcoin to flourish. They both want it to not be co-opted. I'm not prepared to call out a huge difference here, but I think that Alex feels that the Bitcoin or resistance is more inevitable, where Ben is saying that we should be actively engaging in the policy process.

As I said, without putting words in Alex's mouth here, and while also trusting in the Bitcoin immune system, I tend to agree with Ben that there is a moment and opportunity to proactively engage and would just add a couple things. First, I think his point about shaping the narrative of deregulation matters. In other words, there is an existing political narrative that Bitcoin fits within and strengthens. Even better, I think we should be talking about Bitcoin as the people's money and how it differs from China-style surveillance. There are big, clear, political narrative threads that Bitcoin, in its current version,

could be reinforcing and propping up, and I think it's worth taking some time to do that. Second, I think there are advocates to help in this. In the next month or so, the breakdown is going to have a senator and a congressman on the show who are fierce Bitcoin advocates. That's a base to build from, and I think we should take advantage. No matter what, I really appreciate both Ben and Alex taking the time to have this sort of conversation. I think it's the type of topic that deserves an hour on a podcast where people can engage in

good faith versus just another Twitter debate that ends in recrimination. So thank you to Ben and Alex for being here. Thank you to you guys for listening. I appreciate all the time you put into the show. So until tomorrow, be safe and take care of each other. Peace.