The Pomp Podcast - 290: Aleks Svetski On Why Bitcoin Is A No Brainer

Episode Date: May 8, 2020

Aleks Svetski is the cofounder and CEO of Amber, a mobile company focused on making exposure to Bitcoin and the new wave of digital assets as simple, low risk, and automated as possible. In this conversation, we discuss the Bitcoin halving, how natural systems function, why quantitative hardening matters, and what Ray Dalio is missing on his analysis of Bitcoin.  ===============================  BlockFi allows you to keep your crypto, put it up as collateral, and receive a USD loan funded directly to your bank account. They do loans ranging from $2,000 to $10,000,000, and they're perfect for helping you reach your financial goals of all sizes. Visit BlockFi.com/Pomp to learn more about putting your crypto to work without having to sell it. www.blockfi.com/pomp =============================== Pomp writes a daily letter to over 45,000 investors about business, technology, and finance. He breaks down complex topics into easy to understand language, while sharing opinions on various aspects of each industry. You can subscribe at www.pompletter.com

This is Anthony Pompliano. Most of you know me as Pomp. You're listening to the Pomp Podcast. Simply the best podcast out there. Let's kick this thing off. Alex Zvetsky is the co-founder and CEO of Amber, a mobile company focused on making exposure to Bitcoin and the new wave of digital assets as simple, low-risk, and automated as possible. In this conversation, we discuss the Bitcoin halving, how natural systems function, why quantitative hardening matters, and what Ray Dalio is missing on his analysis of Bitcoin. I really enjoyed this episode with Alex, and I think you will as well. Before we get into the episode, though, I want to quickly talk about our sponsors.

The first is BlockFi. They allow you to keep your crypto, put it up as collateral, and receive either a US dollar loan funded directly to your bank account or interest in an interest-bearing account. They do all kinds of loan sizes, and they pay up to 8.6% APY in their interest-bearing accounts. I'm a user, an investor, and a huge fan. They're perfect for helping you reach your financial goals of all sizes. Visit BlockFi.com slash POMP.

Again, BlockFi.com slash POMP to learn more about putting your crypto to work without having to sell it. BlockFi.com slash POMP. Lastly, don't forget, I write a daily letter to over 45,000 investors about business technology and finance. I break down complex topics into easy-to-understand language while sharing opinions on various aspects of each industry. You can subscribe at pompletter.com, pompletter.com, or go into the description and click the link. All right, let's get into this episode with Alex. I hope you guys enjoy this one. Anthony Pompliano is a partner at Morgan Creek Digital.

All opinions expressed by Pomp or his guests on this podcast are solely their opinions and do not reflect the opinions of Morgan Creek Digital or Morgan Creek Capital Management. You should not treat any opinion expressed by Pomp as a specific inducement to make a particular investment or follow a particular strategy, but only as an expression of his opinion. This podcast is for informational purposes only. All right, guys. Bang, bang. Alex here. I'm super excited to do this. This is round two, my friend. You ready to go? I'm ready to go. Cripple, non-cripple, whatever way, I'm ready. Let's start off with, for those that didn't listen to the first episode or don't remember,

Maybe just give us a quick two minutes on your background and then what you're doing with Amber. Cool. So two minutes. I guess I would fit into the camp of toxic Bitcoin maxis or whatever the hell they're categorizing ourselves today. I think the last podcast that you and I did, we were talking about the importance of Bitcoin as being this intolerant minority standing in the middle and not giving ground. And I think that's an extremely important function of any system. You know, there's got to be a group of people who just won't bend. And I think that's what, you know, I kind of align with those Bitcoiners the most. And, you know, through that, you know, I really think Bitcoin is the most important thing happening in the world today.

And my, you know, I've got a philosophical expression of that through doing the writing and podcasts and all that sort of stuff. but my entrepreneurial expression of that is a little product called Amber and Amber is designed to be a Bitcoin accumulation app so I kind of differentiate it from you know the coin bases of the world it's um it's not a trading app you know it's not designed for you to sort of you know trade shit coins or you know like it's not or to to you know buy and sell and all this sort of stuff it's really designed to accumulate Bitcoin in a um in a fashion that's as automated as possible so we kind of led the whole dca move um and there's a lot of people now doing dca and we're doing some cool things now with um with uh we're going to introduce a premium feature

to amber that'll um that'll make sat stacking smarter more automated and um cheaper for everyone so we are uh we're investors uh i don't even know if we've announced that yet uh haven't yet we just did um and so give us an update just kind of uh any metrics or or data so people know how it's going yeah so so we're in we're in oz at the moment uh we've got almost 5 000 users there um we're about to roll out i guess i'm putting the final touches here on this um europe situation which has proven to be you know interesting at the very least um dealing with you know compliance and banking and all that sort of stuff so we're down to now selecting the bank that we're going to partner with um which is good so very shortly we'll be able to deliver this now to europe i'm

hoping for june that's the plan um and yeah man we'll be able to really deliver a nice clean way for people to um to accumulate bitcoin in a broader region and then from there we're just like i want to hit south africa um and then want to look at some other markets as well for sure and so the the big debate right now or conversation is uh we are what seven eight days away uh from the bitcoin halving and this has historically been a a major moment i'll go as far as to say historic moment um what's kind of your general thoughts about the having and how that's going to kind of affect the entire industry yeah look i i um i wrote an article recently you know about the halving and just sort of talking a little bit about you know i wanted to take a

different spin on all the conversations going on around the halving so obviously plan b really um brought the term the concept of the halving um to the fore with the stock to flow model and all that sort of stuff and i think a lot of the conversation has been really around price and price targets and you know this model about you know how to get rich tomorrow by buying bitcoin and that's fine because you know bitcoin is a it's a it's a monetary beast right so the more capital we get flowing into this thing the better and it just makes it stronger but what i what i kind of wanted to focus on was um the this divergence in philosophy so you know the world we live in today has become you know one of more more more now now now with you know blind excess

and complete disregard to like the consequences the cost the ethics and sustainability of the decisions we make today which you know every decision comes at a cost you know and those decisions that we make today are generally at the at the expense of the future so you know we've And COVID has been like a really another one of these, you know, knee jerk reactions, you know, my exponentials and, you know, taking things to an extreme in the way we deal with them, because we're so easily triggered and we don't stop for a moment to think about the longer term ramifications of anything we do. and you know here you've got this incredibly symbolic event in the halving you know i kind of like to say that whilst the world is you know doubling tripling and going exponential bitcoin is you know halving and you know going towards a finite you know end supply and that's such a divergence in philosophy like you know here we are everything is becoming abundant and

um you know cheap whereas we we've forgotten what is scarce and valuable and you know bitcoin kind of stands alone as the the pillar of um you know traditional the the traditional way we um we understand value you know something that is unique um you know i could use an example of you know a fine piece of art like you know that there is one mona lisa or you know your mother you've got one mother she's fundamentally valuable to you because she's fundamentally unique like if you could just print your mom you know a thousand times like she's not going to be as valuable so these things are this is such an interesting to me philosophical divergence and um it's just funny to see how the world is forking um at this point in time with

you know bitcoin being this thing on one side where and all the madness that's happening on the other side so that's kind of how i envision the halving and um and i think it's yeah i think this is probably the first halving like the last halving was yeah you know not many people knew about it i think this is the first one that's getting a bit of air time i know my guess is 2024 it's going to be like it's going to be like one of those new year's eve events you know that everyone's sort of watching and counting down for it's gonna be really interesting yeah one of the best frameworks that i've heard for this is uh while the world is quantitative easing right and kind of expanding that sheet that the balance sheet uh bitcoin is quantitative hardening yeah

and to me like that just puts uh this whole concept in the same terminology that uh financial experts know and understand right and kind of the people in the traditional world when they look at it that way it's like okay hold on a second quantitative easing versus quantitative hardening uh one of those sounds a lot better than the other right absolutely and that's sort of that that again ties up with you know easy versus hard like you know there's there's things in life like if you want to be um let's just take happiness as a as a thing if you want to live um a life of happiness you can either go and grab some heroin and start shooting up and just you know be in bliss the whole time um and you know probably die from an overdose or you can take the hard road

which is live a life of meaning um and to live a life of meaning you're going to have to go through you know pain suffering sacrifice loss and loss but it's going to build depth in your character it's going to build strength it's going to you're going to grow as a human being and and that is the harder path um it's the you know it's the path of the um of the stoic you know it's um but it's it's sort of been drummed out of society you know like we're everything's apparently got to come easy um whether it's our money whether it's our um you know the five minute abs or you know whatever other bullshit is sold to us you know cheap plastic shit it's just it's just crazy so i I really love Bitcoin for that shift in ideology.

I think that's where not enough of our focus goes when we're thinking about Bitcoin. What do you think it's going to take for this to go from what I'll call kind of a niche community in the global world, right? You know, maybe 1% of the world's population is even kind of using Bitcoin, bought Bitcoin, hold Bitcoin, uh, and out of that 1%, I don't know, let's say 50% really, really understand.

And that's probably, uh, me being generous, right. In terms of, um, uh, kind of the, the framework and the, and the difference, uh, what does it take for that to grow, uh, on a percentage basis? So, uh, people who already hold Bitcoin go from, let's say 50% to closer to a hundred percent, but also how do we get from 1% of the total global population to 10 percent right and kind of i'm thinking almost like a penetration of a market what's kind of thoughts there i think so i've got the the the pain and curiosity theory i kind of call it so i think people come to bitcoin for um for two reasons pain or curiosity so curiosity in the sense that um you're interested in what this technology is you're interested in you know money

um i guess you could probably add a third one there greed um you know and greed i think gets a bad rap it's a it's a greed is a an interesting thing i've i've um got gordon gecko actually in my um in my article where you know greed is actually fundamentally good because it's a driver for for human progress um and it you know helps us thrive now greed unchecked um just as anything else um is bad you know like food is a good thing but if all you do is eat all day you're going to get fat right so as with anything you know there's a sensible there's a sensible medium but um i think greed uh curiosity so those who are curious enough to want to inquire about what is bitcoin or what is money or how is society shifting what's going on we're going to get into it but i think

unfortunately more people will discover bitcoin because of some level of pain um and maybe maybe Fortunately, unfortunately, I don't know, but that's not, I guess, my place to judge. But I think the pain piece is probably, you know, going to be the largest driver. And that may be pain from, I don't know, watching your currency collapse, like what's happening in Lebanon now, watching, you know, your own personal finances collapse. So let's say you're, you know, living in America at the moment and you're forced to stay home against your will even though you're young fit healthy and you have a very minimal chance of some invisible virus coming to get you but you're forced to stay home and go broke and

you get given some measly little 1200 you know us dollar check and that's apparently going to last 10 weeks right um you know so so you know that pain is going to drive you to say well this is fucking bullshit and then you know what whilst that's happening on one side you know the prices of your goods are going up because production stopped and money's losing its purchasing power so at some point something's going to snap and you're like you know i i need to something's going to drive so it's kind of like a carrot and a stick you know the the the carrot is probably the um the curiosity and greed and the stick is the pain and as we know throughout society and throughout history it's usually the stick that drives the most change um and i think we're

just sort of lucky in the the period of time that we live in that um we have something like bitcoin as a as an exit strategy um for that because people in the past haven't had this yeah and this isn't like academic theory right like we're literally seeing this play out in lebanon right now yeah right where literally the uh national currency has lost um you know almost 50 percent of its uh its purchasing power in a very short period of time uh the banks implemented all kinds of capital control. So you can only withdraw a certain amount every day. They won't let you withdraw in any currency other than the Lebanese currency. And then on top of that, it's during the coronavirus where people have lost their jobs. And so what ends up happening is people literally go

to sleep. When they wake up in the morning, they have two questions. How much of my wealth did I lose overnight? Because I lost actual purchasing power. And then two is, do I have enough money to go buy groceries? Because at the same time that you're losing the value of your currency, food prices and other prices are skyrocketing. Yeah, exactly. It's mental. It's absolutely mental. What is the catalyst, do you think, or the tipping point where we go from, it's happening in Lebanon right now. And I genuinely believe most people, they want to be happy and they want to have some level of freedom. At the end of the day, that's what they want. And that manifests itself in a whole bunch of different ways of life. But ultimately, they want to be able

to spend time with their loved ones, be free, you know, not have to worry about access to food or shelter and kind of the basic needs of human life. But if the current system makes that hard, we see it on a micro level, do we have to wait for that to happen on a macro level where it's happening in multiple kind of global superpowers in order for people to wake up and shift over? Or can we go kind of population by population and slowly but surely you get some people who say, hey i don't want to you know participate in this lebanese pound uh mirage anymore i'm gonna opt out i'm gonna opt out i'm gonna opt out and then after decades you get kind of a majority of people who have opted out yeah i i was writing a piece so yesterday i released um my little piece called

correcting dahlia um after his little second chapter that he wrote about changing world powers and any um i i one of the sections i wrote in there was about these this idea of a phase shift um so if we think about water for example um you know it's got the you know these three primary um forms that it comes in solid ice liquid water and um gas steam right and you know as the temperature increases um you know it it remains in its state but there's something happening you know at a molecular level that's sort of basically invisible and then you have this situation where it's like slowly slowly slowly but all at once and then the the phase shifts and my guess is that society is probably very similar um in that sense is you know we you know you have this undercurrent

of change you know that's sort of like the zeitgeist of the time that you know that is happening and because societal shifts are um are much longer uh in nature you know and i'm not talking about dahlia's 70-year debt cycle i'm talking more like societal shifts of like you know the the separation of church and state 500 years ago you know now we're sort of seeing the separation of money in state like this is a this is a multi-year multi-decade transformation but you know that sort of um phase shift period um i think you know has an undercurrent but at some point um and and i think connor brown used to have this on his um on his uh twitter profile it's like slowly but all then all at once um it's i think that's going to be the situation where it starts

to cascade and you know i mean when is anyone's guess um like the oh i've got to touch on something there um this this oh fuck where was i going with this i had a point so i think part of it though it's just like the the gradually but then all at once or or um slowly but then suddenly i think is another one like unchained guys use um the idea really comes down to um what are the accelerants and at some point do you hit a point of no return right like i call it like burning the boats right the whole idea of burning the boats is uh when you go and you find new land you know back in the day uh you're not actually committed to staying until you burn the boats when you burn the boats like you can't go back right uh so when do we get to that point well

here we are burning the boats right now i think covid was an example of burning the boats right it's um you know we we just burnt the um you know the the interest rate boat um then we burnt the qe infinity boat so so those two boats are burnt now uh what else is that like the the number of boats that are available to burn to to basically discredit the existing system um uh you know are becoming less and less numerous i mean i always say covid was the one of the best um marketing campaigns for bitcoin um in history because like these are the events that i just remember what i was going the analogy i was going to use earlier was um the smartphone analogy like we can all remember a time before smartphones like when we all had flip phones or the shitty nokia banana

phones and all that sort of stuff we remember the dumb phones and we remember when that was ubiquitous and we also remember when you know modern times now like when smartphones are completely ubiquitous but that transition period i can't exactly remember that i don't really i'm not really clear on when we had like a real good mix of smartphones and dumb phones at the same time like that have that phase shift like happened so quickly and i think you know we we're obviously not at that point yet with bitcoin but i think over the next decade um the the question is going to shift from you know people asking today is like why the hell would you have bitcoin to sometime in the next decade the question will be why the hell don't you have bitcoin like so that

strange look like that the question will change and um i mean maybe maybe the trigger is going to be something as crazy as um another friend of mine is another bitcoiner in australia hasma cook um he he put a tweet out a little while ago saying my prediction for next year is uh 40 000 in the dow and 40 unemployment um and that that to me like i mean as crazy as that sounds like what we're seeing right now with these supposed solution to the covid problem is you know all this printing of money bailing out of the big boys and all this sort of stuff is we're actually tearing society apart um and where you know we we have this illusion of prosperity in the stock market you know basically the nasdaq's almost back at all-time highs i mean shopify's blown

through its highs amazon's blown through its highs tesla's basically back at highs um you know uber and Lyft are back at you know beyond their December price it's it's such insanity but at the same time we've got almost 30 unemployment in the U.S. nobody's working everyone's at home and you know everyone's living on a $1,200 um you know handout it's like Main Street and Wall Street are completely diverging it's madness and um and maybe maybe that's what triggers people to say, you know, I've had enough. And I keep thinking about just like the virus itself has done two things. One, it's accelerated a lot of trends. One, you just mentioned of kind of the wealth inequality gap, right, is definitely getting

accelerated right now by kind of the government's response to this virus. But also the virus has exposed many shams in society, right, whether it's higher education and all the kind of the structure of that, uh, or other things. And the part to me that, uh, I have, um, I've thought very critically about this and, uh, shied away from, um, really talking about it too much because it's so sensitive, but ultimately, uh, here in the United States, what we see is, uh, there's federal income tax, but if the government can print whatever money they need, why are people paying taxes right it's kind of like a business saying like why do i actually charge the customers when they come in if i can just keep editing my bank account and making my bank account have more

money in it like then i don't actually need to sell anything i can just give away the goods right i don't understand why am i actually charging people for it same thing here is like why is the government charging federal income tax if they can just print whatever they want what are kind of the thoughts there well dude that's that's one of those um boats being burnt right it's um you know this idea that um it's it's funny that you mentioned that because i was um during this lockdown period i was stuck with one person who's got a really different viewpoint than me about you know how the world works and very kind of like call it a socialist viewpoint right the government's gonna save us all and all this stuff and then when i sort of asked um when i

bring up this point like i got her straight around to my level of thinking i said so tell me why are you paying taxes and she explained oh you know the hospitals and this and that and i said we do realize that you know more was just printed in a couple days than taxes gathered in a couple years um to apparently bail us out so i go why don't they just do that and build a hospital and she was like that can't be right that that shouldn't happen like so it doesn't make actual sense when you think about it for a second so it's um i mean this is this is the um the issue i guess that bitcoin was originally designed to solve a lot of people and this is where i scratch my head at like the b caches and all the other crypto people who are running around

promoting faster payments and all that sort of shit which is nothing none of that matters when you look at why bitcoin was designed in the first place which is to remove concentrated control or concentrated ability for the um for the resource through which we measure society to be managed by someone so like when you remove that then you can't play these games where you know a business instead of selling products just edits their bank account like you know what we're doing is we're disincentivizing real production which is effectively the driver of economies we're taking that out of the equation and we're just making fucking numbers up like how deranged does one have to be to think that this is normal in no way is it normal but that's

not economics that's not society that's not capital and the funny thing is people try and call it capitalism that is not capitalism dude like that that's not the definition of capital and capital the definition of capitalism is build capital through production and through adding value um and through creating efficiencies whereby you can you know create profit and profit is just the measures how much um relative value you've added in or relative input you've had in society like that's a good thing and people are trying to sit here and you know blame capitalism and support the government just making up numbers in their own ledger it's completely wild my favorite way to articulate this is marty bent says fix the money fix the world right and it literally is so

many problems in the world derived from this money issue they do they do because here's the thing like if money is the the the board is is the um the board upon which we play the game of life or the game of society um if one player or a couple players can just change the rules whenever they want but the rest of us have to play by those rules you tear apart the board like it's no longer the same game we're playing two different games and you're going to de-balance the whole thing and and this is what people don't get but the the problem is the the guys who are um get to change the rules for themselves um they're actually part of a bigger game which they can't get out of which is they live you know in the same world as we do so at some point when you tear apart

the fabric of society by distorting through things like oh yeah we're gonna you know you and i pomp and everybody else has listened to this we have to go out and we have to trade our two finite resources time and energy so that we add value to society in order to be rewarded with this unit called money whereas a couple people in society they get to just make it up out of thin air you start to break the game down and what you end up doing is you create uh ramifications such as 40 000 dow 40 unemployment like you basically make the whole thing fall apart but once the whole thing fall apart they basically fuck themselves over and they fuck everyone else over in the process um and it's just such a i don't know short-term

viewpoint it's it's such it's such an arrogant way of thinking um but unfortunately um that that's what happens when i mean when the needle is so close right you know when you've got a junkie and the temptation to feel good is right there uh you know they're going to use it so the best solution is get rid of the temptation altogether throw throw that out and that's you know as marty says fix the money you fix everything so you throw the temptation to fuck with the fabric of society out the window when that is out when you cannot do it guess what your energies go towards some form of productive action and that starts to coalesce and converge to a more structurally functional society not one where you know a group of people can change the rules in their favor

and so i guess as um as part of this then uh it happens all over the world it's not just a u.s thing it's not just kind of a global superpower thing this literally happens everywhere um and so my guess is that we're going to see people regardless of geography uh start to wake up and slowly move uh at first it'll be percentages of their wealth eventually it'll be um larger and larger and even into the majority uh overly decentralized um you know kind of digital what does that infrastructure look right now can we handle um kind of another 2017 and if not what do you think we need to actually change or improve in order to be ready for that that's a good question okay so i i think we're definitely ready for another 2017 i think the um

you know the on-ramps are better you know there's you know whether we're talking about amber or whether we're talking about you know the boys at swan or river and all this sort of stuff there's a lot better uh bitcoin onboarding services these days so i think we can um structurally have that you know segwit's you know broadly adopted so you know we're not going to get those ridiculous spikes in fees wallets are smarter so you know you're not going to get that um so i think that's uh fine i and and i i personally believe we'll probably see a run you know later this year or next year uh in in my mind again it's going to be a price driven run so i think um this uh rise in bitcoin is going to be probably more um like if we think about those drivers of you know pain

curiosity greed it's probably going to be another greed driven driver at this point in time um because i think you know as much as these stimulus packages and all this sort of shit haven't solved the problem they i think they've managed to at least give a um a sense of solution like it feels like there's been a band-aid applied to you know um some of this apparent bleeding so i think you know bitcoin fundamentally you know does have the infrastructure from an onboarding and from a functionality standpoint to support um another big run and yeah i i think it's really going to kick off once we pass the old all-time highs so once bitcoin's beyond 20 000 what we'll probably have is a period of disbelief so maybe you know it crosses 20 000 people like you know oh shit

that bitcoin thing's back at 20 000 oh it's gonna fall again from here and then i'll buy some and then it'll you know probably reach 25 000 they'll be like oh i can't go any higher than this you know this is another bubble it'll hit 30 and i think that's when we'll start to get some serious FOMO and that's when we'll start to see you know retail market and all that sort of stuff um come in uh does that sort of answer the question or i i definitely think so um what are you excited about kind of post having right so we're going into this event kind of how are you thinking about once we get past that um and we're looking forward to i i guess the um the told you so moments so i think the um the classic you know

all the the rubinis of the world and all of that sort of stuff we've just said that this thing's gonna you know whether go to zero or it's never going to pass the all-time high it was just a tulip bubble all that sort of stuff i think that's really and not from an arrogant place but just from a um rewarding place like you know we've stood strong this entire time like all the people who've stuck with it in the bear market um particularly the people like you know that came in in 2016 2017 like this sort of you know we call it the the class of you know this epoch right it's um you know there was the the class that came before that was sort of between 2012 and 2016 they've already seen um a bear market you know that the people that have come

in between 2016 and 2018 or between 2016 now have seen this new bear market and coming out of that on the other end and sort of being um proven right not to gloat but to sort of inspire more people to come in that's probably what i'm looking forward to um to the most because then then guess what we we basically enlarge the circle of hodlers of believers of that critical massive people that intolerant minority that won't um bend over or that won't go back to the old system i was speaking to someone yesterday on a fintech podcast and you know i was kind of just saying you know when i first got into bitcoin my idea was to sort of get in and get out and make money and make dollars now it's not i'm trying to gain territory on bitcoin so for me it's like a

one-way street i'm going in i'm not coming back out like you know why would you you know move to a new like place which is beautiful that has everything you could one day need um just to move out again like it makes no sense to me so like you know we're pioneers in this new world and i think we're just gonna this post post halving is gonna validate a lot of the things that we've been saying to people for the last year or two or longer one of the best ways i've heard people talk about this is uh everyone understands the concept of land right they're not making more of it and owning land has value um if you can break that model to or bend that model to understand digital land right or digital property and you say hey there's only 21 million

acres, right? And you can buy one right now for $8,900, right? Do you think they're going to be worth more or less in the future, right? And by the way, look, just like land, there's price fluctuations. Sometimes certain areas, it's more valuable or less valuable, right? But generally over long periods of time, the scarce assets rise in price. And that has to do with one, there being more desirability but also two it's actually the currency being devalued against the scarce asset right meaning that the u.s dollar or whatever is losing purchasing power and so it takes more of those dollars to buy that same asset and when people hear that i think that kind of clicks and say oh wait that is interesting explain that more yeah so we've got so you just

mentioned two forces there that um that basically uh inversely correlated but they drive each other which is the the devaluing of the current currency that we're using to price this new thing but also the um the scarcity and the fixed supply of this new thing which can't you know once people understand that it can't be printed or you can't make more of it you know the the common sense thing is all right well infinite finite you know that that's where more value is but then you've also got the um the third piece like yeah you know let's argue that someone could create something that is finite in supply but it's completely useless now that that probably won't accrue value so like if we look at bitcoin um it is fundamentally useful you know it's digital divisible

portable it's got all these sorts of um incredible primitives um another one that i was discussing yesterday with someone was and this is something that i've experienced firsthand as a as a fintech company for us for example to be able to accept credit card payments to help people buy bitcoin man i'm about two and a half or three weeks through a due diligence process with so much paperwork so much checks so much garbage that like i can't even explain to you how much time and effort has been wasted just to give us as a company the permission to help somebody buy a product called bitcoin like if in a world where bitcoin is a functional money that permission doesn't need to be you know chased like you don't you don't have any of that so all of that friction

all of that wasted time energy resources shit that doesn't actually add value to anything is gone like you literally throw that out like i think even jack dorsey was talking about it he was saying you know square is a fintech company but it's fundamentally um unable to operate like an internet company because of all of these jurisdictional limits that um exist because of the current fragmented you know horse and buggy financial system that we have like bitcoin is completely an entirely different beast it's that i mean coming back to a peter tealism right is it's the zero to one it looks nothing like the existing financial system and that therein lies the innovation it's not you know all these fintech bros running around trying to you know

augment the existing financial system and make some things faster and you know you know build some new api and all that's i mean that's all cool and well you know it's it's cute basically but it's not a fundamental reinvention it's nothing new it's not it's not an iphone versus a nokia banana phone like it's it's a it's a complete reinvention of money payments and all in the one stack and that i think when you layer that on top of the the land argument um so you've got this thing which is not 10 times but 100 times more superior and then you say it's finite in supply um and then you say that you can show that this other thing that we're using at the moment is not only infinite in supply but it's also devaluing it's broken and all this sort of

shit like you you literally have to be a maniac or a moron or ignorant or i don't know what you have to be to sort of dismiss bitcoin as a scam like i i literally don't get it anymore like it I see no reason why someone shouldn't have not only, you know, some of their wealth in Bitcoin, but any wealth that they actually value in Bitcoin. Simple as that. Yeah, it's this whole idea of get off zero, right? I mean, look, we went around the country, the United States, and even internationally, and just over and over and over again, get off zero, get off zero uh because there's two things one is there's obviously a um exposure to the upside that has a material impact on a portfolio but two is once you have kind of skin in the game you

start paying attention right and and i i literally used to tell people take a hundred dollars put it in bitcoin and think of it as you just invested in an education because i promise you you'll pay attention right and i think that that works for people yeah it works for absolutely everyone like my mom who's got no financial literacy whatsoever i've got to buy some bitcoin and i get these random texts from like my mom's the kind of person where when she saw um the whole libra news last year she was like oh facebook is setting up their own bitcoin like that that's the kind of you know comment that i would get from my mom right but even she's like messaging me saying oh you know that coin's gone up again like it's just it's such an interesting thing to see

but but but that's that's what skin in the game does to you right it's um you know when when you start to yeah when you have some skin in the game you've got something to burn and then all of a sudden becomes important to you um you know when when there's an ability to feel pain and this is why pain receptors are such an important piece of um of any system like you know tying it back to this whole covid thing and how you know we're in a society now that wants to eliminate any form of pain um you know we we feel a little bit sick we hit ourselves with painkillers you know we we we you know painkillers or medication or antidepressants or you know the economy is down a little bit let's print more money let's artificially drop interest rates like all we're

doing is we're masking the problem we're slapping these random band-aids over problems and every single time you know particularly from an economic standpoint i think that's where we mess with things the most well maybe not maybe we mess with things practically everywhere but every single time these complex natural systems biological economic or whatever try and correct themselves try and come back to their own natural equilibrium in we come with some sort of intervention to apparently fix it right like um you know these these interventions that people say are so necessary like the market was so overextended and and not just talking from a um oh yeah the market needed a crash you know standpoint but everything was overextended like whether you

talk about supply chain and just in time like there was no savings there was stock buybacks for the sake of stock buybacks all of this stuff was so overextended and fundamentally the economy needed to take a breath and corona was an opportunity to take a breath and come back to some equilibrium and therein that was the solution that the fall was the solution and we've somehow been taught that the the correction or that fall or that crash is the bad thing that the solution is pumping more drugs into the system to inflate it back up and it's become such a backwards um kind of you know level of thinking because you know corrections equilibrium pain death that they're necessary in any system you know whether at the cellular level the atomic

level through to the economic level through to the societal level up through to the interstellar you know cosmic level like you know life and death they're symbiotic and the more we try and avoid death the more we try and avoid pain as if it's a plague the more we actually damage life um you know jordan peterson talks about this um the forest fires you know forests have natural fires that burn regularly all the freaking time and by doing that you know you have these spores that are released you know that only are released during these fires and all this stuff then you know humans come in and we're like oh fires are a bad thing you know like a blanket statement we stop the fires from happening and then all of a sudden you have this one big fire that comes and destroys

everything and not only burns everything down but it burns the topsoil so now the forest is a freaking desert and you've destroyed it it's it's such a the more you you play with these levers of a complex system the more you have these um exogenous events that you are you just can't measure and you actually destroy the system itself um instead of allowing it to correct and this is it's just it's just crazy man um that's how systems function right it is uh you kind of kind of let them do what they do for the most part and the more you uh interfere the more issues that you can cause yeah but before we finish up i want to uh spend some time you recently read uh ray dalio's new uh chapter that he released chapter two for his new book um he wrote

a a pretty deep dive on uh basically why you what you think he got wrong right um so let me spend a little bit of time kind of talking through that i know you mentioned it earlier but um just you know what your takeaways were and kind of what do you think he got wrong well i think so i'll hit on a couple pieces number one he he talks about you know understanding money debt and credit and all that sort of stuff but then you know he he starts with that but then he gives like such a really weak definition of what money is he's like oh you know money is a medium of exchange and it's also some some sometimes used as a storehold of wealth i was reading that i'm like what like you can't exchange something that doesn't that's not you know valuable in the first place so it's like

that you know it doesn't make sense and i sort of argued that unless you give you know a much deeper um definition of money the whole argument that is um entire chapter sits on just falls apart so you know i kind of like to define money as something deeper it's you know it's a mechanism via which participants in society can effectively collaborate like if you don't have that mechanism society goes out the window you can't like you know money is used to represent the product of one's time and labor in other words you know their work um and and if you don't get that depth you don't appreciate how important money is and then you can you know call it something as stupid as oh it's just the medium of exchange so that's sort of where he starts off then he starts talking

about you know you know yeah money doesn't have intrinsic value blah blah blah but then he turns around and starts to talk about how um gold became money because it has intrinsic value and then i was like face palming myself again i'm like okay there's no such thing as intrinsic value all value um is subjective simple as that like and like the example that i like to use is you know we all value air right like the ability to breathe but if you have a child um and you're both let's say in a in a car accident and you fall off a bridge and you're in the water and only one of you is going to be able to breathe what are you going to value more in that moment i know this is a brutal example but you're going to value air or you're going to value your child's life so it's

it's a very what that means is that at that point in time the the value you place on air is much lower than the value placed on you know your child's life for example so it's all value is subjective now gold didn't become money because of some notion of intrinsic value it has specific attributes that we converged upon as human beings to say that hey that is a really good object to represent the time and work that i'm trading for money so that was another area then there was a couple sections that me and him agreed on um he talks about how central banks are um able to rig the game um and he's 100 right because um that's one of those things where i can see it was highlighted in my article you know whilst the rest of us idiots spend our two finite resources

uh time and energy to to receive money in return um you know there's a few organizations who just gets to change the rules for themselves at the expense of the rest of us. And it's just, it's, it's madness. Then what else did I hit? Things about where he talks to you. Okay. So he mentions a section in there while the virus triggered this particular financial and economic downturn, something else would have eventually triggered it, which I agree with.

And regardless of what it did, the dynamic value would have basically been the same. because only intervention would have worked to reverse the downturn. And I kind of really like poked at that, which is we didn't actually reverse the downturn. I actually think we've just accelerated the downturn by intervening again. We didn't actually fix anything. We broke the shit even more than it was broken before.

So the correction or this Corona crash or whatever we're going to label it as was the system fixing itself. and instead of getting out of the way and allowing the system to fix it fix itself we just doubled down on breaking the fucking thing and for me when i see someone who's supposedly you know as intelligent or whatever as um as ray is to assume that these interventions are uh some form of solution just baffles me because that's it's not what we're doing like we we can't perpetuate that narrative because all we're doing is running the same game again like the narrative has to be the the system is fixing itself by correcting um and we are breaking it more by

intervening not the opposite way around um and until we do that we're never going to fix it why do you think that he uh hasn't at least publicly kind of crossed the chasm and uh and said hey this bitcoin thing is real do you think it's that uh he doesn't understand it he doesn't believe in it uh or it's more of a sleight of hand and actually he's doing one thing behind closed doors and not talking about it publicly yeah dude i this one's one i've battled with for a long time so i mean most of the writing that he does like particularly prior writing this one i think there was a lot of um if you asked me that question six months ago um i would have probably said it's the latter i think that you know there's a bit of sleight of hand going here and he's buying

up bitcoin like a boss in the background um but reading this one i was like you know man he's actually missing a few really fundamental pieces like you know intrinsic value being one of them and you know presuppositions around um you know he's right about credit cycles but he's defining everything within that paradigm and you know he talks about these paradigm shifts but he seems to be unable to um to acknowledge that bitcoin is an example of a paradigm shift you know or or a phase shift something that is different to what exists so he's either um there's either something really really really not clicking for him um with respect to bitcoin or um he's just because he's got such a i guess a public presence um it may be dangerous to you know publicly promote bitcoin

because i mean you know you got this hundred and what is it 200 billion dollar asset now which i mean if he turns around and says you know uh bridgewater is allocating to bitcoin you know we're probably gonna we don't need the halving it'll be called the dahlia winning renaissance came out and said that they're going to start playing right now they're market makers so they're going to be less buy and hold but still i think there are definitely firms that are waking up to uh to what's happening here well there's another example of that slowly and then all at once right it's at some point the game theory is going to suggest that you know everyone piles in and um it's good it's going to be mental man when when the actual that thing

starts to actually happen um but yeah i don't know man dalio is an interesting um an interesting case i i feel like you should know better but maybe maybe it doesn't i don't know listen we're gonna find out for sure um with uh with Amber you guys are not yet available in the United States you're gonna be available in Europe soon for people who want to find out more and kind of see what you guys are doing around DCA and the various features that you've built where can they go to learn more they can go to amber.app so a-m-b-e-r.app that'll redirect to our normal site which actually get amber.io so we

haven't switched it to the new thing yet so don't freak out when you see it but um yeah amber.app all the stuff's there um and then on twitter it's the amber app that's the um the tag so t-h-e-a-m-b-e-r a double p so that's um that's where people can find out i would suggest we're gonna i'm gonna release an article probably in the next week or two once i get some more solid dates around europe so people can keep track of when we're going to be live there i know we had a recent casualty in europe one of the dca services called get better decided to shut down because as you know in the infinite wisdom of the dutch regulators they decided to introduce some ridiculous new licenses which basically made it unfeasible for get better to operate out of holland where they

were so unfortunately they're out of the market so you know we're now trying to make sure we can get in there to um to service people that were um that are no longer able to be serviced in europe yeah uh i'm gonna leave you with one question uh you have no clue that i'm right what is the one piece of content or writing that you wish somebody else or yourself would write so what's the one thing that hasn't been really heavily scrutinized debated um kind of laid out that you say i would love to see x shit that's a that is i do you know what i thought you were gonna ask me i thought you're gonna ask me what is the one piece of writing that i would recommend is indispensable um shit this is a good question um

it's it's hard for me to say because i i i've recently just started reading uh rothbard um and just you know the his libertarian manifesto and it's absolutely brilliant and i would have said um a real like my answer to your question would have been a whole analysis on whether a completely free market system with no governments is actually possible and what that would look like um i would love to see something like that but now that i'm reading this book i see it's already been written 40 years ago so um yeah i don't know man and and so much good bitcoin stuff has already been written um i stumped you yeah you stumped me dude you you stumped the fuck out of me i have zero

how much pride i take in stumping people sometimes we'll have to do a third one at some point and you got to come with an answer for uh for that question because the reason why i like that question is uh one it draws on uh the ability for you to understand what's already been written which obviously you have and then two it's what is like the the intellectual frontier that has not been uh explored yet right it's really kind of what the the question is asking and uh and part of the beauty of those frontiers is sometimes we know what they are right and so it's uh it's very easy to say um you know hey we want to go to this place or we want to do this thing but other times uh you actually explore and discover uh by accident

right you know the the uh kind of canonical example is uh christopher columbus he wasn't looking for uh for the new world he was trying to get to asia and then just happens to find this other thing and so i think that's part of um you know but part of the question but uh what next do you know what now that you say that there might be one thing i could say and i'm sure this has been explored but um maybe something maybe a modern libertarian manifesto like rothbard's but um using uh bitcoin as the um as the the the core piece of um because Rothbard's entire writing I guess is built on the principle of private property and and with that core principle um he starts to build all the rest of the philosophies you know

off the off the top of that so you know maybe a more modernized version of those philosophies but using bitcoin as the source of um you know private like real private property that um that that that can't be um manipulated so that that would be i guess an interesting thing because i i guess you could almost blend that with the sovereign individual and bitcoin and sort of say like what what would a future look like where um where the world functions as a truly pure capitalist free market um you know society where you don't have the state you don't have these coercive um infrastructure that we have today um and at the core of it is these um property rights that are hard-coded into

you know the source of wealth bitcoin um and then you have a voluntary society built around that so so that maybe that's a really long convoluted answer to your question but i think that's something that um has that's probably i think where a lot of the frontier thinking of bitcoin is now is like yeah yeah bitcoin's gonna go to the moon it's gonna be worth millions of dollars one day but what the fuck does the world look like when that actually happens so yeah maybe that's the area that we need more exploration so let's say i'm half stumped i i love it man i love it let's um let's wrap up there i think this was a great conversation i think people find a lot of value in it and uh we will definitely send some people over to check out amber uh and then just

keep doing you it's uh it's always fun to see you uh kind of putting those ideas out there in the world and i think we need more people doing it so we'll have to do this again maybe towards the end of the year for sure brother thank you for having me on again man appreciate it