We Study Billionaires - The Investor’s Podcast Network - BTC001: Bitcoin Common Misconceptions w/ Robert Breedlove (Bitcoin Podcast)

Starting point is 00:00:00 You're listening to TIP. So there's no doubt about it. Bitcoin has evolved into a major point of interest here at the end of 2020. During our last episode, Stig and I informed the audience that we would be specifically covering this topic on a Wednesday release for anyone in the community that has an interest in learning more about the topic. We know that not everyone has an interest in Bitcoin. And if that's you, no sweat.

Starting point is 00:00:23 Just ignore the Wednesday release and the traditional show will keep dropping on Saturday nights. The Saturday show will continue to be about stock. and traditional forms of investments. However, if Bitcoin is something that has piqued your interest, we're going to be releasing a Wednesday show that goes into the depths of this very complex and often misunderstood topic. On today's show, we have one of the most thoughtful people in Bitcoin, Mr. Robert Breedlove. Robert is the author of numerous articles that have become virally shared content about sound money and the impact Bitcoin might have on the world.

Starting point is 00:00:56 We specifically recorded this episode to address all the common misconceptions that family members and new arrivals the Bitcoin often have. So without further delay, here's our first Wednesday release of the Bitcoin Fundamentals discussion. You're listening to Bitcoin Fundamentals by the Investors Podcast Network. Now for your host, Preston Pish. All right. So, Robert, the thing that I want to just get into here at the start is really the essence

Starting point is 00:01:37 of what we're talking about. And when we talk about the essence, we've got to cover the topic of what is money. Because I don't think we can talk about any of this other stuff unless we first address that and come to kind of a common terminology, maybe a common understanding, maybe even let's challenge our given assumptions. So I'm kind of curious your thoughts on that. That's a great place to start, actually. It's commonly believed today that money is a.

Starting point is 00:02:09 government creation. Money actually, it's an emergent phenomenon in any trading society or any marketplace. And you can think about it quite simply as just the most treatable thing. It's literally the most liquid asset in an economy is by definition money, right? And so the simple example here would be like even cigarettes and prisons, right? These little micro economies, that becomes the most tradable thing, that becomes money. So what we can say about money historically, and by the way, this question, I love that you ask this question first, because I think this is where people hit a stumbling block because they think money is issued by the government, things like Bitcoin are not issued by the government. So clearly, the government's never going to allow it. It's never

Starting point is 00:03:00 going to work. So I think this question, actually by asking it to yourself repeatedly and consistently, you go down the rabbit hole, right? What people describe as the Bitcoin rabbit hole. And you start to question the fundamental nature of a lot of the socioeconomic structures that hold us together. So I think it's a very important question for people to ask themselves. And from a first principle standpoint, what we know about money is that it's selected in the marketplace. based on five critical properties. And a lot of people argue about these properties say there's anywhere from five to 15.

Starting point is 00:03:36 I've narrowed it down to five. And I think each of these have a relevant subsets. So the first, money has to be divisible, durable, recognizable, portable, and scarce. These are the properties that people, market participants naturally select for and money. So divisibility simply means that A money can transact at varying scales, meaning that you can subdivide and recombine the monetary

Starting point is 00:04:07 medium at various scales, right? This is why we have coinage and things like bills, we've used historically. Durability means that the money will persist over time, so you know that it won't rot. So, for instance, fruit would be a pretty terrible form of money, right? It's not durable over time, whereas something like a monetary metal like gold is. It's highly durable over time. It's non-corrosive. You know you can park a value in it and expect it to remain physically constant over time.

Starting point is 00:04:38 Portability means you can move the money easily across space. And also a subset of this is actually secureability. To be able to move a money across space, you actually need to be able to secure it easily as well. And then recognizability is the next property. Recognizability means you can verify the authenticity of a money or verify It's veracity. You can tell that it's not being counterfeit. You can quickly assay its value, making sure that it is what the trading partner represents

Starting point is 00:05:07 it to be. And finally, there's scarcity. And scarcity is a key property of money, which essentially means it's resistance to counterfeiting or supply inflation. Because with money, everyone that interacts with it has a direct financial incentive to increase its supply, right? If I can just print money or if I can just discover a new gold mine, I have a huge incentive to pull it out of the ground or print the money and sell it into the marketplace.

Starting point is 00:05:36 And what that effectively does is allows the person that can create the new supply, gives them a mechanism to confiscate value from all of those who use the monetary medium as a store value or a medium of exchange. So historically, the free market zeroed in on the best tool or technology that best satisfied these five properties of money. And many things have been tried, right? We've used seashells, we've used salt, we've used cattle. Many monetary technologies have manifested in different markets throughout history. But the world zeroed in on monetary metals as money because they best satisfied those first four properties, right? Metals are more divisible, more durable, more

Starting point is 00:06:20 recognizable and more portable than other technologies. And of the metals, gold was the most scarce. Now, we can quantify scarcity, too. Another way to think about it is resistance to supply inflation, right? And there's a very popular metric in Bitcoin circles, also in precious metal circles, called the stock to flow ratio. We can think about this as the inverse of the inflation rate. So you're just taking one divided by the annual supply inflation. So for gold, you know, for the past 50 years, its annual supply inflation has been just sub 2%.

Starting point is 00:06:54 So we say one divided by 2%. it's actually like 1.8%, so its stock to flow ratio comes in around 55 or 60. So of the monetary metals, gold exhibited the lowest and most reliable supply inflation rate or said differently, the highest stock to flow ratio. And that's why markets coalesced around it as money, right? The free market naturally selected gold as money. Gold historically has been the truth of money, right? That's what market participants voluntarily adopted through entrepreneurial experimentation,

Starting point is 00:07:32 countless trial and error. They determined that the best medium to store value in was gold. Yeah, and it's not like diamonds. Like now you can go out and you can lab create a diamond. This is an element that's literally on the periodic table with respect to gold. And you can kind of see how that just naturally occurred over time. Yeah, that's right. Like everyone knows today, it's almost ingrained in our knowledge that even in our, the way we talk about things.

Starting point is 00:08:02 Like it's, oh, that restaurant's a gold mine. You know, I don't know if you ever heard that. We know gold is valuable, right? It's so deeply ingrained in our understanding of economics. I like to say it's a tool that's so old, we forgot why it was useful, right? Not many people. Anyone can tell you gold is valuable. Very few people can name you the properties of money and tell you why it was selected on the market.

Starting point is 00:08:24 it. But I think comprehension of these properties of money, which are the first principles of why a market selects money, are quintessential to understanding fiat currency and Bitcoin. And when we fast forward a little bit, so gold's been used for 5,000 years as money, however, it did lack in three properties that are very important, which necessitated the introduction of gold-backed currencies in paper form. So firstly, gold has a very high value to weight, right, because it was favored on the marketplace. It's very heavy, very hefty. So for those reasons, gold actually lacks in the divisibility property of money. Like to be able to execute day-to-day transactions, right, to say buy coffee and gold, you would need gold dust almost, right? Like, you need very

Starting point is 00:09:17 small, highly fractionated units of gold. So by taking gold and abstracting it into a paper currency or even into coins, we're able to more deeply subdivide gold and use it for day-to-day transactions. And by the way, historically, this is too why silver had some marginal utility across history. Because people tended to use silver as a day-to-day physical monetary medium and gold would be reserved for larger wealth storage and settling of larger transactions. Secondly, gold suffered in the recognizability department, which meant that every time someone executed a trade, they would need to assay the value. They'd actually have to test the value and authenticity of the gold at each trade, right? So this clearly was uneconomic. It took a lot of time. It took certain techniques. It just increased

Starting point is 00:10:13 the transaction costs associated with gold. So pretty quickly, and these emerged first as private businesses, people figured out that you could centralize the custody of gold into a warehouse. You could have this warehouse basically provide a stamp, right, on this warehouse certificate that's redeemable for gold. And then it represented that this one certificate is redeemable for one ounce of gold. So now, instead of needing to assay the value of gold at each transaction, you could just trust the reputation and certification function of that business instead of needing to verify at each

Starting point is 00:10:49 transaction. And then finally, gold lacked portability. Metals like portability. Metals clearly are very heavy. They can be transported across space. However, there's a large cost associated with that, right? Both in terms of the actual logistics transporting the gold, say putting the gold on a tank and freighting it across the Atlantic Ocean, if you're a country in Europe, trying to settle with the United States, for instance. But also, it required a high degree of security, right? Gold was advantageous in that it had a lot of value density, so you only needed to secure a relatively small area to protect your wealth, but you had to guard it really, really well, right? It needs to be Fort Knox-like, if you will. It's essentially that gold is the best form of money we

Starting point is 00:11:39 ever had, but it still had technological failings in these three properties of money. And that's why we introduced gold-backed currencies. That's how we got into gold-backed currencies. And those certification functioned businesses over time, the economies of scale associated with that led to the centralization of gold custody into fewer and fewer hands, which became banks, which ultimately became the central bank. And that is the business, essentially, that the governments have monopolized and controlled throughout history. So I want to ask you, even going into the essence of this a little bit more, when you talk about the last point of the five, which is the scarcity point, which is the point that I think anybody who doesn't even understand what's happening in the

Starting point is 00:12:27 economy right now knows that there's some serious debasement happening and that there's a lot of printing taking place. Why is sound money important from that particular point of view of this debasement happening in the currency and the paper currency? Because we're not even on a gold currency paper currency anymore. We're just on a paper currency. So is there inflating that? What does that mean? Like what's the spillover effect to businesses, valuations, all that kind of stuff? So we get to these paperbacked currencies, right? which are initially introduced as a matter of convenience, frankly, for transacting in gold, which again was the free market selected money.

Starting point is 00:13:14 And what happened over time, especially with the implementation of central banking, is that those entrusted with safeguarding the custody of that gold and issuing certificates for its redemption one-to-one, right, which we now call banknotes, they over time, gave into the temptation to violate the trust placed in them. So initially, it became more fractional reserve where they may be issuing three notes for every one ounce of gold to have on deposit, maybe you got to 10 eventually.

Starting point is 00:13:45 And glossing over a lot of history, this gets us to the 1971 Nixon shock, essentially. In 1944, we'd established the Brettonwood system where the U.S. dollar would be pegged to gold. Every other currency in the world would be pegged to the dollar. So we're effectively still on a gold standard. So what this did effectively was make the Fed the central bank of the world, right? And they inevitably printed more currency than their gold reserves could justify,

Starting point is 00:14:14 which culminated in the 1971 Nixon shock of him eliminating the redeemability of gold for dollars. I actually think this came right in the wake of Germany trying to repatriate their gold after a few of the countries had already done the same. And, you know, Nixon basically said that's enough. And when that happened, this was an implicit default, right? They did not have the gold deserves to justify the currency and circulation. So they had to break the peg. And this took us away from a free market, right?

Starting point is 00:14:44 We had gold, which was a free market selected money, into a monopoly, right, an unfree market with basically unfettered ability to further compromise. the scarcity of money to benefit the politically favored few, whoever it is they select, whoever gangs choose to give this money out to, at the expense of everyone else. So it's externalizing cost of inflation onto the broader society and siphoning its gains towards those that the central bank selects, essentially. So we've moved away from this democratic free market selection process to a more tyrannical selection process through the central bank.

Starting point is 00:15:23 And this, you know, here we stand today in 2020, we're at the peak of this experiment, right? Since then, money supplies have soared, global debt to GDP is soared. There's been a number of socioeconomic consequences on fiat currency. On this topic, I would encourage listeners to go check out the website, WTF happened, 1971.com. There's a number of charts and data, like divorce rates have skyrocketed, a dickensual. convictions, suicide. Like, there's just a whole host of things you wouldn't expect to be connected to the money

Starting point is 00:16:00 that have just coincidentally surged to the negative side since 1971, which I think is super interesting. But to your point about what happens in the valuation sphere when we break this anchor to economic reality that gold gave us, right? Another way to think about this is the economy itself, the entire. purpose, even the word economy, right? It means to accomplish greater results with less efforts, which is another way of saying doing things in less time, right? So we are trading with one another so we can each specialize in our own craft and we know that we can go out into the market and redeem

Starting point is 00:16:42 anything else that we need, right? Like you can be really good at running the show. You don't need to figure out how to sew your shirts and make your hats, right? There's people out there in the market that can do that better. And so we're optimizing our own productivity through trade, right? We're exploiting the comparative advantage. And in that system, all ratios of things trading to one another are expressed in prices, right? So instead of saying this microphone costs three hats, we say this microphone costs $20, this hat costs, you know, six or seven dollars. So money is just the medium through which we're expressing these exchange ratios. But what happens when a central bank compromises the scarcity of money is they're basically corrupting the denominator of prices.

Starting point is 00:17:32 So they're corrupting the very system through which we communicate, which are prices, right? That is the incentive schema that guides human action in the marketplace. I don't need to know the reason the price of bananas went up, right? I just need to know that the price of bananas went up. I'm going to eat less or I'm going to eat some other fruit. But there might be, maybe there's a wildfire behind that, a tsunami, like, who knows? So the price system itself is what I like to call this economic telecommunication network. And when you corrupt the medium, right, when central banks start selectively doling out currency

Starting point is 00:18:09 and picking winners and losers, they're interrupting the Darwinian forces. that are in the marketplace. You know, it's fascinating. We interviewed a neuroscientist on our show a couple weeks ago. And one of the things that he was talking to us about was this idea of biological value. When your brain is effectively programming your neurons, it's doing dopamine, it's doing all these different chemicals in order to teach you how to be fearful of something, how to be happy about something so that you can navigate your environment effectively as a human

Starting point is 00:18:44 being. And I just found that so fascinating because this topic that you're getting into is if you corrupt that valuation system at its core, at its systematic level, and you see this in human beings that have psychological issues. When you get into why they're having these issues is because that biological valuation system that their brain is using in order to value different events and store that in their brain is corrupted. In my humble opinion, you're seeing this on a global scale because of the printing in the basement that you're seeing at that unit level. That's absolutely correct. We can think about this too as thinking itself is an expression of rationality, right? So we're mentally setting one thing against another. We're comparing

Starting point is 00:19:30 two possible courses of events and selecting the better of the two. So it's all about comparison, right? And that's what the pricing system is. It's comparing things. It gives us an instrument to compare things. But instead of having to look at the entirety of the world and say how many hats is a microphone cost, we can compress all of this data down into a single number. So it economizes our ability to navigate the world, essentially. But when you break the constancy of the frame of reference or the unit of measurement, which is the money, right? So now when I see the price of banana is increasing, I can't determine whether this is due to to an actual event in the world?

Starting point is 00:20:15 Did a banana farm burn down? Or did the supply of money just increase? So what it does is it introduces noise into this channel, right? So where the price signal is best conveyed in a money that has ideally zero unexpected supply change. That would be the perfect money because that would be 0% noise of unexpected inflation and pure signal, right? Yeah.

Starting point is 00:20:41 But when you start introducing supply manipulations, especially when a centralized body has total authority to manipulate the scarcity of money, you now can't tell what percentage of that price signal and what percentage of it is signal. And this leads to capital misallocation, right? People start to overbarrow. They start to implement projects that they can't feasibly finish. It shortens your time horizons and ability to be able to see into the future to perform economic planning. And it leads to all these haywire economic consequences we've seen in the

Starting point is 00:21:15 world lately, like negative oil prices, right? That was a big one. We've broken the ruler, right? You've broken the frame of reference through which economic actors perceive the world. It's Alice in Wonderland. It's crazy. Yeah. Let's take a quick break and hear from today's sponsors. All right. I want you guys to imagine spending things. three days in Oslo at the height of the summer. You've got long days of daylight, incredible food, floating saunas on the Oslo Fjord, and every conversation you have is with people who are actually shaping the future. That's what the Oslo Freedom Forum is. From June 1st through the 3rd, 2026, the Oslo Freedom Forum is entering its 18th year bringing together activists, technologists,

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Starting point is 00:25:37 That's Shopify.com slash WSB. All right. Back to the show. So, well, let's go to the really kind of the essence of the big question. What problem does Bitcoin intend to solve? That is a great question. And I wish there was just one answer. It was super simple.

Starting point is 00:25:58 You're right. There isn't one answer. My job would be a lot easier then. But we could start with where we're leading off here is inflation, right? For the first time in history, right, the best money we had historically was gold because it had the lowest and most predictable inflation rate, right? So you're sub 2% per year. People could reliably store their wealth in that medium.

Starting point is 00:26:25 And they knew with fairly good certainty, you know, barring any technological breakthrough or someone mining an asteroid, that that supply is only going to increase about 2% per year. So you knew you're only going to give up, you know, you're going to be diluted 2% a year as a gold holder, essentially. So with Bitcoin, for the first time in history, we have a money supply that's perfectly predictable and universally transparent. Everyone can see where it is today and where it's going into the future. That money supply started at zero in 2009 with the mining of the Genesis Block by Satoshi,

Starting point is 00:27:07 and it goes straight out to just under $21 million in the year 2140, right? So we have a money that has zero unexpected inflation. All of the inflation in Bitcoin is perfectly predictable. So any price signal that it conveys, as we were just talking about, would be 100% signal and 0% in ways. So Bitcoin is the first money in history that has a 0% terminal inflation rate. So what I mean by that is that there is no unexpected inflation in Bitcoin whatsoever, right? We can see the algorithmically enforced money supply.

Starting point is 00:27:48 And this, you know, by solving inflation, this is at the heart of many of the problems in the world, I would argue. people have been indoctrinated into believing that inflation is necessary for a healthy economy. I would argue that even the term itself is a bit of a euphemism, right? It sounds good. Inflation, my house is more valuable. My equities are more expensive. My wages are going up. Like, if you only think one order deep, then inflation sounds wonderful, right?

Starting point is 00:28:17 Everything is nominally more valuable every year. But what is in fact happening is it by increasing supply of money, not only are you disturbing the price signals, but you're also confiscating value away from those relying on the currency as a store of value and reallocating it to those that receive the new money first or that own assets, right, that own real estate or own financial assets. So it is, in that sense, it's a pyramid scheme. That's what fiat currency is. It's the anti-Robbenhood, right?

Starting point is 00:28:51 It's stealing from the poor and giving to the rich. and this is the core driver and tool of exacerbating wealth inequality in the world. So contrary to what Jerome Powell says when he comes on TV and says monetary policy and wealth inequality are unrelated, he is lying to you. I don't know if he understands the lie. I would like to think that he hopefully does if he runs the most important central bank in the world, but he is actively managing a scheme that steals from the poor and gives the rich.

Starting point is 00:29:22 And that's flat out the way it is. So Bitcoin, in that sense, by being the first money with a 0% terminal inflation rate, the first thing is intended to solve is inflation. It's intended to break this monopoly on money and restore the world to a free market paradigm. Talk to folks that might not be familiar with the speed and the change in the inflation rate over that long duration of time that you just mentioned. inflation is an interesting beast too because the government quantifies it with the CPI, which is a calculation that they manage the inputs for.

Starting point is 00:29:59 They've changed it before and they'll probably change it again to make sure that they always back into their target 2% or whatever it may be. But an easy way that I like to think about inflation, the most accurate way, is in rate of change terms. So if the rate of change in dollars, the supply of dollars outpaces the rate of change in say rib eye stake, then you could assume that the price of ribby stakes denominated in dollars will increase. Now, if the rate of change in dollars doesn't outpace, say the rate of production of television sets, we're getting much more

Starting point is 00:30:41 technologically sophisticated, productivity is increasing very rapidly in the hardware software space, those supplies tend to outstrip money supply growth. So we see a lot of deflation in prices in the technology sphere. So it's all about the relative change, you know, holding demand constant, clearly demand fluctuates and changes all this. It's all about the relative rates of change between the money supply and the item that you're measuring the inflation for, right? And what's really important to realize here is that, again, the common misconception that a government is stimulating the economy or adding some value when they contribute money, when they send you a $1,200 check, there is a stimulative effect. But like a drug, like a stimulant, it has a longer term negative consequence. So again, they're stealing value from the most economically vulnerable among us.

Starting point is 00:31:40 The poor, people living on fixed income, pensioners, they're confiscating value from those relying on the store value function of the fiat currency and reallocating it arbitrarily, frankly, as they see fit. And this is widening the wealth gap, right? That's what inflation does. It's creating and exacerbating the wealth disparity over time. And that's probably the most important thing that Bitcoin purports to solve. And it's a death of a thousand paper cuts.

Starting point is 00:32:09 So it's not like you're going to necessarily see it. I mean, you can just look at what's happened in the past year, roughly $6 to $7 trillion printed. It increased the base money by 20% just in the March event here in 2020. And it's still, I don't think for a lot of market participants was real obvious in their day-to-day interactions that their buying power was debased by that much. It takes time, right? It's not an instantaneous thing.

Starting point is 00:32:39 And to layer on to that, there was a much higher demand to hold currency in the wake of this crisis. Money is an insurance policy on the uncertainty of the future. So as uncertainty increases, the demand to hold money also increases. And, you know, central banks historically have printed into that false confidence. That's what we saw in Ymart, Germany. People were hoarding cash because they didn't know what was going to happen. The bank just kept printing into that supply constraint. and eventually it hyperinflated.

Starting point is 00:33:11 I think another reason that it's a little tricky to feel, like we're saying it's a death by a thousand paper cuts. So one of these liquidity shocks happened like we had in March, and you had credit that blew up. You had not necessarily the monetary units, the base units that were removed. It was the credit that was removed. And then the central bank stepped in, printed and added monetary baseline units into the system to swap that credit, swap the credit that just blew up and became impaired. They swapped it back into the system.

Starting point is 00:33:43 But where the inflation starts to materialize itself is whenever lending on top of all those new base units were added is when the inflation impacts start to manifest themselves. And so there's this delay that happens in that process of it being realized into the economy. Yeah, they're essentially monetized debt by performing that swap. And then by injecting this new money into the system, the money multiplier then goes into effect, right? Yeah. Each one of these dollars becomes leveraged 10, 50, 100 times.

Starting point is 00:34:23 And that's true. The money supply is not just dollars, it's dollars plus debt or credit. That's important to realize. Would there be any other problems that you see that Bitcoin, intends to solve beyond what we just talked about? Absolutely. Another one that's really important, and I think will be increasingly important as we move in further into the 21st century, is censorship.

Starting point is 00:34:49 Now, people commonly think that this is just bad people, buying drugs or doing whatever illicit transaction, but it's quite the opposite. We've seen it in Hong Kong recently, where there's protesters trying to get funding and the local banks will shut down the protesters, right? It's people expressing their freedom of speech are being defunded by the local government monopoly on money. And another way to think about this is, so when I hold physical gold, I have a 100% pure asset, right? There's no liability associated with that asset. It's a bearer asset. Anyone that holds it is presumed to be its rightful owner and they have full equity in that bar of gold.

Starting point is 00:35:33 Dollars in all fiat currencies, you cannot have a pure equity interest in a dollar, right? There's always the associated liability. So it's an impaired asset. These liabilities are realized in the form of currency deauthorization, like when they deauthorize the 500 rupee banknote in India, just overnight turned it off, right, as a monopolist is prone to do. these counterparty risk are realized in inflation where they're confiscating the value of it continuously. And it can also just be done in outright account closures, right?

Starting point is 00:36:07 They can shut down accounts, confiscate money, all of these things. So this inhibits the functioning of the free market. All of these represent impediments to trade. When we create blockages to trade, we're actually suppressing wealth creation. We're suppressing innovation. We're suppressing the proper allocation of capital in the free market, which gets us into another thing Bitcoin purports to solve, which are legal monopolies, right? We know from economics 101 that monopolies are bad, right?

Starting point is 00:36:42 They optimize profit for the producer at the expense of all market participants. And in the sphere of money, this is the Fed and all of the central banks have an exclusive right to counterfeit the currency, right? They can produce that money at near zero costs, spend it when it's at maximum value, and externalize all of the consequences of that onto those that are forced to use the money. So, Bitcoin, by out competing these legal monopolies, it's actually returning the world to a freer state where innovation tends to flourish, trade restrictions are lifted, wealth creation is improved. And a great historical example. of this is the 19th century period called the Gilded Age here in the United States

Starting point is 00:37:30 in La Belle Epoch abroad. And it was a period of unprecedented cultural flourishing, artistic creation, a lot of zero to one innovations, which author Safety in Amuse outlines in his book brilliantly. So that's another thing Bitcoin purports to fix. And in doing that by forcing these monopolies to compete, right? Free market competition is the process through which proper price discovery occurs, through which, as we said, innovation occurs, and through which customer preferences are listened to, right? So if you're a monopolist, you don't care what your customer thinks.

Starting point is 00:38:12 They have no choice. You're the only show in town. And so you can think of the rough example I like to give is thinking about your customer service experience at the DMV versus your customer service experience. experience at Amazon, right? This is a monopoly, the DMV, versus Amazon. It's a free market. It's become a natural monopoly over time, but it's not a legal monopoly. No, Jeff Bezos didn't have a license to monopolize digital distribution channels, right? So by defunding this mechanism, Bitcoin defunding this mechanism through which governments confiscate wealth, it actually forces

Starting point is 00:38:46 governments, so they become more accountable to the preferences of their customers. Over time, we would expect tax rates, which are today non-consensual, right? You just get a tax rate handed to you in your country. You pay 40%. This is what you get. There's no negotiation. We would expect these rates to become more consensual, more negotiable over time as jurisdictions start to compete for your citizenship.

Starting point is 00:39:12 This introduces jurisdictional arbitrage. People are doing this already, optimizing for what's called multi-flag theory. So people will actually get. citizenship in two to five places. They'll rotate their physical presence such that they can optimize their tax exposure in any one of them. If things get dicey in one jurisdiction, you've got options. So Bitcoin, I think, is contributing to all of that. And in the longer scale time frame, as we talked about earlier before the show, I see this sovereign individual thesis starting to play out where governments by losing their monopoly on money will start to

Starting point is 00:39:50 become smaller, right? There's just no way to continue funding these ineffective bureaucracies that are unaccountable to their own P&L, right? I think in Lebanon, safety makes the example that there's still a train authority in Lebanon, but there hasn't been a railroad track in Lebanon for like 30 years or something. Like, that's what a bureaucracy is. You just, who was it that said that there's nothing more permanent than a temporary government measure or something to that effect. They're not free market participants, so they're not accountable to the P&L, so they just fester into these ineffective organizations. So Bitcoin, by forcing governments to compete, will flatten bureaucratic hierarchies, which just passes value back to market participants.

Starting point is 00:40:36 So we were going to talk about this a little bit later, but I'm going to bump it up because I think it would be naturally how a person who's not intimately familiar with a lot of the arguments and counter arguments with Bitcoin, what they're telling themselves or what they're asking themselves right now is the government's never going to allow this to step in and replace fiat currencies as we know them today. So how do you respond to a person who just comes to the table with that argument? Because I know I've heard it a million times. I'm sure you've heard it a million times. How do you respond to that person? Yeah, it is, I think without a doubt, the most common arm's length way to write off Bitcoin, right? If you've just heard about it, but you haven't looked

Starting point is 00:41:19 into it, you just think, oh, clearly governments are never going to let that happen. In the U.S., we actually have Supreme Court case precedent for open source software like Bitcoin. And I would encourage listeners to go look at the PGP case study. This was in the, I think this was in the late 90s, the government was attempting to classify PGP, which is a pretty good privacy technology that was being exported abroad. They were trying to classify it as munitions, such that they could restrict its exportation, trying to classify it as a weapon, essentially, so they could control its importing and exporting. And I'll gloss over the details of the case or some back and forth, But the case took a turning point when the plaintiff, I guess the defendant actually, the one

Starting point is 00:42:11 representing PGP actually printed out the entirety of PGP's source code and presented that as physical evidence. So they said, this is PGP. How do you outlaw this? This is the whole thing, all the source code, 100% of the software that were trying to classify as a weapon or munitions is in this paper. It is speech written on this paper. And in that moment, the Supreme Court declared that PGP was protected under the First Amendment

Starting point is 00:42:40 here in the United States, which is the freedom of speech. So we have Supreme Court case precedent that open source software is protected under the most important constitutional amendment in the U.S., which is the freedom of speech. So that's first, right? You would have to overturn the first amendment to outlaw Bitcoin. And if you didn't, you'd have this irreconcilable difference in the body of the rule of law. Even if they did that, even if you overturn freedom of speech, outlaw Bitcoin, the ban itself is virtually unenforceable. Bitcoin is just this lightweight software client running all over the world.

Starting point is 00:43:21 There's no way to tell who's running it and who's not. You could try and target some of the mining operation, but we've seen this attempted in China. Miners just move, right? These little rigs are small, modular design things. You put them in a box, you ship them elsewhere, you plug them back in, you're going again. So it's a very elusive network to try and pin down, right? There is no central authority. There's no office.

Starting point is 00:43:44 There's no CEO. All of these things that governments have become very adept at zeroing in on and shutting down. Bitcoin doesn't have any of those attack vectors on itself. And there's another thing that's interesting. There's a good analogy there. And this is a great analogous question for thinking about how you would shut down Bitcoin is, how would one shut down the internet everywhere worldwide forever, right? Like you can censor inputs and outputs in your own little jurisdiction as countries

Starting point is 00:44:17 tend to do, but that is not enough to stop Bitcoin, right? You would have to literally shut the whole thing down. And so long as even one computer with a node, survives, then the whole thing replicates itself again globally. So it's very anti-fragile in that sense, right? There's no single attack point, and it can be the entirety of Bitcoin is represented on every piece of node software in the world. What do you say to the person that says, well, the government is just going to go after

Starting point is 00:44:50 the exchanges. They're going to shut down the exchanges. And although it can continue to exist, it's just going to snuff out the flame that exists that's there? We have a good precedent of this in China. China has actually done this a number of times. They've shut down exchanges. One interesting side effect of this is that it actually restricted the selling of Bitcoin

Starting point is 00:45:15 in China, which if you restrict the selling, people are still buying globally, the price increased. And the price of Bitcoin increases, the network becomes more secure. It draws in more participants. So it didn't really have a consequence. effect on Bitcoin itself. But you're absolutely right. Governments can target centralized exchanges and shut them down. This encourages, jumping back to the jurisdictional arbitrage play, if you're a government that shuts down exchanges, you've actually increased the incentive

Starting point is 00:45:46 for other governments to then pick up that business, right? Because these are taxpaying entities. So there is an incentive to want to play friendly with Bitcoin. And if you look at what happened with the internet, the U.S. took this do not harm approach, right? Just let the free market experiment figure itself out and see what happens. And we've had an unprecedented economic boom in the wake of that. So I think governments too don't want to miss the next big thing. And, you know, frankly, I think every day that passes, Bitcoin has proven itself more and more as the next big thing on the digital landscape. You know, when I talked with Caitlin Long and I was asking her a pretty similar question to what I was asking you. Her response was, you know, Preston, I'm dealing with this

Starting point is 00:46:33 every single day, trying to stand up her Avanti Bank and all that. She says, everything that I'm seeing from a legal standpoint and from the government stepping in and potentially stopping all of this is the exact opposite. She says, I'm seeing people, you know, going out of their way in order to be able to capture where this is all going in state law specifically. And I think it's really interesting there, which she's seeing out in Wyoming, which is they're really trying to be the Delaware of attracting more business into the state through Bitcoin and other cryptocurrencies, but they're laying all the foundation and all the legal framework for that to be the keystone of states to be able to do this. Yeah, I think it's a great point.

Starting point is 00:47:22 And it is an indication of how Bitcoin actually, I mean, it emerged into the world. It bootstrapped itself by incentivizing others to adopt it and use it, right? And this, it plays out at every level, plays out individual level, the corporate level, and even the nation state level, such that you're more economically harmed by trying to ignore it or resist it than you are just adopting it and holding it. So it reshapes people's. The analogy I like to give here is money actually reshapes people's perception on the world. It reshapes the way we see the world. The table that this laptop is resting on right now that I'm using to do this show with you

Starting point is 00:48:07 is a tool to me, right? It's providing a service to me. If I took a $100 bill and I gave it to someone and told them to jump over this table, it would just as quickly become an obstacle to that guy, right? So money is actually reshaping the way we see the world. And I think with Bitcoin, you can resist it and fight it and all these other things. But as you start to see that a lot of these attack vectors are futile, that you become just more willing to just hold it. It's such an energy efficient strategy to just hold some as even an insurance policy in case it catches on.

Starting point is 00:48:44 And that realization is dawning on more and more people and organizations. and even governmental entities by the day. So it's interesting how it reshapes. You would think that a central bank has a huge incentive, for instance, to resist Bitcoin, right? It's an existential threat to the central banking business model. But what is their appropriate response? You would think it would be to attack or try to shut it down.

Starting point is 00:49:11 But when you see that these vectors don't necessarily work, what's your next best bet? It's to hold some as an insurance policy, right? If I have a 0.1% hypothesis that this thing might play out and my business model is done, then I need to hold 0.1% of my assets in Bitcoin as a perfect hedge against the success. It's the same as a company that has a competitor that's just kicking their butt. And so then they just start buying some of their publicly traded shares and stacking them on their own balance sheet. I mean, if I can't beat them, I got to join them or start to own them somehow.

Starting point is 00:49:46 So you're absolutely right. You know, companies are aqua hire and acquire their competitors all the time. The difference with Bitcoin is it, no matter how much you acquire, you can't change it, right? It's just this perfectly scarce money that no one can really do anything about other than make it more valuable, right? By acquiring it, you're actually increasing its market capitalization. Let's take a quick break and hear from today's sponsors. No, it's not your imagination. Risk and regulation are ramping up.

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Starting point is 00:53:42 How can this not be debased? How can't somebody hack into this and debase it, add more units? Talk to us how it's actually a scarce digital unit. How is that being done? What I think is a great way to answer this question is actually to go back to how we started the conversation, which are the first principles of money, right? What are those five key properties that lead to the voluntary adoption of a money by market participants, which again are divisibility, durability, recognizability, portability, scarcity,

Starting point is 00:54:19 right? So Bitcoin, by being this purely informational, pure digital money, each Bitcoin is divisible into 100 million units called SATs, that the code could be updated. if that was ever a restraint on economic activity, the code can be easily updated to increase that divisibility further. So Bitcoin essentially exhibits infinite divisibility, right? It's perfected the monetary property of divisibility. Because any additional units you add to the right of the decimal point does not debase the total number. So we still got 21 million bitcoins, right? That's right.

Starting point is 00:55:00 But if we want to take the decimal point and say instead of 10 times or move it out eight units to the right that we could divide it by based on where the protocol is at now, if we want to make it nine or 10 or 11 units to the right, everyone who's still participating in that network of 21 million coins, still there's 21 million coins. You're just able to divide more. Yeah. Easy analogy. It's a stock split, right? Yeah. You had one share. Now everyone had one share.

Starting point is 00:55:26 Now everyone has 10 shares. You can increase the divisibility. I love this. This actually reminds me of a great professor I had in college. I was in the master's program for accounting. We're doing this long, complicated calculation to get to an interest rate adjustment amount. And the final answer, I said, hey, you know, professor, that was really complicated and the

Starting point is 00:55:44 final amount is immaterial to the organization. We're analyzing. He goes, Robert, I'm going to tell you something that one of my favorite professors told me. He goes, you see that decimal point there? He goes, go ahead and add as many zeros to the right as your ego desires. Second principles apply. So, Bitcoin's the same, right? You can divide as much as necessary.

Starting point is 00:56:05 On the durability property, Bitcoin, again, it's information that is stored in a distributed fashion, right? So everyone that's running Bitcoin software has a complete copy of every transaction across all history of all time. So you could eliminate 99.99% of all Bitcoin nodes on Earth, and it would still exist. The entire network can be replicated from one node, right? So it's perfected at durability. But a good analogy here is something like the Bible, right?

Starting point is 00:56:41 It's just information technically. It's just words on a page. But it's been so distributed over space and time that no one person can go in and change the Bible, right? You can't change the wording. It's everywhere and nowhere. It's kind of the rough analogy. So in that way, information stored in a distributed fashion exhibits perfect durability. And that's why books like the Bible have outlasted empires, even. On the portability front, clearly, Bitcoin's pure information, it can be moved at the speed of light. Can't get much faster than that. Also, because it's pure information, you can custody it in these ultra-high

Starting point is 00:57:21 security custody schemes like multi-signature wallets, more collaborative custody. So you can take the private key that represents the bearer asset that is Bitcoin and you can chop it into a lot of pieces and put it in different places, give it to different people, you can encode it in different ways. So it just opens up this whole universe of custody arrangements that we're not possible with any physical money. In terms of recognizability, Bitcoin cannot be counterfeit, right? Everyone's node, you can think of it like an army of computers where every computer is checking every other computers work, right, to make sure that they always honor the common rule set, which is no inflation, no counterfeiting, 21 million supply cap. So it's the most perfectly resistant money

Starting point is 00:58:06 to counterfeiting we've ever had. It's just impossible to counterfeit it. And then finally, it exhibits a property that was not possible with any physical form of money, which is absolute scarcity. And as I've written about in a lot of my work, I say that this is a one-time discovery, right? Because money is this single-purpose tool, right? It's just useful for moving value, communicating value across time and space. And the market tends to zero in on the one with the highest liquidity, right? That's what we saw with gold, right? The entire globe settled on gold as the best monetary technology because it had the highest degree of scarcity of the monetary metals. So for the same economic reasons, we only had one analog gold, it's very likely that the market

Starting point is 00:58:54 will zero in on only one digital gold, which is a race that Bitcoin has already run. And by being digital, it enables the property of absolute scarcity, because anything physical in the world is just a product of our time necessary to produce it, right? If we could flip a switch and make everyone in the world go mine gold today, the supply of gold would surge, right? But with Bitcoin, it has this dynamic mechanism called the difficulty adjustment, which we can talk more about in a minute, that acts as like an ever-receasing horizon or something.

Starting point is 00:59:29 The more capital and operational expenditure, because it's not people mining Bitcoin, it's actually computers, the more energy and expenditure directed towards Bitcoin mining, the harder it becomes to mine, such that it adheres perfectly to that fixed and diminishing supply schedule we laid out earlier. Started at zero, goes to $21 million in the year 2140. And all of this is maintained by the mining network, right, which is contributing that energy, trying to solve that math problem. So they're racing to solve the next block, essentially, which is just solving a math problem to close a block of transactions and receive a reward of Bitcoin. So it's kind of like this global lottery system, wherever,

Starting point is 01:00:15 Everyone's entrance fee is going to securing the monetary network itself is a way to think about it. And for those reasons, the rules are unbreakable, right? Another example I like is anyone can fork Bitcoin, start their own network, start their own coin. You and I can start pressing coin in 15 minutes, no problem. The problem is how do you get the social layer to adopt Bitcoin, right? We can fork the protocol, but how do we fork the community that's on top of it? And that's where it's very difficult. There's a lot of cost involved.

Starting point is 01:00:47 So the analogy I like is you can fork the game of chess, right, and change the rules, but nobody's going to play with you, right? These are the rules. This is how chess is played. Any changes of those rules wouldn't really benefit anyone. So it's a shelling point, right? A game theoretic focus point that's already been established, really hard to break. you know, I think Nick Carter has an incredible piece on why hire Bitcoin over the other coins that,

Starting point is 01:01:18 I mean, Bitcoin's been forked. There's everyone coming up with these different protocols and different coins associated with these different protocols. And for somebody who would be entering this space for the very first time, they would be saying, well, how do we know that it's going to continue to be treated as the best form of chess when there's so many different coins that are out there. And we'll put something into the show notes with Nick Carter's article. Do you know which one I'm referencing about? Is it the one about settlement assurances? Yes. Yes, exactly. Talk to us about that.

Starting point is 01:01:48 Love that piece. Nick is a great writer. If you're new to Bitcoin, read everything he's written. He's just a genius. So that expenditure by the mining network, it represents the security budget of Bitcoin, right? And settlement assurances means that every, the point of Nick's piece, if I'm saying it correctly, is that every block of transactions is allocated an amount of that security budget so that when you know that there have been, say, six blocks since your Bitcoin transaction, it is so deeply buried under all of this expenditure of energy that it's impossible to unwind the chain, whereas any lower currency would take hundreds or even thousands of blocks to get the same level of security.

Starting point is 01:02:39 So Bitcoin is giving you this assurance of settlement finality in the lowest amount of time by allocating the maximum amount of energy per block compared to any other currency out there. And again, is another way of saying that the market's going to zero in on one money. If I was going to try to simplify his article, which you got to read the article because it's really good. If I was going to send you $100 million, I'm going to want to do that on the B. Bitcoin blockchain opposed to Lightcoin or one of these other protocols that are centralized, right? That whole discussion is super important for people that might not understand it. But for me to be able to send that to you and have assurance that you received it and are satisfied

Starting point is 01:03:27 with the security of receiving and that somebody can't undo it or I can't undo what I sent you, Bitcoin provides the most assurance, the fastest settlement for the size of that transaction that we just conducted. Of course, somebody could fork Bitcoin and increase the security. They could do that. But now they're so far behind the network effect that's happened and how decentralized Bitcoin is at this point that many in the industry suspect that that can't even be achieved now because you're so far behind the power curve of trying. to fork that and try to make it even more secure if somebody would even try to do that. That's right. And you can fork Bitcoin with ostensibly more secure mechanisms, but you can't fork the mining network, right? It's a ruthlessly free market capitalistic system,

Starting point is 01:04:20 right? People are all competing to earn the Bitcoin, essentially. So you can't really fork a crypto asset and say that it has higher security than Bitcoin because you're not going to fork the miners providing a security budget. That's exactly right. Yeah. And another way to think about this, to speak to the network effect a bit, network effects essentially mean that each incremental user to a network increases the value of that network non-linearly or exponentially, right?

Starting point is 01:04:49 So the simple analogy is the telephone, right? You have two telephones, there's one possible connection. If you increase to five telephones on the network, all of a sudden you have 12 possible connections. If you increase to 12 telephones on the network, I think it jumps to like 69 possible connections, right? And it goes exponentially larger from there. And most people, I think, are familiar with the network effects related to something like Facebook. So Facebook is a social media tool. Everyone wants to be on that network because everyone else is already there, right? So it has this power law, self-reinforcing effect that the bigger it gets, the more desirous it is

Starting point is 01:05:26 by new market participants. Facebook is an example of a one-sided market. There is only the user, right? There's only one type of user. We can look at something like eBay or Craigslist, which exhibits a similar property, but its network effects are two-sided, right? So you have buyers and sellers.

Starting point is 01:05:47 And the more you increase the sidedness of a network effect, the more difficult it is to disrupt it. Because now you have to introduce a superior value proposition for both not only just the user, right? So say Facebook disrupted MySpace, but to disrupt an eBay or Craigslist, I have to now introduce a superior value proposition for both buyers and sellers simultaneously.

Starting point is 01:06:11 If I'm unable to do that, I'm unable to crack their network effect. And I would say that Craigslist is a pretty good example of this, right? They have a stronger monopoly position by having buyers and sellers locked up. And that's why you see their website has kind of limited innovation, right? It just hasn't needed to do a lot because they have this naturally monopolistic lock via the network effect.

Starting point is 01:06:33 When we look at Bitcoin through that lens, Bitcoin has a four-sided network effect. We have people holding Bitcoin, right? People wanting to buy and sell Bitcoin, people accepting it in trade and looking to spend it. We have the mining network. And we have the developer mine share. So where are people going to spend their time and energy creating tools? wallets, ecosystem four. So Bitcoin has this, you know, a double the sidedness of, say, a Craigslist or eBay network effect that insulates it from disruption in a way that we've never seen before.

Starting point is 01:07:11 Robert, I'm kind of curious. You have a lot of people that just look at the internet, they look at their target account was just hacked, or you name it, bank account. It was in the news that city or whoever was just hacked. And I think for the comment, in person, they hear that kind of stuff, and it almost seems like that's just part of doing business online is that you have this risk of hacks. And I can see how, especially with like my parents, for example, they'd look at this and they would say Bitcoin, like how is it not going to be hacked like everything else? Or how is a hacker not going to bring down the network? How would you respond to that? Or is there a source that somebody could read more so that they could become more

Starting point is 01:07:54 comfortable with that risk not necessarily being there? Yeah, Nick Zobo, I think, sums this up really nicely when he says that trusted third parties are security holes, right? The problem with these hacks is that we have entrusted a single party with a single security schema, a single wall, if you will, to penetrate. And then once you penetrate that wall, you've got access to whatever that entity is safeguarding, whether that be your data, credit card information, identity, whatever it may be. Bitcoin is antithetical to that. It's a decentralized security network, right?

Starting point is 01:08:38 The reason Bitcoin is unhackable, and by the way, the network today, this is in Bitcoin, still in its infancy, is already the most powerful computing network in human history. There's never been anything even close, right? It's storing well over $200 billion in market capitalization. It's had almost perfect uptime for the past 12 years of its life. The incentive to breach a target and get their customer data, right, maybe there's a few million dollars to go and sell that data on the dark web. So the honeypot itself is relatively small, just a few million bucks. Bitcoin is this perpetual honey pot, right? That's inviting hackers to try and come and crack it. The prize is over $200 billion if you could hack Bitcoin. And no one's

Starting point is 01:09:24 has been able to do it. No one can come close. And the beautiful thing about it, too, is that you can think of Bitcoin core software as this super simplistic piece of code, right? It doesn't have a lot of features, which is why the development community is very conservative. They don't add a lot of features. It's not trying to be faster, cooler, better. It's just trying to optimize for preserving the supply cap to preserve the absolute scarcity of 21 million. And by being relatively feature less, there's not much attack surface by which attackers can come in and try to exploit the code, right? Bitcoin is this super simple, paired down code that everyone can see worldwide. It's trying to hack mathematics or something, right? No one's going to hack our Hindu Arabic numeral system and add

Starting point is 01:10:13 a number between 11 and 12, right, because we're all looking at it and all of us would reject the change. Bitcoin's similar. Well, and I think it's also a key point that you're talking about something that's a protocol that everyone's choosing to participate on, all the nodes are choosing to participate this version of the code, where when we're talking about hacks of like Target, you're talking about an application that's riding on top of the internet protocol. So we're talking about a protocol. We're not talking about an application or something that needs a password to be logged into that application to be running on top of a protocol. We're talking about that fundamental protocol layer that's decentralized across all these participants that are choosing to run that

Starting point is 01:10:57 particular version. That's absolutely right. And what listeners are probably most familiar with in the protocol space are things like HTTP, TCPIP. The internet itself is built in layers of these protocols, right? So there's the transport layer, the link layer, the data layer, building all the way up to the application layer on which these centralized entities run. And the protocols themselves, once they've been favored, right, they're kind of like the foundational

Starting point is 01:11:27 elements on which everything else is built. So the market tends to zero in on one and that one protocol becomes super ossified. It means it becomes very unchangeable. It becomes very resistant to disruption because that's just the language everyone uses. Well, it's just like the HTML language. anybody who's wrote HTML code to program a website. Well, it's not the most user-friendly code to program a website in. Well, now they've got PHP that you can use, that you can use like a WordPress login that's really easy. User interface is simple. You go in there. But to get rid of that HTML, they couldn't do it because there was a network effect in place. The whole world had used it for literally years and stepping away from that being the core language that was used

Starting point is 01:12:17 was next to the year impossible at the foundational level of populating a web page into your web browser. That's right. Many people would describe this as is the quality of path dependence, which means that history has inertia effectively, right? Things that have already happened, they're very hard to change course, kind of once they become ossified or they develop a trajectory, which HTML is a great example of. And again, if we're looking at the internet as layers of these path-dependent protocols, you know, HTTP, TCP,

Starting point is 01:12:50 we can actually look at Bitcoin as being the latest layer of the internet. So whereas the internet is this stack of open source protocols, they're, you know, freely inspectable and visible to everyone that are useful for moving information around the globe without permission. I don't need permission to create a website or to write software.

Starting point is 01:13:12 It's a ruthlessly free market capitalistic environment. Bitcoin is the same thing for moving value, right? It's this open source protocol for moving value that fits right on top of the existing internet protocol suite. So in that way, again, we're back to that question of like, how do you shut down Bitcoin? Because it is the internet, right? It is everywhere and nowhere. it's a protocol that is highly ossified at this point. Again, we're a 200 billion plus market cap, 12 years of perfect operating history.

Starting point is 01:13:44 I think the perception of Bitcoin will shift more that direction. It's the Internet's money. And in that way, I think if we fast forward 15, 20 years, you and I are having this conversation again, I think Bitcoin might be considered a lot more boring than, right? Yeah. We look back 20 years, and then we're talking to people about. the internet. Like, you need a website, there's going to be smartphones and mobile apps. People just be like, what are you talking about? Why do I need any of this stuff from my business?

Starting point is 01:14:15 And then today, it's clearly, it's indispensable, right? Every business is a technology business. Bitcoin will follow a similar path in that it's going to grow to touch everything and everyone that the internet touches today. Right. And I think the internet, global internet penetration is around 5 billion people. Bitcoin's top tops 100 million, right? People estimate I think 30 to 100 million people have it globally. So it's got a lot of headroom to grow. So I've often described Bitcoin as a Trojan horse.

Starting point is 01:14:52 And the reason I like to call it a Trojan horse is because I'm of the firm opinion that it's a time fuse, that the protocol is designed in order to go through these programmatic, phases in order to allow entrenchment into the existing financial rails so that it can eventually have global mass adoption. I'm curious if you agree with that. And if you do, what do you think inside the protocol is causing that to happen? Yeah, I agree that again, And it's a money or a monetary network, rather, that's actually bootstrapping itself into existence by incentivizing users to interact with it, right? There are financial incentives to interacting with Bitcoin, whether you're mining it,

Starting point is 01:15:43 whether you're holding it, whether you're transacting it, whether you're building a business in Bitcoin, right? It actually creates these incentives for its adoption. And the genius behind this is it, and this runs countervailing to enforce. inflationary economics, where the prevailing theory is print money slowly over time to increase things in nominal value. And then when there is an economic shock of any sort or any contraction, will actually create even more currency, right, and issue it out selectively to try and stimulate the economy or support ailing businesses. Bitcoin takes an opposite tact. And it actually

Starting point is 01:16:27 it embodies the principles that caused gold to be selected on the free market. And on the scarcity property specifically, it's using its inflation, which again is perfectly predictable, to provide an incentive for miners to mine it. And that energy that miners are contributing to the network is translated into security of the network. So the more expensive Bitcoin becomes, the harder it is to try and manipulate, right? It's price and security are positively correlated. And every four years, which is something that's very unique to Bitcoin, the new Bitcoin issued per block, which is the new supply flow,

Starting point is 01:17:13 it actually contracts by 50%. So what it's doing is playing this economic game where every four years, there's a demand line and a supply line that set the price for any asset, and that includes money. every four years, it actually contracts the supply, the newly issued supply by 50%. So it's an exponential decay function for money supply growth. And if we assume that demand, even just holding demand constant, that puts upward pressure on the price, right?

Starting point is 01:17:46 So miners that we're getting, say, 12.5 Bitcoin per block pre-May 2020 are now being issued six and a quarter Bitcoin per block. And a lot of that Bitcoin that miners are creating is being sold to cover their operational expenditures, right? So it cuts that selling pressure in half, basically. Once the algorithm switches from 12-5 to 6 and a quarter, and every four years, this repeats, right? And if you look at the price action of Bitcoin historically, these huge peaks, followed by these blowoff tops and huge troughs, follow the

Starting point is 01:18:22 pattern of its halving cycles. So typically we have a halving roughly 18 months prior to a new all-time high, right? So I think the last full cycle we had the halving was June 2016, 18 months later, December 17, you had Bitcoin blow off top near 20,000, right? It retraced 84% to the $3,800 range, maybe in $3,400. And then again, having in May 2020. So 18 months after that, we would expect to see a new all-time high price sometime in late quarter four, 2021, right? Early to late quarter four. It's just leveraging very basic supply and demand economics to bootstrap itself into value, right? It becomes more valuable this way. The part of this that I find mind-blowing is if you go and you look

Starting point is 01:19:22 at the price chart, and you're looking at the top of the price chart, like the top that we saw in December of 2017, and you go back four years prior to that date, literally almost to the day, four years prior, you see the price top from the previous cycle. 1150, I think. Yeah. And if you go to the bottom, the trough of the cycle, and you go back. four years, almost to the day, you see the trough on the previous cycle. That's right.

Starting point is 01:19:59 What I think is just so mind-blowing to me is it's like you can actually see the code being exercised on the price chart. That's right. I've never seen anything. I mean, I've messed around in financial markets for multiple decades now. And I've never seen anything like that that can be so programmatic. Right. And it's right there in the source code.

Starting point is 01:20:22 That's right. It's perfect information, right? To draw another analogy from chess, we can see all of the players and all of the spaces on the board, right? So we have perfect information as to what can happen in that game. But the possibilities still are endless, right?

Starting point is 01:20:37 And it's, again, where the Keynesian or central bank approach is to add liquidity to apply quantitative easing into markets. Bitcoin is taking the exact opposite attack, and we can call these halvings actually quantitative tightening. It's restricting the new supply flow of money, which increases its price, which draws in more market participants, which makes the network more secure, which increases the profitability of mining, which draws in more miners, which makes the network even more secure, increases its demand as a store

Starting point is 01:21:13 value. And the cycle, it's just, it's a virtuous feedback loop that no one's figured out how to disrupt yet. And that's why Bitcoiners are just so incredibly bullish, right? Not only is it programmatic, but it's programmatic for the rest of history for Bitcoin, right? We know every four years the algorithm will cause this difficulty adjustment. And if the adherence to the price pattern holds, then the incentive to front run this thing becomes enormous. I've heard really superficial arguments of people say, well, if this thing just keeps going up, then it's, you're telling me that it's going to be $10 million a Bitcoin? Like, how could that possibly be a viable candidate to be used in the economy? And you know and I know that this is about the breakdown and the failure of Fiat and this

Starting point is 01:22:03 becoming the replacement. Because at a certain point, if you go back to Germany in the 1920s and you talk about the paper mark, well, yeah, you had 100 trillion dollar or 100 trillion paper marks to be equal to a one ounce of gold or whatever the crazy number ended up being. At a certain point, that measuring stick of that fiat currency that's in circulation breaks down and it holds no meaning at all because if you have an infinite supply of a fiat currency, the value of that infinite supply is zero. That's absolutely right.

Starting point is 01:22:37 And I would argue, too, that that is by design. Fiat currencies self-annihilate over time by design, right? Again, it's this mechanism for creating wealth inequality selectively. There's no equitable economic benefit to printing money whatsoever, right? It is only beneficial to those that can do it, that can monopolize its production. I would also argue that when decision makers decide to start using a Fiat currency, it's, and correct me if you disagree with this, but it's because there's a short-term interest that has to be served at the expense of the long-term interest?

Starting point is 01:23:19 100%. They're trying to paper over bad decision-making, right? They have holes in their P&L that any free market participant would be forced to deal with the consequences for. They'd be held accountable to their own actions. Fiat currency gives government an ability to confiscate from the rest of us to paper over their past mistakes. And that's what creates this bureaucratic bloat we've seen in the world.

Starting point is 01:23:44 So the question becomes, with fiat currency designed to self-enialate, right? And this is not hyperbole, a quick study of history. Every fiat currency throughout history has failed, right? The two exceptions are the U.S. dollar and the British pound, just because those are the ones operating right now. Every other fiat currency throughout history has failed. The question becomes, what's next? What replaces the U.S. dollar as the preeminent world reserve currency, right? Do we go back to gold?

Starting point is 01:24:16 Is there another superpower? Is China going to take to the throne? Or is there the possibility that like the free market we saw historically, zeroing in on this neutral apolitical settlement layer called gold, is there the possibility that this new technology that has perfected all of the properties we know of money, perfected divisibility, durability, recognizability, portability, and scarcity? We know the government's, there's no conceivable way.

Starting point is 01:24:44 that they can shut it down. There's a huge incentive for them to adopt it and front run it. Is there the possibility that the world will shift back to its free market roots and adopt digital gold as the base money for a global, digital, non-state economy? That's the bet on Bitcoin. So we're talking about the Trojan horse and how it's programmatically designed for the number to keep going up until it eventually takes over the settlement layer. And I think one of the really interesting things, and I'm curious if you would agree with this, that I feel like I've been able to uncover is that I think that Moore's law is built into the incentive structure. And the reason why I say that is when you look at the way that the miners are mining Bitcoin,

Starting point is 01:25:30 and you look at how they're the ones that are really dropping the supply into the market because they have electrical expenses that are denominated in Fiat. And so they're right at the center of this exchange between Fiat dollars and Bitcoin, because They're paid in Bitcoin and then they have their expenses that are denominated in Fiat. For now. For now, exactly. That's a really good point. And watch out whenever they aren't denominated in Fiat or they want to accept payment in

Starting point is 01:25:55 Bitcoin. But one of the things that I think is really neat is if you were a miner that started your business four years ago and you purchased brand new hardware four years ago, you had the fastest processors and you were able to compete at the lowest expense per. the amount of energy that you were consuming relative to anybody that came along before you. So let's fast forward to a miner that would step into the market today and compare it to that person from four years prior. Let's just for generic purposes, let's just say that new miner has rigs that are going four

Starting point is 01:26:30 times faster at probably a very comparable price to what the person paid four years before. So when the protocol goes through these supply shocks, where 50% of the reward, that's being dropped into the market for successfully mining a block is cut in half. That person who has just purchased new hardware is moving four times faster at the same cost as the person from four years earlier, and they're able to withstand that shock of not capturing as many coins as they were in the previous four-year cycle. And so if I was going to equate this to gold mining, because I always like to use gold mining because it's so easy to kind of understand what's happening when you picture it in that lens.

Starting point is 01:27:18 Robert, if you started a gold mining business four years ago, and let's say you've got a hundred guys on your staff that are out there digging for the gold, and I come along and I start my own gold mining business today, I only need 25 to basically do the same amount of work, the same capture that your hundred guys are doing. And so when we both, we both, you know, both wake up the next day and we're literally capturing half as much gold as we were the day before because of this the four-year having cycle that happens or the quantitative tightening the way you described it. I'm able to withstand that shock to how much my 25 guys are mining versus the hundred that

Starting point is 01:28:03 you still have to employ with the tools that you armed them with when they started the job four years ago. And so when you look at that incentive structure and you look at how more, you look at how more Moore's Law is built into this whole incentive structure, I think what it does is it demonstrates to you why the network doesn't have these massive shocks and these issues when this event, this big giant four-year-having event where literally half the reward flow is cut in half. The network is able to withstand it. And so like for you, with your hundred guys, you might say, all right, boys, don't come back

Starting point is 01:28:39 for the next three months. We're just going to shut down operations. I can't afford to pay you, but I can bring you back online really easy because you're just a mining rig, right, in the way the protocol works. And so when the price does start to run because there's not as much supply being dropped into the market, that's why the price runs. It's a shock due supply. The price starts to run and you're saying, all right, well, the price of what we can sell this under the market for is a lot higher than whenever I told you to take a hike three months ago. So now maybe not all hundred of you come back. I'm going to bring 50 of you back and let's start mining this again.

Starting point is 01:29:14 And as the price continues to run, you can still get back into the game. You're not nearly as profitable, but you do eventually get back into the game like everybody else. And so those rigs come back online when the price starts going up. It's just fascinating to me how all these incentives have been built into this thing. And then the time fuse to it, the Trojan horse piece to it, of how it's allowing further and further entrenchment into the existing financial rails by not trying to tighten the noose of scarcity too quickly. Yeah, I think it's a great analogy. And when you come to see gold mining, in that sense, Bitcoin is not really new, right?

Starting point is 01:29:58 Gold was energy money. Like the reason it had value in the marketplace is because the energy necessary to extract gold gave us assurance of its supply limitation or assurance of its scary. in the market. Yes. Proof of work. It's proof of work, right? It's exactly what it is.

Starting point is 01:30:16 So we're, we have proof of work, roots of money and Bitcoin's, in a lot of ways, getting us back to that. And I like your point with Moore's law, because what is happening is, again, Bitcoin is inducing miners to refresh hardware every four years, right, to remain competitive and relevant. But another interesting thing that has,

Starting point is 01:30:41 happens is that legacy hardware doesn't go to the scrapyard. No. It's rolled off to cheaper energy sources, to energy sources that are being unused, underused, or underutilized. And this is why I'm very bullish on hash rate coming to North America. I think that as energy producers wake up to the reality, which is a lot of ventures in this space right now, that they can monetize currently wasted energy, right?

Starting point is 01:31:08 Whether this is natural gas producers that flare off excess gas, whether this is, we've looked at wind energy projects that say the peak supplies at midnight. The wind's blowing super hard at midnight. They're just producing energy out the yin yang. But then peak demand for that energy is during the day. They're curtailing that energy production. It's just wasted right now. As producers wake up to the reality that you can monetize this otherwise wasted energy, you're just going to see. more and more demand for Bitcoin, right? And then something we alluded to earlier as well,

Starting point is 01:31:45 once Bitcoin has become diffused enough into society and people have realized its long-term value proposition, there's going to be more and more people that miners that are paid in Bitcoin. I think they're going to be holding more and more of their stack. And eventually, the producers that they're paying for that energy will probably start to hold them. hold some Bitcoin as well, such that that Bitcoin will never be sold into Fiat, which takes further supply off the market and creates even more upward pressure on Bitcoin supply. So again, we're back to energy money. Like Bitcoin is monetized energy, if you want to call it that.

Starting point is 01:32:25 And it's just unbelievable. Yeah, it's truly, I think the major breakthrough is when you come to see all of these enmeshed incentives and the almost inescapable game theory of Bitcoin at all sides. Like, no matter which player you are in the market, you can't ignore this thing, right? I'm reminded of a couple of quotes that I got recently. One was from Saylor and he said that Trotsky said, you may not be interested in war, but war is interested in you. You can't hide from this thing.

Starting point is 01:32:58 And it reminds me of the safety in quote where he says that history shows us that it is impossible to ignore the consequences of someone holding a money that is harder than yours. Yeah. Meaning that the most difficult to produce money wins. That's what the market says. And Bitcoin becomes exponentially more difficult to produce over time as its new supply flow into the market exponentially decays. Yeah.

Starting point is 01:33:25 And no one can escape the gravity of that, right? We're all here. Energy is always necessary for economic production. money is always necessary for economic production. Bitcoin has fused the two. So you might not be interested in Bitcoin, but Bitcoin's interested in you. And straight. Sounds like a great advertisement.

Starting point is 01:33:48 So let's say somebody shared this discussion with a family member, and the family member saying, all right, this sounds interesting, right? I'm going to buy some. But here's where I'm worried is it's just so volatile. So like, what are your thoughts on the volatility? Because it is. I mean, I've traded a lot of different things through the years. And I can honestly tell you, like the volatility on this thing is wild compared to what I think a lot of people are traditionally used to in financial markets.

Starting point is 01:34:18 So I'm kind of curious to hear some of your thoughts on volatility and how a person should think about that, how they should manage their risk associated with that. Talk to us. I'd say first to set the context is that Bitcoin. is right now the ultimate risk on asset, right? It's got the highest volatility, highest performing asset in history, but it's the ultimate risk on asset because it's competing to be the ultimate risk off asset, right? I'm talking about something harder than gold, right? Gold is historically the number one safe haven of value, the least or the most trust minimized money in the world, right? So Bitcoin's either.

Starting point is 01:35:01 zero, right? It's either nothing or it's a global reserve asset. So it's somewhere between zero and a hundred plus trillion dollars in value. And the outcome, I think the more you study it, it's pretty binary. It either does what it's going to do, all of these network effects and incentives we've elaborated on today, they either work or they don't. There's some black swan that just takes Bitcoin out completely. So to go from zero, to $100 plus trillion is a nonlinear path. You're never going to just have this street asset growth. And a core characteristic of markets is that volatility tends to be inverse to market cap, right?

Starting point is 01:35:49 Amazon's a great example of this. I think in 2000, 2001 drawdown, Amazon was down 94%, right? It has grown double digits since every year. it's had double-digit drawdowns and most of those years, and its total return since that 94% drawdown is like 40,000%. Yeah.

Starting point is 01:36:09 Right. And Amazon, too, it accomplished this historic feat by basically dominating a scarce space, which were digital distribution networks, which is essentially what Bitcoin's doing. Bitcoin's dominating

Starting point is 01:36:22 digital monetary networks, right? It's a necessarily scarce space. But I think it's a pretty apt example. And so you have to just understand that. You're getting into an asset that's 12 years old. It has a $200 billion market cap competing to have a $100,000 billion plus market cap. So the volatility comes hand in hand with the current level of asset maturity, let's say. To add to that, that is a natural function of markets, right?

Starting point is 01:36:52 Volatility is a natural function of price discovery in the marketplace. place. But volatility itself, too, just to make the point, has been super exacerbated by fiat currency supply inflation, right? We saw that in March 2020. The drawdown was faster and sharper than anything on record. Not only are markets more interconnected than ever, information is moving more quickly, but the medium itself has been so debased that each unit has such diluted value that it actually contributes to the volatility of asset prices. So I would not expect, expect, like, if you have something against volatility, Bitcoin's not for you, but any intelligent investor will tell you that the answer to volatility is position sizing.

Starting point is 01:37:36 Boom. Yes. You just change your position sizing in your portfolio, and that increases or decreases the overall volatility of your portfolio. And that's just, I mean, that's a basic investing 101. So there's no such thing as too volatile. It's too volatile for the position. It's too volatile or reduce the position.

Starting point is 01:37:53 You know, Plan B's comment, I mean, he said this probably a year ago. He said even if you had a 1% allocation to this and you had 99% of the rest of your portfolio in cash, you would have had the same performance as the S&P 500 over the last 10 years. Everyone knows the S&P 500 has gone up a lot in nominal terms, in nominal dollar terms, not in gold terms. But if you're comparing it in nominal dollar terms, the S&P 500, the NASDAQ, it's gone up. And if you had 1% allocation in the Bitcoin and the rest was just in cash, you would have matched the performance of the S&P 500, which I find fascinating.

Starting point is 01:38:36 That's right. Yeah. And at a lower volatility, I believe as well. The sharp ratio where you're comparing your return to the volatility, yeah, your sharp ratio would crush having been 100% exposed to the S&P 500. which is just through the roof. It goes back to the fundamental, you know, holy grail of investing is exactly what you're getting at right there.

Starting point is 01:38:58 When I have 30 seconds to describe Bitcoin to someone, I'd say that it is very simply, it's a non-counterparty insurance policy on the legacy technology of central banking. It's an insurance policy that becomes more valuable, the more dollars they print, right? So that's what it is. It's a true barometer for the debasement of the, legacy fiat system. And the market, again, and this is very important, I think everyone should adopt this perspective. Always assume the market is smarter than you because it is. The market's to some total of everyone's intelligence worldwide, right? You can never hope to have that much

Starting point is 01:39:38 intellects. Now, you can beat the market here and there and things that the market maybe hasn't wise up to, but on balance, the market's always more intelligent than you. So ask yourself, what is the market telling us that this insurance policy on the legacy technology of central banking is the best performing asset in human history? What's happening in the world? So one of the things that I see a lot of newbies do when they step in is they want to trade it. I think it's a function of the volatility. They want to say, oh, well, I just bought, I made a lot of money. I'm going to sell here, and then it's going to dip, and then I'll buy back in. What are your thoughts on trading versus just holding long? Because I'm a long-term holder.

Starting point is 01:40:18 I'm pretty sure you are too. What are your thoughts on some of that? I can tell you this from very painful personal experience. I've been a fund manager in this space since 2017. Our benchmark is buy and hold Bitcoin, right? We are trying to outperform buy and hold Bitcoin. That is an extremely difficult bar. I've done it. We've exceeded it at times and we've been crushed by it at times. So, and you have no idea. The fee of it being your full-time occupation, trying to figure out how to outperform this asset that anyone else can just buy and hold and not even have to think about it again, zero energy expenditure after you buy it. And that is the high watermark that you're trying to outperform.

Starting point is 01:41:04 The answer for 99.9% of humanity is to buy and hold. It just is so erratic, so volatile, so unpredictable. Unless you have some super sophisticated trading methods, and a lot of experience and some edge on the market, I think the answer is buy and hold. I think one of the challenges you got now is you have no idea who's about to enter the market. I mean, we just saw last week, Stan Druckenmiller, you know, mentioned on CNBC that he's now owning Bitcoin. We had Paul Tudor Jones. We've got large companies like Square now coming out and they're putting this on their balance sheet. You never know who it's going to be, how deep their pockets are.

Starting point is 01:41:48 how much they're trying to acquire. And on the similar side, you don't know what miner would have potentially just blown up and needs to sell their treasury because they just went bankrupt or whatever the case might be. A lot of those factors and a lot of those whales that are stepping in and stepping out of the market throughout time, I just don't know how a person can possibly think that they can time something like that and do it successfully. I completely agree. And I would add to that too, that not only is it unpredictable about what large investors are going to come into the space or what news could be positive or negative, right? You just don't know. But there's also, you know, as Hemingway said about bankruptcy, right? It's like gradually, then suddenly. Again, Bitcoin is this binary bet of either zero or it is an insurance policy on the whole thing. When it does,

Starting point is 01:42:44 enter the suddenly phase, it's going to be really strange. And if you try to time those market cycles, you're probably going to get destroyed, right? Say Bitcoin starts accelerating, runs up to a million dollars. Someone sells it at a million, thinking they're a genius. They're going to buy it back at 200,000 after it does another one of these market cycles where it draws down 85% over 18 months and does another peak. But what they don't realize may be happening in the background is the U.S. dollar could be undergoing. going an extremely inflationary or even hyperinflationary event, to where, to your point earlier, the dollar value of Bitcoin at some point will become irrelevant, right?

Starting point is 01:43:24 It will no longer be denominating prices in dollars if Bitcoin is successful. So I foresee this happening, actually, when Bitcoin gets, you know, call it north of $10 trillion, when it breaks gold's market cap, I foresee people trying to sell it at $1 to $3 million. million thinking they're going to buy it back at a new low and they're just going to get wrecked. They're going to be forced to buy it back at 10 or 20 million dollars. Yeah. So I think your best strategy, your most prudent, energy efficient strategy is to just accumulate over time, put it into your long-term savings. This is not an asset that you trade. If you have to borrow against it, do it at a very low degree, right, very small percentages of your total balance.

Starting point is 01:44:11 hopefully in an arrangement that's not marked to market too quickly, which I think most Bitcoin borrowing services market to market instantaneously. So that's tricky. Call it, say, sub 10% of your stack to be safe if you have to leverage your Bitcoin. And just accumulate. This is an accumulation game. Bitcoin represents the first absolutely scarce monetary territory in existence. So the game is to claim as much territory on that network as you can before this binary outcome plays out. All right. So, Robert, I'm kind of curious, what are some narratives that you hear on Bitcoin that you just immediately shake your head?

Starting point is 01:44:56 And why? That's a great question. There's a lot of false narratives surrounding Bitcoin out there. I think the most popular one a few years ago was that Bitcoin. is a Ponzi scheme. Fortunately, this one is mostly dried up, I think, by 2020. Most intelligent investors that have looked at Bitcoin with more than a glimpse,

Starting point is 01:45:21 have come to see clearly that it is not a Ponzi scheme of any soul. Actually, so a Ponzi scheme to define it is an investment scam that's guaranteeing a rate of return to investors with low or no risk, right? Frankly, it just preys on investor ignorance because as we all know, risk and reward are two sides of the same coin. And in that sense, I actually consider Bitcoin to be an inverse Ponzi scheme, right? Because Bitcoin offers no rate of return whatsoever, right?

Starting point is 01:45:50 It just offers credible monetary properties, as we covered earlier. And clearly, it's very high risk. It's one of those volatile assets in the marketplace. And instead of preying on investor ignorance, I think it actually encourages investor education, right? Because as we ask ourselves that question, what is money to try and get our head around Bitcoin that leads you down this elaborate rabbit hole that really touches all aspects of life. I'm happy to see that that piece of fud is drying up, right? It sort of proves the thesis that the market does zero in on truth over time.

Starting point is 01:46:27 So Bitcoin is now no longer being written off as a Ponzi scheme. And as I said, I actually think it's kind of an inverse Ponzi scheme. another one that still stands that is very popular is that Bitcoin lacks intrinsic value. I get very frustrated by this argument as well because anyone that has studied the concept of value or Austrian economics knows that all value is subjective, right? All market participants are attempting to satisfy their own wants and the wants of their customers in the marketplace. So, and wants are inherently subjective. So anything that can help contribute to the satisfaction of a want, which would be what value is based on, is necessarily

Starting point is 01:47:14 subjective. So we cannot say that any particular good or service has an intrinsic value. It is an argumentative fallacy. It's absolutely wrong. What they are attempting to say, I think actually, is that Bitcoin has no industrial use value, which is something like what gold has, right? Gold's used in electronics, it's used in dental fillings, et cetera. So the argument that's being made against Bitcoin is that because it doesn't have any industrial use value, that it cannot be money. And this is actually just wrong and actually points towards another aspect of Bitcoin's superiority as money. Because, say, the market capitalization of gold today, say it's $10 trillion.

Starting point is 01:47:57 A portion of that is demand for gold as an industrial use metal, right? Maybe it's half a trillion, maybe it's a trillion dollars. The rest of that market capitalization is the monetary premium on gold. So that is the reservation demand for gold to hold it as a store of value asset. Through that lens, we can look at the entire market capitalization of Bitcoin, seeing that it has no industrial use whatsoever, right? You can't put Bitcoin in your teeth. You can't use it to fabricate electronics. It is pure money, right?

Starting point is 01:48:29 It's pure monetary premium. So we can say to the entire 100% of Bitcoin's market capitalization is monetary premium. And I think that just speaks to its utility as money, right? It's the only pure monetary technology we've ever had. So, Robert, when somebody is listening to this, they're saying, well, how is Bitcoin actually fixing its supply? We all know there's going to be 21 million coins eventually. how is that actually being fixed?

Starting point is 01:48:58 Yeah, so as I've argued in a lot of my writing, that the monetary property of scarcity has been perfected in Bitcoin, right? Everything throughout history, the relative scarcity of anything throughout history was just a function of how much time was allocated towards its production, right? But with Bitcoin, which is really interesting, and it hinges on that difficulty adjustment component of the

Starting point is 01:49:24 algorithm. So no matter how hard we try, how much energy or time we allocate towards Bitcoin production, the difficulty of the mining puzzle or algorithm adjust such that it only issues a fixed and predictable supply of Bitcoin, consistent with that asymptotic curve towards 21 million and 2140. And this is, I argue, it's a one-time discovery, right? You cannot replicate an absolutely scarce money. And the reason behind this is it's called path dependence. And this is a bit of a complex topic, but it essentially means that history has inertia.

Starting point is 01:50:04 So the order of events which led to an outcome actually has relevance to that outcome. So one example of path dependence would be, the real simple example would be if you shower and then dry yourself off, you get a very different result if you dry yourself off and then shower, right? So the order of events matters to the outcome. A more nuanced example would be if you tried to go and campaign the world, or let's just say the United States,

Starting point is 01:50:32 to switch to a different socket of electrical outlet, right, instead of a three-prong, electrical outlet, say you wanted an eight-prong, you would have to summon, you know, 10x minimum improvement to the marketplace to get people to incur the switching cost, right? So there's been this path of development that led to us having a three-prong socket that makes it really hard to disrupt, right? It's a protocol, like an internet protocol, that everyone has already adopted and it's become ossified, right, like HTTP, TCPIP. And it gives whatever has been adopted and absorb the network effect, a resistance to disruption. And so money in that sense, right, again, it's a tool for trading value across space and time.

Starting point is 01:51:19 So it's always valued based on its liquidity, right? And because trade itself is this singular universal phenomenon, the market tends towards one money, right? That's what gold was. That's what the U.S. dollar is today. And that's what we argue Bitcoin. It's a race that's already been run by Bitcoin, right? It's an order of magnitude more liquid than anything else.

Starting point is 01:51:45 And it's got the greatest network effects for money in the crypto asset space. So any new investor that's going to come in and look to allocate a position into a monetary crypto asset will necessarily choose the deepest and most liquid option, right? And so this network effect becomes further self-reinforcing. That's what makes money a winner-take-all market, right? Because the network effect is already established and any new entrant always wants the most liquid asset in their portfolio. And then we talked earlier about the specific network effects of Bitcoin,

Starting point is 01:52:22 how they're multi-sided, that further protects it from disruption. And another way to think about this is that Bitcoin perfected at those five properties of money, right? There's no a tax surface left in the concept of money for a competitive technology to come in and disrupt it, right? How do you make anything more divisible, more durable, more portable, more portable? more recognizable or more scarce than Bitcoin, right? It's perfected these properties of money.

Starting point is 01:52:51 So there's no a tax service, if you will, for competitive crypto asset. I think it's also important to point out the importance of the full nodes. Talk to folks about that. And specifically, I would talk a little bit about the 2017 hard fork and what was learned from that process of when you get into the security and everybody being able to run a full node. That's right. I think a useful analogy for understanding nodes. So we have the miners that are contributing energy to securing and validating the ledger.

Starting point is 01:53:24 They're basically executing the protocol that is selected by the nodes. So we can think of the nodes as the market participant governance mechanism for Bitcoin. So they're choosing which protocol to operate, essentially, to run. And you can think of this is like choosing a language to speak. So if all of a sudden you decided to speak a different form of English, like no one's stopping you. You'll speak whatever form of English you want, pig Latin, whatever it may be. But if you choose to exclusively speak that language, you're going to be ostracized from the rest of the world that speaks English, right? So you're forking English, but you'd have to convince other people to go and participate with you in that language.

Starting point is 01:54:05 That speaks to the network effect as well. And in 2017, this was all somewhat theoretical until 2017, when the Bitcoin cash, fork was initiated to ostensibly increase block size to increase transactions. They wanted to drop the fees down. So they were saying, well, let's just make the block size larger and then the fees won't be so much. And all the big engineers in the space that have been in it for a while are saying, you don't want to do that because that means anybody and everybody can run a full node. That's exactly correct.

Starting point is 01:54:38 The fees on-chain Bitcoin fees piqued during the Bitcoin bull run. a group of Bitcoin holders basically decided that they wanted to fork Bitcoin so that it have larger blocks, more transaction capacity per block, such that you could lower the fees and process more transactions per block. The problem with this is that you just correctly identified is that it increases the size of the blockchain such that there are larger computing and hardware requirements to run a full node. So this actually reduces the decentralization of Bitcoin because it's more costly to run a node. And this would make it more vulnerable to coercion or corruption.

Starting point is 01:55:24 It would increase the attack surface of Bitcoin. So there was a civil war in the Bitcoin universe. We had Bitcoin split into Bitcoin Cash. And over time, we saw, like, the market proved out that Bitcoin Core were superior to Bitcoin Cash, as Bitcoin Cash has collapsed, I think 98% to Bitcoin Cash. versus Bitcoin since. And that's what's interesting about this, is if people do want to try to fork it and come up with a better mechanism,

Starting point is 01:55:51 during that fork, you get both coins. So if you had 10 Bitcoin before the fork, you're going to have 10 Bitcoin on both chains. And one of them is going to become predominant and take over based off of network effects, right? And so it's not like you lose your money there. I think that's a misnomer that a lot of people have as well. Talk to us about the Atombach type engineers when they were looking at increasing the transaction

Starting point is 01:56:19 size, because it was also about we can't do enough transactions on the blockchain. What were their arguments and what did they do to the protocol to enable more transactions, but yet protecting the security within the chain? To finish out, to your point there, it's even when Bitcoin forked, right, to add more transactions in Bitcoin Cash, your optimal strategy as a holder was still to just hold, right? Because you get allocated one-to-one, Bitcoin, Bitcoin, cash. And then you just let the market sorted out. That speaks to the competitive resiliency of Bitcoin as well, because even if someone introduces a quote-unquote superior market feature, say Bitcoin Cash would have won for whatever

Starting point is 01:57:02 reason, right, its feature had been market chosen. Your strategy is still just to hold Bitcoin, right? You just keep holding Bitcoin and all of its forks and you let the market sorted out. And this makes it very difficult to disrupt that original UTXO set. That UTXO set sort of follows whatever winner is in the marketplace. And he was a holder, you don't have to do anything. No action. Just hold. I'm not as deeply familiar with the atom back arguments, but I think that he advocated for taproot and snore signatures. I guess what I'm getting to is they enabled the second layer. They put the hooks in there for doing the second. second layer and then getting into lightning.

Starting point is 01:57:44 That's right. So there's a tradeoff, right? There's a tradeoff at the base layer to maintain its decentralization and resistance to censorship. It needs to be really secure and slow, basically. So you can't get this Visa and MasterCard level of transaction throughput and this level of censorship resistance at the base layer. So advocates like, I'm Mr. Back and others said you have to actually build at protocols at higher layers to satisfy this need for transaction throughput. And that was the introduction of things like the lighting network and liquid side chain, which lets you compromise a little bit on the trust minimization of Bitcoin, right? You have to trust the second layer protocol, but you can transact

Starting point is 01:58:31 at much higher throughputs. I think this is a really important part of the discussion because is people that are coming into this that don't necessarily understand a lot of economics or a lot of finance. This is where I think a lot of them can get sucked away and they get taken into all these different directions. Now they're quote unquote crypto investors, right? Because they're buying all these different tokens. But if you talk to people that have been in this space for 10 years since the beginning, the engineers, the people that have actually designed this since the beginning, The thing that they'll always come back to is security and a fixed number of coins. And the reason that they want to talk about the security being just paramount to pretty much

Starting point is 01:59:18 everything else is because if this becomes global money and you're conducting these transactions, these billion-dollar cross-international type transactions, if you don't have security as your number one like thing, and if you don't have a fixed pay, number of units that can't be debased, well, then what is it that you're trying to solve? Because when you go back to what we started this entire conversation out with, it was, what is money? Why are we trying to solve for sound money? And what problem exists in the world today that we're actually trying to put this in place for? And when you answer that, you're saying you've got to have just paramount security. And everybody's got to be able to enforce it

Starting point is 02:00:05 because if the power for this starts to get consolidated into just a few people's hands, they're becoming the trusted agent. But whenever anybody and everybody can run a full node and say, this is the protocol, this is the language we're all going to talk, that's the power right there. And so I would tell folks, this is the part of the conversation that I think is vital to your understanding of why the Jack Dorsey's of the world who owns Square, where one of the biggest finance applications and companies in the world is hyper-focused on one coin and it's Bitcoin.

Starting point is 02:00:40 They're not focused on the other things because the other things, I mean, you start looking at Ethereum. People ping me all the time. Preston, why don't you like Ethereum? Well, it's because you can't run a full node on Ethereum. You definitely can't do it easily. And I can only imagine how difficult it'll be in a few more years. So if you can't do that, how are you decentralizing the price? protocol at that point. And my argument is you're not. You're trusting somebody else. And if there's one thing that this entire movement is about, it's about not trusting anybody and that the whole group has the capacity to reinforce which protocol we're choosing to run.

Starting point is 02:01:19 Yeah, you had the know on the head. I mean, the ethos of Bitcoin is don't trust verify. And to date, there is only one proven decent. centralized protocol, and that is Bitcoin, right? Again, to draw on the analogy of Bitcoin being more like the Internet, right? No one can singularly manipulate the protocols that constitute the Internet, just like no one can singularly manipulate the protocol that is Bitcoin. Every other crypto asset in the universe is basically a company, I think is the easiest way to think about it, right? It's a centralized company.

Starting point is 02:01:57 Most of them have a relatively liquid token underneath them. So you can think of it as a form of liquid venture capital subjected to little, if any, due diligence. Even the second largest one, Ethereum, it has changed, right? It has changed as a result of centralized decision-making in the past, and it will do so again in the future. When it comes to money, to your point, it's all about trust minimization and, frankly, getting the politics out of money, right? That's what gold was. It was a neutral monetary protocol that no one could singularly manipulate. And that was its value proposition.

Starting point is 02:02:33 So you can think of Bitcoin as the depoliticization of money, right? And that's only happened once. So we only have true decentralization in the Bitcoin protocol for everything else. It's basically a goal, right? Ethereum wants to be decentralized ostensibly. We don't actually know. In guiding Bitcoin, right, to the point, the shelling point of Bitcoin is $21 million, right? That is the property that all market.

Starting point is 02:03:01 participants and network participants will optimize for. So that's what makes Bitcoin so interesting is that it is something beyond our control. It's man-made, but now it is no longer manipulable by man. And that's what gives us so much value, right? It's resistant to any political decision. Well, it can be manipulated, but everyone that's enforcing the protocol that's running a full no, we would have to agree that it's all in their self-interest to change it. And I think that's the part that's so important is if you want to change it for the worse, you're never going to get the buy-in from all the full node operators to do that. The only way that a full-node operator is going to want to run an update is if they collectively believe that it's going to lead to a better

Starting point is 02:03:47 version of Bitcoin, which is fascinating. There's an asymmetry in the governance, right? where you have to campaign this group and prove to them, basically, that this fork will be better for them. And then again, they're still just going to hold Bitcoin, right? They're going to hold one to one. I think a good example would be divisibility, right? Bitcoin today is divisible into 100 million Satoshi's. There's the possibility that that divisibility may one day not be enough, right? Maybe we need it to be divisible into a billion units or something.

Starting point is 02:04:19 That's one area where you could actually introduce a proposal, right, increasing the the divisibility of Bitcoin that would benefit holders. So people would probably willingly adopt that. But across all the other properties, you can't get more scarce than Bitcoin. It has a 0% terminal inflation rate. There's nothing you can do. You can argue to my piece, some people are like, what about a deflationary money that loses value every year? It doesn't work because now you've reintroduced game theory between nodes and miners jockeying for position in the protocol to figure out who benefits from that deflationary monetary policy. So there's something very special about zero. If we think again about money from both principles, it's a tool onto which

Starting point is 02:05:02 we try to map our economic time and energy, right? And time and energy from first principles, thermodynamics tells us cannot be created nor destroyed, right? It is a zero percent inflation rate as well. So Bitcoin is the first money that perfectly thermodynamically maps onto the substance it is intended to tokenize originally. And that makes it very special. I really want to talk about this next one because I've heard some economists, some folks with a very substantial reputation, throw this one around, and it's the idea that money needs to be elastic or that it needs to be able to expand.

Starting point is 02:05:42 What are your thoughts on that idea? Dufftelling off the last piece, it's a totally nonsensical argument. If we consider that money is the unit of economic measurement, that's equivalent to making the argument that we need to change the definition of a meter to build a bigger house, right? It doesn't make any sense. The purpose of any unit of measurement is its reliable fixity, right? We need to know that we all understand a meter to be a meter so that we can collaborate on the construction of this home. The same is true for the economy, right? When the unit is fluctuating in value, it is carrying less price signal.

Starting point is 02:06:23 We're introducing noise to the channel. And that's what creates a malinvestment, capital misallocation. It exacerbates the business cycle, right? It's increasing the boom and bust business cycle because entrepreneurs are being blinded by the noise in the channel, if you will. So an example, I love this example, too. This is from, I hope I'm pronouncing his name, right, Wittenstein's ruler, which is a German mathematician, I believe.

Starting point is 02:06:51 And he said that if you're using a ruler to measure a table, but you can't trust the constancy of the ruler, you don't know if you're measuring the ruler or you're measuring the table, right? You don't have a constant frame of reference to perceive the world. So it means it creates distortion and confusion. And that's what fiat currency is. It's a channel full of noise. we don't know how many U.S. dollars are in circulation.

Starting point is 02:07:19 We don't know how many are going to be in circulation. We don't even know the criteria by which they're deciding. We don't even know who's profiting from its production. So it's really bad, right? Fiat currency causes massive economic distortions. And the real simple way, that argument is so assonine. It's hard to believe because my counter argument is like, why was gold selected on the free market? Again, back to that question of what is money?

Starting point is 02:07:44 gold was chosen because of the monetary metals, it was the most inflation resistant. So what is the possible argument that we need an elastic monetary base if the free market selected the least elastic money? I like that argument. I've never heard that one there. I really like that. I mean, it makes total sense. So when we go into this world, so we're so accustomed.

Starting point is 02:08:10 And I think this is why Wall Street and many in finance have such a problem. with this. They are conditioned because our entire lives, and I would argue their parents' entire lives, have always been this debt-based world where you can go to the bank and you can borrow some money and you don't really have to have that much down. And then you can go buy this house that is way more valuable than any value you've actually created in the open marketplace to date. So how does that work in the future? When we go to a system like this, how does debt work now? Yeah, I think in general, we move back towards a world that is much less addicted to debt. Because again, when money's depreciating year over year, inflation is eroding real debt burdens.

Starting point is 02:09:02 So every, all market actors are incentivized to lever up, right? That is the optimal strategy when money is depreciating. That whole thing gets blown out when you move to a hard money system, right? money is now expected to appreciate in line with productivity growth year over year, such that prices are deflating over time. Things are becoming cheaper, which means debt burdens are actually increasing in real terms. So there's a huge disincentive to leverage in a hard money economy unless you're using it to fund a project that's expected to radically outperform, you know, general productivity growth

Starting point is 02:09:38 and pay the interest. So I think we move from a world where we at today, 350% global debt to GDP. It's going to contract massively down to probably 10 or 20%. And this too, again, by getting the noise out of the monetary channel, right, we can't trust the medium today. That's why value investing has been suffering so much. If we look at the equity market today, what do we have Zoom at 1,800 plus price to earnings ratio, right? a totally nonsensical number. No one can hold that stock today and expect that as discounted cash flows will ever justify

Starting point is 02:10:13 its original price. It's just not there. People are just betting on either the growth of Zoom or they're using these tech stocks as a store value because the store of value function of money has been totally compromised. So that's why we've had these historic highs and commercial real estate equities. Anything that can't be printed, right, has absorbed a lot of the store value function that money's intended to facilitate. So I think with Bitcoin emerging and actually becoming more and more of a denominator, if you

Starting point is 02:10:45 will, for our economic activity, it will actually reinvigorate value investing in the world because people will be able to trust the price signals that it is generating instead of the market today, which is much more driven by policy actions. And boy, oh boy, let me tell you, those discount rates are way higher than what you think they are today. Right. Anybody that understands financial valuation, that means prices go down. Yeah.

Starting point is 02:11:14 So, you know, first of all, I want you to, because I think we're going to have a lot of people that aren't intimately familiar with Bitcoin that listen to this show. Tell people who Plan B is and then talk a little bit about his model and then your thoughts on his model. Yeah. So Plan B is a pseudonymous account on Twitter. I guess he's anonymous, actually. No one knows who he actually is.

Starting point is 02:11:39 He does work for, correct me if I'm wrong, an investment bank in... I think over in Holland. No, I think he's over in Holland or something like that. He's a great guy. He's written a lot of good work, and we've communicated a lot. He's very deeply knowledgeable about Bitcoin. Got a lot of respect for him. But he became famous in the Bitcoin circles when he published his piece titled Valuing Bitcoin

Starting point is 02:12:04 through scarcity, or modeling Bitcoin through scarcity, I believe is the title. And he took the stock to flow ratio, which was elaborated in Safety and's book, the Bitcoin standard, which we talked about earlier, but just the hit again. Again, the stock to flow ratio is the inverse of the inflation rate. So one divided by the inflation rate is the stock to flow ratio. And in terms of the ratio itself, the stock is the existing supply, flow is newly created supply, usually over one year, and the higher the ratio, the harder the money. So he plotted a number of different monetary metals and Bitcoin, their logarithmic price map over their stock to flow ratios and drew a correlation between the two. And using this model, we know Bitcoin stock to flow ratio

Starting point is 02:12:56 for all time, right? Again, it's just dependent on its supply curve and quadrennial haltings. Today, Bitcoin's stock to flow ratio is approximately equal to gold. It's around 55. And every four years of the halving, it doubles. So in 2024, it will jump to about 110, which again, gold was the highest stock to flow ratio asset we've ever had. That's said differently. It was the most inflation-resistant money we've ever had. That's why it was selected as universal money. So in 2024, when Bitcoin jumps to 110, we're in uncharted territory. We've never had an asset of the stock to flow ratio twice as high as golds. And he basically mapped the price projections for Bitcoin onto that stock to flow curve.

Starting point is 02:13:43 And it projects some really big numbers. He has a couple of versions of this piece. I think his latest one peg the Bitcoin at a $28,000 USD price at its next peak, which would be late 2021, maybe mid-20202. I might be off in the timing. But this generated a lot of fervor on Bitcoin Twitter to say the least, right? People were very excited thinking, this is it. The historic correlation, you know, the R squared was like 0.96.

Starting point is 02:14:14 It was very high correlation historically. My opinion on this is that it's a model that's worked so far, right? But I would lean on the wisdom of not seem to love, who's one of my favorite authors, that puts it very clearly. He says, all models are wrong. Some are useful. Most are dangerous. So all of our models of reality, like, it's just a map, right?

Starting point is 02:14:41 We've written a map for one segment of one sequence of events, if you will. And that map could be true for a year, 10 years, 50 years, a day. You don't know how long it's going to last. So I think it's a very interesting model. I would not feel comfortable or would I recommend anyone going out and levering up with the absolute expectation that Bitcoin is going to hit 28,000 a couple of years. You know, I really like the Teleb quote. Let's just say that the model is right up to 100,000. And then it runs to 200,000 and people are saying, oh, my God, it's going to, I need to sell right here because it's going to come back to the 100,000 like the model predicted.

Starting point is 02:15:27 And let's just say it doesn't. And let's just say it keeps on running. Right. Your classification of it becoming dangerous at that point is 100% right. It can break either way, right? It can break to the upside. I would argue that in March 2020, the COVID liquidity shock, that was a break to the downside. You know, albeit temporary, maybe not relevant to the total statistical sample, but it's just a model, right?

Starting point is 02:15:54 You cannot put your full faith in a model. And to your point earlier, right, what if it hits 288,000 people sell and then it just keeps going? That's also a possibility. Because what you have to also keep in mind is this model has Bitcoin in nominal terms at what, 10 million USD by 2030, something like that? Like it's a really massive number. I will say this, the longer that price continues to adhere to the stock to flow curve,

Starting point is 02:16:23 the larger the incentive grows to front-run Bitcoin, right? Because now people are looking at this, like, when is this thing going to stop mapping correctly? And you're seeing $10 million in 2030. If it's anything less than $10 million, you have an incentive to buy. The longer it works, the more it's going to drive people to adopt Bitcoin.

Starting point is 02:16:42 So I think it's an interesting tool in that way. And then the last thing I'll say about stock inflow, like stocks and flows are a key component of understanding complex systems. They're using biology, they're using economics, they're using physics, they're used across the board. So it is something very fundamental to complex adaptive systems, is this notion of stocks and flows. And again, if we look at money as a tool for being an emblem of time and energy in the marketplace, what is the stock to flow ratio of time?

Starting point is 02:17:17 Every new year is one in a bucket of 13.8 billion years since the beginning of the union. universe. So the stock to flow ratio of time is as near to infinity and closer to every year that it can possibly be. So the money that exhibits the stock to flow ratio that best maps the near infinite stock to flow ratio of time out competes. Right. That's what gold was. And that's what we argue now Bitcoin is. Bitcoin is the first money in existence with a stock to flow ratio that does actually reach infinity when the last Bitcoin is mined in 21 40 and said differently, its inflation rate goes to 0%. So that means it serves as a perfect medium for storing your time and energy.

Starting point is 02:18:02 And in that sense, this is something really important to think about. Austrian economics, the fascinating field, it is distinctly different than Keynesian economics in that it doesn't use a lot of overly mathematicized graphs and equations to describe the economy. It actually roots its descriptions of economics in human action, right? And it's called Praxiology, which is the study of purpose-driven action in the marketplace. And there's a number of interesting things you can derive from it that it's a whole rabbit hole. I would encourage listeners to go check it out.

Starting point is 02:18:38 But in Praxiology, in Austrian economics, there's one thing that's very unique, is that there are no constants in human action. Everything is subjective, right? The one constant, I guess if you could call it that, is that a man must act, right? You can't not act. Even by not acting and just laying in bed all day, that is an action, right? You're taking an action in the lens in the marketplace. But what I think is so fascinating about Bitcoin is if for the first time in history, that number 21 million is a constant in human action.

Starting point is 02:19:13 It is a number that exists, a money supply that exists with constancy outside of the control of mankind. And I think my hypothesis is, at least, that it's actually going to cause us to rewrite the economic textbooks in a lot of ways because we now have a money that is a constant consideration in the scope of human action. And it's kind of like the old adage, you know, we have two certainties in life. You've got death and you've got taxes. Well, now we've got a third, and it's 21 million Bitcoin.

Starting point is 02:19:48 And I think it's just a total game change. Robert, this has been just so much fun. Just slowly go through each one of these questions. And when we first started recording this, we really kind of had the mission of making this accessible to as many people as possible. So I'm sure there's some folks that are listening to this. It probably wanted us to get into a much more complex conversation. But I think it's so important for people to have a tool or something that they can reference. and man, you really provided that through this interview.

Starting point is 02:20:21 I just want to turn it over to you to allow people if they want to engage with you, if they want to learn more about you, where can they find you? Yeah, I'd like first thank you, Preston. This is awesome. I think, you know, we share common mission in Bitcoin, and that's to help educate people about its significance, right? This is one of the first opportunities where your main street investor has the opportunity to front run Wall Street.

Starting point is 02:20:47 and to adopt an asset that is potentially the most disruptive asset in history. We're talking about a tool that is potentially disruptive to gold. And gold for the past 5,000 years has made the world go round. So, you know, thank you very much for giving me this platform. And I hope this has at least sparked some interesting Thanksgiving dinner conversation. To find me, I'm on Twitter, which is my handle is my last name, Breedlove 22. So that's B-R-E-D-L-O-V-E-22. On my Twitter profile, you can find links to most of my work.

Starting point is 02:21:25 I post most of my writing on Medium Blog. There's a link to that on my Twitter profile. We also just launched a YouTube channel. I think that is YouTube.com slash Robert Breedlove 22. And we might be updating that handle soon, so check my Twitter profile. And then you can also check out our website, parallaxdigital.io, P-A-R-A-L-A-X-Digital.io. And for anybody that's listening, I'm going to have this in the show notes. So all three things that Robert talked about there, the YouTube, the Twitter, and then the Parallax Digital handoff will have in the show notes.

Starting point is 02:22:01 We're also going to have the Nick Carter article that we were discussing and also Plan B's article and probably some stuff over to Safedine's website as well because we were bringing him up a few times. they're talking stock the flow. So, Robert, such a pleasure. Thank you for taking so much of your time to talk with us and explain things. It has really been a pleasure. Thank you, Preston. This is awesome. Really appreciate it. Thank you for listening to TIP. To access our show notes, courses, or forums, go to theinvestorspodcast.com. This show is for entertainment purposes only. Before making any decisions consult a professional. This show is copyrighted by the Investors Podcast Network, permissions must be granted before syndication or rebroadcasting.

We Study Billionaires - The Investor’s Podcast Network - BTC001: Bitcoin Common Misconceptions w/ Robert Breedlove (Bitcoin Podcast)

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