What Bitcoin Did - THE BITCOIN REVOLUTION w/ Pierre Rochard & Michael Goldstein

Episode Date: March 26, 2025

In this episode, I am joined by Pierre Rochard & Michael Goldstein. We discuss the Nakamoto Institute, why they believe money is a foundational pillar of civilisation, how Austrian economics helped them recognise Bitcoin’s potential so early and why everyone should hoard Bitcoin. We also get into speculative attacks, why they think Bitcoin’s incentives are designed to win, and how a state adopting Bitcoin represents a peaceful transfer of monetary power. THANKS TO OUR SPONSORS: IREN: https://www.iren.com/ RIVER: https://river.com/wbd CASA: https://casa.io/ LEDGER: https://www.ledger.com/ ANCHORWATCH: https://www.anchorwatch.com/ FOLLOW: Danny Knowles: https://x.com/_DannyKnowles or https://primal.net/danny Pierre Rochard: https://x.com/BitcoinPierre Michael Goldstein: https://x.com/bitstein

Bitcoin is heavily aligned with these sort of ideas, like I said, of federalism and subsidiarity and aligning the incentives and giving each level more capacity to exert itself against tyrannies that can form in the levels above them. What Bitcoin did is brought to you by our lead sponsor and Massive Legends, Iron, the largest Nasdaq listed Bitcoin miner using 100% renewable energy. Iron are not just powering the Bitcoin network. they also provide cutting edge computing resources for AI all backed by renewable energy. So whether you're interested in mining Bitcoin or harnessing AI compute power,

Iron is setting the standard. Visit iron.com to learn more, which is iri-en.com. Good to see you both. It was my first time meeting Michael here in Austin. Really? Yeah, that's great. We've not met before. It's funny, I thought I had met him.

It was Kurt. Yeah, you mixed me up with the camera guy, Kurt. I mean, we sound a little bit the same. Yeah. But thank you for both coming on the show. Thanks for having us. You're back. I mean, you never really went anywhere, but you're back with the Nakamoto Institute.

And you're back podcasting, which is very cool. Noted was one of my absolute favorite podcasts for a long time. So I'm glad you came back. Are you going to bring Noted back? So I think that what we could do is take what we're recording for the Nakamoto Institute and throw that into the Noted feed. Yeah, and we've, you know, we've been doing our annual episodes. Yeah.

It's just, yeah, you know, over time, you know, each of us was getting older and had, you know, different career paths and just, you know, became harder and harder to schedule things well. And so for the longest time, you know, noted, noted kind of drifted out. And with, with this, you know, now that, you know, working on the Nakamoto Institute again, trying to revitalize it, when, I wanted to do a new podcast. It was like, okay, I want to do it through the Nakamoto Institute for that. So that's where it ended up. And it, you know, it has much more of a more purely educational bent than noted, which was just kind of whatever felt right at the moment. You know, sometimes it was more technical. Sometimes it was us just, you know, bantering. But it was, it was broadly just, you know, our way of having parisocial relationships with just people who

run nodes. Well, I think there's room for both. I think you should, I think you should bring noted back more regularly. We need more Bitcoin podcasts. We do. There's not enough. Even if we have to make them all. But why did you bring the Nakamoto, well, relaunch the Nakamoto Institute now? So I'll just give you a bit of context. When I, I was telling you this the other day, Michael, but when I first got into Bitcoin in sort of 2016, 2017, I went straight down the shit coin rabbit hole. And when it got to the end of 2017, when everything was like going to shit, I remember thinking, I'm either going to give up on this thing and run away, or I'm going to try and figure out where the actual signal in the space is. And the Nakamoto Institute was where I found that. So first of all,

thank you for that. And when I kind of think back, do you know, have you watched Minority Report? You know, the precogs that are like the floating around in the milk or whatever? That's kind of how I think of you guys who started that. Because the stuff you saw, that no one else saw way back in like 2013, 2014, is pretty incredible. So let's start that. Why do you think you had such like a clear sight of what Bitcoin was going to become? I think that it's, we're both into Austrian economics. That's how we met each other.

So the Meesey Circle was a Austrian economics reading group that Michael launched at UT Austin here just down the street. And so there's that. And then combined also with speaking for myself, when I was in high school, I was installing Linux on old computers and listening to Richard Stallman lectures. So I think the combination of sound money, you know, the conclusion I'd come to was that we needed 100% reserve with gold. And that that was like the best system. and that users should be able to control the software that they use, which I thought were two completely, you know, unrelated topics in my mind. And then when Bitcoin crossed those two topics,

I immediately had this vision of this was going to get a tremendous amount of adoption. Yeah, for me, I mean, I was a computer science student when I got into Bitcoin and I've been a technical person my whole life, you know, and grew up on the internet. And the internet is full of, you know, you know, P2P, you know, peer-to-peer file sharing and stuff like that, you know, has always been a big part of the internet as long as I was growing up. So it's more just like a natural thing. You know, it's like, you know, Bain is, or yeah, you know, you were, you know, you merely adopted the internet.

I was born in it, molded by it. And so coming to find out about Austrian economics, everything that I think about Bitcoin, you know, descends from what I used to think about gold, only with a much more positive attitude because the prospect of returning into a gold standard just was not as politically feasible as getting onto a Bitcoin standard has so far seemed. politically successful in so many ways and has actual broad adoption. I don't even mean just politics in the in the state sense, but just, you know, as the polity, the people in general just actually adopting it, a little harder to get people to go buy up, you know, gold to put

in their homes or whatever. So for me, yeah, having that Austrian background as well as just like that, you know, just being born into the internet. nothing about Bitcoin of itself was was really striking. The only thing that I had to get over was understanding the scarcity aspect of Bitcoin because at first, you know, oh, it's like a Fiat money because you're just making it up. And it wasn't until, so the first time that I learned about Bitcoin, you know, I watched, I watched you go up and I watched it go down. I even downloaded the software, opened it up. Nothing was happening. I didn't know about, uh, uh, uh, What are they called? Fossets. I didn't know about Fossets at the time, so I couldn't even get my hands on any.

So it was just a completely pointless piece of software, and I uninstalled it. And only later, I learned about Bitcoin again, and I actually learned it within the context of no, there's really a way to only have $21 million. And as soon as I could kind of think of it, you know, people don't like the digital gold meme because it feels limiting and they want to look into the new. camp, I think. Yeah, but at the same time, it was like, it was what helped me. It was like, oh, it's gold through the internet. So take all of the things that you like about gold and more and put it on the internet and you have Bitcoin. It's like, I'm completely sold. And, yeah, like, almost too exuberant about the idea is like, oh, everyone's going to adopt this, like, really quick. But you were kind of right. I mean, for anyone listening, it doesn't know what the forces were. That was, like, websites you go to that give you 50 Bitcoin just for free, which is crazy to think about.

So you were into Austrian economics before Bitcoin. How did you sort of find Mises and Austrian economics? Because I assume you weren't taught that at school. No, not at all. So this was summer year between my sophomore and junior year in high school. And I was going on Wikipedia. And on the front page of Wikipedia, they had a featured article that was anarcho-capitalism.

And now with Wikipedia's politics, I don't think that they would allow that to be a featured article anymore. But back then, I guess anything went. And it was a high quality, it stood out as a high quality article. That's why they featured it. And to a young high schooler, it sounded really edgy. So I clicked on it and read it top to bottom. And at the end thought to myself, well, yep, I'm an anarcho-capitalist now. And then it linked out to mesis.org, signed up for their newsletter, started downloading MP3s onto my iPod so I could listen to their podcast.

Early podcast enjoyer here. Yes, yes. Yeah. I remember doing that, but I was listening to like Ricky Jervais or something. But what was it that clicked? What was it that was like, this is the thing for me? I think that it was because my family had moved back and forth between the United States and France. And so I had an intuitive, comparative analysis between different levels of statism.

And I, you know, thought to myself, well, less is more. I think there was that. And then when I ran into the topic, specifically with an Austrian economics of the Austrian business cycle theory and of money and banking, and that's where it really clicked for me that here were some people with, you know, what you could describe as like secret. esoteric knowledge, right, that they have an explanation for something that nobody else has an explanation for. And it's something that pervades society. People are constantly thinking and talking about it. So to me, it was like, oh, so this is, yeah, this is something I'm not supposed to know about. I definitely want to know about it. Do you think, so I've, like, nowhere near to the

level you guys have, but I've read bits of Austrian economics. And one of the things that always stands out is that the explanations for things are much more simple. Do you think that actually puts people off because it can't be that easy? Perhaps, yeah. It depends on what Austrian economics you're reading. Like, you know, obviously something like economics in one lesson by Henry Haslett, which I recommend everyone read. That's obviously going to naturally have a much more simple explanation for things in the sense that he's trying to speak to a. popular audience about these ideas. Although, you know, you can get into the literature and, you know, people, people tell me all the time, you know, the times that I've done work to try

to explain some Misesian concepts in a Bitcoin context, they prefer that to reading human action because to them, human action is not so simple at all. It's actually, it's quite dense. Okay. So I think it can depend depend on what you, you're reading, it can get very dense because you have a lot of complex factors that you're having to deal with in a purely logical fashion. You can't, you can't just, you know, run the statistical numbers on the history because in Austrian economics, you have to, theory sort of precedes history in the sense of you need a way to interpret what that data means in the first place. It doesn't, it doesn't tell the story itself. You have to, you have to know the logic of choice

so that you can understand what those numbers might mean. But that being said, the way that it is written, even when it is more complex, it is way easier to read than if you go into kind of that level of, you know, Keynesian economics and such, because they do start to, you know, abstract into some crazy mathematics and stuff. It almost, like, loses sight of the human touch, I think is one of my big critiques of that.

That's part of, the problem with the mathematics and economics is the logic can be shown in symbols. But there is this problem. It's like as you start to do that, you can forget that human element and start introducing mathematical logic that doesn't actually align with the realities of human action. But I think Rothbard had a quote of the more consistently an Austrian a writer is, the clearer his writing will be. because I think being grounded in human action sort of forces you to maintain that connection to the real world,

even if some of the critics don't understand how that's the case. But I do get that sense as well. And, you know, over time, you know, I think that Mises, for instance, is extremely clear. It can be hard to read because it's just written at a sort of... Germanic. Yeah. That is a big kind of cultural thing, just like the style of writing is very different. But once you do kind of get a sense of it, I mean, it's to me, it's like it's very clear, very straightforward. And it really helps bring alive some very rigorous logic in a really cool way. So. And when you first started getting into this, was there a moment where sort of the penny dropped and everything clicked? Between sophomore and junior year of high school, I'm a little younger than Pierre, so it was a little later. But the financial crisis had happened. And I, you know, tended to think of myself as an intelligent person.

But the financial crisis humiliated me in the sense of making me realize that economics is something I know nothing about. I don't know what these words mean. You know, I'm hearing all this stuff on the radio and on the news and such, but I don't actually, it's all Greek to me. And so, you know, I found a, you know, a friend online who called himself an anarcho-capitalist and it's like, well, he must know something about economics. It was someone else, I think, but he, you know, he sent me classics like iPentil by Leonard Reed. and then, which is, I already had a libertarian bent from, you know, going back to like middle school and such. And I didn't think of myself as a libertarian, but I had a sense of, you know, that kind of almost iconic, iconoclasm of like, you know, these sacred cows that you have about, you know, X, Y and Z things. It's like, here's why it's all, you know, bogus, whether it's, you know, gun control or, you know, you know,

whatever topic du jour. And yeah, so I had that in me, and this started to like, it coalesced into like, oh, that's actually like a whole way of looking at the world. And I think it was just a few paragraphs into I pencil that where, you know, he's describing even something as simple as a pencil, takes a whole marketplace, a whole division of labor to actually put together. And it made me, it was like, okay, I kind of get what a market is. It's like this whole of human labor, you know, human, you know, division of labor and everything

working together. And yeah, you probably don't want to mess with that. And then, you know, the next thing I was reading, I was thrown into the deep end with Murray Rothbard. And so I just went whole heart hog into that. And it, you know, it worked out well for me. But that was kind of how I got into it. And it all, you know, fit together, you know, very well.

And it's just like the world made a lot more sense as I was thinking on that. And there was a lot more sort of consistency in things. And so that greatly appealed to me. And kind of tying with the Bitcoin, like the Internet stuff, one of the first topics that I had gotten into at the time, the Mises Institute is really starting to lean into right at that time as I was getting into things. And anti-intellectual property stance based on the great work of Stefan Kinsella talking about how intellectual property as a concept is a, it's effectively, it's a legal fiction and doesn't actually match the realities of what property is. Why is that? Basically, the long story short is that when you share an idea, you still have the idea,

and so you can use it. So it's reproducible. And so because it doesn't have that scarcity aspect, so in economics, scarcity is not merely, you know, the quantity of a thing, but the rivalrousness over that thing. So it's like, you know, there's a bunch of water bottles in here, but that one is yours, and we can't both drink from it and get the, the full bottle of water. Whereas with an idea, you can share an idea as many times as you want.

It's a double spend problem of an idea. I mean, I would say that it's like it's the opposite of a problem with an idea, but it is a huge problem when it comes to money. And so that to me, the reason I think that that topic is very important is, I think it helps better explain the nature of what property is, in the first place, which is, you know, a relationship of, uh, between humans and each other and scarce resources, um, rather than, um, just kind of just merely, you know, stuff. You know, this is my stuff and this is your stuff.

It's like there's, there's sort of, uh, you know, deeper, you know, human relationships built around scarcity. And where that comes into, to Bitcoin then is kind of what you're getting at is why did I think that Bitcoin, like at first is like, well, that doesn't make sense because you know, you can just, it's just made up is because anything online, you can copy it infinitely. But so when you do introduce something that actually has a scarcity aspect to it, that is extremely novel, it's completely novel, and obviously makes it, you know, much more interesting and it like overcomes these things that had previously been fundamental issues. But now, because you have that, you can unleash the power of the internet on monetary technology.

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This is their weekly newsletter that drops every Thursday and it covers how authoritarian regimes use money as a tool for control and how people are pushing back against that using privacy tools and of course Bitcoin. It's an amazing newsletter, it's Pure Signal, and you can subscribe for free at financial freedom report.org. So I'm going to push you both to be a little less humble because back in 2012, 13, 14, when you were writing these things, there were lots of Austrian economists that didn't see this future in the same way you guys did.

Like something obviously clicked for you. Like Pierre, you were talking about the speculative attack in, was that 2013, 14? Yeah, July 2014, yeah. So try to just indulge me. Like, why did you see this? That's what I can't quite. So I had read a lot of monetary history. Also, you know, to give credit where credit is due, there were economists like Peter

Serta, for example, he had written a whole paper from an Austrian economics perspective, looking at Bitcoin and coming to, you know, the same conclusion of, hey, this is sound money. So. Sorry to interrupt. But, I mean, we basically, like, copied him in many ways. Like, we, when we had, so we had the, the me. Circle Economics Reading Group. And, you know, our first Bitcoin meeting where we're like, hey, you know, we've been kind of, we've been chattering about this Bitcoin thing. Let's, you know,

do a proper reading on it. That was January or February 2013 or something like that. His master's thesis had already been out, you know, since sometime in the previous year. And that's what we read. Like, we read that, you know, so I remember, I still remember where I was sitting, you know, on UT campus, reading that in preparation. I feel like I did more studying for the Misi Circle than I did for my actual classes. But I remember where I was sitting on campus, just like reading it and getting into it. And a lot of the ideas, he actually did a lot of great work of showing how this synthesizes with Austrian economics. And we sort of took that and ran with it.

It wasn't like we just completely, you know, came out of nowhere with these ideas or anything. I think we just had the youthful exuberance and arrogance, arrogance, radicalism, idealism, all that sort of stuff that allowed us to, you know, have the freedom to take this idea seriously, whereas there's sort of a generational thing where older people, you know, they might have trouble with the sort of technical aspects of it and don't necessarily go into that to really appreciate it. Or, you know, there's other stuff. But I'm sorry to interrupt, but I did want to point out that, you know, we were specifically

reading that. It wasn't like just that he existed before us and that was also there. It's like, we were reading from that. Yeah. Standing on the shoulders of giants. And so there was that. And then for speculative attack in particular, there was a paper written by, I think he's like an attorney is somehow affiliated with the IMF, and it was about Bitcoin and speculative attacks.

And when I read it, I thought, well, okay, he's onto something in the sense that this is how you have an acceleration of Bitcoin adoption. Because if you look at the history of monetary economics, and, for example, George Soros and the Bank of England, there's a whole story there about speculative attacks or in Asia. And so these are things that I had read about before. But when I read that IMF affiliated paper, I thought it was really interesting that when we were learning about Bitcoin, I think a lot of people's intuition is, well, what we're going to have to do is go door to door to merchants and get them to accept Bitcoin payments.

And then we will have Bitcoin adoption. And that's how this is all going to happen. I was one of those people in some sense. I mean, we can talk about this. was like, I believed in hoarding, you know, it's like everyone should be, you know, holding. I was broke anyway, so I could tell other people is like, you should totally buy some. But, you know, anytime I, you know, went out to you say, hey, do you accept Bitcoin? And, you know, of course, no one even knew what I was talking about.

But there was this feeling. It was like, yeah, this is, you have to, you know, is peer to peer. You got to go talk to these. And Pierre was seeing that and seeing like a different vision of how this would go Yeah. And so there's the, so there's that aspect of getting adoption as a medium of exchange. And then there's the aspect of, okay, adoption is a store of value, but through the financial system. And in a judo move, essentially, of borrowing the weak currency to buy the strong currency, so borrowing dollars to buy Bitcoin. And that's how in, you know, this, I call it the wider sphere of monetary economic.

but it's actually a very specialized part of monetary economics would be analyzing currency competition and how that happens in the market. But what I didn't like about the IMF affiliated paper was that it didn't really describe the mechanism of a speculative attack in a good economically sound way. And so I thought to myself, well, you know, I should actually write a piece that explains it correctly so that I can predict how Bitcoin adoption is going to happen. What do you think they missed in that piece? It really was just the actual causal mechanism of like that it was,

I'd have to go back and look at it now, but at the time I thought that not only was it very convoluted and didn't hold together, but it also missed the critical aspects of what is a, what is a speculative attack from a fundamental economic perspective and also how would a government prevent it

from happening? And so at the time I wrote that a government would prevent this from happening by raising interest rates and we're now in that environment and so we can talk about how that has slowed Bitcoin adoption as of late. Not stopped it, not reversed it, but certainly

slowed it. And then I also pointed out capital controls. And so that is is what we now call Operation 12.2.0 of trying to stop the flow of money. If I could go back and amend it, although I don't need to now, I've actually written a follow-up with Alan Farrington. Another way to defend against it, but also essentially to surrender, is to have a strategic Bitcoin reserve. So that is the kind of the third pathway that we're now exploring as a society.

Yeah, that's why I was going to bring up. When you say interest rates of slow Bitcoin adoption down, but obviously it's not slow Michael Saylor down to any large degree, and we've now got a strategic Bitcoin reserve. So what do you mean by that? So what I mean is that if you can borrow at 0% and invest at, you know, let's say that 40% Kager of Bitcoin, the people's site, that that's a wider spread than if you're borrowing at 5%. And so I think that, you know, borrowing from savings. He points out that people adopt Bitcoin kind of when they're desperate. They don't have anything else.

And so if they have an appealing nominal yield on their savings account, they're less desperate than they otherwise would be. And to me, it's like, okay, well, this is a very temporary state of affairs because inevitably what's going to happen is that the credit system is going to start having seizures and that they're going to do quantitative easing again and we'll go back to 0% interest rates inevitably. But also that it doesn't stop Bitcoin adoption in the sense that there's still a positive spread between the expected return of holding Bitcoin and the cost of financing that trade in dollar terms.

Not to mention, obviously, the fundamentals that we talk about of seizure resistance, censorship trip resistance that are also providing a baseline amount of adoption for Bitcoin. When you wrote that piece, how far out were you thinking? Like, when did you think the speculative attack might happen? Next year. My girlfriend at the time, now wife, Morgan, I told her, you know, the financial system, as we know it today, Fiat, that's all very, you know, it won't be here next year. and that in the piece I pointed out that kind of the prerequisite for this would be an amount of liquidity.

And I didn't really specify like how much liquidity would be needed. I guess, you know, in hindsight, what I really missed in pointing out that there's a tremendous amount of liquidity needed to do this is because the pesky early adopters, they step on it. So whenever Bitcoin is doing very well against the dollar, they decide that they need to sell and buy a Lambo or, you know, put their kids through college or pay off their parents' mortgage or donate to their favorite charity, contribute to the Nakamoto Institute. And so there's all of this rebalancing cell pressure from the wealth effect that absorbs this new demand. whereas if everybody had diamond hands, we could have destroyed the dollar many years ago now. I think this is such an important point because people usually, I mean, the term hoarding itself is in the economic lexicon as a pejorative towards people who are holding a cash balance because the sort of standard mainstream economic view is that if you are holding that money, it's not being put to productive use. Whereas we would argue, well, I mean, frankly, you know it's productive to someone because otherwise they wouldn't be doing it in the first place. So our job is to figure out why is it productive?

And why is it productive? It's because it is reducing uncertainty about the world because you're holding on to the most liquid good or a very liquid good so that you know this is something that you can take on future opportunities with more ease, whether it's good or bad. And so it's a sort of hedge against future uncertainty. And Bitcoin is the best of that because it is the least uncertain asset. You know how much you have, you know, it's durable, transportable, all the good stuff. But because they don't like holding cash balances, they want, you know, they want the economy to be stimulated. They want the circular flow of cash payments and stuff. They use words like hoarding to attack it.

And this is funny because when you have these. oh, geez, you'll see the whale account say it's like, these coins haven't moved since, you know, 2010. Like, what a legend and whatever. It's like, well, unless he's moving it into a better cold storage, which if it was set up in 2010, they should probably be doing so. But like, unless they're doing that, you could say, you know, oh, oh, this is like somehow good or something.

But actually, I see it is sort of selfish. It's like we could be, you know, having Bitcoin accelerate to full global adoption and end all of the monetary destructive forces in this world that does everything from just, you know, destroy capital in general to fueling socialist regimes and so on and so forth. We could be putting an end to all of that. But instead, you're deciding you'd prefer a Lambo. And so there's sort of a, you know, everyone has their individual preferences and rights and all of that. But there is a sort of selfishness to it if you think about it from some angles. I guess on the flip side of that, though, the more distributed Bitcoin gets the better for Bitcoin as well. But you could have like 5% of the total Bitcoin supply be distributed among millions of people.

and that, you know, 95% is just held by, like, one early whale or something. And so that would actually cause the value of it to, but it's all very, like, theoretical. But to me, it was, you know, working at my previous roller crack, and it was kind of funny to me when I'd hear people say that nobody spends their Bitcoin. And then I'd see, like, people selling a lot of Bitcoin to, like, yes, to acquire dollars, but not to hold the dollars to, go acquire something else. And so it was just...

But even then, I mean, even if they're just selling for dollars, you're selling your Bitcoin. Yeah, yeah. You're spending it. You're no longer having use for Bitcoin. Yeah. And that the dollars are just a utility token for payments. And so it's not like that, you know, because you're not spending it directly for goods and services that somehow it's not being spent, it really, truly is.

Yeah. I don't know if it was in the speculative. attack piece or one of the other essays you did, but you I remember there's a chart where you were saying that we were moving at that point from like the innovator stage to the early adopter phase. That seemed like you might have been getting ahead of yourself there.

Where do you think we are on that now? We talked about this on the podcast and yeah, I mean you can Well, you're the one who are using that. Listen to this podcast. That one's much higher signal. No, no. So I think I was

completely delusional in wrong. And so we are so early. And, you know, that's not a meme. So I still think that, so there's, there's kind of different ways of looking at that percentage. If you look at it of just brand recognition, we're already at 95% brand recognition. Everyone knows what Bitcoin is now. Yeah. Or they've heard the word.

Yeah. I don't know that they know what it is. In 2013, if you were going, oh, do you accept Bitcoin? The question was literally, it's like, what is Bitcoin? What do you, like, literally what is that? Whereas now you still might have someone saying is like, what is that really? But underneath it's like they're asking that because it's like they want to know about this thing that they know about. Is this crypto?

They won't get the distinction, but they've heard the word. They know that there's a digital something out there. And they know that Bitcoin exists. And that's, you know, that's obviously huge. That's the first step in the marketing funnel to getting them to, you know, stack some stats and play a part in this new economy. Yeah, I had a friend recently say, hey, I heard cryptos at $87,000. It's like, okay, that's how we're using the word. Now crypto's just Bitcoin. Okay. Maybe we need to take it back. Yeah, that would also be acceptable.

Yeah, I suppose so. Yeah. And so if we're 95% sort of brand recognition as it were. Where do you think we are on the rest of everything? Well, so then you have adoption in the sense of somebody holds an ETF or they hold an index fund that it's micro strategy, right? And so maybe let's say that's a 15 or 20 percent. But then if we go deeper into what percentage of that person's balance sheet is in Bitcoin. And if we look at everybody's balance sheets, right, what percentage of total global wealth is in Bitcoin, I still think we're at less than 1%. And then if you look at what percentage of people are running their own node and doing a multi-sig with their, you know, their hardware wallet and cold storage, you know, again, less than 0.01%. So I think that we, this is very bullish because that means that Bitcoin's

price can go up tremendous amount from here and will. It's also very humbling of, we've got a lot of educational work to do. Totally. That's why we're doing this, right? And so that's one thing you got wrong. What are the other big things that stand out, something you were like, we were way off base on that. So timing percentage. I also think that we were pretty much wrong, or at least I was overly optimistic on how dismissive people would be of alt coins. I thought, yeah.

We haven't gotten, so for people who haven't listened to our podcast, check it out. But we're going through our old Mempool posts, our blog, that, you know, all the articles that kind of made up this, this, you know, worldview of this Bitcoin worldview that we developed from about 2013 to 2015. It's all in those articles. And we're going article by article, reading through them and looking back at them with the historical context to, you know, maybe there's some things where it's like, you need a little historical context, what was going on at the time to really understand

what we were saying because times have changed. Yeah. Mems have changed. There's other stuff where it's like, you know, we, use, we use this, like, chart of like, oh, yeah, we're, we're entering the, the, you know, early adopters, innovators phase or, like, all that stuff. And then we're like, eh, this is, this is a really stale meme and it was not really good to begin with.

So we look at the stuff that we, we think was wrong. We haven't even got into the alt coin stuff. And that's something that, uh, in many ways we were, uh, more right than we could imagine. Uh, in other ways we were, uh, not, not as, uh, we were, we were, uh, like he's saying, Like two, we were dismissive, but we also assumed that there would be a more general dismissiveness. And, you know, we can get into the reasons why that might be. Was that because you just faded the idea that everyone loves to gamble and, like, people are going to go out and speculate on this stuff?

I think it was more of just expectation. It's like, we saw that it was stupid. And it was like when we look, we look, you know, all the way down to the end. We see the end of the tunnel. And at the end of all this monetary competition, Bitcoin is the thing that eats everything. up. And the universe prefers a single currency over multiple currencies because, you know, it's just like it, you know, everything converges on one eventually. Yeah, yeah. And, you know, any, any reversion from that is at some level a reversion to barter. So the universe tend towards a

single currency. Bitcoin's the best currency. So at the end, we see Bitcoin is like that. That ignores, like, that doesn't mean that in the whole process, people are not finding ways to, try to, you know, gain their way down that whole tunnel, or, you know, it doesn't even mean that everyone believes that that's going to be the end game. So you have all kinds of, you know, more, we were focused on the long term. And most people, especially the people who are interested in altcoins are focused on the short and medium term. And so they still, they still percolate. And that's just something you have to deal with. Do you think part of the reason for that is that, like, the shitcoins at the time were basically trying to be Bitcoin, but better. Whereas like the

shitcoins that came later had a whole other bunch of narratives behind them. Yeah. Well, so the first one I heard about was Lightcoin. And, you know, essentially somebody was like, hey, you're like an old boomer if you're still focused on Bitcoin, like, like coin's the future. And then I, you know, I try to understand like their perspective. Because at that time, I was not a toxic maximalist yet. I was Like, okay, all right, why is this, you know, why is this better? Well, first they were like, well, it's the silver to Bitcoin's gold. I'm like, well, Bitcoin's divisible, so you don't really need a silver. You know, it's 100 million Satoshi's.

And then second was that it had a faster block time. And so I'm like, okay, well, that's interesting. I go look and I see that, you know, the transaction finality, the equivalency is over the same amount of time. And so even if you have a faster block time, it doesn't actually give you more transaction finality. or like it doesn't help in any meaningful sense. So then, you know, when I presented these counterarguments to this person, they didn't really, you know, like it's not like I persuaded them of anything. And it didn't click for me that what was interesting about all coins was that because they were

less liquid than Bitcoin, that they could actually outperform over certain timeframes. And that that would be very appealing to a lot of people. that, you know, they felt like they had missed Bitcoin. Perhaps because, like, at the time, it was, like, so early in Bitcoin. Although, I kind of felt like I'd missed Bitcoin, you know, 2013. But in any sense, it was like that that's not something that I understood myself. And so I didn't realize how many people would, you know, find that to be an interesting aspect of all coins. That kind of gets back into the unit bias, which I think is still potential issue today.

So if that's one thing that you, you got wrong. What's the thing that stands out that you're like, we were so right? I think that the Bitcoin itself had the right set of incentives to be able to survive. Yeah. And so that was, I think, an open question at the time of how is this going to last for a decade? And we were right about it being able to last for a decade. I think we had, and I think this comes from sort of the Austrian stuff. There's always been an Austrian streak in the Bitcoin community, but I think we were among some of the first, obviously, like we said, like Peter Serta came before us, but I think we were sort of among the first cohort that was looking at it

through a very kind of hardline firm Austrian lens, as opposed to, you know, broadly speaking, people get into Bitcoin for all kinds of reasons. So you have, like, I'm in it for the tech. you know, stuff like that. And because we came at it from that perspective, we were also able to bring ideas like, you know, hoarding Bitcoins is actually a good thing. And the way that a monetary network is going to grow is through hoarding, non-spending per se. And so, you know, that was contrary to basically, you know, most people, that's why we were writing, you know, articles about that, was to to sort of combat these things. But, you know, we were, to also be clear,

it's not like we were, like, super popular guys back then. I know, like, we have a bit of a following now, but back then, you know, we were just some punk college kids. Shadding the internet. Yeah, and, you know, we were just kind of aiming, aiming at, you know, our libertarian friends and stuff like that. But because we had that and we could see things like, you know, savings being such a vital part

of the growth of a monetary network, I think that that has been a much more robust model for understanding Bitcoin. And that's why over time that became a dominant thing, we were sort of early. We just like latched on to the right thing that could withstand a lot of the different things. You've had all of these narrative battles in Bitcoin. And I think it's because every, you know, any narrative is a sort of lower resolution, explanation of the sort of capital T truth of the universe. And ours just, it had some of the right stuff that made it much more robust. Whereas if your vision of Bitcoin was purely, it's like, oh, we got it, it's peer-to-peer

cash, we have to spend without some savings component really being like a core thing, it could get very easy to find yourself down pads of, you know, wanting big block, and being more open to that, you know, and so on and so forth. So there's all kinds of narratives that fell apart. And I think that that Austrian Foundation gave a strong thing. And savings, Bitcoins as savings technology, I think, was one of these sort of key memes around that, that allowed it to be so far much more robust. And now Michael Saylor is saying that on Fox.

Isn't it funny that, like, without a typo in a drunk blog post, hoarding Bitcoin would probably be like the lexicon. Yeah. Sort of huddle. Yeah. Yeah. I guess like when we, when we,

I think the, the article that we have, uh, that especially focuses on that, I believe may have come out prior to that, um, post. Yeah.

Um, but it certainly had not become a, a meme yet. Yeah. Um, it wasn't until like, I think the, the process of that becoming the meme was you had more instances of

Bitcoin going up and then going down. And every time it was going down is like, you know, hoddle people, people have, you know, those 300, you know, Spartans, you know, huddle, you know, and that sort of just kind of baked itself into the lexicon. Even, even outside of like the Bitcoin narratives, I think that something that

we were very right about was for 12 years, we had people telling us, hey, look, it's blockchain technology, okay? Bitcoin, the currency aspect of it is a distraction. Like, this technology is applicable to supply chains and medical records, and that's what's going to transform the world. And you crazy libertarians and, you know, your digital gold is just irrelevant to this wider revolution in blockchain technology. And, you know, we have to get called idiots for 12 years while Bitcoin was going up in value. But now you get to call them idiots forever. Well, I don't want to call them idiots. I mean, I just, I, I, I, I, I, I, I, I, I, I, I, I, I, I, I want them to like actually listen to us.

Yeah. You know, to buy some Bitcoin and enjoy, yeah, the NGU. But it's something where I think for me, you know, beyond like being a libertarian, it was like, okay, yeah, we're not winning. So I understand you being skeptical of libertarian politics. But with Bitcoin, it was like, we're winning. So I don't know where this skepticism is coming from beyond. some kind of ego trip.

Yeah. Now that you say that, I think that's an incredibly important point about, you know, what was something that that stood out for us, I think, was not only it was like savings important, but you have to go one step deeper, which is like, what are you saving? It's like money.

And a lot of people, very few people were, you know, sort of just hit that, the center of that nerdy Venn diagram to think money is actually super important, if not one of the most important things. You know, so going back, we had the Misi Circle. Why did I create the Misi Circle?

There were two reasons. One was that, you know, I'm a nerd. And so when you have a sort of broader libertarian group, there's always new people coming in and you need to get those people up to speed. So it's like, oh, let's talk about the broken window fallacy. You know, it's just an important economic concept. Like, let's talk about that.

And then you move on or whatever. And then, you know, the next meeting, There's like a new person. It's like, oh, hey, you're new. So anyway, there's the thing, broken window fallacy. And it just like continues on and on. It's like, you know, being in Groundhog Day. It's just like every meeting you come to.

It's like, oh, let's like talk about the broken window fallacy again. And I really wanted to get into the deep cuts. I liked reading, you know, 900-page books, you know, by Austrian economists about, you know, in fact, like, ones that were specifically about money. I was, like, fine with reading those. and I wanted to talk to my friends about those. And so the MISC circle was the place to be able to do that. The other side of it was that, you know, if you can be, you know, libertarians,

it's a very broad group. The term can sometimes be so broad that it's practically meaningless. In terms of like, what do people even mean by liberty is, you know, a huge question that people have been pondering for, you know, thousands of years and you get kind of like a hodgepodge of people, you know, uh, coalescing around different labels. So you end up with a whole bunch of libertarians. And we found ourselves, uh, in our libertarian group. A lot of us, you just wanted to talk about the Fed. You know, it's like how bad the Fed is. I mean, I end the Fed. This is awful. Um, and others would want, you know, it's like,

hey, you know, maybe we can talk about this, this or that, you know, uh, other idea, you know, some maybe like a, you know, civil right issue or, you know, whatever. And we were just, no, we got to talk about the Fed because it's like, why do you think that's a problem? It's because the Fed has been printing money. So, you know, which also, you know, the Bitcoin fixes this kind of memeology that descends from the views that we've had for a long time that money printing is at the core of so much social woes.

So there was also this, even within these groups that we were in, to be saying, even people who also dislike the Fed, to be so zeroed in on money being so important to both the actual productive capacity of a society, but also on the converse, when you mess with it, just how destructive it can be to society and how of all the things in the world, you know, of what are the most important things to try to form, we're looking at effectively central banking, war, et cetera, et cetera. And so, and even, you know, war, there's question how much of it is fueled by central banking in particular, or at least like the nature of modern war coming from that. So even within our circles,

to be as focused on explaining to people the importance of money and the importance of money and the importance of getting it right was very unique. And so... And look down upon. Yes. Yeah. It was like, you know, we're kind of like,

okay, I guess I'm just going to go start, you know, like a side group and we'll, you know, just go on over there to talk in our corner about these things that matter. Because, you know, everything else always, you know, feels more important. And, you know, money is sort of this meta thing, right? Where it's like, you know,

even when we say Bitcoin fixes this, we don't, We don't like literally mean that like, oh, blockchain technology from Bitcoin is going to cure cancer or something. It's more about how it changed incentives. Yeah, exactly. It's a recognition that the monetary incentives are so great that if you put them on a better track, we have expectations of the rot of institutions to start to go away and for more healthy institutions to develop that actually attack these problems with.

a more, you know, rational, so to speak, way of going about it. So, yeah, I think, I think you're right that us recognizing money, and if you notice throughout the history of Bitcoin, so getting into the Bitcoin world, you get all sorts of people who it's like, you know, even in Bitcoin, oh, it's not just about money, you know, it's about these other things. And for the ones who are bitcoins, it's like, oh, it's much more than that. It's like, usually it's like what they're describing is, yeah, that's what money gives us. Money. allows us to have the coordination and such that gives us the nice, um,

kind of lofty ideals that, that you're describing. Um, but then you have the people who are anti-Bitcoin in a sense, like, you know, alt-coiners where I'm saying they're anti-Bitcoin in the sense that, hey,

uh, my thing is better than Bitcoin. You should be focused on my thing, uh, as, as being more important than Bitcoin. Um, not even just,

you know, side by side. Um, it's like, this is more important. it's like, oh, we're, we made prime coin and prime coin, uh, generates prime numbers. And that's good for this like niche, you know, mathematical, uh, you know, uh, interests that that people have. Um, and somehow that's, that's like that utility is more important than just

money itself. Or we see it in defy in general where people like, oh, they get all to all these financial games, like, look at us. We get to think about all these new ways. to play shell games with one another, without thinking about all of finance begins at savings. Savings is the original finance, where you put things away for the future to be able to finance some kind of capital production. And we're the ones who are like,

no, no, no, no, it's like, if you want all of that, you have to fix the money first. You have to be focused on the money so that when you're building financial tools, it's actually based around real capital production. So, long rant, but yeah, I think that's a very important point. And, yeah, I would, you know, I'll step out of the humility there. I think that we were very right to view money as a, basically a fundamental pillar of civilization.

And it should be taken that seriously. And Bitcoin was giving us the way to take it that seriously with actual winning in mind. It's funny that you mentioned, like, not wanting to call it. constantly, constantly talk about the broken window fallacy, because I have the same problem with the podcast where, like, I want it to be super accessible. I don't want it to be a ton of assume knowledge to come in here and listen to a show. But the same time, you can't start every show with, what is Bitcoin? What is Bitcoin? Like, so it's a really hard line to tread. But you brought a big block before. When you were writing these pieces, it was probably like at the very start of that kind of debate happening, I guess, around like 2015. Is that about right? Yeah. I mean, by time a lot of these articles were written, the real debate had not heated up. It was very, it was very, it was very, it was very, it was. was something that was in the background. You had had people talk about as like, you know, in the long run, you know, hey, maybe we're going to need to increase the box size. Or you had some people who had already taken positions of, no, actually, you know, you want the, the box to say the same for, you know, whatever, whatever reasons. But it wasn't until, I think, after these articles had

primarily been written that the debates really got heated. Got heated, yeah. So you didn't really get into that very much on? Not at the time. And I mean, there's a lot of stuff that we could have gotten into, but, you know, at the time, I think, you know, we had stronger opinions, but there was also a sense of not really knowing the full end game. There was like a, you know, it is possible that we're wrong. And so, you know, the position that I had taken as editor at the time was if we could do like a really strong, balanced kind of thing of like really getting into it. And we just didn't have the things were a little more dormant by that time. So it just, it didn't become like this, this, you know, debate center for it.

And so the editorial policy that I had was more just like, well, let's just, let's just make it ecumenical for now. and focus, you know, on other things. And, you know, I, so I was strongly in the small block camp from the beginning because when I heard the argument of, oh, well, we need to have more payments so that Bitcoin's value increases. I was like, well, that's wrong. So let's, you know, just right off the bat. And then, and then the counter argument of, well, we need nodes to be affordable so that

Bitcoin's decentralized. I was like, yeah, well, that's right. And so, you know, obviously at the time, Daniel Kraywitz was contributing articles, and he had the complete diametric opposite perspective. And so it was like, okay, well, let's keep the Nakamato Institute be like Switzerland, you know, neutral, because obviously we've got two very conflicting views from people contributing to it. And I had a debate on IRC with Gavin Andresen, and this is back in 2014, I think, or maybe 2015. Maybe early 2015, but definitely back then.

And so already at that point, this is, you know, before any kind of forks or anything like that, I just didn't buy the argument at all that this was an existential question for Bitcoin that we needed to increase the block size limit. And I still feel that way about a lot of conversations I have with people in Bitcoin where they're like, oh, if this doesn't happen, then Bitcoin fails. or if this happens, then Bitcoin fails. And I kind of run it through that like verification process of, is that actually true? Does Bitcoin actually fail, you know, in these circumstances? And it's usually just like fear mongering of somebody like trying to advance their cause by being a little exaggerating.

I think also, you know, and I was kind of somewhat more in the middle at the beginning. I wasn't as quick to Pierre to, that side. But I remember kind of, I was not impressed with the argument that the conservative way to look at things was to keep the economics the same. That's how they would say. It was like, keep the economics the same. It's like, oh, we're used to not paying fees, so therefore we shouldn't have to pay fees.

Whereas there is this, you know, changing the block size. So we never really went up against the limit back then, not much at least. So it was there. So it was like the conservative thing is just to keep kicking it down. But it was around these times that we were also only starting to really think about things like soft forks versus hard forks, which just forces you to think more about backwards compatibility and the importance of that. And yeah, anyway, it took me some more time. But, you know, I actually remember that being rather persuasive.

to me because, you know, you can always change Bitcoin theoretically, like in some style. Everyone can wake up tomorrow and decide we want to change. And if everyone goes along, you can even, you know, make sure that everyone goes along with it. Like, that's, that can't happen. But that doesn't mean you have to change now. The market gives signals and lets you know that you actually need to change. And you might also come up with creative solutions, you know, before,

that so that you don't actually have to change the technicals. And I think that's one of the things that I got from what Pierre was saying, which was like, you, one of the arguments he was making was that transaction fees are much more inelastic than people want to think. So people think that if transaction fees go up, then we just don't see any more transactions. But as that played out later on, as transaction fees really did grow, yes, like, you know, it kind of stinks to if you just wanted to move $5 worth of Bitcoin and you have to pay a $50 fee in that moment, yeah, that can be, that can stink. But the rest of the network doesn't care.

And it's still like, you know, is actually chugging along. But that also ended up inspiring. And to be clear, like some of what I'm saying is stuff that I came to to the conclusion later, not literally then it's. But, you know, this also inspired. people to come up with better solutions of how to deal with the constraints as they were. And Segwit, which allowed a lot better throughput and also obviously the basis of things like the Lightning Network. All of these allowed people, you know, other ways of dealing with this

block space than just increasing the thing. And when you start to understand backwards compatibility, it's like, actually, that matters to me a lot. In fact, in some ways, I think back, backwards compatibility might be more important than the sort of raw cost of a node. I agree. And so, yeah, but these were all things. Like, this took a long time to really either, you know, Pierre, Pierre saw that with, with that, but I'm sure he can say how his ideas developed on that over time. But, yeah, it was like that whole period.

There was a lot of, a lot of learning. And I certainly, you know, came down on the small block, the small block size. But at the time, yeah, it was, I was fine not getting into it at the time. Maybe now, I mean, we see that there's still a lot of the arguments or dispositions that people have towards these ideas that might demand a more rigorous, look at some of these topics, and maybe that's something that still needs to happen. It's not just in the past, but at the time, it just never, it never led to us doing that. And yeah, like, especially with our desire to be more of a Swiss, you know, kind of thing, until there at the end. And then at that point, I don't know, we're just more sucked into fighting on Twitter than

writing think pieces. Yeah. It's great. Like when you look back, so Daniel Kravitz wrote some amazing pieces, it's wild to me that that's something he missed. It doesn't seem like it fits with the earlier pieces that he was writing. Well, I will at least say that

some of his arguments around big blocks. He was unique among, at least what it seemed like from not being on that team, unique among them in that he was not talking about the need for actually spending Bitcoin, and his arguments for better or worse, were about a concern about whether or not when people want to spend if the network would be

able to handle that kind of liquidity. So there were certain aspects of it that were uniquely his and actually sort of in that narrow band shared with, you know, the, small block size, but so, you know, Daniel was always a very unique thinker, so I'm also not surprised by that fact. This episode is brought to you by CASA, the leading Bitcoin self-custody solution. I've been using CASA since 2019 and I can't recommend them enough. Cassa have options for all Bitcoiners from a 2 of 3 multisig to a 3 of 5 and a private client option for absolute best in class security. Kasa also do inheritance which are very recently set up and it really couldn't be easier. My inheritance plan has gone from a vague treasure map for my wife to a rock solid

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If you want to find out more, visit Ledger.com and secure your Bitcoin today. That's LEDGER.com. I also want to tell you about cheat code. On April the 11th to the 13th, we're going to be back in Bedford and we have an amazing lineup of speakers, including XPM Liz Truss, Preston Pish, Alex Gladstein, Nat Brunel, James Lavish, and so many more. We then have a football day where we'll hopefully see Rail Bedford win the league again. Last year was amazing.

This year is going to be better, but tickets will sell out for this. So if you want to come, head over to cheatcode.combe at UK and grab a ticket. So let's bring it to today. Obviously, both of you came at this from a very libertarian perspective. We've now got the US potentially stacking Bitcoin, at least saving the Bitcoin they've got. I asked Michael this the other day, so I'll go to you first. Have you been surprised to see Bitcoiners kind of cheering on the state so much when this was always about separating money in state? So I'm not surprised at all, and I'm among them cheering on the state on this.

Because ultimately, and I mean, it was just astonishing to hear Larry Fink saying this on national television. Bitcoin exists above governments. And so when a government, when a state adopts Bitcoin, it is the ultimate act of, separating money from the state. They are bending the knee and kissing the ring. And it's a tremendous act of humility to say, okay, we're adopting this because it is greater than we are. And so I see it as the, you know, a process of almost abdication of monetary sovereignty and kind of transfer of power, peaceful, peaceful transfer of power, which should be applauded because I think that It's a completely rational move for the state to make.

You know, ultimately, if the state does not adopt Bitcoin, it's not like Bitcoin goes away. You know, they can't wish it away as much as Elizabeth Warren would like to. And so I think that it represents the ideological defeat of chartalism, which is long overdue. And it's, yeah, it's the, but it's the beginning of a process of, really formally separating money and the state and kind of transitioning the dollar away from being fiat to being something different, which I don't know exactly what it's going to end up looking like. I think ideally we get to a situation where the strategic Bitcoin Reserve has enough Bitcoin in it where it is fully backing the dollar, where one Satoshi is backed by,

or $1 is backed by one Satoshi in the reserve. And it's a one for one thing. And we have the political will to keep that to be the case so that the dollar is what I call layer 21 scaling technology. And that we have the fortitude to make it work. Whereas when we tried that with the gold standard, it didn't work. because we didn't do it 100% reserve. We did a fractional reserve. And I think that that was a huge mistake,

and we have to re-architect the financial system to be 100% reserve so we don't go back down that same road. I definitely want to ask you about fractional reserve. But do you think the government are thinking about it the same way you are? Do you think they realize what they're doing? So that's a great question. I think that there's different perspectives within the government on what this is all about.

I think that ultimately it's about if we want this future, we have to engage in the political process, which does mean meeting people where they're at, and that we can, you know, we've got many decades ahead of us. Bitcoin's not going to happen next year, unlike what I previously thought. So every year that goes by, it's like, okay, that adds another decade to, you know, what I think is how long it's going to take.

But I also take it now far more seriously of the question of what happens to everyone else, right? So if I was correct in 2013 that the dollar collapsed in 2014 and that everybody, you know, who was relying on the dollar was just out of luck and that their financial life fell apart. overnight. I think that would be hugely destructive to society. I think that that would, you know, destroy so much of what people had worked for for decades, you know, building up their nest egg or whatever it is, that we have to find a very graceful way to have hyper-bit cornization so that we're not tearing apart the fabric of society and destroying people's lives. And so I think that that's probably a, now that I have three kids myself, a more serious approach to this. And I think that if people in government are wise, that they have the same desire to have a

very graceful transition. Yeah, I remember Andreas coming on the old version of what Bitcoin did, saying it's no good if society collapse around you, you've run outside your house, like, yeah, I'm rich because you have Bitcoin and then everyone else is in ruins. Like, that's not a good outcome for this. You also wouldn't be rich because the purchasing power of Bitcoin would not be what you would want it to be. It would also be much easier to scapegoat Bitcoiners and blame them for that which has happened. Because look, of us, even though we're all poor, you're less poor because you have the thing that retained more value.

And so it's much easier to scapegoat, which is not good because in that case, in fact, you're a scapegoat. apcoating the entirely wrong institution. Bitcoin was the thing that actually gave more opportunity and gave it to everyone. And is the thing that as people come into it, it allows more, it is an upgrade. So one of the things with hyper-bitcoinization is the idea that with hyper-inflation, you have the destruction of society effectively. But with hyper-bitquinization, everyone who's at the margins adopting a better money is now able to live a better economic life. And so it's all good. And if people are viewing, and we've seen them at times, you know,

try to start pointing fingers at bit corners for this and that, you know, Elizabeth Warren's one who loves to do this. And that can distract, you know, people who, you know, we want what's best for them. I, you know, we want a better economic life for those people. That's why we advocate for Bitcoin. So if they get, if they get scammed into believing that it was Bitcoiners that caused it, instead of the people that we felt the need, like we needed Bitcoin because the central bankers were there, that's pointing fingers at the wrong people. And that's also not helping those people get back on those feet.

So it's like a double whammy for them where, you know, their monetary life has collapsed and they have a fundamentally wrong idea about why that happened, that's going to keep them from being able to reestablish themselves. So I do agree that there is a sort of prudence to, you know, wanting, wanting a more peaceful, you know, transition into a better monetary upgrade. And, you know, it's frankly, I mean, the thing is, it is sort of up to the government and the central bankers to have that prudence. But also, you know, because Bitcoin is where it's at, they're actually willing to listen to us now. I've been surprised by some of the people that I've, I've had the chance to talk with. I'm not out there, you know, talking to

tons of people. But it's like some of the people I have found myself talking to, it's like, it's it's interesting to have that opportunity and the fact that they are actually willing to listen to me especially considering not that long ago we were total idiots we were total cranks um you know that that makes me excited that you know maybe they will um you know different people you know the government is not a big monolith there are many people with many interests um that a lot of them will start to actually become bitcoinsers in a in a real way um i think um You know, some politicians around the world have already shown that. I think Bucheli, obviously, you know, different people are going to have, you know, criticisms of this or that, and there's concerns about IMF and so on and so forth. But it would be hard for me to look at him and think of him as anything but having become a big bitcoiner, you know, like a real bitcoiner and whatever choices that he's having to make. frankly, I don't know enough about the tradeoffs that he is facing as a head of state.

But I know that, and it's just wild to think, I know that when he's making those decisions, he's doing it with a sort of Bitcoin maxy attitude as part of the calculation for those tradeoffs. And I think more governments would probably be making better decisions on behalf of people if Bitcoin maximalism was a part of their trade-off calculation. And finally, the thing I'll say is that, you know, it's not like people, not everyone gets into Bitcoin because they have just, you know, grand idealism for the good of society. And this is, I just want to, you know, altruistically contribute to the common good and stuff like that.

Mostly, I think for a lot of us, you know, it's just number go up. And so you just see number go up. and you do that. And that is a, that's a gateway drug because, well, if number goes up and I want to hitch myself to this wagon, well, you do have to start understanding why is that wagon experiencing number go up in the first place? And that forces you to actually look into what it is about this. And in the end, even if that's, even if they didn't come into it for sort of altruistic reasons,

at some point, you do start to develop a sense of the real social, benefits of Bitcoin. And, you know, I'm as skeptical of the government as anyone else, but I'm not so skeptical of all individuals, literally all individuals. And I do think that we could see a real shift. And that could have a beneficial impact on, you know, how those people view Bitcoin and, you know, how Bitcoin relates to society as a whole, too. Yeah, the Buckely one's interesting. I find it a hard one to kind of balance. Because on one side, like, clearly he's a Bitcoiner. Like, he gets this.

And I know he's made the country much safer, but I can't agree with imprisoning people who haven't been committed of a crime. So, like, I find that a really tricky one to balance because obviously the tradeoff is the country is much safer now than it was however many years ago. On the scapegoating thing, Pierre, do you think it's inevitable that we'll go through a period

where Bitcoiners are scapegoated? So the ECB is certainly trying to gin that up. So they had written a paper basically saying that early adopters get rich at the expense of everyone else with Bitcoin. And then more recently, they said that Trump's embrace of Bitcoin is going to be the root of the next financial crisis, which I find hilarious because it's the ECV. So I definitely think that they want that to be the scapegoat. I think that we move further away from it being a scapegoat.

with a strategic Bitcoin reserve because basically it's saying, we the people are the early adopters. And so we the people, you know, as a whole, are the beneficiaries of Bitcoin adoption. And so there's no scapegoating possible because everybody, it's for the benefit of everyone. And so then, you know, when the ECB says, oh, the United States is getting rich at the expense of everyone else, Well, there's a rich tradition of that. And so if we look at the U.S. dollar standard, it's been a story of the United States getting rich at the expense of the rest of the world. So I think that that kind of falls flat. And it's also a moment of introspection of, well, you know, ECB was recently telling, I think the Czech central bank telling them, oh, you know, don't put any Bitcoin in your reserves.

So they have been denying themselves the opportunity to benefit from Bitcoin. And I think that gets back to that, that, you know, name recognition now. Yeah. Everybody has heard the word Bitcoin. Everybody has had the opportunity to listen to all the episodes of what Bitcoin did, to listen to all the noted episodes. We've been very transparent, open source, right? It's all out there. So I think that for somebody to say, it's not fair because I, you know,

didn't buy. It's like, well, that's your fault. That's your responsibility. And, you know, it's never too late either. We're still very early. And I also heard somebody, Josh Mandel make a very interesting point that, which we can get into that story, but he was pointing out that, you know, children are so innocent. Like, if we say that everybody buys Bitcoin at the price that they deserve, Well, Bitcoin, you know, children deserve to buy it at $0 because they're innocent, so they don't like, and they weren't born. So they didn't have the opportunity to buy sooner. And so actually, that got me thinking that, well, so that's a really strong case for, you know, saving enough Bitcoin to have an generational wealth so that you're passing. Yeah, I was going to say, that's the parent's product of them.

At $0. But also that as the state, that also introduces a responsibility, that. For all the citizens that are not born yet, who don't have the opportunity to buy Bitcoin today, it's your responsibility to be stacking sats and selling gold. Especially if you're going to take my money for Social Security Ponzi schemes, you might as well make something that actually works. If you're going to take my money, put it to the best use. And the best use is hoarding Bitcoin.

and because, you know, something, when people think about, like, taxes, sometimes they don't think about just how awful taxes are because they only think in terms of the government takes the money from you. It's like, oh, you know, that's not cool. It's my money. Yeah, that's awful. But it, of course, gets worse because they tax you along the way on everything. But then they don't take that tax money and, like, do something useful with it. They use it to make your life worse. So at least, at the very least, if you're going to take my money, you know, can I check a box somewhere on my IRS form that says, put this into the reserve?

You're like, I can't keep you from taking this money from me because you're going to put me in jail if I don't. But please put this here because I think, you know, that least has a chance of increasing the social welfare. Whereas whatever else you're going to do is almost like definitionally going to decrease social welfare. Yeah. One of the more interesting thing is happening now is that like states have taken this prerogative and doing some of themselves. I know you've been working quite closely with them in Texas. What's actually happening there? I don't fully know. Yes. So I think that the, the root of it is actually Elizabeth Warren. And that she's come up a few times. Yeah, she's come up a few times. So her activism against Bitcoin mining, after China banned Bitcoin mining, a lot of Lots of Bitcoin mining came here to the United States, and especially here to Texas. Yeah. And so it got the attention of Elizabeth Warren and the environmentalist movement, and I'll put environmentalists in air quotes, because lots of dubious things about that. And so they started trying to lobby to either ban Bitcoin mining.

You know, the Biden administration said, oh, we're going to have a tax on Bitcoin mining that's essentially going to make it uneconomical here in the U.S. That didn't get past, all thanks to the mining industry coming together and making, I think, two key arguments. One, with regards to the carbon emissions, the EPA already regulates or has a process for regulating carbon emissions at the source at which they come from, which is coal-fired power plants, natural gas plants, cars, obviously, not Bitcoin mining rigs. Right. And so Bitcoin mining is already fully electrified. So this is obviously a politically motivated attack. The second was really about the value of Bitcoin. Because if Bitcoin has no value, then any expensive resources is a waste, right?

Just by definition. So we had to go and make the argument to a lot of different politicians, a lot of different policymakers and staff. Hey, here's why Bitcoin has value. So even though, yes, Bitcoin mining does consume a lot of electricity, it's not for, it's not a waste because here's the value of why we're doing that. And so already we had planted seeds in these people's minds that Bitcoin has value. And so if it has value, well, huh, maybe there would be an interesting way for either I'd buy it for my personal account as a politician or and maybe the state. should actually acquire some Bitcoin because, you know, it's this sound money, freedom money that is aligned with my values. Then what happened was that Trump spoke at Nashville, 2024, the big

Bitcoin conference, and David Bailey and many others had had orange-pilled Trump and a lot of people in his orbit, you know, for example, Lutnik, who was his campaign finance manager, was already orange-pilled. RFK was orange-built. So there was a lot of Bitcoin in the air, and then Trump came down and said, well, we're going to stockpile the Bitcoin that have

been seized in the past. And then that was quickly followed up by Senator Lummis saying, hey, we're going to have a strategic Bitcoin reserve. And the interesting thing I think about politics is that politicians, especially Trump, he's a very influential person, and he's a role model within the Republican Party. And so when he says that

Bitcoin is worthwhile and is something that we should be stockpiling, that doesn't just get the attention of voters. That also gets the attentions of all of the state Republicans. So I think that when it became a part of, let's say, the MAGA America first agenda of, of we need to be accumulating Bitcoin here in the United States. Well, then Lieutenant Governor Dan Patrick, State Senator Charles Schwerner, they look at that and say, okay, we need to get moving on this. And we need to start passing some of just legislation. They got some excellent advice from Lee Bratcher of the Texas Blockchain Council,

who's been working very closely with them, to steer this in a direction that's going to benefit the state and the people of Texas. So it seems like assuming the State House does what it's supposed to do, which there's a lot of Texas politics. There's some acrimony between the House and the Senate, but putting that aside, that we'll have at least a symbolic amount of a strategic Bitcoin Reserve here in Texas. And then that can grow over time, right? Everybody always starts small and then grows. But weren't they talking about acquiring $500 million a year? And so they the initial draft of that bill had a limit of the they can appropriate up to $500 million of the state budget per year to acquiring more Bitcoin.

That limit was removed. So they could appropriate, for example, the full budget surplus, which is $23 billion. I don't think they'll do that. I think that they want to lower property taxes, another huge debate in Texas politics. But, you know, so it might be more of a symbolic gesture at this point of, okay, we're just going to do like $21 million, you know, something like that to set the precedent and then see how things evolve over the next two years. The Texas legislature meets every two years. And so when that dollar value has grown a lot, then maybe they'll think, oh, you know, we have regret of not buying more. Let's fomow in and let's really aggressively acquire Bitcoin.

one. Okay. And you think that's likely to pass? I think the probability is at 75%. Yes. That's very cool. And how important do you think the states are in this movement? I think they're very important. I think they're very important, first of all, because I live in one. And so I think that, you know, when we look at Texas does not have a central bank, right? So we are dependent on what's going on in D.C. with the Fed and what's going on in New York with the financial system. And Texas should be independent and that we should actually be masters of our own destiny. So we don't have the ability to just like print dollars and bail ourselves out. So I think that from that perspective, we already don't have monetary sovereignty.

So it's not like, and just this was the case in El Salvador as well, they didn't have monetary sovereignty. They were dollarized. So there's that aspect of it. There's also the aspect of the Texas economy can be very cyclical because it's so dependent on oil and gas. And so if the price of oil and gas goes very low, then that creates an economic downturn here in Texas. And so we want to be able to offset that by having an asset that's not correlated with those other external factors. And so that's why I think that it's really particularly important in Texas to have a reserve that is of Bitcoin. Just like mining is a load balancer on the Texas grid, Texas Bitcoin reserves would basically be able to be a load balancer on the economy, which is, I mean, that's what sound money is supposed to be.

And, you know, there's also been other interesting moves in Texas. There's right now the development of the Texas Stock Exchange up in the Dallas area. So that's going to be moving a lot of economic activity into Texas away from New York. And you can imagine a future where that becomes more Bitcoin denominated. And Texas not only ends up with its own electrical grid, but also has more control over its finances. And this is something, you know, I brought up the other day at the Bitcoin takeover, but, you know, the United States is built on federalism. And, you know, the United States is meant to be a collection of effectively sovereign states that come together for particular purposes where a united, you know, federal government allows for additional benefits for the states. But the states are not supposed to be. just, you know, simply subservient to the federal government. But because of the financial system and being so dependent on the dollar and specifically, you know, the, you know, being, you know,

printed away and, and, you know, all of the business cycles and all of that, it makes it harder for states to actually exert their sovereignty. So there's constantly a carrot and stick with, you know, needing federal funds to be able to do various. domestic, you know, in terms of the state, you know, state programs, whether it's, you know, education or roads or so on and so forth. You know, you were joking, who were built the roads? It's like, well, you know, we've put ourselves in a situation where that can get affected by the government. So, you know, classic example was the drinking age. I forget, I think this was the early 80s that they wanted to raise the drinking age to 21 across the country. And one of the

ways that they were able to get states to give into that was by saying, if you don't, we will restrict highway funds because you obviously, you have mothers against drunk driving type of stuff. And so a lot of states gave in. And in fact, I've never been to the border of Texas and Louisiana. and I don't know if it's gotten better over the years, but my understanding at Louisiana was a holdout. And it's like, no, we want to drink at 18. And they, what I've heard, you get to the border. It's like, you know, because the highway suddenly is a lot more bumpy.

And so they rely on that. And, you know, the drinking age is one of those things. It almost sounds superfluous. And like a lot of us are not, you know, sitting around like dreaming. I mean, P.S. from France. I think it's like eight or something. It's like you're, you're born. They put it in the bottle for you, a little. But, yeah, so, you know, it almost, that's almost, it seems like a frivolous example. But we can, we can go on and look how, like, education has been distorted and forced under very, you know, federal level controls, which has all sorts of negative consequences.

because you're trying to come up with a curriculum for, you know, 350 million people, however many, you know, schoolchildren there are within that number. But, like, you're coming up with the curriculum for all those people. It's like, you know, Pierre and I are best friends. And I doubt that we share all the same views of, like, you know, what we want to be teaching children. So the idea of, like, the federal government trying to make those decisions as opposed to at the state level,

making more of those decisions and having more sort of federalism or subsidiarity or these sorts of things where it's like you should be solving the problems at the level where you should actually be solving them unless you need something higher. Having that kind of economic sovereignty, that financial sovereignty, I think with Bitcoin aligns these systems way better

because at the individual level, you get to make these choices of, What do I really value? And you don't have to go invest in the market. Maybe you're not going to make as much returns once Bitcoin, you know, levels off, you know, in the long-term future. But you can still just be fine. You can decide that you want to operate a different way at the family level, at the company level,

people with their balance sheets. And, you know, moving on to municipal, county, state level, all of these places, they all have to deal with the same balance sheet problems. Some of the, you know, Democratic governments, you know, they're not necessarily dealing with it as as purely productive people by nature of being a state, but they still have these financials that they have to deal with. And I believe that if they had more of a Bitcoin-based system, they would have to be more receptive to the incentives that we would we would prefer out of them of, you know, imagine if the Texas Reserve, Bitcoin Reserve existed and it had tons of Bitcoin, and they're even able to put that, you know, Bitcoin to use into the

future of, you know, putting it into some kind of, you know, different Bitcoin-based financial things to kind of help. And they're able to get, you know, some level of purchasing power returns every single year, you have a natural surplus without taking a dime from anyone. And so then when you turn around and you tell people, oh, hey, we need to raise your property taxes. Suddenly the people have a much more, much easier way to say, not only am I not only am I not allowing you to raise my property taxes, I will, I will not vote for that. But also, you already have all the money you need, take this, like, you need to decrease or get rid of the property taxes. And so, yeah, I think, I think Bitcoin is heavily aligned with these sort of ideas,

like I said, of federalism and subsidiarity and aligning the incentives and giving sort of each level more capacity to exert itself against, you know, tyrannies that can form in the levels above them. I love it. Hopefully it passes. I mean, more bullish on Texas than ever. I've got an interview coming up with a fellow European refugee, Churdemista, so I'm going to have to leave it there, but I thank you so much for both your time. Yeah, thank you, Danny. That's been great.