What Bitcoin Did - THE WORLD WILL CONVERGE ON BITCOIN w/ Parker Lewis

Episode Date: March 20, 2025

Parker Lewis is the author of Gradually, Then Suddenly and Head of Business Development at Zaprite. In this episode, Parker pushes back on Jeff Snider’s ideas about the monetary system, challenging the idea that central banks don’t actually print money, the fallacy of elastic money and why the world will ultimately converge on Bitcoin as its dominant currency. We also discuss why Parker believes the U.S. is locked into perpetual money printing, how fiat debt cycles will inevitably collapse, and why Bitcoin will win. 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/

I figured out that they were going to have to print money forever. And I figured out as an individual holder of that currency, that's a problem. And that the logical conclusion of it was that it was going to stop working as a currency system. You can't print money and expect people to trade their time, goods and services for it. What Bitcoin did is brought to you by our lead sponsor, a massive legend, 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-n-n.com. Parker, thank you for having me back in Austin. Unbelievable to have you here in Austin.

It's been a phenomenal week. This has been a good week. I'm tired. A great way to cap it off. I'm tired to it. But Takeover was a massive success again. I've been to Austin, like, I don't know how many times, five or six times. I don't know if I've ever actually seen it because I just stay in the commons and then go back to either.

We then go to like three forks or bobs and then I go to my hotel room. I don't know if I've actually seen Austin. I mean, did you get to see some of it this time? Not really. I'm going to have to bring my family back and have a holiday here. Yeah. I mean, usually, and this is a great, you know, occasion because it's the first time we're recording in person with you, you know, taking over the show. and you'll usually have a Airbnb somewhere, you know, kind of off the beaten path.

We just don't leave for a week straight. Yeah. So it's great to have you here in person. Thank you. So earlier this week, I recorded a show with Jeff Snyder. I think Jeff's great. Like, just for full framing, I really don't think he's a bad actor. I think he's incredibly smart.

I think he knows, like, the plumbing of the monetary system really well. But he always butts heads with Bitcoiners. And like, if you look through the YouTube comments on that video, it's just everyone calling me an idiot. And I don't think that's a fair framing. But, and he's also, like, I feel like he's 90% Bitcoiner. Like, he believes in free markets. He doesn't want the central bank.

He doesn't like the current financial system. But he kind of gets hung up on Bitcoin. And probably for a few reasons, maybe the main one being kind of the in-elast, like, it's a fixed supply currency. And he wants the elasticity. You had a debate with him with Mark Moss. And it was both good and frustrating at the same time because you were kind of talking past each other at a lot of points. And I didn't feel like he was really in the place to be receptive to your ideas.

I don't know. Do you think that's fair? Yeah. How long ago? It was probably like six months ago? Something like that, yeah. Yeah. And he had made a comment.

And what's his firm called? You're at all university. You're a dollar university. That's his like podcast. I don't know if he works for someone else. Okay. Well, in some of the background which we talk on the podcast, but for people listen to this one, is back before I had gotten interested in Bitcoin, I was trying to understand what would happen when the Fed tried to unwind post-financial crisis QE. This was in about 2016.

And somebody either recommended I read Jeff's writings or blog, but I did, and one of the exercises that Jeff had done, was going back and reading all of the transcripts of the Fed during the great financial crisis or leading up to and thereafter, which isn't just the minutes, it's the actual verbatim transcripts. And they're released five years after the fact. And that five years is designed to allow for the central bankers, the people that actually run each of the different, you know, Minneapolis Fed, Dallas Fed, San Francisco Fed. to have open discussion and debate without somebody immediately looking over their shoulder, but to also have transparency.

I went back and read all of the meetings from 2008, 9, some of the meetings from 2011. Each one of these is a couple hundred pages, double space. So they're long meetings. Anyways, that was formative to me in the conclusion that people always look to the central bankers at the Fed or the ECB is in control. Yep. And that they weren't in control. I came to the conclusion they were always going to have to print money.

They were they were consistently in an objective way wrong. So anyways, before we get into the meat of this discussion, just to say that I do have a lot of respect for Jeff as well, I think he is very much, I think, philosophically aligned. Yep, I agree. With Bitcoin. And but a lot of people do struggle with this idea. of a currency with a fixed supply. I was somebody who got an economics degree and was very much a Keynesian basis. And people just really struggle. They struggle to evaluate first principles and

microeconomic decision points that, you know, lead to, you know, or effectively prexiology of, like, what will lead to certain outcomes. And they look at it from the top down and that's very much a Keynesian outlook and people have blind spots and Jeff has a massive blind spot because because I think of that top down looking at the system as a whole rather than individual decision points and what will dictate why things exist the way they do. So coming from like you studied Keynesian economics, did you have the same blind spot when you first saw Bitcoin? I don't I don't think I had the same blind spot but I like I. I, I, I, I like to think that I was predisposed to be against it, to not think for the same reasons that I would say someone like Jeff might.

I was also somebody who, like, all of the debt in the world never made sense to me. Never had any personal debt, always had an aversion to it, always felt like there was something broken about it. So I think that that was something that despite having this classical Keynesian education allowed me to question things that other people might not and then be open to an entirely opposite world economic view or kind of fundamental way to think about economics then is classically trained in most Western universities, which is very much a Keynesian-dominated educational system. Okay, but the actual thick supply of Bitcoin never stood out to you as like a big red flag.

No, because I, you know, through this process in part having Jeff sent me down, you know, not directly, but indirectly through his writings and recommendations, sending down this rabbit hole of the Fed and their logic and how and control, how what they, you know, whether they understand the consequences of their action or not, what guides them, that I figured out that they were always. always going to have to print money. I figured out why. And at an individual level, and this is where I think if people are looking at it from a system level, rather than an individual level, they can easily get to the wrong conclusion, which was, I figured out that they were going to have

to print money forever. And I figured out as an individual holder of that currency, that's a problem. And that the logical conclusion of it was that it was going to stop working as a currency system. because you can't print money and expect people to trade their time, goods, and services for it. So I had started from that anchor point, and that was fresh in my mind as I started going down the Bitcoin rabbit hole in for other reasons, but similar time frame. So I was staring at, okay, there's this problem. And then I figured out that Bitcoin's whole purpose was to be money that couldn't be printed, and I put those two and two together. So I had the benefit of my college education or university education that allowed me to test the assumptions. I just didn't necessarily assume that they were true because I was staring at a massive problem that everyone suffered thinking from first principles rather than what I had been taught.

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Visit anchorwatch.com today, which is anchorwatch.com. So that is another one of Jeff's hangups that we may get to, may not. So he obviously he doesn't look at money printing the same way we necessarily do. We had a whole show on the old what Bitcoin did with him and Lynn debating that. We might get into that. We might not. But let's start. So his thinking, and I'm going to butcher this, but I'll try my best, is that when, like, bank reserves aren't the same as money printing. And bank reserves don't actually go into the economy, so it doesn't, the way we look at money printing as Bitcoin, as he thinks that's not actual money printing. He's wrong. Okay, let's start there then. And a lot of, um,

A lot of people, and I think the root of his problem, which is the root of a lot of people's problem on this whole line of thought, is that they look at the system as a whole. And they start to become, and I don't say this in a negative way, but they look at it from the macro rather than the individual decision points, and they get a little bit, what should I say, like bean counterish. They think about it just as numbers, not in terms of like what the actual substance is.

And so a lot of people from the macro world will say, well, when the Fed does quantitative easing, they'll just swap, they'll say this. They're swapping one liability for another. And they'll say another thing, which is that the reserves don't leave the banking system. Yeah. And to try and elaborate on that point, and again, like, this is something that should come from Jeff, not me. But I think his take is that bank reserves can't be used in the same way as money so they don't actually trickle down into the economy. And that's false statement. And do you think that's false because bank reserves collateralize the banks and allow them to go out and buy other assets with that collateral? The bank reserves, when a bank creates credit, reserves transfer between banks. So a bank can run out of reserves.

That's one. That is what functionally happened to or was about to happen to Silicon Valley Bank. So the Fed inserts and controls the number of reserves in total, but reserves move between banks. And if you take your deposits to go to another bank and one bank is left without any reserves, that bank fails. So that's number one. Two, reserves are actually transferred. They can be converted to physical notes. So this is one other example where these guys just get it completely wrong.

That at the beginning of the financial crisis, there was only $900 billion in existence. And there was about $350 billion in the banks. The net amount of cash, like physical bills that have been taken out of the bank since, is well over a trillion closer to two trillion. So if the reserves that the Fed creates through QE don't quote trickle down, how has nearly twice as much money been taken out of them that existed at the time of the financial crisis.

Yeah. So what happens is the Fed creates reserves and then a bank goes to the Treasury and the Fed and says, I need a certain amount of these converted to, actual treasury notes physical bills and they swap from digital reserves to physical bills there's been over functionally more than two entire bank runs on the system that could only be made possible because the fed created more reserves so reserves are lent reserves can be contributed and are converted to physical bills those are two objective facts the way that a bank actually goes out of

is because they run out of reserves. And when these macro economists say, oh, they're just swapping one liability, a reserve for, say, something like a treasury. And through QE, what the Fed does is they say, hey, JPMorgan, here's another reserve, give me your treasury. They essentially, and what we would refer to that, or I would refer it as, they're monetizing the debt.

But more realistically, the macro people, like someone like Jeff Sineering, like someone like Jeff Seyers, they're just swapping reserves. It's like, no, they're not. They're two different types of assets. A treasury is a future claim on dollars, and a reserve is a dollar. It can be converted to a physical banknote right there. And a second thing is,

you've never walked into a grocery store and seen a grocery store except U.S. treasuries as payment. And the question is why is because they're a claim in the future. You owe dollars in the future. Reserve one for one increases deposits in the banking system. So on all three of those, the macro people are just wrong technically. Like they look at this system and they like they zero in too close on something. And then they can't explain something in this common sense.

Be like, well, why does the Fed do this if they're just the same? well they do it because debt is an obligation owed in the future and a reserve is something that can be transferred in the bank banking system on demand and so to throw one more thing in there that I think is one of Jeff Snyder's points

is that a bank reserve you can give a bank more bank reserves but it doesn't mean it creates demand for credit from the customer I agree with that statement okay and then I think so for that reason if you assume that bank reserves aren't money you assume

that's not creating money because there's no demand for it. Is that right? Yeah. But the reality is it is money. The Fed's doing it for a reason because there's a liquidity crisis and they are actual dollars. And the Fed says it themselves. They're like, yeah, it's more akin to money printing than anything. And then, you know, a combination of Jerome Powell and Ben Bernanke on 60 Minutes have said this, where they basically say that we literally just credit an account with more money on a computer. They have to do that because there's too many debt liabilities, and that's what a treasury is or a mortgage-backed security is or corporate debt that they purchase. And any sort of debt instrument has a maturity date, and the dollars are due on that maturity date, a reserve that the Fed creates is something that is dollar good today. And this is where, like, I get a little bit lost in Jeff's argument in that he tries to separate different types of money.

So it's like money, and I think he would describe that as ledger money. And I don't understand the distinction there. So, I mean, and this is where, like, oftentimes these macro economists are many ways, it's like too smart for their britches and they can't look at it from a common sense perspective to be like, well, if all of, if these things are functioning the same and just like, marginally different, then why does the Fed do it? Yeah. That there must be this reason.

And that there are, the way that I would describe it is that there's different definitions of money. And the system is like base money, M1, M2. And the difference between that spectrum, like I look at and say like the base money is the true, like, that's the inception of like the actual dollar supply. And then M2 is basically credit that's been created. like actual debt such that if the fed didn't create any more base money it doesn't matter of banks create more credit that credit would in the future shrink because the the actual underlying base money m0 if you were is what creates the governor of it um where it's like hey people oftentimes think of like the banks is creating money it's really the central bank that creates money and then

there's leverage created on top of that um but all of that would unwind if the Fed didn't create more. And what ends up happening in a practical perspective is very logical is that the banks create more credit. The Fed starts to take the base money out and then everybody figures out that the show's stopping and that the degree of debt relative to base money and to give people perspective. It's like right now in the US it's about $101 trillion of total debt liabilities, like very vanilla debt. And there's about $7 trillion base money. So what I'm saying is that $101 trillion, it would naturally collapse if the Fed didn't continue to supply base money.

And so someone like Jeff would be like, well, they're functioning the same. It's like, no, they're not. All that credit that exists in the system would shrink. It would go from 101 to 90 to 80. It would essentially feed on itself. That's what happened during the great financial crisis in 2008-9, which induces the Fed to have to put more, quote, I mean, it's made up money overnight, but it's the the actual dollars that can satisfy the debts to prevent the debt from collapsing on itself.

So they are 100% different in their function of how they're created and what can happen with them in the banking system. And so the only one that can create dollars is the Fed at the end of the day. And even the banks that are viewed as creating credit, they're not creating money in the same way that the central bank is. But that dynamic between the debt and the dollars is what dictates that they're always going to have to print more. And that's, you know, that's an example of something where, like, Jeff, someone like Jeff Snyder thinks it's terrible that the Fed can create money. I mean, he doesn't think the Fed can create money. He thinks the only thing they do, they have any impact on is interest rates. And they're basically just a signal.

Yeah. And that's just, you know, I don't know what the right analogy is. the frog boiling in the water that you've been in the system too long. Maybe knows the system too well. Yeah, that you can't see it. Yeah. You know, that you can't take a fresh look at it because you've been boiling for too long. So I want to.

And real simply from sometimes people can get lost in these economic terms and debates, but it's like, hey, Jeff, financial crisis. were only 900 billion physical. I'm talking like physical bank, no, something I'd get out of my wallet right now, like a green paper bill. 900 billion, 350 billion existed in the banks, and 550 billion existed outside,

like in people's... In circulation. And more than 2 trillion physical bills have, or somewhere approximately 2 trillion, have been taken out, like green. green backs. How does that happen? Yeah.

Like, explain that. Yeah. And what happens is the Fed creates money through QE, the reserves, and then the banks say, I need more physical bills because people are withdrawing it from the banks. I mean, that makes sense to me. Yeah. And there are other consequences of it to the digital banking system, but 100, absolutely, the Fed creates money through QE.

You know that that statement, when someone tells you who they are, believe them. It's like, when Jerome Powell tells you that they're functionally creating money, believe him. Believe them. Yeah, that makes sense. I want to go back because it's interesting that you read all of those Fed documents. When they were responding to 2008, was this something they had in their plans? Or was this a complete knee-jerk reaction? It was a knee-jerk reaction, I would say.

And was this Benanki? Yeah. Okay. Bernanke, I believe Yellen, too. Yellen was in there. Because Yellen later took over for Bernanke, but she was, I believe, the president of the San Francisco Fed during this time. Okay.

Yeah, I mean, what I would describe it was reactive. Reactive, like trying one thing, it not working, trying the other thing and not working, and then continuing to just throw shit at the wall. What option did they actually have there? Presumably they had to do something like this. just to keep the whole financial sector afloat. Right, but if you remember, or whether you remember or not, what they did was they, in early 2008,

it began lowering interest rates. They lowered interest rates something like six or seven times, like to zero from something, I don't know what interest rates were before that, five percent. But it went down to close to zero, yeah. To zero, to actual zero. I went to actual zero. Yeah. Okay. But they did that over the course of six or seven times. They're like, oh, we're going to lower it to 4%.

And we're going to load three and a half. Now we're going to load to three. Now we're going to load two and a half. It's like if they knew what they were doing, if they had some end in mind, why did they keep swinging and missing? And too often people look at them and say, oh, the Fed's in control. They know what they're doing. And you go through and read this, you would just understand how reactive that they take one action and it doesn't work. And then they take another. And then eventually, whether something, quote, works, whatever end they wanted to see starts to happen, whether they were the causal relationship to it or not. And so they literally reduce interest rates all these times,

and then there was the liquidity crisis. Then Lehman Brothers failed. And then they figured out that they needed to print a bunch of money as the solution. Because rates can't go lower. Yeah. And the way that I think about it, which is not necessarily,

the way that they think about it, but they had a liquidity crisis. In their minds, they were trying to target lower interest rates, which you need to supply more dollars to lower interest rates. But I don't know that they were expressly targeting the liquidity crisis instead saying, like, oh, well, if I lower interest rates long enough, then people will get... They'll create more demand. Yeah.

Yeah. But the other side of that is you lower interest rates. rates from a central control manipulation, it reduces the incentive to lend. Yeah, of course. Makes sense. Right. So, like, even that as a policy decision of what will induce lending. Oh, let's create a lower incentive to lend.

Well, the only way that that can actually have the incentive is to create so much money and basically break the economic incentive between the people that are lending and the money, the people's money who it is. So that actually kind of leads quite nicely onto the elasticity thing, because I think maybe what Jeff would say, I don't know, don't quote me on this, is that when interest rates are being lowered that much, it also reduces demand because it's signifying something's broken or very wrong in the system. I think that that's wrong because if interest rates are low from a organic perspective,

if the economic environment is driving the cost of interest down, the lower the rate of interest, the more your incentive to borrow. And so, but that is not. necessarily true if it's an exogenous force that's manipulating it to be so. So the way I was central planning in the problem. Right. In the way that I would think about as in the financial crisis, there was a credit crisis. At the time of the great financial crisis, there was 52 trillion in the U.S. 52 trillion of dollar denominated debt. There were that 900 billion of all dollars existing, but there were only 350 billion in the U.S. banking system. So the way I look,

as like 52 trillion to 350 billion. Everybody needed loans. So the fact that you manipulate interest rates lower doesn't increase demand. It's that everyone was going bankrupt. So everyone needed credit. Yeah. The only thing that was going to satisfy that was more dollars to flood the system so that more of that present demand to prevent them, you know, and individual stakeholder from blowing up, blowing up, they needed money and they were, they were functionally willing to probably pay whatever rate they could get it at. Yeah. But when everyone figures out that the music is stopping, no one wants to lend money. Mm-hmm. Right? Which is when the Fed steps in.

To be the lender, the quote, lender of last resort, but they're not lending capital that actually exists or creating money out of thin air to do that. Okay, so let's get on to the Bitcoin side of things. So in the debate you did, Jeff said something that I thought was quite interesting. He said, if Bitcoin had an elastic supply, he thinks it would take over the world. Like, we obviously think it's going to take over the world anyway. But I think we should probably start by framing this. This is something you've said a thousand times for the last eight or nine years or however long.

But explain why Bitcoin's fixed supply is important. Yeah. So this is one of those examples where like a macroeconomist is looking at the system as a total of like, what are the systems needs? What is the goal of the system to create economic activity and economic output? And how do we optimize the system, top down? And you start to look at that system and say, man, if things were just slowing down and I could just access a little bit of money to inject into the system, then wouldn't we all be better

off and that there's this bean counter mathematical too myopic way of looking at things that make you think that something's possible and it's really not. And in this context to your direct question, it is that when a macroeconomist can get lost thinking about the system as a whole or the top down and lose sight of the individual decision points and the individual logic, it's that any individual if they were posed with this dilemma of, can I be paid

in a form of money that can't be printed versus one that can? Which one would you choose? 99 out of 100, 100 out of 100. Jeff might be the only one. Or I guess even in Jeff's case, if I gave him the chance to be paid in a form of money that couldn't be printed, he himself would probably accept that.

And if you add all those individuals up from the bottom going up, you'll realize that that is why the fixed supply is so important that the individual decision point is it's an A-B test and I can either opt into a system that can't be printed or one that does get printed easily and often the individual rational economic actor saves in the form of money that can't be printed

because it's what's going to store value more. The macroeconomist looks at it and says that's too rigid. But the Austrian view is describing why things occur the way they do rather than trying to dictate a system level top-down control. And so someone might accept, yeah, if it were possible to do without some massively negative derivative consequence, maybe we do that. But describing the way the world actually works is that 100% of the world would choose the alternative, basically not. granting somebody else the authority to print money.

So again, just trying to like steal man Jeff's point. I think what he would say to that is that like Bitcoin is great as a store of value, but the free market has chosen an elastic supply currency in the dollar as the like the choice over and that's not been. But I even had this discussion with them. I'm like, well, do you agree that more people are adopting Bitcoin? Mm-hmm. That, you know, more people in 2025 own it and are adopting that in 2021.

and he would say yes. So my point of that is because he makes those two points and they're in conflict. They contradict each other. Okay, explain that. Well, he's saying that the market has chosen an elastic currency of the dollar, but then he'll admit that more people are choosing Bitcoin progressively. But would he then talk about, say, stable coins in Argentina and how they're choosing the dollar over Bitcoin in those places?

Well, it doesn't matter because they're just trading one fiat currency with the loss of supply for another fiat currency with the long as supply. He'll admit that people are increasingly choosing to store a value in Bitcoin.

So he can't reconcile or he needs to reconcile. Well, why is that happening? Because the market is actually in the process of unselecting the dollar. They're selecting Bitcoin because it is a great store of value.

If you accept it even though Bitcoin adoption is increasing for the reason that it stores value better, that still only one in a hundred people probably have any material exposure to it. Well, what happens when 99 out of 100 have material exposure? Because it's the same incentive that's the same incentive that's driven the first one out of 100 is going to be the incentive that drives the next 99, that fixed supply that opting into the system

that no one can print. So do you see like he has a conflict or a contradiction? He says, the market has chosen the elastic supply, but then he will admit people are increasingly choosing the currency with the fixed supply. And he can't bridge those two. He can't say, well, the same thing that's dictated that people have increasingly chosen Bitcoin, what is going to cause that to stop? He won't sit and stop and say, what is it that's causing those people? And it's the same thing that's causing the first movers to go going to cause all this. the others. So this is like Alan Farrington wrote a piece on this called

Wittgenstein's Money where he talks about the economists that will say it's not a store of value, it's too volatile, it's not a mean of exchange because no one's using it and it's not a, you know, they account for kind of the same reasons. And he, his argument is that semantics don't matter and reality does. And in reality, people are choosing Bitcoin. People are choosing Bitcoin. He'll admit that people are choosing Bitcoin. He then won't bridge to let me accept that the reason why they are doing that is because it's the form of money that can't be printed and that that is the reason why it's storing value and then

trying to reconcile well that is actually the market choosing the opposite way of what his first statement is that the market has chosen the dollar is like no they're actually in the process of unchusing that it doesn't just flash cut overnight where everyone starts to figure out what money actually is one of these options is something that Canon is printed out of thin air. The other one is one that no one can control and that no one can create more of. And that, you know, the reason of that property is why it's a better solution for them. Yeah. One thing that bugged me in that is he talked, he basically said the world has store of value assets.

And we, like, it's not that interesting to have another one. And he kept comparing Bitcoin to like a NASDAQ stock. Right. And I'd like you to dive into why that's not the case. So I think I probably will have given a better answer there. Don't say that. They're listening to this one. No, I'm trying to remember because I felt like I nailed it.

But so, you know, people oftentimes say, okay, he made that comment. And it's that, you know, I made the comment before that there's a reason why you've never showed up at your grocery store and been able to spend U.S. treasuries. stocks like Apple stock or Google stock, their companies, and their goal is to make a profit in money. But just like you've never showed up at the grocery store and been able to pay with your U.S. Treasury bill, you've also never shown up at the grocery store and been able to pay with your Apple stock or your Google stock.

That money is the asset that you save in and financial securities like Google or Apple are businesses that are taking risk with the goal of making money. Bitcoin is replacing the world's money, and companies like Google and Apple are going to have to adopt Bitcoin. But at a fundamental level, the way to think about it is the value of that stock is valuable based on those individuals' companies' ability to earn money. that a financial asset, like a stock or a bond, derives as value through cash flows, and Bitcoin is the cash flow. And so with something like a stock or a bond, there's counterparty risk. There's performance risk.

The business has to perform, but you also have to trust the issuer of the stock. There's a central issuer to not issue more stock. There's also like macroeconomic risk. To dilute the supply, right? There's macroeconomic risk. there's competitive risk in terms of, you know, how many people are going to buy iPhones? Yeah. How many people are going to pay Google for advertising?

How's AI going to destroy the market? What if Brock comes out and, you know, steals all the search from Google, their ability to generate cash flow to generate Bitcoin is impaired. So the reason why that you've never shown up at a grocery store with the ability to pay in an Apple stock is because it's not money, you know, and that people generally, have been forced into monetary substitutes as substitute stores of value because central banks create money.

That's what Bitcoin is fixing. And so it's like people are using many things to quote store value passively for this reason that money is engineered to lose value. In reality, what a lot of that, quote, store of value substitution is, is a function of the bad money

and it will be replaced through sound money, which Bitcoin is ultimately here to, you know, what it's intending to solve. And so someone might say, well, you haven't ever showed up to a grocery store to be able to, you know, spend Bitcoin. It's like, well, I've bought food with Bitcoin. I've paid my rancher in Bitcoin,

and there's a reason why he doesn't take Apple stock that I can't transfer a bearer token like Bitcoin to somebody, like I can't transfer stop that way. I mean, I bought my water here with Bitcoin this morning. Right. So it is a, it is, Bitcoin is a, and money generally is an asset without counterparty risk. And when I send it to you, it's yours. You can't do that with a stock.

And so I think in, in Jeff's, like if Jeff slows down, he understands that there's difference between money and a financial asset, and that a financial asset is valuable and it's an ability to earn money and money is money itself. He's just trying to make a point with that probably. So I think one of the last things that's quite important to address here is that, so Jeff likes the idea of Bitcoin, or so he says, but he wants it to have an elastic supply. So let's say somehow he figured out how to make Bitcoin with all the same properties, but just with one difference where he figures out like a way of making it an elastic supply with no central authority.

Why does Bitcoin still win and like to steal Trace Mayers line? Why is it the apex predator? Because the form of money that can't be printed is the, optimal form of money and that the only way that Bitcoin is able to credibly enforce its fixed supply is because it works in a system that removes the need for a trusted third party that if you go to a hundred out of a hundred individuals again you have to start from that yeah and what Jeff's view is functionally if If you could have, if you, you know, say there's 21 million and say there's this

economic calamity, if there were a mechanism to allow that 21 million to be dynamic so that you could create, you know, not necessarily by, he's not saying you need a central bank to do this. He's expressly saying there needs to be some other market mechanism. Yep. That you need some dynamic way that everyone would be better off. if that 21 million could go to say 21 million 500,000 to ease that pain in that moment. But one of the dilemmas is what is the mechanism and who is better off?

Because what I talk about when I'm talking about individual economic decision points, it is the holders of the 21 million Bitcoin, there's a way in theory for everyone to get together to say, let's increase the supply more. It's never going to happen, but it could happen. But the reason why it never would is because there's never going to be an overwhelming majority of currency holders that will all take an economic action to...

Harm themselves. They've adopted this form of money. So that individual decision point is there's currency A and currency B. Currency A has a fixed supply. Currency B does not. currency B is increased by some market mechanism like Jeff Wands which one do you want oh I want the one that can't be printed at all from a more fundamental economic perspective

the form of money that has the lowest rate of change in the supply is going to have the most efficient trade that the ability to price things and have reliable pricing it's going to drive more efficient economic activity. And what Jeff misses fundamentally, when the prices of money is changing, and the reason why Bitcoin is such perfect money is because the supply is cap,

but demand for the currency can change and supply and demand for all the other goods in the market change, the thing that provides the constant thing that makes the money work is the fixed nature or the relative scarcity of the supply, that when the market is either increasing demand for money or reducing demand for money and prices are changing, that's actually the market mechanism to create equilibrium. And one of the examples I use for them was that when the price of Bitcoin rises significantly,

money is supplied to the market. That that is the most efficient way to, that the available supply of Bitcoin is, actually highly elastic to price elastic. And we just know that's like empirically true. Yeah, and that's empirically true. And so you start with, well, if you went to individual one through 100 or one through a thousand or one through eight billion, so which one of these two things would you rather have if you, you know, A versus B printed versus not.

Nothing about that economic decision point changes because the market is responding to prices in a way that's causing, say, people to want to save more and invest less or spend less, it's like self-referencing. The market is saying, no, we've already over-invested. What we need is more savings. And so the prices are changing. And Jeff's saying, well, wouldn't it be great if there's this countervailing force? But by definition, it would be a force working against the market itself. The market resetting prices is responding to, to some imbalance to eliminate that imbalance. This episode is brought to you by CASA, the leading Bitcoin self-custody solution.

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And I mean that in like the healthiest sense of the boom and bus cycle. Because if the supply could change, when we had things like FDX and Celsius and BlockFi, I think we all agree that it's a good thing those were washed out the market. But if the supply of Bitcoin could have changed at that point, who knows if any of those or something similar could have survived? Right. Yeah. And that's the exact point. I believe I made it to Jeff, which is that in the old world, or what happened in 2008, was all the banks that created this problem, they got bailed out. So then the problem persists for longer. In the Bitcoin world, that was Bitcoin working. Those entities, they functionally ran out of Bitcoin. The bank run was over. And those Bitcoin were in somebody else's pocket. The bad apples. they're out of business. They don't get bailed out. And even though it was harsh, like, for a price perspective at the time,

like, we're in a much healthier spot now. Yes. And balance was eliminated rather than allowed to persist into the future. Yeah. Yeah. So the other point that Jeff made, last thing on Jeff, I know I said that before, but on the show that I did with him this week, this is the thing that surprised me most. This is probably, like I say, I have a lot respect for Jeff. I like him, but this is probably the worst take I've ever heard from him in that he was saying in the future, he thinks, like quote unquote digital currency asset whatever will be the future but he thinks it'll be many

competing ones rather than the world converging on one currency and I know that's something you would definitely disagree with definitely disagree so one of things I write about and gratitude suddenly is is that economic systems converge on one form of money and they do so for reasons fundamental to actually solving the problem, which is trade. That trade is an intersubjective problem. The way I would describe it is if the two of us

need to trade, we have to have, before we can trade, we previously have to have arrived at a consensus of money. You have to accept the form of money I have and I have to have the money that you're willing to accept. We evaluate all the different

things that could be money in the market on very objective relative properties, part of our evaluation is what other people will value, what other people consider to be money, what other people, what other properties people value in money. And if I have to have the form of money that you're willing to accept and you vice versa, but part of your evaluation is the next person, it's not a one-to-one problem, it's not a one-to-one-to-one problem, it's functionally a one-to-one to everybody in the world problem. And that's the core problem and that forming the consensus, like opting into the foreign money that has the widest acceptance allows you the greatest

future optionality. And that if you accept that the reason why that it's this intersubjective problem, that your decision of money is dependent on the next, that then you look at the real world and the real world says the world previously converged on one standard of money that was gold so that's the macro why and was it by coincidence did people just coincidentally over thousands of years act irrationally to solve this very important rational problem which is how do you trade yeah of course not of course not then 99.9% of all people in the world only interact with one form of money

on a daily basis. There might be a few large multinational corporations that deal in multiple currencies every day, but 99.9% of individuals and businesses only interact with one. And then the question is why, like, is everyone, is everyone just hallucinating into this thing that's very rational? No, of course not. And so because money is an intersubjective problem, because it solves a problem of trade, and also this recognition that the only way that you get a price system, some people like to think about this world of many currencies and the reason that you're not, the reason that why they think that is because there's many fiat currencies, but all those fiat currencies derived functionally off of the gold standard. There might be one or two exceptions, but

it was some other commodity money, if not gold. And that, like, everyone takes prices for granted. The price of beef, the price of gas at the gasoline station, the prices of going to see the doctor, the price of rent, that the only reason, the only way that prices exist, is by a very large group of people converging on one form of money, to begin to price it, price their goods and services in a denomination of the currency that they all accept. And that then allows the money system to work. And then coming back to this heuristic of,

well, if there's a form of money that can't be printed and that no one controls, everyone has an ability to opt into that, And then the alternative is some form of money that can be printed. Everyone has the incentive to opt into the money that is hardest to produce. And that will also then be the money that is most widely adopted for the reason that it's global, it's permissionless, and nobody can print it. And no one controls it. And the only reason we can trust it is because it's trustless. And therefore it has the best information signal.

Yeah. So all of the fundamental economic things say, no, like create a basis. Like, if you have, if there's a form of money, Bitcoin that can't be printed, and this is, this is what Jeff's dilemma is as a, as a macro person, where's the other form of money that can't be printed? And then how does that come to exist when everyone can opt into Bitcoin? Because they're always choosing between A or B. So here's this thing, Bitcoin has this credibly enforced fixed supply. It's been around for a long time. It's adopted. You know, it's whatever, you know, somewhere between five and 10th largest currency system in the world. the best that any other currency could do would be to match Bitcoin. But everyone has the opportunity to choose Bitcoin today versus something that's so much more speculative. I could create a form of money that can't be printed or I could even create the form of money that Jeff envisions

that could have some mechanism to go against the market, to work in opposition to the market forces that are trying to reprice money. everyone still has the chance to opt into Bitcoin. So the question is, hey, if I create this currency that has this flexible fixed supply, and someone's looking at it say, well, I'd just rather the money that can't be printed. Yeah. And so six ways from Sunday, whatever that's saying is, they'll all just adopt the form of money that can be printed. But adopting that form of money and everyone converging and forming consensus is a necessity to solving the problem.

that money works to solve, which is trade. So there will not be tens of currencies or hundreds of currencies. The other thing people think is, oh, well, the machines will do the calculations. It's like, no, the humans have to adopt the money, and then they write software, and money doesn't work if there's not convergence, and if there's one, if there is a best money, which there is, and the only reason why there have been these hundred of currencies is because there's been this jurisdictional friction by force, by fiat, and Bitcoin is the, the, you know, this perfected money that can't be printed that no one controls and water moves downhill.

So everyone has, it's realistically the first time that anybody could opt into a foreign money that literally can't be printed at all. Yeah, that's why that statement confused me so much. I was surprised to hear him say it because all you have to do is look at history and see the world did converge on one currency. And to think it won't do that again seems crazy to me. But anyway, this has been like a very long intro into your recent paper that you've written, which is Bitcoin is money and currency.

You've obviously talked a lot about Bitcoin as money here, but let's talk about Michael Saylor for a minute. I have a huge amount of respect for Michael Saylor. He's done incredible things with Bitcoin. But he is kind of pushing this narrative that Bitcoin's not necessarily money, and instead it's more akin to digital gold as an asset. And I'm not 100% sure why that is. It could be just to kind of get the foot in the door at DC, and he may not believe that. Or he may. But that narrative is growing either way.

Is that kind of why you wrote this piece? So I'm someone as well, a lot of respect for Michael Saylor and both for his contributions to Bitcoin and everything that he does to help educate Bitcoin and further Bitcoin. I would say that his, if I was to describe his position, it's not that it's not money. He'll say it's money. What he'll say is that it's not currency. They'll say it's not competing against the dollar. It's money, but it's not currency. and I think that the analogy or parallel would be that gold was money, but the dollar was currency.

So maybe you should explain that because before I read your piece, I think I would have thought money and currency were kind of like just an interchangeable term. And I did as well the first time I was asked about the distinction a year or two ago on Daniel Prince's podcast. But then the more that I listened to people talk, because Michael said I was not the only one that draw this distinction. the question is like are they being pedantic and from I don't I don't think that they're being pedantic I think that like historically money and currency

that currency has been a subset of money but that there's been an issue of currency that is either coining gold right and that if you coin gold into a I would screw it up is it like the South African Cougarian or I don't know okay you can say that because I don't know

What's the Australian currency? Dollar. Australian dollar. Okay. Yeah. That that process of coinage is part of something that takes a raw material. Turns it into a more functional currency. You're setting a standard weight measure.

And so there is a prior to Bitcoin, there was a real distinction between money and currency historically. even under like gold standard. Yeah. So that's the part. Because think about this distinction of imagine, have you ever had, have you ever held a gold bar? I've held a gold coin. I'm not held a gold bar. Okay.

Well, but if you could picture a gold bar that is just gold. There's nothing that. It's just pure gold. Just pure gold. something that's a coin that puts the crown on it that says this was issued by the crown this is the actual unit

this is one ounce that that process of refinement from the raw gold to that coin improves the utility of the money and that would be the distinction that people would make like if it was just a raw material you wouldn't know how much its weight was

you wouldn't necessarily know that it was gold because you'd have to validate that against something that you know to be gold and that if you see this mark of the crown and that if anybody counterfeited it, then the crown would kill them. So that's where I had a misunderstanding when I read the piece because I thought you were talking about like the denominator. So whether it was like a gram or an ounce, but you mean it's like the stamp of approval?

It's both. Okay. It's recognizable. but it's like that the issuer which historically was the crown or the state they would they would refine the gold into a standard unit which was also important but it was the standard unit as well as as the stamping of it so that somebody when they saw it they could trust okay this actually is an ounce of gold and that if this person that's giving it to me is counterfeiting it there's also someone going around ensuring that the money is not or the currency is not counterfeit.

So I'm making the point that that process of refinement of gold into a currency was part of what made what made the money work. Otherwise, if you're the person receiving gold for goods or services, you have to then go and validate it if it doesn't have that stamp. Right. If it's a validate it, you have to weigh it. You got to asset. The process is called assaying.

You have to assay gold to make sure that it's actually gold. It's a highly technical process to do and not something that you could do if you're sitting at a counter about to make a transaction. Yeah. And in the Bitcoin parlance, the way to think about that is when a Bitcoin is accepted to a node, it's validated. It's functionally assayed. And the distinction that I draw on my piece is that Bitcoin is the first money that, Bitcoin is the first money that, is also functional as a currency, and that that's never been true of any other money before. That with gold, you know, and this point might have been lost on some people, even if you've read it,

but Bitcoin does a few things that make it on its own capable of being both great money and a great currency system. So whereas gold needed some refinement either into coin, like physical, coin or to become convertible to a paper note in order to solve this problem of standard weights of measure, the trust in the currency, that the currency was actually the currency to essentially make it easier to not have to assay a bar of gold every time that it's being transferred. And that process of refinement always required there to be an issuer and that the issuer was playing a part to make the raw material, the money more functional

as a utility in trade and that Bitcoin eliminates the issuer from all parts of the currency function in the sense that any role an issuer of currency

previously played in the refinement of money to make the money a utility and trade is not technically needed in the Bitcoin world because Bitcoin can do all of those things. So what I would describe it as there's several different functions that Bitcoin's able to do itself within the network.

It's able to issue the 21 million fixed supply. It's able to enforce that that supply can't be broken. The Bitcoin network controls the rate of issuance that every 10 minutes on average. And it resets, but it targets that. It is able to, the Bitcoin network to transmit, currency. It's able to validate currency. Very easily for basically no cost. Yeah. And importantly, it has this standard unit inherent to the system. You can't just have one gold. You have to have like an ounce of gold or a 10 kilogram bar. Those were set by issuers. Now, a standard may have

emerged on the markets. I'm sure people tried different standards and then settled on one ounce or set it on a 10-kilogram bar or a one-kilogram bar. But you can't, you can have one Bitcoin or you can have one Satoshi. You can't just have one gold. You need some one ounce. You need someone to convert the raw material into that. And so because Bitcoin has the standard unit, because currency can be transmitted, because currency can be validated and because the supply is both issued and enforced all in one closed-loop system, there's no other fine. that Bitcoin can't do on its own, which also isn't true of any thing that had previously been money or at least any commodity money and commodity money is emerged as the

most functional forms of money that has ever existed. So when this piece was at least partially directed at like policy makers in D.C. Yeah. And I mentioned Michael Saylor and the piece saying like, hey, he's someone that disagrees with this. I'm going to explain the logic. as to why this is the case that the Bitcoin operates as a currency system.

It's the first type of money, and this is why that is able to do this, and that if these certain facts are true, that Bitcoin does have a credibly enforced fixed supply, and that that is why people adopted as money, that it's just a matter of time before everyone figures it out. And there might be a world today where people can save Bitcoin

and spend their dollars. But once everyone figures out that Bitcoin is the better form of money, then because Bitcoin is able to also facilitate the transfer directly, and what I mean by that is you don't need, like if Bitcoin wasn't capable of being sent, but somehow all these other properties happen to be true, which realistically, they all have to be true or none of them are true. But let's just say theoretically, say it wasn't possible.

say it wasn't possible. All the other things were true, but it wasn't possible to send Bitcoin between peers and the network. Then maybe you need some outside currency system to affect that. But that's not the case. People can actually. Because if you couldn't transmit it between people, then maybe I need to go to this other system and then use that system for the transmission. But Bitcoin is capable of being sent. So as the market learns, it has this.

supply and that that's better than any other form of money. Everyone adopts it. And once everyone's adopted it, there's no need to go back out into this other currency system. So was part of this because you're worried about stable coin regulation? Because that's obviously like another growing thing in DC. And like we know Paolo is over here. Lutnik's in charge. Is that one of your fears with this? What I would say is that the There's no sense. There's no good that comes in my mind from defining Bitcoin expressly as not being something that it is.

Because two things end up happening. Either people figure it out on their own later and they think that you were either lying to them or somehow, I don't say lie, that you were. But that's a good point. That you're either being untruthful or that you were ignorant, you didn't know. And neither of those are good outcomes. Yep. And that when they do figure it out, that they're more likely to overregulate.

And so if you've put something in a box today that says Bitcoin is expressly not currency, then and that something else is that stable coin is currency and that Bitcoin is not what is that it is not like what purpose does it serve if Bitcoin is currency in my view and I don't believe

that this is at all Michael Saylor's intention but if you put it into that box it then makes it you've created the framework to then say, oh, and you can't use it for transactional purposes. It's not currency. This is currency.

The person that's framing the policy might not have that intention, but that's how it becomes, you've essentially created the framework to then affect a policy like that, at least legally. And it is problematic when Bitcoin is currency. You're essentially putting Bitcoin in a box, like a square peg round hole situation. because people are using it as currency every day. And then this is the other thing is,

functionally, if you were to say that, that it's not currency and that it shouldn't be used as currency, you're also then saying, because this is what happens every day, is that Bitcoin is traded for dollars, that you're then, you're steering toward a path where it's okay to transact Bitcoin for dollars, but not anything else.

Yeah. And why would you do that? And I think that the root of it is that you don't want to be scene is competing with a dollar. Yeah, I was going to say, is there an argument to be made that as like a Trojan horse mechanism, just pretend it doesn't compete with a dollar, get Bitcoin in office as much as possible, and then people will figure it out later? I can't.

Kind of speed run the policy side of the policy side. Yeah, I'm, that's one side of the logic. I think that's short-sided. I don't know if that's the side of it that is dictating this. but, or in terms of the, anybody like Michael Saylor, who again is somebody that I have a lot of respect for, I can't say, I can't speak for him. I do think that it is inconsistent with the economic gravity,

it is inconsistent with the economic reality, and that it does, it is problematic for anybody that's working on, like I'm working on Bitcoin. So part of it is a policy perspective and saying, hey, this actually is the economic reality. This is why it is currency from a fundamental perspective just in terms of what the actual distinction between money and currency is and why Bitcoin is unique and it's able to affect all of these currency functions thereby or therefore its currency. But when you're actually working on helping businesses right here in the U.S. or around the

world, except Bitcoin as payment, it is problematic when there's a active movement in DC to try to say, this is expressly not that thing. Yeah. And so, like on that same thread, do you see the stable coin side of things and the stable coin regulation they're trying to put in at the moment as kind of like a misnomer? And if everyone converged on one currency, that's kind of irrelevant anyway. Yes. Yeah.

That it's kind of, you know. It's like a short-term thing. It's not going to be here for a long time. Yeah. And I think it's so funny because I think, not to go down another tangent, but it's like calling solar energy and wind energy renewable and clean when it's only, quote, renewable if it's economically sustainable. Yeah. But you put this word on it that is a pejorative. It's like, oh, it's renewable, therefore it's good. It's renewable.

And you're like, what do you mean it's renewable? You still have to produce it. Still have to refine it. They put this term stable coin on it. It's like, well, it's only as stable as the underlying fiat currency. And the fiat currency is not stable. The fiat currency is losing its value. So you're just putting this word on it.

And in reality, what it is, it's more akin to a credit card. it is more a different method of payment of an existing currency. Yeah. We don't consider Visa MasterCard as being a different money. No. Like we didn't have to create a new coin. So in my mind, it's kind of crazy that, one, it's not a stable coin. It's a fiat coin, it's a dollar token.

It's a different way to transact dollars. It's more of a method of payment than it is a currency. So you don't need to define this expressly as currency. No one needed to define what happened when Venmo are selling, you know, transacting dollar claims as Venmo coins. Right. And so the basis of it is illogical. The thing that it, the only thing that would be problematic in the context of Bitcoin is if you say, this thing is expressly currency,

And this thing Bitcoin is expressly not currency. Yeah. I don't care if people spend their time munking around with, you know, public-private key encryption as a way to move claims on dollars. I haven't, whatever, do it. But don't try to put Bitcoin in a box contra it because you think that instantiates, you know, what you're working on over it. Yeah, no, I totally agree with that.

And so is this really like the edge you see at Zapbright that people aren't appreciating that Bitcoin is also a currency? No, I think that the single thing that is holding back Bitcoin payments, or there's a number of things. But the greatest thing holding it back is just adoption of Bitcoin. That you have to understand why Bitcoin will store value over time before you want to be paid. if you accept that still very few number of people in the world understand the basis of Bitcoin is money, then it's also logical that not many people are accepting it. At the same time, what is true is that going down the money rabbit hole is something that's very esoteric.

It's very difficult to understand money. The concept of money, I always want to say intangible, but it's just not. tangible and that one of the biggest Elena Medellivia was here over the weekend and she got a question. I can't remember what the question was, but she mentioned that some of the biggest pushback she gets to Bitcoin is, well, you can't spend it anywhere. And so it appears to be this chicken egg problem, which I don't really think is it's more so people first have to understand why Bitcoin stores value. It stores value because of its fixed supply. But if you're not yet there, than if very much feels like this chicken egg problem of, well, no one accepts it.

So therefore, it's unintuitive to me as money. And that part of what will help people understand Bitcoin as money, it's like the first people that go down that rabbit will have, like unavoidable have to think about these economic concepts. But when someone sees Bitcoin being accepted at the gas station, it's going to become much more intuitive as money. And that the vast majority of people are going to begin. to understand Bitcoin as money because it's able to be used as money. So tax policy can hold Bitcoin payments back.

Totally. But it's not the principal thing. It's Bitcoin adoption, you know, that when we go from a world where one in a hundred people understand Bitcoin to two and 100 to three and 100 to 400 to 400 to one out of 10, as the density of Bitcoin holders increases, the opportunity. for trade increase. We have to, you know, the way we think about it at Zapparite is we have to put the tools out into the world that the people that already understand Bitcoin that run businesses

will make it easy for them to make that option available. As we do that, Bitcoin becomes better money. It becomes a greater utility. You can't, you don't have to just convert it to dollars. You can actually just take it as money and then go on to the next person. but that through that process, the next wave of people, they'll start to be seeing it used as they have no money to be, but then they also won't be able to say, well, it's not accepted.

Yeah, it just takes time. So are you seeing Bitcoin payments grow? Because I use that right. And every time I send an invoice, I have the option for them to pay in dollars or in Bitcoin. And I'm sending these to Bitcoin companies, and the vast majority, like almost all of them, are still choosing to pay in dollars.

Do you put a premium on dollars? I don't yet. Because it's not in the contract for me to do that. Okay, but then put a discount. So we actually, so we, I was the big, or I don't say that, I don't take, okay, for me personally, I charge a 10% premium when I sell my books. Okay. When you put a premium on Fiat, people respond to that incentive more so than when you put a discount

on Bitcoin. The way that BTC session, I've seen him describe it, is that, so say, like, the book costs, when I sold the book, it's $30 if you pay in Bitcoin. But if you want to pay in Fiat, I'll take it, but it's 33. There's a 10% premium. When you put a premium on it, not only does it communicate to the buyer without having to have a conversation. This is part of what we think about it, Zabri. Like, how do we, the way that we deliver value is not just by making the option available to pay, in Bitcoin, but to actually drive the Bitcoin payments.

Because what that allows you to do is it dollar for dollar or sat for sat allows you to get more sets. Like if you're going to get the dollars and then convert them to sats, you're going to end up with fewer sets. Yeah. That are us as app right. The way we deliver value to you, the podcast, Danny, is not simply by making that option available.

It's by actually driving the customer to follow through and pay it. so that you can get more sats, right, so that you can get more money. Well, when you, when I give people for my book, the tradeoff, when they're paying the premium, it feels like something's being taken from them. Yeah, it's just a reframing. It's a reframing, but it causes them to change their actual behavior. Yeah, well, what's the difference? It's like, well, no, because when they feel like, I'm actually paying more than I otherwise would,

they're more likely too. Like it's just statistical. I can prove it to you. If I could show you all my statistics, it's provable. Yeah. Now, we also give the opportunity to put discounts for a lot of people that use the invoices because of what you just said, I've got a contract. Such that it will feel like I'm breaking my contract if I said, well, it costs X to

advertise with me, but it's actually X plus 10% if you pay me in the currency that you want to pay me in. So you can put the discount on it, right? Yeah. Because you're providing a discount to whatever your contract was. Now, the reality is that even though I said that adoption is the greatest barrier to Bitcoin payments, that you need more density of Bitcoin holders, the tax is still an impediment. I just recently wrote a piece explaining why, you know, when you're spending your Bitcoin, if you have a gain on it, it's only because your Fiat didn't lose value.

you're you saved in a form of money so it's more of a spending bitcoin dilemma it's more a spending versus savings but the tax is still it is a friction yeah you know if if there weren't taxes on it that would be a friction removed it's not the greatest friction the greatest friction is adoption but this still say they were saying to odell in nashville yeah but um in your case like there might be companies with bitcoin that they the bitcoin companies don't yet accept Bitcoin for transactional purposes and their and their accounting is the friction. Yeah, I spoke to one in particular. That's the reason they can't do it. Like they would like to do it as well, but it's an accounting issue. Yeah. And realistically, that's a human issue. That's,

if someone in the accounting department that's saying no. Yeah. And that if the CEO of that business said yes, they'd have to just go to their CFO or their account and say like, figure out. It's important for us to do this, figure it out. Yeah. Because it's a solvable problem. other companies are doing it. You know, so what I would say is that using Bitcoin as a currency, it's like, because the article I wrote just the other day was explaining why like the logic of spending Bitcoin of like you're not worried about foregoing future appreciation because if you're spending dollars, it's the same foregoing because you could convert those dollars to Bitcoin.

The next one I'm going to write is the efficiency of Bitcoin transactions that if you have two Bitcoin holders on either side, if you and somebody wants to receive bitcoin and someone has bitcoin that's technically capable of sent regardless of the friction that those two economic parties are going to save about 5% if they don't have to interface with the fiat system so that that makes sense it's funny so oh like two years ago let's say i was living on as close to a bitcoin standard as possible like i was spending everything on my credit card throughout the month um paying that offers once i got paid and everything else went into Bitcoin. So I never had a single dollar in the bank account. Now, with the business that I've now got, I have to have some form of dollars there. And also just personally, like I've had a kid since then,

and I feel like I need something in reserve. Do you think that's the wrong way of looking at it? No, I think it's the right way to look at it. I mean, everybody has to, volatility is real. and even though Bitcoin is functional as a currency system it's in the process of being

improved such that like we're going to get to a world in the future where everyone accepts it the reality is still that that future is not yet here so you know having some dollar reserves

is perfectly logical It kills me every time I look at it, though, when the price crashes. I know. But if you think about that over time, you know, it's like go back to when Bitcoin was $10,000 or $15,000. You know, that functionally over time, what you're going to optimize for is how you can most comfortably hold the most amount of stats. Yeah. And that, you know, the economic energy that you would spend trying to. to time things is an actual cost to you.

So, you know, that's one of the arguments to having some dollars, which is like, I didn't, you know, for a month or two months, I don't want to have to worry about. Do I have, you know, do I have enough dollars in the bank to cover expenses for the month? What I don't know, though, is if, like, in the scenario where I would need to dip into, like, the Bitcoin stack, if I'd have still been better to have held Bitcoin in the interim. Yeah. I think, remember the guy who defined, or the hoddle thing? Like, yeah, if I knew exactly when the next guy was going to sell and then be able to perfectly time buys, yeah, I would do that. But if holding for the long term is the best thing, then if you need to dip into that, like say, say if you needed to dip into 5,000 pounds or dollars, whatever. Yeah, if you had been able to sell it at when Bitcoin was 100,000 or 105,000, you'd have more stats left.

Yeah. But life doesn't work that way. Life doesn't work that way, but also zoom out, if you had chosen not to save that $5,000 in Bitcoin when it was $10,000, you'd be in a much worse. Yeah. So as long as you're, this is the thing. As long as you're consistently delivering values that you can build up savings, you're going to get more Bitcoin in the future. And volatility is real

So there's some distribution of Bitcoin versus dollars or Bitcoin versus euros Or Bitcoin versus pounds However you can comfortably hold the largest amount

in Bitcoin You're going to be better off Yeah But you don't want to constantly be sitting there thinking Do I have enough? Do I not? Yeah.

This is what Bitcoin does to you though, you're always thinking I'm not about enough Bitcoin. And, but one of the points that I make about like, because people are, well, people don't want to spend their Bitcoin. Imagine someone that has, you know, like myself, I almost have, I almost have 100% such that if someone did, you know, allow me to pay in Bitcoin, I'll pay in Bitcoin because it just makes my life easier. Yeah. Because the alternative would be I would sell those for dollars and then move dollars.

That one of the, one of people's hangups, whether they're a merchant or a consumer is, I don't want to part with my Bitcoin because it's going to go up in the future. And that is the incorrect frame because what your real dilemma is, is whether you should spend it all. Yeah, it's all opportunity cost. It's all opportunity costs. And because you have this expectation of Bitcoin going up in the future, your spending versus savings decision is necessarily sharpened.

Yeah. But say imagine I had a thousand dollars and $500 of it was in Bitcoin and $500 of it was in Fiat. And I went out and got a stake for $50 and just spent the dollars. Makes no difference because that could have been Bitcoin. I could have spent the $50 on Bitcoin. Now, say, if I have a thousand dollars and it's all in Bitcoin and I'm evaluating whether or not to go buy that $50 steak, I'm sitting there thinking, this money's going to appreciate versus in the other one I was thinking, oh, my fiat's going to depreciate. I might as well go get the stake. It is the same dilemma. And if you're hungry, you're going to go and do it. Right. Yeah. And that we all have needs and wants them, both are valid. So it's really should you save or spend,

not whether you should save or spend the Bitcoin. And then, as I mentioned before, the tax only, you know, you only have a quote gain if fiat's gone down. and that you've made a good savings decision. Yeah. Amazing. Thank you for this, Parker. It's been a great week. Appreciate you coming back on the podcast.

I appreciate you coming and hanging out during the takeover and being a part of it. You know, appreciate you emceeing a portion of the takeover and then doing the live podcast with Marty. It made the event that much more special. So it's a lot of fun. Appreciate you being a part of it. Thank you, Parker.