{ "episodeId": "SLP413", "speakers": { "stephan": { "name": "Stephan Livera", "role": "host", "tag": "STEPHAN" }, "jevi": { "name": "Jevi", "role": "guest", "tag": "JEVI" } }, "segments": [ { "speaker": "stephan", "time": "00:08", "start": 8.41, "text": "Hi and welcome to Stephan Livera podcast, sure about Bitcoin and Austrian economics. Today my guest is Jevi from Unchained Capital. Jevi joins me to talk about the crypto collapse earlier this year and why this is the right time to learn about Bitcoin self custody. We talk a bit about his journey coming into the space, as well as the fiat and yield chasing mindset, as well as why now Now is the time to learn about self custody and removing single points of failure. This show is brought to you by Swan Bitcoin, and Swan is organizing a conference, Pacific Bitcoin. It's going to be on in November, on the 10th and the 11th. It's called Pacific Bitcoin. This is gonna be an all new West Coast event, deeply dedicated to Bitcoin and Bitcoiners. There will be multiple stages, there'll be a main stage, there'll be a SwanDome, there'll be a Bitcoin lab, there'll be all kinds of fun and events, as well as opportunities In this space. So if you're interested, I highly recommend getting together with some friends or family members of yours, bring them along, it'll be really fun. I'll be one of the hosts and there'll be so many awesome bitcoiners there, so get your tickets over at pacificbitcoin dot com and use code livera for a discount on your tickets. For those of you interested in Bitcoin mining, brains dot com is the site to go. They've got a range of different products and software that you can use as part of your Bitcoin mining journey. If you have Bitcoin mining ASIC machines, make sure available for them, because if it is, you can upgrade your performance by as much as twenty percent. You might be getting a higher hash rate, or you might potentially be using low power mode, so you can reduce the power consumption and maximize your efficiency in terms of joules per tera hash. So those are some great options for you. They also have Brain's Farm Proxy, which can help you manage your fleet of mining machines, and they've also got an analytics dashboard which you can use to do all kinds of Bitcoin mining, profitability calculations. So you can find all of this over on On the website over at brains dot com, that's brains with two i's. Mempool dot space is the Bitcoin explorer built by Bitcoiners for Bitcoiners. It features real-time transaction tracking and mempool visualization, and recently, the big new feature coming out is the Lightning explorer, so you can now use mempool dot space to search the Lightning network. So if you have a Lightning node that you wanna search, let's say you wanna just see what are the biggest nodes in terms of connectivity or in terms of liquidity, or maybe you want to actually trace the Down the transactions that involve channel opens and channel closes. You can see all of this over on mempool dot space, and don't forget, this is available over Tor and it's completely open source. So if you want to, you can run it yourself on your own hardware. Over one million people use mempool dot space every month. It's operated freely for the benefit of the Bitcoin community without ads or third party trackers. Go to mempool dot space and check it out. Onto the show with Jevi. Jevi, welcome to the show. Thanks for having me, great to be here. So, yeah, it was great to meet you, just recently over in Austin at Bitblock Boom, had a chance to, you know, quickly chat, obviously, you know, it's, you don't really get a chance to kind of have in depth conversations with everyone, but, you know, I think that was cool and, I know you're working at Unchained, you're doing product management there as well, and, you know, lots of things we can" }, { "speaker": "stephan", "time": "03:26", "start": 206.19, "text": "Bitcoin, before we get into everything. Yeah," }, { "speaker": "jevi", "time": "03:29", "start": 208.99, "text": "sure. so I, I'm an American, but I was born in Germany. My parents worked over there, for about twenty years. I moved back to the States, to finish high school. I've effectively been in Minnesota since then. And I went through, I worked in tech for a long time doing user and support, doing some IT work, and during that period, kind of transitioned into, pursuing a passion in photography and video work. which then became a full time operation for me for better part of five or six years. And then, I had an opportunity to work at a startup in Minneapolis, where I started out as kind of a video photo expert and that kind of, migrated into product management for me. that startup was acquired by Microsoft, so I was at Microsoft for a few years. And during that period of working at Microsoft, was when I started to really get into Bitcoin, I actually fell down the rabbit hole initially with Brandon Quittum, who's a really close friend of mine. Our wives are actually friends with one another, and, we actually were roommates before we were friends because, Brandon and his wife needed a place to stay after coming back from Thailand or somewhere else. And so we were sitting around the dining room table just falling deep into the rabbit hole at the end of 2017. And during my period of kind of slowly shifting into understanding Bitcoin better, understanding- Our, our economic system. That period during that bear market, there were a lot of distractions for me. I got married, we had our first kid, the startup that I was with got acquired in the summer of twenty eighteen. So I kind of, I lost track of Bitcoin a little bit. Brandon ke-kept going and, you know, occasionally would nudge me to a little bit like, \"Hey, you know, don't forget this is over here.\" But then it wasn't really until the pandemic hit and I've always been a little bit of a gold bug In years past, had some silver and gold in a safe, and then when I saw the money printers fire up, after the pandemic started, I was like, \"Oh, Brandon, they're, they're just gonna print, aren't they?\" He's like, \"Yeah, they're gonna print.\" so, yeah, and so I started to then realize that, and I, I had a good run with the startup that I was working at, and, I really enjoyed the people that I worked with, but, the product was starting Starting to move in a different direction than what I was interested in. We were building an edtech platform and they were wanting to drive it more in the social media direction. And at the same time, it became very clear to me that, Bitcoin is what I'm passionate about, and I really wanted to pursue an opportunity in Bitcoin. And so in the fall of twenty twenty-one, it was actually at, Bitblock Boom last year was, I was waiting in line to get my, my name badge and Brandon pulls Parker Lewis over and says, \"Uh, Parker, I'd like Your new product manager. Haha. And start chatting with him, start chatting with Will Cole, and about a week later, I had applied for the job and, yeah, started there. So I've been there now, a little over nine or ten months." }, { "speaker": "stephan", "time": "06:41", "start": 401.05, "text": "Fantastic. And, and I mean, that's great, and I think it's a great example of networking and the connections that you make in the space, especially when you go to some of these events, whether it's a conference or, or a Bitcoin meetup. If you have even one or two friends who are already there, and they can introduce you to people, you know, Brandon's a colleague of mine at Swan, and obviously I'm a big fan of Parker and Will over at Unchained, and, you know, I think they're doing great work, and their ability to help educate Yeah, it's really cool to see the, the interconnections there. And so, yeah, coming in as a product manager, I, I suppose, and you mentioned you were previously a gold bug, so were you already into Austrian economics or was that like kind of there or not really? Austrian" }, { "speaker": "jevi", "time": "07:26", "start": 446.14, "text": "economics was entirely new to me, and that was something that I began to learn and, you know, starting to dig in a little bit on the Mises Institute, you know, obviously discovering the Satoshi Nakamoto Institute And when you approach these concepts with an open mind, they become very apparent very quickly. for a lot of people, they're so scared of letting go of what they know and what they're familiar with, and so they see these new concepts and they immediately hit a wall and there's apprehension, there's a lack of interest in better understanding how things could work if you give proper economics an opportunity to thrive. And I think That often-- I mean, this, this concept applies broadly in a lot of different areas of our lives, is that when, when there is an existing framework, the notion of moving to a new framework seems impossible and the distance that you need to close in order to get there, seems so hard to overcome that, even the thought of pursuing it or entertaining it just seems unwarranted or impossible, and so there's no need to apply any thinking to that. area. But if we took that approach throughout humanity, we would never have progress. And so I think that there's, there's a fundamental mismatch in terms of people's capacity for recognizing that there can be revolutionary changes, in a very short period of time. People often will not recognize how quickly the internet came about. I mean, even in my lifetime, I recall a time when the internet was in its infancy. I was there, you know, relatively early on. I was lucky enough to have a computer, and access to the internet from the time that I was, you know, eight or nine years old. But commercial enterprise online is something that's really only what, less than thirty years old. And to think that we can't have these kinds of monumental, innovative changes in our lifetime is, I think, short-sighted." }, { "speaker": "stephan", "time": "09:36", "start": 575.69, "text": "Yeah. And I think as well that point about how sometimes there are things- Where people just don't really think about it, they just use this technology or whatever it is, and only-- it's, it's only if somebody focuses your mind to it, and then all of a sudden you actually start reading further about that, right? Like it's like how everyone uses fiat currency without really understanding, you know, if you ask the average person, \"Oh, how does Fedwire work?\" or \"How does, you know, how does the ACH system work?\" No, there's like basically no chance they'll be able to tell you, unless they're like working in the industry" }, { "speaker": "stephan", "time": "10:11", "start": 610.77, "text": "be able to explain at least some of the basics, okay, this is like a transaction and it's broadcast to the network and things like this. And so I think it's, it's about awareness, and I think that's also a conversation as well around risks, and I think a lot of people are unaware of the risks that are just sitting out right there, and they're just taking them right now in the fiat system. And I think that really plays into, I think what we saw with this recent, you know, with the recent collapse as well of the quote-unquote crypto world, we Providers and companies, you know, BlockFi, Celsius, Vault, Voyager, Babel Finance. I think it comes down to just awareness and maybe people's awareness was not up to the level. What do you think?" }, { "speaker": "jevi", "time": "10:53", "start": 652.98, "text": "Yeah, no, I, I think you're absolutely right. I think, well, I think for starters, there was a, a lack of proper disclosure amongst many of these companies in terms of making clear what the risks were. you know, and you've got people on Twitter and places like, let's call- called it, fake vision, who talk about risk-free yield, and there is no such thing as risk-free yield. If you're looking to get yield on a product, you ultimately have to put capital at risk, and a lot of people misinterpreted the notion that, well, you know, five, ten, fifteen, twenty percent yield, you know, they're only looking at the, the big picture of like, okay, well, worst scenario, maybe they reduce that yield over time, something that, like, a BlockFi would do, where Your yield on your deposits were slowly shrinking over time, they would update their yields every six months or whatever. But most people wouldn't take into consideration what the other side of the coin was. What happened if there was an insolvency? What if there was a contagion event that would cause everything to collapse? No one thought about the fact that, well, you know, the upside is five or ten percent annually, the downside is a hundred percent overnight. So I think that there was blame to be had on both sides. A lot of people were just taking, were put- Putting too much risk out into the market and not accepting responsibility for understanding the risk that they were taking on. And then on the other side, there were a lot of, industry businesses that were not properly disclosing the real risks and the real trade-offs. And we saw that with, the way in which people responded to the recognition that Coinbase had in their legalese that in the event of, bankruptcy or other kind of, event where they needed to close things down Effectively, people that had Bitcoin or any other crypto in their account were the last in line effectively, and they were likely not gonna get their money back. And people think, \"Well, you know, these institutions are so big and they've been around for so long, there's no way they could go down.\" But anything is possible, right? And that's one of the, the challenges that I think a lot of people see in crypto broadly is that it is this wild west, and this free market and it's still very early on, and so there's a lot of volatility involved, and, not everyone is in a position or doing a very good job of, mitigating that volatility and thinking about the long term and lowering their risk profile and being smart. there's, y-you may notice that there are far less instances of Bitcoin-only companies that are having these challenges Challenges during the bear market of, you know, reduction in staff and doing all of the, rescinding, offers that they had already extended to people, whereas in the, the crypto space that was pervasive. And so I think that kind of, that, that is a perfect example of how there is a, a different approach, a different modeling in terms of what is risk." }, { "speaker": "stephan", "time": "14:04", "start": 843.69, "text": "Right. And I think it also comes to, of course, we're living in this fiat currency world, the fiat system is the dominant one today, of course, we wish it wasn't. That way, we wish it was the Bitcoinized future, but, you know, accepting that's, that's the model, that's the paradigm for most people today, and they are probably coming from a paradigm where they are looking for yield, right? Like, and that's, that's just-- there's just such a strong demand for yield that perhaps people are willing to overlook certain risk factors. And so I think, I wonder how much of that plays into it. Is it just that so many, I guess, non-orange-pilled Bitcoin types are- They're just looking for yield, and either they individually or let's say the fund that is investing their money, it could even be a pension fund, right? So as I'm sure you saw, and many listeners probably saw, there were those lists floating around of who had put money into Voyager, or who had put money into some of these different ones, and it was quite surprising to see who had put money in. There was even a Canadian pension entity who had done this. And so it's quite pervasive, it's not just individuals just getting wrecked on these platforms, it was large institutions. I think," }, { "speaker": "jevi", "time": "15:12", "start": 912.01, "text": "yeah, as you rightfully point out, because we have been trained into this inflationary monetary system where we assume that the only way that we can stay ahead and retain our purchasing power is by chasing yield, and I, I think most people in society don't even actually understand that, right? They, their understanding of, broadly speaking, financial literacy is, woefully under-prioritized, especially in our education environment, which we could argue whether that's intentional or not, but we're not gonna go there today. However, most people don't understand the risks that they take on, they don't understand why they're chasing yield, they just know that they need something that continues to grow over time, because otherwise they're not gonna be able to retire, they're not gonna be able to, you know, pay for their college, the college for their kids. And I think that there, you know, for a lot of people, there was this, spark, this light up moment Where, you know, crypto may not have appealed to them, but they could understand stablecoins because they were a US dollar, and here was an opportunity to deposit money into a bank and get a yield, right? But nobody actually asks-- oh, well, the only person that really asks is Alan Farrington, who asks, \"Where does the yield come from?\" Right? And if you try to follow the yield back, oftentimes you end up right where you, where you started. it was a- Very, the cyclical system of, you know, one, one person having a, a can't-miss trading scheme, as Will mentioned during his talk, and when you actually follow that back around, it's really just kind of recycling the same stuff over and over again, and people think that they aren't going to get involved in a, a Ponzi scheme, but if you aren't looking for what is actually there, it's- It's gonna likely end up turning out as we saw with the three Rs Capital and, all of the other lending, unsecured lending, whether, you know, All of the, the shenanigans that were unfolding during that period. Once everything came to light, it was very clear, like, \"There's really nothing here. It was just people recycling, existing money.\" And, I think that that was very-- the, the concept was very appealing to people, right? And in a world of inherent volatility, Bitcoin still feels too risky. I think that's one of the biggest challenges that we face in terms of providing an understanding of- Bitcoin to the average person is that they just see the volatility and they don't think about the broader perspective, and they don't understand scarcity, they don't understand supply demand inelasticity. And so ultimately, I think that this last cycle was instead of ICO craze where people are just chasing massive hundred xers or whatever else might be happening out there I think people were actually being misled into thinking that they had stability, into thinking that they had, you know, something that they could rely upon to provide them with a very comfortable fifteen to twenty percent return. It was guaranteed, it seemed, and I, I think that lulled people into a false sense of security. And unfortunately, most of those people now are just gonna simply swear off crypto altogether, alright? they just no longer have any- The interest in playing that space, they think it's too risky. Even the stuff they thought was safe is risky, and it, it really, it harms, it harms the opportunity for people to, be able to start retaining their purchasing power in something that is provably scarce and has a, an immutable issuance. And that value proposition is still too hard for most people to understand." }, { "speaker": "stephan", "time": "19:16", "start": 1155.51, "text": "Yeah. I also think to the point from earlier about the can't miss trading strategies, like our friend Will, talking- Spoke of, it, it's that people weren't quite aware that there was almost this CFI to DeFi recycling going on, because people were on the front side putting their money in with the likes of Voyager and so on, but actually on the other side of Celsius and so on, they were out putting their money out to Three Arrows Capital and others out there, and when the cycle turns, or perhaps in the case of Three Arrows Capital, where they were Coming up by profiting from the GBTC arbitrage, and when that arbitrage flipped, it be-- it went from going a premium into being a discount, right? Perhaps that was when, maybe that was when 3AC started to come undone because they started to take increasing amounts of risk to try to make it back. Right. Instead of unwinding" }, { "speaker": "jevi", "time": "20:09", "start": 1209.31, "text": "the trade, they just simply tried to figure out ways in which they could keep that same strategy alive by going elsewhere, and, they probably would have been Much better off had they just unwound the trade, taking a small hit on their overall profit, but they've, you know, they had still massively up, right? Right? And it, you know, it's greed and ego play a huge role. The, the, it is very difficult for people to be able to, especially once the, the numbers start adding up, there is this sense of pride in thinking, \"Well, I, I clearly am very good at...\" Trading and finding these arbitrage opportunities, and there's no way that I can, give up on this. I need to continue to pursue this. So there's this ego component, just that I just described, and then there's the greed component of, I've seen number go up in my bank account, it's now eight figures, it's nine figures, I don't want to, give up on this new lifestyle that I've achieved. It's this like insane process of thinking like, okay, you know, five mansions One in Singapore, one in Malta, one in Miami, and one in the Bahamas, wherever else, is somehow normal, like that's the new normal for you, right? and you have to keep the system going, you have to keep it alive, and, I think that there's a lot of, there's a lot of people that would benefit from just staying humble and stacking Sats." }, { "speaker": "stephan", "time": "21:38", "start": 1297.88, "text": "Absolutely. And I think, yeah, it, as you say, it comes down to ego, overconfidence, and people just thinking that they're above it all. And I think- That is so seductive as well, and I, and I look, being honest, it's also during the time, like in twenty twenty-one, when the, when the, the heat is on and everyone's going crazy about it, there are so many times I'd be getting questions, \"Oh, hey, what do you think about this platform? What about, what do you think about yield here?\" And, you know, it's, it's, it's quite seductive, so I'd be constantly being like, \"Uh, look, I wouldn't, I'd rather, you know, you know, who doesn't get the new thing? Don't you get the new thing? It's, it's all about yield, and look, it's eight percent risk free or it's twenty percent risk free or whatever, right? And so I think there's a possibility to run with it all and get lost, and it could be even like, it doesn't just have to be in this context, it could be even like Bitcoin mining if they stretch themselves too far or if they lever up too far, and like the whole industry, no matter where your place, your position, I think there" }, { "speaker": "jevi", "time": "22:47", "start": 1366.61, "text": "I still have, you know, I, I try not to rub the receipts in friends' faces, but, you know, from last summer, there were friends of mine who were asking about Celsius, and I was like, okay, well, can you explain to me how this works? You know, it seems suspect. How are they offering this high of a yield? What's the risk? You're still ending up on a custodial exchange that has its own risk profile. You know, not all custodial exchanges are equal, but certainly some of them seem a little bit more suspect. And Celsius fit the profile for me. And you're absolutely right, you come off as a boomer that doesn't wanna, you know, take on a safe eight percent yield on their Bitcoin. And on the flip side, when it all comes undone, you don't wanna rub it in their faces, right? You wanna find a healthy way of being able to explain, \"This was why I was thinking about it in this way. This is why I saw the potential risks and why I was recommending that you not take this approach or that you...\" To limit your exposure as much as possible, and that you're ready at any point in time to get out of there, but keep in mind that Celsius flipped the switch on withdrawals before anyone really had a chance to do anything about it. And that's, that, that to me, that's the unfortunate, risk that most people don't take into consideration when they think about the trade-offs of convenience versus security, and ultimately what Bitcoin is supposed to offer you. Bitcoin is a bearer asset, and it is the first time that we have the ability to really hold something tangible in the digital world, and we can control it in a way that no one else can do anything about. But, I think that for a lot of people, there isn't-- there's just fear of the unknown. There's fear of how do I approach, securing those keys? How do I make sure that I don't lose them? There's a lot of personal responsibility that's- starts to add up. And so I think a lot of people are apprehensive about taking that leap of faith and think to my-- they think to themselves, \"You know, a custodial exchange is basically like the crypto version of a bank, and I trust my bank to secure my larger deposits on my behalf. I don't like to be worried about that. I know that I can go and take those out at any point in time.\" And I think that a, an analogy to present here Is most of society at this point doesn't remember, a, a world where a hot war was really part of their daily life. you know, most of, Western Europe and Japan relative peacetime for the better part of seventy years. Obviously, I'm not discounting other military engagements that have happened in the, in the years since, but a large swath of the people that are in particular engaged in In, in modern society, in the crypto space, don't have that context, and they don't know what it's like to suddenly have their bank accounts frozen. they don't know what it's like to, go through this experience of being insecure in your own space and needing to leave on a moment's notice of having to cross borders potentially and having all of your belongings stripped from you. And when you have enough of a, a gap between generations that have experienced- experienced war, there starts to, there's this growing complacency and this lack of understanding of what that experience is like, and you can, draw that comparison into the crypto space, w- Most of people, haven't experienced, any type of, government intrusions on their wealth. I think what the, the prohibition on owning gold privately in the United States ended in nineteen seventy-four. And so you have to consider the possibility that just because we haven't experienced in our lifetime, doesn't mean that it isn't possible and that we shouldn't consider potential risks, and especially- As the world, you know, now in terms of military engagements is, is heating up again a little bit, people need to be mindful of, what might happen in those, situations. People in Eastern Europe are certainly far more aware on a more recent basis, or people in Lebanon or people in Turkey, they're seeing what happens if they leave their hard-earned value in a legacy system, in an inflationary currency or in an environment where they need to extract- themselves, those legacy financial systems don't serve them well. They don't hold up under pressure, and I think we are very likely going to see an increasing pressure across the world. I, I think that we're, heading in a, a very interesting direction in particular, as it pertains to energy policy in Europe, and how that may spread in terms of risk, into broader economies, even though other- places might have energy security, one area's, energy constraints can create, credit issue that then can spread to elsewhere. We've seen that happen with the, the housing bubble in two thousand and eight, that had a massive impact across the world." }, { "speaker": "stephan", "time": "28:17", "start": 1697.08, "text": "Back to the show in a moment. I use the website bitbo.io to periodically check on a range of things through the day. It has things like the price, it has Bitcoin network stats, Lightning stats, mining stats. You can see things like sat per dollar. So you can value things in Sats. It's also got a Bitcoin magazine feed, as well as comparisons of things like the inflation rate and comparison versus other assets such as gold or gptc, what's the premium? And you can see things like the projected halving dates. as you might have seen on Twitter, there was recently some, discussion about when the actual halving date will be. It's not gonna be in twenty twenty-three, and you can check that on the website bitbo dot io. Now, when it comes to Bitcoin self custody, really stop and think, do Setup. If somebody came to your house or if somebody got your hardware wallet, would they get your coins? Well, with Unchained Capital, you can improve that by going to multi-signature and removing single points of failure from your setup. So with multi-signature, you can have two keys in different locations alongside two metal backups for the seed, again, in different two, in a, in different locations, and Unchained holds the third key. So if you need help with this kind of setup, they've got a concierge onboarding program and they can onboard you very easily, and they can Withdrawing from the exchange into your own multi-signature vault. So this is a great setup for those of you who want to improve your security. You can find out more go to the website unchained dot com slash concierge and use the code Livera for a discount on your concierge onboarding package with Unchained Capital. Now, when it comes to Bitcoin hardware, my favorite are the products over at CoinKite dot com. I find them really reliable. My favorite is the Cold Card. I find it very versatile and useful as a tool that you can quickly spin up new wallets, you can Phrase you can use BIP eighty five. There's just all these different ways that you can use your cold card to help you secure your Bitcoin. I particularly also really enjoy the address explorer feature, which is available in the cold card. You can use it to check your receiving address to make sure that you really hold the private keys as-associated for that Bitcoin address. So there's all kinds of features and you can learn more and you can order your cold cards either for yourself or for your family and friends that you're helping onboard, so you can get all of that over at coinkite dot com. Use code Discount on your cold card. And now back to the show with Jevi. Yeah, and a-as, and as our friend Brandon talks about, he talks about cycles, right? He's big into this idea of, right, the different cycles and paying attention to what's happening, around us in the world and looking at that, where are we in that cycle? And I think it's also relevant that, you know, at various times in history, there would have been some people who said, \"Hey, hey, we gotta get outta here, like it's not" }, { "speaker": "stephan", "time": "31:00", "start": 1860.11, "text": "All good, they got wrecked. And unfortunately, that's, you know, that's, that perhaps there's a little bit of that in the, in the Bitcoin culture, in that we're trying to help warn people about, hey, these are the problems with the fiat system. Your money is, is being inflated, you're guaranteed to lose purchasing power over time, like if you just wait long enough in fiat, and there's a chance they'll freeze your money. And so there's, there's this, you know, it's, it's like the burning platform analogy that people normally" }, { "speaker": "stephan", "time": "31:30", "start": 1890.13, "text": "Burning platform to, to the Bitcoin, you know, to the Bitcoin world. Is it, is it fear of the unknown? Is it, you know, and, and I'm curious as well, you know, from the Unchained Capital perspective as well. I'm sure you get some, you know, customers or potential customers who are maybe, you know, you hear of customers who aren't ready to take that step to self-custody. And, you know, what are the typical- Objections or things going through their mind that, that, that are like the barrier stopping them." }, { "speaker": "jevi", "time": "31:57", "start": 1916.87, "text": "Yeah, I think it's, it's just new. It's entirely-- it's a new concept. There, you know, there are those rare individuals who have been gold bugs who have- Put a giant safe in their basement, and they have bars of gold, and they, they understand what it means to take self custody of a hard asset. I think once gold bugs get over their mental block of Bitcoin not being tangible, physical, something that can hold, they very quickly understand everything else and they're ready to jump in. People, you know, a perfect example would be Lawrence LePard, who was a, an ardent gold bug, and then once The light switch went on, all of a sudden it was like, \"Oh, this is, this is the, the best tool to secure our wealth over a long period of time.\" But I think, a-as I mentioned earlier, most people just don't have-- they have this apprehension of taking that responsibility. They don't want to, they want to, offload and outsource as much of the responsibility to a trusted individual, a trusted third party. this is one of the reasons why large centralized governments are working so well right now, is that there is this complacency that is pervasive in society. People don't want to take on personal responsibility, they wanna have, those, those safety nets put out underneath them for them at all times. And so I think that there's that fundamental apprehension that, most people have, you know- Not just in terms of getting into Bitcoin, but then in going into proper self custody of their Bitcoin. I think once they overcome some of those apprehensions, they're still seeing that risk in terms of, well, I don't necessarily know, I'm not technical, I don't understand what this private key is, how am I supposed to secure it? I'll do something wrong and then it will all be gone, which is certainly an issue that people have experienced. They put their, their money onto a ledger, but then they only do a Paper backup. and then there's a fire or a flood, and both of those copies are done. And people, people have a fear of the unknown. There's a lot of different variables that come into play when you're dealing with self-custody that, you need to be mindful of, and for many people, it's just not something that they're interested in putting a lot of energy into, right? For us as Bitcoiners, this is what we live for. We love better understanding how you can directly interact with- protocol, how you can take control, how you can be self-sovereign, most people don't have that desire. So, I think from there, if they get beyond that apprehension, maybe they understand the risk of having just a, a single ledger wallet with a paper backup, you know, creating a metal backup, on a seed plate or on washers is a manual process, some people are just not interested in pursuing that and they don't wanna take that on. But even if they get- Beyond that, then they maybe understand well enough that a single copy of their private key or two copies is still putting them at risk. One of those gets taken, and whoever gets that on the other end has the ability to potentially sweep their Bitcoin. And so I think slowly over time, as people become more educated, they start to recognize the value proposition of multi-signature. But then you open up this giant can of worms of, \"Well, now I need to...\" To maintain three private keys and three backups, and I need to maintain the wallet descriptor file, and all of a sudden there is so much more involved, and I need to, in order to be really secure, I need to geographically distribute them. I don't know where else I would want to put these. And I think that the, it's just, what you end up with is these, at each step along the way, as they drop further into, comfort level with self-custody, there are these new barriers, there are these new blockades that create challenge And create apprehension. And so ultimately, our goal at Unchained is, once somebody has been able to better understand the importance of self-custody and our understanding the risk profile, they want to secure their Bitcoin as best as they can. They understand that multisig allows for distribution, removing single points of failure, but it's a lot to take on, and it's a lot to take on on your own. Getting a quorum set up and doing all the individual- Keys, understanding what an xPub is, dealing with derivation paths, I don't think anybody could say that it, it's simple. And so not only are we there as kind of a, a guide to be able to help you through the process of setting it up, but in letting us take on the responsibility of one of your keys, it means that you don't have to take full responsibility and take on all of that risk of if something gets, misplaced, your Bitcoin is gone, right? When you walk away From setting up a multi-signature vault with Unchain Capital, you end up with, four, well, five pieces of information. You have your two private keys, your two backups, and the wallet descriptor file. And in theory, with Unchain with you there, you can lose four of those five pieces of information and still be able to recover. Technically, you leave the wallet descriptor file out of it, you could lose three out of four, right? You could lose two private key, two private key Is in one backup and still you'd be able to recover your Bitcoin. And so I think that starts to shift the perception of the risk that you're taking on versus the trade-off of what security you get in the process. Ultimately, we wanna help people secure their Bitcoin for the long run and to ensure that, you know, whether it's five years from now or forty years from now, that they can recover their Bitcoin and still be able to use that for their own lives or- for their next generations to come." }, { "speaker": "stephan", "time": "38:11", "start": 2290.65, "text": "Yeah, absolutely. So let's just walk that through for any listeners thinking it through and maybe you haven't self-custodied before. So the idea here is, it's a two-of-three multisig vault. And as an example, let's say you've got, you know, one cold card and you've got one Trezor as an example, and each hardware wallet has a metal seed backup, right? So each, for each one, you've got a metal backup, and then Unchained has the third key, and Unchained obviously is The script file you mentioned is kind of like the map to find your keys, to think of that. And now if you really wanna be self-sovereign, that's where you keep a backup of that also. So maybe you've got a USB key, maybe you encrypt that or don't, it's up to you. So in the end, you have, let's say, two different locations. So in practice, you might have, let's say, if you've got a safe at your home, you might keep, you know, one of your devices there, and let's say you And then slowly, you can slowly start to geographically distribute your keys and the key backup, the seed metal, seed metal plate backup information. And so I think, you know, to that earlier conversation as well about people wanting safety nets, and I think that's the way maybe in Bitcoin land we have to help people with that conversation to say, \"Look, the safety net you're using right now, it's actually not that safe. Like, in certain ways it's safe, but in other ways it's, it's not. Here's a better safety net. Here's the Bitcoin safety net" }, { "speaker": "jevi", "time": "39:37", "start": 2377.34, "text": "Well, and not only that, but when we go through a setup of, multisig arrangement, we instruct the user to download that wallet descriptor file and to maintain that for themselves. And one of the key reasons for doing that is we've designed our multisig to be interoperable and native to the Bitcoin protocol, and we've also released, now for well over two years, the Caravan software that allows for an individual at any point in time to decide that they no longer trust us Or, you know, something happens to Unchained, we're down for website maintenance, you get spooked, you wanna take control of your Bitcoin, you don't need to rely on us. You can take that wallet descriptor file and your two private keys, you can load them into either Caravan, it also works in Sparrow, a ton of other open source software, and you can, create a spend transaction to move your Bitcoin somewhere else. And, so the, what, what we often like to say is that, We've set up, collaborative custody in such a way where you don't need to trust us, and for a lot of people, that really starts to, click a little bit more, even though they might not necessarily be technical, but simply understanding that there is a way to still remain self-sovereign and to take advantage of what Bitcoin has to offer while being able to leverage, in the event of a, a, a calamitous outcome, to be able to have someone that's there to be able to help you recover. that's really the, the key balance in terms of safety. I think that to your point that people perceive the current legacy systems as safe and the Bitcoin system as unsafe, I, I think that there's just simply an education gap that they see it as volatile, they're, they're unwilling to look beyond that volatility. and even if they do start to look beyond that volatility, more often than not, that comfort level in terms of taking on the- Volatility and the risk involved, is then unlocking a desire for pursuing speculative investments. And it's, it can be very difficult to find that pathway from, thinking of Bitcoin as unsafe to moving beyond the speculation and into this, this method of getting away from and, protecting oneself from currency debasement. I think that people in places like Venezuela, Argentina, Lebanon, Nigeria, Turkey, they're much more open to this because they, they feel it tangibly. I, I, I've occasionally referred to it as like frogs boiling in water. in places like the Un- the US or the EU, up until recently, inflation was running at such a low click that people didn't really notice it. They would just hang out in the water, it felt like a nice hot tub. But in places like- Turkey or Lebanon, you're very acutely aware whether you had any interest in financialization of anything, you're very acutely aware of the negative impacts of currency debase and the resulting effect on your purchasing power. So I think that, There's unfortunately, as much as I would like to get as many people as possible into Bitcoin before all of these systems start to come completely unwound. I just don't necessarily see it happening. I think that ultimately, and this goes back to the broader conversation that we're having of taking on risk without realizing it, is that oftentimes you need to get burned before you take that responsibility. If you are a Bitcoiner and you've held on an exchange and that exchange has disappeared and done a rug pull, suddenly you better understand why self-custody matters. people- That are still living in this Coinbase Gemini Kraken world haven't experienced that, and it's possible that we don't see that, but there is still a risk there. It is a non-zero chance that something happens that results in their Bitcoin being seized or taken away, even with Coinbase, there have been instances, there's people, that work at Unchained who have had family members that have had Bitcoin on Coinbase and for years, despite not doing anything illegal, despite, you know, be- Being a US citizen, having their Bitcoin seized, effectively frozen in their account for well over three years. And so to think that it couldn't happen to an individual in one of these environments is just simply naive. And we need to, we need to find a way to be able to bridge that gap before people ultimately have to get burned by everything going to hell." }, { "speaker": "stephan", "time": "44:30", "start": 2670.2, "text": "It's important for everyone to really think through the infrastructure we're using every day because it's quite feasible That you think something is safe and working, but it's really not. And if that infrastructure were to fall down, would you be capable of running your own infrastructure? And so of course, this applies in things like running our own Bitcoin node And then an Electrum server, and then connecting our Sparrow wallet or our Specter or our Electrum, as an example, to that server to be, to actually be self-sovereign with our own private keys. and I think that's also important when it comes to, let's say, in the case of the Unchained Vault customers, where if they do it right, they can't be frozen out of their own money because they have the keys that are required to spend, and they've got the wallet descriptor, and if they run their own infrastructure, and, you know, over Full node, packages out there, things like Umbrel and Raspiblitz and Minode and so on, and so you can actually run your own infrastructure. And I think this is a great, probably a, a lesson for listeners. So if you're just listening and maybe you're earlier in your Bitcoin journey and maybe you're just, maybe you're investing a little bit in Bitcoin, but you've never actually like run it properly, like you've never run a Bitcoin node and actually tried it with your own node and connecting, let's say, Sparrow or Electrum to your Or even if, if, some of the, node package, node packages also even bundled in Caravan as an example, so you could literally run Caravan on your own infrastructure, and that gives you that feeling of freedom and safety, and I think that really gives you a real sense of sovereignty, but it takes time to get there, right? And, you know, I think what we've seen with the Celsius blowups and all of this is just like how after Mt. Gox went down, it was a, you know, a lot more people were focused on This had not yet popularized the saying, \"Not your keys, not your coins.\" That's how early it was. I think he popularized that in maybe, off the top of my head, someone correct me if I'm wrong, but I think around twenty fifteen. So that was when he popularized that saying, and obviously now, that's, that's part of the Bitcoin ethos, if you will. It's not your keys, not your coins, and it's important that, you know, people learn that and," }, { "speaker": "stephan", "time": "46:43", "start": 2803.39, "text": "really, really believe in it and really stand for Builders, developers, whatever. It's, it's, you know, what do we stand for? And I think part of that also comes to the way products and services are made. I think it's important that people are coached and educated in that direction. Also, I know you've got a new trading desk as well, so do you wanna just tell us a little bit about that, what's the structure of this, and how does this differ from what is, you know, or what was there, you know, just prior with some customers who could, you know," }, { "speaker": "jevi", "time": "47:16", "start": 2835.81, "text": "purchase on the Buying and selling Bitcoin, directly into cold storage for better part of two years now, but it was an OTC desk, so you had to-- It was a more manual process. You got on a call with us and we talked through a quote, and this was only available during business hours, our minimums were relatively high, and when I joined, this was kind of the primary focus for my work was to, help build out a, a tool that is built into our website site, into our platform so that clients can log into their account, they can see an option to go and buy Bitcoin, and they get a real time quote. The unique value proposition, there's a few, one is that you face us directly as a counterparty. so when you buy Bitcoin, you're buying it from our, our Bitcoin reserves. So when you send us funds to pay for that, we are then settling directly into your cold storage vault. So It is the, the time and the distance between you making a purchase and settling final settlement of Bitcoin into, a multisig quorum with keys that you can control without any additional processes involved. that's really kind of the value proposition that we have. We still have-- we've lowered our minimums, we're looking at, five thousand dollar minimums, and so clearly it's still not appealing to the, the DCA army necessarily. I don't see most people doing five thousand. thousand dollar DCA, but, there's probably people out there that are doing so. But for a lot of people, there is also this, this hesitancy of needing to purchase on, say, a Coinbase or a Gemini and then making that spend transaction, entering an address, it's just an extra step. And, I think that's actually one of the, the things that Swan has done really well is to find ways to integrate that more tightly and to set up auto withdrawals that you can set it up once, know that you have it set up right, and then- be able to worry less about it. But what, what we ultimately try to offer is, a solution that allows for there to be less distance between you and your counterparty and the, time in which your Bitcoin settles into your own cold storage. And because we've now been able to integrate this into our website, that means that it's available twenty-four seven, so you no longer have to wait until Monday morning at eight AM if there's a good- Price on the weekend, you can execute that trade, and then next business day, you can wire us in the funds and we send you the Bitcoin." }, { "speaker": "stephan", "time": "49:59", "start": 2999.44, "text": "Fantastic. And so that could also be handy, perhaps if there are people who, you know, they wanna buy the dip, right? Like if there's a certain dip at, you know, midnight and you're up and you're like, \"Hey, I'm, I want some coin, let's do it.\" So, you know, there's a few options there, and I think, yeah, I think it's just great to see The self custody message, and obviously that's why I'm, I'm a big fan of Unchained. I love what you guys are doing. You know, I, oh, while we're here as well, what states and, what states is the availability?" }, { "speaker": "jevi", "time": "50:33", "start": 3032.62, "text": "So we, prior to really pushing into this new tool, our OTC desk was only operating in maybe twelve states. I think that's one of the reasons why people weren't really aware of it. It was kind of a niche solution for those specific states. Fifty K minimums really priced a lot of people out. In Massively going after money transmitter licenses, we're now at thirty states. it's probably easier to list off the states that we don't operate in than we do. you can always go to our website at onchain dot com slash trading desk, trading dash desk, and you'll be able to see what states are available there. currently only in the US, there is, I think we operate in the US Virgin Islands now, so we do have one territory, not just states that are involved. And we're, we're keen to try and push into- To all fifty states, as quickly as possible. Obviously, you know, there are some that are always more challenging, the likes of New York, Louisiana, those are just inevitably gonna take some more time. Hawaii, another example, where the regulatory requirements are very strict and very difficult to overcome. But that, that is our mission, is to make this as widely available in the United States as possible." }, { "speaker": "stephan", "time": "51:45", "start": 3105.29, "text": "That's fantastic. And, you know, it, it could also happen that, let's say, if your customer is a high net worth- Individual, which, you know, they might be if they're buying five K chunks at a minimum, and, you know, let's say they've recently become more curious about Bitcoin, let's say they've got an allocation, they're saying, okay, look, I've got, you know, two hundred K that I wanna put into Bitcoin over the next, I don't know, year or whatever, and they, they wanna do ten K a month, you know, that's, that's also an example where they are able to buy, you know, directly into their custody." }, { "speaker": "stephan", "time": "52:17", "start": 3137.19, "text": "So that And so I think for people who are, who are newer to Bitcoin, and let's say they're buying larger sums, what are some of the ways that you would help explain to somebody how to deal with the volatility of Bitcoin, as, especially if they're relatively newer in that, in that orange peeling journey or process?" }, { "speaker": "jevi", "time": "52:41", "start": 3160.52, "text": "Yeah, I think that volatility is, is here for the time being. We're not gonna get away from it. I think most Bitcoiners, who understand the value proposition, re- Recognize that we are woefully undervalued in terms of the dollar-denominated price value, and as long as we're such a long distance away from where it should theoretically be priced for the value that it offers, it is going to remain inherently volatile. So you should expect more volatility, you should plan your, purchasing and your allocation around that volatility, you should only invest what you can genuinely- afford to leave without touching or needing for anything for at least five or ten years, I think is a conservative approach to take. And you should assume that there are going to be, you know, we've just had a, a nice ten percent candle, but you should assume that there's going to be another sixty percent drop from here. You shouldn't assume that just because we've taken a big drop off that suddenly we're-- and you saw that in the twenty eighteen bear cycle where it kind of seemed to- flatten out and stabilize around six K and then the floor dropped out. And if you have this mindset of thinking longer term, of lowering your time preference and building towards, just growing that allocation and knowing that there is going to be a future where, the value proposition is gonna be better understood, I certainly feel as though the way that our society is evolving, the macro climate, there, it's just a matter of- Of time before more people suddenly switch that perception of Bitcoin being a risk asset to being a risk-off asset. And set a plan that you can, you know, you can leave and not necessarily think about, have a plan and then Let the, let the price do what it does. I think that's one of the, the really strong, arguments for a dollar cost averaging tool is that, you are able to define what you can afford to set aside, and when you think about a lower price not necessarily being a loss on the existing position, but that you're getting an opportunity to acquire more into that position at a lower price, suddenly that mindset shifts. I think a lot of people can still be susceptible to paying attention to the whimsical nature of the Bitcoin price, and it can create anxiety and stress. And so, I think ultimately, set a plan that you can afford to leave and not have to touch the money. Don't trade on leverage. Don't do dumb margin stuff. Just have a plan and stick to it, and I think you're, you're gonna end up in a much better position." }, { "speaker": "stephan", "time": "55:39", "start": 3338.76, "text": "Fantastic. Well, I think that's probably a good spot to finish up there. So listeners, make sure you follow Jevi online. His Twitter handle is at Jevi Don, so that's J E V I D O N, and of course, Unchained dot com. So, Jevi, thank you for joining me today." }, { "speaker": "jevi", "time": "55:53", "start": 3352.84, "text": "Absolutely, it's been a pleasure." }, { "speaker": "stephan", "time": "55:55", "start": 3354.74, "text": "Get the show notes at stephanlivera dot com. Thanks for listening, and I'll see you in the citadels." } ] }