{ "episodeId": "SLP473", "speakers": { "stephan": { "name": "Stephan Livera", "role": "host", "tag": "STEPHAN" }, "crypto_voices": { "name": "Crypto Voices", "role": "guest", "tag": "CRYPTO" } }, "segments": [ { "speaker": "stephan", "time": "00:08", "start": 8.45, "text": "Hi, you're listening to Stephan Livera podcast, a show about Bitcoin and Austrian economics, brought to you by Swan Bitcoin. Today my guest is Matthew Majniskis. He is joining me from the Crypto Voices, or also known as Paul Copelus Economics, and we talk about this idea of the structure of the fiat fractional reserve system, the different monetary metrics, euro, dollars, and crypto, euro. dollars, how the Bitcoin system may evolve in the future, and why focusing on bottom up is key. Now, this show is brought to you by Swan Bitcoin, and Swan can make it easy for you to stack Sats, whether you are just a normal everyday individual or you are a high net worth individual. Now, particularly if you're a high net worth individual and you want a trusted partner, you want some additional guidance, if you're buying a larger amount of Bitcoin, you can use the service, bribe Swan Private. Swan Private will give you a dedicated Bitcoin expert, access to exclusive events Support for retirement, trust, and corporate accounts. You also get original Bitcoin and investment research. This is a great way to leverage the breadth of Swan's services and get that extra personalized support and guidance as you go down that Bitcoin rabbit hole journey. So if you're interested in signing up for Swan Private, go to swanprivate dot com. As always, with Bitcoin, not your keys, not your coins. And when it comes to securing your keys, CoinKite dot com have a range of products that can help you with this. So most notably, the Coldcard is their hardware signing device, previously known as a hardware wallet, which is available. It has two secure elements, it has NFC support, it's a very reliable performer, you can use it without phoning home, which is also really useful because you can just plug it into a wall and plug it into power rather than having to plug it into an actual computer. Computer and phone home to somebody else's server. So this is a really cool way to improve your security setup. You can use it in a range of different configurations and settings. You can have single signature mode, you can use it in multi-signature mode, and it's just a very versatile and reliable performer. I use it myself in various setups. Go and get yours over at CoinKite dot com. Use code Livera for a discount on your cold card. Now, when it comes to sending Bitcoin transactions, I use mempool dot space as my favorite block explorer. Bitcoin has grown beyond a single layer, it's a fully fledged multi-layer ecosystem, and with mempool dot space, you can see the full range. You can see the mempool, you can see the blockchain, you can see second layer networks like the Lightning Network, and with mempool dot space, you don't have to trust a third party. It's free and open source, you can host it yourself, you can run it yourself. Now, if you're with an enterprise, mempool" }, { "speaker": "stephan", "time": "02:45", "start": 164.84, "text": "API limits, you can have increased access with the team for feature requests, and you can go and learn more over at mempool dot space slash enterprise. And now on to the show with Matthew. Mattie, welcome to the show." }, { "speaker": "crypto_voices", "time": "02:58", "start": 178.08, "text": "Thanks, Stefan. Appreciate it. Happy to be on." }, { "speaker": "stephan", "time": "03:01", "start": 180.9, "text": "Yeah, it's been a while. I've, I've-- Well, actually, this is the first time I've, I've had you on my show, but I've known you for a while, and I've, you know, we kind of, kind of wanted to make it happen, but we just never made it happen until now. But, yeah, I'm a fan of your work. I think you're doing some interesting stuff, the stuff you're writing" }, { "speaker": "stephan", "time": "03:26", "start": 206.3, "text": "Where does Bitcoin fit into this? And, you know, I, I know you also host, what was called Crypto Voices and now I believe it's called Polkopolis Economics. And so yeah, do you wanna just tell us a little bit about, you know, what you're focusing on at the mo- you know, focusing on these days, and we can go from there?" }, { "speaker": "crypto_voices", "time": "03:44", "start": 224.37, "text": "Yeah, so, so yeah, thanks again. Crypto Voices, actually, is about six years old. I still do call it that for guests, still do regular shows, doing video now, like you, but I'm doing these dailies as well, which, focus a little bit more on the macro money and like kind of- Trying to break down different money supplies, whether it be narrow money or broad money or base money, as, as you mentioned. And, I put together a little, little API. It's just, it's local, it's, it's a lot of data intensive stuff, but, that I just film basically, and I'm doing dailies now, and I'm having fun with that. It's pretty good. So, using, using Highcharts for that, it's good open source software. And yeah, just trying to educate people on, you know, money supply, macroecon, things like that. you mentioned base money, my former co-host, who's, a YouTube star now in, Brazil, Fernando Ulrich. Him and I, we were I don't know if we were like the first, I mean, you can say Hal Finney was the first, but people didn't really focus on it as much until we did. It was basically just trying to clarify that, like, if we're talking about money, banking, credit, these things are often, you know, they're definitely intertwined, but they're oft-often also sometimes not used very precisely or rigorously when we talk about the terms. And so Bitcoin, if you wanna talk about what it actually is, you know, every ten minutes, final settlement, ultimate settlement on, on the Bitcoin network. And then you have other interesting things that Bitcoin too, like Lightning or Fed Mint, we can talk about as well. But if you're talking about the actual on-chain UTXOs of Bitcoin, that's most analogous both in the ancient world to like gold, gold and silver, or to the fiat world, which is, you know, central banking for about four hundred years, roughly, from the Bank of England. being the first kind of modern central bank is, is like it's, it's, analogous to the fiat monetary base or fiat-based money. So that's the-- That's just the general thing that we try to orient around when we talk about Bitcoin and try to remind people that that's what it is, that's why it's different than, you know, something in your bank account And, there's a lot of interesting things that usually come from those discussions." }, { "speaker": "stephan", "time": "05:56", "start": 355.69, "text": "Yeah, for sure. So just with the, narrow money, base money, broad money, like, could you maybe just- Give for the layman, what's-- Could you just give a bit of an overview, what are these different terms, what do they mean? So," }, { "speaker": "crypto_voices", "time": "06:11", "start": 371.23, "text": "central banks came up with them. Paul Volcker was one of the main people in the fifties and the sixties in the US to kind of really start defining these things. before that, you had terms like, you know, deposit, bank deposit, bank account Of course, but you didn't really have these monetary aggregates, so that's what they're, they're called, they're monetary aggregates. And they are indeed often, some of them used incorrectly, so it's, it's hard to keep in mind unless you really sort of go through the different, central banks. And it is also true that some central banks define them a little bit differently as well, so there's no consistency across the central banks. I mean, as we would expect, right there. You know, I've been through fifty, I have fifty of these, on my" }, { "speaker": "crypto_voices", "time": "06:57", "start": 417.36, "text": "Other than, you know, the Fed, the ECB, Swiss Bank, maybe Bank of, Canada, Bank of England, like other than just a few banks, even if you go to like Bank of India, like a lot of these banks are just the websites. I mean, the, the paper is bad enough, right? But the, the websites are so bad, it's amazing that these are like underpinning the entire financial system. But, Anyway, the-- so they, they are, they are supposed to-- the central bank, as, as is, you know, come to be known the lender of last resort, that is the monetary regulator, that is the institution that is supposed to regulate the money supply. So, One of the things that they tried to do over the last fifty years basically was define money in different, different tranches in different ways, as you mentioned. So the main one that we always talk about, you can basically think of it as the central bank's balance sheet. Everything that the central bank does, it creates money ex nihilo. buys assets with that money they just created ex nihilo, and that money goes out into the economy. They have paper and they have also a ledger based money or digital money, you can call it. It's basically, it's called a bank reserve That's the bank account for each, each, each bank. So basically, the bank reserve, you can basically think about, is, it's a bank account that each bank has with the central bank. Those bank reserves. But they also do the paper. And the co-- some do, some banks do coins, some central banks only do paper. It's another little thing, it's not a big deal, but, you know, usually, like in the United States, the UK, because of their old history, the mint, the treasury still controls the coins. The central bank just does the notes. In any event, when you talk about the balance sheet of the central bank, you're basically talking about the monetary base, but it's on the liability side of the central bank balance sheet. So that's, that's the monetary base, notes and coins. as I always try to put coins in regardless where it is, notes and coins plus, plus the bank reserves. And then once banks have those reserves, traditionally they're not so anymore since the crisis, we can get into that, but before the crisis, they used to be quite scarce things. They're actually a very small part of the balance sheet, and you didn't earn any interest on them, so banks would try to lend them out. And I'm not defending central banks, I'm not a fan of central banks in the least, as I know you aren't either. But that's just the theory, at least of central banking, as long of other crazy theories, is that they can be the lender of last resort, and then banks can, if they need, go to the central bank, but if not, otherwise, they have these reserves that they can lend out. Further. And so once you get into the banking system, basically anything that is outside of the central bank, then you're in the either you call it narrow money, it's typically referred to as M1, or broad money can go up to M3, M4. Some countries even have like M4 plus and whatnot, but basically the, the-- I'll try to keep my answer short here. the, the, the difference is between these things is basically M1 Inc is the only money supply that includes a little base money. This is also people make mistakes in this. So M1 includes M0, which is that physical cash and coin that is outside of banks And it also includes demand deposits, so that's M1. So that's the only money supply that has a mixture of the two, like a direct mixture. Actually, they all do because it's-- they're all a subset of M, M1 and M0, but I don't want to get too long there. So that's, that's like the most-- you can think of those as like the most on-demand retail type accounts. And then as you move up to M2, it's typically savings or, retail less regulated. Sometimes people say less liquid, but it's Of accounts, so savings accounts, time deposit accounts, money market funds, typically for retail. Then you move to M3, which the US hasn't calculated for since 2006, really. M3 is less regulated, sometimes you can say less liquid, institutional money. So institutional, accounts, institutional time deposits, institutional money market funds, also euro dollars are included in that, also repurchase agreements. I'm, I'm using US nomenclature now, but a euro dollar also exists in, in the UK or in, in-- There's no such thing as euro euros, 'cause that just sounds dumb, but it's basically a, it's when the- Currency is outside of the home country, they have traditionally tried to track that and put it in the broadest money supply as well. So there's such things like Euro, Sterling, this is Sterling that exists outside the UK, they try to track it and throw it in M3 and M4. So that's, that's basically it. You have these, bank money, all of these Ms, M1, M2, M3, M4, and then you have the base money, and that is the central bank. And Bitcoin is fully analogous with base money." }, { "speaker": "crypto_voices", "time": "11:45", "start": 705.08, "text": "It has no, as That represent a bank account." }, { "speaker": "stephan", "time": "11:48", "start": 707.86, "text": "Yeah, fantastic. Yeah, like, so let me just walk through some of that as I understand it and just kind of paraphrase for listeners as well. So as, you know, obviously setting Bitcoin to the side, for obviously you and I are big fans of Bitcoin, but just for the sake of this discussion, we're trying to understand, you know, this is, know your enemy, right? It's defense against the dark arts, right? We're just trying to understand the system, the fiat currency system as it exists today. So as most people are probably" }, { "speaker": "stephan", "time": "12:16", "start": 736.18, "text": "Cash and coins, it's numbers on a database somewhere. But as you point out, there are different metrics and there are different kinds and different ways of sorting them and counting them. So as we said, we start with this base money concept, right? This concept of how many, how much does the central bank have in reserves? And this may be, for example, where they purchase, you know, mortgage-backed securities or assets from a bank and create new money ex nihilo, right? Just from nothing, as you said. Yup. and then We sort of get out into the broader economy, right? Like you and I, retail individuals, we might have money that we have in our bank account in what is held as a demand deposit, i.e., it's-- we believe it's accessible to you or me at any time that we choose, right? And that's kind of one of, I guess that, that would be inside the M1, as you said, narrow money. And then maybe another layer up from that is, let's say, time deposits. So let's say you take, you know- A thousand dollars or ten thousand dollars to the bank, and you say, \"Yes, Mr. Banker, I would like to put this in your term deposit. What interest are you gonna pay me?\" And then, you know, the banker gives you a certain level, and you, you've put that money away, right? It's not accessible to you because the bank is holding it in their term deposit or time deposit. And so this kind of figure is calculated and included as part of metrics like M2 and M3, correct? Exactly. Yeah. And so then, as you said, then there" }, { "speaker": "stephan", "time": "13:46", "start": 826.28, "text": "Broader money and, as you said, Eurodollar. So another way to understand Eurodollar is maybe to think of it like Euro just means offshore, right? It just means kind of offshore dollars that's not, in this case, not part of the US banking system per se, but we can sort of think of it like a, like a synthetic or like a, it's kind of like banks outside of the US wanted to try to offer a dollar-denominated account for those customers outside the US, and so that's kind of- Kind of where this kind of euro-dollar dynamic comes. And, and, you know, interestingly, it might also be that we eventually are in a world where there's crypto euro dollars, right? Like Tether, as an example, like maybe some of those could, potentially like synthetic positions that are designed to replicate a value of the US dollar. So as an example, Stablesats might be like an example where maybe it's kind of trying to represent a, a kind of crypto euro dollar in a sense, right? So I'm curious, where would you place that? kind of thing, whether it's, let's say stable sat or let's say people using the likes of one of those derivative exchanges like a BitMEX and things like this, where they're trying to represent US dollars, but actually there's no dollars, it, it was just Bitcoin in and Bitcoin out all the time. Yeah." }, { "speaker": "crypto_voices", "time": "15:03", "start": 903.07, "text": "Well, that's actually precisely what a Eurodollar is. It's actually precisely a, a stablecoin. it's actually a combination of, say, two traditional instruments. So stablecoin is, like a money market fund Which money market funds started in the '80s, always because of bad government regulation. They actually limited the amount of interest that banks could pay on, their deposits, and interest rates were sky high in the '80s because Paul Volcker was trying to cut off inflation. So people went into these Less regulated, as I said, you know, up the stack types of accounts to try to get more yield because they're actually restricted in the bank deposits. They-- I think Regulation Q only limited to like five or five and a quarter percent when interest rates were fifteen percent higher in the eighties. So it's actually bad regulation that caused people to go away from banks, interestingly, into the money market fund. And a lot of these money market funds blew up in two thousand eight because they invested in risky, excessively financially engineered mortgage backed securities, which is another interesting thing, another interesting byproduct of bad regulation, basically. So a money market fund has always existed, well, let's say always ex-existed in the United States, for example, large markets for a long time, you know, forty, fifty years, and that works precisely like a stablecoin product. So it's always- Another thing about all this stuff, it's another way to say it's fiduciary media, it's basically money that is at the control of someone else. It's not at the control of the central bank, and it's certainly not in the control of you if you are holding gold or you're holding bitcoins, it's at the control of someone else, a fiduciary. So this fiduciary, whether it be Tether Corp or Bitfinex or whoever might be connected in certain levels with this stuff, they have assets and they have liabilities. And on the asset side, so again, always assets and liabilities with the fiduciary. On the asset side, they hold- Dollar based securities that will earn them an interest, so bonds typically, although they of course have a lot of commercial paper that they're very secretive about, which might not be so stable. But nonetheless, these are dollar-based assets that they are the asset holder, they are the creditor to whoever owes them money. Might be the US taxpayer, might be someone else. And they receive interest from that. And then on the flip side, with those, with that interest, with that expense, they work out this stablecoin product. People collect the stablecoins, they trade the stablecoins, and that's just how it goes. They collect the spread. Stablecoins are zero coupon thing, but, you know, sometimes money market funds pay a little bit of interest, maybe stablecoins-- we know that they pay interest, but that's not directly connected to Tether. Anyway, Tether pays for its operations. And from the interest it collects from people's money, basically buying those stablecoins when it issues, they, you know, take that money, invest it into assets, and then people trade around the stablecoins like cash. So it's precisely a broad money thing, an M2, M3 thing, but it's actually even more than that because Tether's not so much USDCs, 'cause they're kind of regulated inside the US, but for sure Tether is outside of the United States, so it's a combination of a money market fund and an offshore dollar, as you mentioned, a Eurodollar. So that's, that's precisely what it, what it is. Tether's around a lot longer than I thought it would be around. Turns out, yeah, turns out people, like it, you know, which is okay. But, you know, you un- you need to understand that Tether also has a history of being very secretive, you know, apparently they- You know, might have bailed out, you know, I don't have to go too much into the history, might have bailed out Bitfinex, might have not so much, and then, you know, apparently that got paid back. But regardless, we don't know for sure their balance sheet, and they're, you know, again, I'm not making a claim that regulation is better, I'm just saying they're They're just an entity that's offshore and they're engaging in these eurodollar type things, and that's what, that's what they do. And, and those things that they create, that fiduciary media that they create, those tethers can go around and trade like cash. So that's precisely what a money market fund is, or precisely what, if a foreign bank was doing that outside the United States, precisely what a, you know, eurodollar account was. And those started as well after, World War II, the Marshall Fund," }, { "speaker": "crypto_voices", "time": "19:22", "start": 1162.11, "text": "you Rebuild Western Europe, and there was a demand for dollars, so that's kind of where the term Eurodollar came. But as you correctly, posit, you know, it's, it's, it's an offshore dollar. It's a dollar-based account that is outside of the Federal Reserve. So it's all assets and liabilities, way different than Bitcoin, which is asset first, nobody else's liability." }, { "speaker": "stephan", "time": "19:42", "start": 1182.38, "text": "Yeah, that's a great way to put it. And I think what's interesting, and some of this gets into the whole full reserve and fractional reserve sort of debates as well. So Also part of the problem is that governments have legal tender laws that force us to treat them all the same. Do you know what I mean? Like so, for example, it would be like saying, \"Um, you must treat a, a dollar, a dollar at Wells Fargo the same as a dollar at Chase Bank, the same as a dollar at, you know, pick another big bank.\" And in reality, there might be different risks associated with those banks, and I think maybe that's where perhaps the, the full reserve camp style people and probably aren't I mean, obviously I'm, I'm more in the full reserve camp. I'm seeing it more like what we, what people should be doing is treating them as different things, right? We should be saying, and maybe in the Bitcoin world even this could be applied, right? We could say, well, a Kraken IOU is different to a Coinbase IOU, which is different to a Binance IOU, and they should be treated differently. But in practice, what's happened is with the government, because of all these regulations, and, you know, I think you are also critical of some" }, { "speaker": "stephan", "time": "20:53", "start": 1252.79, "text": "Sellout guarantees, things like the FDIC, yep, all of these things sort of push people into a system where they are fractional without even having a real choice, you know, to opt out unless they're opting out with Bitcoin, right? They're just kind of stuck in this fractional reserve system that there's no way out, that even if you took out, even if I go to the bank and I pull out all my US dollars in physical cash and coin, I'm still being inflated away over time. And so that's kind of how I'm seeing that aspect of it, but I also see it in a way, and I'm curious, this is what I'm curious to hear what you think. Do you believe we will be moving to a full reserve system in a Bitcoin world, right? Because if you and I transact using the Lightning Network or just on chain, it's all full reserve, isn't it?" }, { "speaker": "crypto_voices", "time": "21:37", "start": 1296.61, "text": "Well, it's interesting, two questions there. Firstly, your first part about legal tender, I fully agree, a hundred percent. that is my view as well. I was just on with Peter McCormick last week" }, { "speaker": "crypto_voices", "time": "21:52", "start": 1312.32, "text": "In my view, it's legal tender in the central bank itself. That's like the depths, that's the seventh circle of Dante's Inferno. That's the, that's the worst thing that they do to us, is that we have to use their money. There's no competition, and we have to- Bank on their credit, basically. So it's legal tender is the money, and the central bank is controlling the credit, primarily the rate of interest. So that's, in my view, is the, the worst of it all. Things like FDIC, the implicit bailouts, as you mentioned, guarantees, those are absolutely bad, but I think that they are a few levels up, a few circles up. Gotcha. So you don't see" }, { "speaker": "stephan", "time": "22:28", "start": 1348.27, "text": "them as bad? They're," }, { "speaker": "crypto_voices", "time": "22:29", "start": 1349.37, "text": "they're definitely bad. I mean, I, I just don't see them as, the core of the problem The legal tender. That's basically it. So that's, that's my, that's my, my point there. sorry, my daughter's just come in. I don't know if you can hear crying in the background, but, and then the second point regarding the full reserve thing, I think that's, you know, Fernando likes to say it's a quicksand. People always circle this debate. I, I actually don't, I don't think the debate is that interesting. I think if you stick to the legal tender and the central bank stuff, that's more" }, { "speaker": "crypto_voices", "time": "23:08", "start": 1387.67, "text": "full reserve under a Bitcoin standard, first of all, I wouldn't be disappointed. I, I'm not, advocate of fractional reserve banking. I'm, I'm more of an advocate for free banking, and history has kind of showed us that even in free banking without a central bank, banks had very low reserves. Like, it was never a hundred percent reserve standard. That's, that's just a, that's just a fact of history. I'm not saying it's-- has to be that way, but, it's also a fact of history, by the And succumbed to central bank, to central banking, to the, to the central bank state. There is no country in the world that has a free banking system, even though we had many in the past. with no central bank, now we don't have that. So that's why we need Bitcoin again. Another reason why, you know, it's this, this nature that we seem to have of getting caught up in other people's problems, regulating and socializing the losses, that's the big problem. So Anyway, that's, I think that's still regarding your first point, my first point. Regarding though, what could happen, in a Bitcoin standard, first of all, I think Lightning is extremely interesting. I think that- I think it's great. I think there's really no is-- there really isn't an economic comparison of historical nature, because we talked about before, when you go to the bank, when you go into that fiduciary system, you're in the world of assets and liabilities, alright? So for every, you know, if you wanna count up all that money, it's on the liability side of all these institutions' balance sheets. Doesn't matter if it's a Eurodollar, repo, money market fund, all of the stuff that trades, stablecoin, all the stuff that's trading" }, { "speaker": "crypto_voices", "time": "24:39", "start": 1478.56, "text": "Assets on the other side, they have loans, they have securities, they have bonds, they have investments, but those maturities might not be matched correctly, which is, I think, a lot of the full reserves problem. The maturities might not be matched in the right way, and also, it's just the nature of it, it's assets and liabilities. But with lightning, with lightning, it's kind of like locked, I think it is, it is like it, it's locked base money. So where you still, it's not an on-chain UTXO, everybody" }, { "speaker": "crypto_voices", "time": "25:09", "start": 1508.58, "text": "Balance trading around. Peter Todd used an example which I've used for years. He said it on a tweet, like from twenty eighteen or something, where he said it's, it's not quite a claim. A claim would be, again, these assets and liabilities, but it's also not fully under your control. And, you know, I don't know if you'd revisit that now. I know Lightning gets better every day, more usage, safer. But, you know, there are a lot of custodial Lightning wallets if you're not running a Lightning node. It's, it Bitcoin, but it also is locked Bitcoin, so it's great. I think it's great. It's, it's fantastic. But then, I think finally addressing your question about the full reserve nature of that, I don't think there's a way to manage people's issuance of credit on an asset, even on Lightning or on Bitcoin. So, for example, we don't know How many balances on the Lightning Network or UTXOs on Bitcoin have been lent out to third parties with a private loan agreement that we can't see? I mean, in some respect, that is fiduciary media. Like, yeah, we're not trading those loans around like claims, but, you know, it is the case with all the Bitcoin that is on Coinbase and Kraken and, and Gemini and everywhere, every other exchange, there is an asset and liability relationship, right? It's like, not your keys, not your coins, right? Once you deposit-- This is why I think Bitcoin makes" }, { "speaker": "crypto_voices", "time": "26:32", "start": 1592.01, "text": "Onto Coinbase, it's now, you don't have it anymore. It's not yours. You don't have nothing. You don't have nothing, but everybody knows, right? Not your keys, not your coins. You just have a claim. You're, you have something that's just not- It's just not Bitcoin, it's a claim. So there's a lot of different ways to talk about the full reserve stuff, but I think that I have a hard time seeing that credit would just go away, right? Like we, we, we could still-- I could lend one Bitcoin to you, you could lend it to someone else, someone else could lend that Bitcoin to a third person. We may have all different needs. I have a very short term need, you have a midterm need, someone's a long term need, whatever. I mean, I'm not saying we should" }, { "speaker": "crypto_voices", "time": "27:15", "start": 1634.53, "text": "You know, when people want to go for interest, they do go for interest, that is a fact of history. so I don't necessarily see a problem with that, but I also kind of see it as a moot point at the end of the day, like I don't really even care about those arguments much. I, I, I do think the big, the main point is that, as I go back, circle it back from the beginning, Bitcoin is an escape hatch from the legal tender and from the central banking, and If, you know, going back to when we originally talked about doing the show in Riga, this was a lot of the point of my presentation there in, in September is, you know, I'll stop, but, you know, because I know I'm go- going along with my answers as I tend to do, you know, that's exactly what happened with gold. Gold got centralized, and that was problematic, and we don't want that to happen with Bitcoin, so I'm certainly not a fan of like- People loading up with Bitcoin on exchanges and all that, I don't think that's, that's the ethos of Bitcoin." }, { "speaker": "stephan", "time": "28:08", "start": 1687.97, "text": "Yeah, interesting. And so yeah, I think that's interesting explanations, and I think I kind of agree with a lot of it, and maybe there's parts of it where I'm kind of like, it, I think it's sort of like a different view of where things go, and hey, let's, let's see what happens, right? The way I'm seeing it is, we'll probably- Be moving more to a full reserve world in the sense that we would only have commodity credit and not circulation credit. So I think here's, here's maybe the, the interesting, point to discuss, I think, which is that It might be, it might well be true that people issue loans and things like this, but it comes to that question of is it money? And I think that's maybe that's where, if somebody creates a loan It's not that we're gonna trade, people are gonna trade those, the, those loans around like they were bitcoins, you know? Does that make sense to me? It does," }, { "speaker": "crypto_voices", "time": "28:59", "start": 1738.96, "text": "but again, let's just look at what's happened in the last ten years of Bitcoin, which is fully unregulated system. Regulation is coming, unfortunately, but even in the unregulated system, you know, fourteen years, but, you know, thirteen years of pricing data, so on and so forth, a lot of Bitcoin has made its way onto exchanges. I, I don't necessarily see the catalyst that's Take that off. And I made this point on Marty's show as well a while back, like, I, for example, what Caitlin Long is doing with Custodia, and she's gonna, you know, she's actually just like the Narrowbank idea this is a thing where, you know, it's almost like it's too safe for this risky central banking system, right? So they don't allow it. and she's gonna pursue her rights, and I think that she should. I think it's great. Absolutely, I think it's great. But at the end of the day, you know, you gotta pay for a type of account that she's offering, that's a bailment account, that's something very different than, a typical bank account where usually you're using the media, you're using the online service, whatever it is, you're using the fiduciary media for your own convenience to make payments, to scale. and you don't really pay, and people don't wanna pay, that's, that's the point. So, look, I think she should do it, I think it's great, but you gotta ask yourself, you know, a, a, an example like Custodia, the only example I can think of that really is like kind of successful, that people really care about, as far as a fiduciary holding stuff that's fully backed, that's like gold money? Jim Turk's company, you know, Peter Schiff, our, our good friend, right? He's invested, unfortunately, in that. But they, they-- those guys are hardcore, right? Like, you gotta pay. they audit it twice a quarter, they got big doors. You know, when-- I remember when the Hong Kong protests were going on, they were sending-- I got an account with them. you know, you-- I don't have any problem with gold, by the way, of course, Bitcoin's much better, but, you" }, { "speaker": "crypto_voices", "time": "30:45", "start": 1844.62, "text": "know, they Things you gotta work with, with a fully custody bank, and that wouldn't be no different if it was a Bitcoin custody bank like Custodia, it's like, it's just whoever's controlling the keys. So Again, my point of all this is just saying, we've had a pretty free and open market. I don't necessarily think it's a win for Bitcoiners if like Custodia gets their full reserve bailment master account with the Fed. I think it's great. She should pursue her legal rights to do it, absolutely, hundred percent. And I would, I would welcome more bailment, you know, services for Bitcoin, for people to get involved and, and I think it's a short term gain for sure with Bitcoin. But this goes back to the presentation that I made in Riga. Like we've seen this story before with gold, the danger of all of this, of centralizing this around a bank, is, or any fiduciary at all, is that they can eventually control it and they can eventually take it over, and that's what they did with gold. They-- the central banks control one fifth of the world's gold. Whereas if you were in the nineteen eighties, you know, or nineteen seventies, as I talked about in my presentation, like gold was starting to soar from thirty-five dollars an ounce going to eight hundred and fifty dollars an ounce by the end of the decade. Like if you were Goldbug sitting in a gold conference, you know, analogous to us sitting in a Bitcoin conference. And Inflation was running hot, the Vietnam War, Vietnam War was closing because it was so bad, fiscal deficits, stagflation in the '70s, all this stuff, and gold is on its way to eight hundred and fifty dollars an ounce. You are thinking like, \"Hey, we're winning, we're winning, this is it, yeah, yeah.\" So I think those are the more important concerns to worry about, and I don't think any-- there's no salvation there from a, from a regulator, from a Bitcoin being accepted and whatnot. But here's the paradox, is that this" }, { "speaker": "crypto_voices", "time": "32:34", "start": 1953.83, "text": "This is what people wanna use. And so I think if we can get to that world, which maybe you're saying where everybody's on a Lightning, but then again, we can go now talk about Fed Mint, we could talk about, you know, there are different levels of that still, who's really in control of the keys and control of the money. Yeah, it might not be an asset liability relationship like we have now, and I certainly prefer it to now, but there's still this sort of abstraction away from the on-chain UTXO. So I, I don't know, I, I The, like as you're alluding to, like I don't have a, I don't have a, a strong heart towards full reserve banking, I just haven't, it hasn't happened in the free market before. Also, we see it with Bitcoin, it's not happening now. But I certainly agree, and I think everyone should agree that if it's centralized, if you, you, if you view your success in Bitcoin, I say, just for example, Caitlin on getting her master account with the Federal Reserve That's like a short term success for adoption, but I don't see that as a long term hopeful thing for Bitcoin at all. So I, I certainly think that we need every single decentralized, scaling solution that we can possibly find." }, { "speaker": "stephan", "time": "33:39", "start": 2019.32, "text": "Right. So let me add a few things there. Like, I think let's- Harken back to the old days, right? The, the, the promise in the old days of Bitcoin was be your own bank, right? That if you can hold your own keys, that, more and more people can be their own bank, and I think of it in that sense. But like you said, it's going to get interesting with things like, let's say, Fed Mint, or even today, with something like Wallet of Satoshi, right? It's a custodial Lightning, what, you know, account, I guess, even though it's called Wallet of Satoshi, you But, you know, I, I obviously I prefer to try to get non-custodial usage, or self-custodial usage, but nevertheless, there are many, many customers using Wallet of Satoshi. The number of transactions is going up a lot, especially now in this age of Nostra, people are zapping each other and all this. And, you know, maybe in o-other examples could be things like Bitcoin Beach Wallet, or recently renamed to Blink Wallet. now I'm an investor in Galois, so disclosure, but nevertheless, the, you know, these are like So to some extent, they're operating like a, you could, you could argue like a full reserve banking system, and they are just your payment, you know, provider. For, let's say, if you aren't an individual who can run their own Bitcoin node or Lightning node or have their own self-custodial wallet, you're a service, you're a user. Now, yes, you are beholden to them, you-- there is a risk that you could get robbed, but in a sense, it's kind of like a full reserve banking system, but they're using Lightning as the payment" }, { "speaker": "stephan", "time": "35:14", "start": 2113.72, "text": "As a banking system in that sense, right? So it's not as much about, okay, it's great, Caitlin Long gets custodial and, you know, it's good, you know, it's a good thing, but I'm obviously more focused on the getting individuals to be their own bank. Yeah. So I guess that's kind of the view I'm seeing. I'm curious if you have any thoughts on" }, { "speaker": "crypto_voices", "time": "35:32", "start": 2131.64, "text": "that. No, I agree with you, man. I, I'm, I'm totally with that. I, I don't see anything, wrong with that view. This is what we're trying to do, right? Educate as much as we can and get people, you know, this is real tangible ways to escape from, as I said before, from those legal tender laws and from their, manipulation of course of the credit, credit markets. So I, I really don't have any, I certainly wouldn't have any objection, and I, I certainly wouldn't think that it's not a noble goal to have the full Bitcoin system On the sort of layer two locked Bitcoin, and we could just stop there. You don't have to worry about the assets, liabilities, or if it's fully custodial, if you get rugged, like you said, it's still locked, it's still locked Bitcoin, so it's great. It's absolutely a, that's a different type of- monetary classification than we've ever had. We've just never had that before. Like a stablecoin is absolutely a traditional monetary as- classification. There's, this thing that's supposed to peg the value to a dollar is the United States Treasury bond or some other US-based Treasury assets. Now, could we have Bitcoin-based assets that circulate like that and also might circulate as fiduciary media? Maybe. I don't know. I, I wouldn't like rule it out, but I also wouldn't be opposed if it just stays, like you're saying, on the locked, like the locked system that we have now." }, { "speaker": "stephan", "time": "37:00", "start": 2220.28, "text": "Yeah, it'll be interesting to see because I think my conception of it, or the way I'm, I'm thinking about it, is it would just be too difficult to enforce this kind of claim on Bitcoin But to also make it treated the same across everything, right? To say, you know, a, a thousand sats on Wallet of Satoshi should be the same as a, you know, a thousand sats on, Blink Wallet or, you know, like I think what we're likely to see is it's more like a full reserve system and bank failures in this sense are maybe, okay, fine, maybe there's a risk of theft or there's a risk of getting rugged or there's a risk of, you know, some technical error, but it seems to me like it's still fundamentally a That's the interesting thing to me about, about that kind of idea. Now, we don't know where it all goes, but it, it does seem like we're creating this alternative system, and it, it just has these fundamental differences to the fiat system as it is today. Now, yes, today there's a lot of people who use stablecoins and things like this, and, you know, maybe that's a transitional thing, like eventually people are using those because maybe, you know, they have a need to, in, in, let's say dollar-denominated liabilities, because maybe they Or their, you know, whatever their living expenses, but I see it sort of like fundamentally we're moving towards a Bitcoin-denominated system, and in that world, there'll still be some credit, but I just see it like it'll be commodity credit, like full reserve style credit, as opposed to this kind of ex nihilo credit creation. But I'm also curious to kind of get your view on, you know, if we were to look at these different monetary aggregates, as we said, like M zero, M one, M two, et cetera, I'm curious how would you- Think about it, if we're thinking about like valuations for Bitcoin, right? Like, let's say Bitcoin someday becomes, you know, widely traded around the world. Now, as you said, it's probably in the base money category, but when we're thinking about like what would a valuation look like, let's say twenty years from now, let's say there's, you know, massive adoption of Bitcoin twenty years from now, what kind of, you know, monetary metrics would, do you think would be comparable today versus Bitcoin?" }, { "speaker": "crypto_voices", "time": "39:10", "start": 2350.43, "text": "Yeah, it's a, it's a fun question to ponder for sure. Well, the only point that I make with the base money stuff is that's like, that's still the economic, nature of it right now. It's like with gold. I think you can compare Bitcoin to anything, right? Like we can compare it to real estate, we can compare it to bonds, stocks, we can compare it to other liquid type deposits or less liquid type deposits as well. But fundamentally, it's not, the nature of it isn't like any of those things. The nature of it is like gold or silver that you would hold, personally as an asset, or it's like at least the way that the financial system, as we said, is now the, the monetary base, where this is the core of the system and no one can settle any, any deeper. So if you wanna put numbers on that It's roughly thirty trillion. It's actually like twenty-seven trillion, but the US has a huge non-bank re—reverse repo facility, which is for basically money market funds that they're now providing liquidity for. So basically, round it back up to thirty trillion. Thirty trillion dollar equivalent. That's the base money stock of the world. And then ten trillion is the number you hear a lot for gold. That's, that's correct. It's actually a little bit higher if you count the industrial gold, which is, which is, which I'm taking away from that figure at the moment." }, { "speaker": "crypto_voices", "time": "40:25", "start": 2425.23, "text": "Trillion. So forty trillion. So you can do the math on how forty trillion would be" }, { "speaker": "stephan", "time": "40:30", "start": 2430.01, "text": "the M one or we're talking base, that's base, that's M zero, that's base, yeah, yeah, yeah. That's kind of adding up all the M zero across the world gets you something in the ballpark of forty trillion. But again, remember" }, { "speaker": "crypto_voices", "time": "40:41", "start": 2440.64, "text": "M" }, { "speaker": "stephan", "time": "40:41", "start": 2440.78, "text": "zero" }, { "speaker": "crypto_voices", "time": "40:41", "start": 2441.38, "text": "is, it's just physical cash. M, M zero is physical cash outside of banks. There's actually, to get back to the monetary base, you'd have M zero plus vault cash plus bank reserves." }, { "speaker": "stephan", "time": "40:52", "start": 2451.57, "text": "Oh, sorry, Exactly, gotcha. So the" }, { "speaker": "crypto_voices", "time": "40:56", "start": 2456.11, "text": "base, the, the core, the central bank money, basically the size of the central bank balance sheets, plus a little bit of non-bank money, this reverse repo facility the US has, which is gigantic right now, two and a half trillion. So you're back to about thirty trillion at the moment, plus ten of gold, so it's forty trillion. That is, again, that's the nature of it, that's just, I, I, you know, again Bitcoin could go up in value, those other things could go up in value. Bitcoin could go up in value, those other things could go down in value as Bitcoin takes away. It's, it's hard to know exactly how that will work. And again, like you said, I think regardless, if, if we're gonna get to a- A sat standard or whatever, it's gonna take decades, and we're talking decades where, you know, it's a generational thing. Obviously you have very well known economists that are just completely doltish to Bitcoin, it's, it's a generational thing, right? So, And anything could happen in the meantime too, like maybe there is, some sort of a intermediate layer of sort of, bank money type of a thing that could come up, but it's bank money based on the Bitcoin network, you know, a decentralized bank money. It's hard to really know how all that goes. So I, I just-- That's why I just stick with the base to say that if you really wanna understand what this is, that's the nature of it. Bank money is something else, and, and, you know, gift cards as well, that's Monetary aggregate, credit card, balances fit in." }, { "speaker": "stephan", "time": "42:19", "start": 2538.59, "text": "It's gotta be like M3 or M4 or something like, like even M5 or something crazy like this, right?" }, { "speaker": "crypto_voices", "time": "42:24", "start": 2544.29, "text": "It's a trick question because it's none of them. okay. Can you imagine that? Can you imagine the credit cards aren't part of the broader money supply? So yeah, so" }, { "speaker": "stephan", "time": "42:33", "start": 2552.64, "text": "to be clear, are we talking about credit, like an outstanding credit balance or like the credit limit? No, no, the payment," }, { "speaker": "crypto_voices", "time": "42:39", "start": 2559.35, "text": "the payment, the payment. Okay. The payment, the payments. Yeah, yeah. It doesn't matter, I mean, the balance or the payment, but any of it. Is, it's again, it's a pure fiduciary, it's very monopolized one. But anytime that you make a payment, you know, your Apple Card or whatever, Venmo, whatever credit card you have, yeah, I know they make credit cards too, they also do direct debits, but, you know, Chase, Bank of America or whatever European bank you have a credit card with, Amex Those, those credit cards, Visa, Amex, Mastercard, they are, it's just a purely abstraction, it's a spreadsheet that exists within their networks, right? So when you make a payment, the merchant gets credited from Amex, you get debited from Amex. Nothing happened at all in the banking system. The only time credit card payments hit the money supply is when you would pay off your credit card statement from your checking account, from your deposit account. Then Then the credit card value gets hit on the money supply. Or when Amex or Visa makes a direct deposit from Amex or Visa, not from, you know, the thousand and one different transactions that they had on their, in their network, but they make one direct deposit into their merchant's bank account, then the, the banking system gets, gets hit. So this is, it's just a good example, in my opinion, of how Creative, you know, banking is how different things scale. But again, it's not that I am obsessed with, you know, fractional reserve banking or even think that it's, it's necessarily the future. It's just that, that is kind of how the history has- developed, but then I fully admit, and I fully will agree, that this system has become completely centralized, right? Like we should have many more credit card companies, we should have-- we should be able to pay with gift card points in many more places than we do. We should have like way more freedom in our finance than we do. So that's why we need Bitcoin, because we need to break that system of centralization which we all trend toward basically. So anyway, I got on a little tangent there with the credit cards, but my, My view is to not like go crazy thinking about real estate or stocks or bonds or even broader based money or gift cards or credit cards, it's just that the nature of Bitcoin, when you finally settle with someone every ten minutes, you know, final settlement, it's just like Base money at the central bank, or just like if, you know, I gave you a gold coin." }, { "speaker": "stephan", "time": "45:00", "start": 2700.17, "text": "Yeah, interesting. And I think that makes a lot of sense, right? It's to compare to that monetary base. I think, as you said, it's the nature of the thing. I think in terms of what the nominal value of Bitcoin ends up being in twenty or thirty years may end up being much, much higher than that, because, you know, that's kind of-- Yeah. It may be that, you know, and this is where people kind of throw out crazy numbers, and" }, { "speaker": "stephan", "time": "45:27", "start": 2726.59, "text": "And you get lots of engagement and, oh, wow, you're bullish on Bitcoin and you're throwing out whatever thirty million Bitcoin or what- whatever, you know? But, yeah, as you said, it's kind of like, at least comparing the nature, like for like, right? Like for like. It's probably something in that thirty or forty trillion range." }, { "speaker": "crypto_voices", "time": "45:44", "start": 2744.44, "text": "And the math is two there, obviously, two, two million per Bitcoin. So if it's forty, forty trillion USD, roughly twenty trillion, right? on the denominator, that would be two, two million. but again, that, that actually only means that it meets it, right? Like I said, in that time, the base money could go up or it could go down. You know, it's, it's hard to, it's hard to know how that, how that will take off, and I think- Yeah, that's where, you know, it's, it's the tricky thing with money. This is why Satoshi remained anonymous, right? 'Cause that's, they really wanna come after it. I think we're really in the \"They Fight You Stage\" right now, don't you? I mean, this operation showed point two point one was pretty clear. Yeah," }, { "speaker": "stephan", "time": "46:22", "start": 2782.32, "text": "I mean, this New York Times, disinformation piece. obviously I just did an episode with Pierre about that, but, it's garbage, right? But of course, you know, I think And now everyone uses VoIP technology, right? Like it's the same kind of thing. They, at first, they saw it like, \"Oh, it's a competitive threat to telecommunications companies,\" or even, similar arguments have been made about the container, the C-container, right? That just the container used, that, you know, that's a big problem or whatever. But then, then eventually, it sort of, they realized, \"Wait, no, it actually makes sense to be part of the overall system. It's too valuable to not use this technology, especially when it And that's why I think, you know, as, Bitcoiners focusing on the bottom up is really the best way to go. Like if you can focus on the bottom up, whether that's a merchant on the day-to-day-to-day level or just individual everyday people who are learning to use Bitcoin for payments or savings over the longer term, the more people who are getting in on board in the bottom up way, it's just a stronger system, and I just think they're not gonna be able to stop it over time. So, you know I and yeah, I guess one other comment around the, the valuation stuff is that it's just so difficult to under-- because today dollars are being valued, but there's like all these other systems, as you said, right? There's these kind of other things that kind of float above, like credit cards, as you said, or like derivative markets and all these other things where the dollars are being tre-treated equal. So maybe there is a case for Bitcoin to be valued at some of these really high valuations, but it's just too difficult to predict because in two decades' time Like in the nineties, a million dollars is awesome, right? But nowadays, a million dollars, sadly, isn't even that much, right? So it's the same kind of thing. Like in, in two decades, three decades' time, these numbers might not really be that meaningful. So I guess at the end of the day, I kind of bring it back to, well, it's, it's gonna be something like millions of dollars in today's terms, you know, at, at, on the low end, right? That's on the low end. Yeah. So that's kind Or, you know, monetary bases can shrink. So, what would that scenario look like, if monetary bases were to shrink? Or how would it, how would it come about?" }, { "speaker": "crypto_voices", "time": "48:49", "start": 2929.02, "text": "Well, I just mean that it would basically die. there would be no, no more usage, no more demand for the thing, and so the value, again, let's presume it's not the US dollar first. Michael Saylor likes to make this case that the dollar's gonna be so strong with Bitcoin, I'm not really a fan of that argument, you know? But," }, { "speaker": "crypto_voices", "time": "49:09", "start": 2948.83, "text": "The price of money, that's the exchange rates, not the interest rate. A lot of economists make that mistake, even Australian economists, but it's, it's the exchange rate. So presumably they're talking about, you know, the yuan or the Russian ruble, you know, they're making waves with gold. Whatever other currency you're talking about, at some point the people will give up, as they have done thousands of times throughout history, and they'll go to a stronger currency, event-- or a stronger money, let's say. And eventually that money, I think will be Bitcoin. And then those monetary bases, the demand for them will just collapse. And it's, it's typically how it goes, right? It's a power curve. It's never a gradual linear thing, which is also a hard thing for a lot of, I think, casual writers to understand, right? It's like the casual writer who- After the, you know, one of the first Bitcoin busts in, you know, twenty thirteen and twenty fourteen, these writers are just saying, \"Oh, you know, you're picking on, taking such a risky asset without understanding anything about the underlying fundamentals of the system.\" So the point is, yeah, I think this can come on a lot faster than people understand. We have history of that, that it can come on a lot faster, the, the lack of confidence in currency. And if, let's say, the dollar is the best looking horse in the glue factory, if the dollar is the last currency, standing-- I don't know, I, I don't even necessarily believe it's gonna be like that. I just think that, Bitcoin is gonna be valued so much higher on the margin that, again, it's just like, it's just like what happened- when gold was again freely tradable in the United States in, at the end of the, you know, the Vietnam War and the start of the '70s, is that, you know Finally, some property rights and some pe-people were allowed to, to trade real value and real money. And then you said that, you know, most economists thought that the value of gold was going to fall at this point against the dollar, but precisely the opposite happened. Now, again, of course, it goes, it goes too far and then the central banks continue to monopolize the gold. That's why this can never happen with Bitcoin. And, and this is where I think the real lesson is. This is where I think- That's why I keep talking about it, and I've, I've talked about this a lot, is I don't see any hope for, you know, a government sort of backed Bitcoin standard. It's gotta be something, like you said, from the ground up, grassroots, where everybody is using it and we have- You know, just the, the, just this explosion, right? The Kameer explosion of from the ground swell up, not, not from the top down. Because if it's like that, if it's like this top down, and we have, you know, some economists arguing at Yale about how much Bitcoin, the Federal Reserve or the ECB should hold at any one time and how the gold-backed Chinese yuan versus the, you know, or the Bricks Bucks or whatever, how that's doing versus, say, a Bitcoin-based dollar or something. That's a bad place to be. We, we know where that is, we know where, where, where that's been. Like anytime you're talking about excessive regulation, econometrics Economists thinking that they know, that they can model an economy on a spreadsheet, all of these things, like that's just always ended in tears, and they never admit it, you know? They'll never admit it. They'll always-- So, so that's what we're gonna have to fight. And, that's why I just, I don't really see any salvation in sort of like a central bank adopting Bitcoin. I think it's nice on the short term, in the short, in the short end of people like kind of getting exposure and understanding it and whatnot. But we've just never had a, a banking system that can withstand, the state coming in. So that's why we really, really need to have this sort of decentralized groundswell from the ground up, Type of, type of market. Yeah." }, { "speaker": "stephan", "time": "52:57", "start": 3177.33, "text": "And as you say, historically what we have seen with government managed gold standards is they would centrally set the price of gold. They would say, \"Oh, we're gonna revalue it from twenty dollars to thirty-five dollars or whatever, right?\" Like Rosevelt did from his," }, { "speaker": "crypto_voices", "time": "53:12", "start": 3191.6, "text": "from his bed in the Oval Office." }, { "speaker": "stephan", "time": "53:15", "start": 3194.58, "text": "Right? So, you know, we might, if things played out the wrong way, let's say, I know I don't think they're going to play out that way, but hypothetically, you know, you might end up with this crazy scenario where it's like, it might be like the Argentina blue dollar thing, right? Like there's like a government rate for what they think Bitcoin should be, but actually the street rate is very different, right? It might be kind of like that, where some government bureaucrat who think they know how to manage and they, they're some technocrat person who They're just sort of court economists or people trying to give power to their own, state or king or whoever. but in practice, really, there's gonna be like this bottom-up market of users of Bitcoin, and there'll be, let's say, the street rate, which is like the real rate." }, { "speaker": "crypto_voices", "time": "54:02", "start": 3242.1, "text": "Totally. I, I think that's a totally legitimate, possibility. I hope not, and I hope-- I think that's part of the generational trend, right? Like, I think- in the United States, in Europe, you're starting to get younger people in, even though the top down, the really, you know, the, the fud about the environmentalism, all that stuff, you know, it's just every few years there's gonna be more of this. It's not private enough, it's too private. You're gonna get a lot of this to keep coming, and the best thing would be if they just let it happen, but we know with history they will try to not let it happen probably until their dying breath. So, but," }, { "speaker": "crypto_voices", "time": "54:36", "start": 3276.44, "text": "but, but I The, the younger politicians that are coming in, they're just gonna be more amenable to letting this thing go. And, you know, I, I don't think it's gonna-- I, I just don't think it like a law, you know, I, I think it's great in El Salvador that they're trying it, but I don't think that a Bitcoin law makes any sense or, you know, it's just, it's, it's gotta be a free market type of a thing where it's either allowed or if it's not allowed, then it's still" }, { "speaker": "stephan", "time": "55:09", "start": 3309.06, "text": "Yeah, because I actually was gonna ask your views about your, I guess your take on what's happening with El Salvador, but there are other countries where, as an example, they don't have capital gains tax laws. so, you know, Singapore, Switzerland, UAE, just a few examples who, who they, you know, or Panama, I believe, has, kind of a law where I think you can use different things as legal tender, so you can, yeah. But I guess in some cases, you get maybe people coming from a more The government has explicitly given a, a tick of approval. They don't wanna operate in a gray zone, right? They don't wanna feel like, \"Oh, it's not illegal, but it's not legal, and it's kind of in this gray zone.\" And, you know, maybe from their perspective, they think, you know, \"I'd rather stick to fiat,\" right? Like that's in their mind, obviously. Of course, we, as we, as we were focusing on bottom up really is to get more people to just learn and understand how money can arise from the bottom up," }, { "speaker": "stephan", "time": "56:09", "start": 3368.94, "text": "I think that's kind of where, that's really where the rubber meets the road, but it might be interesting to see in some examples like El Salvador where it's explicitly permitted, and maybe that is sort of enough to get people to, to start, and maybe it's enough to actually attract investment and tourism and capital and talent, maybe that is enough to have an, a good example, right? And, it's kind of interesting as well, right? Because, you know, I guess, knock on wood or whatever. Like, are we entering a bull cycle now, and it's gonna be interesting to see that, you know, after all this time, people are saying, \"Oh, look, Michael Saylor underwater,\" well, now he's not, and, you know, maybe El Salvador won't be underwater, and then over time it just kind of looks like a good example, and then maybe other people look to that, they look at MicroStrategy, they look at El Salvador and think, \"Hey, why don't I do that?\" Yeah," }, { "speaker": "crypto_voices", "time": "57:01", "start": 3420.53, "text": "good point. I mean, there are- Plenty of different ways to skin a cat, and I think that, I, I'm certainly not, saying that it has to be like only bottom up, not any mainstream sort of a thing. it's just that's, that's, I think the strict def- that's the strict lesson from gold, particularly, 'cause these free banking systems were all based on a gold back standard, right? And so, or silver standard. or even a trimalt standard, some sort of a copper-bronze standard. So there, there's, there's many different ways to do banking, but at the end of the day, this is the theme that I'm recurring here on your show today, it's just that, you know, that government gets too greedy and they wanna, spend more than they- Tax, and then they can't borrow enough either, so the only other option is to borrow from the central bank, i.e. the printing of money ex nihilo. So, That's, that's a powerful tool. That's what they're gonna try to do for a long time, and I have a hard time seeing how maybe it's a gradual way of how that changes, right? If we get to a full Bitcoin standard" }, { "speaker": "stephan", "time": "58:05", "start": 3485.32, "text": "Apologies, listeners, we unfortunately had an audio error with the last four minutes of Matt's audio, so that's where this episode ends off. Of course, make sure you follow Matt and check out his work over at Pocopolis Economics and find the show notes for my show at stephanilivera.com. Thanks for listening, and I'll see you in the citadels." } ] }