{ "episodeId": "SLP480", "speakers": { "stephan": { "name": "Stephan Livera", "role": "host", "tag": "STEPHAN" }, "the_bitcoin_handbook": { "name": "The Bitcoin Handbook", "role": "guest", "tag": "THE" } }, "segments": [ { "speaker": "stephan", "time": "00:09", "start": 8.61, "text": "Hi and welcome to Stephan Livera podcast, a show about Bitcoin and Austrian economics brought to you by Swann dot com. Have you wondered about new and visual ways of appealing to people about Bitcoin? Well, Anil Patel joins me on the show to talk about the Bitcoin Handbook, which is his new visual and simplified explainer of Bitcoin concepts on how to meet people where they are. Are you a high net worth investor? Consider swanprivate dot com. With Swan Private, you get a trusted partner on your Bitcoin journey. That can mean a person who you can pick up the phone and call, you can email, this is your dedicated Bitcoin expert who is going to help you. 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You can use it easily and directly plug it into the computer. You can use it with software such as Specter Desktop or Sparrow or Electrum or even Nunchuck on the phone. So there's all kinds of options there. Coldcard makes it easy for you to To learn about it, if you just directly plug it in to the computer, you can spin up your new wallet by writing down the twelve or twenty-four words and the pin codes, and of course, don't forget to get a metal seed backup product. So, CoinKite have the seed plate which you can use, and there is a puncher that you get to punch in the twelve or twenty-four words, and this is what you can use to have as your backup in case your home goes up on fire or things like this, then you have redundancy and security there. So, go to CoinKite Discount on your cold cards. And now, onto the show." }, { "speaker": "the_bitcoin_handbook", "time": "03:10", "start": 190.2, "text": "Anil, welcome to the show. Stephan, thanks for having me. Really excited to chat." }, { "speaker": "stephan", "time": "03:14", "start": 194.21, "text": "Yeah. I, I'm a fan of your work. You've been doing some great stuff in terms of helping simplify Bitcoin concepts, and the challenge for people is, Bitcoin is a very complex thing, and there's all these different ways you could look at it. There's different fields that you might need to go and do some research. I mean, it's not that you need to be the master of all of these things and some amazing polymath, but you might need to do a little bit of work on all these different areas to grasp what's going on here. So, do you wanna just tell us a little bit for people who don't know you? Can you tell us a little bit about yourself and," }, { "speaker": "the_bitcoin_handbook", "time": "03:50", "start": 230.08, "text": "Absolutely. So I, like many Bitcoiners, was pretty much just completely absorbed into it the more I understood it and could appreciate what it could actually do for me, for my family, for my community, and I don't come from a technical background, so I really didn't know how I could contribute to this space. The gap, I guess I saw, was really around helping other non-technical people understand what Bitcoin is, and Bitcoin is many things, as you pointed out. So how do we build assets or almost like an arsenal of content that- Bitcoiners could use when helping to educate their friends and family who maybe are coming from almost zero, understanding of what Bitcoin is or maybe having never even heard of it. So I just started, side of the desk as a hobby, creating little visuals, infographics, wrote, you know, started writing a newsletter, and over time, you know, you refine your messaging a little bit and you see what hits And I just kept doubling down, and, you know, now I'm really happy to be in a place where, the community's kind of accepted, my work, and there's a huge amount of support that I've gotten, and I'm really grateful for. And, here we are." }, { "speaker": "stephan", "time": "05:15", "start": 315.1, "text": "Fantastic. And I think it's important to point out that in the earlier years, there just wasn't a lot of high quality information. And even if there was, it wasn't the popular information. I think some of the ideas like Austrian economics and things like this, yes, they were around and there were people talking about them, people like, let's say, Tödtlemeister or Peter Sutter or Konrad Graf. At least at the time I was coming in, they were some of the people who were writing and speaking from an Austrian perspective. And and it was only later that we started to see people find new ways to sort of crunch it down, simplify it, put it into simple terms, and like you said, I think it comes from having a lot of practice. a good example is Jan Pritzkir when he made inventing Bitcoin, that was actually the result of him teaching a lot of high school students over and over and over, \"Here's how you learn about Bitcoin,\" and then he just found certain analogies that used to work. So what's that process been like for you, finding what works? How do you You skillfully convey the basic concept." }, { "speaker": "the_bitcoin_handbook", "time": "06:16", "start": 376.46, "text": "Yeah, you've, you absolutely nailed it. And, you know, just to point out, very little of what I produce is my original ideas. You know, I'm standing on the shoulders of giants. You know, many of which you just mentioned, which were instrumental in my own journey, including yourself. You know, I, I kind of ran into that brick wall by sending friends, you know, fairly well-educated friends with a, with a financial background or economic background, you know, I might send them A podcast of yours, maybe talking to Terre or to Pierre, from five years ago, and, it, it just wouldn't, wouldn't connect with them, even though it's incredibly, high signal content. It's just in their maybe normie lifestyle or world, there, there isn't really that inclination or the, space in their calendar to kind of sit down and make an effort to grasp something like that. So, yeah, how, how do you then take something like an hour worth of, you know? content and condense it down into maybe just one or two images that someone glancing, you know, scrolling through their phone might stop and it might force them to, to reconsider something they believed before. So it, it, it was really just a process of first curating what, what's already out there, you know, we already have a fantastic canon of, of interviews, of, of books, and, you know, how do we curate that maybe for that kind of top of the funnel group as they're just starting to, to dip their toe into, into this field? So yeah, it, it, it's definitely an iterative process. there's, there's already a huge amount of incredible, knowledge and work and content out there on the topic. It's, how do you help someone find what they need at that particular point in time on their journey?" }, { "speaker": "stephan", "time": "08:01", "start": 480.93, "text": "Yeah, I think that's an important point also. It's, it's selecting the right tool for the job, because you could be talking to a person in the Western world who maybe this is already a high net worth individual and maybe they already have access to US- Bank accounts or, you know, you know, high level bank accounts and things like this. So you could be talking to somebody who is maybe, just an average everyday, you know, Joe from the street, you know, Joe Sixpack or someone like that, and you, you, you sort of have to find the right message that might resonate with them, and at the same time people talk about as an example coming from first principles. So do you wanna just el-elaborate a little bit on that idea of first principles and why you have to use that approach?" }, { "speaker": "the_bitcoin_handbook", "time": "08:42", "start": 521.62, "text": "Yeah, it's In the, the, world of hype and price prediction and, that might help maybe bring you in initially to, to understanding, say, SoundMoney, but it won't keep you there. you'll probably get burnt, have some pretty bad experiences, so maybe you're better off served understanding these kind of fundamental frameworks, rules, laws which are generally correct over time, and I mean that through we could survey history and see what were the incentives in a particular situation. situation, and what was the outcome? And not that that's necessarily inferring what happened, but if we can pattern, you know, use some pattern recognition, then we can kind of arrive at these, you know, frameworks and rules that are just helpful to understanding, not just Bitcoin, but the wider world. so, you know, I tried to put together this book for myself, really. I, I really just wrote it for myself. This is the book I wish had existed when I first started learning about Bitcoin. And it's a reference style book that you can kind of just Through, you know, I don't have an encyclopedic, you know, mind. I don't have a photographic memory. I kinda just need it, something within grasp to, to pick up, flick through, \"Oh yeah, that's right, this is reminiscent of this particular framework or this particular concept might apply to this situation.\" And when looking at it through that lens, I have a rough idea of what the incentives are and what might, happen or what's most likely to happen. So it's just, it's just helpful for, for- Sort of planning your future basically." }, { "speaker": "stephan", "time": "10:15", "start": 615.44, "text": "When it comes to money, people say, people have this idea, and maybe, maybe this is a Bitstein tweet I'm, repeating here, but it's something like, \"Who, whoever can print money, will.\" And I think that's an interesting tweet-sized motif or idea that maybe helps motivate the point of Bitcoin, doesn't it?" }, { "speaker": "the_bitcoin_handbook", "time": "10:32", "start": 631.95, "text": "Yeah, and he's really a master of, of, you know, memeing these absolutely massive, ideas into, you know, tweet form, and, yeah. It's, it's an incredibly powerful way to do it, because it kind of goes back to what I was saying earlier, if you can just get someone to stop, you know, they don't have to, suddenly be, encouraged to go down the rabbit hole, but can they just stop what they're doing? Does it, does it cause them to pause in their thought and kind of break something in the model that they hold of the world, and most people just don't understand money at a very basic level. They've never stopped, had that moment, and had to reflect This, what I'm using to exchange value with other people, so, you know, yeah, he's someone I really, admire for, for what he does and some of the earlier pieces he wrote, so yeah, I really hope to do something similar, but just visually, I suppose." }, { "speaker": "stephan", "time": "11:28", "start": 688.15, "text": "Yeah, fantastic. Yeah, and as you, write about in your book or you have graphs and things like this, you talk about this idea of scarcity and monetary premium. So how do you bring that up? Like, let's say you're, you know, you're talking" }, { "speaker": "stephan", "time": "11:43", "start": 703.06, "text": "You know, we're following the advice of Matt O'Dell, we're shilling lightly, we're not sort of being over, over the top with people, but you sort of see an opportunity where maybe you could bring something up and it maybe, it gives you an opportunity to introduce the concept in a socially savvy way." }, { "speaker": "the_bitcoin_handbook", "time": "11:57", "start": 717.31, "text": "Yeah, yeah, absolutely. So the, the most common one for me at the moment, so I'm currently based in Canada, we're both Aussies," }, { "speaker": "stephan", "time": "12:05", "start": 725.23, "text": "yeah," }, { "speaker": "the_bitcoin_handbook", "time": "12:06", "start": 725.69, "text": "something that's in common with those two countries for our generation has been the topic around housing affordability. Now everyone has an opinion as to how to fix it, whether that's, you know, misguided or actually, you know, perhaps useful in the short term. Very few people are willing to go back, you know, take the symptoms as a snapshot and try to figure out the root cause. So without even mentioning the B word, when that topic of conversation comes up, it's, it's a very easy opportunity to introduce the concept of scarcity of money because very few people who maybe are concerned about how- housing won't have any idea of the trajectory of the money supply during the same, you know, period of housing appreciation. and if they can kind of maybe connect those two dots, then they can sort of begin to even explore the concept of, you know, monetary premiums and how they nest into those financial assets, as, you know, Preston Pisch likes to say. so it's kind of this step-by-step process. I kind of use something I'd like to call it the Bitcoin marketing funnel, and that's, you know, a normie will look out into They will see issues, they know something is wrong, they can't put their finger on it, they're looking at the symptoms, and if they can be curious enough to kind of look for, the root cause of that, they may then, you know, be very interested in inflation because that's kind of explaining that price appreciation. Well, then they'll look into the factors that go into how we calculate inflation. They might have some issues with how that's done if they're a fairly, critical thinker, and then, you know, from there, they look at, well Well, okay, what is money? So eve-everyone kind of has that different, staircase that they, they climb to get to the point, but, you know, it's, it's almost unavoidable in this day and age, given where we are in the cycle of fiat monetary systems around the world. So it, it, I think our job's getting easier and easier as the fiat monetary system does a poorer and poorer job." }, { "speaker": "stephan", "time": "14:07", "start": 846.79, "text": "Right. I think in some ways people stumble towards the truth, right? So that even if you can point out, \"Oh, Look, there's this system that it solves this problem. It, it sort of, it takes time for people to realize that, and as you point out, rightly so, Australia and Canada have some of the worst property bubbles on earth. I think maybe Hong Kong might be the, the worst, but I think Australia and Canada are definitely up there. And there's big conversations going on, I think in both countries, about housing affordability. People are talking about things like, \"Oh, well, you know, the birth rate is going down in these countries, but we'll just fix it with immigration.\" But Even if immigrants come here and, yes, they can earn more in Australia or Canada versus, let's say, Sri Lanka or India or something, but then even with that higher salary in Australia or Canada, they still can't afford to own a place near to where their work is in that, you know, newer country. And so it's, it's a, it's a big conversation, and we see a lot of people having that. I think it also comes into, you know, speaking of things like scarcity, people talk about the supply of new housing, right? Because there's, you know, I'm sure you have conversations with people about this. People talk about how they're blocking development or how they need to develop more properties and apartments, but then you also get that conversation about how some people are to the same question around monetary premium, you get this qu- question about people who are using apartments, high value apartments, as a store of value. They just buy the apartment 'cause they wanna get the money out of China or whatever other country, and they don't even live in it, right?" }, { "speaker": "the_bitcoin_handbook", "time": "15:38", "start": 938.13, "text": "Yeah, we actually hear the term, I, I hadn't heard it till I moved here, but for, I guess waterfront condo properties here that largely sit vacant, they're called safety deposit boxes in the sky. That's just the term that's used here, which I think perfectly captures what's going on, right? but the overall, I guess the higher point to all of this is we're touching on a pain point. There's something going on in people's lives that is upsetting them. It's, it's not what they've been told, and they're having that someone's taking advantage of me perhaps, and, you know, am I willing to do the work to figure out what's going on? Yeah. So, you know, it's, it's sort of an individual journey." }, { "speaker": "stephan", "time": "16:17", "start": 977.18, "text": "Yeah. So then I think the question is, how do you get them to come with you on that journey? And of course, I'm sure, you know, as I've had, there have been so many times where I try to bring someone along, and, you know, you just find, okay, they're not really willing to go with you. So you kind Willing to listen or at least try to, at least are open-minded to exploring what is this idea of, like, what makes a better money?" }, { "speaker": "the_bitcoin_handbook", "time": "16:43", "start": 1003.49, "text": "Yeah. And look, you've had-- You'd be the master at this. You've had thousands of conversation about this exact topic, right? So I should, I should be asking you this question. I guess my own belief now, where I'm at, is, completely agree with you. You, you can't force someone down the rabbit hole, and your time is probably better spent, guiding people who are already open-minded Maybe lowered their ego enough to be willing to look at other options and admit they were maybe wrong about some of the beliefs they had. so yeah, you, there's no point using your energy when others are more willing to kind of come with you on that journey. It's less of a battle. And the, the most frustrating thing for me is, so I went to business school for, my undergrad and did an MBA. So I was kind of in that, I, I guess fiat business school, the yuppie elite" }, { "speaker": "stephan", "time": "17:30", "start": 1049.84, "text": "kind of world." }, { "speaker": "the_bitcoin_handbook", "time": "17:32", "start": 1051.69, "text": "Yes, exactly. And that that, that particular group, they've spent so much time and effort and sweat climbing this particular ladder, that to get them to climb back down it and up a different ladder is just asking so much of them. So I get why they would be one of the most hesitant groups to do that, and that's the big battle I had, because just a lot of my friends by default happen to come from that world, and they're lovely people, they, they mean well, doing well, they just maybe had the wrong guide at a certain point in their life, that took them in Focus a lot of my time and energy on, especially younger people. You know, you look at a, a fifteen-year-old and how they interact digitally, they're never going to accept a kind of closed proprietary system when an alternative option exists where they can transact frictionlessly with their friends, and, you know, they're very skeptical of what's kind of coming down the pipeline. So yeah, I, I would, I would encourage people listening to, to focus their time and energy on younger, digitally native, people. And those who are already maybe open to the idea of, of going down the rabbit hole, and they're just looking for you to maybe hold their hand." }, { "speaker": "stephan", "time": "18:41", "start": 1121.23, "text": "Yeah. And I, I'm with you on the idea of focusing on the younger generations. I think we do need to do that, whether that is writing books that young people can read or even TV shows. I know the Tuttle Twins recently did one about Bitcoin, so that's a great example. But, you know what? Even there, there are problems too, right? Because a lot of younger people, they might be stuck" }, { "speaker": "stephan", "time": "19:04", "start": 1144.45, "text": "Still people who are stuck, but nevertheless, I think that is the pathway that we have to go down, and we have to be willing to sort of play that longer game of focus, like firstly having lots of our own children and also helping put out educational material that is viable for them also, whether it's video content or books or whatever, because fundamentally, that's who we need to get, right? Like, As wealth passes down, as, you know, older generations of society passed, w- you know, passed away, they passed their wealth down to younger generations. Guess what? Like, it's, it's if you foc- if you're focused on winning with those younger generations, you're gonna win in the long run. So that's sort of how I'm seeing it, I-- But the, the, I guess the challenge that I see is, as well, is we're living in this attention economy where it's, you have to sort of be able to seize people's attention at the Listening to a one hour podcast is, maybe a big ask, or reading a big book is, is a big ask for somebody, but that's also where I, I see some value in, in, in your book as well, The Bitcoin Handbook, because it's, it's sort of a quick page turner sort of thing. Like you could give it as a gift, it might be sitting on somebody's coffee table as an example, and then, you know, maybe a visitor comes by and they just kind of pick it up and they start flicking through and maybe they see a" }, { "speaker": "the_bitcoin_handbook", "time": "20:27", "start": 1227.25, "text": "Yeah, what was I just about to say? You, you touched on something really interesting. I think, yeah, sorry, the, the in-inherited wealth piece of, of wealth being passed down generation generation, and someone who may not want to listen to a one hour podcast, but those that do will be, you know, rewarded, in an outsized manner. And that's kind of the, the, the system we're living in now, where, a huge amount of wealth gets passed down and is inherited, where now we're existing during the birth of this new monetary Be rewarded, have to take some kind of risk, have to listen to that one hour, have to re-read that book, because they need to build conviction to then act on that, and sort of, you know, perhaps denominate their saving in, in that new monetary asset. So it's, I think it's beautiful in the sense that, you know, it's proof of work. It-- those are the people who will hopefully be better off in the future are those that, you know, are willing to take the time to really think through things in, in a first principles manner, and All, all kind of these political talking points that we hear so often, you know, Bitcoin really can deliver, so I'm, I'm really hopeful, I'm really, really hopeful. But you're, you're in Dubai, you see a huge amount of wealth on display and getting passed around, you know, what's, what's your view on it?" }, { "speaker": "stephan", "time": "21:43", "start": 1302.77, "text": "So I think- A lot of people got, well, kind of going back to the events of last year with, you know, the multiple failures of, quote, unquote, crypto, right? FTX, BlockFi, Voyager, you know, Three Arrows Capital, Terra Luna, et cetera. I mean, I probably, I've, that's probably only half of the failures that happened last year. But, I think some people got burned on those, sadly, not, obviously not people in the hardcore kind of Bitcoiner crew, obviously, where, you know, my, my closer circle of type of people, but let's say one or two layers out, the people who are into quote unquote crypto, I think there's a bunch of them who got wrecked, unfortunately, on, the likes of FTX. and, you know, sometimes re-education, I think someone made that, someone made up that term, and I think that's, that's an important one for some people. It's sad, but maybe that's what it takes for some people to learn, and I think because a lot of people are stuck in a gambling mindset or stuck in this kind of, \"I need to just chase some yield, I just need to get something, otherwise, you know, I'm just gonna get wrecked or I'm gonna fall behind, whether that's falling behind on inflation or maybe they don't wanna fall behind versus their peers, maybe their peers are, are getting richer than them and it's keeping up with the Joneses, maybe there's a little bit of that. I think, yeah, it's all of these This whole idea of insiders, right? I think the Cantillon effect, that's something that, I think Bitcoiners have helped popularize that idea, and I think That idea was not well understood out, obviously outside of the Austrian circles, like the Ostro libertarian circles, of course they knew what the Cantillon effect was, but the average person, had basically no idea what that was. so I'm curious how you, do you end up, do you ever end up having to explain that for people and what's your approach? Like if somebody says to you, \"Oh, hey, you know, what's this Cantillon effect? Why should I care about it?\"" }, { "speaker": "the_bitcoin_handbook", "time": "23:34", "start": 1414.22, "text": "Yeah, I mean, it just-- The idea that, let's just A bank is lending money into existence, that breaks a lot of people's mind, if they really think about it, that you're increasing the supply of money, and that's going to have an impact on other things around you in a complex way. So, you know, not to always go back to housing, but I find that's the thing people are most obsessed with where I live, and mortgages, that, that's just a really interesting topic, you know, because if you think about it, someone asked me, quite recently, what do you think will happen to" }, { "speaker": "the_bitcoin_handbook", "time": "24:11", "start": 1451.46, "text": "He was that things will continue to appreciate, and I just asked them, okay, what would happen if banks weren't willing to lend you money? If banks weren't willing to extend credit to you, what do you think would happen? And they just never considered that question. they couldn't, they couldn't even comprehend a world where that was the case, which it is for many parts of the world today. But if you're in that bubble, or you see someone who's inside that bubble and you can pose a question that gives them that moment, that breaks their brain a little" }, { "speaker": "the_bitcoin_handbook", "time": "24:42", "start": 1482.2, "text": "And the Cantillon effect is a great example because people see wealthy non-productive people getting continually wealthy disproportionate to, to everyone else. And, you know, if you're willing to stop and ask, \"Why is that? Not how do you feel about that, but why is that?\" The, what's the actual mechanism that allows that to happen? you know, they're, they're, they're usually gonna say, \"Well, it's corruption.\" Okay, well, how does corruption actually function in that situation? and the idea of, you know, a, a money to that would benefit. That, that makes sense in a lot of people's mind, if they understand that money is created centrally in this fiat world we live in, then obviously people closer in proximity to where money is created and how it is allocated into an economy in an expansionary period, those people are going to, you know, have information asymmetry, they're gonna be able to, bid up scarce assets, so yeah, if you could just slowly walk through a process like that with people in, in words they can understand, you know, I, when I first started learning Like an idiot. I still do, most days. And part of that is because, I need things explained in a very simple way for it to stick. And so when I talk to other people, who are, you know, pre-coiners, no-coiners, be really conscious, don't use words that they've never heard before. You know, if they're complaining about, the price of assets and you say, \"Oh, well, Cantillon effect,\" that doesn't mean anything to them. You know, they almost put up a wall 'cause they see" }, { "speaker": "the_bitcoin_handbook", "time": "26:11", "start": 1571.46, "text": "yourself and how you would explain it to someone else. so metaphors are really powerful, the concept of a tap literally pouring money, you know, people can see that, they can understand that, and, and that really makes it stick. You don't even have to use the word \"canteen\". Sorry, Richard." }, { "speaker": "stephan", "time": "26:24", "start": 1584.09, "text": "No, that's a fantastic way to put it. And, something I've occasionally found success with is, you may have heard, it's like a funny little, short way of putting it, but people say, \"Oh, that money Sometimes like certain ideas like that can sort of push people, and then they can be, \"Wait a minute, what? Like, it's not my-- it's not there, it's not my-- what, what do you mean?\" And then you have to-- then you're able to sort of explain, \"Wait a second, if, if you, if you, if everybody, if every customer of your bank went to the bank to try to take their money out, it wouldn't all be there.\" And then you can start to sort of go down that track of, \"Oh, wait a sec, what? I thought my money was, you know, they thought their money in the bank was theirs, right? Unfortunately, it's a difficult concept for people to grasp because the effect is at a net aggregate level, right? So when that bank issues that credit, he-- when the banker issues that loan, let's say I'm the banker and I give you that loan, you are now running around thinking, let's say it's a hundred thousand dollar loan, whatever, just to keep the number simple," }, { "speaker": "stephan", "time": "27:31", "start": 1650.52, "text": "Your bank account, but there's someone else running around out there who has his money and he thinks it's immediately callable or accessible for him too. So two people are running around thinking sort of with a claim when there's really not that much money to go around per se. And so that's where the confusion is, and that's where this extra money is being created ex nihilo, right, as we say. And so that's where the Cantillon effect occurs, right? Because you got issued that new credit, you're able to now go become a property- speculator or whatever you're gonna do with that loan, and everyone else in the economy has been diluted, and especially the people who lose the most are the savers, people who were saving in fiat currency. And I think that's a cultural aspect as well, because, you know, you talk to people and sometimes they're stuck in a mindset of just Oh, how many dollars do I have, or how many whatever the fiat currency is? I just need to stack more of that. Or they just think the only way to save is with, say, property, right? They, they don't-- it doesn't enter into their mind of, \"Oh, I could save with Bitcoin, or I could, you know, do something else, rather than just trying to get a property.\"" }, { "speaker": "the_bitcoin_handbook", "time": "28:36", "start": 1715.94, "text": "Yeah, and that's it. I mean, i-- everyone understands the concept of saving, they just think of different vehicles as what is the piggy bank of the moment, And that mindset exists, it's usually not going to continue. If a previous generation saved in a particular asset, then them passing down the knowledge to the current generation to do the same rarely works out if you kind of look back through, you know, modern history. And what's really upsetting, I think, for a lot of people, especially, you know, Bitcoin as sound money advocates, is right now we're seeing this demonization of saving when, you know, saving, savings is basically just saying that you're not spending every- thing that you earn. So you create value in the world, you are rewarded or compensated, and you choose not to immediately spend everything you've seen. The difference of that is your saving, that allows you to delay gratification, and that allows you to make, investment for which you bear the risk. No one's, you know, no one's bailing you out on that on a personal level, but that allows you to invest. So the idea that someone who has that mindset is being, you know, looked at as a source of the problem of, you know, the current financial A very just dangerous angle and turn that we're kind of seeing play out right now. and I, for a period of time, work in a, business school in admissions, and you see how, applicants and students look at their student debt, how they think about it. And again, it kind of goes back to what we're talking about with, banks and mortgages. Would houses be worth so much if banks weren't lending standing credit, for purchases? And the same thing exists in academia. You know, if the government wasn't willing to underwrite certain loans To allow individuals to borrow from banks at very favorable rates, would education be as expensive as it is in the, you know, traditional system? and, you know, you run into the same, same line of questioning, well, probably not. You know, could the average person save up fifty, a hundred K to go to business school? Probably not. So then what would happen? Okay, demand drops. If universities are serious, they, they're gonna have to lower their prices to kind of meet, you know, where supply and demand intersect. and yeah, it's just People, understand the concept of saving, you know, everything's" }, { "speaker": "stephan", "time": "30:53", "start": 1853.13, "text": "debt. So let's hit this topic. I think this is an interesting one for people. Why is it the case that people shouldn't be looking at property as their piggy bank in the sky, as their safe deposit box? I think as an example, a lot of people, they-- and I'm sure you've seen this in Australia, you know, back when I was there, I'm not there anymore, obviously, but when I was there, I remember I would go to bar-- you know, barbecues or parties" }, { "speaker": "stephan", "time": "31:19", "start": 1878.99, "text": "Buy a department there and whatever I bought it for this much, and now it's worth this much. There'd be no consideration of inflation, firstly, right? So the real term, the real price of that property or the real gains that they experienced, there'd be very little discussion about the interest expenses they were paying, the maintenance, and, you know, sometimes you'd get people to, appreciate that sometimes these properties can just be a money hole, right? It's just like a money pit that they're throwing all this effort in re-repairs and maintenance 'cause something breaks or the The apartment broke and you're trying to, you were trying to fix it up, and there's all of these little hidden costs that people don't appreciate. For example, the transaction costs that you pay when you are regularly turning over houses, I think that's another one a lot of people forget. there might be a stamp duty or some kind of land tax that you're paying. There's all these little hidden costs that people are just completely neglecting, or maybe they're, if they're more savvy, maybe they sort of understand, but they're, they're sort of gambling on enough Price appreciation to account for or deal with all of that, and so it just becomes this situation where people haven't really thought through the broader costs of it and they don't understand why property shouldn't be the piggy bank." }, { "speaker": "the_bitcoin_handbook", "time": "32:33", "start": 1952.73, "text": "Yeah. I mean, the fundamental level, you kind of talked about, you know, at a barbecue, people at a barbecue and they're not having an honest conversation about their financial situation, that they're playing status game. They're saying, you know, I made this particular bet. I'm very smart, it's gonna pay off well, and with property, anyone can take a very highly leveraged bet on the direction of the real estate market thanks to the fiat system and everyone having the same, interest rate basically price that they have to pay, which is insane. In no world should you, I, and five other people have exactly the same interest rate with, someone lending money, 'cause our-- we all pose different levels of risk to that institution. But real estate allows, people to do that, they're all in the same playing field. A very much a status game and it's, I, I understand it because being outside of that circle at the barbecue is incredibly lonely, as someone who is at those barbecues very frequently and the topic of conversation is always that one thing, real estate, and you can sub that in for other, markets in different parts of the world depending on what is the, you know, asset of the day. It's, it's incredibly lonely and you're only able to tolerate that if you have a lot of conviction in what's Actually going on. To listen to those conversations, to not get highly reactive, and you're kind of incredibly good at that. And I think that's why a lot of people listen to you, is 'cause you deliver messages in very calm ways where the average person would get quite worked up about some, and if you get very worked up and emotional, people just glaze over, they shut down, they take a step back, you know, you're, you're a threat to them basically. So, yeah, it's, it's unfortunate, but I, I get it from a social perspective Friends taking a particular action, you're probably going to copy them because then you're talking about the same things. You know, you have, you have a huge number of things in common immediately, and that's kind of generally what you want to be accepted into a group. if all your friends have big mortgages, homes, and they're talking about renos, they're talking about interest rates, and you're there saving in Bitcoin, you're renting, it's, you, you look like crazy person, you know, to, to convince that entire group who have made this life Changing decision, who've put probably all their savings into a deposit and now highly levered long the direction of the real estate market, to get them to change their opinion on how best to preserve their purchasing power is a very tall ask. So in those situations now, I kind of just, you know, shut my mouth. I don't wish any pain on people, but it's, I'm able to do that because I have other Bitcoiners I can talk to and, you know, use as points of reference to say, \"Hey, wait, am I the crazy one in this situation?\" but it's, yeah, it's a willingness to be lonely in, in your perspective." }, { "speaker": "stephan", "time": "35:23", "start": 2122.54, "text": "Yeah, I will say, it's funny that, if you're a long-term hodler and stacker of Bitcoin, you basically spend three years looking like an idiot and then one year looking like a genius, and then you, you rinse and repeat. You spend another three years looking like an idiot and then another year looking like a genius, and that's, at least that's historically how it has played out. Of course, no guarantees, I don't have a crystal ball about," }, { "speaker": "stephan", "time": "35:47", "start": 2147.08, "text": "I, I think it, it touches on this same idea of, of wanting to fit in. And I think this is something where most people-- and this may, there may be actionable lessons for us as Bitcoiners also here. So I'll give you an example. I think most people I think it's true to say this. I think most people would rather be wrong but with the group than correct and on their own. Bitcoiners tend to be that person who's willing to kind of buck the trend, be on their own, and huddle, and the long-term Bitcoiners have, have won out, right, compared to, you know, generally speaking. But that represents a bit of a challenge then. Is it that most people are just looking to whoever is high status in their society or in their group because it's all about fitting in? And maybe there's like an evolutionary reason Ago, if you didn't fit in with the tribe, you were out and that was basically a death sentence, right? If you didn't fit in with the tribe, you're screwed. You've gotta like fend for yourself and you're probably gonna die. So maybe there was like an evolutionary reason for that, but maybe now it's kind of maladaptive given our modern day world and our modern day, you know, capitalist-- or we wish it was more capitalist economy. but then the le-- here's the lesson, maybe it's that most people unfortunately are gonna learn the hard, hard way" }, { "speaker": "stephan", "time": "37:01", "start": 2220.78, "text": "I'm gonna guess fifteen to twenty percent, right? Or, you know, someone like Francis Pauliot or Michael Godsey might call them the remnant, right? Like we have to focus our efforts on that, fifteen to twenty percent of the population who can be reasoned with, who are the open-minded people, who aren't, let's say, the yuppie elite in the Jesse, you know, Krissus model, right? Because The, the yuppie elite people are in that eighty percent now. They may be intelligent, but they're in that eighty percent group of people who just wanna fit in. They just wanna fit in into elite circles, not into kind of the everyday circles, 'cause they wanna be in the elite, right? But I think that perhaps is our, our task, our calling, is to call out to and find those people in the fifteen or twenty percent, let's say roughly, and ideally make content that is appealing in to, to a broad audience, but, you know, also to young generations. That's how I'm seeing it now. I'm curious, what do you think?" }, { "speaker": "the_bitcoin_handbook", "time": "37:52", "start": 2271.85, "text": "Yeah, I think you've absolutely nailed it. You know, the eighty twenty rule or Pareto principle, it's also touched on in the book because it's so powerful. It, it transcends the psychological aspect of, you know, how humans behave, but then it, you also see it popping up in finance all over the place. Howard Marks wrote a really good book called Mastering the Cycle, or Mastering the Market Cycle, I think, and he just kind of really methodically goes into detail about You see in a market cycle, and he mentions exactly what you just pointed out, is that in any, market, and you see it most, clearly during times of bubbles, is, eighty percent of people are going to get fleeced, unfortunately. You know, it's not that the twenty percent are making that happen, it's just that about eighty percent of people have that tendency to get sucked into things, go with the group, and not really, think critically. About what's actually fundamentally happening beneath, you know? So, yeah, you see that in Bitcoin as well. there really are a very few number of people who are willing to be in that twenty percent bucket because, you know, as we talked about, it's, it's a very lonely journey. But now we're what, fourteen years in, there's enough data and enough of a track record to look at this thing, with, you know, very practical eyes and make a individual decision Because when you're talking about preserving your own wealth, or planning for your future, your family's future, that's a very unique, journey, and it's gonna be a very unique, decision to make based on your particular circumstances, how old you are, what your goals are in the future. So, you know, if you're trying to fit in by making a very significant life-altering financial decision, I mean, that's just wrong to begin with. You know, it's a very personal decision, it should be treated that way. and I think a lot A lot of Bitcoiners are just very analytical people. They, they're looking for evidence to either confirm or reject certain theses. So maybe, you know, it's not that Bitcoiners are, special, it's just maybe the critical thinkers just become Bitcoiners by default, is maybe how I see it." }, { "speaker": "stephan", "time": "40:07", "start": 2406.98, "text": "Yeah. And I think another thing that's very important is to run the numbers, right? And this is also like a bit of a meme in Bitcoin circles. It, previously people would talk about this idea of, there's a command in Bitcoin, Bitcoin dash CLI, DX Outset Info, I think it's called, and, basically this sums up the total number of Bitcoin, and I guess it's kind of the, the point or the lesson of it is that, hey, we can verify our supply. And I think a lot of people in the normal world who aren't in the Bitcoin world yet, they could benefit from running the numbers a lot more, right? Whether that is even if it's property, doing a, a rent versus buy calculation. Now, how many people would actually go and do that, right? or even if they do, maybe they, they bias, they tip the scales in the favor of buying a property because they really wanna fit in, right? So maybe on their own running the numbers calculation, they build in, let's say, a very overly optimistic property appreciation rate so Say, \"Oh, I'm gonna buy this property, and let's say whatever the interest rate is, five percent, whatever, but I'm gonna build in an assumption that property goes up ten percent per year or something like that. And then if you build in these crazy assumptions, of course it's gonna look like, 'Yeah, you should buy it because the property's gonna go up ten percent per year.' But is it? In real terms, over the longer term, it might not be true. It might be going up in nominal terms, but not in real terms. And I think that is the" }, { "speaker": "stephan", "time": "41:29", "start": 2489.42, "text": "on the last, let's say, ten years or twenty years, depending on which market you are in the world, because that is not likely to be representative of real returns going forward. It may be of nominal returns, but not of real returns, is how I'm seeing it. What do you think?" }, { "speaker": "the_bitcoin_handbook", "time": "41:46", "start": 2505.51, "text": "Yeah, and that speaks more to, this insidious, I guess, outcome of the current state of financial literacy is that the ability to do basic economic calculations like that has kind of- Kind of been destroyed, and that's not a criticism of an individual, that's like, there's all these forces acting against the average person to make it overly confusing, unnecessarily complex, you know, it, it, it's a tall order to ask the average person to sit down, make a comparison like that without emotion, without confirmation bias, and understand all the complexity in both those decisions and kind of end up- But, you know, a reasonable outcome. So, yeah, I mean, again, just going back to just simplify, just simplify things to the absolute bare necessity, and then make your decision. Because like you said, you know, if we're talking real estate, yeah, there's all these extra costs or aspects that you don't consider, interest rate risk, and what we're really talking about is uncertainty, you know, do you have certainty over particular aspects of this particular asset? And you just mentioned Bitcoin with Supply, yes, you do, and that's what a lot of, the draw is for people, is Bitcoin is uncertainty reduction technology in a sense. So, yeah, it's a, it's a crazy point in time, it really is." }, { "speaker": "stephan", "time": "43:13", "start": 2592.65, "text": "Yeah, I think that's, that's a good point to hang it on there. And also, one other interesting point I think it's interesting to discuss is the world of financial influencers today, right? So there's all these finance influencers and- If you look at the system, to, to the point you were saying, to, to the point you were making, there are a lot of people who have not done the work to teach themselves personal finance concepts, interest rates, accounting, finance, all these basic concepts, and so they're just looking at the junk food of social media, they're looking at some TikTok financial finance influencer type of person who's telling them about, you know, maybe credit card hacks or something like this, or maybe, they're shilling some nonsense like Masterworks, right? You might have seen on YouTube some of these finance influencers, every now and again I check in on what they're saying, and you look at what they're advertising, and they're shilling like masterworks. They're saying, \"Oh yeah, everyone, go like, let's all invest in like fractional artwork or something like this.\" And, and, you know, even like well-known, like big influencers, you know, multi-hundred thousand or millions of followers, influencers or subscribers, they'll be shilling this garbage like this, and they'll be saying, \"Oh yeah, How to do real estate stuff, but also here's this like masterworks, whatever, this art investment thing, and it just seems like a recipe for disaster, and unfortunately, people are so poorly equipped to critically assess the claims that they are, you know, just seeing every day when they're scrolling on TikTok and Instagram and all the rest of it." }, { "speaker": "the_bitcoin_handbook", "time": "44:45", "start": 2684.69, "text": "Yeah. Again, yeah, the, the comparison to junk food, I think is spot on, because if there was a word for, say, perhaps being obese and comparing that into, you know, your financial health or economic understanding, the eighty twenty rule would absolutely apply there. And again, it's just, are you surprised given the incentives of the fiats when you look at what algorithms reward in terms of the attention economy? You look at the monetization, I guess setup of how the internet is currently structured, it, it, it makes perfect sense when you understand the incentives, but it's a recipe for disaster. It's, it's only gonna make people poorer, sicker, more stressed, and unfortunately that's how the fiat system is kind of designed. So," }, { "speaker": "stephan", "time": "45:32", "start": 2732.08, "text": "yeah, sad to see. so I think the important concept, and we've been touching on this idea throughout our chat today, is the intrinsigent minority, right? And I think, now of course, now, so we, we have our, we We all have our criticisms of Nasim Taleb, but I think the concept, the intransigent minority, is an interesting one. Do you want to explain how you see that and, perhaps explain the relevance of that for us as Bitcoiners?" }, { "speaker": "the_bitcoin_handbook", "time": "45:57", "start": 2756.59, "text": "Yeah, it's, it's really a, a nod to the idea of a tipping point that it only takes a very small group of very, I guess, headstrong individuals to, either opt out of a system or kick up a fuss, but in a constructive way, you kind of have to either show the path of an alternative or offer an alternate system. it's not just about complaining, you have to actually act on that. You have such a small critical threshold to force a system change. I think most people think in, you know, democracy terms of, \"Oh, until fifty-one percent of people do something, it's not gonna happen, or we're not gonna change.\" But the truth is that in any system where individuals are free to choose, and, you know, the financial system and Bitcoin world is a perfect example, because most-- everyone starts in system A, which is the fiat monetary system, in our current timeline, in the future that won't be the case. But everyone begins in system A, and then we're seeing enough people or a certain percentage of the population opt out in B, and the question is always, at what point does everything kind of flip and do we move into hyperbitcoinization, whatever you wanna call it? And I again also don't have a crystal ball, I have no idea what current level of adoption we're at. It's very difficult to-- you can make estimations, but to have any precision is quite difficult. but the number is much lower than most people understand. It only takes You know, I think the example used in Taleb's book is maybe, I think it's four percent, two to four percent, very, very small number to kind of really force a change. And that, that doesn't just happen because that group overruns everyone else, it's, it's also in the evidence that results from that. If, if I leave, if I stop consuming junk food and all of a sudden I'm starting to become, healthier, stronger, my immune system fares better, and when, you know, under attack, people will see that From the current system, and they'll then start to reconsider their choice. so, you know, I don't like to use the word influencer, but you almost become an influencer in your community, and you demonstrate behavior and results that are admirable, that are people desire, and that's how you kind of, you know, get a system to change. And I know people maybe don't, especially Bitcoiners, in terms of how they feel about Telet, but let me just tell you an idea that completely helped me on this rabbit hole journey, and that's this concept of separating, The person from their ideas. So if someone you fundamentally dislike, you think's an idiot, and they present, an idea, a concept, can you look at that independent of them? Can you put aside your emotions for a second and just assess what they've put forward, that idea? Because in many cases, the most valuable things that will help you are gonna come from people you dislike. So yeah, learn to make that, that distinction." }, { "speaker": "stephan", "time": "48:50", "start": 2930.26, "text": "Yeah, absolutely, and I agree with you there. I think the- Intransigent minority is pretty much something that we, as Bitcoiners, trying to grow that. That's definitely part of the thesis with Swan. Corey's written about that as well. And I think growing that group of people who are trying to use Bitcoin as their savings, or ideally, be a Bitcoin native, earn Bitcoin and spend Bitcoin. I think that's the ideal case, though. You know, I would encourage people to do that, but I'm not trying to shame hodlers for not spending or whatever. You know, if you're hodling, you're still helping, as far" }, { "speaker": "stephan", "time": "49:23", "start": 2962.6, "text": "I think that is the main metrics that we, that we could grow. If we could grow that number, so people can read your book and, you know, teach each other, teach their family, teach their friends, you know, influence the people close to your life, right? Not in like the cheesy kind of, influencer way, but actually in the real, genuine person-to-person, family or fri-- or close friend influence way, I think we'd be making a lot of progress in that way. So let's finish it up there. Anil, where can people" }, { "speaker": "the_bitcoin_handbook", "time": "49:52", "start": 2992.5, "text": "so you can find the book on Amazon, or if you prefer to pay in sats, you can find it through, Consensus Network through their online shop. you can find me on Twitter, and in my bio, there is a link to a site where you can get pretty much all of my educational materials for free. They're in-- It's available in multiple languages, 'cause Bitcoiners are awesome, and they've helped me translate those works into a whole range of different, different languages, and, also on Noster. So we'll see, plays out for that, but open protocols for the win usually seems to be pretty, a pretty, a good view to, to hold. Stefan, I also just want to say thank you for, all the incredible content you've put out over the years. I've learned a huge amount from, from just having you ask thoughtful questions to really intelligent people, and being a fly on the wall in that situation helped me a lot. And, you know, I think having thoughtful conversations in public is also helpful, you know, Twitter is kind- Kind of a public forum in that sense, and people sometimes confuse, arguing on Twitter for a waste of time, but you also have to take into account who's, who's viewing this and how might their thinking be influenced by this. So, yeah, thanks for having me, it's been a pleasure." }, { "speaker": "stephan", "time": "51:08", "start": 3067.59, "text": "Hey, thank you. I appreciate, the kind words. And, listeners, make sure you check the show notes, stephanalivera dot com, you can find all of Anil's stuff there. Thanks, Anil, for joining me. Cheers. I hope you enjoyed the show. Let me know what you think, and of course, share the show with your family and friends. See you in the citadels." } ] }