0:02

In order to match inflation,

0:04

to meet long-term goals and to do all of the things

0:06

that people want to do in their lives, they're being forced

0:09

beyond their risk tolerance. In my mind,

0:11

Bitcoin, even though it's a volatile asset,

0:14

you're actually not being forced beyond your risk

0:16

tolerance because it's a savings vehicle.

0:17

Hello there, everyone. Hope you're all

0:19

doing well. Right, Danny

0:21

and I have been working hard in the background, getting our

0:24

website ready for the launch and announcement

0:26

of our big conference next April, Cheat

0:28

Code. I know I've been talking about this for a while,

0:30

but we just have to get the website and the marketing ready.

0:33

And the last thing we're doing is Bitcoin payments, so you can

0:35

buy your tickets with Bitcoin. So that

0:37

should come out hopefully tomorrow,

0:40

maybe Friday, but definitely this week.

0:43

Very exciting stuff. Anyway, welcome to

0:45

the What Bitcoin Did podcast, which is brought to you by the

0:47

massive

0:47

legends at RS Energy, the largest

0:49

NASDAQ listed Bitcoin miner using 100% renewable

0:52

energy. I'm your host,

0:54

Peter McCormack, and today we have the Rashads

0:56

on the show. Yes, not just one Rashad,

0:59

Pierre, not just him, but we also have his wife, Morgan,

1:01

on the show. Now, Pierre is one of my favorite Bitcoiners

1:04

in the whole world. He is my signal

1:06

when something's happening online, people are debating,

1:09

arguing over something, Pierre is my

1:11

signal. I always go and see what his take is because usually

1:13

he pretty much nails it and thinks about things

1:15

that I haven't thought about or in a way I've

1:17

not thought about. So love what he does. And

1:20

when we were booking this show, Danny let me know

1:22

that Morgan was joining as well for her first

1:24

appearance on What Bitcoin Did, and she also

1:26

absolutely crushed it. So we get into all sorts in this show.

1:29

We talk about Bitcoin security incentives,

1:32

ordinals, and Bitcoin as financial

1:34

advice. So I know your legends will love

1:36

this, but if you've got any questions about this

1:38

show or anything else, you know how

1:40

to get a hold of me. It's hello at whatbitcoindid.com. Good to see

1:42

you, Morgan. Good to see

1:43

you. Pierre, it's been a minute. It's been a minute.

1:45

Yeah, good to see you, man. Good to see you

1:47

as well. Thanks for having us. No, go ahead.

1:55

We

2:00

used to carry a little black

2:02

case around and a couple of mics and now we've

2:05

got some mics. But there's a

2:07

lot to catch up on. It's

2:09

good to see you here with Pierre.

2:12

I know you have a husband and wife podcast, which is cool.

2:15

I only found out about that today. So

2:17

I'll be checking that out. But

2:19

how was conference for you both?

2:21

It was good. Yeah, we

2:24

it's, it's a different experience for sure when

2:26

you have kids, because

2:27

you're like trying to bounce, making sure that

2:29

they're doing well, while also balancing the work

2:31

stuff. We were just saying that

2:33

maybe maybe we don't bring the kids next time

2:36

just to fly and fly out and have just more

2:38

of a conference experience. But

2:39

otherwise, I mean, it was pretty good. And

2:42

our youngest came to basically

2:44

all the events. So

2:47

she's only five months, so she didn't really know what was

2:49

happening. But she I think she had a good time. I

2:51

think it turns on their age because both of mine have been

2:53

Scarlett came when she was

2:56

I came when he was 19. And

2:58

they love it.

2:59

I mean, they get fully involved and hang

3:01

out and work on the stand

3:04

and help us. I think it's different. Probably

3:06

got little ones running around. Yeah, I think when they're a little

3:08

older, it'll be a little better for this sort

3:10

of thing. But every age, there's something good about

3:13

it for sure. Children appear in

3:15

natural Bitcoin as well. We'll

3:17

see. They might rebel. Yeah. Become

3:19

communist. That

3:21

would be like my children's support in Tottenham

3:24

and it would not be allowed to be in our house.

3:26

Yeah. Listen, this.

3:30

We've had a big gap since we've asked me to show. So

3:32

there would be a lot we could catch up on. But

3:34

there are a few things I do want to catch up with you on.

3:37

And Morgan, please jump in and get

3:40

fully involved. She's got the inside skirt.

3:42

Yeah. On everything. I

3:45

know all the good things. Thank you. I'm

3:48

a big fan of Pierre, by the way, because he seems to be

3:50

right about everything.

3:51

I'm a big fan of Pierre too. Yeah. He's

3:54

a back wrecker and he's a good dad, good husband. I

3:56

only remember what I was wrong about. So I just

3:58

have a very different.

3:59

that yeah I can also remind

4:02

him of those moments as well. Well we all

4:04

tend to sometimes see that I only see the

4:06

negative comments on YouTube and not the positive

4:08

ones but uh I was

4:10

saying to Danny I said the funny thing about Pierre is like we

4:12

haven't always seen eye to eye but whenever there's like something

4:15

going on I go to Pierre's Twitter

4:17

to see what his take is and it's usually like yeah that's right

4:20

yeah there's a there's a compliment to you there Pierre. Pierre

4:22

remind me when did you first get into Bitcoin?

4:24

I can't remember the actual year. So

4:27

um technically uh 2011 I

4:29

downloaded

4:29

Bitcoin QT,

4:32

opened it up, looked for the mining button,

4:35

didn't find it, closed it, and then

4:38

forgot about it

4:39

and then it came back into my life

4:42

towards the end of 2012

4:44

with Michael Goldstein and Daniel Krewis

4:46

at UT Austin and

4:48

we were debating fractional reserve banking

4:51

as libertarians you know they debate

4:53

these topics um and

4:55

they were already into Bitcoin so uh

4:58

they they're the ones who Orange filled me.

5:00

So a good decade yeah so you've you've

5:03

lived through all the

5:05

different kind of epochs of Bitcoin uh whether

5:08

it's uh the cypherpunks or the libertarians

5:11

and the macro people and the cultural

5:13

people have come in so you've seen everything like

5:16

how do you it's kind of a broad opening question

5:18

but how do you take it all in having have

5:20

been around for a long time you've

5:22

witnessed so many changes so many events it

5:25

seems additive right the new

5:27

people come in but um for the most

5:29

part the existing groups

5:32

like don't necessarily leave um other

5:34

than some individuals who you know get Bitcoin

5:37

Derangement Syndrome and kind of rage

5:39

quit which that to me

5:41

is always like a cautionary tale it's like

5:44

yeah I could I could see myself rage

5:46

quitting one day I gotta watch out I gotta

5:48

stay humble. uh yeah

5:50

I think also um just being

5:52

around as long as we have been it's

5:55

it's the same story over and over

5:57

again with different words different people And

6:00

so

6:01

like the cycles, they are always

6:03

very similar in a

6:04

way, even though there's always

6:06

different actors, different coins, different things

6:08

happening. But it's always the same

6:10

ebb and flow with how it goes. Is

6:13

Pierre responsible for your orange billing?

6:15

He actually is, yeah. So I had

6:17

read about,

6:17

I was already into Austrian economics before

6:19

we met. It's actually how we met. And

6:23

I had read a Mises.org article when

6:25

it was $2 a coin about

6:27

Bitcoin and thought that it was pretty cool. And

6:30

thought, well, whatever, I'll just buy like 100 bucks

6:32

of it or whatever. And I went to go buy it.

6:34

And at the time, Mt. Gox was like, like

6:37

as a woman, I didn't really want to do like the local Bitcoin thing

6:39

because I didn't want to be in some sketchy

6:41

situation. And so I thought I'd send money to Mt. Gox.

6:44

But I've been working in financial services now

6:46

for 15 years. And so when I saw the

6:48

wire instructions at that time, like they there's

6:50

something off about them. And it was because

6:52

it didn't go into your own account. I didn't really know.

6:55

And 100 bucks for me back then was quite a bit. So I

6:57

just said whatever and didn't

6:59

buy

6:59

it. Damn it. Yeah. And then and then

7:02

like a year later, Pierre and I met and he was talking

7:04

about Bitcoin on the first date, you know, because

7:07

he's here. And you got a second date. That's

7:09

quite impressive. And I was like,

7:11

oh, OK. I mean, I wasn't like I don't

7:13

I wouldn't say I was orange pilled on that date. Right.

7:15

I mean, we had many conversations after

7:18

that about it, but I wasn't like I

7:20

wasn't shunning it. I wasn't I wasn't

7:22

turning it away and being like, you're a crazy

7:24

nut.

7:24

I printed out articles and like for

7:27

the first date after. He

7:31

also

7:31

printed, which is kind of funny. He left

7:34

you printed the Marcus Aurelius stoicism

7:36

thing. Oh, yeah. He printed that for me. And

7:38

when I read that, I was like, do you think I'm a crazy

7:41

person? I need stoicism.

7:43

But no, it was just him just being nice. You know,

7:45

he just wanted to help.

7:46

I I I

7:48

won't bring up Bitcoin on the first date. I

7:52

just can't do it. The head

7:54

from this guy. Yeah. But but but you

7:56

have witnessed them.

7:59

lot, you've been through a lot.

8:01

Has your views changed

8:04

at all and anything significantly?

8:06

I mean, I think that the whole

8:09

like security budget transaction fee

8:11

stuff, my views have changed on

8:13

that. But

8:16

overall, I mean, in terms of the monetary economics,

8:19

the only thing that's changed is I've just

8:22

come to accept that it's going to take longer than

8:24

I thought it would when I first

8:26

got into Bitcoin. I remember in 2013, I

8:28

was telling Morgan like, next

8:31

year, like the entire dollar system is going

8:33

to be replaced by Bitcoin. And

8:35

that didn't pan out. And,

8:39

you know, trying to understand why it takes

8:41

longer than I would have expected

8:43

has been, you know, fruitful

8:46

intellectually. But I think a lot

8:48

of it is just, yeah,

8:50

history takes a long time to unfold.

8:53

I think we've all

8:55

expected a pace of adoption

8:57

of Bitcoin. Because I think you go

8:59

down a rabbit hole, you suddenly get it.

9:02

I certainly don't understand it as well as you, but I understand it

9:04

enough to be irresponsibly long. And

9:06

you keep thinking, why does nobody else get this? I

9:09

think also Pierre is, he's very

9:11

optimistic. That's something I've always appreciated

9:13

about him. And so his optimism,

9:16

though, is that not only

9:17

is this going to be amazing for humanity, but

9:20

everyone's

9:20

going to understand it and get it as quickly

9:22

as I have. And that optimism,

9:24

I think, leads you to believe that things will

9:26

take

9:26

shorter than I actually do. So

9:29

what have, how's your opinion changed on the security

9:31

budget? So at first,

9:34

I thought that Bitcoin would

9:36

end up consuming like 51% of

9:38

all electricity. And that's how Bitcoin would

9:41

be secure. So it's kind of just like, taking

9:45

it from the wrong direction

9:47

of starting with, oh, okay,

9:49

it has to be 51% secure. And so therefore

9:52

the budget will be that. So then I got

9:54

into this idea that, with

10:01

the block size war that we need

10:03

to have small blocks because that's

10:05

what will drive up transaction fees

10:08

and make that coin secure long-term.

10:11

Then with the adoption

10:13

of SegWit and when

10:17

blockchain.com adopted SegWit,

10:19

I think like 2021, 22 years after the upgrade, when

10:25

the transaction fees went really low

10:27

because of that, I came

10:30

to a realization that even if

10:33

transaction fees go up, all that does

10:35

is incentivize developers to develop

10:37

new technologies, whether it's SegWit or Lightning

10:40

or whatever comes next. And

10:43

that in turn drives transaction fees

10:45

back down. And so now

10:48

I just think transaction fees are gonna be volatile

10:51

whenever we kind of hit that ceiling and

10:53

it incentivizes more innovation,

10:55

but also different use

10:58

behavior. So

11:01

batching, for example, and things like that. So

11:05

then the question became, isn't that a problem,

11:07

right? Because that would mean that Bitcoin's

11:09

not secure long-term. And

11:12

that's where I started really digging into, okay,

11:15

what exactly is going on with the 51% attack and

11:18

like, why is that an attack per se?

11:21

And the

11:23

conclusion I've come to is that it's really about

11:27

are you able to, so

11:29

the attacker is outbidding you on transaction

11:31

fees and are you able to outfit them in return?

11:34

And so it's kind of just a

11:36

bidding war on transaction fees that

11:40

ultimately where we fall

11:42

on whether Bitcoin is secure or not is are

11:45

the defenders, the honest transactors

11:48

able to outfit the people who

11:50

are trying to double spend them. And

11:52

that because, that's an open

11:55

question, because

12:00

we haven't really seen people try. But

12:02

I think the reason why we haven't seen attackers

12:05

try is because there's not

12:08

a huge economic payoff

12:10

to performing the attack if you succeed. So

12:13

it's kind of a high risk, low reward attack.

12:16

And so now I'm just

12:19

of the mind that the only time transaction

12:21

fees are going to go up is due to congestion pricing.

12:23

It's not going to be due to in response

12:26

to an attack. And

12:28

the Bitcoin won't really ever be attacked because

12:30

the game theory of it doesn't make sense for attackers.

12:33

You don't think it will ever be attacked? Yeah,

12:36

not in that 51% attack kind of scenario. And

12:41

it all has to do with the mempool

12:44

and the auction mechanism for

12:46

transaction fees being driven up

12:49

in response to an attack. Is that in

12:51

terms of an economic attack

12:54

because there's no economic benefit to the attacker?

12:57

Well, so I think that then

13:00

if we get into like, yeah,

13:02

economic attacks of like, let's say, mining

13:06

empty blocks or spamming

13:10

blocks to push out

13:13

non-spam transactions. And this is where

13:15

we can talk about the ordinal situation. So

13:19

I don't think that there is a,

13:21

you can't look at it objectively. And

13:24

people say, hey, there's no such thing as spam. If

13:26

you're paying a transaction fee, then it's not spam. And

13:28

I think that they're right in the sense that when

13:31

there's congestion pricing, because there's too

13:33

many honest transactions, real transactions,

13:36

that is indistinguishable from an experiment attack.

13:39

It's just a distributed denial of

13:41

service attack. It's

13:43

not malicious because people are just trying

13:45

to, it's because there's a bull

13:47

market and they're trying to arbitrage between exchanges.

13:51

But from the systems perspective, if

13:53

we're neutral on what the use case

13:55

is, then yes, it's

13:57

something that has to be mitigated through. higher

14:00

transaction fees and that these higher

14:02

transaction fees will essentially

14:05

drain the attackers'

14:07

resources until

14:10

they don't have those resources anymore because they've spent

14:12

them all on transaction fees going to miners.

14:15

And so I think that's really the only kind

14:17

of attack per se is just

14:20

denial of service attacks by having too

14:22

many transactions, whether it's actual

14:25

spam or legitimate transactions

14:28

and that the way it gets mitigated is just

14:30

higher transaction fees. You don't think there's a

14:33

scenario where people are incentivized just

14:35

to

14:35

attack Bitcoin to destroy the

14:38

reputation of it as a system?

14:41

So I don't think that

14:46

actually, like in terms of how much they

14:48

damage the reputation, it's

14:50

just never enough to

14:53

justify the cost of the attack. Right. And

14:56

so, for example,

14:59

in 2017, transaction

15:02

fees went up a lot and Bitcoin

15:04

did get a reputation

15:06

damage in terms of, hey, before we

15:08

thought of it as a low fee way

15:11

of avoiding banks. And

15:13

then afterwards, it was like, oh, this is a high

15:15

fee system. And

15:17

so it took a hit reputationally.

15:20

But ultimately, I don't think that that

15:22

was something that

15:25

is going to undermine Bitcoin

15:27

medium or long term. So what do you

15:29

think of oldenalism?

15:31

I think they're a distraction.

15:33

I mean, that's just

15:35

like with altcoins. It's like, okay,

15:37

well,

15:41

they distract from this idea that fix the

15:44

money, fix the world. That is

15:47

what is interesting about Bitcoin and

15:49

that the other parts of it are

15:54

like putting JPEGs on the blockchain.

15:56

This is less interesting from

15:59

my perspective.

15:59

So you're not opposed to it, you

16:02

just think it's a distraction, maybe

16:04

annoying. Well, I mean, if I

16:06

think it's a distraction, then, you know, whether

16:09

I'm opposed to it, it's like, yeah, I am opposed

16:11

to it, right? Do I

16:13

think that it should be illegal? No.

16:16

Like, do I think

16:18

that Bitcoin's rules should be changed

16:21

to stop them? So my

16:23

view has been that if the

16:26

transaction fees are not... If

16:29

they're driving up usage of Bitcoin

16:31

block space to the point that the transaction

16:34

fees are really high for

16:36

an extended period of time, then we

16:38

do need to look at, okay, beyond

16:40

just this mechanism for preventing a denial

16:43

of service tech, is there a change that

16:45

we can make to the Bitcoin protocol that would increase

16:48

the cost of this kind of

16:50

activity so that it

16:52

levels the playing field with other transactions? But

16:55

I think the reality is that the high transaction

16:57

fees did essentially,

17:00

in addition to it being a

17:02

fad and, you know, people lost

17:04

interest or they moved on to other things, that it

17:07

actually did mitigate the problem

17:10

successfully. So there's not really any reason to

17:12

look at further changes to the Bitcoin protocol.

17:15

Well, sorry,

17:16

to add to your point about distraction,

17:18

I mean, I think what people often

17:21

say is fix the money, fix the world. And what they're really

17:23

saying is that individuals need

17:25

to use the money in a way that can

17:27

fix the world, right? It really takes people's ownership

17:30

over their money and responsibility and using it in

17:32

a way that can fix the world. If we're just using Bitcoin

17:35

to put things like JPEGs on the blockchain, or

17:37

to use it really in any

17:40

of these ways where we're not actually trying to make

17:42

the world a better place, then Bitcoin doesn't actually

17:44

do what it's supposed to do. So I just

17:46

think that, like, again, I would agree

17:48

with you there that it doesn't need to be illegal, but

17:51

people should maybe rethink why

17:53

it is that we're working on this project.

17:55

Yeah, basically, people see

17:58

Bitcoin's freedom.

17:59

as an end of

18:02

itself. Whereas

18:04

from my perspective, and I think Morgan's perspective

18:07

as well, the freedom is

18:10

there so that you can choose to do good

18:12

with it. And you

18:14

could all, you have free will. So you could also choose

18:16

to do bad with it. But ultimately,

18:19

if everybody does bad with it, in

18:21

the sense of doing things like

18:24

losing their private keys, not

18:27

storing their private keys properly, and then having

18:29

North Korean hackers steal their private keys,

18:32

or only using, or

18:35

if everybody spends their Bitcoin, its value

18:37

goes to zero immediately, because there's nobody

18:39

wanting to hold it. So the

18:41

way that we use Bitcoin, I think, matters

18:45

from both a moral perspective,

18:48

but also kind of

18:52

how successful is this system going to be in terms

18:55

of improving the world. It

18:57

does matter how we use it,

18:59

even though we have the freedom to use

19:01

it poorly or to use it well. So

19:03

do you think if people were using

19:05

Bitcoin for ordinals quite significantly,

19:08

that essentially is a denial of service attack,

19:11

because it's kind of denying

19:13

the use of the system as money? I

19:16

do. And people were kind

19:18

of ridiculing this position of, hey,

19:21

you're crowding out

19:23

the global south by

19:26

stuffing blocks with JPEGs. Now somebody

19:29

can't send a payment in El Salvador.

19:32

And I think that's

19:35

a real argument in the sense that

19:39

if we encourage

19:41

that, and if we design that, hey,

19:43

this is more important

19:46

to have these use cases than to be

19:48

focused on payments and savings, then,

19:51

yes, inevitably, it's to

19:53

the detriment, because it is a fixed

19:55

pie of block space. Perhaps

19:58

in the future, the block space will increase.

19:59

Another point

20:02

of factor, I see. But

20:04

so I do think that there is a

20:06

trade-off. Do you think at some

20:09

point the books size might increase then? Well,

20:11

it increased with SegWit. Yeah. Well,

20:14

yeah. Exactly.

20:16

Yeah. So I think that

20:18

that could happen again, and I think it

20:20

will happen again. Because

20:26

essentially, I

20:28

think that it's important to have small blocks

20:30

because it's important to keep the cost of running

20:32

a Bitcoin node low. I

20:34

think that there is continued improvements

20:37

in the Bitcoin node software that makes

20:39

it increasingly efficient. And there's

20:41

continued improvements on the hardware side of, hey,

20:44

better Internet connectivity, whether it's fiber

20:47

optic lines or Starlink, et cetera, and

20:49

better computer hardware, better chips, cheaper

20:53

memory, cheaper hard drive, et cetera. So

20:56

with those two trends, I do think that running

20:59

a Bitcoin node is getting

21:01

less expensive in some regards. Now, you

21:03

could point to the growth of the total blockchain

21:05

size, right? Which is now probably around 600

21:07

gigabytes. So that's continuing to grow.

21:11

But I do think that, yeah, long

21:13

term, there will be an increase in the

21:16

base layer capacity of

21:18

Bitcoin. Where do you debate?

21:21

Where are your opinions divergent? Definitely

21:24

not on this subject at all.

21:27

We don't debate that

21:30

much in Bitcoin, do we?

21:32

No, I mean, it's some. No,

21:34

I think some

21:35

of my financial planning positions.

21:38

I feel like that we've kind of converged over the last

21:40

decade on a lot of these things, like maybe

21:42

if you had interviewed us

21:43

seven years ago, we would have had more divergent

21:45

points about how to be responsible

21:48

with your money, because

21:50

like so I've been a I have

21:52

a registered investment advisor. My practice has been

21:54

around for nine years now. I've been in

21:56

finance for 15 years or maybe more than

21:58

that now.

21:59

Maybe more than 15. Now it's

22:01

about 15. Just put some context on that. Do

22:04

you now recommend Bitcoin?

22:06

Yeah. So in my practice, nearly

22:09

everybody, we have 42 families and nearly everybody

22:11

has a position in Bitcoin. Only

22:14

two families do not. Some of those families

22:16

came through as Bitcoiners who are

22:18

looking for advice on just their financial

22:20

situation, whether they be 100% in Bitcoin or just somewhere between 10

22:22

and 50%. And

22:26

then there was a portion of my practice who I spent

22:28

time actually sitting down with an orange pilling

22:30

and getting them interested in Bitcoin

22:33

to the point where it's about

22:36

close to two thirds to 75% of

22:38

my practice actually holds their own keys now. They

22:41

all have like a lot of them have multisig

22:43

of that. And

22:46

yeah, they're storing their keys. They've got steel plates, some of

22:48

them. I mean, they're doing what they're supposed to

22:50

be doing. And then I've got a small percentage

22:52

of my practice where they've got their own keys. We're

22:54

still working on storage. And we have a very

22:56

small percentage that still has GBTC, unfortunately,

22:59

that we've been working on. And then I've

23:01

got the last two who

23:02

they're just holding out and they'll get it when

23:04

they're ready.

23:05

So in that nine year

23:07

history of the practice, at what point

23:09

was Bitcoin one of the services you offered, but at day

23:12

one, or was it maybe a couple of years?

23:13

I wanted to offer it day one, but it

23:16

was very murky from a

23:17

compliance perspective, whether or not that was something

23:19

that I can do. So

23:20

basically what my compliance consultant said to

23:22

me was that if somebody asks you about it,

23:25

you can talk about it. You cannot go

23:27

out of your way to talk to people about it. And I said, okay,

23:29

fine. And in 2016,

23:30

I actually had my first kind of asked me about

23:32

it. So 2016 was the first time I

23:34

started advising on Bitcoin, one

23:36

client in 2016, and then a

23:38

few clients actually in 2017, and many more in 2018 after the run

23:40

up in 2017. And

23:44

once I had just kind of been getting my feet

23:46

wet and talking about it, I, you know,

23:48

the rain started coming off. You

23:50

know how it is. It's like you do a little bit, you dip your toe

23:52

in, then you're like, whatever, I'll just jump in now. And

23:55

so at that point, without guidance,

23:57

I just decided like,

23:58

hey, this is really important.

23:59

And so

24:00

when people started asking about gold,

24:02

I would start soliciting Bitcoin. And then

24:05

in 2020, anybody who hadn't, we hadn't touched

24:07

basically about Bitcoin yet. We just decided,

24:09

OK, this is what we're doing. And we

24:12

got people involved in Bitcoin, whether they liked it or not,

24:14

basically in 2020. And then

24:16

from there, worked through 2021 and 2022 and

24:18

all this year to get people like

24:22

holding their keys, holding them properly, getting

24:24

them set up properly and doing what they need

24:26

to do. Can

24:27

you recommend allocation or is it

24:29

really just about education

24:31

and they have to make that decision themselves? No,

24:33

no, we help with that. Yeah. So the

24:35

thing that's great about having my registered investment advisor

24:37

is actually the SEC doesn't really care about

24:39

Bitcoin. It's commodity. And so Bitcoin

24:41

itself, I can actually talk about

24:43

all day when we actually get down to the

24:45

specific investment allocation because

24:47

that person generally holds other things. If

24:49

you're going to recommend an allocation, you're actually

24:51

are making an investment recommendation.

24:53

But because I'm a registered investment advisor, I can

24:55

do that. And so people who come

24:57

through my practice, we give them specific allocations.

25:00

I actually I gave a talk on this at Pacific Bitcoin

25:03

about how people should be approaching it from an

25:05

educational standpoint about all the different buckets

25:07

and how they can think about it, like if they want to be on

25:09

the low end or on the high end, what they need to do to be in

25:11

those positions. So what

25:13

is the split from low end to high

25:15

end? But what do you recommend an allocation wise? Yeah,

25:18

so I put myself there's

25:20

all there's always the 100 percenters in Bitcoin,

25:23

especially I'm sure with your audience, there are people who are

25:25

maybe higher than 100 percent. And I

25:27

never recommend higher than 100 percent. I

25:29

do not think under any circumstances you

25:31

should be levered up to buy Bitcoin. But

25:34

we do we're fine with clients having 100

25:36

percent allocation as long as they have an appropriate

25:38

emergency fund. So if people are really

25:41

into Bitcoin, they understand the technology, they have really

25:43

high risk tolerances. Then by all

25:45

means, as long as you've got at least two

25:47

to three months, we generally like to see as

25:49

high as six months really of expenses. So if

25:51

something does happen,

25:53

you are not scrambling or selling

25:55

your Bitcoin at the

25:56

absolute worst time in order to pay

25:58

medical bills or the

25:59

you know, make ends meet or whatever else it

26:02

is. And hopefully, you know, people aren't in that

26:04

situation, but it is good to have that emergency

26:06

funder on. And if from there you want to be 100%, be my guest. What

26:09

we've found though, is that for most people, somewhere

26:12

really between 30 and 50% is right. And

26:14

the reason why is because Bitcoin is long-term

26:16

savings. It's

26:17

not a short-term asset. And so in

26:19

my practice,

26:19

we do something called asset liability matching,

26:22

which is just a fancy way of saying, anything

26:24

that's going to happen in the short term, we match

26:26

that with a short-term style of asset. And

26:28

right now, fiat, cash, and

26:30

even short-term bonds is something that is appropriate

26:32

for something like

26:32

that. And anything you're going to be doing in the

26:34

long-term, like retiring or sending kids

26:37

to school in 20 years, things like that, you

26:39

can own Bitcoin for because it's

26:41

a long-term savings event. But

26:43

anything under that five-year mark, if you're going to

26:45

go buy a house in, you know, three to six months or two

26:47

years,

26:48

right? Saving in Bitcoin for that is inappropriate.

26:50

And so, or you want to go start a business

26:52

relatively soon, right? These are nice

26:54

things that people want to do, not necessarily emergency things,

26:57

but it doesn't make sense to be 100% in Bitcoin

26:58

if we're going to do those things. And so

27:02

what we found, at least what I've found through research

27:04

and working with clients is that 30 to 50% is generally right. And

27:09

really most of my clients end up in that 45 to 50%

27:11

range. And

27:13

as long as they can stomach the volatility and have a high

27:16

risk tolerance, then it's going to be fine. But

27:19

basically because of what's been going on in

27:21

financial markets and what the

27:23

government has basically been doing to our money, we

27:25

have been forcing people outside of their risk

27:27

tolerance for a long time in my practice. I mean, we're

27:29

stretching the bounds of what people generally

27:32

want to be doing because most people, they don't want

27:34

to be 100% stocks, right?

27:36

And so, but in order to match

27:38

inflation, to meet long-term goals and to do

27:40

all of the things that people want to do in their lives, they're

27:42

being forced beyond their risk tolerance on a regular

27:45

basis. And so in my mind, Bitcoin,

27:47

even though it's a volatile asset,

27:49

you're actually not being forced

27:51

beyond your risk tolerance because it's a savings vehicle.

27:54

And it doesn't have all of the other monetary

27:57

pressures that every step the inherent.

28:00

parent system an investment does have. And

28:02

you don't have the systemic risk of a company. You don't

28:04

have the worries of a CEO stepping out

28:06

who was making magic at that

28:08

company. You don't have worries about fraud

28:11

happening in that company, right? There are so many things

28:13

that people don't think about when they're thinking about stock

28:15

market investments. And because it's

28:17

become so commonplace to just hold index funds,

28:19

we are starting to just be removed

28:22

from what an investment itself actually

28:24

is. And I think that people should be

28:26

removed from that. I mean, most people, they should not

28:28

be spending their time trying to pick the right stock.

28:31

And so, if anything, Bitcoin removes

28:33

them from that and gives them the security,

28:36

but over a long period of time, right? Not over that short

28:38

period of time, which is how we end up

28:40

with that 45% allocation.

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30:47

Is there a funny dichotomy that you have where

30:49

you have some clients that may be up to 100% Bitcoin

30:52

and you're trying to make them hold their own keys, so

30:54

you're essentially giving up customers I assume? Yeah.

30:58

So I would say for the average advisor, that's going to be a problem.

31:01

In my practice, we charge a flat fee based on net worth.

31:03

We don't charge an asset center management fee. So

31:05

that removes the conflict of interest that I have where

31:08

normally

31:08

under that circumstance, I would be trying to

31:10

hang on to clients' assets as much as I

31:12

could

31:13

and not having them buy Bitcoin.

31:15

But because of how I charge, a

31:17

client can hold literally anything. I mean, we don't obviously

31:19

want them buying pogs and having

31:21

that be how they save for the future. If

31:24

they wanted to do that and be included that

31:26

on their net worth statement, theoretically,

31:27

I could get paid on it. We don't do that

31:29

obviously. But it's

31:32

nice though, because then we're asset

31:34

agnostic and can really look

31:37

at a client's specific situation and decide what's

31:39

actually appropriate for them rather than it being like,

31:41

well, I'd really like to get paid 8K on this

31:43

client's account, so they can't take out any

31:45

more money. That kind of a thing, which does

31:47

happen in the advisory world all the time. And

31:49

so with any of your customers,

31:52

what are their main fears with Bitcoin? Obviously,

31:55

volatility is one. Is it

31:57

still that kind of

31:59

irrational?

31:59

no existential fear

32:02

for Bitcoin? Yeah, so I

32:04

think there's a split for sure. There's

32:07

the hardcore Bitcoiners

32:07

that have come in through my practice in the last

32:09

few years

32:10

who they're actually

32:11

more worried about what's going

32:14

on from a macro perspective globally.

32:15

And I think it's because they listen to

32:17

podcasts all the time and they're tuned into all

32:20

the macro that's the big turn around. I'm

32:23

not bashing you in any way. But I'm hearing you've

32:25

got macro people coming on here. And people, I mean,

32:27

I hear what clients fear

32:30

is they come into my practice and like, they can't travel

32:32

anymore. They can't do it like they're hamstrung by

32:34

the amount of doom and gloom that's out there. And

32:37

I agree like it is. It's a sad situation

32:39

that like the world is in for sure. And

32:41

so there's that aspect of it, which I think is affecting

32:43

Bitcoiners and affecting Bitcoin psyche for sure.

32:46

And I think especially because the price hasn't gone up,

32:48

right? Like when the price is up, people

32:49

don't care so much about the world being on fire.

32:51

But when the

32:51

price is down and the world's on fire, people are, you

32:54

know, they're not very happy about the situation. And

32:56

on the other side of that, I've got, you know, my clients

32:59

who they've been with me a while, they trust

33:01

me. And so we've been talking about this new asset

33:03

class. And for some people, they've jumped onto

33:05

it because, oh, this is something that's

33:08

exciting and makes sense. And I get what you're saying

33:10

to me. And for other people, they're sort of,

33:12

you know, they're like, okay, I get that. Like I should

33:14

guess I should have this as some sort of insurance

33:16

policy is kind of how we've been

33:18

explaining it. But they're not really on

33:20

board. And I've gotten everything from the quantum computing

33:23

question to the, you know, it's going

33:26

to warm the earth by thousands

33:28

of degrees question, you know, all

33:30

the regular things that you hear in the news

33:32

that are bad about Bitcoin are generally what people ask

33:34

me about, oh, isn't it only used for drugs,

33:36

that kind of stuff. And so we just sit there, you know,

33:39

because my practice is small, I can take the time and actually

33:41

explain like, no, this is why this is not a thing.

33:44

Or here's, you know,

33:44

somebody who you might want to listen to who's

33:46

smarter than me who can talk about the environment. It's

33:49

interesting, because you bring up the points of FUD and

33:51

Pierre, one of the things I want to talk to

33:53

you about is that I feel like

33:55

in the last year,

33:57

we started to see Bitcoin wrecking.

33:59

We've recognized legitimately in certain corners

34:02

where it never was. There's certainly a growing

34:04

number of politicians. I

34:06

think that the sport has done some great work reaching

34:09

out to politicians and trying to educate them on Bitcoin.

34:11

We've seen some better articles in the

34:13

press. We've seen Bitcoin

34:16

being used with

34:18

the miners, what's been happening at ERCOP, but I think in

34:21

other places as well, we've seen

34:23

the work that's been done to perhaps use

34:25

miners at landfill sites. There

34:27

feels like a growing legitimacy, which

34:30

isn't just coming from Bitcoin and saying, yeah, this is

34:32

great. Actual legitimacy outside

34:34

of our historic circles. Is

34:37

that something you're recognizing? Yeah,

34:39

absolutely. And I think it just has

34:41

to do with Bitcoin became

34:44

like a macro scale asset

34:47

in the past cycle. And

34:50

so now it's on the scene and

34:53

it's also the case that it hasn't gone

34:55

away.

34:56

I think that whenever there's a news article about

34:58

Bitcoin in a bear market, like a lot of reactions

35:00

are like surprise that it's still

35:03

on the scene and still functioning.

35:06

The interesting thing is that the

35:09

more politicians want

35:11

to attack it,

35:13

the more there's other politicians who

35:15

want to defend it, right, because then it

35:17

becomes a political football. And

35:21

we've seen that dynamic play out as well.

35:24

But the other

35:28

challenge has been with FTX and Sam

35:30

Bacon Freidin and now he's on trial. But

35:34

his involvement in politics and also

35:36

in the world of finance, right, he was

35:39

meeting with prominent

35:42

financial figures

35:45

that they felt like they

35:47

got scammed after

35:49

that. And they

35:51

raised the real question of like, OK, well, if

35:54

FTX went to zero and he's

35:56

going to jail, but Bitcoin

35:59

is still here, what's the. different about Bitcoin that

36:02

it's not crypto per se, or it's not

36:05

part of the scam aspect of

36:07

it. But I also

36:09

think that, as you mentioned, Dennis Porter, there's

36:12

also Bitcoin Policy Institute. Ryan

36:15

has hired a head of public policy, Brian

36:17

Morgenstern. And so I think that there is

36:19

a recognition within the ecosystem that in

36:22

order to make sure

36:24

that the truth is being

36:28

talked about, rather than just sound

36:30

bites, that we have to invest

36:32

in education at the

36:35

political level. And we also,

36:37

you know, Ryan does a lot of investor relations where

36:40

the question is,

36:41

you know, if you can't understand Ryan's

36:44

business without understanding Bitcoin, so let's

36:46

start by talking about Bitcoin. So I think

36:48

even the rise of the large, locally

36:50

traded Bitcoin miners has made it

36:52

so that it opens up conversations about Bitcoin

36:55

in traditional finance that

36:58

might not have otherwise happened. The

37:01

big

37:02

dam, the big blocker right now

37:04

is the SEC,

37:06

Gary Gensler,

37:08

and

37:08

then really Elizabeth Warren behind

37:11

that, right? Elizabeth Warren is like

37:13

the puppet master in terms of financial

37:15

regulations in the United States. And

37:19

her

37:21

rabid anti-Bitcoin

37:23

stance and anti-Crypto stance, I

37:26

think she's bucket them together. She

37:28

doesn't understand the difference. Yes.

37:31

And no, I disagree there. She

37:33

understands the difference. I don't

37:35

think that

37:37

she, she might know that there's

37:40

a difference, right, in the sense that Bitcoin

37:42

is like the number one crypto. I

37:44

don't think she sees it as like

37:47

Bitcoin's ethically different.

37:48

No, I don't think she sees it as Bitcoin

37:50

is ethically different. But I do think that she sees

37:53

that Bitcoin is a threat to the US dollar

37:55

while the other ones are not. They're more of

37:57

just a threat to individual consumers.

38:01

Perhaps, yeah, I could see

38:03

that.

38:03

I could be off. I'm not inside the head

38:05

of Elizabeth

38:06

Warren. But when she comes on the show,

38:08

you can hear her. I

38:10

did write to her. Yeah. Because

38:13

I don't know if you saw it, but we made a film because

38:15

we went to write facilities and we ended

38:17

up calling it Dear Elizabeth. I had to write

38:19

to her at the end because there's a couple

38:22

of things that stand out for

38:24

me with her. But one of the things as somebody who's

38:26

considered liberal is that

38:30

if she was able to bring in draconian

38:32

laws against Bitcoin, I don't think she understands

38:34

the global impact that would have on the people

38:36

who need Bitcoin in some of the

38:38

most challenging geographies. I

38:41

don't know if she's connected those dots. But

38:44

to me, that would be my start

38:46

in the conversation, but there wouldn't be anything to do about

38:49

US dollar domination,

38:52

or it would be asking her what she thinks

38:54

about people who live under authority and regimes

38:56

with capital controls or people,

38:59

activists in certain markets.

39:01

What she thinks of women who

39:04

can't access bank accounts, all those things where I think it

39:06

would be a nice way to trap her. Just explain to her the difficulties

39:08

she would bring. But has anyone actually

39:11

got close to what her real

39:13

issues are? You said it's dollar

39:16

domination.

39:16

I think so. I mean, she's

39:18

actually pretty smart. I

39:21

would say of the senators

39:23

out there, she's one of the smarter ones. It

39:26

just seems to me, just based on

39:29

who she is

39:30

and what she can understand, that

39:32

she would be able to understand that

39:35

Bitcoin is a threat to the US dollar. It

39:37

is a threat that the government wouldn't be able to use

39:39

the printing presses, basically,

39:41

if it were to take over. That

39:43

does affect her significantly.

39:48

That's my take on it, but I could be totally

39:50

wrong. I don't know her well enough to know

39:52

whether or not that's actually what she thinks. And

39:55

so is Gary Gensler putting her strings

39:58

for her? Or is she putting his strings for her?

40:00

Yeah, I think she's following his strengths.

40:02

And I think ideologically, like,

40:04

she thinks money is an

40:06

institution that should be controlled

40:09

by the public through the democratic process.

40:12

Now, granted, we could debate whether the federal reserve's democratic

40:15

or not. But she's

40:18

been raging against these interest rate

40:20

hikes as being bad

40:23

for the little people. And she's not necessarily

40:25

wrong on that. But I

40:28

think it is genuinely ideological that

40:31

she wants the monetary

40:34

system to be under

40:36

her control or the control of a

40:38

democratic political system. The other

40:41

part of it is that she's

40:43

very

40:44

hands-on with it, right? So she

40:47

personally lobbies other

40:49

senators. And she's gotten

40:51

more than a dozen co-signers on

40:54

her bill that would effectively

40:57

outlaw Bitcoin mining in the United

40:59

States, along with a lot of other crypto activity.

41:03

But I still think she's a minority. She

41:07

won't have enough votes to pass that law. But

41:10

she clearly feels strongly about it enough

41:13

that she's personally

41:15

involved in trying to persuade others

41:17

in the Senate and eventually in the House to

41:20

see things her way. I know you've

41:23

done a bit of work on the policy side, alongside

41:25

Dennis and a few other people, I'm sure. There's

41:28

a lot of Bitcoiners that would say we shouldn't engage with politicians

41:30

and regulators. I assume you disagree

41:33

with that take. Do you not see him in DC with a

41:35

suit on? Mountain

41:37

Mountpia was wrong.

41:41

I do think it's important to engage.

41:44

And I would shout out to Lee Brancher

41:47

from Texas Blocking Council as well. He's

41:49

been a mentor of mine in understanding

41:52

the political landscape in Texas and nationally

41:55

as well. And I

41:57

think the reason why it's important

41:59

to engage

41:59

engage is because

42:02

politicians are influencers

42:05

in normie world. Right. And

42:08

so from my perspective, it's like

42:10

if we can Orange Pill politicians

42:13

and then when they're giving a campaign

42:15

speech and they say something good about Bitcoin,

42:18

they're helping Orange Pill, you know, hundreds, thousands

42:20

of people. And so it's like, I

42:23

don't see it so much as like, oh, we

42:25

need to get a good last pass.

42:27

Although, you know, that would be nice. I also

42:29

see it as, hey, this is an effective

42:31

way of getting the word out about Bitcoin is

42:34

through the political process.

42:36

And when you're there, are you noticing

42:39

like a similar uptick from like Democrats

42:41

and Republicans or is the one party that's

42:43

kind of getting on board more? I

42:46

think that it is bipartisan for

42:48

sure. And in fact, what we

42:50

saw in Texas was that the

42:53

there was a bill introduced in the Senate

42:55

in the Texas Senate by

42:58

a Republican.

42:59

And so there's definite

43:01

that was anti Bitcoin mining. OK. And

43:04

so, you know, people

43:06

often focus on Elizabeth Warren, as we just did

43:08

at the national level. But a

43:11

lot of the people co-signing her

43:13

bill are Republicans. And

43:15

their concerns are around part

43:18

of it is kind of weird conspiracy theories of

43:21

Bitcoin is invented by China. It's

43:24

like take up all of our electricity or

43:26

a real real one. Yeah,

43:30

you know, it's kind of like there's there's

43:32

like this Q and on element to it.

43:34

Right. And it's just driven by

43:36

misinformation, disinformation going

43:39

around the Internet these days. People can

43:41

just write anything or

43:45

the, you know, from their perspective, it's

43:47

like it's not a productive use of

43:50

our resources. Right. So electricity

43:52

should be going towards manufacturing, not

43:54

towards the coin. And air conditioners

43:57

and air conditioners. That's right. It gets really hot

43:59

in Texas. And then

44:01

the kind of the nimbyism of like,

44:03

oh, we don't want it here because we see

44:06

it as a nuisance. Even things like

44:08

the air cooled Bitcoin mining can be too loud

44:11

if it's adjacent to a residential area. And

44:13

they're right, like you shouldn't build a giant

44:17

air blower right next to where people live. But

44:22

there's that aspect of it. I

44:25

think, though, that it's

44:27

basically the extremes

44:30

on both sides

44:33

can have reasons to really

44:35

not like Bitcoin, whereas the more moderate

44:38

centrists are aligned

44:40

that, hey, this is innovative, it's

44:42

creating jobs. And

44:45

there's not really these

44:47

massive negative externalities that the

44:50

critics try to attach to

44:52

it.

44:53

I think also on the job side, I mean, it's not just

44:55

creating jobs. Like, for instance, in

44:57

Texas, they did these tax

44:59

abatements for companies to basically

45:02

to create jobs there.

45:02

And so what they found, let's say

45:04

like the solar companies, a lot of them

45:07

like it took advantage of these tax abatements,

45:09

but then they outsourced these jobs. So even

45:11

though the company that's based in Texas, right, the jobs

45:14

themselves didn't actually come to Texas.

45:15

Whereas like the mining facilities,

45:17

right, they're doing everything there. So they're

45:20

actually creating jobs in the location in which

45:22

they are built. And so I think it's

45:24

just it's a difference, right? This is not when

45:26

these jobs are created, they're actually created

45:28

rather than it just being sort of taking advantage

45:31

of the rules type of a thing and still being able

45:33

to add source. And if you witness firsthand,

45:36

whether it's TC or wherever,

45:38

but the conversations with these

45:40

politicians, whereby

45:42

you've kind of seen the light bulb click

45:44

for them, they've had maybe pre

45:48

preheld opinions from things they've read, but where you've

45:50

actually explained things to them, you've seen them

45:52

have that moment. Yes. One

45:54

in particular had a background

45:57

in software development. And when I

45:59

explained to him that it's.

45:59

it's open source

46:01

and then you can see the source code yourself. I

46:04

saw that light bulb moment in his eyes. So

46:06

I think that different things will

46:08

click for different people, but that was one

46:11

where I was like, hey, that was a solid win

46:13

right there. Yeah. What

46:15

was it like going down to DC and just doing

46:17

all this? Because I've got to admit, when I first

46:19

saw you in your suit in DC, it's

46:23

not that I was surprised. I was more

46:25

like, oh, this is cool because Pierre's down there doing this,

46:28

Pierre understands everything about Bitcoin. But

46:31

at the same time, I was a little bit surprised. It's like, oh,

46:33

shit, Pierre's down there doing that. Yeah.

46:36

Yeah. I don't like being

46:38

away from family. So in that

46:40

regard, you know, it kind of feels like

46:43

it's a big time investment. But

46:46

I also, you know, I got to run into Jamie

46:48

Dimon. I remember

46:51

he was lobbying because, you know, they need

46:53

to get bailed out. So

46:56

this was, you know, right around Silicon

46:59

Valley Bank. So what did you say to him? So

47:02

I was funny. I can't remember him. Hey,

47:06

Jamie, I'm a huge fan of yours and what you're doing.

47:09

Can I have take a quick selfie with you? And he goes, yeah,

47:11

sure. So I took the selfie and

47:13

then he asked me, what do you do? What are you doing here? And

47:15

I said, well, you know, I'm with a Bitcoin

47:18

miner, Ryan. And he

47:20

just kind of like smirked and watched. Love

47:23

that. Yeah. Yeah. So

47:26

that, you know, so you get to meet interesting

47:28

people. But I think that the the

47:30

other part of it is that in in

47:33

Congress, the staffers, they're the

47:36

ones who are kind of trying to absorb

47:38

all this information and distill it down

47:40

for the senator or the representative.

47:43

And they have to deal with a million different

47:45

issues. So like I'm very

47:48

single track like I just talked about Bitcoin,

47:50

but they got a deal with like Medicare, you

47:53

know, health insurance reform, gun

47:57

reform or whatever. You know, they've got like every political

47:59

issue.

47:59

that

48:01

they're trying to get the right information

48:03

about foreign policy, all this

48:06

stuff. So in a way, for

48:09

them, it's helpful to have

48:12

someone come and be able to

48:14

answer their questions because their line

48:17

of questions often is like

48:19

they're trying to dig deeper than what they've read

48:21

in an article.

48:23

And it's really hard

48:26

from outside the industry if you're

48:28

reading a New York Times article

48:30

or a Wall Street Journal article to

48:33

find the subject matter expert who would be able

48:35

to provide more context

48:37

or a counter argument to something that they read. I

48:40

think it's important

48:43

for Bitcoiners to do. And

48:46

I enjoyed doing it. There's lots of smart

48:48

people who work in DC. Some

48:50

people who are not smart and who work in DC too, but

48:53

they're very friendly in either case.

48:55

Do you have a similar scenario with other financial advisors?

48:58

Do you work with trying to orange pill

49:00

them and trying to help? Because

49:03

there's a lot of financial advisors I know who won't

49:05

recommend Bitcoin. And I know why. Some say it's

49:07

just not worth career risk for recommending

49:09

it or they don't understand it themselves.

49:12

Do you just want to corner the market yourself or do you actually want

49:14

to increase the number

49:17

of Morgan's there are?

49:17

Yeah. So we actually have a small network.

49:20

It's called the Bitcoin Financial Advisors Network. I

49:22

think there are seven or eight of us on there now

49:25

who are like me fee only

49:27

CFP financial advisors who

49:30

have minimized conflicts of interest and who

49:33

know the financial landscaping very

49:36

well and also are very well versed on Bitcoin.

49:39

And so we are hoping to grow that

49:41

network. I originally

49:43

had tried. I did

49:45

try in fairness. I tried to kind of get

49:47

out there and get the word out there with advisors.

49:49

And I thought that it would be easier

49:51

with some of the newer advisors coming up. There

49:54

are some groups where you know we thought I thought

49:56

that I because I was involved in them that it would be you

49:59

know these are people. in their 30s and 40s, it

50:01

might be an easy way to get some younger

50:03

advisors involved. And that was

50:06

pretty shot down, like shot down pretty quickly,

50:08

for sure. I was shocking

50:10

to me actually that basically

50:13

the new age financial advisor

50:15

is very evidence based investing,

50:18

quote unquote, where, you know, doesn't matter

50:21

what's going on in the world. Like

50:23

we just do stocks and bonds.

50:25

And the reason why they do that is because they've got all

50:28

this data, you know, going back over 100 years

50:30

of every single stock market crash and all

50:33

the news events around it.

50:36

And every time they look at the chart, it recovers

50:38

over time. So it's like you just kind of, you know, you

50:40

just buy your portfolio and you sit and wait and

50:42

you'll get through anything. And

50:44

I think that that has generally been

50:46

true over the last 100 years. But

50:49

I do think that the time that we're in now is unprecedented.

50:52

And I do think that a lot of these advisors are making

50:54

a huge mistake now because there's

50:57

a new asset here that it's not an investment,

50:59

I think, is what's not being focused on about it. They

51:02

just see it as another asset class that you would add to your portfolio like

51:04

anything

51:04

else. You know, you just buy stocks,

51:07

bonds and, you know, alternative investments and

51:09

Bitcoin would be considered an internal alternative

51:11

investment. And we don't really mess around with those things

51:13

because they tend to not do well over time, which is true.

51:16

I would totally agree with that there. But

51:18

they're not looking at it for what it is, which is

51:20

savings, not investment. And so if

51:22

you're thinking about in terms of savings, then you're actually

51:24

thinking about what money is. And most of these advisors

51:27

actually don't know what money is because when

51:29

they studied any kind of economics, they studied

51:31

Keynesian economics, they didn't study anything

51:33

about Austrian economics or really

51:35

just the foundations of money in general. And so

51:37

I think that there's a huge education gap

51:39

there. And unfortunately, what's happened

51:41

is that instead

51:42

of going from no-coin or to Bitcoin,

51:45

or at least stopping at Bitcoin, what's happened is that we've gone

51:47

from no-coin or to a cryptocurrency

51:50

almost overnight

51:51

and nobody's kind of settled in the middle. There's

51:53

that seven or eight of us that are like, come on,

51:55

we're over here. This is the right camp. But

51:58

instead, there have been other.

51:59

organizations and institutions that have popped

52:02

up with prominent people who,

52:03

you know, they are including

52:05

Bitcoin in it. So it's not like Bitcoin is not being

52:07

talked about, but they're also including the vast

52:09

array of other currencies

52:11

out there that are, you know, obviously, they're irrelevant

52:14

to client situations. And I say

52:16

that because really

52:18

what most people need is a savings vehicle,

52:20

right? For most people, they don't need some, you

52:23

know, random app on their phone, like, you

52:25

know, some people are going to get some use case out of it, and

52:27

it's going to be helpful to them. But for the vast majority

52:29

of people, just taking up space

52:31

on their phone, taking up time and energy, right? Taking

52:33

up money in this case, just that could be productive

52:36

somewhere else. And so

52:37

I think that that's often lost.

52:40

And the education is so lacking, and

52:42

it's so hard to get the right

52:44

education in the right place. I had

52:46

been in talks with the CFP board. The

52:48

CFP is this, it's certified financial

52:51

planners. And I have that

52:54

designation, and they were actually looking

52:56

for somebody to come in with

52:58

digital asset experience to help

53:00

with the curriculum, which would be the whole new

53:02

wave of CFPs coming forward.

53:05

And they actually ended

53:05

up going in another direction after everything

53:08

happened with FTX, they were like, you know what, we just don't

53:10

have anything to do with this. And so I

53:12

had applied to do that and thought that that would be a

53:15

really good way to like kind of get the message

53:17

out for financial advisors

53:19

and planners. But it's

53:21

really falling on deaf ears. And I guess, I

53:24

don't think it's a good use of my time. And

53:26

in all honesty, I think that the

53:29

best use of my time is focusing on people

53:31

who have an open mind and who really

53:33

truly need help with their finances, and that

53:36

I can make a difference in that regard rather than

53:38

trying to like knock on the doors of people who

53:40

have them shut very tightly.

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I

56:01

think it just goes back to that point of adoption

56:03

being a lot slower than we all think

56:06

it should be or hoped. But

56:08

then also me and Danny would discuss in debating

56:10

the other day, but maybe adoption

56:12

is necessarily slow, because

56:15

fast adoption would perhaps lead to even

56:17

more volatile Bitcoin prices,

56:19

which could perhaps scare more people

56:21

off. I mean, I don't know if this is one

56:23

thing you've done in the history you're writing, but

56:27

looked at the adoption curve of Bitcoin and does

56:29

it need to be at a

56:30

necessarily slow pace? So

56:33

this is where I learned a lot from Morgan, which

56:35

is the I think why it needs to

56:37

be at a slow pace is because of the

56:39

rebalancing of portfolios. OK. So

56:42

when Bitcoin has a massive run up, it has

56:44

a 10 X or 100 X. Everybody

56:47

who is holding Bitcoin, they're now

56:50

looking at buying a Lambo,

56:52

paying off their parents mortgage, putting

56:54

their kids through college, taking

56:56

chips off the table,

56:58

buying stocks, you know, and

57:01

and basically trying to to see

57:03

risk because they, you know, they've

57:06

made a life changing amount of money, essentially. It

57:09

doesn't mean that they sell it all. It just means that they trim.

57:12

Yeah, the very least. A redistribution.

57:14

Yeah, I guess that's also important that the centralization

57:17

of Bitcoin too is redistributing coins to

57:19

people. It is. But it creates

57:22

a bear market and that negative psychology

57:25

essentially puts a big break on

57:27

new adoption. And so then you have

57:29

this distribution phase that,

57:31

you know, last year, the bear market.

57:33

And eventually the

57:35

rebalancing process reaches,

57:37

you know, everybody's portfolio reaches an equilibrium,

57:41

either because the price went down or because they sold

57:43

enough. And then

57:45

that's the base of the

57:47

bear market. And then from there, that

57:50

trickle of new adoption will eventually

57:52

catalyze with that with the halving

57:55

into another bull market. And

57:57

then again, that distribution process.

58:00

So that's kind of the hottle waves that Unchained

58:03

put together as well. And

58:05

so I think that's what causes, in

58:08

contrast to that with another different

58:10

technology, right? Let's say

58:12

the iPhone, right? You don't have that with the iPhone.

58:15

Apple can just manufacture a bunch of iPhones. And

58:17

so even if you have a wave of adoption, it's

58:19

not going to cause the price of the iPhone to

58:22

skyrocket 100X. And then people

58:24

are trying to sell their iPhones to their friends.

58:28

And so that's what makes Bitcoin unique. And

58:31

it's like, hey, that's a nice bit of add security. But

58:33

it's also, I think, what causes the adoption curve

58:35

to be different than other technologies. And

58:38

there's other benefits of that as well, scaling,

58:41

being able to scale the technology to understand the scaling

58:44

needs for allowing the pace

58:46

of development, the acquisition of new

58:49

developers. It almost feels

58:51

like sometimes a little bit scarily perfect.

58:55

Well, I'd say maybe that's a cope. Because

59:00

Bitcoin

59:01

worked in 2012. Like

59:03

it

59:04

functionally. And

59:07

so there have been tremendous improvements.

59:10

But if we think about

59:12

maybe it's enabling

59:15

Bitcoin to scale in a way that's more non-custodial than

59:17

it otherwise would have. If it had just been

59:19

an overnight phenomenon, then it would have been purely

59:21

custodial. But

59:22

at the same time, I

59:24

think we recently found out Coinbase has

59:27

this massive percentage of the Bitcoin

59:29

supply is with Coinbase just

59:33

because it's convenient. And so I think

59:35

that

59:37

even with all the technology improvements, product

59:40

improvements for non-custodial, that

59:42

doesn't really take or has not taken

59:44

a lot of market share from Coinbase. The

59:46

topic that comes up a lot at the moment is BlackRock

59:49

ETF. Morgan, do you think that's good or

59:51

bad for Bitcoin? Don't look up here.

59:53

I

59:55

don't. I actually don't have a view about

59:58

that either way to be.

59:59

honest, which I know is not necessarily answering your question.

1:00:02

What I think about it is that, so

1:00:05

this is what I saw with clients with GBTC. And

1:00:07

so most clients, when we got them involved

1:00:09

in GBTC, they had a lot of questions

1:00:11

about what it is and how it worked. And

1:00:13

most of them from GBTC actually

1:00:16

wanted to outright own Bitcoin. So I think

1:00:18

an ETF is positive because it's a bridge.

1:00:21

Yeah, it's the best way

1:00:24

for somebody to get involved and not

1:00:26

have the issues that GBTC

1:00:29

has as basically a private placement that trades as

1:00:31

a closed end fund on the market, or to

1:00:34

be leaving

1:00:34

coins on an exchange,

1:00:36

just because that's convenient. I

1:00:39

mean, it is a little bit better for,

1:00:41

because at least in this situation, if a client

1:00:43

is leaving coins on an exchange, we don't really know what that

1:00:45

exchange is doing. But there's going to be clauses

1:00:48

and so forth in the perspectives of this ETF

1:00:50

whereby there's

1:00:52

going to be more security on how this

1:00:54

is held, unless they're just holding it at like an FTX

1:00:57

type place. That's where you're keeping your Bitcoin.

1:00:59

So in some ways, it's a really good bridge for people

1:01:01

to get involved in Bitcoin, see what it is.

1:01:03

In other ways, though, it's bad for Bitcoin.

1:01:05

Because it's bad because if people get too

1:01:08

comfortable with this ETF, because it doesn't

1:01:10

have as many problems with some of the other ways of holding

1:01:12

Bitcoin, then potentially, they

1:01:14

end up in a situation where later on, they have to convert

1:01:16

out of their ETF and into actual

1:01:19

Bitcoin when they want to go use it

1:01:20

later. And so that's what we keep talking to clients

1:01:23

about because I think to add on

1:01:25

to your point about like adoption

1:01:27

and rebalancing and all these things is that most

1:01:29

people when they

1:01:31

buy an investment, they're

1:01:33

not thinking about, you know, holding this investment

1:01:35

for infinity number of years. They're

1:01:37

thinking about, okay, in retirement, I'm going to sell

1:01:40

this investment, I'm going to get dollars,

1:01:41

and I'm going to go use those dollars to fund

1:01:43

my retirement to pay for my kids wedding

1:01:46

to go take a trip around the world, whatever it is that they

1:01:48

want to do, right. And so

1:01:50

when we're talking to clients about this, what we're

1:01:52

telling them is, okay, you're young, our hope for

1:01:54

this asset is actually you don't convert back.

1:01:57

And so they're like, what are you

1:01:59

talking about?

1:01:59

I'm in the future, I'm going to

1:02:02

use it. So for some people, it's a

1:02:04

really foreign concept. And so I think that's what

1:02:06

makes Bitcoin a little bit different in that regard,

1:02:08

where there's some rebalancing going on. But for the

1:02:10

hardcore Bitcoiners that are out

1:02:11

there, who they're looking at

1:02:14

this in the future

1:02:15

as something that they're going to use as money and that they're never

1:02:17

converting back. And so there, but

1:02:19

there's the rest of the market that doesn't view it that

1:02:21

way, that views it the standard

1:02:23

way that you would approach assets and rebalancing

1:02:25

and so forth and kind of adjusting based on your lifestyle.

1:02:29

And so to get back to your question about the ETF,

1:02:31

right? Then if people are putting money

1:02:33

into this ETF, they don't have that opportunity

1:02:35

later, especially with the BlackRock ETF. And

1:02:38

that's what definitely what

1:02:38

some Bitcoin companies have

1:02:40

sort of pounced on of like, well, you can't convert

1:02:42

out into Bitcoin, you can't withdraw in kind,

1:02:44

which is true, you can't. And so people

1:02:46

really should be owning Bitcoin outright, but for

1:02:48

a lot of people, right? Having them hold their

1:02:50

own keys is maybe not appropriate. And I think

1:02:53

that that's kind of, it

1:02:55

falls on deaf ears sometimes in our community. Holding

1:02:59

your own keys is not hard, right? It's not,

1:03:01

right? You write down your 12 or 24 words, right? You

1:03:03

store it properly, you move the Bitcoin, you copy

1:03:05

paste an address, right? It's not that hard

1:03:08

at the end of the day, but it's

1:03:10

not the difficulty of it that's the problem.

1:03:12

It's the fact that you're literally

1:03:15

holding your money in your hands, that's the problem.

1:03:17

And so people just need to become more

1:03:19

confident and capable of doing that,

1:03:21

because we now live in a society where we never

1:03:24

do that, right? Like we think of these kind of

1:03:26

strange people who are keeping cash

1:03:28

in their mattress, like what are you doing? That's nuts.

1:03:31

And so people have never, like we haven't done

1:03:33

this in years. And so I think that that's more of the

1:03:35

reeducation process of like, okay, you

1:03:37

can do this and you don't have to

1:03:39

be in a situation where you lose your money. And I think that

1:03:41

for most people, that means multi-sig. And so

1:03:44

from there

1:03:44

it means, okay, figuring out storing in multiple

1:03:46

locations, which is hard for a lot of people, right?

1:03:48

But

1:03:48

that at least, I think that

1:03:51

the number one opportunity really in Bitcoin is not the

1:03:53

ETF. It's making multi-sig something that

1:03:55

people can actually use. And if we do that

1:03:57

in a way where it's...

1:03:59

user-friendly where people can

1:04:02

really take ownership

1:04:03

of their money and figure out how to store properly, then

1:04:05

this is what I think that'll actually make Bitcoin really

1:04:07

take off. I think Multi-Sig is pretty friendly

1:04:10

now if you're using Unchained

1:04:12

or Kasa. I think both those tools

1:04:14

are particularly user-friendly and I'm sure there's other

1:04:17

similar ones. I also wonder if the ETF

1:04:19

probably is good for business for you because it's

1:04:21

going to open up a potential

1:04:24

larger base of

1:04:26

clients that you can go for. We've now had Bitcoin exposed

1:04:28

to them as, oh, this is okay because Larry

1:04:30

says it's okay. Hopefully,

1:04:33

you'll be ready to teach them to buy

1:04:35

themselves and custody themselves. Yeah, that's

1:04:37

my hope is that we would go from the ETF to

1:04:41

holding it properly for sure. I agree with you there

1:04:43

on Kasa and Unchained. I think Unchained has a great product.

1:04:45

We actually use Unchained for a lot of my clients. I

1:04:48

think that there are people who

1:04:49

want to do it without a third party being

1:04:51

involved and

1:04:53

that's more difficult for sure. That

1:04:55

would give me anxiety. Yeah, and not

1:04:58

necessarily something that is widely available

1:05:00

to the average person at this point. Yeah.

1:05:03

How about you, Pierre? Because for me, I go back and forth on the

1:05:05

BlackRock thing. Sometimes I think it's good for Bitcoin

1:05:07

because it would lead to massive exposure

1:05:10

and legitimacy again, but also at the same time,

1:05:12

it's not great for the Bitcoiners are holding the asset

1:05:15

via BlackRock. Yeah.

1:05:18

I think that eventually they

1:05:21

will enable people

1:05:22

to deposit and withdraw Bitcoin.

1:05:26

We

1:05:28

saw this with Robinhood

1:05:30

where at first they launched Bitcoin trading, but

1:05:32

you couldn't actually deposit and withdraw. Same

1:05:35

thing with Fidelity, but eventually

1:05:37

they do enable it. I think BlackRock

1:05:39

will realize that it's in their

1:05:42

commercial self-interest to be able to

1:05:44

do that.

1:05:46

I just see it as BlackRock joining the Bitcoin

1:05:48

network and

1:05:51

that's great news just

1:05:53

because of how big they are. Now, I know that there's

1:05:55

people who are like, hey, they're pushing

1:05:57

their agenda and they're going

1:05:59

to... try to influence Bitcoin or fork

1:06:02

it. And I think that's somewhat delusional.

1:06:04

I don't think that's what's going to happen.

1:06:07

And Bitcoin changes

1:06:10

you. You don't change Bitcoin. And that applies to Larry

1:06:12

Fink as well. I love it. With the,

1:06:14

obviously they've been pretty stringent on the rules around

1:06:16

like only accredited investors can actually

1:06:19

withdraw. Why would they open up deposits and withdrawals?

1:06:21

Because presumably that's a one-way thing. Like

1:06:23

no one would want to put Bitcoin into that, you wouldn't imagine.

1:06:25

There's no real benefits putting Bitcoin into the

1:06:28

ETF. Well,

1:06:31

unless the ETF might be

1:06:33

trading at a premium and

1:06:35

you could then upgrade, you'd

1:06:38

be

1:06:40

able to profit off that arbitrage

1:06:43

without having to take the steps of converting

1:06:46

your Bitcoin into dollars, wiring the dollars

1:06:48

to BlackRock and then converting the dollars into

1:06:50

the ETF. If you could just convert the Bitcoin

1:06:53

into the ETF directly. Would

1:06:55

that not open up to then just like a big

1:06:58

player, arbing that back to sort of power

1:07:00

and then real retail investors probably have no

1:07:02

opportunity to do that? Right. And

1:07:04

maybe the deposits and withdrawals will just be

1:07:07

for other large institutions. Fidelity

1:07:09

will be sending a Bitcoin transaction to BlackRock.

1:07:13

And so that's certainly a bad thing though, because it then

1:07:15

will keep the net asset value where

1:07:18

it's supposed to be. So arbitrage in this instance

1:07:21

would actually help the average investor who is holding

1:07:23

it rather than being a detractor. Yeah.

1:07:26

And it grows the Bitcoin network

1:07:28

and it grows kind of... I

1:07:31

think that a lot of times people don't

1:07:33

really understand Bitcoin until they actually use it.

1:07:36

And so this is they're going to be actually

1:07:38

using it. And

1:07:41

that I think is eventually going to have ripple effects

1:07:44

onto other equities. Where,

1:07:47

for example, if you are

1:07:49

Fidelity

1:07:50

and a Bitcoin

1:07:52

whale wants to,

1:07:54

again, because the Bitcoin price went up 10X,

1:07:56

they want to rebalance, they might want to

1:07:58

trade their Bitcoin for 10X. stocks directly

1:08:01

rather than going through kind of the conversion

1:08:04

and the cost associated with us. Do

1:08:06

you think Genzler is going to get out of the way?

1:08:09

I think that

1:08:11

it's going to depend on the presidential

1:08:14

election because he's

1:08:16

not, no, so now he's not going to get out of the way up

1:08:19

into the courts. He's

1:08:21

going to drag his feet as long as he can. And

1:08:24

he's doing what the Biden administration wants

1:08:26

him to do. And so

1:08:28

Biden's not going to fire him. Congress

1:08:32

would have to really, there's a high

1:08:34

bar to, I know Warren Davidson

1:08:37

has introduced a really great bill that would eliminate

1:08:40

Gary's position, create

1:08:42

a new set of, I think, three

1:08:44

people who would be leading it. And so

1:08:47

it would be trying

1:08:49

to unblock things there. But I don't think that's

1:08:51

going to pass anytime soon. And so it's really going to depend

1:08:53

on who gets elected in the next

1:08:56

presidential interest. It definitely does

1:08:58

open the door to advisors. I think if

1:09:00

the SEC approves a product, right, the

1:09:03

compliance departments of all of these large

1:09:05

firms can no longer say, hey, this is something

1:09:07

we don't have guidance on anymore. Right. In

1:09:09

which case, at that point, like the

1:09:11

advisors are going to have to educate themselves

1:09:14

on this as a product. They're not going to just

1:09:16

be able to sell this Bitcoin ETF without

1:09:18

knowing anything about Bitcoin. I mean, there are advisors

1:09:20

out there who do that. So maybe don't hold

1:09:23

me totally

1:09:23

to that. But the

1:09:25

average advisor

1:09:26

is going to at least know a few things, right? They're

1:09:28

going to at least be able to talk

1:09:30

about it for a paragraph, which is good for

1:09:32

Bitcoin, right? Because then more people will know more

1:09:34

things about Bitcoin.

1:09:35

I would also add, in

1:09:39

addition to a different president,

1:09:42

the courts could actually force

1:09:44

Gethler to

1:09:45

allow for a Bitcoin ETF. Oh,

1:09:47

yeah. What was that? There was

1:09:50

a case that you were telling me

1:09:51

about with the... It was

1:09:53

a... No, it wasn't GBTC. It was with the Futures

1:09:55

ETF,

1:09:57

where the judge

1:09:59

basically said...

1:09:59

that

1:10:01

it was worse for investors because

1:10:03

investors can't possibly understand a future

1:10:05

ETF as well as they would be able to understand a spot ETF.

1:10:07

Do you remember what I'm talking about? I

1:10:09

do. I forget which specific case that

1:10:11

was. That's the other avenue to unblock

1:10:14

things is for the legal

1:10:16

system to do its thing. And the SEC

1:10:18

keeps losing. Yeah. They

1:10:22

need better lawyers. I've got two... I

1:10:25

got two... Or better arguments. Yeah.

1:10:28

They're already on the right side of the law. I don't

1:10:30

know. Learn the truth. There is

1:10:32

a couple of other things I wanted to ask you about, Pierre,

1:10:34

just because it's been a while since I spoke to you. Stablecoins

1:10:37

on shitcoin protocols. I've

1:10:39

seen used in the wild a lot just traveling

1:10:41

with work. And I

1:10:44

find myself anti-shitcoin and anti-shitcoin

1:10:47

protocols whilst pro-stablecoins

1:10:50

on these shitcoin protocols because I've seen how people use them

1:10:53

and the lifeline they have become. I

1:10:55

actually saw Stefan Rivera tweeted something

1:10:57

earlier. He's talked about why these coins are

1:11:00

called stablecoins because they always lose

1:11:02

a value. And he's right. But as a currency,

1:11:04

they are the most stable option for people in places

1:11:07

I've traveled to with work. And I understand why people

1:11:09

use them. And so I've become a little

1:11:11

bit more nuanced about it. I'm glad they exist. I

1:11:14

would rather it was on liquid.

1:11:18

The benefits went to Bitcoin and not to Justin Sun.

1:11:21

But at the same time, I've seen them use them. It's

1:11:25

like a moral dilemma I have with it. I was wondering

1:11:27

what you'd be really intrigued in your position

1:11:29

with it. Yeah, I think the

1:11:32

best argument for stablecoins

1:11:35

is, Pierre, don't you use dollars?

1:11:39

It's like, yeah, I do use dollars.

1:11:41

And so then it's a point of privilege to say

1:11:43

that I have access to the dollar

1:11:46

banking system. I use dollars.

1:11:49

And somebody abroad,

1:11:52

I'm going to judge them because they're

1:11:54

using dollars. But

1:11:56

on Tron instead of on Visa, which is like a little

1:11:59

bit of a business. like, okay,

1:12:02

isn't Tron better than Visa? I don't

1:12:04

know. Yeah. But

1:12:07

I think that the other

1:12:09

point of the dilemma is really around, what

1:12:12

Morgan was saying is that you wanna

1:12:14

have that asset liability

1:12:16

matching. So somebody,

1:12:19

we say, hey, you should have three to six

1:12:21

months of expenses saved up in

1:12:23

your local Fiat currency in case you

1:12:26

lose your- Come on. In

1:12:29

case you lose your job, I think you've got good

1:12:31

job security. I think I've got three months left. Okay. And

1:12:36

so, if you need to have

1:12:38

that short-term savings,

1:12:41

I find

1:12:44

that challenging. Maybe this is an area where I disagree with

1:12:46

Morgan, because I do think

1:12:48

that if

1:12:50

that is constantly being eroded by inflation

1:12:53

and you're losing your purchasing power, you're

1:12:56

constantly having to add more dollars

1:12:58

to your short-term savings account. Yeah,

1:13:01

but I think the point about the emergency

1:13:03

fund, which is often lost on people,

1:13:05

is that at some point it's irrelevant to have

1:13:08

it. Because at some point you have so much

1:13:10

in assets that it's kind of irrelevant whether

1:13:12

or not you liquidate a little bit because you're in some

1:13:14

sort of a pickle, right? Like, I

1:13:16

think, yeah, when you get to a certain point, you don't

1:13:18

need that anymore, in which case it doesn't really matter that

1:13:21

it got eroded in Fiat. And like everyone's

1:13:23

best hope in Bitcoin is that you get through

1:13:25

three, four cycles or whatever, and

1:13:27

now you're good, right? In which case you don't need

1:13:30

that fiat emergency fund anymore. And

1:13:32

so, sorry to interrupt you there, but I

1:13:34

agree with you in that regard, because we

1:13:36

do have clients constantly adding to these

1:13:38

emergency funds because they

1:13:40

have to because of fiat

1:13:41

inflation. But at some point, right, we have

1:13:43

them stop adding to it because they've amassed

1:13:46

enough where it would just be sort of irrelevant

1:13:48

if we had to liquidate. And I'm tending to think

1:13:50

more people in developing

1:13:53

economies who have a

1:13:55

sovereign currency that's inflating away, and

1:13:59

actually for them in some way. the dollar is their Bitcoin.

1:14:01

So where Bitcoin is our

1:14:03

savings technology for the long term, you

1:14:06

know, I go from pound to Bitcoin, they may

1:14:08

go from peso or whatever to Naira

1:14:10

to the dollar, and the dollar is in

1:14:13

some ways serving the same purpose as Bitcoin is for

1:14:15

us. You know, it's holding value, but these

1:14:18

people might be living day to day or week to week, month to month. I

1:14:21

still think that there's an education part of

1:14:23

it, too. I think that if you surveyed

1:14:25

folks, a surprising number of people think

1:14:28

that the dollar is still backed by gold. And

1:14:30

so the dollar is essentially still

1:14:32

coasting off of this reputation as,

1:14:35

you know, world reserve currency, etc.

1:14:39

And that drives

1:14:41

adoption of USD

1:14:43

denominated stablecoins.

1:14:46

The other part of it, too, is like,

1:14:48

what do we want to spend our time

1:14:51

promoting and educating people about?

1:14:54

I could spend my time educating people about

1:14:57

the benefits of using a credit card, and

1:14:59

using Visa because you know, you get cash

1:15:02

back every time you, you know, I could start

1:15:04

doing marketing for Visa. But it's like,

1:15:06

okay, I don't think that even

1:15:08

though it might be better than writing

1:15:11

checks, I still

1:15:13

think that I'd rather spend my time talking

1:15:15

about Bitcoin, because ultimately, I do

1:15:18

think that the dollar system

1:15:20

is going to rug these people. And

1:15:23

there's also kind of that regulatory

1:15:26

risk overhang of the

1:15:29

stablecoins that are backed by dollars in a bank account

1:15:33

are vulnerable to that bank account being seized.

1:15:35

The algorithmic stablecoins historically

1:15:38

have all been in Ponzi's games that collapse. And

1:15:40

so in either case, I just

1:15:42

think that there's not enough

1:15:44

discussion about the risks involved.

1:15:47

That's basically why we're here. Yeah,

1:15:49

well, it wasn't really what

1:15:52

my thought was, it was,

1:15:54

I'm still promoting Bitcoin, it's more that

1:15:56

acceptance of these tools

1:15:59

are useful to people. people in certain places. In certain

1:16:03

places, I would promote Bitcoin, but at the same

1:16:05

time, understand something. Bitcoin is

1:16:07

a privilege to own or

1:16:09

use for some people because of the

1:16:11

desperate short-term situation

1:16:14

they find themselves in. I was

1:16:16

thinking of that kind

1:16:18

of perspective that I feel like actually,

1:16:20

it's really

1:16:23

shitty saying this, but we're fortunate

1:16:25

to have these tools available for certain people in

1:16:27

certain places. Yeah,

1:16:31

I mean, without a doubt, I use dollars. But

1:16:37

the thing is, we also can't discount

1:16:39

the fact that there is a middle

1:16:41

class, an upper class in the global

1:16:43

south that could be saving

1:16:45

in Bitcoin and developing

1:16:48

a Bitcoin circular economy

1:16:50

there. And I think

1:16:53

that it's just for the same

1:16:55

reasons that it's hard for

1:16:59

some of Morgan's clients or potential

1:17:01

clients to like graph Bitcoin and

1:17:03

to see the value in it, or

1:17:06

politicians to see the value in Bitcoin.

1:17:09

Same applies in the global south, right? It's not that,

1:17:13

as you pointed out, there are

1:17:16

local currency might be hyper-insplaining, but

1:17:18

they know that the dollar has been relatively

1:17:20

stable compared to that. And so

1:17:22

they can't make the leap to, okay,

1:17:24

decentralized currency. I think it's more of an issue

1:17:26

though, too, that because of what is

1:17:30

being done to the US dollar, right? These people

1:17:33

are being even more affected by the

1:17:36

money printing here and the

1:17:38

real lack of care for

1:17:41

people's money. So

1:17:42

much so that they

1:17:44

would benefit from saving $1

1:17:47

a week if they could

1:17:48

in Bitcoin, or

1:17:51

even 30 cents a week in Bitcoin, whatever

1:17:53

they could do to just ink

1:17:55

out a little bit. I think that's often

1:17:57

not spoken about because we often think,

1:17:59

okay, And somebody has to have

1:18:01

this, and we've been talking about it, the three to six

1:18:04

months worth of emergency money

1:18:06

in order to be able

1:18:08

to buy any Bitcoin at all. And that's like, okay, but

1:18:10

maybe if when you're in this specific circumstance,

1:18:12

where you're so reliant on being

1:18:15

paycheck to paycheck, where inflation

1:18:16

actually affects you way

1:18:18

more than somebody else, that

1:18:21

using something like Bitcoin would actually protect you from that. Amongst

1:18:24

your clients, how much fear is there

1:18:26

regarding the kind of

1:18:28

global economy at the moment, the state of the dollar, the

1:18:30

state of debt, the potential debt spirals.

1:18:33

And again, the reason I ask is like me and Danny talk about

1:18:35

this stuff a lot. And I would say for the first time in

1:18:37

my life, I

1:18:40

don't know where we'll be in five to 10

1:18:42

years. And I don't know what to do specifically

1:18:45

with my money outside of Bitcoin. Should I pay

1:18:47

off my mortgage or should I have a massive

1:18:49

mortgage? Are we going to see massively

1:18:53

high inflation in the UK? We've

1:18:56

had 10 to 15% over the last year or so.

1:18:59

I've seen how this plays out in

1:19:01

other jurisdictions. Could we have 40% 50%? I

1:19:04

don't know. But I'm definitely

1:19:07

highly concerned that it can come to where I live

1:19:09

now for the first time. And are you

1:19:11

having that much your clients?

1:19:12

Yeah, so the reason why

1:19:14

this conversation of owning Bitcoin

1:19:17

was so easy

1:19:18

to have is because people see

1:19:20

that their dollar is buying less. It's

1:19:22

not hard for people to see inflation

1:19:25

anymore. I think in the past it had

1:19:27

been. And so what actually was sort of an interesting

1:19:29

thing, a phenomenon I saw in my practice was that

1:19:31

wage growth hit first. And so all

1:19:33

of a sudden, everyone's financial picture started

1:19:36

looking really rosy. And

1:19:38

it should have been a clue to me. But because

1:19:40

I hadn't been through this kind of a period in time

1:19:42

before, it didn't really click that like, oh,

1:19:45

this is actually because wage growth

1:19:47

has happened before consumer

1:19:49

price inflation, basically.

1:19:51

But what we saw is that everyone all of a sudden,

1:19:53

like they were retiring, you know, five, six,

1:19:55

seven years earlier than what we had previously

1:19:58

projected.

1:19:58

And it was like. like

1:20:01

maybe we finally got

1:20:03

them to increase their income and

1:20:05

decrease their expenses and things are

1:20:07

looking good. We're feeling pretty good about

1:20:09

the work we had done. And the

1:20:12

reality was that there was wage growth, but the consumer

1:20:15

price inflation had not yet hit. And so

1:20:18

that phenomenon

1:20:18

has now gone away where yes, there's

1:20:21

been wage growth, but

1:20:21

also now because of that wage growth

1:20:23

that people experience and because of the free money that

1:20:26

people were given, that now they have gone and used

1:20:28

that money and prices have now increased. And so

1:20:30

because though people are seeing that price

1:20:32

increase, right? When you go to the store, I mean, milk is

1:20:35

five times more what it used to be, right? I mean, you

1:20:37

look at the price of meat and it's ridiculous. Like

1:20:40

you can experience it. Whereas

1:20:42

before, like, you know, things felt expensive,

1:20:44

but it wasn't so, like it was always, it

1:20:47

was these pockets of

1:20:48

places where, you know, oh, maybe people

1:20:51

were really wanting a specific service or

1:20:53

a specific subscription

1:20:54

or something that, you know, was kind of a fad

1:20:56

and that's where you would see the CPI increase, but not

1:20:58

in everyday day-to-day life. And so I

1:21:01

think because of that, this really opened the door to conversations

1:21:03

about Bitcoin because people realize that maybe

1:21:05

they will have to opt out and they

1:21:08

want kind of that backup

1:21:10

plan. You know, like there's

1:21:11

plan A of like, hey, we're gonna be in this

1:21:12

fiat economy and everything's gonna keep going the way

1:21:14

that we expect it to go and that'll be great.

1:21:17

But what if plan A doesn't work out, right?

1:21:19

In which case, you know, insert

1:21:21

plan B where at least we've got this backup.

1:21:23

And so for us, right? Like we were talking about the allocation

1:21:26

question earlier and I guess I never actually

1:21:27

got to this point of it because we were so kind of focused

1:21:30

on the larger allocations. But

1:21:31

like for most people, right? The

1:21:33

starting position really should be somewhere between three and 10%

1:21:36

and really like the reality of

1:21:38

it is that you really don't want that 1% exposure because

1:21:40

it's actually not enough if something, if

1:21:42

things were to actually catch on fire, you

1:21:44

need more than that. And like three is really on

1:21:46

the low end and that three to 10% range will

1:21:49

protect most people and it won't be material,

1:21:51

right? If it does actually go to zero, which is not what

1:21:53

I think, I don't think Bitcoin is going to zero. But

1:21:55

if it does go to zero, which is something that we can talk to clients

1:21:58

about, that, you know, they're not going to be. able

1:22:00

to not achieve all the things that they want to do in their

1:22:02

life, but it will actually protect them in case

1:22:04

of this Black Swan style event that a

1:22:07

lot

1:22:07

of Bitcoiners are talking about

1:22:08

and predicting and thinking about because of

1:22:10

the macro environment in which we live. And

1:22:12

I do think that because of what's

1:22:15

going on with CPI and consumer

1:22:17

price inflation and so forth, that people

1:22:20

are thinking about, like average people are thinking

1:22:22

about this more

1:22:23

so than just the pundits talking

1:22:25

about it. And

1:22:27

so it's definitely

1:22:29

strange times for sure. I also see there's

1:22:32

not a

1:22:32

bipartisan effect on it. I

1:22:34

think that like when there are Republicans

1:22:37

in office, my more Democratic clients are

1:22:39

generally more worried about the state of

1:22:41

the world and vice versa.

1:22:44

My more Republican clients are worried when somebody

1:22:46

like Biden is in office. And so I've seen that, you know,

1:22:48

the flip flop because my practice has been

1:22:50

around for a decade. So

1:22:53

I guess it's yet to be seen if everyone

1:22:55

will converge no matter who the

1:22:57

candidate is. Things are just bad.

1:23:01

And I haven't seen that yet, but I expect to see

1:23:03

that. All right. Last

1:23:05

things before we let you go. What

1:23:07

do you look forward to? Do you still have the same balance

1:23:10

for Bitcoin? Or

1:23:12

more? Probably

1:23:15

the same. You know,

1:23:17

what I'm looking forward to, we mentioned multisig

1:23:19

earlier. There's currently a

1:23:21

roadmap on Bitcoin core to

1:23:23

have built in support for hardware

1:23:26

wallets and for multisig.

1:23:28

And so that I'm excited about

1:23:30

because I want to be able to use multisig using

1:23:33

just Bitcoin core. It's like the most

1:23:35

highly reviewed code

1:23:38

base.

1:23:39

And I think that there's a lot of other people who

1:23:42

might have that same

1:23:43

approach to it. They just want to use

1:23:45

Bitcoin core with their hardware wallet

1:23:47

and that that would actually grow the

1:23:50

number of long term savings users

1:23:53

beyond its current base and give people

1:23:55

more confidence in putting more wealth

1:23:57

into Bitcoin.

1:23:59

That's what I'm looking forward to. I

1:24:02

also think that in the next bull

1:24:04

market,

1:24:05

Bitcoin mining is going to grow a lot.

1:24:09

And so I'm looking forward

1:24:11

to arguing with people on Twitter about

1:24:14

why Bitcoin mining is good

1:24:16

and all of that, Jess. I think there's a potential

1:24:18

interesting argument that's gonna become

1:24:21

part of that conversation in that

1:24:24

our sponsors are Iris Energy, they've invested

1:24:26

recently in AI GPUs.

1:24:29

And that these data

1:24:32

centers for AI are gonna be using a lot

1:24:34

of power. And we'll somewhat like Elizabeth

1:24:36

Warren be worried about that. And

1:24:39

the people who aren't worried about AI, but we have these

1:24:41

data centers which integrate both Bitcoin and

1:24:43

AI, ASICs

1:24:46

and machines and GPUs. That presents

1:24:48

an interesting argument. It's kind of like, well,

1:24:51

you can use half your data center for that

1:24:53

job, you can't use it for the Bitcoin. So

1:24:55

I think it feels like it might

1:24:58

put a cloak around Bitcoin and protect it a little. It

1:25:01

might, I also think that it's gonna affect

1:25:03

the Bitcoin mining industry in

1:25:05

the sense that currently,

1:25:08

AI is growing very rapidly.

1:25:10

Bitcoin mining is still growing, at

1:25:12

least at Riot, we're building during the

1:25:14

bear market and we're well positioned for that.

1:25:18

But in a Bitcoin bull market,

1:25:20

we'll see a massive influx of investment

1:25:22

into Bitcoin mining

1:25:24

that's gonna be competing with

1:25:25

all of this AI investment. And

1:25:28

it's also competing with

1:25:30

solar and wind deployment

1:25:32

for all of that electrical equipment.

1:25:35

And in past Bitcoin mining

1:25:38

cycles, the constraint has been on the

1:25:40

mining rigs. Who can get

1:25:42

orders from Bitmain? In this

1:25:44

cycle, I think the constraint is going to be

1:25:47

on transformers, on large

1:25:50

industrial electrical equipment, where

1:25:52

every part of the economy is going through

1:25:54

electrification and there, you know, so

1:25:57

it's gonna be massive competition over this scary.

1:26:00

resource and it's going to completely,

1:26:02

I think it's gonna change in

1:26:04

past cycles, the hash price. Typically,

1:26:08

it takes like 12 to 18 months for

1:26:10

the market to adjust. I think it'll

1:26:12

take much longer than that in the

1:26:14

next bull market. Interesting. What about

1:26:16

you, Morgan? What are you looking forward

1:26:18

to? Yeah. So there's a concept in Judaism

1:26:20

called Tikkun Olam and it's about fixing

1:26:23

the world. it's

1:26:25

part of why I do what I do. So when I

1:26:27

first started my career in finance,

1:26:30

I was a market maker in equity options.

1:26:31

And while it was

1:26:33

kind of sexy and exciting, it

1:26:36

felt very purposeless to me and

1:26:39

where you're just kind of moving money around namelessly

1:26:42

in the name of liquidity providing.

1:26:45

Whereas what I do today is to help

1:26:47

actual people live the life that

1:26:49

they want to have in a meaningful way. For

1:26:52

me, that's what Bitcoin has always been about.

1:26:54

And so I guess to

1:26:57

be a little bit more specific, I think

1:26:59

that there's a lot in the personal finance

1:27:02

arena that

1:27:04

already exists in traditional financial planning

1:27:06

that can be applied to Bitcoin

1:27:07

and that we're starting to do. And

1:27:10

so estate planning and multi-generational

1:27:13

wealth planning and retirement planning,

1:27:15

these are all things that are now... Now

1:27:17

that Bitcoin has been around for 15 years, people are

1:27:19

actually asking about these things and wanting these things and needing

1:27:22

these things. And so for me, it's

1:27:23

really exciting to sort of be on the cusp of that

1:27:26

and see the direction that goes in and hopefully

1:27:28

influence outcomes for many families.

1:27:30

And so if anyone's listening and thinking, Morgan, I need your help,

1:27:34

please help me sort my finances out. How

1:27:36

do they get in touch?

1:27:37

Yeah, I have two places.

1:27:39

So my registered investment advisor is

1:27:42

Origin Wealth Advisors. That's originwa.com.

1:27:45

And I also provide Bitcoin consulting

1:27:47

at moneyowners.com. And the podcast?

1:27:49

Our podcast is Bitcoin for Advisors.

1:27:52

It's on every major

1:27:54

podcast outlet.

1:27:56

So check us out there. I'm on

1:27:58

Twitter. I'm at Morgan with an E.

1:27:59

Rushard. And I also wrote a book

1:28:02

called The Personal Finance Quickstart

1:28:04

Guide. It has a little section of Bitcoin in it. And

1:28:07

most of it is fiat financial planning. But

1:28:09

I am currently working on a Bitcoin personal

1:28:11

finance book as well. So hopefully that'll be out sometime

1:28:14

next year. Okay. Well, listen, thanks for coming on. I

1:28:16

think the two of you make a really interesting dynamic

1:28:18

together. And Pia, it's

1:28:21

been way too long. Do you want to send anyone

1:28:23

anywhere?

1:28:24

Yeah, I'm on the platform.com.

1:28:27

At Bitcoin Pierre on Twitter.

1:28:30

And my DMs are open if people have questions.

1:28:32

Okay. Well, far too long. Hopefully we'll

1:28:34

do it again sometime soon. Thank

1:28:37

you. Thanks

1:28:37

for having us.

1:28:42

All righty. What do you think of that one?

1:28:44

It's pretty cool, right? Great to get Morgan

1:28:46

and Pia on the show. Great to get Pia back. It's been far

1:28:49

too long. Hopefully it won't be that

1:28:52

long till we have them back on the show again. And

1:28:54

also just trying to get this idea around

1:28:56

financial advice with Bitcoin, like the role it

1:28:58

plays for financial advisors. Because obviously

1:29:00

lots of them ignore it, miss it, don't understand

1:29:03

it. But I completely agree with Morgan.

1:29:05

She crushed it. I agree with all her advice. I

1:29:08

have Bitcoin in my portfolio, obviously. But

1:29:11

I think more people should be considering it, especially

1:29:13

with everything that we've seen over the last few

1:29:15

years with our currencies, our sovereign

1:29:17

currencies getting debased away by our idiot

1:29:20

government. So anyway, amazing.

1:29:22

Thank you, Pia. Thank you, Morgan. Going

1:29:24

to get Pia back on the show again soon. Want to talk

1:29:26

about the future of Bitcoin mining,

1:29:28

the current state of Bitcoin mining, everything mining.

1:29:31

So yes, we'll get that booked as soon as I can see Pia

1:29:33

again. Okay. Thanks for listening. If you've

1:29:36

got any questions about this or anything else you want to do, get

1:29:38

in touch. Hit me up at hello at whatbitcoindid.com.

1:30:00

you