Ask Jack: Who Gets My Bitcoin When I Die?

[0:00] Yo, what is going on guys? How are you?
[0:04] You are listening to the Jack Mers show.
[0:06] I am your host Jack and this is yet
[0:09] another edition of Ask Jack, our new Q&A
[0:12] segment where you guys can call in
[0:15] totally anonymous from anywhere in the
[0:17] world and you ask me whatever you want.
[0:21] And once a week, every week I record
[0:23] myself listening to them and answering
[0:26] them. This has got to be one of the most
[0:28] fun pieces of content that we've done
[0:30] maybe ever. You guys are enjoying them.
[0:32] I love doing these. These are a blast.
[0:35] So, without further ado, shall we? First
[0:38] caller, Brian. Let's hear from Brian.
[0:41] Hear what Brian has to say.
[0:47] Hey, Jack.
[0:50] I'm a husband, father, and thinking
[0:53] about uh Bitcoin storage.
[0:57] got two goals in regards to that. You
[1:00] know, don't lose it. Don't, you know, I
[1:04] want it to get stolen. Um,
[1:09] and if I were to unexpectedly die, I
[1:12] want my wife to have uh the ability to
[1:14] access it. Recently, you recommended
[1:17] Bitcoin Core for cold storage.
[1:20] and just want to your thoughts. Uh, is
[1:24] is multi-endor multi-IG collaborative
[1:26] custody as good or better
[1:31] at accomplishing my goals with storage?
[1:36] >> Yeah, great questions, Brian. Thanks for
[1:37] calling in. Uh, let's just let's first
[1:40] take a step back. Bitcoin custody.
[1:42] Listen, uh, one of Bitcoin's
[1:44] long-standing slogans, at least when I
[1:47] was around almost 14 years ago, was be
[1:50] your own bank. And that's so cool. I
[1:52] mean, one of the best parts, best
[1:55] properties that Bitcoin has accomplished
[1:57] and achieved is you do not have to have
[2:00] counterparty risk with anyone. That's at
[2:03] the monetary policy level. I don't have
[2:05] to trust anyone not to print any more
[2:07] Bitcoin. And I don't have to listen to
[2:08] Fed rate hike meetings or understand
[2:11] what central bank balance sheets look
[2:12] like. None of that matters. There's zero
[2:15] counterparty risk. There's only 21
[2:17] million. And that also goes for
[2:18] receiving it, storing it, and moving it.
[2:20] I don't need anyone's permission. I
[2:22] don't need to pay anyone a fee. I don't
[2:24] need to call any customer support or
[2:26] service. I don't need to trust anybody
[2:27] with my property. That is I I'm stating
[2:31] the obvious for many of you, but that is
[2:33] one of the most important properties
[2:35] that Bitcoin has accomplished that makes
[2:37] Bitcoin what it is, the best performing
[2:39] asset we've ever known, the best money
[2:41] we've ever conceived. However, with
[2:44] great power comes great responsibility.
[2:48] And I mean, I've talked to you guys on
[2:50] the show before. I think that we will
[2:52] have a tough time restoring harmony in
[2:54] society without a renewal of self-
[2:58] responsibility
[2:59] that goes into your health, what goes
[3:02] into your body, what you're eating, what
[3:04] you own, what you save in your the money
[3:06] that you're using, uh your family and
[3:09] the safety. You can't you we as a
[3:11] society can't be relying on government,
[3:14] can't be relying on big corporations.
[3:16] Nobody is here to save you. You have to
[3:20] save you. You have to be responsible for
[3:22] you. And Bitcoin actually makes that
[3:24] abundantly clear. It is a renewal of
[3:26] self- responsibility. Was be your own
[3:28] bank doesn't only mean yeah you have a
[3:32] fixed monetary policy that you're not
[3:34] trusting and that you don't have to
[3:35] trust. It's it's the big leagues. It's
[3:38] the big leagues. And anyways, I just
[3:39] want to acknowledge that you know
[3:41] custody is always a interesting topic.
[3:44] It's there's such variety. There's no
[3:47] right answer. Um, but definitely for
[3:49] folks coming from traditional assets,
[3:52] it's a bit of a culture shock because
[3:53] you're like, "Oh my goodness, I can't
[3:55] call a customer support. I can't reverse
[3:57] this transaction." When they said be
[3:59] your own bank, that's literally like you
[4:02] are responsible at the end of the day
[4:05] for the outcomes of your life, including
[4:08] money and your property and your
[4:10] bitcoins. Uh, with that being said,
[4:12] you're talking about uh Bitcoin
[4:14] and my recommendation. Listen, I'm not
[4:16] going to get into that tangent for a
[4:17] second. I just uh I'm trying to make I
[4:20] think a very important point in this
[4:23] modern-day AI era that Bitcoin Core is
[4:27] likely not only the most secure
[4:30] open-source library in Bitcoin, but
[4:32] maybe one of the most secure open-
[4:33] source libraries in the world because
[4:36] being source available and open- source,
[4:38] it does not imply security on its own.
[4:41] Just because it's public doesn't make it
[4:43] secure. People have to actually also
[4:46] care about its security. It has to have
[4:49] peer review. It has to have a diverse
[4:51] set of reviewers and researchers and
[4:54] contributors. A good example of a
[4:57] codebase that did not have this although
[4:59] it was public was Cold Card. Cold Card
[5:01] didn't let anyone else commercially use
[5:04] their software. So, it was hard for
[5:05] anyone to have an incentive to care
[5:08] about it. and it only had a few
[5:11] contributors and no one was truly
[5:13] peer-reviewing the software. And so you
[5:15] create an environment where the most
[5:17] incented person to fish around the
[5:20] codebase is actually an attacker. And so
[5:23] all I'm doing is I'm just to the Bitcoin
[5:25] community. I'm saying guys let's not
[5:27] forget that you know at the end of the
[5:29] day from a high level storing Bitcoin is
[5:32] generating a very very large and very
[5:34] very random number and then keeping that
[5:36] number safe and protected in a way that
[5:39] only you know it and who what how can we
[5:42] rely on doing that safely that number
[5:45] generation well Bitcoin core is in this
[5:48] world of AI where cyber security and
[5:51] hacks this is going to be this is going
[5:53] to proliferate this is not going away
[5:55] anytime soon. This is the new normal. I
[5:57] think the Bitcoin community needs to
[5:59] have an honest conversation about, you
[6:01] know, niche smaller, whether it's
[6:03] hardware projects or layer 2 lightning
[6:05] network projects that are open source
[6:07] and only have a few contributors without
[6:09] a large incentive for the community. I
[6:12] mean, Bitcoin Core, you've got uh
[6:14] university professors, Sailor needs
[6:16] Bitcoin core to be successful. Jack
[6:18] Dorsey needs Bitcoin core to be
[6:19] successful. Now that the US government
[6:21] is strategically holding Bitcoin,
[6:23] investing in Bitcoin, thinking
[6:24] positively about Bitcoin, the US
[6:26] government has an incentive for Bitcoin
[6:28] core to be successful. That is that is
[6:30] another league, another stratosphere of
[6:34] security and accomplishment for a
[6:37] opensource
[6:38] critical open-source software library
[6:42] than some of the other things people
[6:43] have used in the past. And I'm only
[6:45] trying to make that point. But should
[6:46] you use Bitcoin Core or and and not this
[6:49] isn't specifically to you Brian to all
[6:52] of you guys what should you do it
[6:54] depends on what you want for example
[6:57] Brian's talking about inheritance you
[6:59] know what you can use for inheritance
[7:00] Brian Strike you can log in your Strike
[7:02] account and set up inheritance on Strike
[7:04] that's one of the awesome parts about
[7:06] being a customer of a platform that you
[7:08] trust and you like and that serves you
[7:10] well is I hopefully make your life
[7:13] better. We make your life better with
[7:15] Strike, but it's not your keys, not your
[7:17] coins. And that's counterparty risk,
[7:19] right? Uh, and so is multi- vendors,
[7:22] collaborative custody, is multisig are
[7:24] these things better? I'm careful with
[7:25] this wording here. Is it better? It it's
[7:28] be it depends on what you want. Now, I
[7:31] know something like bit key. Bitkey, it
[7:33] think of it all like a spectrum.
[7:35] Trusting a custodian is maybe on one end
[7:38] of the spectrum where the whole I'm my
[7:41] own bank. I'm self-s sovereign. I own
[7:44] and hold and protect my really really
[7:46] large really really random number, you
[7:48] know, and that would be you could do a
[7:51] Bitcoin core on an offline laptop um and
[7:56] generate keys that way and then you can
[7:58] trust a business. And now there's ways
[8:01] in maybe towards the middle of that
[8:03] spectrum which is maybe like a bit key
[8:05] like one of Dorsy's products where it's
[8:07] collaborative custody in a way and
[8:08] there's an inheritance feature on there.
[8:11] Um, now it's multi-IG and technically
[8:14] they have some form of master key to my
[8:16] understanding. Um, but anyways, I think
[8:19] it's a spectrum. There's no right
[8:21] answer. I don't want to get on the show
[8:22] and say this is what's better or this is
[8:25] what's right. There's no such thing. And
[8:27] that's kind of the culture shock where
[8:29] what do you mean? What's the right
[8:30] answer? What what's the Chase Bank?
[8:32] There's no such thing. That's that's
[8:34] this new cultural I think trend that
[8:37] we're all in of self- responsibility.
[8:39] Well, I it's not for me to determine
[8:41] what's best for you, right? Uh so yes,
[8:46] could and and by the way, Strike is
[8:48] investing. We're we're building a lot of
[8:50] these products. Custody is something I
[8:52] mean, at the end of the day, we're here
[8:53] to be helpful and people need help with
[8:55] custody. And so it's something as a
[8:57] company we're trying to build
[8:58] potentially potentially products that
[9:01] sit along this spectrum. you want to
[9:03] fully trust us, you want to kind of
[9:04] trust us, you don't want to trust us at
[9:06] all, but we can maybe help you set
[9:07] things up all the way across the
[9:09] spectrum. So, yes, collaborative custody
[9:11] and there's some vendors out there that
[9:13] do have inheritance uh as well. Um, it's
[9:16] totally an option. I, you know, there's
[9:17] always going to be a plethora of
[9:19] different options.
[9:21] The other cool thing about Bitcoin is we
[9:23] can still build on top of it. I can't
[9:25] submit a feature request to gold. Gold
[9:27] is gold. Gold is this rock that mother
[9:30] nature invented and it is what it is.
[9:32] And I've watched the Bitcoin custody
[9:34] space truly evolve in remarkable ways
[9:40] and it will continue to do so. And every
[9:42] single year that goes on and goes by and
[9:45] Bitcoin continues to survive and Tik Tok
[9:47] next block, there's going to be more and
[9:49] more services, more and more features,
[9:51] more and more options along the
[9:52] spectrum. None of them are necessarily
[9:55] better. It depends on what you want and
[9:58] it depends on what you're looking to
[9:59] achieve. But to answer your question,
[10:02] Brian, it sounds like this stuff is
[10:05] might potentially be a little
[10:06] overwhelming for you, you need to set up
[10:08] inheritance away that your wife can be
[10:11] in a position to successfully take over
[10:14] the bitcoins. If, god forbid, something
[10:16] bad happened to you, it doesn't sound
[10:19] like I personally would recommend
[10:21] Bitcoin Core to to you to start. Maybe.
[10:25] Yeah, maybe some collaborative custody
[10:26] or some vendor relationship or even a
[10:28] strike account for some of the coins
[10:30] would be a better option. But it's all
[10:32] dependent on what you're looking to do.
[10:36] I don't know. Hopefully that was
[10:37] helpful. Let let me know, Brian. I'll be
[10:39] in the comments. Let us know if that was
[10:41] helpful. But just broadly for all you
[10:42] guys, I think custody is becoming more
[10:44] and more because the other thing is as
[10:47] Bitcoin goes from a trillion dollar
[10:48] asset to 5 trillion to 10 trillion to 20
[10:51] trillion. I mean, we're all accumulating
[10:53] more and more wealth and custody is
[10:54] going to become increasingly important
[10:56] and the amount of serviceable details
[10:58] that we're all going to need as we're
[11:01] part of the largest wealth transfer I
[11:03] believe that will happen in human
[11:05] history. Um, it's it's going to always
[11:08] be a top of of the line topic of
[11:12] conversation. Uh, and I do think people
[11:14] need to acknowledge this responsibility
[11:18] that is embedded in this asset class. I
[11:20] actually think it's a healthy societal
[11:21] trend. I think it's good that there's a
[11:23] renewal of self- responsibility across
[11:25] all things, including your property and
[11:28] your money. And I'm glad that you guys
[11:30] are asking the right questions and
[11:31] taking this stuff seriously.
[11:34] Okay, next question. Let's see here.
[11:37] What about Renee?
[11:40] Renee from the Netherlands. I love how
[11:43] global this movement is and I love that
[11:45] all of you guys call in from all over
[11:47] the world. Renee from the Netherlands.
[11:49] Let's hear what you have to say, my
[11:51] friend.
[11:56] >> Hey, Jack. I'm a great fan of you
[11:59] because you're explaining so good most
[12:02] of the items, especially the macro
[12:04] stuff. The question I have for you is,
[12:07] can you explain why you have said that
[12:10] no matter what if the Fed raise or
[12:12] lowers the rates that this doesn't
[12:15] affect the Bitcoin price? Which forces
[12:18] are behind that mechanism? Furthermore,
[12:22] I'm looking forward to see more stuff of
[12:24] you that keep me informed. Love from the
[12:26] Netherlands.
[12:28] >> Unbeliev how electric is that voice from
[12:33] the heavens. I question if that's your
[12:35] real voice. Unbelievable.
[12:38] This is just the coolest life
[12:39] experience. Thanks for calling in, man.
[12:42] And a and a phenomenal question. So, I
[12:44] am correct on record saying that the Fed
[12:47] can hike rates or the Fed can lower
[12:49] rates, it's all inflationary is my
[12:52] point. And if inflation is really baked
[12:56] in the cake here, then I think it's all
[12:58] bullish for Bitcoin. Now, that is
[13:01] counterintuitive and that flies in the
[13:03] face. You've got all these, oh, Harvard
[13:05] University economic professors and all
[13:07] these former Goldman Sachs guys that
[13:10] have uh the Fed hike is riskoff and risk
[13:12] off Bitcoin trades like a tech stock.
[13:14] And
[13:17] um here's my point. Let's take a look at
[13:20] the Fed hiking rates. Um right now the
[13:23] US government is operating a over$2
[13:26] trillion deficit. That's a huge problem
[13:29] when you're sitting on top of $40
[13:30] trillion of debt. That's the other thing
[13:32] is people say, "Well, in the 1960s or in
[13:35] the 1970s or in the 1980s before you
[13:37] were born, yeah, but guess what? That's
[13:39] not an apples to apples comparison."
[13:41] None of that matters because we didn't
[13:43] have debt to GDP at 120% and $40
[13:46] trillion worth of debt. That's the
[13:49] that's the most important part of what
[13:52] we're living through right now. Don't
[13:54] tell me what happened 50 years ago
[13:57] because 50 years ago, debt to GDP wasn't
[14:00] 120%. and there wasn't $40 trillion
[14:03] worth of debt. So, let me explain to you
[14:05] why that's so relevant and why this is
[14:06] unique and why I don't think a Fed rate
[14:09] hike or a Fed cut matters at the end of
[14:12] the day because inflation's already
[14:14] baked in and we're already in a
[14:16] sovereign debt crisis. So, the Fed hikes
[14:18] rates, what does the Fed do when they're
[14:20] hiking rates? They're further blowing
[14:23] out the deficit. The third largest
[14:26] expense that the US government has is
[14:29] the treasury expense is the expense to
[14:31] carry this much debt. It is incredibly
[14:34] expensive to have $40 trillion worth of
[14:37] debt. I mean the interest on that debt
[14:40] is hugely expensive. The other expenses
[14:44] that the US government has things like
[14:46] Medicare, things like social security.
[14:49] So unless the US government is willing
[14:51] to default on its interest payments and
[14:54] its debt or it's willing to cancel in
[14:58] default on things like Medicare and
[15:00] Social Security,
[15:02] this is only making the deficit bigger.
[15:06] How do we go from a $2 trillion deficit
[15:08] to a $3 trillion deficit? Well, if Worsh
[15:11] keeps hiking rates, that's how. Now ask
[15:14] yourself this. What should yields do?
[15:17] So, these uh Treasury yields, right,
[15:19] we're seeing the 10-year go blow through
[15:21] 5%, the 30-year higher and higher and
[15:24] higher. Ask yourself, what do you expect
[15:26] yields to do if the go the government,
[15:30] the person that you're lending money to,
[15:33] is becoming increasingly insolvent?
[15:36] They're becoming increasingly less
[15:39] creditworthy. Do you think yields are
[15:40] going to go up or down? They're going to
[15:43] go up. Of course, they're going to go
[15:44] up. If I'm lending someone money and
[15:47] their deficit is getting blown out
[15:49] further and further, they're becoming
[15:51] less and less creditworthy, they're
[15:53] they're they're get becoming more and
[15:55] more indebted, more and more insolvent.
[15:59] Am I going to give them better terms
[16:00] lending money or are they going to get
[16:02] worse terms? Worse yields are going to
[16:04] go up. And then you have this sovereign
[16:08] debt crisis where wars raises rates. The
[16:12] deficit then further blows out because
[16:13] you're adding a ton to the expense of
[16:16] the government. Now, how does the
[16:18] government pay for that? They need to
[16:20] issue more debt. They need to borrow
[16:22] more money to cover that expense. They
[16:25] issue more debt. Yields go up because
[16:27] there's there's a just a supply demand
[16:30] imbalance. There's not enough people
[16:32] buying the debt that they need to issue.
[16:35] And so they're issuing more debt. That
[16:37] further blows out the deficit. Yields go
[16:39] up. That's inflationary. By the way, all
[16:42] of this is inflationary because who owns
[16:45] the debt? The United States used to
[16:47] export the currency, export the debt,
[16:50] export inflation. the way that the
[16:52] system worked and the intended setup
[16:55] which is now changing. Scott Besson,
[16:57] Donald Trump, uh Jameson Greer, all of
[17:00] these guys part of this administration
[17:02] have been very vocal in saying we want a
[17:04] new monetary order. The current monetary
[17:08] order and the old monetary order is the
[17:10] United States is going to run structural
[17:12] deficits with countries like China.
[17:14] China's going to run a trade surplus.
[17:16] For every deficit, there's a surplus. So
[17:18] the United States is running a $2
[17:19] trillion deficit. There's $2 trillion
[17:21] worth of surplus out there. China is one
[17:23] trillion of it. Now these trade partners
[17:26] would take their surplus and recycle
[17:28] that trillion dollars. So the two
[17:30] trillion dollars net across the world,
[17:31] they would recycle that into US debt. So
[17:34] United States would run these deficits.
[17:36] Their counter partners, the folks that
[17:38] they're trading with called China would
[17:40] run a trillion dollar trade surplus.
[17:41] They'd take the trillion dollars and
[17:42] they'd buy government debt. the
[17:44] government would be able to issue more
[17:45] debt because who they're trading with on
[17:47] the other side of of their deficit the
[17:50] whoever's running the surplus is buying
[17:51] the debt. International foreigners have
[17:54] stopped buying US debt for a long time
[17:57] especially after 2008. No international
[18:00] you there's no we talk on the show that
[18:03] the Cayman Islands is the largest market
[18:06] for US government debt and that's just
[18:09] US hedge funds doiciled there. That's
[18:11] not actual foreign demand. There is no
[18:14] foreign demand. So all of the de the
[18:16] debt is now domestically owned. It's on
[18:19] our It's on us, America. It's on
[18:21] American banks balance sheets, Renee. So
[18:24] it's on American banks balance sheets.
[18:26] It's owned by the boomer class. It's
[18:28] owned by these endowments. It's owned by
[18:29] these pensions. So the United States has
[18:32] gone from here's a way to think about
[18:33] it. We've gone from exporting the
[18:36] currency, exporting the debt, and
[18:38] therefore exporting inflation. That was
[18:41] the hack. That was how America acquired
[18:44] a high quality of life is we were able
[18:46] to export inflation. But now that the
[18:49] debt is owned domestically and locally
[18:52] because internationally there are no no
[18:55] one is that dumb to have real rates
[18:58] negative to be lending the United States
[19:00] money and get real return negative in
[19:02] purchasing power. So we've gone from
[19:04] exporting inflation to now importing
[19:06] inflation. Think of it that way because
[19:09] people will say, "Oh, America are
[19:10] bullies to the third world, to these
[19:12] emerging markets, because they're
[19:13] exporting inflation onto these
[19:15] countries." But now America's doing it
[19:17] to itself. It's because they're issuing
[19:20] the debt locally to the banking system,
[19:23] to its populace and its people. Then
[19:25] we're now importing inflation. So when
[19:27] you are paying out like think of $40
[19:30] trillion worth of debt, there's a
[19:32] trillion plus dollars of interest
[19:35] expense on this debt alone.
[19:37] Who's getting that money? Americans are
[19:40] getting that money. So, it's
[19:41] inflationary. When you hike rates with
[19:44] this much debt, it's inflationary
[19:46] because you're stimulating. You're
[19:47] paying people out in you're not paying
[19:50] out China. You're not paying out India.
[19:52] You're not paying out Russia. You're
[19:54] paying out boomers. You're paying out
[19:56] people like Tether. You're paying out
[19:58] and that's so here here's another way to
[20:01] think about it. If I raised the social
[20:03] security payouts by 25 basis points,
[20:06] would that be inflationary? You say,
[20:08] "Yeah, that's stimulative because you're
[20:11] giving out more money to people, the
[20:14] boomers, that are active consumers."
[20:17] This is one of the highest consumption
[20:20] age classes in the history of humanity.
[20:23] And so hiking rates blows out the
[20:26] deficit which then forces the United
[20:28] States to issue more debt which blows
[20:30] yields higher. So rates go up, deficits
[20:34] gets blown out, yields go up, debt goes
[20:36] up. You get into this cycle and then
[20:38] this is all inflationary. So then Worsh
[20:40] hikes rates again which further blows
[20:42] out the deficit which further pushes
[20:44] yields higher which further causes more
[20:46] stimulus and inflation which causes him
[20:48] to hike again which blows out the
[20:51] deficit which pushes you get into this
[20:54] cycle of sovereign debt crisis.
[20:58] And so I don't care what happened in
[20:59] 1970 or 1960 or 1980. None of that
[21:03] matters. Debt to GDP was not 120%. there
[21:08] wasn't $40 trillion worth of debt.
[21:10] That's so when you raise the expense
[21:14] that the government has to pay out,
[21:15] you're blowing out the deficit and
[21:17] you're stimulating the economy because
[21:18] now all that debt is owned locally. The
[21:20] United States has gone from exporting
[21:22] inflation and its debt to importing it.
[21:24] So the inflation is baked in the cake.
[21:26] Now obviously if they cut rates, well I
[21:29] don't necessarily need to explain that
[21:31] one to you guys. That makes it much
[21:33] easier and cheaper to create credit.
[21:35] creating credit is just creating more
[21:37] units of fiat currency. So there's more
[21:39] paper claims of fiat floating around
[21:42] competing for a relatively fixed amount
[21:44] of stuff and that's obviously very
[21:46] inflationary as well. So I, you know,
[21:49] I've been very consistent in my opinion.
[21:51] Inflation is baked in the cake. And by
[21:53] the way, if you look at the US's fixed
[21:55] expenses, things like Medicare, Social
[21:57] Security, and the interest uh
[21:59] obligations that it holds, it's already
[22:02] at 105% of its receipts. What that means
[22:04] is the United States tax receipts, the
[22:07] money, the revenue that the United
[22:08] States is bringing in, it's fixed
[22:10] expenses, fixed expenses, things that
[22:13] like theoretically like really can't
[22:15] change or it's some form of default.
[22:16] They're defaulting on social security.
[22:18] They're defaulting on the Medicare that
[22:19] they've promised people or they're
[22:20] defaulting on the interest obligations
[22:22] they have on this debt. Assuming they're
[22:24] not going to have some form of default,
[22:27] the revenue they're generating alone
[22:29] doesn't even cover the fixed fixed
[22:31] expenses. And that doesn't get into, oh
[22:33] well, now they're in another war and the
[22:34] military expense has to go up. So, we're
[22:37] already in Ponzenomics. We're already in
[22:39] you have to print just to start making
[22:43] your fixed expenses. And if the Fed
[22:45] keeps hiking rates, then that 105% is
[22:49] just going to go higher. Debt to GDP is
[22:51] just going to go higher. And as long as
[22:53] I'm on this very long rant, let me tell
[22:55] you guys, you're you're probably sitting
[22:56] there, well then what do they do, Jack?
[22:58] How do they solve the problem? I'll tell
[22:59] you guys how they have to solve it
[23:01] mathematically. And this is not a
[23:03] political thing. This is not a bit Oh,
[23:05] well, Jack's just talking his own book
[23:07] cuz he's he's a Bitcoin guy. No, this is
[23:09] what's I call this a mathematical thing.
[23:12] This is a 2 plus two equals four. Okay,
[23:15] you have to delever the balance sheet.
[23:17] Debt to GDP is at 120 plus percent. That
[23:20] has to get down to 20%. That's just the
[23:22] that's just the facts. That's that's the
[23:24] thing. Okay, how do you do that? Well,
[23:28] you need the growth that you're
[23:30] producing to be higher than how much it
[23:34] costs you to borrow money. You have to
[23:39] you have to be producing some
[23:40] productivity. So, right now, let's say
[23:42] the economy is growing at 10%.
[23:44] No wonder yields are pushing higher.
[23:47] yields want to be six, seven, eight,
[23:48] nine, 10 because I'd have to be a
[23:51] to lend the US government and only get
[23:54] three, four% when I can invest it in the
[23:56] economy and the S&P 500 and Bitcoin and
[23:58] anything else and get a better return.
[24:00] So naturally, yields are going to find
[24:04] if if they're truly allowed to test a
[24:06] free market, they're going to find the
[24:08] true cost of capital. They're going to
[24:09] they're going to find some equilibrium
[24:11] naturally. Now, the US government can't
[24:14] allow that. one they can't afford it but
[24:17] it doesn't matter if the economy is
[24:18] growing at 10% but they're but the 10
[24:20] years at 10% then they're not aiding
[24:23] towards the problem they need to solve
[24:25] that's where I think there has to be
[24:27] some form of yield curve control which I
[24:30] I'm sure there won't be outright yield
[24:32] curve control but what yield curve
[24:33] control is is when the Federal Reserve
[24:35] the central bank is printing money to
[24:37] buy government debt which is another way
[24:39] of saying they're just printing money to
[24:40] lend to the US government that is the
[24:43] most stimulative the post-inflationary
[24:45] Bitcoin to a million dollars. I'd be
[24:47] shocked if they ever outright say that
[24:49] that's what they're going to do. But
[24:51] some variation of that has to happen
[24:53] because they have to cap yields. They
[24:56] cannot let the yields go to the actual
[24:59] growth of the economy because then you
[25:01] won't get the debt to GDP from 120% to
[25:04] 20%. The way that you do it is you cap
[25:06] the 10-year at call it 5% and then you
[25:09] run everything else hot. And so
[25:12] everything else, the the economy is
[25:13] growing at 10%. The S&P 500 is all-time
[25:15] highs, Bitcoin's all-time highs, your
[25:17] your gas bill all-time highs, your
[25:19] grocery bill all-time highs, but they
[25:21] cap the yield on the long duration or or
[25:26] or whatever or it doesn't really matter.
[25:29] And then that's how you delever the
[25:30] balance sheet because you're grow you're
[25:32] growing faster than the debt.
[25:35] That's how you do it and that's what
[25:37] they have to do. And so Wars, it doesn't
[25:40] really matter what War does. Now, here's
[25:43] one last thing. thing I'll say, Rene,
[25:44] and then I've been ranting too long on
[25:45] this one, but I'm not I just want to be
[25:48] clear with you guys. I'm not saying that
[25:49] we can't have like some riskoff event
[25:51] and Bitcoin has a flash crash lower.
[25:53] Like, if what I'm So, right now, I'm
[25:56] recording this on a Sunday night. Okay?
[25:58] If I wake up tomorrow morning and the
[25:59] 10-year pushes to 6% and this whole
[26:04] Ponzi fiat system is imploding before
[26:07] our eyes and Bessant and Trump don't
[26:09] step in and start issuing bailouts and
[26:12] fiat liquidity in the meantime,
[26:14] everything could sell off. You could see
[26:16] a stock market crash. You can see a
[26:17] Bitcoin dip. All of that is totally
[26:20] reasonable. But I don't necessarily
[26:22] count that. Like I'm not a day trader.
[26:24] I'm not speculating on the near- term.
[26:26] I'm saying over the medium to long term,
[26:29] this is all incredibly bullish for
[26:30] Bitcoin. It doesn't really matter what
[26:32] Kevin Worsh does because we're not in a
[26:34] normal circumstance and scenario at debt
[26:36] to GDP of 120% and $40 trillion worth of
[26:39] debt. Hiking blows out the deficits and
[26:42] is very stimulative and yields will go
[26:43] higher. Same with cutting. Cutting is
[26:46] further inflation expectations which
[26:48] will push yields higher. More fiat
[26:51] credit will be created. Hard assets will
[26:53] go to the moon. So either way you slice
[26:55] it, they need fiat liquidity. They need
[26:58] some form of yield curve control. They
[27:00] need a severely weaker dollar. They need
[27:02] to delever themselves from this 120%
[27:05] debt to GDP. And Bitcoin's going to the
[27:08] moon and I don't really care what
[27:10] happened in 1970 because it's not apples
[27:12] to apples. So that's my answer. In the
[27:15] meantime, if there are dips, they're
[27:17] dips to be buying. So, no one should
[27:19] ever be too levered on Bitcoin or
[27:22] thinking that they can price predict day
[27:25] day trading. That's not what being, at
[27:27] least for me, that's not staying humble
[27:28] and stacking sats. But over the medium
[27:30] to long term, um, I have no idea if like
[27:33] there's going to be some, you know,
[27:35] liberation dayes risk off where
[27:37] everything drops by 20% and then they
[27:39] step in and they provide the fiat
[27:40] liquidity and they issue the new uh,
[27:42] yield curve control type program and
[27:45] then off to the moon, off to the races.
[27:48] Uh, but this is all just math. This is
[27:50] all just 2 plus 2 has to equal four. I
[27:53] don't care about your beliefs. I don't
[27:54] care what happened in 1970. None of that
[27:56] matters to me. 2 plus 2 is four. It is
[27:58] what it is. Uh, like the math is the
[28:01] math. And the United States is just way
[28:03] too indebted and way too levered that,
[28:06] you know, the interest rate that the Fed
[28:08] sets is irrelevant. And raising it is
[28:11] actually stimulative and further blows
[28:13] out the deficit. Okay, I'll cut myself
[28:16] off there. Renee, voice from the
[28:18] heavens. Thank you for calling in, man.
[28:21] Uh, all right. Let's hear from Jake. How
[28:23] about Jake? Here we go.
[28:29] >> Hi, Jack. First of all, I just wanted to
[28:32] say thank you and that I respect what
[28:34] you do. I I find your ability to take
[28:37] really heady financial and technological
[28:40] concepts and and and put them in
[28:43] layman's terms to be impressive. uh
[28:45] reminds me of the quote about
[28:47] >> any fool being able to make the simple
[28:51] complex but only a genius being able to
[28:53] make the complex simple. So, thank you
[28:56] for doing that. [snorts] Uh I kind of
[28:58] have a two-pronged question. Uh first
[29:01] prong is, are you Irish? Um I'm Irish on
[29:05] my dad's side and I find your manner of
[29:08] speaking to be very reminiscent of
[29:10] conversations I've had around the dinner
[29:12] table. The Irish are
[29:16] uh quick to call They do not
[29:19] suffer fools and they tend to express
[29:22] affection in ways that others would
[29:24] conflate with uh being an So,
[29:28] are you Irish? And the second question
[29:30] is,
[29:32] what have you found to be the most
[29:33] effective way uh to explain Bitcoin and
[29:37] its value proposition to older
[29:38] generations in particular boomers uh
[29:42] while avoiding common pitfalls that can
[29:44] derail the conversation? And to kind of
[29:47] weave it back to the first part of the
[29:48] question, if the first part of the
[29:50] question, your answer is yes, then how
[29:53] would you specifically tailor
[29:56] your Bitcoin sales pitch, so to speak,
[29:58] to a notoriously hard-headed Irish
[30:01] audience? Thanks, man. Keep up the good
[30:04] work.
[30:06] That's hilarious. Awesome question. Uh,
[30:08] am I Irish? Yeah, my middle name, I
[30:10] don't know if this is on the internet
[30:12] already. My middle name is Mali. So,
[30:14] there you go. Am I Irish? Yeah, after my
[30:17] grandma Mali. I'm definitely Irish. Um,
[30:20] orange pilling. Uh, older generations.
[30:24] Um, I don't know. I don't know if I have
[30:25] a silver bullet for that one. I was, as
[30:27] you were, uh, talking, I was trying to
[30:29] think in my head and prepare an answer.
[30:31] And, uh, I don't know if I have a good
[30:32] one necessarily. I, to be honest, I
[30:34] think Bitcoin is the story of
[30:37] consistency and reliability. Like I
[30:39] think over time if we're able to just
[30:42] consistently stand for moral, ethical,
[30:46] positive, good things and we get
[30:49] results, the protocol works, Tik Tok
[30:51] next block around every 10 minutes,
[30:54] there's a credible fixed supply, um then
[30:57] the world will do the marketing for us
[30:59] because they're going to have to print
[31:00] astronomical amounts of money and uh
[31:03] everything is just such clown world
[31:06] world relative to this new distributed
[31:09] cryptographic network. So that's my
[31:11] broadly speaking, you know, I always
[31:13] convince myself the best thing I can do
[31:15] is just keep showing up. Um, but let let
[31:17] me try and give you uh some meat on the
[31:19] bone here. So there's two that um when I
[31:22] would say older generations or people
[31:24] that deal with in analog assets, you
[31:26] know, like real estate for example,
[31:28] there's two uh that come to mind that
[31:30] sometimes resonates. One is there's no
[31:34] ongoing expenses to own Bitcoin, which,
[31:38] you know, I had no idea how complicated
[31:41] it is to own a basket of real estate
[31:45] because you've got tenants and you've
[31:46] got personal liability, right? Like what
[31:49] if the tenant does something terrible on
[31:51] your property? You have property taxes.
[31:54] So, right now I live in I mean the house
[31:56] I'm sitting in right now I own and I
[31:58] have my property taxes only go one
[32:00] direction. it increasingly gets
[32:02] expensive for me to own this property on
[32:05] this land. And then I mean it's
[32:07] non-stop. Oh, the sink has a problem. Uh
[32:10] the the roof is leaking. Oh, the uh I
[32:14] need new plants every summer on my roof.
[32:16] It's it's nonstop ongoing expenses. The
[32:20] tax for me. Meanwhile, my bitcoins just
[32:24] sit there. There's no property tax.
[32:26] There's no tenant counterparty risk. It
[32:28] doesn't matter if someone gets drunk and
[32:29] bangs their head on it. You know,
[32:31] there's no such thing in Bitcoin. And so
[32:34] it is extremely cheap asset with no
[32:37] counterparty risk. It's free. It just
[32:40] sits there digitally.
[32:43] And there's no property tax. There's no
[32:45] tenant this or that. There's no leak in
[32:46] the roof. There's no pipe I need to fix
[32:49] ever. Um which is I mean that is I mean
[32:52] come on. That's unbelievable. Uh and so
[32:56] I I would say that has resonated with
[32:59] some of the older generation because you
[33:02] know think of it this way. Bitcoin is
[33:04] short dollar really that it's a way to
[33:07] monetize the destruction debasing of the
[33:11] currency and other ways to have gotten
[33:14] short dollar over the years. It's very
[33:16] complicated. It's hard. you know, people
[33:17] have done it through real estate, but as
[33:19] I just described, like managing a a real
[33:22] estate position is not always a simple
[33:24] thing, and it's certainly not free. And
[33:26] so, just how simple Bitcoin makes it,
[33:29] uh, I think that's resonated for folks
[33:31] that own some of these analog assets or,
[33:33] you know, like people are long fine art.
[33:36] How complicated is that? you know,
[33:38] understanding if you what the liquidity
[33:41] profile is of a certain artist or a
[33:43] certain piece or painting and how to
[33:45] secure it and you got to get insurance
[33:46] on this stuff is just yuck compared to
[33:50] Bitcoin just sitting in cold storage. I
[33:53] mean, it's just the easiest, most
[33:55] elegant solution to preserving wealth
[33:57] and purchasing power. And so those
[34:00] little details as relative comparison to
[34:03] analog assets I mean that is I mean the
[34:07] other difficult thing is is giving
[34:09] Bitcoin credibility to its fixed supply
[34:11] because I think everyone understands
[34:13] scarcity but it's well can't can't you
[34:15] just make another Bitcoin or why can't I
[34:17] just copy and paste it like I can a text
[34:18] message and it's what's so important
[34:21] about Bitcoin is not only is it scarce
[34:23] it's credibly scarce and um that
[34:25] credibility part is difficult because
[34:27] you're talking about cryptography and
[34:28] distributed networks and stuff. So, um I
[34:30] I I've found success in just hey,
[34:33] imagine owning something that performs
[34:35] better than your real estate and doesn't
[34:37] have any property tax or a leak in the
[34:38] ceiling or tenants that are getting
[34:41] drunk and kicking in the mirror. Uh I
[34:43] don't know. I don't know if that was
[34:44] what you were looking for, but uh that's
[34:46] uh when I'm talking to boomers that
[34:48] these are the type of people that are
[34:49] calling in to strike private and saying,
[34:50] "Okay, fair enough. I'll let me
[34:52] liquidate some stuff and and build a
[34:53] little bit of a Bitcoin position." That
[34:54] was a good point. So, that's I've I've
[34:56] had success there. Uh, okay. Rob, let's
[34:59] hear from Rob. Here we go. I got two
[35:02] more questions.
[35:07] Yo, Jack, this is Rob here. First of
[35:10] all, love the show. Love your passion,
[35:12] your insights.
[35:14] 100% agree with you that authenticity
[35:16] always wins. So, never change, my man.
[35:18] Um, I've been in Bitcoin since 2020. I
[35:21] consider myself techsavvy. Um, but
[35:23] managing my Bitcoin uh is is mentally
[35:27] exhausting to me. Uh, my phone is the
[35:30] link to multiple wallets, uh, including
[35:33] Strike. I'm constantly thinking about
[35:35] what would happen to it if I lose my
[35:36] phone. And even moving Bitcoin from
[35:40] wallet to wallet is is nerve-wracking.
[35:42] So, I I try to avoid that as much as
[35:44] possible.
[35:45] Just wondering if Strike's working on a
[35:47] custodial service. I know you had
[35:49] mentioned that a few months ago in light
[35:51] of the recent hardware hacks that had
[35:54] happened. So curious if you have any
[35:56] updates on that and uh appreciate it,
[35:58] man.
[36:00] >> You're the man. Thank you. Thank all of
[36:02] you guys. By the way, thanks for the
[36:04] compliments. I continue. I was at a
[36:05] wedding this weekend. Had a few guys
[36:07] that listen to the show and have been
[36:09] following my work uh at the wedding. Uh
[36:13] all it's just cool. So, the kind words
[36:16] uh really do mean a lot. It helps me
[36:18] keep going. So, thank you, dude. Uh
[36:22] yeah, here's that custody topic again.
[36:24] Listen, um are we working on stuff at
[36:25] Strike? Yeah. Uh we are now we've built
[36:28] a lot of custody infrastructure, but for
[36:31] ourselves, we're the only customer of
[36:33] what we've built and we're thinking that
[36:35] that might need to change because like I
[36:37] said before, we're here to help you
[36:39] guys. That's what we we're in the
[36:41] business of helping Bitcoiners. That's
[36:43] why we exist. And more and more and more
[36:45] of you guys are saying, "Man, custody,
[36:48] this is this is a complicated thing.
[36:50] It's not very easy. It's very diverse.
[36:52] There's a wide range of things. It
[36:53] depends on what I want. It depends on
[36:55] who I trust. And there's many ways we
[36:57] could participate in that. There's
[36:59] things like insurance. There's things
[37:00] like vaults. There's things like
[37:02] multisig. There's things like
[37:03] collaborative custody. There's things
[37:05] like fully self-s sovereign custody. And
[37:07] when we just help you set it up in like
[37:09] a white glove way." So, yes. Uh
[37:12] actually, you know, it's the literal
[37:14] last days of Q3 as I'm talking to you
[37:17] and and next quarter is about to start.
[37:18] We're doing a lot of our Q4 planning and
[37:21] 2027 planning and custody is littered
[37:24] everywhere. So, you should be hearing
[37:27] from us in regards to custody, whether
[37:28] it's proof of reserves, collaborative
[37:30] custody products, insurance, all sorts
[37:32] of stuff. We want to be helpful. We want
[37:34] to be helpful. And uh this is certainly
[37:36] a topic within the community that just
[37:38] keeps hitting my inbox. Keeps hitting my
[37:41] inbox. So, we got your back. In the
[37:43] meantime, if you guys need help with
[37:44] anything, we have 24/7 support. We're
[37:47] we're a company where you can call us on
[37:48] the phone. You could talk to us. You
[37:50] could DM me. We now have a strike
[37:51] private desk, by the way. So, led by
[37:54] Trey. If you are high netw worth
[37:57] individual or family office or someone
[37:59] you're just or even if you're not, just
[38:00] try us. I mean, obviously I we wouldn't
[38:03] be able to concierge white glove all
[38:06] millions of our customers, but just
[38:08] shoot us a note at privatestrike.me me
[38:10] and we literally even when the products
[38:13] aren't ready for market, we we are happy
[38:15] to get on the phone and just help you
[38:17] guys out. Um, so anyway, long way of
[38:20] saying, yeah, we're working on it and
[38:22] you guys keep the feedback coming. Keep
[38:24] it coming. What would you guys be
[38:25] interested in? Do you want your Bitcoin
[38:27] insured? Do you want collaborative
[38:29] custody with Strike? Do you want proof
[38:32] of reserves from Strike? And and the
[38:35] other thing uh to be clear about your
[38:38] phone tray, we already have a lot of
[38:41] unbelievable security features. So we
[38:43] have this 5day cool off feature where
[38:47] you can't actually change settings or
[38:49] enact anything on your Strike account
[38:51] for 5 days. We're about to launch
[38:53] whitelisted addresses so that even if
[38:55] someone got your phone, they couldn't
[38:57] send to a Bitcoin address that hadn't
[38:59] previously been established by you. So
[39:00] there's no way for them to send it to an
[39:02] address under their control. There's
[39:04] already existing a lot of unbelievable
[39:07] security features on Strike. We've
[39:08] thought through all of this. Maybe I
[39:09] need to do a video of like how my Strike
[39:11] account is set up, how to best use
[39:13] Strike from a security perspective. So,
[39:15] keep giving me the feedback, the
[39:16] questions. I know all this stuff has
[39:17] been top of- mind in the community, and
[39:19] we want to be helpful. So, we're working
[39:20] on it. These are not products we're
[39:22] going to be able to launch overnight,
[39:23] unfortunately. But 2027, you should
[39:26] start to see some really cool custody
[39:27] stuff from us. And uh yeah, in the
[39:31] meantime, just hit me up. We're happy to
[39:32] help. Um, all right, last question.
[39:37] Frankie, let's hear from our boy
[39:39] Frankie. Last one.
[39:43] Hi, Jack. It's Frankie all the way from
[39:45] England. Uh, I love what you do for the
[39:47] show. I mean, it's taught me so much
[39:49] about Bitcoin and life in general over
[39:51] the last few years. So, just keep it up.
[39:53] My question to you is, as we know, we're
[39:56] all in Bitcoin, let's be real, to get
[39:58] wealthier over a long period of time.
[40:00] And we've all seen our wealth go up over
[40:02] the last 5 or 10 years you've been
[40:04] holding that long. But my question is
[40:07] Bitcoin is not there to be stared at
[40:09] forever. I think it's there to be used.
[40:11] Um and my question is how do we utilize
[40:14] Bitcoin in terms of still earning money
[40:16] from it in terms of being wealthier but
[40:19] also being able to buy that house or
[40:21] that car that you want or send your kids
[40:22] to school when they need to and
[40:25] whatever. Now I know that you dropped um
[40:27] a Bitcoin line of credit. It's not
[40:29] available in the UK right now. Um, but
[40:32] maybe you could go into a bit more depth
[40:33] about how we can actually not sell our
[40:36] Bitcoin, but still reap the rewards of
[40:38] our efforts we've been putting in over
[40:40] the last 5 or 10 or 15 years, whatever
[40:42] it will be by the time you want to
[40:43] actually use the Bitcoin that you've,
[40:45] you know, saved all this time because at
[40:47] the end of the day, I don't want to be
[40:48] 80 years old just looking at all the
[40:50] Bitcoin in cold storage again. I want to
[40:52] still utilize it. But don't be stupid
[40:54] and just sell it all. one because of tax
[40:56] reasons and two because you still want
[40:58] you know the Bitcoin for the future as
[40:59] well. I hope that makes sense. Um but
[41:02] thanks a lot dude. Makes all the sense
[41:04] in the world. Also just shout out the
[41:06] global audience man from the UK. So
[41:09] cool. Um you could not be more right. So
[41:14] here just let me uh expound uh on your
[41:18] point of money. We don't value money for
[41:21] money's sake.
[41:23] pieces of paper that are dollars or
[41:25] pounds or euros. People don't value
[41:27] those for the paper. They value what
[41:29] those things can get them. Same thing
[41:32] with Bitcoin.
[41:33] I don't want to stare at digital UTXOs
[41:37] for my life. No, I value the Bitcoin for
[41:40] what the Bitcoins can get me. And that
[41:43] that's the case for all and any money is
[41:46] they're only as valuable as what you
[41:50] can, you know, like life is short. take
[41:52] the trip. You know what I mean? Like
[41:54] that that age-old saying. So yeah, 100%.
[41:57] Bitcoin would be worthless if it was
[42:00] just bytes of data on a hardware device.
[42:03] It is worth everything because it is the
[42:05] best performing asset at allowing you to
[42:08] actually get stuff for them. So that
[42:11] point needs to be repeated and sometimes
[42:13] it gets lost. I could not agree more.
[42:15] I'm glad that you made the point. Uh
[42:17] actually this goes back to Jake. you
[42:20] know, we're talking about orange
[42:21] pilling, older generations, potentially
[42:24] explicitly older Irish people. Um,
[42:27] another one, and I'll I'll interweave uh
[42:29] Jake and Frankie here, is cash flow. So,
[42:32] Bitcoin doesn't have any cash flow.
[42:33] There's no yield on top of Bitcoin, but
[42:35] one of the problems was always accessing
[42:38] liquidity against the asset. And Strike,
[42:40] we've built all sorts of credit
[42:42] products. The industry at large has
[42:44] built credit products. This is huge
[42:46] because in in my opinion now you can get
[42:48] liquidity against your Bitcoin without
[42:50] having to sell it because selling it
[42:52] you're you're incurring capital gains.
[42:54] So you're incurring a taxable event at
[42:55] least here in the United States and I
[42:57] know in the UK as well and you're also
[42:59] giving up the best performing thing that
[43:01] you have your hands on. Now obviously
[43:03] I'm not implying that everyone needs to
[43:05] borrow against their Bitcoin instead of
[43:07] selling your Bitcoin and realizing you
[43:09] know that house that college education
[43:12] that medical emergency surgery selling
[43:15] Bitcoin as you just explained Frankie
[43:17] totally rational thing to do. We value
[43:19] the money for what it can get us. But I
[43:21] do think an underappreciated part of
[43:24] this cycle that this chapter that we're
[43:26] in in Bitcoin is the proliferation of
[43:30] Bitcoinbacked credit of Bitcoin backed
[43:32] loans of Bitcoin lines of credit because
[43:35] think about it guys, one, it allows you
[43:37] to get liquidity and allow the Bitcoin
[43:40] that you've been stacking and you've
[43:41] been storing and you've been saving to
[43:43] impact your life in a meaningful way
[43:45] without having to give up ownership of
[43:47] the asset and incur that taxable event.
[43:49] The other thing is it's actively taking
[43:51] sellers off the market. Real estate has
[43:53] created the most millionaires in the
[43:55] United States of America. And one of the
[43:57] reasons is all of the financialization
[43:59] and the credit and the tooling built
[44:01] around the asset class. You know, very
[44:04] very wealthy people don't sell assets.
[44:06] They just borrow against the assets. So
[44:08] Frankie asked, you know, well, how do I
[44:09] do that? Well, I borrow against a
[44:13] smaller fraction of my overall stack.
[44:16] Now, the risk is liquidation. So, you
[44:19] know, let me just tell you guys how
[44:20] Strikes Product works. We allow 50% LTV,
[44:24] meaning you can take 50% of the value of
[44:27] the Bitcoin that you want to borrow
[44:28] against out in cash and we put it in
[44:30] your bank account in 0.2 seconds. And
[44:33] that's real money. You can go off and do
[44:35] whatever you want. So, if you have
[44:36] $100,000 worth of Bitcoin, you want to
[44:38] borrow against 50 grand in your bank
[44:40] account in less than a second. You go
[44:42] off, you put that down payment down on a
[44:44] house, you go off, you build that
[44:46] business, you go off, you pay off your
[44:47] student loans, you go off and do
[44:49] whatever you need to do. Now, if that
[44:52] $100,000 worth of Bitcoin all of a
[44:54] sudden becomes worth $49,000 worth of
[44:56] Bitcoin, well, now you're insolvent,
[44:58] right? Because your collateral, you
[45:00] don't have enough collateral. And that's
[45:01] the risk. So, I always will recommend to
[45:04] you guys, and this is what I do, I would
[45:06] never borrow, you know, 50% of all the
[45:10] Bitcoin I have. If all I had was
[45:12] $100,000 worth of Bitcoin, I would not
[45:14] take out 50 grand because I might need
[45:16] to add collateral if Bitcoin gets
[45:18] choppy, gets volatile, goes through a
[45:19] multi-year bare market. But if you have
[45:21] enough bitcoins where you could say,
[45:23] "Hey, I've got a million dollars worth
[45:25] of Bitcoin. I'm gonna take out $25,000
[45:28] against it and if I need to add some
[45:30] collateral here and there and just, you
[45:32] know, protect and manage my position.
[45:34] But the point is, as long as you're
[45:35] paying in interest less than what the
[45:38] taxable event would be, less than what
[45:41] Bitcoin's performance is going to be,
[45:42] then strike has you roll over the debt.
[45:45] You refinance the debt. You just keep it
[45:48] going because listen guys, the million
[45:49] dollars worth of Bitcoin that you maybe
[45:50] have is not is one day going to be worth
[45:53] two million, four million, five million,
[45:55] and then you're you're sitting only on
[45:57] 25,50, $100,000 worth of debt. That's
[45:59] what you want. You want your asset side
[46:02] of your balance sheet to be Bitcoin
[46:05] number go up 50% Kagger. And you want
[46:07] the liability, the thing you own to be
[46:10] fiat, number go down, the thing that's
[46:12] actively being debased. And so what
[46:14] strike customers do, I'll tell you guys,
[46:16] I mean, I sling out hundreds of millions
[46:19] of dollars worth of loans a quarter.
[46:21] Like I there's a lot of people that
[46:23] borrow a lot of money uh on strike. And
[46:26] what these customers are doing is they
[46:28] borrow against the asset. So let's say
[46:30] they're paying seven and a half, 8%.
[46:33] Well, one selling Bitcoin is a capital
[46:35] gains event in the United States. So
[46:37] that's at least 20 to 30% tax right
[46:39] there. So just by borrowing against it,
[46:41] yes, it's not like I know people
[46:43] complain about the fees and stuff, but
[46:45] like when you do the math and you're
[46:47] like a serious customer that's like
[46:48] sitting here and like actually equating,
[46:50] is it worth it? One, it's far cheaper
[46:53] than selling because
[46:57] I mean singledigit annual expense as
[47:00] opposed to 20 30% capital gain. And then
[47:02] on top of that, obviously, you get to
[47:03] keep owning it. So you're not foregoing
[47:05] any future performance that Bitcoin
[47:07] gives you. And then as long as you can
[47:11] hold the position for a long time, which
[47:13] is all Bitcoin's been about. Stay
[47:14] humble, stack sats, lower time
[47:16] preference, delayed gratification, then
[47:18] you just keep rolling the debt forward
[47:19] and refinancing it. Guys, I've never
[47:22] fully closed my loan at Strike. I just
[47:25] have one big loan and I keep rolling it
[47:27] forward and rolling it forward. And if
[47:29] we're in a little bit of a bare market
[47:30] like we were, I go, I add a little bit
[47:32] more collateral, make sure the loan's
[47:34] okay, and then every single time it's
[47:36] refinance, refinance, roll it over, roll
[47:38] it over, roll it over. We're about to
[47:39] launch interest rollovers as well. So,
[47:41] you know, I Bitcoin backed credit for
[47:44] Strike is one of the most successful
[47:47] things I've ever built in the space. You
[47:48] know, people like act, you know,
[47:50] payments I think will have their time
[47:52] and day. I think you know we one day
[47:54] we'll disrupt crossc currency transfers
[47:57] but like for right now the most product
[47:59] market fit I've ever experienced is
[48:01] lending by far guys and that's why we've
[48:04] invested so much in it as a company is
[48:07] it is solving the most critical issue
[48:10] that we all have that Frankie just
[48:12] elegantly described which is the money's
[48:15] only as good as how it's only as
[48:18] valuable as as how it can impact our
[48:20] lives but we don't want to sell
[48:23] And so we have uh interest rollovers,
[48:26] refinancing,
[48:28] um liquidation proof loans. If you want
[48:30] a loan where that it's impossible to get
[48:32] liquidated, we take on that risk for you
[48:34] for an extra fee. We have lines of
[48:36] credit. We have 12-month term loans. I
[48:39] mean, the world is your oyster with
[48:42] Strike. And that's how I and many, many
[48:45] others. And the the emails that we get
[48:47] to our customer support inbox are just
[48:51] it's one of my favorite parts of my job.
[48:53] Like I there was one I I put on Twitter.
[48:55] I'll have to go find it. I'm not going
[48:57] to waste the time now, but a guy that
[49:00] said, "Hey, you know, my son's turned
[49:02] three. We we raised him so far in a city
[49:07] and we've never had a yard and you know
[49:09] Bitcoin has as we all would have hoped
[49:12] you know 40% Kagger 50% Kagger depending
[49:16] on what you when you got in. He's like
[49:18] man you know we I was just looking at
[49:20] these houses in the suburbs. I just want
[49:22] my son to have a yard and I didn't want
[49:24] to sell the Bitcoin and it's it would be
[49:26] a big tax bill. it would eat into a lot
[49:28] of my position if I had to dump because
[49:29] then I got to sell some for the house
[49:31] and then some for the taxes. And when
[49:33] you guys launched lending, I I got that
[49:36] house. My son now has a yard and gets to
[49:39] run around and we play catch and I still
[49:41] got my bitcoins and just he was just
[49:43] sending us a heartfelt thank you and
[49:45] like that the it is like a life-changing
[49:48] product in that way. I don't want to gas
[49:50] up my own business line um and turn into
[49:53] too much of a salesman. You guys know
[49:54] there are no ads on here. Um, I do this
[49:57] because I love you guys and I just like
[49:59] participating in the revolution in my
[50:01] own little weird way. Um, but yeah,
[50:04] Frankie, uh, you you want to hear about
[50:05] our lending product? It's one of the
[50:07] favorite things I've ever built in this
[50:09] space. And I've just watched it change
[50:11] people's lives. And as Bitcoin continues
[50:13] to go up and you guys get more and more
[50:15] wealth, you're going to need more and
[50:16] more a need uh, for credit products and
[50:18] ways for this asset to benefit your life
[50:21] um, without necessarily having to sell
[50:23] it, incur a taxable event, all sorts of
[50:25] stuff. So, um, hopefully satisfying
[50:27] answer. I'm sorry about Listen, the the
[50:30] most unfortunate thing about running a
[50:31] global Bitcoin company is every single
[50:34] place is different regulation, different
[50:36] laws, different licensing requirements.
[50:39] In the United States alone, I have 50
[50:41] money transmitter licenses, but those
[50:43] don't allow me to do any lending. So,
[50:44] now have state-by-state lending licenses
[50:46] as well. I'm also federally regulated at
[50:49] the United States. Now, Europe has ma,
[50:51] but the UK is not in Europe anymore. And
[50:53] it is so complicated. So, I know that
[50:56] some of you guys are hearing about these
[50:57] products and don't have access to them
[50:59] yet. We are working our tail off to get
[51:01] them to you guys. But hopefully that
[51:03] made sense, Frankie. And and maybe
[51:05] honestly between the Strike security
[51:07] features and the lending stuff, maybe I
[51:09] need to just upload a video of like how
[51:11] I use Strike, how my account is set up,
[51:13] and walk you guys through. You know, I
[51:15] live my life on my credit cards and and
[51:18] so, you know, there's no need for fiat.
[51:20] Credit card doesn't need to be
[51:21] collateralized. And Strike has bill pay
[51:23] here in the United States. I pay whether
[51:25] it's my HOA or my property taxes or my
[51:28] credit card bill or or my energy bill,
[51:30] whatever, water bill, any of that stuff.
[51:33] Uh I all do all from Strike and then
[51:35] Strike gives me this line of credit. So
[51:37] this like Bitcoinbacked dynamic credit
[51:39] facility or I can take out these big
[51:41] loans and I just refinance them, roll
[51:43] them forward and over time as Bitcoin
[51:45] just goes up and up and up and up and
[51:47] fiat gets debased to base to base to
[51:49] based. It's just a life hack. It's a
[51:51] life hack. It's like, you know, I'm just
[51:54] like living my life short the dollar,
[51:56] you know? And again, there's a way to
[51:58] blow yourself up, right? Like credit uh
[52:01] lending these type of products, it's
[52:03] like fire, you know, it can heat and
[52:05] proliferate civilization. Uh it could
[52:07] also burn your house down. So, on that
[52:10] on that topic of respon personal
[52:12] responsibility. Uh but with that being
[52:15] said, I mean, and we can help you call
[52:18] us, call our strike private desk. we can
[52:20] help you set it up. We'll run the math
[52:21] with you. That's what Trey on my team,
[52:24] that's what he does. That's what he
[52:26] does. So, anyway, thanks for the point,
[52:28] Frankie. It's a really, really important
[52:29] one. Hope to get you these products soon
[52:31] in the UK. And for those that have
[52:33] access to the products, use them. And if
[52:35] you don't understand them and you need
[52:36] help, give us a call. Um, okay guys,
[52:39] that's all I got for today. Let's see,
[52:40] where do I Oh, 52 minutes. Uh, I I want
[52:43] to keep these at least 45 minutes, so
[52:45] this will be one of the longer ones um
[52:48] every Friday. So, I recorded one of
[52:50] these on Friday and I didn't set up the
[52:53] audio properly or something. I don't
[52:55] know. Not a professional podcaster. So,
[52:56] I apologize for getting this to you guys
[52:58] Sunday night, but man of the people, I
[53:00] would never let you guys down. I if I
[53:03] say once a week, I mean once a week and
[53:05] I do what I say. So, getting this one
[53:07] out to you guys on Sunday night, but my
[53:09] intent is to make this a Friday
[53:11] tradition. Ask Jack on Fridays. Take the
[53:13] edge off heading into the weekend.
[53:16] listen to some audio clips from you guys
[53:18] and respond to them. So, I will look
[53:20] forward to you guys on Friday for the
[53:23] next Ask Jack. If you guys want to call
[53:25] in and you want to leave a question or a
[53:27] comment or anything, you could do it
[53:28] anonymously. It's ask.jackmallers.com.
[53:32] I get hundreds of these. I do feel bad
[53:34] for all the ones that I can't get to,
[53:36] but I love hearing from you guys. This
[53:38] is a blast. Uh, cool. Peace and love.
[53:40] Uh, tomorrow's Monday. Tomorrow's live
[53:42] stream day. So, I will see you guys uh
[53:44] tomorrow, 600 p. p.m. Eastern uh live
[53:46] stream to break down macro and all
[53:48] things Bitcoin.
[53:51] Peace. Love you guys.