Bitcoin 101: How Can Bitcoin Be Worth Anything?

[0:02] Yo, welcome back to another episode of
[0:04] the Jack Mallerie Show. I am your host,
[0:06] Jack, and you are listening to yet
[0:08] another edition of Mailbag Monday,
[0:11] episode 131.
[0:15] Let's get this episode timestamped.
[0:16] Ladies and gentlemen, it is always good.
[0:19] I guess I can't see you. Good to be with
[0:21] you. Uh, what a time. Happy summer. Uh,
[0:25] don't let these markets wear you out.
[0:26] Don't let them scare you out. Let's stay
[0:28] positive. I'm talking to you all at a
[0:29] Bitcoin price of 64,350.
[0:33] A little bit of a bump for those that
[0:36] have been paying attention. Okay.
[0:37] Bitcoin's market cap sits at 1.29
[0:41] trillion US. Alltime high remains
[0:45] $126,160.
[0:48] We are 49% off that high that we made on
[0:50] October 6, 2025. It's been 315
[0:55] days. Shout out to all of you that have
[0:57] stayed humble stack sats turned on that
[0:59] DCA during those 315 days. The last
[1:03] Bitcoin block mine since I hit stream
[1:05] was block height 962,950.
[1:11] Okay guys, here's the deal. I could not
[1:14] be more excited because I'm starting a
[1:16] new segment on this show called Bitcoin
[1:20] 101. So, as you guys know, I've had more
[1:24] time to do content. I really think
[1:26] education is one of the most valuable
[1:28] things I can do for Bitcoin. People say,
[1:31] "Oh, well, at least Bitcoin's adopted by
[1:33] 1% of the world." No, it's not. I don't
[1:36] think 80 million people understand
[1:37] Bitcoin. I think the difference between
[1:40] people making conscious decisions to
[1:42] adopt better money, lower their time
[1:44] preference, better their life. A lot of
[1:47] the times it's just education. It's just
[1:49] the fact that people don't know. They
[1:50] don't know any better. And so I've
[1:53] really tried to make an effort as of
[1:54] recent to produce more content, have my
[1:56] team put out more content. And I asked
[1:58] you guys, I said, 'Hey,
[2:00] how can I be more helpful? How can the
[2:02] show be more helpful? Do you want me to
[2:04] have on more guests? Do you want me to
[2:07] uh talk about different stuff? And you
[2:10] guys came and said, "We're not that
[2:13] interested in guests, to be totally
[2:14] frank with you, Jack. We're more
[2:16] interested in this Bitcoin specific
[2:18] content. We're more we're less
[2:20] interested in the macro. We're less
[2:21] interested in the straight of horn moose
[2:23] and what you think about Donald Trump.
[2:24] We're actually much more interested in
[2:26] if you can break down Bitcoin comp uh uh
[2:29] Bitcoin con uh excuse me, subjects,
[2:32] content simply.
[2:35] And so we did we did an episode about
[2:37] cold card and private keys and how the
[2:39] hack technically happened and what it
[2:41] means to create a big random number. We
[2:43] did an episode about AI and open source
[2:45] software and how the world of security
[2:48] and free and open source software is
[2:49] changing before our eyes. And this week
[2:52] I was able there
[2:55] thankfully there wasn't a massive hack
[2:58] or the world wasn't falling apart in
[3:00] front of our eyes and I was able to have
[3:03] a free week to think okay how can I
[3:05] break Bitcoin down in a first principal
[3:07] sense and that's what allowed me to kick
[3:10] off this series and the most common
[3:12] question you guys were asking is a video
[3:15] about how Bitcoin can be worth anything
[3:18] because a lot of the skeptics a lot of
[3:19] the critics or just frankly the
[3:21] uneducated. They don't have to be
[3:22] malicious. So, isn't Bitcoin just bytes
[3:25] of data, information on a computer? I
[3:27] can't even hold it. I can't even touch
[3:30] it. How can it have any value at all? I
[3:33] don't get it. I can hold a bar of gold.
[3:35] The US government tells me the dollar is
[3:37] valuable. How can Bitcoin be worth
[3:40] anything? So, welcome to episode 131,
[3:44] the first segment of Bitcoin 101. How
[3:48] can Bitcoin be worth anything? An honest
[3:51] first principles exploration into value.
[3:55] Why anything has value
[3:59] and how Bitcoin has value.
[4:02] Let's go. So the objection and I think
[4:05] we have to acknowledge that the skeptics
[4:07] around Bitcoin have every right to ask
[4:09] this question. It's a good question
[4:12] because Bitcoin has no cash flow.
[4:14] Bitcoin has no company. Bitcoin has no
[4:17] government guarantee. Bitcoin has no
[4:20] redemption. It's not an IOU that has
[4:23] physical backing of metal in a vault.
[4:26] Bitcoin is information on computers. You
[4:30] know, now we'll get to this in a bit or
[4:32] maybe on a separate episode in a deeper
[4:34] dive. All money is at the end of the day
[4:36] is information. It's a who owes what to
[4:39] whom in society. But I digress. At the
[4:42] end of the day, the truth is Bitcoin is
[4:44] simply information on computers all over
[4:47] the world. So a skeptic saying, "How can
[4:49] this thing have any value? Why is it not
[4:51] worthless?" It's a fine, it's a fine and
[4:54] fair question. So to understand why and
[4:58] how Bitcoin could have any value above
[5:00] zero, we have to ask why is anything
[5:05] worth anything? Okay, so this is chapter
[5:07] one. Why economics exists in the first
[5:10] place? What does it mean for water or
[5:13] for oil or for shoes or diamonds or
[5:16] bread or dollars or a house to be worth
[5:19] anything? So
[5:22] listener, whether you're a Bitcoiner or
[5:24] whether you are totally uneducated and
[5:27] your buddy sent you this video and said,
[5:29] "Please just give it 30 minutes to
[5:31] understand." Let's put Bitcoin away.
[5:34] Let's put it down completely and we're
[5:36] going to do plain 101 fundamental
[5:40] economics. Why is anything worth
[5:42] anything? The first thing we need to
[5:44] understand is that value itself is not
[5:47] embedded inside of said thing. Okay?
[5:51] Meaning this, if you cut a thing open,
[5:53] if you cut a house open, if you cut open
[5:55] a Dior bag, if you cut open a Ferrari,
[5:58] you won't find value inside of it. Okay?
[6:01] A Ferrari is not actually worth more
[6:04] than a Honda because of some formula
[6:08] that's been embedded into the seat
[6:10] cushion or that's hidden inside of the
[6:12] trunk or the fact that it may have a
[6:15] more powerful engine. That's actually
[6:17] not what is deriving its value. Value
[6:21] lives in a relationship between the
[6:24] thing and a person. It lives between an
[6:29] object.
[6:31] In economics, the technical definition
[6:34] is a good. So, it lives between a good
[6:38] and a human need. Okay? The relationship
[6:43] between these two is solely based on the
[6:46] human desire, the human need and the
[6:49] human's opinion on how well the good or
[6:51] service can serve that need. Now, it
[6:56] also is important to know that this
[6:57] relationship can change. Therefore, the
[7:00] value of things changes as well.
[7:02] Sometimes a human really, really, really
[7:04] needs something at any given second. And
[7:07] sometimes they actually have plenty of
[7:08] it and don't need to buy another one
[7:10] anymore, but it's not embedded inside of
[7:14] the thing. And you open a car, when you
[7:16] open a house, when you open, you know,
[7:18] why is one stake $1,000 and another
[7:21] stake $100? It's actually not once you
[7:24] cut open the steak, you find the value
[7:26] inside of it. That's actually not the
[7:28] case. Okay,
[7:30] so more specifically,
[7:34] value period is all about satisfying a
[7:37] human need. And I know that sounds
[7:40] obvious, but embedded in economics in my
[7:44] opinion is the human condition itself,
[7:47] which we'll get into in a second. But it
[7:49] has to satisfy a need. If there is no
[7:53] need, there is no value. It's a very
[7:56] important thing to understand obviously
[7:58] when we are understanding the basic
[8:00] first principles aspects of value. Set
[8:04] another way, it actually doesn't matter
[8:05] how rare the thing is. Often times
[8:08] people will say, well, Bitcoin is
[8:09] valuable because it's scarce.
[8:12] That's so oversimplified that it's
[8:14] technically incorrect. You know, uh your
[8:17] child's painting that they made in
[8:19] kindergarten could be scarce. That does
[8:21] not make it valuable. A rock in my
[8:24] backyard, if I were to put on eBay, a
[8:26] rock found uniquely in my yard, there's
[8:30] no guarantee it would have any value.
[8:33] The reason for that is because it's not
[8:35] satisfying anyone's need. Just because
[8:39] it is rare, just because it is scarce,
[8:42] just because any property it could have,
[8:44] it is worthless unless it satisfies a
[8:47] need. Okay. Now more on to the human
[8:51] condition.
[8:53] The reason we economize and the entire
[8:57] reason for economics in the first place
[9:00] like you must understand this economics
[9:02] would not need to exist if it were not
[9:05] for the very simple idea that we can't
[9:08] have everything that we want. I'm gonna
[9:12] say that again. There is a difference
[9:15] between wanting something and having
[9:17] something. If we could have everything
[9:22] we want, we would not need money, we
[9:25] would not need to economize. Okay. Now
[9:29] the human condition is to want better
[9:33] future. We imag as human beings we
[9:35] imagine better futures.
[9:37] However, we cannot pursue them all.
[9:40] There are limitations in what we call
[9:42] scarcity to living out our hopes, our
[9:46] dreams, our desires and the futures that
[9:48] we imagine. So we as humans end up
[9:51] having to make choices. And this is the
[9:55] starting condition of being human. So on
[9:58] the screen I have one life and there are
[10:02] four arrows breaching away from this one
[10:04] life. This one life could decide to go
[10:06] study for four years at university. They
[10:09] could decide to start the business now
[10:11] that they have in mind. They could
[10:12] decide to take a steady job and start
[10:14] producing new income. Or they could
[10:16] decide to move somewhere new and chase
[10:18] the girl they have a crush on. Now,
[10:21] unfortunately, they can't do all of them
[10:24] at once. Now, this is not even a lesson
[10:27] about economics because this person may
[10:30] or may not even be making an economic
[10:32] based decision. The point is it's
[10:35] embedded in the human condition.
[10:37] Scarcity is a human construct. We will
[10:41] always want.
[10:45] So, you know, let me let me say
[10:47] different. Have you you guys have
[10:48] probably heard guys like Elon Musk say,
[10:51] well, AI is going to AI and robots are
[10:54] going to have so much production that we
[10:57] won't even need
[11:00] money.
[11:01] And
[11:03] I he's probably half true in that he's
[11:07] right to highlight that there will be an
[11:10] abundance of new stuff, right? Like if
[11:12] you think about the kings and queens of
[11:15] the world hundreds of years ago, they
[11:17] did not have the abundance that you and
[11:19] I have today. Even though we're not
[11:21] kings and queens, we have more of an
[11:23] abundance of water, of medical care, of
[11:25] medicine, of travel, right? I get cars.
[11:30] I get to fly United. I get an abundance
[11:32] of water. I get to go to the doctor and
[11:35] get cured. My life expectancy is longer.
[11:39] So yes, there has been commercial
[11:41] abundance, but we still need money. And
[11:44] we still need money because humans will
[11:46] always imagine and want. I want to fly
[11:50] private. I want to own the Chicago
[11:52] Bulls. I want I want I want. But not all
[11:56] of my wants can I have. And the delta,
[11:58] the difference, the gap between wanting
[12:01] and having results in the need to make
[12:04] choices. And the need to make choices
[12:06] and decide what is more valuable to me
[12:09] and my needs and my wants. Who gets
[12:11] what?
[12:13] That is the phenomena of economizing of
[12:17] deriving subjective value. Make sense?
[12:22] So
[12:24] said simply, wanting is not enough. If
[12:29] we could get everything we wanted, we
[12:31] would not need economics. Economics is
[12:34] how we choose when we can't have
[12:37] everything.
[12:38] Okay.
[12:40] So with that being said, scarcity is in
[12:45] my opinion an embedded property of the
[12:48] human condition and it does not mean
[12:50] suffering because another thing people
[12:51] will say is because something is scarce
[12:54] it means there's not enough for everyone
[12:56] and therefore it implies suffering. Not
[12:59] not the case. Scarcity and and maybe I
[13:02] can delve into that in a separate
[13:04] episode but for this episode I keep it
[13:06] simple. Scarcity simply means the
[13:09] necessity to choose. You cannot afford
[13:13] not to make a choice. You have options
[13:16] A, B, C, D, E, F, so on and so forth.
[13:20] And you have to make a subjective choice
[13:24] as to which one is the most valuable to
[13:27] you in any given situation.
[13:30] Said another way that I think is
[13:32] interesting, for every yes, you are also
[13:34] saying no.
[13:36] If the person decided to go to a new
[13:39] city and chase the girl, they were
[13:41] saying no to university, to the job, and
[13:43] to starting a business. Right? For every
[13:45] yes, it is a no. That is the entire
[13:48] point. Okay? So, back to what is an
[13:52] economic good. Okay? This sounds simple,
[13:56] but the more you think about it, it's an
[13:58] incredibly important distinction to
[14:00] make. An economic good has to be both
[14:03] useful and scarce. Let me explain. Air.
[14:08] Air is incredibly useful. Without air,
[14:11] we would all die. Okay? You need oxygen.
[14:14] However, air is so abundant that nobody
[14:18] trades for it. You don't have to pay for
[14:20] air. Said another way,
[14:23] the supply of air exceeds the demand for
[14:27] air. Therefore, air is not an economic
[14:32] good. We do not need to economize for
[14:35] air because we have a plentiful amount
[14:38] of air. We have more air than the demand
[14:41] for air.
[14:43] Fair enough. So air is free. We do not
[14:46] need to economize for it. We do not need
[14:48] to apply subjective value for it. And we
[14:50] do not need to exchange with each other
[14:52] for air. Now let's take the counter
[14:54] opinion. A rock. A rock in my yard may
[14:58] be one of a kind. I could say, "Listen,
[15:01] you all have rocks, but you don't have a
[15:02] rock that was found in my yard." Sure,
[15:06] but that rock is useless. So therefore,
[15:10] it is also not an economic good. And
[15:12] that if you walk in my yard and pick up
[15:15] a rock, you could do it for free and I
[15:17] honestly won't really care because it's
[15:19] pointless. It's useless. I have no use
[15:20] for it. So, it's the opposite of air.
[15:24] It's one of a kind, theoretically
[15:26] scarce. That's when people say, "Oh,
[15:27] Bitcoin's scarce." Like, isn't my
[15:29] daughter's painting scarce? Yeah, you're
[15:30] right. But the problem with your
[15:32] daughter's painting is it's useless.
[15:34] Okay, now let's pick an example of an
[15:38] economic good. This weekend is one of my
[15:41] hometown buddies bachelor party. For
[15:43] this bachelor party, we're going to a
[15:45] lakehouse. A lakehouse is both useful
[15:48] and scarce. There can only be so many
[15:51] lakeous because there's only so much
[15:55] land that surrounds the lake.
[16:00] The lakehouse is al also incredibly
[16:02] useful. It can house us. It can sleep
[16:05] us. It can host us. So it is therefore
[16:08] an economic good and people apply
[16:11] subjective value to the lakehouse. There
[16:13] is a price to it. So an economic good is
[16:16] a good that is both useful and scarce.
[16:20] Air is useful, but it's everywhere, not
[16:23] scarce. A rock in my yard is technically
[16:26] one of a kind, but it's not useful. A
[16:29] lakehouse, a Bitcoin,
[16:32] you can think of countless things. A
[16:34] cheeseburger. These are all things that
[16:37] are useful and scarce. And it doesn't
[16:40] mean literally scarce like
[16:41] cheeseburgers, eggs. These aren't as
[16:43] scarce as gold. So, I don't mean finite
[16:47] like you should invest in them. I mean,
[16:50] there is more demand than there is
[16:53] supply. I cannot just snap my finger and
[16:55] print it out of thin air like I can air.
[16:58] Air I just [snorts] just inhale and I
[17:01] got me some air. I cannot just inhale a
[17:03] burger when I'm hungry.
[17:06] We can make lots of burgers,
[17:10] but there's more demand to eat than
[17:13] there is food at any given time.
[17:15] Therefore, we must economize. fair. We
[17:19] move on. Now you guys have to understand
[17:22] I mentioned earlier subjective value
[17:24] changes because it is a relationship
[17:28] between a thing and a human's wants and
[17:32] those change all the time. One of the
[17:35] greatest historical examples is oil. In
[17:38] the 1800s, oil was a nuisance. It was
[17:41] disgusting. It was for peasantry. It was
[17:43] get this industrial sludge off my land.
[17:47] And then the combustion engine came
[17:48] around and oil became fuel. And now oil
[17:53] and fossil fuels power the world
[17:55] economy. It is the most valuable
[17:58] consumption commodity that we have
[18:00] today. And it literally is like
[18:03] determining war uh geopolitical context.
[18:07] You know it obviously I don't need to
[18:09] sell you guys on the value of oil.
[18:13] The point is value again was not
[18:16] embedded inside oil itself. It was the
[18:19] same molecules in the 1800s. It's the
[18:22] same molecules today. Oil itself hadn't
[18:25] changed. What changed?
[18:28] How oil could solve a human's need.
[18:34] It it became useful. And going back to
[18:37] being an economic good, the demand for
[18:40] oil versus the supply of oil, there is
[18:42] more demand than there is available
[18:44] supply.
[18:45] If we lived in an abundance of oil like
[18:48] we do air, we would not need to
[18:50] economize oil. We would not need to
[18:52] apply subjective value. But you have to
[18:55] understand that subjective value is
[18:57] subject to change.
[19:00] Understand?
[19:03] And again, we let's let's just revisit
[19:06] one more thing. I have to remind you
[19:08] guys scarcity is a permanent human
[19:10] condition. No matter what, unless human
[19:13] beings stop being future oriented
[19:16] species, stop imagining a better future
[19:19] for themselves. And so much so that they
[19:22] can't immediately want or excuse me,
[19:24] immediately have what they want and
[19:26] desire. So scarcity is permanent. So,
[19:28] we're constantly and always choosing
[19:31] between courses of action. You always
[19:34] have multiple courses of action to
[19:36] service your needs. And by the way, your
[19:38] needs may be different than any other
[19:40] given person's needs. So, to choose, you
[19:43] have to hold two utilities side by side,
[19:47] oil or
[19:49] something else, and you have to compare
[19:51] them. And that act of comparing is
[19:55] valuation.
[19:57] That's it right there. How does anything
[19:59] get value? Well, you want a future and
[20:02] you are subject to different
[20:03] opportunities to service that need of
[20:06] the future that you want. And just by
[20:09] having an opinion, you are subjectively
[20:12] valuing a thing. So value is your
[20:14] subjective assessment of the
[20:16] satisfaction that you expect from that
[20:19] good. That's all value is.
[20:23] So comparing two options is the act of
[20:26] valuing them. So what I have on the
[20:29] screen for those podcast listeners, what
[20:31] I have on the screen is on the far left,
[20:33] we start in this permanence of scarcity
[20:36] where the human condition is to always
[20:38] want, always desire, always dream,
[20:41] always be future oriented, right?
[20:45] And then we make choices
[20:50] and after that we have to juxtapose
[20:53] between those choices. And that
[20:55] juxtiposition is the value itself. Value
[20:58] is your own assessment.
[21:01] It is the assessment of the satisfaction
[21:03] that you expect from the good. It
[21:05] happens in your head, not in the thing
[21:08] itself. It doesn't happen in the car, in
[21:10] the plane, in the food, in the oil. It
[21:13] happens in your head.
[21:17] Understand?
[21:20] Okay.
[21:25] So, who decides what is useful? Who
[21:28] decides what is valuable?
[21:31] Hopefully, this is a self-explanatory
[21:34] question, but
[21:36] nobody and everybody.
[21:40] And this is what we call an economy.
[21:43] This is what we call a market of people,
[21:46] a free market of people willingly
[21:49] exchanging with each other.
[21:53] So the point is, and just to remind
[21:55] everybody, there's no committee who sets
[21:57] value. Importantly, people say, "Well,
[22:00] the US government tells me the dollar's
[22:02] value." Yeah, but that doesn't matter.
[22:03] There's no government that sets value
[22:05] either. There's no committee. There's no
[22:07] company. There's no government.
[22:10] You have to understand that every single
[22:12] person decides against their own life
[22:15] and their own situation, in their own
[22:17] desire, what is valuable and what isn't
[22:20] valuable.
[22:21] You can give one guy a billion dollars
[22:24] and another guy a billion dollars and
[22:27] they could spend that money on entirely
[22:29] different things. And that's because
[22:32] they derive value differently based on
[22:35] their own desires, their own wants.
[22:39] Someone might want a Ferrari and a yacht
[22:41] and a this and a that. And someone might
[22:43] want to solve world hunger in a region
[22:45] of Africa.
[22:47] Nobody is right and nobody's wrong.
[22:53] Each person judges against their own
[22:55] life and their own wants.
[22:58] Okay.
[23:00] Now this leads us into a very very very
[23:04] important economic theory called the
[23:06] paradox of value. Okay. Another term for
[23:09] it is the water diamond paradox.
[23:12] The question is why is water cheap and
[23:15] diamonds are expensive? Even though you
[23:17] cannot live without water and you can
[23:20] absolutely live without diamonds.
[23:24] We need water to live.
[23:28] We do not need diamonds. In fact,
[23:30] diamonds are arguably a scam. You know,
[23:33] diamonds came about when gold was
[23:36] banned. You used to give gold to your
[23:39] fiance and then wife because you were
[23:41] pledging them a scarce monetary unit
[23:44] that they could use to build your family
[23:47] if anything happened to you. It was like
[23:49] pledging savings to the future of your
[23:51] family on the mother of your child
[23:54] basically like putting up putting hard
[23:57] money on her finger.
[23:59] But when gold was banned, diamonds kind
[24:02] of stepped in as like, hey, we could be
[24:03] this like scarce, desirable thing. Like,
[24:06] but diamonds are not nearly as scarce
[24:08] and not nearly as desirable. It's kind
[24:10] of a scam. I digress. The point is, we
[24:14] don't need diamonds. We can live without
[24:16] diamonds. We need water. We cannot live
[24:19] without water. So, why is water cheaper
[24:23] than diamonds?
[24:26] Water is plenty more useful than
[24:28] diamonds.
[24:30] So,
[24:32] the answer is pretty obvious once you
[24:35] think about it for a second. Um, let's
[24:37] imagine that you're in a desert. Okay, a
[24:41] bottle of water in your kitchen is maybe
[24:44] a dollar if it's expensive, but it
[24:46] depends. If you have one of those like
[24:47] uh purified reverse osmosis things, then
[24:51] you you made one one giant reverse
[24:53] osmosis uh purifier in your kitchen and
[24:56] your water from that point on is free.
[24:59] Totally clean water and you don't have
[25:01] to pay anything for it from that initial
[25:03] installation.
[25:04] So maybe your bottle of water is a
[25:07] dollar if it's expensive, but it's
[25:09] probably trending towards
[25:12] the marginal cost of zero.
[25:14] Now, let's imagine that you were in the
[25:16] desert for three straight days and you
[25:19] hadn't had water in 72 hours and you're
[25:22] starting to reach the point where if you
[25:24] don't get water in the next 24 hours,
[25:27] you're at risk of death. How much would
[25:29] you pay for a bottle of water? Now, I
[25:33] have on the screen everything you have.
[25:35] If I charged you your net worth, you
[25:38] would probably pay it because you would
[25:41] rather have a significantly lessened net
[25:44] worth than die. But you have it's the
[25:47] same bottle of water.
[25:50] It's still H2O.
[25:52] Nothing about the water changed.
[25:55] Your needs changed. Your circumstances
[25:58] changed. Your desires changed. What you
[26:00] want changed. And so you made a
[26:02] subjective value on the bottle of water
[26:05] in the desert versus in your kitchen.
[26:10] And this point and the whole paradox of
[26:14] value and the water diamond paradox is
[26:16] to really hammer the point home that
[26:18] prices emerge at what we call the
[26:21] margin.
[26:23] So if I were to ask you what is more
[26:25] valuable to humanity as a whole, water
[26:28] or diamonds? Obviously water. If we all
[26:34] we had was just bunch of cardier but no
[26:36] water then we would go extinct in less
[26:39] than a week
[26:41] or a week. I actually don't know the
[26:42] math on how much you can survive without
[26:44] water. Dry fasting. I have no idea but
[26:46] whatever. We would die. We would all die
[26:48] soon. Can't drink Cardier. Okay. But the
[26:54] point is nobody is faced with that
[26:56] choice when you walk into Whole Foods.
[26:59] When I walk into Whole Foods and I'm
[27:02] getting a pack of Mountain Valley Spring
[27:04] Water, I'm not checking out saying, "You
[27:08] know what? I think water is far more
[27:11] valuable than diamonds and then NFL
[27:13] football uh red zone subscriptions.
[27:16] That's why I'm buying this water." No,
[27:19] I'm choosing whether I want the next
[27:21] bottle of water
[27:23] that averages out at about $2 per glass
[27:27] bottle of 33.7
[27:30] milliliters of Spring Valley Mountain
[27:33] Water. That's what I'm deciding. And
[27:35] that's what we call at the margin
[27:38] because I already have access to plenty
[27:41] of water. The next bottle satisfies a
[27:44] relatively unimportant need for me. Now,
[27:48] if I were dying in the desert and all of
[27:50] a sudden water became a lot more scarce
[27:53] and my need and my want for water was
[27:56] heightened and greatened a lot, then
[27:59] suddenly the next bottle of water is
[28:00] extraordinarily more valuable to me. It
[28:02] might be more valuable to me than all
[28:04] the bitcoins that I have in cold
[28:06] storage.
[28:07] So the point is we value marginal units.
[28:11] We do not value abstract totals.
[28:15] Market prices emerge from marginal
[28:18] people actually choosing to trade at the
[28:20] margins themselves.
[28:22] There is somebody out there that just
[28:25] bought a Bitcoin for for reasons that we
[28:28] don't totally understand. Maybe they're
[28:30] evading an authoritarian regime. Maybe
[28:32] they're looking to buy drugs that they
[28:34] can't buy with fiat currency. Maybe
[28:37] they're looking to save in an ETF. We
[28:39] don't know. But they made that decision
[28:40] at the margin. They did not go, "You
[28:42] know what? I think Bitcoin is worth at
[28:46] least $1.3 trillion. And the fact that
[28:49] its market cap is 1.29 trillion, I must
[28:52] purchase it. That's not the decision
[28:54] they're making. They're making decision
[28:55] at the margin, which we'll get into in a
[28:57] second. But you have to understand
[28:59] that's why water is far more important
[29:01] to society than diamonds, but far less
[29:04] expensive.
[29:06] It's all subjective value, and these
[29:09] prices emerge at the margin. So, let's
[29:13] say you have 10 grand. Okay? I say this
[29:16] on this podcast all the time and I'm
[29:18] happy now that we get to actually talk
[29:20] about it and I get to walk through it in
[29:22] detail. I say because people will say,
[29:24] "Wow, I can't believe that in 2013 you
[29:28] decided to hold Bitcoin and you know,
[29:32] you knew then that you would be holding
[29:34] it for 14 years." That's not true. What
[29:38] I say is every single day I decide to
[29:42] hold Bitcoin. What do I mean by that?
[29:44] Well, every single day I could hold
[29:46] whatever I want.
[29:48] I could sell all my Bitcoin and buy real
[29:51] estate. I could sell all my Bitcoin and
[29:53] buy the S&P 500. I can sell all my
[29:54] Bitcoin and buy Nvidia. I could sell all
[29:56] my Bitcoin and buy Ferraris.
[29:59] But I don't. So therefore, at the
[30:01] margin, I am making the decision to
[30:04] continue to hold Bitcoin. So set another
[30:07] way, let's say you have 10 grand. Where
[30:10] does it go? You have to make a decision
[30:12] at the margin. Now on the screen I have
[30:14] you can pay down debt. You could buy a
[30:16] used car. You could buy tools to enhance
[30:19] your profession and your work. You could
[30:22] just leave it alone and not touch it.
[30:24] You could put it in an index fund. What
[30:26] I have highlighted is you can save it,
[30:28] which is a whole different question of
[30:30] what does it mean to save it and how do
[30:31] I save it? But nobody asks what is
[30:34] objectively valuable. Everybody asks
[30:37] where their next dollar goes. We make
[30:38] these decisions at the margin. Another
[30:41] really important economic point that
[30:43] goes over everyone's head and that
[30:45] everyone seems to have a tough time
[30:47] grasping is that every single trade has
[30:50] two winners. Both parties are winning.
[30:53] So the buyer, the person that is
[30:56] purchasing the thing for currency thinks
[30:59] that the thing is worth more than the
[31:01] money. meaning this. I go to the store
[31:04] and I buy a $2 bottle of water. I think
[31:07] that the water is more valuable than the
[31:10] $2. Or else I wouldn't buy it. If I
[31:14] didn't believe that, if the $2 was just
[31:17] as valuable to me or more valuable to me
[31:19] than the water, then I would not have
[31:22] acquired the water for the $2. So
[31:24] implicit in my purchase of the water I
[31:27] am saying in economic expression that
[31:30] the water is more valuable than whatever
[31:33] I am trading for it. Now the seller is
[31:36] saying saying the opposite if they did
[31:38] not believe that the currency the $2
[31:42] that they're getting in exchange for the
[31:43] water was worth more to them to them
[31:46] again because value is subjective. It's
[31:50] not. I don't get to decide how much the
[31:52] water is worth to them. I'm only making
[31:54] a subjective decision on how much the
[31:56] water is worth to me. They have no idea
[31:59] how thirsty I am, how scarce water is to
[32:02] me. What if I'm actually the CEO of
[32:04] Mountain Valley and I have a Mountain
[32:06] Valley water fountain in my house? They
[32:08] would have no idea.
[32:12] So to them, they are making the economic
[32:14] claim that the $2 they are charging is
[32:17] worth more to them as a business than
[32:20] the water they are selling because maybe
[32:22] they create so much water they're making
[32:24] wholesale purchases. They have
[32:26] relationships with vendors where they're
[32:28] able to produce and acquire the water
[32:29] cheaper than the $2. Meanwhile, the $2
[32:32] is as cheap as I can find a water bottle
[32:34] because I'm not Whole Foods.
[32:38] But you have to understand that the e
[32:40] each side of the trade is winning.
[32:43] Economizing and creating a free market
[32:46] produces value for everybody. Nobody
[32:49] loses. That's another thing that these
[32:52] like either socialists or these cra
[32:55] people that can't wrap their head around
[32:57] basic economics in any given free trade.
[33:01] Free trade. Obviously, if you're putting
[33:04] guns to people's heads and you're
[33:05] saying, "You have to do this. If you
[33:07] don't do this, then I'm going to put you
[33:09] in jail. I'm going to lock you up. I'm
[33:11] going to arrest you. I'm going to abuse
[33:13] you." Well, then all bets are off. That
[33:15] that is now coercive. That is not free
[33:18] trade. People aren't acting out of their
[33:20] own desires and their own wants. This is
[33:23] why we must must allow for free markets
[33:27] and free trade. It is the only way
[33:30] society can and should be governed. But
[33:33] if you act out of the assumption that
[33:35] you're in a free market and two people
[33:37] are freely and willingly trading with
[33:40] each other, both parties win. Even
[33:43] someone that's selling Bitcoin, you
[33:44] could say you should never sell Bitcoin.
[33:47] Yeah. But if someone's selling Bitcoin,
[33:49] for whatever reason, they are valuing
[33:51] the cash more than the Bitcoin because
[33:54] let's say they're dying and they need to
[33:55] finance a medical bill. Their kid just
[33:57] got into Harvard, their dream school,
[33:59] and they need to pay tuition. They
[34:01] finally can pay off their mother's
[34:04] mortgage. Who knows? But they're valuing
[34:06] the cash more than the bitcoins. And the
[34:08] person buying the bitcoins is valuing
[34:10] the sats more than they're valuing the
[34:12] fiat. It is a free and equal exchange.
[34:15] Every trade has two winners in a free
[34:18] market economy. Understood?
[34:22] So
[34:23] after all of that, you understand prices
[34:26] emerge, value emerges from many
[34:29] individual comparisons. So nobody
[34:32] uniquely sets them. They are what is
[34:34] left over when everyone in the market
[34:37] has chosen. So everyone in the market is
[34:40] constantly wanting things. They're
[34:41] constantly having to make choices.
[34:44] And the price emerges from everyone in
[34:48] the market comparing and ultimately
[34:51] making choices amongst each other.
[34:53] It is the residue of millions of people
[34:56] and nowadays in the internet economy,
[34:58] billions of people potentially comparing
[35:00] what they have to what they want. That's
[35:03] all a price is.
[35:05] So now, what is money? I actually made a
[35:09] conscious decision not to include a what
[35:12] is money in this episode. Trying to keep
[35:14] these concise, focus a little shorter.
[35:17] Uh the editors are going to clip out the
[35:19] parts of the live stream like Q&A and
[35:21] just make these episodes just about the
[35:24] content so that they're shorter,
[35:26] digestible, quick, and then I can always
[35:28] do deep dives on whatever topics you
[35:31] guys want. So, I did not go too deep
[35:33] onto what money is, but money is also an
[35:36] a good in the marketplace. And so, I
[35:39] don't want to talk about where money
[35:41] comes from and what money does and how
[35:43] it emerges in an economy. That's for
[35:45] another episode. But for the sake of
[35:48] this episode, you can think of money as
[35:50] having these three jobs. It holds work
[35:54] you've done for later. So, if you've
[35:58] worked and produced value, but you don't
[36:00] want to turn all that production into
[36:02] consumption, you're not hungry yet, you
[36:05] don't want to choose where to live for
[36:06] the next 20 years yet, you don't want to
[36:09] buy your vacation flight yet because you
[36:11] haven't talked about it with your
[36:12] fiance, then you you need to hold the
[36:14] value over for a time being before you
[36:18] later exchange and consume from the
[36:20] market. Money also helps you move it
[36:23] across to someone. So holding it for
[36:25] later moves it across time. How do I
[36:27] take value that I created today and move
[36:30] it across a year, two years, a decade, a
[36:32] hundred years. How do I store value
[36:35] today till the year 2126?
[36:39] Okay, you also need to move value across
[36:42] what we call space distance. So how do I
[36:45] move value that I'm creating in Chicago
[36:47] to New York? How do I move it to London?
[36:50] And then the third, which is relevant to
[36:51] this episode, is money is used to
[36:54] compare unlike things. So, how do I
[36:57] compare the value I'm creating at strike
[37:00] to the value that's being sold at Whole
[37:03] Foods? The butcher that I'm buying my
[37:05] steak from has no idea what
[37:08] Bitcoin elliptic curve cryptography is.
[37:11] And I have no idea what it's like to
[37:13] raise cows. So, how do we create a
[37:17] marketplace that allows us to exchange
[37:20] this subjective value that different
[37:23] people are applying to the goods and
[37:25] services that we're creating for the
[37:27] market?
[37:28] And so, again, you hear a lot of
[37:30] Bitcoiners talk about, well, money is
[37:32] about moving value across time or across
[37:35] space because that's what saving and
[37:37] exchanging is. But you also have to now
[37:40] when it comes down to value, subjective
[37:42] value, you have to understand that money
[37:45] has a third job which is moving value
[37:47] across choices is what I have written
[37:49] here across these decisions. How do we
[37:52] subjectively value? I want all these
[37:55] things for myself and we all want all
[37:57] these things. That is the human
[37:59] condition. That is what it means to be
[38:00] human.
[38:02] And you then have to make choices as to
[38:05] what things available to you in the
[38:07] market because not everything is
[38:08] available to everybody. Some people can
[38:11] get planes and professional sports teams
[38:13] and hire all sorts of engineers
[38:16] and some people can barely afford ramen
[38:18] noodles. So you could want all all the
[38:21] things that you want and then you have
[38:22] to look at the market and see what
[38:24] options are available to you and start
[38:25] making choices and that is economizing.
[38:29] So now we get into Bitcoin. So hopefully
[38:32] that was very digestible, easy to
[38:34] understand. What is value? How does
[38:37] value emerge in an economy? Value is
[38:39] entirely subjective. It's not baked into
[38:42] the thing. Gold has no value inside of
[38:44] it that Bitcoin does or does not. Value
[38:47] is subjective.
[38:49] Okay. So what does Bitcoin serve? Okay.
[38:54] Bitcoin theoretically competes in the
[38:58] marketplace for money. So it serves this
[39:01] idea of you're you do work and you spend
[39:04] your time doing stuff and then you want
[39:07] money in return for that so that you can
[39:09] later consume and you need purchasing
[39:12] power. Uh and so
[39:18] let's take a look at this idea of a
[39:22] market for money. So again, value is all
[39:25] about us wanting something and then
[39:28] having to make a choice as to how to
[39:30] acquire what we want or how to work
[39:33] toward what we want. So let's take a
[39:36] look at what can go wrong with money.
[39:38] And this is a short list. I could have
[39:40] made this list a hundred items long, but
[39:43] some of the things that can go wrong.
[39:45] Someone can make more of the money that
[39:47] I save in which would inflate. That's
[39:50] highly inflationary. it would debase my
[39:53] savings. So that could that's a problem.
[39:55] Someone can seize my money. So if I have
[39:58] to store my money in the possession and
[40:00] in the hands of someone else, they could
[40:01] just decide that my money is their
[40:03] money. That's a problem. It can be
[40:05] expensive for me to use my own money. So
[40:08] if it's on inefficient rails, if it's
[40:10] sitting in between a lot of
[40:11] intermediaries, then there's a lot of
[40:13] economic friction for me to use my
[40:15] money. Like it costs 2, three, four,
[40:17] five, 10% just for me to use my own
[40:19] money. That's a problem. the rules of
[40:22] the money can change without my consent.
[40:24] So again, if it is with someone else or
[40:26] if it's in a system that I don't control
[40:27] or that doesn't respect me, then the
[40:30] rules can change. And then another one
[40:32] is that I can't verify any of it myself.
[40:35] That's a problem. Now again, this list
[40:37] could have gone over and over and over
[40:39] and over again. But you start at a place
[40:42] where a human has wants. And I'll speak
[40:45] for myself now. I would assume that many
[40:48] humans share the same wants that I have
[40:49] when it comes to money. But I don't know
[40:52] that for certain because I'm not them.
[40:54] It's all subjective. But I'll just talk
[40:55] about myself. What do I want? I want a
[40:58] money that is fixed in supply. I want a
[41:01] money that is fairly reasonable for me
[41:03] to own myself so that I do not have to
[41:06] if I don't want to trust someone else to
[41:09] hold it for me without the threat of
[41:11] seizure. Even if it isn't the company
[41:13] that's going to seize it from me. Maybe
[41:14] the government makes the company sees it
[41:16] from me. I want to be able to hold it
[41:18] myself. Okay? I want it to be fairly
[41:21] cheap and sometimes free for me to use,
[41:23] especially free for me to receive. I do
[41:25] not want to pay 2 3 4% to have to
[41:28] receive money and value to myself. I
[41:31] want to ensure with real credibility
[41:33] that nobody can change the rules. I want
[41:36] to be able to verify with math that
[41:39] every day I wake up, the rules in fact
[41:41] have not changed. Right? These are all
[41:44] things that I want. I want these things.
[41:47] So now I have to go about making a
[41:50] choice to acquire what I want in the
[41:52] marketplace. I can choose dollars. I can
[41:54] choose gold. I can choose pounds. I can
[41:56] choose real estate based on the
[41:59] properties that I want. This is what
[42:01] Bitcoin actually does. You can hold it
[42:04] yourself fairly reasonably. It costs you
[42:06] nothing. You do not need to pay a vault.
[42:08] You do not need to pay auditors. You can
[42:11] literally hold it yourself on your
[42:13] phone. It can move anywhere. Nobody can
[42:16] make more of it. Anyone can verify it.
[42:18] Nobody can control it. The rules in fact
[42:21] are fixed. So the point is if that is
[42:25] useful to someone, then demand does
[42:28] exist. This is the same as oil. This is
[42:31] the same as water. Importantly, nobody
[42:34] has to authorize demand and for someone
[42:38] to apply subjective value to it. The US
[42:41] government or Facebook or Google does
[42:44] not have to approve someone subjectively
[42:47] applying value to Bitcoin. Someone is
[42:49] saying, "Hey, I want something." Let me
[42:52] tell you guys another thing. Silk Road
[42:53] was an incredibly valuable chapter in
[42:56] Bitcoin's journey. And the reason for
[42:58] that is Bitcoin provided utility value
[43:02] when it came to money that other monies
[43:05] could not provide. So there was a market
[43:08] of people that said I want to put
[43:10] substances in my body. I want to put
[43:13] whatever I want in my body. Now I am not
[43:15] promoting drugs necessarily. In fact,
[43:17] uniquely the only drug I've ever tried
[43:19] is marijuana and I I don't like it. So
[43:22] I'm actually not a consumer of drugs. I
[43:25] totally support the notion that people
[43:27] should do what they want with their own
[43:29] body. I do not think that we need both
[43:32] elected and unelected officials telling
[43:34] people how to how to be um but I I I
[43:38] personally just don't like drugs. But it
[43:41] is Silk Road was an incredibly important
[43:43] chapter because there were people that
[43:45] say I want to participate in the
[43:48] exploration of substances in my body. I
[43:51] want to see what it feels like. I want
[43:52] to see if it helps, if it hurts. I want
[43:54] to experience that myself. Now, there
[43:56] were no monies that allowed people to
[43:59] freely exchange substances and currency
[44:01] except for one, and that one was
[44:03] Bitcoin. And so, people started to apply
[44:07] subjective value to Bitcoin. Nobody had
[44:10] to authorize that. Nobody had to accept
[44:12] an application. The the value wasn't
[44:15] inside of the bitcoins. It's not like
[44:17] you mailed the bitcoins and you unpacked
[44:19] the mail and inside of the mail, ah,
[44:21] yes, here's the value. The value was
[44:23] subjectively applied when people
[44:26] realized that bitcoins were useful to
[44:29] them. And this was before bitcoin was
[44:32] liquid enough to be the digital gold or
[44:35] before bitcoin was liquid enough and big
[44:37] enough to have an ETF approved or to
[44:39] have liquid exchange. The point was it
[44:42] was useful to someone and because it was
[44:45] useful to someone demand existed and
[44:48] that is how subjective value is applied.
[44:51] Why was Bitcoin worth something? Because
[44:53] it was useful to someone. Why was it
[44:55] useful to to someone? Because it does a
[44:58] thing.
[45:00] If I go back, Bitcoin does stuff. How
[45:03] many things can you have where the rules
[45:06] are fixed? And not the rules are fixed
[45:08] like, yo, trust me, bro. The rules are
[45:09] fixed. No, credibly enforcable fixed
[45:12] rules. Meaning, you can run the math and
[45:15] it doesn't matter what a government
[45:16] says, what a supercomput says, what Elon
[45:18] Musk says. The rules are fixed. And I
[45:20] can credibly prove that with 2 plus 2
[45:23] equals 4. Nobody can control it. Anyone
[45:26] can verify it. I can move it anywhere in
[45:27] the world for effectively free. Nobody
[45:29] can make any more of it. I can hold it
[45:31] myself for free.
[45:34] So Bitcoin does stuff. It has properties
[45:38] that are unique. And if people find
[45:41] those properties useful, then they apply
[45:44] subjective value to it. Go back to the
[45:46] whole water at Whole Foods versus water
[45:48] in the desert. You may not find Bitcoin
[45:51] useful, but someone else might be in the
[45:54] desert parched and about to die. So,
[45:57] they're actually willing to pay $10
[45:59] million for a Bitcoin. How much would
[46:01] you pay for a Bitcoin if you were living
[46:03] under an authoritarian regime and you
[46:05] needed to evade your hometown and take
[46:07] with you as much wealth as humanly
[46:09] possible? What are your options? What
[46:12] are you going to lug around a bunch of
[46:13] gold? What are you going to try and
[46:15] uproot the house out of the ground and
[46:17] carry with you your real estate?
[46:20] No, buy a bunch of Bitcoin, write the
[46:23] seed down, and get the out of
[46:25] there.
[46:27] But that is it was useful to someone.
[46:30] Now, it might not be $60,000
[46:32] useful to you. I disagree with that. I
[46:35] think no matter what the Bitcoin price
[46:36] is, when it comes to needing to save
[46:39] money, I look at my options and I'm
[46:41] making a subjective valuation that this
[46:43] is the best option I have. But you see,
[46:46] it was useful to someone. Therefore, it
[46:48] has demand. Therefore, it has value.
[46:51] Now, the other really important point
[46:53] that we mentioned in the beginning that
[46:54] I have to just bring back and and
[46:56] complete the loop here is that it's also
[46:59] because Bitcoin has a scarcity component
[47:01] to it. So, if Bitcoin was as abundant as
[47:05] air, then it would have no value because
[47:08] although it's useful, it's abundant. And
[47:11] so, we don't need to economize and apply
[47:15] subjective value to it. It doesn't need
[47:17] to be part of our lexicon of choice. We
[47:19] could always have as many bitcoins as we
[47:21] want. Oh, I want as much bitcoins as
[47:23] satoshi. Sure, you take a million. You
[47:25] take 21 million. You take 42 million. No
[47:27] supply cap. Everyone gets as many
[47:29] bitcoins as they want. But it's because
[47:31] bitcoin is both useful and scarce. We
[47:35] economize around it and we have to apply
[47:37] value toward it. And so supply cannot
[47:40] follow the demand. So there's only 21
[47:43] million. Nobody can print the
[47:45] difference.
[47:46] So importantly, and this is really
[47:48] important, scarcity itself does not
[47:51] create the demand for Bitcoin. People
[47:53] demand Bitcoin because of its usefulness
[47:56] to them. Maybe Bitcoin is useful to them
[47:58] because it's scarce, but the scarcity
[48:01] does not create the useful. Bitcoin can
[48:03] be useful for a lot of different reasons
[48:04] to somebody.
[48:06] Scarcity makes the demand consequential
[48:09] though, for sure, because demand itself
[48:11] is not enough. I demand air to live like
[48:14] we've talked about. But the air I I
[48:18] don't live in in an environment where
[48:20] air is scarce. So the demand for air
[48:23] around me is not consequential. We do
[48:25] not have to economize around it. We do
[48:27] not have to make choices. I don't have
[48:28] to choose between buying diamonds or
[48:30] breathing. I can breathe and buy
[48:32] diamonds and drink water.
[48:35] I live in in that abundance. If I I
[48:39] lived in a scarcity of water and a
[48:41] scarcity of air, then my fiance would
[48:44] not have a ring on her finger. We would
[48:46] be spending all of our excess capital on
[48:49] the ability to breathe and hydrate,
[48:52] right?
[48:54] And so it is the mere fact that Bitcoin
[48:57] is useful to people in solving problems
[49:00] problems. It's all subjective. Maybe
[49:02] somebody wants to do a certain
[49:04] transaction. Maybe it's a remittance
[49:06] transaction. Maybe someone's trying to
[49:07] save and persist money through space and
[49:09] time
[49:11] and it's scarce.
[49:15] So I mean the other thing that hopefully
[49:17] is obvious but should be said is you can
[49:20] copy the software. So people say isn't
[49:22] Bitcoin just open source code or isn't
[49:24] it just information on a computer? Can't
[49:26] I just copy and paste it? Sure I can
[49:29] create Jackcoin but Jackcoin doesn't
[49:31] come with it. all of the existing
[49:33] holders of Bitcoin, all of the
[49:35] liquidity, all of the security, all of
[49:37] the infrastructure, all of the
[49:38] transactional history, all of the proof
[49:40] of work, all of the miners, all of the
[49:42] social consensus. It's the equivalent of
[49:44] like, can't I just create my own
[49:45] Twitter? Yeah, but when I register to my
[49:48] new Twitter, I'm the only user and I
[49:50] have zero followers. So, when I post,
[49:52] who am I even talking to? Like, yes, you
[49:56] can copy the software, but you can
[49:57] cannot copy the network itself. So
[50:00] anyone can fork the code but again this
[50:04] goes down to why Bitcoin is useful to
[50:07] people. Bit remember it all starts for
[50:10] is the good useful and is there more
[50:15] demand than there is supply. If so if it
[50:18] is both useful and scarce then we must
[50:21] economize because we can want it all we
[50:24] want but we might not necessarily be
[50:26] able to have it.
[50:28] So when we take a step deeper, we say,
[50:31] "Okay, Bitcoin's competing for this
[50:33] money thing." So what's it competing
[50:35] against? Cash, stocks, bonds, gold, real
[50:37] estate. So when someone says, "How could
[50:40] Bitcoin possibly have any value?" Well,
[50:42] you have to understand, people are
[50:44] making these decisions at the margins,
[50:47] like we said, someone is waking up and
[50:50] saying, "Okay, I paid my phone bill. I
[50:52] bought my groceries. I paid my rent. I
[50:55] have leftover money whether it's a
[50:57] dollar, $10, $1,000, a million dollars
[51:00] and I want to save that money. Here are
[51:02] the deci here are the choices I have
[51:04] again because we want to have more
[51:07] purchasing power in the future. Let's go
[51:09] back. All of this starts from the human
[51:11] condition that we all want. We want a
[51:14] future, a better life. We have desires.
[51:18] And that is the amazing part about being
[51:20] human is we're so future oriented. We
[51:23] have an ability to lower our time
[51:24] preference. We have ability to
[51:26] prioritize the future.
[51:28] So what do I want? I want purchasing
[51:30] power in the future. Okay. What are my
[51:33] options to achieve that? Well, I can
[51:36] keep cash. I can invest in stocks. I
[51:39] could buy bonds. I could buy gold. I
[51:40] could buy real estate. Let's walk
[51:42] through each. Cash? No thanks. Because
[51:44] the amount that they're debasing it by
[51:46] printing more, my purchasing power is
[51:48] going to get entirely eroded. Inflation
[51:50] is a modern-day like crisis everywhere
[51:52] you go. Okay, stocks. I'm taking
[51:55] counterparty risk on given companies.
[51:57] And by the way, stocks have not
[51:59] outperformed gold since the year 2000.
[52:04] So I would much I mean I do not want to
[52:06] take counterparty risk against
[52:08] leadership teams and products that I
[52:10] don't understand. And I also don't want
[52:12] to invest in an asset class that can't
[52:14] outperform, you know, a a metal bonds.
[52:19] I'm not even going to get into that. No,
[52:20] absolutely no thanks. Similar to cash.
[52:22] Gold. I guys, I don't want to store a
[52:25] bunch of gold in a vault in my house. I
[52:28] don't want to pay someone to store the
[52:29] gold for me. Gold has already been
[52:31] confiscated by the government. I don't
[52:32] know why it wouldn't be confiscated
[52:33] again. It's an analog metal. uh and I
[52:37] have no interest in trying to figure out
[52:40] how to sovereignly store a bunch of gold
[52:43] uh in real estate. I do not want that
[52:44] counterparty risk. I don't want to have
[52:46] tenants. I don't want to have to pay
[52:47] property tax. I don't want to have to
[52:49] have risk of natural disaster. So, I
[52:52] work through and this is just me
[52:53] personally. Everyone makes their own
[52:55] subjective valuation. But me personally,
[52:57] I look at all my options and I say,
[52:59] "Okay, I want purchasing power in the
[53:01] future because in the future I might
[53:03] want a car. I might want a new house. I
[53:05] might want to buy the Chicago Bulls. I
[53:06] might want to fly private. I might want
[53:08] to have a nice dinner. I'm going to want
[53:09] a lot of things. And I need purchasing
[53:12] power in order to have the life that I I
[53:14] want or to protect myself from bad
[53:16] things happening. Inevitably, someone's
[53:18] going to get sick. Someone's going to
[53:19] have an accident. Someone's going to
[53:20] need something from me. I'm going to
[53:22] need purchasing power or at least I want
[53:24] purchasing power. And I look at all my
[53:26] options and I say, "Okay, hey, Bitcoin
[53:28] is the one I elect to choose." So at the
[53:31] margin I am assigning value and people
[53:35] because people sometimes will think what
[53:38] are you saying like Bitcoin's more
[53:39] valuable than water or Bitcoin's more
[53:42] valuable than No dude that's not what
[53:45] I'm saying in the same way that I'm not
[53:47] saying diamonds are more valuable than
[53:48] water. What I'm saying is I'm making a
[53:51] decision at the margins. I have money
[53:53] that I need to save. I created value. I
[53:56] have value left over. I paid the phone
[53:58] bill. I paid uh I paid my YouTube TV
[54:00] bill. I I paid my credit card bill. I
[54:03] paid my rent. I did all the things that
[54:04] I need to do. And I have some cash left
[54:06] over and I want purchasing power in the
[54:08] future. So I I have decision to make and
[54:11] this is the decision I'm making. That's
[54:13] it. That's how Bitcoin is valuable. And
[54:16] take take yourself back to Silk Road
[54:18] when someone says I want to buy drugs on
[54:19] the internet.
[54:21] How do I do that? Well, they made a
[54:25] decision at the margin to say, "Well, I
[54:27] couldn't have used cash. I couldn't have
[54:28] used PayPal. I couldn't have used Venmo.
[54:30] I couldn't have used Cash App, so I used
[54:32] Bitcoin."
[54:34] Now, you could politically agree or
[54:37] disagree with the decisions they were
[54:38] making. But the point is, they found
[54:41] Bitcoin useful. Therefore, there was
[54:44] demand for it. Therefore, it had value
[54:47] because there's more demand than there
[54:49] is existing supply. It is not like air.
[54:51] It is not plentiful.
[54:54] So prices emerge from these marginal
[54:57] choices. Every possible buyer asks,
[55:01] "Would I rather hold this or something
[55:03] else?" Every single day I wake up and I
[55:07] I could sell all my Bitcoin and own
[55:10] other things, but I don't. I'm making
[55:12] the decision every day at the margin to
[55:15] own Bitcoin. So every possible buyer
[55:17] asks would I rather hold this or would I
[55:20] rather hold something else. Every
[55:22] current holder asks would I rather keep
[55:25] this or would I rather buy something
[55:28] else. So nobody uniquely alone sets
[55:31] Bitcoin Bitcoin's value. The price is
[55:33] what is left over after these decisions
[55:37] that emerge from the marginal choices
[55:39] that we all make.
[55:42] You understand? So, Bitcoin is only
[55:45] worth something because people value
[55:47] what it can do for them.
[55:49] Again, going back to the early slides in
[55:52] this deck, it is sat somehow satisfying
[55:54] a need that somebody has.
[55:58] And it scarcity is relevant and matters
[56:00] because the demand that people have for
[56:02] it cannot be satisfied just by making
[56:04] more bitcoins. We can't say like, hey,
[56:06] someone else found bitcoin useful to
[56:08] them. We we're going to need a bunch
[56:10] more bitcoins. You know, demand always
[56:13] finds supply. But when the supply can't
[56:16] come from a factory, can't come from a
[56:17] government, can't come from the ground,
[56:19] then it has to come from the market. And
[56:21] so, if you want more bitcoins because
[56:22] there's more demand, you're going to
[56:23] have to get them from a higher price.
[56:25] And again, if I wake up and bitcoins at
[56:27] 65,000, am I going to sell any bitcoins?
[56:30] No. If I wake up in bitcoins at 200,000,
[56:33] am I going to sell any bitcoins?
[56:34] Probably not. But I'll be closer. If I
[56:37] wake up and bitcoins at $2 million,
[56:39] okay, how much are the Chicago Bulls? I
[56:43] I might be interested in giving some
[56:44] bitcoins up and getting a professional
[56:47] sports team in my hometown, right? So,
[56:50] you understand, we're all making these
[56:51] decisions at the margins
[56:54] all the time. All the time. If Bitcoin's
[56:57] price doubles, some people at the margin
[57:00] might say, you know what, I do need that
[57:02] house. You know what? I do want that
[57:04] car. And some people conversely are
[57:07] like, "Well, I need to save money. I
[57:09] don't really give a what the price
[57:10] of Bitcoin is. It's the best option I
[57:12] have."
[57:16] So, the last slide, the quotable
[57:18] takeaway. Read this one slowly.
[57:22] Scarcity does not make Bitcoin valuable
[57:24] on its own. Bitcoin's usefulness creates
[57:27] demand for it, and scarcity makes that
[57:30] demand matter, which results in a price.
[57:33] Again, an economic good is something
[57:37] that is both useful and scarce. And all
[57:40] scarce means in this context is there is
[57:44] more demand than there is supply. So
[57:46] something that is useful but not scarce
[57:48] is air. Just breathe. [snorts]
[57:50] You just breathe and you got yourself
[57:53] some air. Okay. Something that may be
[57:56] scarce but not useful is uh your child's
[57:58] drawing in kindergarten or the rock in
[58:00] your backyard. technically one of a
[58:02] kind, but it it doesn't serve a purpose
[58:04] to anybody. Nobody finds it useful. And
[58:08] then there's plenty of useful things.
[58:10] And these are all the things that we
[58:11] economize. And these are economic goods.
[58:13] Food, housing, lakehouses, bitcoins,
[58:16] bonds,
[58:18] right?
[58:21] So, how does Bitcoin have value? Well,
[58:23] how does anything have value? Something
[58:25] has value when someone subjectively
[58:28] values it as useful to them. And we have
[58:31] to economize and economics exists period
[58:34] because what we want is not necessarily
[58:37] what we can have. And the difference
[58:38] between that results in choices that we
[58:41] have to make and those choices at the
[58:43] margin well given I want all this stuff
[58:45] but I don't get to have wanting a
[58:47] Ferrari isn't enough. Wanting a private
[58:49] plane isn't enough. Wanting the Chicago
[58:51] Bulls isn't isn't enough. Wanting more
[58:53] bitcoins isn't enough. Okay. Well then I
[58:55] have to start making choices to pursue
[58:56] my wants. And those choices, choosing X
[58:59] over Y, A over B, that you're applying
[59:02] value. You're making decisions at the
[59:04] margins.
[59:07] Understand? And we're with that, we're
[59:09] at the top of the hour. Okay. So, I'll
[59:11] stop there. You guys give give me um all
[59:14] the feedback you want on these episodes.
[59:16] Hopefully, they're valuable and we can
[59:18] do as many as you want, but I love
[59:19] getting back to first principles, really
[59:21] allowing people to to grasp things like
[59:24] economics, value,
[59:26] um, scarcity, human condition, decisions
[59:30] at the margins, all of this good stuff
[59:32] because, you know, once you are
[59:35] educated, uh, it does make, uh, adopting
[59:38] Bitcoin and pushing the cause a lot
[59:41] more, uh, useful and easier to
[59:43] understand.
[59:44] So, with that, I will, uh, give some
[59:47] updates on Strike. I'll do a little bit
[59:48] of Q&A and we'll be done. Um, okay,
[59:53] let's see here. Uh, for Strike, so, uh,
[59:57] we,
[59:59] Hold on, let me pull up my notes. Uh, I
[60:02] just want to shout out firstly all of
[60:03] the businesses that we seem to be
[60:06] onboarding onto Strike. Uh, just so much
[60:08] fun. We We do these tweets. Uh, let's
[60:12] let me pull this up. Uh, can you guys
[60:15] see this? Oh no, my face is still in the
[60:17] way.
[60:19] Uh, we do these tweets
[60:23] um from Strike. Uh, they're so they're
[60:26] so much fun. So, uh, new businesses on
[60:30] Strike this week. We do this once a
[60:32] week. a Bitcoin network visualization
[60:35] provider, an an educator, a car
[60:37] dealership, pediatric and sports
[60:39] psychotherapy,
[60:42] uh private investment firm, a wine
[60:44] merchant. Um so just shout out to all
[60:47] the businesses that are on boarding to
[60:50] the platform. I don't know if everyone
[60:52] knows all of the tools we have for
[60:54] businesses, but um just wanted to shout
[60:56] you guys out. Really exciting. I just
[60:58] find it really cool um that you know the
[61:01] the view I get on Bitcoin adoption at
[61:03] Strike of all of the individuals and
[61:05] family offices and businesses that on
[61:07] board and they're starting their own
[61:08] treasuries or they're taking out loans
[61:10] against Bitcoin financing things in
[61:12] their life with Bitcoin backed lending.
[61:14] It's all just really cool stuff. Um
[61:16] which and I I just generally appreciate
[61:19] it. Wanted to give you guys a shout out.
[61:21] Um what we launched last week volatility
[61:23] proof loans uh are in a lot more states.
[61:26] So consumers in California, Vermont,
[61:29] Virginia, Ohio, Mississippi, Tennessee,
[61:32] Illinois, and Pennsylvania. Also,
[61:34] businesses in California and Vermont. So
[61:36] you guys all now have access to
[61:38] volatility proof loans. What those are,
[61:41] you can take out a loan, and there's no
[61:42] such thing as a margin call. We charge
[61:44] you a little extra for that. But if you
[61:46] ever get worried of what if Bitcoin
[61:47] price dips, I don't want to have to
[61:49] worry about getting a margin call. We
[61:51] charge you a little extra and we take on
[61:52] the risk ourselves as a business. And so
[61:55] there's no such thing as a margin call
[61:56] when you get a volatility proof loan.
[61:58] You take out the loan and you owe us the
[62:00] money uh in the future and that's it and
[62:02] you go off and do whatever you need to
[62:03] do. So that's what those are. It's a
[62:05] pretty cool innovation. We're seeing a
[62:07] lot more traction with that product. I
[62:09] think it's one of the most underrated
[62:10] products in the market. So uh those uh
[62:14] became available in a lot more states.
[62:15] And then what is coming up? We have a
[62:18] new view like activity view. So I have
[62:20] it right now. It's very very cool here.
[62:23] Let me pull it up. You guys won't be
[62:24] able to see it, but so when you go into
[62:26] your strike activity, a lot of people
[62:28] have different demands. Like they want
[62:30] to filter by their balance, whether it's
[62:33] cash or bitcoin, the type of
[62:35] transaction, the date, the availability,
[62:37] because people have different exporting
[62:38] needs, tax obligations. There's all
[62:40] sorts of stuff. And we felt our activity
[62:42] screen was just too basic and didn't
[62:45] serve all the vast desires of our
[62:47] customers. So, my activity tab, this is
[62:50] crazy. I could filter by type, which is
[62:53] purchases, sales, deposits, withdrawals,
[62:55] sends, receives, bill payments, lending,
[62:57] line of credit, credits, card, and then
[62:59] I have cash and Bitcoin. I can filter by
[63:02] dates like the last week, the last
[63:03] month, the last 90 days, year to date,
[63:05] or a custom date range. I can filter by
[63:08] availability. So, whether it's pending
[63:10] or already available, I can create my
[63:12] own filters. So, like by cost basis, by
[63:15] status, by amount. And then I can hit
[63:18] download and export my my view at any
[63:21] point. And we also added a search field.
[63:24] So if I need to search for something
[63:25] from a long time ago, it can fuzzy
[63:27] search like, oh, I think it was with
[63:29] John or I think it was with this Bitcoin
[63:32] address, and it'll fuzzy search for you.
[63:34] So really, really cool new act. I know
[63:37] these features are small, but really
[63:39] really cool new activity rollout
[63:40] happening to a lot of our customers.
[63:42] We'll roll that out to everyone with
[63:43] time. Uh interest on cash. I've talked
[63:46] about this at Nauseium. We're targeting
[63:48] at least 3.5% to start and like I said,
[63:51] I have a vision to get that hopefully up
[63:53] to five six% uh with time. Uh and and
[63:56] not too far away. Uh website, we we're
[63:59] launching a new website which is really
[64:01] exciting. Uh we call website 3.0, but
[64:03] the existing strike website just doesn't
[64:05] reflect who we've become as a business,
[64:06] this global financial institution. So,
[64:08] our new website is really, really cool.
[64:10] A lot of personal touch from me on that.
[64:12] Uh we're having a totally new optimized
[64:15] deposit flow uh which should help new
[64:17] customers. I know a lot of you guys are
[64:19] referring your friends and family and
[64:20] just making it easier for them to go
[64:21] from downloading the app to getting
[64:23] started. So a lot of that should be the
[64:26] next week or two. We're always shipping.
[64:29] We're always improving and we're always
[64:31] listening to you guys. So if you don't
[64:32] hear something that you're interested
[64:34] in, obviously just let us know and uh we
[64:37] will build it. And with that, let's do
[64:40] some Q&A.
[64:42] Cool. Blow myself up. Open Dylan's uh
[64:46] [sighs]
[64:47] document here.
[64:49] Bitcoin [clears throat] 101 series. How
[64:51] exciting. I really enjoyed that episode.
[64:54] And uh and I hope you guys did too. And
[64:57] I hope you guys can kind of guide me
[64:59] towards what uh other things like I've
[65:02] had people say like why Bitcoin over
[65:05] altcoins? Uh what is money? How does
[65:08] money emerge in an economy? Um, like
[65:11] there's all sorts of things I can do to
[65:13] really try and, you know, help help
[65:15] people understand the basics. Um, just
[65:17] try and try and help. Um, okay. Bitcoin
[65:20] and markets. Question for Jack. Can you
[65:22] talk about the security budget and ideas
[65:24] for how fees will fund the budget? I'm
[65:27] not entirely sure what you mean. Is it
[65:29] uh like how miners will finance
[65:31] themselves? I think what this person is
[65:34] talking about is uh this idea that
[65:37] there's a block reward with every
[65:38] Bitcoin block. And obviously with the
[65:40] havingss and the inevitable cap at 21
[65:42] million, there's not going to be a
[65:44] reward in every single block and the
[65:45] rewards diminish. In fact, they get cut
[65:47] in half in Bitcoin terms every four
[65:50] years. And so inevitably the fee market,
[65:53] so the fee that we're all adding to our
[65:55] transactions will have to subsidize uh
[65:57] the Bitcoin mining industry. Now there's
[66:00] actually it's actually not a big deal
[66:03] because we have things like the
[66:05] difficulty adjustment. So, you know,
[66:08] people say like, "What if miners start
[66:10] getting paid a lot less?" Well, then
[66:13] less people will mine. And, you know,
[66:16] the the whole idea of the difficulty
[66:17] adjustment is Bitcoin, the protocol and
[66:21] the network can react to the world
[66:24] outside of it changing. And so over
[66:27] time, I absolutely expect Bitcoin's fees
[66:30] to be able to subsidize people that want
[66:34] to contribute energy and resources to
[66:36] mining bitcoins and therefore securing
[66:38] the network. I expect that to happen
[66:40] now. What's the size of that market?
[66:42] Like
[66:44] are fees going to replace block
[66:45] subsidies in a year and two years and
[66:47] four years and a decade and 20 years? I
[66:49] don't know and I don't really care. It
[66:52] doesn't really matter.
[66:54] um because of the difficulty adjustment.
[66:56] Like let's say a bunch of miners drop
[66:58] off. So we've seen a lot of miners drop
[67:00] off to go do AI stuff and has Bitcoin
[67:04] bad in an eye? No.
[67:07] The difficult if if miners drop off, the
[67:09] difficulty will just adjust lower and
[67:11] life goes on. And if everyone in the
[67:13] world all of a sudden wants to mine
[67:14] Bitcoin, is it going to matter? No. The
[67:16] difficulty will rise and life goes on.
[67:18] So, Bitcoin is is optimized to have like
[67:22] a steady heartbeat. And I have no doubt
[67:25] that like mind you guys like the uh
[67:29] block rewards aren't ending for like a
[67:31] hundred years. So, you know, I don't
[67:34] know that that's my high level answer.
[67:36] Assuming that's what you meant. Uh if
[67:38] that's not what you meant or if you have
[67:40] more specific question, uh let me know.
[67:42] But, uh I it's just not a concern. Uh
[67:46] love the show. Listen every week. What
[67:47] is your favorite go-to orange pilling
[67:49] conversation? My friend's eyes glaze
[67:51] over when I talk about monetary
[67:52] debasement. H
[67:55] [sighs]
[67:56] one of my favorite man, this is tough
[68:00] because I
[68:02] I mean
[68:05] I I have not
[68:07] uh
[68:09] I have not like orange pled a friend
[68:11] from zero in a long time because you can
[68:14] imagine I've already had all these
[68:16] conversations with my buddies. So I
[68:17] don't know if some of my favorite
[68:18] conversations are a little too advanced
[68:20] for someone who's super new. Sephedine's
[68:24] conversation with Lex Freriedman I think
[68:26] is phenomenal. He does a lot of intro
[68:30] stuff like this. What is money? He talks
[68:33] about the water diamond paradox.
[68:36] Um so I mean that one's an all-timer for
[68:39] me,
[68:41] but I don't know if that's too uh
[68:44] complicated. Not sure.
[68:47] Um, hey Jack, wondering when we will get
[68:50] the stacks feature on strike in Missouri
[68:53] where we can subdivide our Bitcoin and
[68:55] cash among different accounts. Yeah, so
[68:57] we talked about this today actually as a
[68:59] leadership team that's going to launch
[69:00] in September hopefully. We've got a goal
[69:04] internally that we can probably get that
[69:07] out in the next four weeks. I don't know
[69:10] if it will be Bitcoin and cash. It might
[69:12] just be Bitcoin to start, but this is a
[69:14] feature we call it stacks where you can
[69:17] create sub accounts inside your account.
[69:19] So you could say, I'm going to create a
[69:21] stack and this is Bitcoin for my kids.
[69:24] This is Bitcoin for my wife. This is
[69:26] Bitcoin I promise I won't touch. This is
[69:28] Bitcoin that I might touch. And
[69:29] obviously it's all in your account, but
[69:31] you're able to kind of divide and add
[69:33] DCAs to different accounts and and stuff
[69:36] like that. Uh, and yeah, so if today's
[69:39] August 17th, hopefully in the next four
[69:41] weeks or so. So, I know you guys are
[69:44] really looking forward to that one. Hey,
[69:46] Jack. Question. If life is valuable
[69:48] because it's rare and goes fast and
[69:50] money should be rare, then why is
[69:51] Bitcoin slow and high fees to transact
[69:54] with? Uh I
[69:59] so I think that this person is uh citing
[70:04] I I give this analogy all the time and
[70:06] there was a video on Twitter today about
[70:08] it where I say the only reason that I
[70:12] value my life and that I think anyone
[70:14] values their life is because it is
[70:16] scarce. Again scarcity in my opinion is
[70:20] embedded in the human condition itself.
[70:23] And life is scarce because not that time
[70:25] itself as a resource is scarce but my
[70:29] time is scarce. Meaning I don't get
[70:31] infinite time. I will die. And that is
[70:36] the reason that listen if I wasn't going
[70:38] to die I would go to the gym in a
[70:42] million years. I'd get married in a
[70:43] million years. I would eat healthy in a
[70:46] million years. Why would I ever value
[70:48] right now? Because I have infinite nows.
[70:51] I don't care to value. Now, if we go
[70:53] back to the episode I was just talking
[70:55] about it, it'd be like air. Like, I'm
[70:57] not paying for air. There's plentiful
[70:59] amounts of air. Why would I value the
[71:02] air I'm breathing now? Who cares? I
[71:04] could always get air. I just just inhale
[71:06] whatever. And that's not the case. I
[71:09] will die. And so, it's the it's the
[71:11] finite promise that my time is scarce
[71:15] that
[71:17] makes me want to get married and have
[71:18] children as fast as I can. makes me want
[71:21] to get up and watch the sunrise and
[71:23] ensure I see the sunset. Makes me want
[71:25] to take care of my body and be healthy
[71:27] and enjoy the scarce amount of time that
[71:30] I do have on the planet. You see? And so
[71:34] scarcity is what deres the value out of
[71:37] my time. And you can make the same
[71:39] argument for money. If there's
[71:40] theoretically infinite amount of dollars
[71:43] or pounds or euros, how am I supposed to
[71:46] value the paycheck I'm getting today?
[71:48] You know, Bitcoin gives us the finite
[71:50] promise that death gives to life. I
[71:53] think Bitcoin is the equivalent to
[71:55] money, which is like kind of a weird
[71:56] twisted angle, but it's an important
[71:59] one, I think, because without a finite
[72:02] monetary promise. It's impossible to
[72:05] value your paycheck or how valuable your
[72:08] job is or it's impossible to economize
[72:11] with each other when you're living
[72:13] where, you know, whoever wants money can
[72:16] just get money. Well, then why would I
[72:17] work for the money?
[72:20] So, this person then asks, "Why is
[72:22] Bitcoin slow and high feed?" I I would
[72:26] disagree with the premise of the
[72:28] question. I don't think it's slow. I
[72:29] don't think it's high feed. Depends on
[72:31] what you're talking about. Is it slow
[72:33] and high feed compared to Venmo? Sure.
[72:36] But I tell you what, you save in Venmo
[72:39] and I'll save in Bitcoin and we'll see
[72:40] who has the bigger house, more cars, and
[72:43] owns the Chicago Bulls in 10 years. Like
[72:47] I think Bitcoin's probably competing
[72:49] with gold if you want to draw a monetary
[72:52] comparison. And which one is slower and
[72:55] more expensive? Bitcoin or gold? I mean,
[72:58] Bitcoin blows it out of the water. It's
[72:59] not even a comparable. To be honest with
[73:01] you, I find it embarrassing that gold is
[73:03] so often compared to Bitcoin.
[73:05] Poundfor-pound. Like if you were to show
[73:06] the graphics, like ESPN graphics before
[73:09] two boxers fight, like what's their
[73:11] height, what's their weight, what's
[73:12] their wingspan. I mean, Bitcoin blows
[73:14] gold out of the water. They shouldn't
[73:15] even be allowed in the same fighting
[73:17] ring.
[73:18] So, what are you comparing Bitcoin to?
[73:21] It's slow and inexpensive compared to
[73:23] what?
[73:25] I disagree with the premise of the
[73:27] question. I don't think it's slow and
[73:29] expensive at all, honestly. I mean,
[73:32] lightning is fast and free oftentimes.
[73:35] Not not literally free, but often or or
[73:38] it is cheap. So, I I disagree with the
[73:41] premise.
[73:42] Um yeah, I guess I'll stop there for the
[73:46] sake of time.
[73:48] Uh
[73:51] question for Jack. Uh okay, this is
[73:54] strike questions. Uh is there a way to
[73:56] add potential gain loss uh to uh gain
[73:59] loss information to confirm Bitcoin sale
[74:02] page on strike? This would help me make
[74:03] tax decisions easier and allow for tax
[74:06] loss harvesting. Yeah, I'm going to put
[74:09] this in our product channel right now.
[74:14] Uh, hold on
[74:21] because I know we use uh
[74:26] we we have some tax features, but um I
[74:29] think that this would be fairly easy. Uh
[74:32] question for Jack. Uh ETA interest on
[74:35] cash. interest on cash also is we're
[74:37] testing it right now like I um I have it
[74:41] on my account so I would say
[74:45] four weeks same same type of timeline
[74:49] sometime in in September hopefully first
[74:53] few weeks of September if I had to guess
[74:56] but really really soon really really
[74:57] soon for interest on your cash uh
[74:59] payable in Bitcoin uh what made Strike
[75:02] apply for the New York bit license do
[75:03] you see other companies like Kraken
[75:04] eventually getting their bit license.
[75:06] Uh, Strike got its bit license because
[75:09] we want to serve Bitcoiners everywhere.
[75:11] Um, we think Bitcoin as a global
[75:14] phenomena, as global money, as a utility
[75:17] for everybody. Um, going back to the to
[75:20] the presentation today, like why does
[75:22] Bitcoin have value? Why does anything
[75:23] have value? Well, it's because someone
[75:25] found it useful and there's demand and
[75:28] that demand exceeds the supply. That
[75:30] means we have to economize and uh apply
[75:33] subjective value to it. So the reason we
[75:35] got a bit licensed because we think
[75:37] people in New York will apply subjective
[75:39] value to Bitcoin. We think people in
[75:40] Europe, UK, Africa, Latin America. Um we
[75:44] want to be useful where Bitcoin is
[75:46] useful and that's everywhere. So I
[75:48] really do think Strike is on this really
[75:50] boring but methodical path of serving
[75:53] Bitcoin globally. I think that sometimes
[75:56] businesses have gotten distracted
[75:58] because it might have been in the short
[76:00] term more advantageous to work on other
[76:03] altcoins or work on prediction markets
[76:05] or list stocks. Um, and maybe that was a
[76:09] a better business in the short term. And
[76:12] so then they kind of stopped
[76:14] methodically just like doing Bitcoin
[76:17] simple but well everywhere in the world.
[76:19] And so, yeah, I mean, one of the reasons
[76:22] I started Strike is because as a
[76:24] Bitcoiner, um, I didn't see anyone
[76:27] building a company kind of with a
[76:28] Bitcoiner ethos. And despite all these
[76:32] opportunities that may present
[76:33] themselves along the way and maybe
[76:35] different stuff that would that would
[76:36] make more money like listing shitcoins
[76:38] or futures and all this stuff, um, just
[76:41] sticking to, hey, just try it, just do
[76:43] the boring thing, get the licenses, um,
[76:46] lower the time preference. And so that's
[76:48] why we got the bit license and that's
[76:49] why we get all of our licenses is I
[76:51] think Bitcoin is going to be popular all
[76:53] over the world. And I like our odds
[76:55] serving Bitcoiners no matter where you
[76:57] are because I think we will be better at
[77:00] Bitcoin than everybody else. Now we
[77:03] won't be better at shitcoins or
[77:05] prediction markets or options, whatever
[77:08] the We won't be better. There's no
[77:10] doubt. But I'm okay with that. I'm okay
[77:14] serving the market of Bitcoiners. I
[77:17] think that there will be more Bitcoiners
[77:18] than shitcoiners over time.
[77:22] There probably isn't today. I don't
[77:24] know. I mean, shiters. I would say
[77:29] I think there will be more Bitcoiners
[77:30] than just like natural innate
[77:32] speculators over time. Right now, you
[77:34] know, debasing the currency creates a
[77:36] speculator out of everybody. So,
[77:37] unfortunately, whether people know it or
[77:39] not, they are speculators. You know, you
[77:41] have to take your paycheck and it's like
[77:43] hot potato. You got to get rid of it.
[77:45] You got to punt it into stocks. You got
[77:46] to punt it into Robin Hood. You got to
[77:48] punt it into a prediction on the
[77:50] prediction market. You got to punt it
[77:51] into draft kings. And so everyone's a
[77:53] speculator. Everyone knows now innately
[77:56] whether like they it's present in their
[77:59] mind or not. They cannot just sit in
[78:02] cash and get the life that they desire.
[78:05] Um, I think with time though, you know,
[78:08] people will learn how to save in things
[78:11] like Bitcoin and there will be more
[78:13] Bitcoiners than just like degenerate
[78:15] speculators. And that's kind of the
[78:17] market that we're building for over the
[78:19] long term. And the people that are there
[78:21] today, that's who we're building for.
[78:23] Like we work really hard every day and
[78:25] we decide to work for those people.
[78:27] Although there isn't as many of them as
[78:30] there are Robin Hood users yet, but
[78:33] that's kind of why I started the company
[78:35] is like all these companies got so big
[78:37] and their investors wanted more and more
[78:38] profits that, you know, they start
[78:41] getting distracted and veering away from
[78:43] Bitcoin and into all this other
[78:45] And I didn't really see anybody building
[78:47] the company that I thought should exist.
[78:55] Uh,
[78:58] okay. Oh, wow. Interesting question.
[79:02] Dylan, question for Jack. Do you
[79:03] categorize alcohol as a drug? What's
[79:05] your favorite drink of choice? And how
[79:07] often and how much do you drink?
[79:10] Hm.
[79:12] Uh, do I categorize it as a drug?
[79:14] Probably. I don't know. I I disagree. I
[79:17] don't know. Like I said, I mean, I can
[79:20] only be honest with you guys. I'm not a
[79:22] drug guy. I never tried drugs outside
[79:26] cannabis and I don't like it. So, I
[79:32] don't know much about drugs. I don't
[79:33] know what would classify as a drug or
[79:36] not a drug. Um, but do I think of
[79:39] alcohol as a drug? Kind of pretty much.
[79:40] I mean, I just think of these things as
[79:41] substances. And you can obviously abuse
[79:44] substances um and be addicted to
[79:46] substances and do too much of
[79:47] substances. Substances can sometimes be
[79:49] useful. Substances can sometimes be
[79:51] medicine. Um, so I don't know is does
[79:54] that make alcohol a drug? What is a
[79:56] drug? I actually don't know. I'm sure
[79:57] there's a definition. It's just not
[79:59] somewhere I'm an expert. Um, but yeah,
[80:01] sure. I would c I would categorize
[80:02] alcohol as a substance. And uh, how
[80:06] often do I drink alcohol? I don't know.
[80:09] I mean, I I actually go through uh bouts
[80:12] of uh drinking uh socially and having
[80:17] more fun with my friends. And then I've
[80:20] gone through bouts where I just don't
[80:22] drink at all. Uh so I would say right
[80:25] now Summer and all my friends are either
[80:28] getting married or having bachelor
[80:29] parties. I've definitely had more drinks
[80:32] over the last three months than I did
[80:35] the three months prior to that. So I go
[80:38] through kind of these cyclical bouts of
[80:41] uh having some beers with buddies versus
[80:43] not. And uh like I said, I have a
[80:46] bachelor party this weekend. So, I'm
[80:49] going to be celebrating my buddy for
[80:50] sure. But, uh I don't know. So, I don't
[80:53] know if that uh answers your question,
[80:56] but um yeah, I don't know. I just always
[80:58] try and just however I'm feeling, trust
[81:00] my body. I actually took off my aura
[81:02] ring a few months ago. Um because I
[81:06] again, I think it's it's just I'm trying
[81:09] to I'm going to put it back on because I
[81:11] want to um be very scientific about my
[81:14] HRV. I just want to I have been reading
[81:17] about HRV and I want to try a few things
[81:19] more like a science experiment but uh
[81:21] trying to
[81:23] u do more
[81:25] uh make more judgment based on how I'm
[81:28] feeling. I I think that a part of health
[81:32] that I wanted to optimize for for myself
[81:34] is being in more tune with my body and
[81:37] regulating my nervous system and my
[81:39] emotions by having a better relationship
[81:42] with uh myself as opposed to like being
[81:45] overanalytical on the data. So, I've
[81:47] been making decisions on like, hey, you
[81:50] know, should do I feel like having a few
[81:54] beers with my buddies or not just based
[81:55] on how I'm feeling and seeing how that
[81:57] goes. and it's been fun. Um, and it's
[82:00] also just been wedding season and uh
[82:01] bachelor party season. So, I would say
[82:03] when the winter comes around, I can
[82:05] imagine myself not drinking for a while,
[82:08] but we'll see. I don't know. Uh, and
[82:11] then what's my favorite drink of choice?
[82:13] I don't know if I have one. I like
[82:16] Mezcow,
[82:18] but I wouldn't like for people that know
[82:20] me, for them to say that's my drink of
[82:22] choice, they probably say I'm full of
[82:24] I don't know. I'll drink whatever.
[82:26] Doesn't really matter. I mean, it's not
[82:27] like it's all poison at the end of the
[82:29] day. It's not like any of it's like
[82:31] really tasty. I mean, it's all poison,
[82:34] but um in good fun. If you're with good
[82:36] company and celebrating fun stuff, it
[82:38] could be fun. Uh second question, do you
[82:41] think preaching Bitcoin is
[82:42] counterproductive or do you think
[82:44] organic interest is the best way to
[82:46] onboard people onto Bitcoin? Um I don't
[82:50] know what that question is even asking.
[82:51] Do I think preaching about it is
[82:53] counterproductive? No. I mean, listen, I
[82:57] think how about this answer? Um,
[83:01] any network needs attention, okay? I
[83:04] actually don't really care if you hate
[83:07] us or you love us as long as you know us
[83:12] because there will come a time and place
[83:14] where Bitcoin is interesting to you.
[83:16] Like I said earlier, you're going to
[83:18] apply value to Bitcoin when you have
[83:20] demand for Bitcoin. You'll have demand
[83:21] for Bitcoin when you find it useful.
[83:23] There will be a time in your life where
[83:25] Bitcoin crosses the lexicon of a choice
[83:28] you have to make,
[83:30] right? You want things, but you can't
[83:33] get what you want all the time. And
[83:35] that's the scarcity of life. And so, you
[83:37] have to economize. And Bitcoin at some
[83:39] point will will enter the Rubicon of you
[83:42] having to make the decision of achieving
[83:44] what you want. And as long as you know
[83:46] us and you're familiar with us and
[83:48] that's just about awareness and
[83:50] attention. The death of any network is a
[83:54] lack of awareness is that just nobody
[83:56] knows what Bitcoin is. And so I actually
[83:58] don't ever really mind people hate
[84:00] Bitcoin,
[84:02] you know, as long as they know what it
[84:03] is and we're spreading awareness. And
[84:05] you try and do that constructively and
[84:07] you try and do that from a basis of
[84:08] education. you know, you don't want to
[84:11] do it from a place of arrogance or you
[84:12] don't want to do it like there's ways to
[84:14] do it and there's ways not to do it. But
[84:16] that's only my opinion. I mean, I think
[84:18] as long as people know what Bitcoin is,
[84:21] which is great, right? Like how many
[84:22] times have you seen a Jamie Diamond or a
[84:24] Larry Frink, they're aware of Bitcoin
[84:26] and they say they hate it and it sucks
[84:27] and it's stupid and then later come
[84:29] around to it, but the journey started
[84:31] just when it they became aware that it
[84:34] exists.
[84:36] So, you just got to like you you gotta I
[84:39] don't know. So, I do these episodes just
[84:41] with the hope that people are like,
[84:44] "Hey, um you know, I know that you can't
[84:47] understand why information on a computer
[84:49] has value, but this guy broke down in
[84:51] hopefully a digestible way, like why
[84:53] anything has value, and it's actually
[84:54] simpler than you learned in school. Um,
[84:58] if you have 45 minutes, just take a look
[85:01] at this link. And that that one little
[85:04] thing like added another person and grew
[85:07] awareness just a little bit.
[85:09] That's that's the story of Bitcoin since
[85:11] Satoshi released the white paper right
[85:13] there. Not that everybody loves it right
[85:15] away, just that they know what it is.
[85:18] Eventually, their ability to apply value
[85:20] to it, therefore have demand for it. It
[85:23] all all comes down to just whether at
[85:26] some point in their life if they find it
[85:28] useful.
[85:31] Um, okay. With that, I'm out of here. A
[85:35] good 90minute episode. Um, the editors
[85:37] are going to clip just the Bitcoin 101
[85:40] part and upload it as its own YouTube
[85:42] video so that you guys can share it with
[85:44] friends and family if they want to learn
[85:46] what value is, why we economize, what
[85:49] economics is, why we apply subjective
[85:51] value, prices emerging from the margins,
[85:54] uh, and then why and how Bitcoin has any
[85:56] value at all along with everything else
[85:59] in life. And if you guys wouldn't mind,
[86:01] just keep giving me feedback on what you
[86:03] liked about these episodes, what you
[86:04] didn't, and what topics I should cover
[86:07] next. And uh I really appreciate it. I
[86:10] really enjoyed making this episode. This
[86:11] was a lot more fun than the straight of
[86:13] horror moose. And it's also a good
[86:15] feeling to know that um I'm kind of
[86:18] pushing the whole Bitcoin thing forward
[86:20] in the educational aspect. So makes my
[86:23] heart a lot more full than talking about
[86:26] the US government. So with that, peace
[86:29] and love. I appreciate you all. Hang in
[86:31] there. Bare markets are tough, but
[86:33] that's why we [snorts] got each other.
[86:34] And uh I will talk to you all on the
[86:36] internet. Take care. Peace.