Good evening everybody. My name is Toma Kojicuk and on the behalf of Well, the world and that's for you my own behalf I'm doing this event tonight. So we got 30 seconds 45 more to bring our guests and who is it tonight? I'm hosting discussion between famous Bitcoin Postcaster and famous Bitcoin evangelist Namely Stefan Libra and on Stefan Libra.com you can see his work You can listen to Stefan Libra podcast. He's a student of Austrian economy. He's a libertarian himself and Very well known in a Bitcoin community You can check his Twitter Stefan Libra, but also the second guest is Mr. Jarnbrook He used to be CEO of the Andron Institute Now he's chairman of the board and he's also a popular podcaster a great speaker and objectivist and I'm fun of both of them Let me let me welcome Yes, so they can hear me as well Hello. Good evening gentlemen. We are already online the countdown has started have finished and our meetup has started Good evening Stefan. Good evening. Yeah, how are you? Very good. Thank you to make Doing very well. Thank you to make Well, I'm very glad to listen to you and to talk to you tonight because I'm Fun of both of you. I'm myself consider myself almost Bitcoin maximalist and almost objectivist and I found this topic to be well kind of Crucial product for both of the communities and kind of the thing that I a little bit regret that these two communities of Libertarians objectivist is freedom and philosophers do not cross so much with Bitcoiners at least It did not used to since like one or two years ago since class of 2020 in the Bitcoin community Began to libertarian itself and educate and philosophize So much more but on the other hand, I do not see Objectivist community, you know stacking sats and I regret it not only because I am both Bitcoiner and objectivist, but also because I would like to see Objectivist rich in the future And I would also like to see the Bitcoin world and Bitcoiners to have a little bit more of philosophy background So well, I don't want to be cliche and start explaining. What is Bitcoin or what is objectivism? I hope our audience already knows But I have my first question to mr. Libert, uh, let's talk with names. My name is Tomik Stefan do you as a bit coiner or just as a person you have your own philosophy? Do you consider yourself some monies? So I think I am I Guess I'm more interested in the political philosophy aspect of it as opposed to the broader Philosophical philosophical elements of it. And so for me, I just consider myself a libertarian. I'm in the Austro-libertarian camp and so I mean for people who are interested Yeah, I'm in the I'm in the camp of people who believe in right and our co-capitalism under sort of the similar style of thinking to Like Mises and Rothbard and Hansen and Hopper So I'm sort of I'm coming from that school of thought And then that informs some of my Bitcoin perspective as well And why I think it's such an important thing in terms of giving us liberty and actually Essentially restraining the size of the state and I think that's quite an important thing And I think we're going we're moving into a world where that is going to become a reality And like you I share that goal actually of having I really would like to have more Liberty-minded people into Bitcoin because I want these people to also be rich in the new world Right, I'd rather those people have the resources because I think they will sort of push it in a better direction So yeah, so I'd say that's probably how I would summarize Some familiar with and run philosophy of objectivism, maybe Only loosely so I obviously know there's you know some relation there and obviously I'm Rand had some you know Interactions with many early libertarians, but I know there's also some conflict there in the sense of some I think some objectivists really don't like libertarians. I understand that But I would say I don't know a huge deal about the objectivist philosophy Like I've you know, I've read a couple articles here and there Maybe a few wiki pages, but I wouldn't say I'm you know familiar with it moving to your own Mr. Brook you are already a Well known financial out there as well, so I guess you have your own financial strategies as you're a founder of a hedge fund So maybe apart from the philosophy or Bitcoin could you share with us your secret or what is your? basic investment strategy No, I mean, why would I share that with anybody? I Don't want competition so Yeah, I mean I am a I am a managing partner at a hedge fund. I can't say too much about the hedge fund because we live in a world where You know the the various branches of A government authoritarianism limits what we can say about these things and if I am Seemed as somehow marketing my fund I could get into deep deep trouble and since I doubt there are very many investors here who could participate I just would rather not get into that whole morass But I am I'm a finance PhD. I've got a I was a finance professor for many years The hedge fund is based on financial research. I did as a professor It's it's basically all in the equities market. I invest only in one area, which is Very very very very not sexy Which is the way I like it because that's where I think you can make money It's it's it's basically invest in small banks in the United States so I have my little niche and It's quite a profitable niche and I you know, I work to exploit that niche so it's It's not exactly It's not that interesting put it this way in the context of this this kind of discussion But have you considered maybe investment in Bitcoin? No No for a number of reasons one is I don't understand it I tend to not invest in things I don't understand one of the things I'm looking forward to today is For Stefan to educate me a little bit about Bitcoin because I will admit that I am Relatively ignorant of it. I don't understand it. I also don't know how to value it. That is I am a finance guy you show me an asset and I can Give you an approximation of what I think it's worth if I put enough work into it, right? I can I can look at future cash flows. I can look at the risk I can and so on and I can tell you what it's worth Bitcoin is an in my view This is my layman interpretation, right? My view Bitcoin right now is is a is a financial asset Whose value is the right from the expectation that it will become money? But I'm not convinced that it will ever become money and I think the the probability that actually does become money is fairly low Even if it was a good money and I'm not even convinced of that but even if it is I think it actually becoming money I think they've probably is fairly low and I don't know how to value that so I could take 21 million bitcoins divided by the total amount of money in in in the world and say if it replaces every currency in the world and this is its value and That would place its value much higher than it is today Much much much higher than it is today, but I but I but then I'd have to accommodate the probability of of That actually happening and in multiple dimensions of that happening one. Is it a good money to? Well governments allow it to happen And we can have a discussion about where they need government to allow it to happen, but I think they it does And and will markets allow it to happen so they're kind of to do the two different distinct things Is the competition? What are the other competitors other crypto currencies who I understand even less than Bitcoin are they money will they compete with? Bitcoin to what extent does that affect Bitcoin's valuation? So I think there's massive complexity here and At this point, I don't know how to deal with that complexity and I don't know how to place a value on its I'm not an investor obviously I should have been because it's gone up But you know There's a lot of things that I should have invested in or as many people will tell you over the last 50 years I could be fight if I had with hindsight. I should be a trillionaire right now But the first trillion ever, but I don't have hindsight So I have to be able to project into the future and since I can't I won't touch it Seems like Orange peel objective is Orange peeling for those of you who don't know is like very quickly and Deeply convert people to believe that Bitcoin could be the money of the future Somehow we are on does not believe it. Maybe it's not a matter of belief Maybe there are some fundamental arguments like within the nature of this cryptocurrency of this asset And maybe with the nature of the world and scarcity and why we need money and what do we need as money? Stefan do you think I mean I don't do you do but what would be your orange peel for a year on of course So I think you're on I think let's start with the question of what what would make a good money like can it be a money? I think The maybe the framework is important as well So perhaps you're on if you could outline to me what what do you think makes a good money like why do we hold it? Like if you could just outline some of your thoughts around that and then perhaps I can sort of respond with how I'm thinking about that Sure. So money is a is as mesas to find it, you know a commonly used medium of exchange And why would somebody use something as a medium of change? It would have to have certain characteristics that would make it a desirable medium exchange And we can go over there. The you know, it would be have to be divisible Yes, Bitcoin and gold are divisible. It would have to be durable Bitcoin and gold are doable, although I have some questions about bitcoins durability under certain circumstances It would have to be recognizable. We know bitcoins very good at that. It would have to be portable Yes, but again, there's some questions about that It would have to be scarce. Obviously bitcoin is the most scarce because it has a finite number. So I get it although If it's competing against other crypto Then is it scarce that is what do we measure the scarcity? Why is bitcoin unique versus other cryptos? Who might be also scarce, but then you add up if you add up the total number of not bitcoins But if you add up the total number of cryptos Is that number scarce number and and and why not why is why are the others? Not competition for bitcoin. Why uh, why would we have one standard not many? But I think the most important one is and that's not in these five And that is that it holds some Value to the holder beyond Acting as a medium exchange and Mises talks about this right that it that it is something That people value above and beyond the medium exchange indeed Something like gold was valued first and then became medium exchange. That is it wasn't it wasn't designed as a medium exchange It was people wanted it and that's why they could exchange it for a cow The reason you could exchange it for cow is not initially because the person thought oh cool I'll have money But because they said oh cool. I want gold or silver or whatever the the money was at the time And I think this of course is is the biggest problem in my view with bitcoin is It doesn't have that that is it has no value as I understand it. I'm willing to be educated um above and beyond its function as a as a medium of exchange or as What people think will be a medium exchange because the its ability to be a medium exchange is still an unproven idea Um, it right now. It's just a fight. It's just an asset so so that that to me is what money is and that to me is what uh what Bitcoin is good at and what it isn't good. I just say something about durability and portability The challenge with durability and portability is Um, and I know this is far read far fetched right, but you very much depend on electricity uh for both and um Uh, I think I I'm not a pessimist. I in a sense that I don't think the world is coming to an end But one of the reasons I hold gold is because I think there's a slight probability It's very very small that the world will come to an end that uh that in a sense certain areas Certainly, Puerto Rico. We won't have electricity for a while And while I know that if in Puerto Rico, we don't have electricity because power was out after maria and it could be even worse next time um people will exchange Goods for for gold in such an environment. Bitcoin is basically worth zero in such an environment.  So so again, uh, that would be that would be a concern I had it's it's dependability on electricity, but I think the the issue of value is is more fundamental and more important Okay, yeah, so yeah, let me um speak to some of that as well. So the way I'm thinking about it Money is the most saleable or the most marketable commodity. That's the way mango spells it out And obviously me this sort of takes from that also Um, and then that's what we get into this question of you know, the monetary quality things like divisibility portability scarcity blah blah blah all of those typical things and so the way I think about bitcoin is It it solves in some sense the problems that neither fiat or gold could achieve and why do I say that because It's about saleability through time and space and so we can think of it like gold Did solve that problem of saleableness through time But it was not able to achieve that goal of saleableness through space Because in order for people to transact long distance, especially internet commerce, etc You require a custodian you couldn't do it in the same way Uh, and then on the other hand with fiat obviously, yes, you can transact over distance You can use the central banks blah blah blah You know paypal or whatever credit card networks, but it's not saleable through time You store your value in fiat and it's going down over time. You you're guaranteed to lose money basically You're you're the security that you have is going down. So in that way, I think bitcoin manages to sort of Achieve the best of both worlds in a sense and So I guess that's kind of high level how to how I would think of it But I'm looking at it more like it's a settlement layer You're not we're not necessarily going to be doing every day-to-day transaction on the bitcoin Blockchain we're going to use layers above that and that's kind of the key concept And I think you and your listeners probably are familiar with that idea Um, can I ask you a question? Yeah, sure what you said she said Correctly mark mingo says it's it's the most marketable commodity and and I think that's right What makes bitcoin a commodity? So this is the okay, so we're kind of getting into this idea of does something need to have a non monetary use Right, and I think that's to your question that you said a commodity. It's it's it's something that has a use Not as money. That's what the commodity is. So Bitcoin by definition. I think goes outside of manga and mesas framework for Money and and maybe that's okay, but I think that's important to recognize So I yeah, so I would say it's well, it's kind of like they could never have foreseen this You know manga and mesas were writing pre, you know pre The digital world and so I think they could never have foreseen this and the way I see it It's more like it's sort of like a digital commodity in a sense But yes, you're right. It doesn't it does not have like, okay So setting aside some of the less you things like time stamping and so on. Yes I think for the most part bitcoin doesn't have non monetary use So I think perhaps our disagreement then is more just that you think something needs a non monetary use and I don't think it does I think there's a bit of a confusion You have a non monetary use and therefore could be maybe better than bitcoin as money So I say again what like ethereum ethereum have a non monetary use and maybe Could evolve to be better money than bitcoin ultimately because of that So for me, I would say no the reason is it doesn't have the same Characteristics or monetary qualities if you will it doesn't have like that same sort of scarcity and difficulty to change right they've they changed ethereum all the time and So I think what matters more to people is When we're looking at monies and potential so the way, you know, I see it and you probably agree on this point is that Everything out there is sort of competing to become money and whichever one is best There are differences in the saleableness of these different things and bitcoin just tends to be is that one that's The best one and that's why I think longer term It's going to win out because it just has these qualities and it's hard to change And whereas ethereum does change and it doesn't and a lot of and this kind also comes to into the question around altcoins and do they Somehow detract from the scarcity of bitcoin and to be that my answer is no they don't the reason is they don't have That they don't have the same qualities of bitcoin, right? So they're not as decentralized They often make trade-offs where they're, you know, not really And often the promoters of these coins are not really telling you about those trade-offs And essentially they have all essentially been proven that they can change a lot more easily than bitcoin can And the other important point is I think there's a network effect going on here Because bitcoin is first there's a lot more bitcoin holders. There's you know, there's bitcoin exchanges. There's developers There's wallet software.  So that's the way I would frame it with bitcoin um and Yeah, so I think the other thing and even some in the austrian world get hung up on this idea of you know Non-monetary use and saying well see if it doesn't have anything then it's going to collapse down Or they might say something, you know looking at say the Mises regression theorem where I think they are maybe Misunderstanding that now actually in my recent episode with bob murphy We went we went into this exactly into this topic And so I think there are different ways to go back to that point around regression theorem One way to think of it is that you know in the early days It was just nerds It was just nerds online money and they wanted to you know, whatever with 10 000 bitcoins for two pizzas or some of the earlier There were earlier transactions prior to that But it was just a bunch of online, you know cypher punks crypto anarchist libertarians people who just wanted to play around and from then on Like it just grew and so the prices And I think there is a specific point where I believe I think it's Rothbard or it could be Mises, but I think Rothbard makes the point where Even if you were to sort of Strip away the prices Uh, even if you were to strip away gold's use people could then proceed on the basis that they they had already established some kind of monetary relations in it and so I think the way i'm seeing it is that We are going through this process of adoption of bitcoin so at the start It's going to be more like a you know store of value sort of thing even though Yes, the the canonical or quintessential element of it is that it is the best medium of exchange But I think it'll just take time for that to prove out So it'll start in kind of like a more of a store of value Collateral sort of sense and then eventually more and more people will start to use it as their medium of exchange and as their Unit of account Bitcoin unique As compared to other coins or somebody starting a bitcoin competitor With similar characteristics other I mean the network effect is is real obviously But you know there be network effects are being Replaced by superior networks. So network effects are not fixed. They're not metaphysically You know necessary And networks can be changed and they and they in the in the world that Moves at the speed that the internet moves. I think it doesn't it's not that rare as people suggest So so in what way Is it not possible to replicate the bitcoin magic formula if you will Yeah, interesting question. So I think you're right the the main argument the main counter argument in my eyes is the network effect But I would say It's it just comes down to yeah So it's that point that you can copy the code, but you can't copy that network of people who want to use that thing And the way I see it is you can't just beat bitcoin on the mark in some small marginal sense on one dimension You'd have to beat it on like multiple and it needs to be convincingly better It can't just be like a little bit better It's like in our world If you want to come out and beat something you need to be like 10x better for people to actually switch over And the other point is also that I think once things kind of hit a certain size. It's just hard to Sort of overcome them. It's like how facebook came up and twitter came up and all these You know google came up like once they hit a certain level they were placed They were placed Companies that everybody thought were going to be the winners because of the networking effect, right? So who would have believed in to sitting in 2000? I was there So in 2000 who would have believed that these couple of kids running a private company called google would beat yahoo and A variety of really what looked like high quality search engines And yet they did and the same you could say with facebook I forget. I forget the name of the of the social network before that it doesn't always It it sometimes happens much faster than one would expect it to happen And and the replacement happens and and and the sometimes Just a little bit better is enough if the if the marginal cost of switching or The marginal cost of getting new people is small enough, right is low enough then i'm not i'm not convinced So i've seen enough technology evolution and studied enough evolution of technology to know That early on in the life of a technology There are the people who are convinced that this is it that it's over that there's no competition And you know 10 20 years later, maybe it doesn't work out quite that way and And it's very very hard very very hard to pick winners and losers Early in an evolution of a technology Yes, so I agree with you that certainly, you know, it's not like I think the The company's example is probably not the best I mean it is an example, but I would say it's not I think with money We're talking about something with a network effect that is far far stronger and far far harder to dislodge Your you know your opportunity cost to hold one money versus another like for me to hold More us dollars instead of Australian dollars is much much higher than for me For example to have a facebook account and a twitter account or to use yahoo and to use google Well, it's no big deal to me, but the opportunity cost for holding money is massive, right? It's a really really big cost So you really need to like it the way I see it is you would have to really surpass it and Basically nobody has and of course it's not that people haven't been trying there been what is it? I don't even know probably 8,000 alt coins out there How many times have people tried and none of them have succeeded. So of course people can try I just don't think they'll be successful I just think it's very very very unlikely that of course I guess I have to admit Yeah, it might be theoretically possible that someday someone comes out with a technology that's even better and someday surpasses it But I just I haven't seen it yet and It also it's not money right not yet It might become money you're betting on the fact that it will become money But right now it's not money because it's not used as a medium exchange It's very very rare that it's used as a medium exchange Well, I would say that Tesla with bitcoin, but how many teslas sell with bitcoin? Very few Because it doesn't make any sense to buy a tesla with bitcoin if you believe bitcoin is going to go up in value right right now It's a speculative asset where people are holding it with expectation They'll go up in value It's not being used and the only place it's being used this money is to get money out of countries that have capital controls And it's and maybe to to transact into legal activities, but It's very I don't know what the what the actual volume of trade done at bitcoin is But my guess is it's tiny and you couldn't call it a common medium of exchange I would agree that it's not a common medium of exchange today in but in certain communities it can be in In the world of online gaming as well There's a potential there that people will start using it for potential. I agree saying actually right now. It's not money Because nobody's using it as money I think it it sort of depends on how you're defining money I I but yeah, I mean in the sense that yeah, like it's not the world. It's not the global common medium of exchange Okay, fine. I yeah, I think it's not a It's not commonly used not commonly as small, right? Mises has two definitions of money and I think money credit and banking He says the universally and then he changes it In human action to commonly use because he realizes they can't be universal You know, it you know Bad money can also be money if it's commonly used Uh and bitcoin right now is not commonly used. I would say bitcoin is not money It's an asset that you expect to become money That's how I would think of it if if if we are defining our concepts clearly Yeah, what would have to change like there are some Some pieces of nature of cryptocurrency or maybe size of the bitcoin for you to like give it some hope And believe that you know, this kind finally can be a money of the free people and something that could replace central banking So I don't think it well, I I think I think I think it's delusional and this To think that it replaced central banking unless we replace central banking that is uh, my view is that uh That bitcoin would become money if we had a truly free market if we had no central banks And I think it would lose in that competition because I think gold will would be a better money gold which was backed by You know by electronic transactions, but with a you would store the gold somewhere with a intermediary would store your gold But we would all transact Electronically in a free market I don't see the reason why bitcoin becomes a bet why bitcoin is a better money than gold But um, I think the challenge you have is that as long as they are central banks And as long as they are governments and as long as governments want power They won't allow bitcoin to become money as soon as bitcoin makes significantly inroads into Uh into money versus into a speculative asset I think as long as it's an asset central governments don't care that much When they start seeing massive transactions and it and it starts replacing gold dollars Or uan or whatever the currency is Then they care because now they're losing control right the whole point of central bankers is control It's not efficiency. It's not anything. It's to control the economy. They want control of our lives That's the purpose of central banking And you know if they feel like they're losing that control They will ban bitcoin. Now, I know they can't literally ban it without turning off all their electricity But they can ban you buying physical goods with it That is what they can do is they can ban tesla from selling teslas To people with bitcoin they can ban the grocery store from accepting bitcoin As a medium of exchange they can ban Uh its ability to perforate through the economy and become A currency and so I don't believe it becomes a currency at least I think there's massive political risk to it becoming a currency because I think governments are far more powerful Then bitcoin is on the one hand they tend to be libertarians and they tend to view government with suspicion On the other hand, they tend to think governments don't have that much power because bitcoin can beat them I don't think technology beats government. I think government beats technology The only thing that can beat government are ideas better ideas So and this goes to the kind of the title of a thing I think the battle needs to be an ideological battle and then in a free market I'm happy to see competition between Of different monies and let the best money win and that would be cool But we're not there and we're not going to be there in my lifetime. Maybe so let me Yeah, so let me respond to a couple of those points. Um, and certainly interesting points. Yaron. I think the point around Government being able to stop bitcoin. I think at this point they couldn't stop it, but they could regulate it They could they could start certain countries could try to ban it and let's just note here By the way, certain countries that have tried to ban it or regulate it They've seen a spike in the peer-to-peer trade volume on bitcoin So in some in some cases we've seen that when they try to ban bitcoin or try to regulate it out of existence They end up tell like indirectly they're telling people Hey, there's a reason you should be interested in bitcoin or you should be thinking about this thing Because there is actually a reason why you can save your value in this thing So what do you mean by peer-to-peer? Exchange local like trade platforms bitcoin buying bitcoin Buying or trading bitcoin We're seeing volumes rise in certain countries where this you agree with me that they can stop you exchanging bitcoin for physical stuff Because they control the physical world So I think that's a question of how how much enforcement they could do and how much ideological support bitcoin has won By that time by the time that becomes a serious consideration I think in some sense it might be like uber right so uber obviously that same example of you know You got the taxi medallions and you got the government regulations And then and yet uber still managed to sort of get a foothold in many markets Even though they were probably illegal in many markets they were operating in but they managed to sort of Win enough people over that it didn't matter I think it's a similar story with bitcoin that we're going to There's a sense in which maybe that's true But you remember I mean how much government how much does government have invested in taxi medallions? Maybe a little bit, but you know, no no politician is going to fall in his sword over that central banks That that's a hub of power That is that is greater than any other hub of economic power in economy That is government care more about their ability to manipulate and control their currency Than maybe any other single activity other than taxation So I don't think they're quite going to be willing to fall in their swords as rapidly as they did with with uber And I would note that I Forget the name ib 5 or whatever it's called in california Was a pretty significant attempt to regulate uber It was quite successful even though it's been somewhat reversed only somewhat It's still a form of regulation over uber and and that's just the beginning Potentially right it it it could be a lot more plus and this is I think important People see the immediate benefits of uber everybody uses uber Like it's it's it's self-evident I don't think the obvious benefits of A bitcoin are quite as obvious Even relatively smart people like me and people who are pretty A student finance. I don't quite get it the common person for common people To use uber the city to use bitcoin and care about bitcoin as much as they I mean for most people Until the dollar collapses the dollar is pretty cool. I mean it's pretty fine. They they can transact pretty much with anything Yeah, it loses its value a little bit, but their wages go up as well. They're so security Checks up linked to cpi. So yeah, when everything goes bankrupt There'll be a rush to an alternative. I I think common people again The masses use uber are much more likely to see the value and maybe gold and they have to see the value in something abstract like bitcoin Again, maybe i'm wrong, but I just don't see why Anybody would fight. I mean your community world because your community is unbelievably passionate and unbelievably invested in it But your community is still pretty small By global standards Yes, the number of bitcoin users is probably something like 1% of the world right something like one or two percent. We're talking in that range Well, how many of you are passionate and understand what they're doing Understand, yeah, of course many less than that and I think for me the way I would friend that really is that we're just that early That a lot of people still haven't and I can understand some of that like and I mean even for you like you're a smart guy it's not that you You know, haven't heard the argument for bitcoin is that you are sort of you still want a bit more time for it to be proven Out and I can understand that like it's bitcoin the white paper is it was came came out in 2008 the network started in 2009 Here we are in april 21 2021 And you know, what is that 12 years or so? It's still early days, but it to me it's sort of like looking at the You know a young You know Kobe Bryant or a young Michael Jordan and being like look see he's not already gone and won all the world championships yet Well, hang on this kid's only 12 years old Right, it's like and he's already like an incredible phenomenon. It's gone from zero to one trillion And it's like there are millions of people all around the world using it to transact And of course I grant you that many of them are not using it day to day for commerce yet But they will and there are examples of people For example, even bitcoin beach in El Salvador That's an example where jack mallard's with strike is using lightning to enable people to Pay with fiat and the other side to receive bitcoin. And so the way I would anybody do that Why would anybody use bitcoin given that and this is The problem I think of it becoming a currency in the short run Is one of the requirements of being a currency that is not mentioned here because I don't think it was contemplated is It's purchasing power has to be stable And bitcoin's purchasing power is anything but stable. It varies by the minute on the day It's massively volatile You know, I'm sure people are using bitcoin to buy and sell stuff They're using it because they think it's cool. They're not using it because it makes any sense It's not rational to use bitcoin to transact today If you believe it's going to be money one day You should hold it because it's going to be worth a million bucks of bitcoin one day, right? And if if if you don't believe then you should be selling it, right? So To to actually transact it it would have to have some kind of stability So let me respond to that a few different ways. So firstly Bitcoin as I was mentioning before it's going to move through stages, right? I think for most people it's going to be holding bitcoin, right? It's going to be you're holding this thing and you might do the michael sailor style borrow Collateralize and borrow against your coins and spend the fiat There are services now coming that allow this ideas or another related idea as I mentioned strike this idea Michael is doing make a sailor. He's borrowing against this bitcoin is spending the fiat Well, he his his example is a little different because he's borrowing fiat to buy more bitcoin But it's something that he's mentioned is this idea that you can just literally never spend your bitcoin by just borrowing against it all the time Because you're sort of you're taking advantage of the idea that you know normal fiat credit is Call it 10 even if it was 10% but bitcoin if it's doing 200 per year. Well, obviously that's a huge You know, why would you I have to say because I didn't know this but I have to say that in any other market I would say that is a number one sign of a bubble When people are massively leveraging to buy And taking on lots of debt to buy That is that is my indication of a bubble not quite because my taxi drive is not buying bitcoin yet. Um, but Although my the guy who drives the airport is was dabbling in bitcoin, which led me to be suspicious a little bit But when people start borrowing massively in order to buy I get worried, but I don't own bitcoins. I'm not worried, but I would worry for the people who own Well, I see it like Being removed and again not not having any vested in. Okay. So let me respond there. So a few things there like I would say People are In some sense trying to help adopt bitcoin and they're trying to Essentially attack one currency and borrow the other land. You could think of it in that way It's like sort of so one of my friends Pierre Rashad wrote a phenomenal article back a seminal article back in 2014 called speculative attack And basically he was saying if you look at how much bitcoin is going up versus what the fiat interest rates are Of course, it might make sense to do this because by by by taking out a loan in fiat in a fractional reserve system You are essentially helping inflate the fiat system even further. So you're kind of Causing this sort of feedback loop of you buy this thing and and here's the other thing. I don't think it necessarily goes Now the velocity of money is so low and the the banks are holding so much Money on reserve you it's it's a blimp.  It's it's not quite that simple So the way I think we can learn from this also is to look at what happens in high inflation scenarios Now I've done episodes on my show where I've interviewed people Probably a good example is the one about when money destroys nations. So that's a book. It's by Phillip Haslam and Russ Lambert and they're talking about what happened in Zimbabwe Right, obviously the high inflation and they're talking about some of the different Stages if you will now I'm not saying where the world is going to hyperinflation tomorrow But some of the principles that apply under a high inflation environment are still true that people are trying to borrow In the weak money so that they can buy an asset And I think that's what we're seeing as well because the fundamental problem is that the money is broken And so people are now you know colloquially this term as I'm sure you know is reaching for yield They're reaching for stocks. They're reaching for property. They're doing something because they you know the the intelligent ones No, they can't just leave their money in fear. It's it's starting to go down quite a lot and so I think of it like the world is slowly going to wake up to this idea that bitcoin is that hard asset that you can't make more of and There will just be more and more people trying to do this now Yes, some people will be irresponsible and borrow more than they are able to service in terms of the debt servicing cost But for people who are intelligently meant you know navigating their way through the fiat standard They will emerge You know quite wealthy out of this because they'll have a lot more bitcoin in a world where bitcoin is the Is is increasingly becoming the medium of exchange and unit of account which we're not there yet But I think that's the direction we're going you have a timeline. You have an expectation I think call it 10 15 years something like that Is uh, so I'll take that bet. I don't know what we should bet. Maybe a dollar or Email you in five years What's it? I'm gonna email you in five years. What are you gonna bet on? Go five years 10 years. I'll take a bet on 10 15 years because the fact is 2026 you're on brook. What was gonna be a bitcoin price in us dollars end of april 2006 No, I don't know why the bitcoin price is what it is today. I have no way It's pure speculation from my perspective. So I've no I don't believe that in five years 10 years or 15 years Bitcoin will be a dominant currency in the world that I'm willing. That's the bet I would take I'm not gonna bet on the price because I have no idea But the question is will it be a dominant currency that is used as a medium of exchange in the world? I would say the the answer is no and we could argue what dominant means, but I think we know dominant when we saw it, right people people choose to use bitcoin when they go to buy Assets or buy uh by consumption goods. That's what money means, right? Otherwise, otherwise it's a it's a hot asset And it might be a hot asset and I wouldn't you know, but I just it's not going to be money in the next 10 15 years unless Only outcome I can see that that would happen is if Truly the dollar collapsed in the next 10 15 years, which I'm skeptical of But more than the dollar collapsed governments For some reason were willing to give up control of banking and I think the probability of that happening in the next 10 15 years is Basically zero or very close to zero. So You know So and and again, even if that happened, I still think gold has a better shot than bitcoin of surviving as the dominant money But I just don't think the world is ready. I think that While I think Happy and flake. I mean part of the lesson of zimbabwe you have to be careful with zimbabwe, right? Because zimbabwe didn't have inflation out of nowhere. It it it was an authoritarian regime That it confiscated assets All the assets all the land and redistributed all the lands and kicked out the productive and and Kicked out technology and then inflated on top of all of that Very unsophisticated, you know, the worst case you've seen the same venezuela. It's it's associated with socialism For better for worse, the u.s. And the western governments are far more sophisticated In the way in which they expropriate our wealth right through through Fiat money and through other mechanisms They downfall will be a lot slower in it will be a lot and it'll be much more So we haven't gone through the authoritarian phase. I think we're heading there But I think I think if the if if there's a lot of collapse tomorrow I don't think the solution is more freedom I think if the dollar collapsed tomorrow This solution is going to be more authoritarianism not the solution I would want but the solution that the world I get you yeah What people and more authoritarianism are going to allow more bitcoin more authoritarianism An authoritarian government is is likely to come down on bitcoin and likely to Replace a dollar with something that they can control So let me a couple points. I think there so I think you are very much right that there's a political We have to understand the political circumstances of what happened in zimbabwe But I think it's also fair to say now. Yes. Yes, it's fair to say, you know The u.s. Is a very different story or the western world is obviously a very different story to zimbabwe They have much more built up capital stock, you know, so they can sort of they can play these games for longer They can try to kick the can for longer But it is also important to remember in zimbabwe. There was an entitlement culture. There was a high welfare There was high debt these were similar sort of circumstances And also there is a brain drain factor I think there will be jurisdictional competition And what's different with bitcoin is that there will be some areas that are very pro bitcoin And they will attract a lot of capital entrepreneurs Employees, you know places like miami for example or wyoming or potentially even austin as in the examples in the u.s Are probably some good examples where they may be able to successfully attract bitcoin and we may see And that's just in the u.s. Also elsewhere around the world We'll see other places that may be very suitable for bitcoiners, for example Singapore or portugal with no capital gains tax They may also be in the end You know suitable places we may see this competition play out where You know government some governments. Yes are very anti bitcoin, but others are saying hey, there's an opportunity here You're you know, the thing that's bad for you is actually good for me if I can Play my cards well and as an example I would say look at how some countries around the world are now actually starting to promote the idea of hey If you're a digital nomad come and work in my country, right? Dubai has the virtual working program I know antiga and barbuda has something similar. I know indonesia are looking something similar Estonia and some other places in europe are talking about this if if they would try to say hey digital nomads come here and work here Why would they not do the same with bitcoin? well So you miss the most important jurisdiction in the united states, which is port urico Which maybe has more bitcoin as per capita than any place in the u.s You know brock pierce is here and he's created a whole big community of bitcoiners Around here is one of the one of the bitcoin billionaires Followed by scandal, but you know who knows uh, you know, so Look, I My my view is is that one of the challenges um, one of the differences between objectivists and libertarians um is that I think ideas play a crucial role Philosophical ideas not just political ideas. I don't think political ideas are that important because I think they're consequences of deep ideas I think the deep ideas in the culture of the world today Are fairly rotten particularly the explicit ones as taught at universities and taught in the in the world and that's true worldwide I don't see that changing in the next generation. I don't think that changing in the next 15 years Yes, there can be small movements towards more freedom Because oh we can make more money by being free and we can exploit these people a little bit more by giving them a little bit of freedom But at some point that's reigned in it always is that's reigned in Because because they recognize that oh we don't want to give them too much freedom because that's dangerous um I don't think people learn from examples very well if they have a bad philosophy So, uh, if they did china would become hong kong not hong kong china um If they did we would all have learned from west germany east germany and north and south korea and everything else But we're not we're clearly not politically or uh philosophically so You know i'm i'm more you know, I don't like how myself pessimistic because i'm not fundamentally pessimistic, but I do view uh ideas as driving history and ideas as driving where we're heading um, and Yeah, for a while indonesia might play at attracting bitcoiners a come over here We'll let you do your thing and then they'll regret it because I realize they lose control as a consequence and I'll clamp down on it Because they're more fundamental and the people which is important because as you said in uber people Said no, you know, we want this you can't take it away from us The people don't understand it. They don't get it. They they don't care They're quite happy with fiat currency for the most part if it's if it's reasonable, right? We we we don't necessarily zimbabwe is not a free country today because they went through a hyperinflation They're just a a country without a currency The uses south african rand and us dollars and and still has an authoritarian regime And still has no proper property and still has the same evils it had when it had hyperinflation So it's not like people learn from hyperinflation. Oh We should we should have freedom. We should get rid of central banks now zimbabwe got rid of the central bank because they had no choice Because there there was such a basket case. I don't see the west being that kind of basket case In 15 years, maybe one day So again, I I think We need to convince people that freedom is good Because most people don't think it is We need to convince people that government control of the money is one of the ways that they control them That they control the people and therefore they should stop controlling the money And if we achieve that they'll be competitive more as we said before they'll be competitive marketing currencies And let the best currency win. Um, I don't think it can happen the other way around I don't think the currency will just take over And then people say, oh, this is cool. I want to be free. Uh, so Government let let this currency do it. I just that's not how history works. I don't know of an example of that ever happening Oh, you mute it for some reason Yeah, don't you think that there could be a technology that drives the Change towards freedom. It doesn't necessarily have to go because freedom freedom requires Change with regard to morality. It requires a change with regard to religion It requires a change to the fundamental beliefs people have You know, you can go into a culture and this is you know, you can go into Cultures that don't have a respect for example for reason and say, okay, everybody you're free And I'll slaughter each other and that'll be the response to freedom and um And and and that's the reality we see over and over again in history So you need a set of ideas to establish freedom and that set of ideas today in the world doesn't exist and until it exists The powers to be are not gonna and the people are not going to resist the powers to be are not going to allow for that freedom So I agree with you that it is important for people like us to be out there Like promoting this idea that freedom is good and you should value you should cherish your freedom And you should respect other people's freedoms very importantly rather than you know Voting for or promoting statism and stealing other people's property and all that stuff, right, which we agree on I think I just think of it like Bitcoin is this fundamentally changing world changing technology in the sense that it's like it enables this kind of asymmetric defense Right this idea that you can defend your property much cheaper And so if we think back to books, which you might have heard of the sovereign individual, right? Like it's this idea that technology is changing the calculus of violence, right? It's this idea that Now that this technology is here more and more people can protect their value for the longer term And that is just going to fundamentally change the relation Uh of power that the states states have with individuals like you and me So I think probably the main point where I think I see it like where you were saying something like people don't learn from examples, right? So the hyperinflation and so on I think in a monetary sense some of some of them do right people who live in Argentina or brazil it's quite in their living memory that they had currency and monetary collapses And so they they start thinking more about oh, hey, what hard assets can I use now? I followed Argentina and the the the amount of bankruptcy they've had since the hyperinflation And I'm saying Yeah, I'm saying people in the country will will care about And they've got their assets and dollars and gold or something and they put it away and they've hidden it away something But I still don't but part of the reason they do that is they know that gold is usable It's usable every way Not gold dollars are usable usable every way And and gold is you know, always usable in one way or another I still haven't heard the case of why bitcoin is usable It's it's only usable if people want to use it and the governor of argentina tamal can say you can't buy food with With bitcoin you can use all those you can't use bitcoin so I think What happens over time is that they there is only so much control and power that governments can exert Especially when there's enough people right so it's like the uber effect right when there's enough people who have who just want this thing No government is going to be able to stop that because politicians can only do what enough of the population supports them to do So I see it like because bitcoin is so important because your money is so important It's going to be the the effect that uber effect is going to be magnified Right just you wanting ride-sharing services is one thing But you wanted to preserve your value is another all together And I think that would just fundamentally restrict or restrain governments Longer term right? I think for now We're still we're not at the numbers that it actually matters yet But we may get there and the way bitcoin moves is it moves in these huge Cycles right so we've historically seen these kind of four-year cycles and so The way i'm seeing it. I think this year we may see literally another five or 10x in the number of people Who are you know buying bitcoin holding bitcoin and it eventually it reaches a point where You know there's enough jurisdictions that are at least Bitcoin friendly even if they're not fully zero tax or whatever They're at least a little bit more friendly to it and over time It just erodes the power of government because what's happening over time is this number is going up right the people holding bitcoin Their value is going up and the people holding fiat is going down And so over time the wealth of those bitcoin holders is going to enable them to start doing things like Lobbying or buying politicians and trying to get favorable laws and regulation lower taxes Whatever and of course it won't be perfect right like it won't be the exact society that you or I would like But I think it will have the net effect of making government smaller Because it will be much more expensive for governments to engage in the practices they have done because up until now they have been The having this kind of bountiful benefit of cheap debt In a world where we're living in a hard money world and this might be you know, like I said 15 years out we don't know but if essentially Bitcoin strips away that power of cheap debt for governments Because less and less people want to hold their money and I think the important point here Is there's like this kind of feedback loop because the more people who opt out of the fiat system and buy bitcoin They're pushing even more of that debt cost onto the people who are remaining behind So it's like a brain drain It's kind of similar to that idea of the brain drain right a country When the rich and the smart people leave the country because things are going bad things are going south in that country All the rich and the smart people leave It it may it leaves it makes it even worse that it happened, right?  So yes, we could all huddle up in in Singapore the one place in the world that's had a relatively relatively benevolent dictator, but not not realistic So it just it just it's a fantasy in my view to see that I could see how You could you could build that world in an imaginary sense But it's just not going to be allowed to happen and the fact is that most people today Who hold dollars? Don't have any problem holding dollars. Don't care about the debt Um inflation in terms of the stuff that they buy on a day-to-day basis is very low It's not high. It's not zimbabwe and it's not even anyway close. It's it's probably less than 2% Now that could change granted that could change pretty quickly But I think central banks know the danger of that and they know how to deal with that. It's painful But why would the average joe ever care about bitcoin given that they're quite happy today I don't think anybody out there is concerned about the value of the dollar except some intellectuals like us And and some economists out there not all the economists. I mean the most popular economic theory right now is modern monetary Modern monetary theory right that basically says as long as there's excess capacity in the economy You can print up as much money until that capacity gets used up And then you can suck the money out of the economy if there's inflation by raising taxes which is There's a truth to that but it is nutty and and offensive And and and rates violating and destructive, but most people don't care and have no clue So look, I obviously I think you and I are obviously very anti mmt But I think mmt is It's one of those things where they get so much airtime in on social media and on tv and things like that But the actual, you know policy making people and the actual people in like central banks They're not mmt is right like they just they're kind of more bog standard, you know inflationist types Obviously again, you and I obviously Feels that way these days they are mmt is I mean we're getting one stimulus package after another five trillion dollars in the u.s Infrastructure bills. Let's let's dig some holes and fill them up again um You know, so it's it's kind of a they don't like to call themselves mmt's but they stretch Keynesians I guess they they're taking Keynesianism and stretching him to be Yeah, look, I agree with you there that in some you can you know Certainly we can make that argument that um, it's it's mm. It's like mmt, but not calling it mmt, right? They're giving people all these checks and they're sort of related to like ubi But not actually calling it ubi similar kind of thing. Um, I just I see it though that Your value you're storing your value over time is very Crucially important to us and because bitcoin is doing, you know on average it's done 200 per year It it's sooner or later becomes important for people to think about holding some and You know, I don't know where that tipping point is I couldn't tell you but I think more and more people are going to learn about that and of course Bitcoin won't maintain 200 per cent per year forever. Of course nothing can I mean, it's it's been going pretty wild But I think it will obviously have to taper off at some point But I think that point is nowhere near here. So I think it's just that I think that's that's based on your beliefs that more and more people are buying into the idea that bitcoin Will be money one day And I'm not convinced that that I you know There's a certain number of people that are Convincible of that and at some point that tapers off and once people realize that that tapers off Bitcoin could lose it couldn't lose 200 percent a year obviously But it could lose 20 30 percent a year for a few years at least and wipe out almost all the gains It wouldn't take much to wipe out all those gains. I've seen it happen um, you could have bought Call options and scp 500 throughout the 80s and made two three four hundred percent every year Until you made until you lost it all one year and literally went to zero and but that's that's what I You know when I see 200 percent a year I usually uh, I usually run for the hills, but that's just me. Um So Amazon does I don't think 200 percent a year. I don't think anybody's ever done 200 percent a year for a long time So, uh, I see the value creation. I know what value I get from it. I know what value it's created I see the cash flows I can justify Again the justification to me for For uh, uh, uh, bitcoin doing 200 percent a year Is a what I consider a fanciful view that it will become This prevalent dominant Form of medium exchange and I I I just still don't see the evidence that that is going to happen Yeah, so let me outline a little bit around how I'm thinking of it. So it's not that I think You know in that 10 or 15 years bitcoin will be the only money I think we may be in a world where there's multi currencies for a while So the the people who are running the US dollar they want to kick the can as hard as they can They want to keep kicking that can they want to keep the party going as long as they possibly can Now that whether that means we're living in a world where you know, some people are you know, there's US dollar people Euro people Japanese yen people pound whatever And there'll be parallel a whole bitcoin economy sort of building up Alongside as well. And so that's probably the main way I I would see it But I think I guess yeah, so we I think we're just going to have to agree to disagree on the whole 200 percent thing Because for me, I think it's like I think that's just going to pull people in and there will be a lot of people And here's the way I would counter that right so of course fine people who are intellectually reading You know economics and trying to understand like of course There's only so many of those people But the reality is a lot of people just do what their family or their friends do and they just kind of go like herd animals Right, so they just kind of you know, there'll be kind of those intellectual leaders or whatever But then people will just follow them into it because they'll they'll see it and the other I think here's another important concept. I think it's that there's not really an alternative Right because if you want to you know bonds are becoming incredibly You know just a bad deal, right? Would anyone voluntarily hold bonds? So then now people are looking at stocks and property and now, you know, and eventually it's going to reach a point where They'll just be forced into bitcoin because there's no other thing that they can store their value or easily store their value in That's how I see it because that's that bitcoin is liquid, right? It's really easy to trade that whereas obviously selling a property is not that easy now Maybe stocks would be the one thing that okay What this stock of amazon is you know equivalent fungible, whatever So I could see stocks do very well during inflation in that not very well Stocks hold their value in inflation. So they yeah, they do less bad than You know, then no holding yeah, yeah And during the 70s you you didn't do great But you didn't lose a lot of money holding stocks during inflation in the u.s And in places like in places they had a thousand percent inflation Stocks went up a thousand percent. So you kind of it was it was it actually acted as an inflation hedge during those periods. So You know, I worry about madness of crowds arguments. I mean, I get it that people follow the crowd That's why game stop You know what happened with game stop have all the game stop But game stop will at the end of the day trade at 20 And a lot of people lose a lot of money because that's its value and you know Now your argument is and and I get it that the value of bitcoin is a million or whatever the number is Because if it ever becomes the dominant money, then that's its value because because you have to it replaces all of the money But it's You know relying on I I worry about relying on people's just doing it because they their friends do it Because then they leave when their friends leave as well and and it doesn't take much to get people to sell off Um something they don't why would they so in that example then? Why do you think you know, let's say people are continuing to adopt bitcoin and maybe it doesn't do 200 percent But it slowly tapers off like 150 percent 100 percent bubble and so on until we get to that point. Why would people suddenly leave? Oh lots of reasons the government saying You know, this is anti-americans to hold bitcoin it's It's we're not allowing you to buy physical assets with bitcoin. You can't buy stocks you can't buy Thing we're shutting down the exchanges in the u.s. Yes, you can trade with it other places But just know that we consider it illegal and we're watching you People get scared You know in spite of the anonymity and we know bitcoin's not as anonymous as maybe It some some would claim and people would get scared and leave. I don't think it would take I think I think it would be easy If you were in power to bring about a run on bitcoin, I don't think it would be hard at all And I think there's a lot of people that have an incentive to want to have a run on bitcoin at some point So, you know, particularly if you were lying now today You couldn't maybe form a run on bitcoin because it's people like you and michael saylo and and elon musk and real believers Right and even then I didn't quite get Maybe you could explain what uh, what's his name? Um Uh Elon musk partner in paypal peter teal what peter teal was talking about with china and bitcoin. Maybe you can explain that to me but um Yeah, but even peter teal who's a maximalist. I think oh said he's a maximalist was saying well china could manipulate this Well Okay, if that's the case there's another scam ongoing tactic that so right now Maybe you don't want a bitcoin because you've got a lot of true believers But if start now relying on not true believers you start relying on the game stop kind of people Then now it's not going to take much. It's going to take very little to get them to leave and to get them to escape the asset So the peter teal thing I think I mean there's all these different theories going but people saying oh, it's 4d chess He's doing like the you know, he's trying to whatever trying to encourage the The u.s. Government and people in the us to sort of go hard on bitcoin because they don't want china to go hard And maybe there's like a jealousy plot line or something that he's trying to Run there. I don't I don't actually know like to be honest. I Yeah, I I think at the end of the day the Vatican came out and said it it's wrong for catholics to hold bitcoin. I mean You laugh I've you know Crazier things in the world have happened Okay, fair enough, but I think it just That's what we've got to look at what's likely though. I mean don't forget like so The house of representatives of louisiana came out commending bitcoin You know, we've got some places that are very much pros and supporting this thing because they want to compete against the other states Uh, that you know, I just don't see it like They'll change them very quickly if they discover it's going to reduce their revenue it just I think I think they could they could see it like We want to compete against other states and we know that you know, where things are going are just where they're going. So The other important I think example Is that oftentimes once somebody in an organization gets orange bill Then they try to turn their organization to actually support bitcoin or try to benefit from it Right.  It's high net worth office family office, whatever funds I think a similar story could even happen with governments as well where People inside the government get orange billed and then they start thinking. Hey, you know what? This is actually an important freedom technology and people even like neil Ferguson Like I've interviewed neil Ferguson the historian on my show and he mentioned as well that there's this idea of A more decentralized money than what's the sort of chinese social credit system is offering us and bitcoin might offer that kind of potential where okay Yeah, it's not a hundred percent anonymous, but it's not a hundred percent Transparency that depending on how you use it and it might provide a more decentralized way and actually there are people arguing that it is more of an America it's more american to support the idea of bitcoin. So who knows, you know, absolutely It's not more american to support the idea of bitcoin. It's more american to support the abolition of a central bank and to have competitive currencies and and again, let bitcoin win in that case if it's the best, but Yeah, if neil Ferguson was influential The world would be a better place. We'd be at a better starting point, but he's not so that's that's part of our challenge, right and and The problem is that the people influential on the left and on the right are basically all statists And I don't see that changing anytime soon and they basically don't want to give up that kind of control now again I'll go back to my original argument that As long as it's not a marketable commodity as long as it doesn't have a use beyond money I don't think it'll win in the battle for money In a free market now we don't have a free market. So maybe it wins because it undermines It's better at undermining fiat currency than anything else. Maybe But it would be interesting to run the experiment of a true free market And and let entrepreneurs go at it at money and see what happens That would be that would be that's an interesting Yeah, I mean that is an interesting idea and I know obviously hayek talked about, you know The denationalization of money and this whole idea of competitive monies I I think at the end of the day now bitcoin has sort of shown that well Maybe we don't need that we just have this one money and it's just the open standard that everyone joins And not everyone in the bitcoin world is actually a libertarian, right? There are a lot of people who actually some of them are even more on the left side Although I would say that kind of they're a little bit more left libertarian than they are left authoritarian, right? The kinds of people who are into bitcoin tend to be more, you know pro Liberty values even if they're not necessarily the right wing libertarian like I am So Yeah, I think the other important point is that, you know, how has gold done to all of this? Well, gold hasn't exactly gone up a lot compared to some of the other Commodities and other and you know property of stocks or other things that people could be invested in people don't see inflation They don't see price inflation right now. They don't see The weakness in the dollar that that kind of the quantity theory of money would suggest what happened because I think I mean, I have a theory about that. It's it's a theory. I you know The smarter economists to me, I'm sure would disagree but but I think we've we've lost the ability In the world in which we live right now To measure the quantity of money and to understand the quantity of money I don't think economists know how to measure the quantity of money given given what the Fed is doing given zero interest rates zero interest rates create A very interesting environment In which a lot of things become money that wouldn't be money if if interest rates were higher Like bonds I think become money because at zero interest rate Um, you know, they're exchangeable example during the financial crisis people So the the Fed print huge amounts of money and they thought the amount of money in the economy was growing But if you actually look at some money aggregates Some of the money aggregates were actually shrinking dramatically during the financial crisis same during the great depression Money aggregates shrunk dramatically during great depression. One of the reasons it was a depression So it's it's not easy to figure out what money aggregate to use what money aggregate to look at and that is an evolving thing because Because of the way the financial system works. It's not as simple as it used to be When the austrians were writing the original austrians were writing where it was bad banks and making loans which Create, you know and the Fed and today it's so much more complex than that because the the number of money substitutes in the economy Is just astronomical and yet It's also true that money is not circulating in much debt creation is very little debt creation Um, the federal reserve most of money is printing is sitting at reserve at the federal reserves It's not even the economy even it's back at the federal reserves. It's just a kind of a shell game The Fed plays a shell game the benefits financial assets, but almost nothing else um Is a lot of stuff going on that economists have yet to Grapple with and that's and that gives modern monetary theory quote credibility quote, right? Because a free ride a bit they kind of better economy school in the austrians I'm not very good at predicting where the world will go so I think you're right that um the The government and many of the central banks are they they play this whole game of obfuscation But that was similar to what happened in the zimbabwe story. They you know as things got start to get worse They try to obfuscate how much money creation is going on and you're right that there is uh And funnily enough I did an episode with kate le long on this idea of what did austrians miss and She she made a really interesting point. She was saying if Rothbard were alive today He would have written instead of the mystery of banking. He would have written the mystery of shadow banking He would have written about you know, how as you're saying there's like this Shadow banking system and that there's like a creation of money or money nurse as well this idea that That would suggest that there's even more money than what we see And given that the movements and prices that It it doesn't seem real right because if if all of that were true inflation should be five six seven eight percent Um no matter how you measure it and if there's almost no measure inflation that shows that And if you take into account increased productivity take into account technology You could argue that from much of the last 20 years inflation has been negative price inflation You know, we're not monitoring inflation price inflation has been negative So I think I think there's still a lot austrians can go out and figure out because they don't quite get it yet Because uh, there's something going on that's more complicated. I have I have a theory about it. One is that uh, You know because the dollar is is a is a A global currency is the it's a currency on a global scale one has to take into account increases productivity on a global scale And uh productivity increases on a global scale have been massive And therefore that you know in a static money supply would have driven prices way down I mean dramatically down So the fact that we're stable means there's been inflation, but it's relative to downward slope Yeah, first um and uh in the effect of china and india Globalization and all of that have basically Driven price inflation out of the equation Because of the increased productivity in these countries But I don't see any literature on that and and that that being quantified I wish it was because I think I think we're letting unfortunately, this is to the austrian economists out there I think you're letting mmt The bs that is mmt Dominate the airwaves because you we're not giving a good explanation for what has happened in the last 30 years in the u.s. economy Yeah, that's an interesting idea But I mean i've seen for example bob murphy's critique of the mmt book Stephanie kilton's book the deficit myth and I think the key point that I took from his critique was that You know at the end of the day people can switch monies Right, so while the mmt people sort of think oh, I see we've got you trapped in here But ultimately it it matters if you are a monetary sovereign You are the creator of the money that you use right so argentina are not the creators of the money that they use They have to borrow from the u.s. And then boom now you're interested now You're feeling the cost of that interest So I think the way it's going to happen is more like a lot of people will just run into bitcoin and Then eventually governments around the world will not be the sovereign because Eventually people will just want to hold bitcoin and that I think that is the mechanism The main mechanism by which governments will be forced smaller But I think to the point you were making earlier around you know Not having a good conception of what's going on with inflation and deflation. I think You know there are a lot of people have been speaking about it But I think it's just difficult to quantify because it's all it's kind of like that It's below the iceberg It's the iceberg You know what we're seeing is it's that bit above the water But really because of all that productivity growth the real price inflation should be negative, right? And so I think that's the way If I were to think back to my interview with michael sailor as well He thinks of it like hey, there's different buckets You might think of it like there's one bucket of things where because it's digital It's almost free or the cost is getting cheaper and cheaper It's free or some things are getting really really cheap and they're just staying super cheap because it's digitally delivered the scale All of that right and then you got some, you know Some consumer good things where maybe or whatever food Maybe it's not going up that much But then if you look at all the things that rich people want to buy whether that's, you know, luxury property Luxury or private education for their school for schooling for their children and artwork and things like that All those are going at 15 or 20 percent And we are hitting a point where I think Property markets around the world in certain in certain places Are just going crazy. So in that's a lack of supply driven by gum and regulations I mean and the same with education. It's it's the free loans that the government provides So in the same with medical care anything the government touches And it's why You know, you'll see people moving. It's why miami's doing well and why austin is doing well because As highest prices on miami and austin they're really low compared to california And people are leaving california and going there because there's less of an issue of supply and demand But it It still doesn't You know, there are few areas in which prices have gone up a lot But it's still we're still not in a Inflationary environment and it's true rich people are the ones that consume these goods more than others But rich people don't change the world gentlemen for sure we can see that it's not decided yet with Any of the future or maybe not if it probably the price wouldn't be so low some argue that this 60 000 dollars Pretty low, but I also wonder if We could name bitcoin technology inherently driving change towards freedom because Well, we can say that there are certain institutions that Do that like globalization privatization sound money decentralization. Those are the institutions which Well, maybe not necessarily but throughout our history They move the world towards a more freer place free place for individuals and bitcoin encapsulates those characteristics Yeah, and what do you think this is just a tool that could be used also for evil or maybe we actually need Only ideas and do not support technology with which may change the future I think institutions Follow ideas so globalization doesn't happen in a vacuum It happens because certain ideas become prevalent and people people open up That's why you had globalization in the 19th century Because the ideas of adam smith and the ideas of the enlightenment and the ideas of of trade and openness And and treating people as individuals became dominant and that's why you saw hunkering down post world war one And and during the great depression you saw hunkering down Against globalization so reversal because the world moved towards authoritarianism You saw an opening up of globalization After world war two in the west And that seems to have ended, you know today both left and right in the united states and in many other countries It you know including your poland are moving away from a view of globalization free movement of capital labor and In goods and and becoming much more nationalistic. So you're seeing a movement away from that So I think institutions and technology are great. I love technology I and and but they are they are results of freedom they are results of good ideas And when bad when ideas turn bad They are the victims of those ideas And look, I I don't think we'll ever see Rome again in a sense of the defeat of Rome and the collapse of Rome But remember that Rome had amazing technologies And all those technologies disappeared like that, right now I hope that it never happens again And I truly believe it won't because I think knowledge today Is diffused in a way that it wasn't during Rome. It was concentrated and the diffusion of knowledge is crucial I don't see again, I don't I don't see Uber as educating people towards more freedom Since uber was uh became a dominant technology We elected donald trump and joe biden to anti freedom as anti freedom as presidents as we've ever had in the united states of america So, uh, I I don't think that technology drives politics I don't think uber will drive a movement to to be more free Because I think freedom is dependent on values that people have to Choose That precede and are more important to them than bitcoin as I said before if somebody like donald trump said bitcoin is unamerican Some people not everybody obviously, but some people would sell bitcoin would get out of bitcoin immediately. They'd say, oh my god I don't want to be anti-american Because their americanism if you will is more important to them than the 200 percent that bitcoin might increase the next year There are values that are deeper for people and until you change those values and you know this the the lesson of communism hasn't been learned as uh as You know, certain countries in eastern europe are experimenting more and more with authoritarianism and you lived it you lived it Through communism, right? You should know better, but it doesn't it doesn't have been born yet Not you I don't mean you personally. I mean you is representing eastern europe Um And you is representing all young people who today clamor for socialism as if it's never been tried As if they are the first generation to discover socialism and if they wanted it's been tried It's failed over and over and over until you challenge the underlying premises of socialism the underlying ideas of socialism No technology will move us away Cause them to move away from it now It helps that is it it you know people experiencing the freedom of technology Helps at the margin, but it doesn't fundamentally change Well, maybe here's where I might Yeah, let me just add a point here. I would say You know how people talk about how uh politics is downstream of culture, right? I think I think There are actually our cultural consequences of fiat money And I think the broader adoption of bitcoin will change some of that culture because you now Like I think of it like fiat money and the government interventions are sort of removing the consequences of our long-term actions and so what that does is stops us it it sort of Nullifies that cost Of what we normally would have paid and so you know, you know in a hard money world You're gonna you're being forced to pay that cost now So that will change the culture and I think that will then in turn change some of the politics So I guess that's how I'm viewing this kind of transition happening now I could be wrong on the timeline right or maybe 15 years is too short It's actually 50 years away, but the way I'm seeing it. It's like the As the world returns to a hard money, whether that's bitcoin or gold I think it will have cultural consequences relative to what we have now and that will in turn have political consequences Yeah, and I'm also thinking the question for you Stefan from my super chat Questions actually also from zoom. So that's my uh, that's my so how does bitcoin solve the issue of price discovery? When you buy a product by bitcoin the buyer doesn't know how much exactly he is paying and the seller doesn't know how much he's getting Is that a is that a problem in terms of price discovery? So, uh, I'm not clear that because currently Right, okay. So I would say for now People who are transacting with bitcoin have become comfortable with just dealing with that volatility They just basically write it for the long term or they are using a payment processor who automatically Domps it for fiat basically. So they are really just selling say 10 australian dollars worth But whatever that is in bitcoin terms. So whatever if that is, uh, you know 8 000 satoshis or whatever whatever it is that's um That's kind of the way they're doing it right now, but longer term Yeah, I see it like this is all a function of bitcoin being small and as it rises as it becomes bigger Then it will be less and less volatile We also have questions on zoom There is a lot of comments, but people on zoom who are uh with us people on facebook You can join us at zoom dot lecifer dot pl You can raise your hand on zoom or post the question on on the in the comments sections I will let you in with the video and hopefully we will Your beautiful faces asking Good questions Yeah, I was thinking after Yaron's comment that maybe actually bitcoin is the product of these ideas And maybe is finally the technology which encapsulates as I mentioned before the centralization globalization privatization sound money And maybe we don't know who created it exactly who satoshi nakamoto was but It it is almost clearly that bitcoin was created by people who respected Transparency who respected privatization who didn't like central banks who were Cypher banks cypher banks and didn't want government to know what you own and how do you communicate with other people Also today, I can see that a lot of bitcoin community the core bitcoin twitter community is very libertarian and it became more and more Uh in the previous year So yeah, I give it I give it a lot of hope and and I I guess like So as you know tommyke I I just have to say this for the record. I'm not a libertarian I'm certainly not a an anarchist. I reject anarchism Quite quite seriously. I think it's an anti-liberty Thing so I just want to Make clear that because there's too much danger of lumping us together here. Of course disclaimers also Whatever we talk here. It's not the financial advice of an assort You have question from zoom and nicos nicos has a question nicos. Please unmute yourself and welcome to Yeah, thanks to both this question is not I'm not asking for financial advice. I'm just curious So I cannot understand the situation two things I can understand the situation with gold the first is Why it's not skyrocketing way more than bitcoin if the reason that bitcoin goes up is that people are worried about inflation So you'd expect that some people would go to gold some people would go to bitcoin But why do we see the rise in bitcoin not so much on gold and silver and the second question is Okay, if someone has gold for a situation of emergency Isn't it basically a situation where even gold is not going to get you that far because you're you are in a situation where What are you going to do? You're going to buy bread or you're going to buy rice with gold It's it's already going to be so bad that probably the thing that you need more is a house in the mountain and guns. So I mean, I'll I'll give you a best attempt at both of those first. I think I don't think bitcoin is viewed as a hedge of inflation. I think bitcoin is viewed as As you know, the most rational explanation as money one day And uh, every time somebody like michael sailor or ellon musk says they're using bitcoin That gives it more credibility And if it is money if it's going to replace all the money in the world Then you need to take the value of all The current of all money in the world and divided by the number of potential bitcoins And that will be a number and that that number is way higher than 60 000 Um, so so it's being driven by in that sense true believers and believe people who believe in it as money It's not being driven as a hedge for inflation a part of the idea of it being adopted as money Is the idea that we're heading towards hyperinflation the collapse of the dollar the complete disintegration of the dollar dollar goes away And therefore there'll be a need a desire to replace it with something and bitcoin will step in and if that's the case Then it's worth all more than 60 000 So I don't think you can compare that to because I think the motivations to buying the two right now at least are very very uh, very different And that's why you're seeing different rates of acceleration and then in terms of gold. No, I mean, I think if the world collapsed them are people Always want gold not since of it can be used in electronics because electronics is this There's no electronics industry, you know in a collapsed world But because gold has always been valued primarily for jewelry and primarily because people assume that other people will want it as well That is that it is a medium of exchange And and the end that there's always somebody who'd want it and use but in the meantime it's used for as a medium exchange And it's been proven throughout history that people are willing to use it for that And one of the ways in which you're going to get weapons in a house in the mountains is by buying them with gold in that kind of scenario There is next question from sergius Without guys, can you hear me? Yes. Yep Yeah, let's go so we haven't if we move. Yeah, anyway, I don't go ahead say again Right, uh, good to see you guys, uh, yeah on you you like managed to last one hour 22 minutes by Saying you're not a libertarian. So I'm proud of you, bro. Good to see you all And yeah, I got I got a question to you now because like you're you're claiming that people are not really aware of the whole monetary system the the clue but Don't you think of a bit just simply of the tool of spreading the The libertarian like the freedom ideas call it call which one Just to the new people to the to the people who are high quality people like thomas like Stephanie because like right now we got the millions millions millions of people Uh, that are able to to get in touch with those ideas like that The whole bit from my festival and stuff like this So I'm just I'm I'm just saying that from that perspective or just from perspective of a person who wanted to achieve the goal It's pretty nice question. My question to you is simple. Uh, are we able to use bitcoin in your, uh, Store in your shop. You are online. Are we able to purchase your your your products with? The cryptocurrency, um, thanks so much I don't know. Uh, I think so. I think we we started a wallet and we we made it possible But I'm gonna tell you I'm gonna convert it into dollars immediately because I don't And I'm not gonna hold an asset that I don't know what it's worth I don't believe it's gonna become money. So I don't do that division division It would I explain the 200 increase I invest in things. It's an to me bitcoin is an asset It's not money. Uh, nobody's convinced me it's money yet It isn't used as money and it's not a commodity. So those are the things that to me still It's got some of the other characteristics that are good, but it as long as it's not a commodity I don't see it as money, but um, I think it's a it's an investable asset um I you know if somebody asked me I you know and um in a in a particular context I think holding a basket of cryptos is in a diversified portfolio as a as a as an asset class Is not necessarily a bad idea I'm older than you guys and is such I tend uh and somebody's gonna call me a boomer in a minute, but I I you know I happen to be at the tail end of the boomer generation, but um I have seen technologies come and go. I've seen technology to be replaced um, I'm not willing to say Bitcoin one the crypto was I think it's way way too early to say that I don't see anything metaphysically different Between bitcoin and what could be produced now Maybe none of the cryptos right now is anywhere close to bitcoin But I don't see anything stopping somebody from creating something as good as bitcoin Um, it would be nice if somebody created something as good as bitcoin and that had a use Because I think if you gave it use like for example, ethereum The supposed use and again, I'm not an expert. I don't know if this is true is is uh is contract validation, right? It's it's smart contracts. So that gives it value above and beyond its use as money Now it's got other flaws as stefan says Maybe it's a lousy money fine But the point is could you make a bitcoin? Coase this is the first money you're claiming is not a use and it's still not money because it's still not being used So that's that's why I would sell it immediately if I got it it also It's complicated. That's why I have a hard time Uh in terms of I mean, I I'm sure I could learn it and figure it out if I would motivate it But creating a little bit sustain itself that would be But I wanted liquidity out today so yeah, so I think the other point I would just make is that I think Obviously, that's our main disagreement here is that you think it needs a non-monetary use and I think it doesn't need that And I think that it can be successful If anything, it might make it more clarified as a money because that's it's really that is what it's mainly used for And also I want to make I just want to make it clear that there are certain parts of the world where You know, for example, bitcoin beach in el Salvador There is like a whole town of people who are all using bitcoin transactions over the lightning network And they are doing it literally for day-to-day comments There are people who earn sats and they spend sats to buy bread or milk and things So in certain contexts, it already is used as money. It's just not all around the world And you know, I'm I'm prepared to to wait and see and I think That that's that's really where people and listeners have to make their own decision Are they are they willing to you know do this idea of speculate on this future adoption or think of it as like a long-term savings technology? That's how I view it. I also think that eventually It's Bitcoiners already faced the choice which money they want to use either the money Created by the government to finance the war and used to finance the war and under control of politicians and central bankers or the money designed to be a sound money used by Three people adopted by a choice and under your private control So I hope there will be a time where also jaron will face this Choice and it will be possible to people who are still septic today That they could convert into bitcoin economy and since we have more and more possibilities to either earn in bitcoin or spend bitcoin It will drive adoption up as well. Also weaker Uh among the people who value freedom Again, I think you underestimate The enemies of freedom you underestimate the power you underestimate the commitment to Stopping you from it and I don't think bitcoin protects you from that Maybe you underestimate humanity and bitcoin communities. We have maybe we have questions from audience adam read um I'm thinking of bitcoin as Prative equity And as an investment I compare it to other equities on the market rather than thinking of it as a medium of exchange And while this is not an area in which I want to invest my equity funds I prefer to invest in anti-aging companies It's an enterprise And equities are a hedge against inflation. So what why Wouldn't people who think that's the best edge Use it for that So what is what is the What are you buying an equity in that is what is the productive function that you're buying So you buy equity in amazon you're buying equity in a company that has assets and has cash flow What is it you're buying equity in That what is the equity in What does it represent? the equity represents um a symbolic ledger And there are As long as there are buyers and sellers it's uh a product and it's made by somebody and uh You know the people who make it um Contribute to equity that you can buy But what you're buying is the product Because what they're producing of bitcoins and bitcoin is the equity in the bitcoin manufacturing It's it's a bit I guess I don't get it We're back to me now getting it Well, again, I'm not investing in it personally But if I were to invest I would consider it more as an equity than uh as Let's say medium of exchange. That's what I call it an asset. I think it's more. That's why I said it's an asset It's not medium exchange. I don't think it's money Yeah, maybe it will be one day, but it's not yet But you see it right somebody's mining it so and those entities have I just noticed that my mic was not on on the stream But that's fine. Leo vinnia is uh with us also. I hope I pronounced his name correctly Yeah, that's fine. Yeah Hey, Aaron, I discovered your channel recently so big fan So my question Whoops you keep bringing it up Oh Is it right now? Yeah, yeah, my wife is a bit choppy. Uh, so you keep bringing it up basically like, you know governments will resist putting restrictions And uh, my question would be what you know, what is the alternative as you know, because my view is that bitcoin is one of the most secure asset that is unequal by any uh, coercion and so, you know You might say, okay, the u.s. People like it's not terrible compared to like other countries So what if you're living in greece or like where they seized assets or totalitarian governments, right? And you know, potentially maybe it kind of happened in the u.s. You know, i'm rand white's about at least right So what would be an alternative and do you think there's if there were like very Like a massive wealth tax, for example, right? Whether it's through inflation or through some totalitarian government What would be the alternative to protect your assets? Well, it's not that I think there's an alternative to protect your assets because I think that at the end of the day Bitcoin will not protect your assets. That is at the end of the day either While the government can't literally confiscate your bitcoin they can may get almost impossible for you to use it And they can penalize you for using it and that's what they will do If they think that you're using bitcoin in order to escape their You know, imagine if they institute a wealth tax tomorrow imagine if Elizabeth wands plan is instituted and as a response to that Everybody who has wealth, I think the plan is anybody over 30 million dollars gets taxed Everybody with over 30 million dollars takes all their money about 30 million buys bitcoin with it. I mean Stefan will become a gazillion if that happens, right? Because bitcoin will go through those but What would the US government do?   We'll we'll we'll think of something else We'll go we'll go do something else. We know. I mean, I don't know exactly what they'll do But they're not going to play nice, right? So I'll give you an example The one of the founders of facebook It was facebook Before the company went public Gave up his US citizenship Went to singapore Made all the money in capital gains, right? And didn't pay any US taxes And immediately the united states senate came into session and passed the law the law that's on the books right now That basically says that if you if you give up your american citizenship There will be an audit of your assets immediate audit of your assets And they will be taxed as if you were liquidating it. So all the capital gains and and all future capital gains That I expected or I don't know exactly how it works, but they they can penalize you dramatically Now, I don't know how they're gonna go after bitcoin. I'm not saying I have the answer But they are going to try and that effort that attempt And if it's sustained We'll have a dramatic negative impact on the value of bitcoin I think what stefan was bringing up was that You know because the alternative right now, for example, would be a bank account where you can always freeze it versus here I would say, you know Liquidate your assets in bitcoin hop up hop in a plane memorize 24 words And then you can be like, I don't care about your exit tax. Basically if you're in a non extra digital I wish I wish we all lived in a world where you could hop in a plane and go wherever you wanted We don't but well Soon you're gonna have to show you're vaccinated. Not only do you have a actual passport, but you also You know, you guys underestimate the power of the status You underestimate the power of government an extent to which they You know, they they are Intent on not losing control Over wealth or over the ability to tax you over your citizenship You know, one of the reasons I oppose a wall in the southern border other than I'm pro immigration generally Is because walls can be used to keep people in And the United States government has shown a willingness to in a sense erect walls to keep people in You know, this senate bill is a tax to keep you from leaving. So all I'm saying is You know life is these things are more complicated and harsher Then you make them seem and you're not fully protected with bitcoin Now there might be ways to protect yourself But those you have to think them through you have to have a plan you have to get an escape route you have to have all of that It's it's going to be tough. It's going to be tough. I'm not saying the status of one by the way um, I'm saying Somebody's writing here that I I'm saying the status of one I'm not saying the status of one. I'm saying that the only way to defeat the status Is to defeat the status That is to go after them And to convince people that they are bad now to the extent that bitcoin is a tool in convincing them cool You know, I'll use any tool. I can So i'm not against using tools, but we have to convince people that statism is bad Before we can be free. We're not going to be free that you know, uh I'm not moving to El Salvador to the beach.  I you know, don't don't prove a point One difference though is I would say it's not just this little, you know community It's actually that they're interoperable with the rest of the world. We're building this kind of digital nation if you will a kind of Everyone can participate and trade in this world and you know, it allows people to have that kind of digital gold aspect or digital Digital goods and services sales online. That's one example but I I would say To this whole question of you know, have the status one and certainly it's important to sort of fight that battle of ideas I agree with you there. I just see it like you want You know the people who believe in you know, I think, you know Of course libertarians and objectives have their disagreements But in some ways we're sort of we have some fellow We have some element of fellow traveler Like we have some element of similar things that we're looking at that we want and that we would rather have Those people get some wealth and then use that wealth to You know try to drive change and try to change the way people think so that's how I would think about it Well, I mean, I think I would I would say that bitcoin is money when bitcoin is used as money that is not It on a large scale I don't think I have that much power or influence, uh, tommy. So I I wouldn't put that all that weight on me. Um I know I it just it doesn't as I said, it it doesn't make any sense to me and in a in a True free market competition. I think that a something whatever it happens to be That has a commodity feature to it Um Is going to be bitcoin in the end whether that is gold that is