Crypto Masterclass: Everything You Need to Know About CRYPTO From The Worlds Leading Experts

I could talk to somebody all day long and they could tell me Bitcoins not valuable. It's a trillion-dollar asset, tens of millions of people around the world holding it, transaction volume and some of the card networks. I believe it to be true that technology is a one-way street, that we will never go backwards. Well, Bitcoin is the strongest asset the human race has ever invented. It's like gold with none of the defects of gold. And then suddenly NFTs come. And suddenly your mind is completely blown. It's the entire exchange, transfer, and storage of value for the internet. The internet from 1990 to 2000 grew at 63% a year. That was the fastest adoption of any technology in all recorded history. Prior to that, mobile phones was the other one. But what happens is the internet technology and the mobile phones technology allows for these networks to be built. And once that network is in place, it's faster to build the next next network. So, in India, for example, they've just basically given out free data to every mobile phone in India. So, guess what? Uh data data usage is the highest in the world. And so, their internet scaling becomes faster. So, this So, the internet was huge, as we all know, and it remains huge. So, at 63% a year, it then flattened out over time as more and more people got adopted. So, at 1997, it was growing at 63% a year and there was 140 million users of the internet. In 2021, there are 140 million crypto users. And it's growing at 113% a year. Jesus. Double the speed. Now, this is where humans struggle. Linear numbers and exponential numbers. Because it's exponential, it means that growing at 113% a year, we're going to go from 140 million people to a billion people by 2024. I mean, so so So, when you go back and what you how are you introduced to all of this? So, if you know that something is being adopted at this speed and it's a network of money at its core and you combine infinitesimal fraction of it, so everybody can buy 10% of their net worth. Then everybody who takes this opportunity will probably have the biggest opportunity in history. Yeah, sure the meme stocks, cryptocurrencies, it's easy to mock and make fun of these young people, but these young people are interested in understanding how does the market work? How does finances work? How does investing work? And so, you know, if you go back to that data, right? We talked about 45% of people have no investable assets. The two stats that just blew me away when I started to look at this was uh 80% of millionaires in the United States inherited $0. So, the narrative is everyone inherits wealth and it's just passed down. Well, 80% of Americans inherited nothing. 20% inherited something, 80% nothing. The second one is that 33% of millionaires in America never made more than $100,000 in a single year. So, you start to ask yourself, well, how does it that somebody that doesn't make six figures a year become a millionaire? Well, they have to be disciplined and understand personal finance. And so, it is possible to do it. It's not everyone, it's hard, right? It's not the uh the easiest thing to do, but it can be done. And so, as you start to understand like, okay the education is a huge piece of this. So, you can go to Vegas, lose all of your money and there's no regulation. But, if you want to invest in a group of startups or a single startup, it's deemed too risky by somebody. And a lot of that is a power grab by Wall Street. Cuz what does that mean? It means you can't do it, you have to give it to somebody else. Um and they can pool the money. So then you're not taking specific risks. And what that means is somebody on Wall Street gets rich at your on your behalf. Because you're now paying them fees that you didn't have to pay. That's the beauty of Bitcoin. You're basically a VC investor in the future of money, not Bitcoin, Ethereum even, even better. You've got You're a VC investor in the future platform of the internet of value. And you're paying nobody any fees. I believe it to be true that technology is a one-way street, that we will never go backwards. We will never unwind the internet. We will never be a less digital creature. We will only be more. And things like Neuralink are going to become real. And I actually and and I don't want to lose people on this. I think in a very far distant future, so this is not in the next 20 or 30 years, you know, maybe this is 100 years, maybe it's 300, but there are people already that have cochlear implants that give them back hearing. We're working on um implants into the eye that give people back vision. So, it'll start with correcting things, but we will ultimately as ourselves become really um tied physically to technology. So, I believe that everything will ultimately get digitized. So, what we're living through right now is a really fascinating moment where art is now being digitized, money is being digitized, and those two I live at the intersection of art collectibles and money. And and watching those go digitized and watching for anybody that wonders if this if the human mind is just ever going to be into these things in the way that they are physical things, I will just say this, that uh in August of 2021, OpenSea did $3 billion in revenue on purely digital goods, digital art, digital collectibles, all of it. And that blew them past Etsy at like day 16 of the month or something. They went past I mean just absolutely insane to see how much money is pouring into the system. I think this is with only 200,000 wallets. So, 200,000 people driving $3 billion worth of revenue all on digital goods that have no physical tangible thing in in out in the world. Now, there's utility it's beyond the scope of what we're saying now. So, okay my thesis the world's only going digital. I have all these kind of proof points around it. Now, one of the things that's going digital is money. Bitcoin in particular has a really fascinating feature which makes it what you call sound money. And that feature is programmatically it can only ever produce 21 million of these units. Unlike gold which for me and I don't know if you'll agree with this, my mind got wrapped around it immediately when it was like Bitcoin is digital gold because I understood what gold was meant to be. I was never going to carry it around and shave some off to buy a loaf of bread. Like it's a thing that I store somewhere else that we all agree and yes, it only has value in that we agreed it has value. It only can be created when stars explode and that rains down on the planet and gets embedded into you know the bedrock of you know, the earth and so we have to go and dig it out. But we dig it out at a rate roughly 2% a year as economic incentives go up, we dig out more. And so there is some big question around well, if there was enough incentive could you devalue that more by discovering that there are actually harder to reach deposits of gold. Okay, so I get that it's capped. There's only 21 million units. Therefore, as long as we all agree that that thing has value, it becomes sound money as you say because there can never be any more of it. Look, I think the big thing that happened with regard to Bitcoin this year is that Bitcoin is the first is the first point in human history where engineering impinged on economics. Up until this point people didn't really embrace the idea of energy theory and engineering theory and math and sciences as being integral to the way that a monetary asset function. You know, it used to be money was, you know, seashells and tokens and then and then we have this general you know, we have gold and we have coins and then we have general agreements and and uh and the like and Bitcoin was the first time when we created um a digital monetary asset, a a pure a a pure digital token on a pure digital network that uh that actually uh respects the laws of conservation of energy. You know, I say it's it's sound money but that's the same as thermodynamically sound money, which is conservation of energy, which means mathematically proper. Do you mind saying again the cost of loaf of bread compared to dollar versus Bitcoin? I denominate my life in dollars and let's say I buy a loaf of bread today and it's $2. Five or 10 years from now, that loaf of bread may cost me three, four, five dollars, depending on the rate of inflation. If I denominate my life in Bitcoin and today, let's say that it cost me one Bitcoin for a loaf of bread, in the future, it will cost me less than one Bitcoin. So, it will actually become cheaper for me to buy because every asset, when you think of price, it's denominated in a currency. So, a stock, right? When I when I ask you, "What is Amazon stock price?" you're telling me one Amazon share over how many US dollars. And that's how we get to the actual value. And so, when you start to think about that, look at the stock market. The stock market from 1971 to today is up and to the right. So, perfect 45-degree angle. I know you're about to say. When you denominate it in gold, it's down. That's since 1971. If you denominate it in Bitcoin since 2009 2010, it has crashed aggressively. Bitcoin has been the best performing asset, but that's because it's denominated in dollars. And so ultimately what we're watching is we're watching an entire generation of people wake up to this fiat currency kind of fiasco. And there's a famous I think it's Henry Ford quote where he said, you know, if people understood how money worked, there would be riots in the street before morning. If you sign up for technology, I think you got to have this model in your head that you're a snake that's shedding its skin every 3 4 years. Or I mean a really good model in nature for growth under pressure is a chambered nautilus. And a chambered nautilus is this creature that grows under under deep sea pressure and it and it builds a shell. And of course the shape of the chambered nautilus is the spiral because the creature is rebuilding the next shell to be twice as big as the last shell and turning in on itself and is using its previous work as the structure to support the next piece of work. And so it if you look at the at the design of a chambered nautilus, what you see is is nature's solution for growth under pressure. And then you start saying okay, but that's Bitcoin and then what's this Ethereum business? And then you start realizing decentralized finance and you're like it's kind of a finance thing, but that's kind of cool cuz I can get yields now, you know, I can get instead of getting zero in my bank account for my hard savings, I can now get 6% a year. Wow, that's a difference. It's like going back 25 years in time. And then suddenly NFTs come and community tokens and suddenly your mind is completely blown that this is not just money. It's the entire exchange, transfer, and storage of value for the internet. Whole business models are about to change massively because of what this technology unlocks. And then once you get that your head around that, you're like, "Oh god, I can't even hold this in my mind any longer. It's so big." Um and that it's not just buy some Bitcoin, I'm going to make some money over time. You know, it's actually an entirely parallel financial system and business structure for the world. And it's being adopted faster than anything we can ever imagine. What is it that makes Bitcoin interesting enough that so many smart people see this as ultra-sound money, and what does ultra-sound money mean? As you can probably see, I'm obsessed with the future of crypto and NFTs, and I want to make sure you are prepared to understand and enjoy this new digital revolution. To help with that, I've launched a new Impact Theory Discord where you can get not only all my information on crypto and NFTs, but also stay up-to-date on everything Impact Theory. You'll be joining a community of amazing Impactivists and have direct access to me, early offers, and so much more. To join, click the link in the description, and I hope to see you in there. The world has a history of money whether it's backed by gold or not where government gets themselves excessively into debt and they devalue the money. So, the Romans used to clip the edge off the coins, so there was less gold in each coin. And eventually people would lose faith in the coins cuz they'd blend them with silver and then blend them with copper, and you know, the coins were worthless cuz that was supposed to be worth the value of the of the denarii in Roman times. But governments can't help themselves. Humans, we're just humans, right? Humans are fundamentally flawed creatures and we always will be. So then we have the gold standards, you know, the US and the UK are on gold standards, World War I, World War II, we all have to leave it because we've got too much in debt again. We've overly financialized yet again cuz humans love leverage above all things. It's kind of sex and leverage are the two things that drive humans for some reason. Then we adopt a new system which has been around before but it keeps getting abandoned called fiat money. Fiat money is money not backed by anything. It's backed by the promise of the central bank paying it. So that's the dollar bill that we all are familiar with and every country in the world now adopted fiat currency. But as with everything if you're really thirsty and I gave you a bottle of water or sold it to you you'd probably pay me 10 times too much for that bottle of water. If I give you a million bottles of water, they're worth precisely zero to you. So scarcity has value and that's arts, that's cars, that's almost anything. Um humans value scarcity. For whatever reason we do. Um and so if you're printing too much money you're creating less scarcity. So yes, there's money everywhere. But the money has less value. So once you understand that you say, "Well, what does it mean? The dollar hasn't collapsed. It's kind of where it was versus the euro in the last 5 years or whatever it is." And then you say, "Huh." But my $50,000 salary now can buy me much less shares in Apple, Amazon, Google, Microsoft. In fact units of the S&P 500, right? I suddenly can't buy as much. Since 2008, it's a fraction. I can buy like a third of what I could. Same with real estate, same with gold. And then you're like, "Huh, assets have suddenly got expensive." They haven't. The value of your savings has gone down or your money. So, you can't afford to buy assets. What is an asset? An asset is deferred consumption from the future. I buy a house, I sell it in the future, I get to retire. Whatever the the the things are, right? We don't buy the S&P because we want to hang it up in our wall, we buy it because we want to sell it at a future date to realize money. So, that means our future selves are now poorer. That's essentially what this means. That's what currency debasement is. So, Bitcoin comes along in 2008 in the middle of the crisis. It's kind of like it was perfectly prepared for this and said, Satoshi goes, "Hey, look at this. I can create an algorithm that only creates so much of this thing, the Bitcoin, and it can never vary, ever. So, therefore, this is scarcity that humans can't [ __ ] around with. Now, humans have this propensity to [ __ ] around with scarcity because they're economically incentivized to do so. Here, they can't. So, then they become economically incentivized to own this asset because it's scarce and it cannot be changed because it has this consistent supply curve and a limited number. So, Bitcoin becomes this great store of value. And it would look like gold cuz gold's a good store of value. It's worked for thousands of years. But, Bitcoin has this other thing to it. It's a network, which gold isn't, and it's technology, which gold isn't. So, we have use cases and the benefits of building a network. So, suddenly it goes up exponentially in price. Roll on to 2015 and suddenly somebody is looking at the blockchain and they start saying imagine if these bits on the blockchain which is where you record the ownership of something in Bitcoin it's Bitcoin itself. What happens if we could put contract in there? Because humans live off contracts. You know, everything is basically a contract in in our legal terms. And that was the rise of Ethereum. It became a platform where you could programmatically change the blockchain. Not the attributes of the blockchain, you couldn't remove anything off that ledger, but you could change the little holding buckets and say well it can look like this, it could look like that, it can adopt to this. And those things were verifiable as well, so they couldn't change. So this created Ethereum which became the platform. So if you think of Bitcoin as the store of value, this very pristine beautiful thing then you think of Ethereum as also a very beautiful thing, but it's a much broader application because it's like programmable money. Okay, so what's Bitcoin? Well, Bitcoin is the strongest asset the human race has ever invented. It's like gold with none of the defects of gold. So define what the defects are. Why why is it the greatest monetary invention? So I buy a million dollars of gold. Okay, um if the price goes up, the gold miners first of all, the gold miners are going to create more gold and dump it on the market. If I could eliminate all gold mining forever, if I could wave a magic wand and make it impossible to mine any more gold, my million dollars of gold will hold its value better because it'll be scarce. But gold miners are inflating the value of the the supply of gold by at least 2% a year or so. And then if the price doubles again, investors will invest in more gold miners and they'll create more capacity to mine gold. So, you'll create capacity to mine gold, you'll mine the gold, you'll crank up the rate at which the gold mines function. After that, people with gold jewelry will melt their jewelry down, convert to gold bullion, and sell it, right? If if the price of gold went up by a factor of 20, you would be like converting all your gold stuff into gold bullion cuz it seems like a good idea. They call it scrap gold, right? And then after that, um bankers will issue gold warrants and gold and gold paper and gold derivatives, and they'll sell them short without the gold because they can speculate in it, and they don't have to have a one-for-one coverage of gold to the gold derivatives. And so, that's called hypothecation and rehypothecation. Okay? If it keeps going up, the governments holding gold will start to sell some of their gold to manipulate the price down. Right? And And all of these And if it And ultimately, if it goes up enough, someone will club you over the head and take your gold, or a hostile regime will take your gold, or a politician will pass a law taxing your gold. Right? There's a There's a lot of ways you lose gold because it's physical. How do you cure the problem? Right? I mean, uh Here's how you cure the problem. You make it impossible to mine any more gold, and then you make it possible to take custody of your gold personally off of the exchange or off of the bank. So, that way the bank can't hypothecate it or rehypothecate it, miners can't inflate it, investors can't create any more gold miners. And then you make it possible to move it from here to Switzerland or Singapore in an hour for or for a nickel. And that way, if you don't like your bank or don't trust your bank, if the state of New York passes a law taxing it, you move it to the state of Wyoming. You know, if the government passes a law taxing, you know, the the ownership of uh in California, you can't move the land out of California, can't you? If you have a million dollars of gold in a bank in in a vault in New York City, you know, there's only a couple places you can move it. You can move it to London if you have 6 months. Okay, so you're going to be subject to the law of London or the law of of New York. Can you actually move to your favorite island or you know, can you move to the Cayman Islands and bury your gold underneath your hut in the Cayman Islands and be safe about it? Not likely. Can't even get it through the airport. Right? So So the problem with other properties and gold is the simplest example, but the problem the the challenge or the analogy holds with any property. I give you a bunch of money and I tell you you want to keep it and give it to your grandchild. Do you buy a building in Manhattan? Do you buy a ranch in California? Do you buy a stack of gold bars? Do you buy shares in a company headquartered in San Francisco? Do you buy bonds issued by a government or company? Or do you buy Bitcoin? And you can you can see the problem of course is the the debt is devaluing rapidly. The land in California can be taxed and is not movable. You know, uh the building in New York's not going anywhere. It might be valuable to a rich person that lives in New York. What about a rich person that lives in Beijing? Do they want your building in New York? How are you going to hide your building, right? Buildings get property taxed. There's a very famous story about, you know, a bunch of luxury, you know, yachts sitting in Sardinian port and the locals decided that that that it wasn't fair that all these uh people were rich people are sitting on their yachts in the port spending all this money, but they weren't paying enough taxes. Now, they're putting millions and millions of euros into the economy, but they came up with the idea that they were going to put a tax on the yacht on the value of the yacht. And so, they you know, they passed a yacht tax that would have cost people millions or tens of millions of euros if they stayed in the that port. And uh everything was happy and uh all the restaurateurs and the hoteliers and and and the entertainment people in the port, they were all happy making tons of money off the yachts until the day before the tax went into place, and the morning that the tax went into place, the port was empty and the economy died. Everybody left. Cuz yachts are floating capital. It just moves. It's floating property, right? So, it's it's a very visible example, right? Why it's not that smart to put a uh an an unfair tax or an extreme tax on a yacht if people can float the yacht to the next port, you know, 100 mi to the left. So, one would be discouraged from taxing stuff that floats. On the other hand, taxing a building that's buried, you know, 100 ft down in the bedrock, that's easier. You can't move the building. So, Bitcoin represents the apex property rights of the human race. Like I'm not Mind you, I'm not disputing the ability or or the you know, legitimacy of a government to pass a tax. At the end of the day, they can tax your gold, they can tax your stocks, your bonds, your building, yourself, your income, whatever they want. But the point really is you're a lot more likely to tax the stuff that you walk past, you know, every day on the way to work, and you're a lot a- and uh legitimately, you can move yourself and you can move your property if it's crypto to another jurisdiction, but you can't legitimately move a ranch in California. So, your property rights are stronger and the value of the property is higher. Right, you have a valuable thing in Manhattan. It's interesting to other wealthy people in Manhattan, but when you have Bitcoin, it's interesting to wealthy people everywhere on Earth. Right, it's you can liquidate a billion dollars of Bitcoin on the weekend in any currency you know, any any time. Try liquidating a billion dollar building. Right, that's three-year process, right? So, it's liquid, it's fungible, it's desirable, and so that what that's what makes the asset valuable, and it's very it's the it's the most difficult thing to impair. Are there stats around how much sort of nefarious stuff is going on with Bitcoin versus US dollar? The stats that I know off the top of my head is over two trillion dollars of uh fiat currency are just money laundering every year used for illicit purposes. Oh. Which is about the size of the entire crypto industry, not just Bitcoin, but the entire crypto industry, right? Uh so, it's a very big number. Um some of that is uh simple things like uh terrorist financing and then you're you know, literally bringing a a bag of cash or whatever, but a lot of it also is uh major banks who end up being caught up in money laundering situations, etc. And I'm always careful. I think it's very easy to kind of point your finger at banks and say, you know, these are all bad people, whatever. Uh I tend to think of it more as uh folks with good intentions. They're trying to do the best that they can. Um are there situations where they definitely know they're doing it? Of course. But if you had to monitor millions of transactions a day going through your bank, they'd do a better job than I would. Right. Right. So, there's there's again nuance there. Um so so, that's the fiat system and then uh in the Bitcoin world, so not all crypto but in Bitcoin specifically, the latest stats that I've seen is there's a report out that says 0.4% so less than half a percent of all transactions are used for illicit or nefarious purposes. And then there was also a former CIA director who came out and basically published a whole report. I don't remember what exact number he came up but it's pretty much in line, you know, definitely less than 1%. And so if you talk to law enforcement, they say all the time. They're like, if somebody commits a crime we want their fingers on a keyboard. Why? There's a digital trail. It's much easier to track them. It's much easier to figure this stuff out. And so I think what we've seen is just criminals in the early days 2009, 10, 11, 12, even maybe 13, 14. Oh, there's a pseudonymous currency that no one knows about. Like I'm going to go do all this crazy stuff with it. Well, now that we're in 2021, people realize, oh wait a minute. I just used this public, you know, ledger. That probably wasn't the smartest idea. Um, but I think that it's important actually that the criminals and bad actors adopted it first because that is the adoption cycle that every great technology takes. Whether it's mobile phones, beepers, the internet, etc. There's a constant cat and mouse game between law enforcement and bad actors. And so what are bad actors constantly doing? They're looking for new innovative ways to use technology to get away from or obscure law enforcement from catching them. And so criminals are actually usually the first adopters of new technology. Which again doesn't make people feel good but if you go back and you look it it's a historical pattern. And so the fact that they were first and then we got kind of the first adopters from a technology standpoint and then we started to get more of the mainstream and now it's estimated that more than 100 million people globally use this stuff. It's kind of like goes back to your is that high already? Oh, yeah. I mean Coinbase alone, I think they report now that they've got if I remember the number correctly it's like 58 million you users. Just one company and they're not even the biggest exchange, right? Um in the month of July, uh 1.2 million new users came onto the Bitcoin blockchain. So, not Coinbase, not any exchange or wallet, the actual blockchain itself. You can see on chain new entities. Uh and 1.2 million new entities came online, which is the fastest it's ever grown in a single month. And so, what you have is you have a fixed supply asset that now you've got the most number of entities ever joining in a month. Of course, the price goes up, right? Like fixed supply asset demand goes up, unless you think that supply demand economics are invalidated, you know, that the price has to move to accommodate everyone. And so, it's just um a just a fascinating asset that I think ultimately um those that embrace it early will end up benefiting from. And and a lot of times as I kind of go down this path talking about the criminal behavior and you and you talk about the public ledger, you talk about the adoption, people get uneasy. They don't like change, right? Humans hate change. But just like the internet, right? Imagine if we had sat here in the United States and we had said, "This internet thing is kind of crazy. It's a decentralized, open thing. Anyone that has an internet connection can kind of join and and participate and get information and do all this stuff. You know what? I don't think the US should participate. You know why? China. China's going to benefit. And North Korea is going to use the internet, too. And Iran, those bad people, they're going to use the internet as well. So, the US, we're going to sit this one out." Well, people did do that. North Korea did that, and North Korea would suck to live in. Right? It's just they cut their people off from a very important technology. And so, when you think about that from a open payment system, right? The idea of an open payment system is so foreign to us because of the system that we live in, but anyone in the world can plug into this open system and send value to anyone else without asking permission. If we sit here and we say, "You know what? We shouldn't participate because there's some other country or some other organization that's going to also benefit from it." We're actually get likely to be the ones that get hurt the most by these decisions. Instead, we should do what we do with the internet. Internet's going to be a thing. The United States is going to be a leader in the internet. Yes, there's volatility to Bitcoin in the short term. I've heard you say, "If you're looking at a number in anything less than a 4-year increment, it's just noise." And that once you extend out to 4 years and beyond, suddenly it actually becomes a a story of, you know, growing, I think it's like 200% year over year, um which is, you know, pretty thrilling. Um how far does when you think about this being sort of the apex um property, how much goes into just the the fact that it's taking sunlight and turning it into something that's cryptographically protected, and how much of that stance is that this evens the playing field? You know, I I think of Bitcoin as like that shining city in cyberspace where a billions of people will eventually want to live. Right? Instead of moving from Europe to America or moving from the old world to the new world or whatever or moving from the planet to cyberspace. We can't move to outer space yet. I can't get a billion people off the planet and settle on a better Earth, but I can move a billion people to cyberspace. Bitcoin is property in cyberspace. It's 21 million city blocks in cyber Manhattan. Um the people that move there first, right, get to buy the land cheapest. And then event- you know, how many people will eventually want to live there? Well, unlike Manhattan, where there's a limit, there's really no limit. Why wouldn't everybody want to live there? Right? I mean, I don't know that there won't be other cities in cyberspace that that might meet other needs. I mean, I suppose if the Chinese, you know, made it illegal to own Bitcoin, but there was a Chinese Bitcoin, there might be a Chinese version of Bitcoin in cyberspace. Kind of like Alibaba, you know, and Ant and and WeChat kind of branched off from Facebook and Google and Amazon. So, there might be some other digital dominant monetary networks or dominant monetary networks. But But Bitcoin is the greatest the greatest um monetary network that the human human race has ever developed, and it's certainly the dominant one right now, and it looks like it's going to be continue to be the dominant one for as long as we live. So, um what makes it uh dominant? Well, I mean, clearly the the architecture is uh proof of work, or in other words, throwing up a wall of encrypted energy, right? It's all of uh the crypto hash power that's channeling energy through the hashing function, which creates uh creates the stability and the security. And so, it's based upon the architecture, but um but ultimately, the appeal of it is that it's an open permissionless protocol that everybody on Earth can engage in. Anybody can mine it. Anybody can So, anybody can contribute security to the network. And anybody can run their own node, and anybody can own it, and then any company uh can plug into it. And so, there's nothing that open. There is no You know, there is no monetary protocol or asset or currency that is so open as the Bitcoin asset. And so that's what's driving its value right now. It's It's an opportunity for people that are that have little that have little to lose and much to gain. It's It's an opportunity for everybody though. I mean, the way I think of it is it's a moral imperative, a technical imperative, and an economic imperative. Morally, it's an imperative cuz it's it's the best hope for 8 billion people to secure their property rights. If I give you a $50 Android phone, you can carry around in the Android wallet your property and no bank or no hostile regime can seize it. And we've never And that's the best property right you're ever going to get. I think it's a technical imperative for the same reason. You got 8 billion mobile phones that will all have property. And so what's more important, storing your photos and your videos on your mobile phone or storing all your money? All your life worth in your mobile phone. I mean, you're worried about losing the photos you took on your iPhone or you worried about losing your life savings? Clearly, it's more valuable. So So it's a it's a technology imperative for an Apple and Amazon and Google and Facebook and companies like Square and PayPal and Binance and Coinbase are already extraordinarily successful by embracing it. You can see that right now. And finally, it's an economic imperative because there's $500 trillion worth of fiat derivatives, cash and bonds and stocks and real estate that's valued based upon cash flows. And all of those things are being devalued at 1% a month. Something So we can go back and forth over what's the rate of currency expansion, but you know, it's it's not that hard to see that this is a $25 to $50 trillion a year problem for anybody with assets on Earth. It's very rare that you find it a technology that's a solution to every rich person's problem and every poor person's problem simultaneously. Rather than rely on that hierarchical structure, by creating a network, we created the strongest computer network in the world. In 12 years. And is it strong because you can't break it? There's no person, there's no point of failure. I can't go hack Timmy. Um I can't you know seduce somebody and like you know get their keys to something. Is that what makes it strong? Just that it is There would be so many people to go after. I I think of strength of a network in two ways, specifically around let's say Bitcoin. Um one is just a pure qualitative uh metric. Um or I'm sorry, a qualitative metric and then one is a quantitative one. The quantitative one's really easy. How much hash rate or how much computing power is actually running this network? And that's can stop a brute force attack or anything like that. And so um the Bitcoin network has more computing power running it than anything else, right? It's way bigger than any of the large computers in the world, etc. Um so that's a quantitative metric. The qualitative one I think more uh structurally, right? So um from a structure standpoint, if you think about um other technology networks that have been shut down, right? Napster's always like a really easy one. Peer-to-peer file sharing. Was a great idea. People were doing it, obviously. Uh the music industry didn't like it. How do they shut it down? Well, you can basically go and find out who's the CEO of the business, where is the business, where are their servers, all this type stuff, and you can go ahead and you can shut it down. And so when you remove that hierarchical structure, and you now have a decentralized structure, the strength comes from there is no single point of failure. Hey guys, I hope you enjoyed the Impact Theory Discord, which if you were unfamiliar with Discord, it is basically a more fun Slack. But if you need another reason to join, here is the ultimate one. On October 13th, we are going to be dropping our most valuable product yet, maybe the most valuable product that we will ever offer in the form of an NFT. This yet to be revealed NFT token will give you unparalleled access to everything I am working on. Special discounts, free access, exclusive access, and much, much more. If all of that was exciting to you and you want to learn more, click the link below to join community and follow the steps to read my article, The Beginner's Guide to Crypto and NFTs. Reading that and joining the Discord community will make sure you are ready for October 13th. So, when I started in crypto, I was like, okay, 1%. I'll I'll get to 1%. I just don't want to be a fool. It's sort of schmuck insurance. Then, as I got to 1%, I was like, well, this feels pretty good. I'm going to go to 2%. And then, that's where I was about when it started to fall. And so, I was like, okay, well, here's my opportunity to buy in. Thesis is still intact. Why don't we go to 5%? And so, now I'm like, well, 5% feels pretty good. I'm thinking about 10%. So, what is your allocation? Of course, I know this punchline, but it'll be interesting for people that don't know. So, I am This is going to sound weird when I tell you, I'm actually risk-averse. So, I own a few properties myself. And I live in them. So, I don't rent anything out. You know, these are This is my bank is lifestyle. So, and I and I like to live in nice places. So, that I don't consider consider money that I'm investing or doing anything with. That's just buried in lifestyle. My shares in Real Vision as an entrepreneur, they could be worth nothing, they could be worth gazillion. That's not part of it. So, what really matters is your liquid net worth. The money that you've got available to invest. And I'm a 100% in crypto. And I feel like I'm under exposed. So, maybe I didn't start with enough cash. Um that I should you know, I should have had more in cash, you know, more um as opposed to in real estate or whatever. But, it's 100% and I feel massively under exposed. Now, why can I do 100%? Because I have income. I have numerous sources of income. So, I've always got money coming in. If I lost well, you're never going to lose 100% cuz I've got no leverage. So, it could go down 80% and it'd be back to roughly where I bought it. So, I'm kind of safe in this crypto space now. I can't really lose money. But, I've got cash flow coming in. So, even if I did lose it, it's not going to change my life. And in fact, cash flow coming in gives me an ability to buy at lower prices. So, I'm structurally set up to take oppor- take advantage of the biggest opportunity I've ever seen. Um and I'm comfortable with that. Now, I don't know what percentage of my total net worth it is cuz I don't think of total net worth as total net worth. Because those are things that I'm never going to change. You know, my my my beach house in El Carmen or I sell it and buy something else. I'm not going to invest in something else with it. That is the answers. Lifestyle is the answer to everything, right? We don't do anything else for any other reason, I don't think or you shouldn't. To be rich is not is not a future state. To have the lifestyle that you want is the future state and that can be anything. You can live in a shack on a beach in Nicaragua and be the happiest man in the world. Go for that. So, that's what I care about. But, liquid net worth, yeah, everything and I feel under invested and desperate to you know, waiting for the next quarter when more income comes in to put more in cuz I feel under invested at all times. That's how that's how much conviction I have. I've And I've never done that before, ever in my entire lifetime have I ever taken a bet like this. Going back to investing, I want to lay out for people that might be new to this. They're not seasoned investors. The idea of dollar cost averaging was extraordinarily comforting to me. Um and I'd love to go into what it is, why it's useful, and whether you think that applies to what's happening in crypto. So, there's a mythology of investing. The mythology of investing is hedge fund manager George Soros spots the opportunity, gets in at the right price, makes a fortune. The reality is most people have no idea where the price is going over a short term. So, what happens is you buy something, you put all your money in, you've saved up your 5,000 bucks, you put it all into Bitcoin, Bitcoin falls 50%, you panic, you sell it. You feel terrible, Bitcoin goes back up again, you felt feel even worse now, you can scrape together, you know, you've you've lost, you know, half of your money now, and then you've you you you keep compounding these errors, right? It's called market timing. And market timing is extraordinarily difficult, you know. I I do some market timing because that's been my job and 30 years. I've done more than my 10,000 hours, a lot more than my 10,000 hours. And that doesn't make me very good at it, either. I'm not bad at it in long-term investing. I'm terrible at short-term. So, what is dollar cost averaging? Dollar cost averaging is basically what everybody does with their 401k. The problem is with 401k's or retirement funds is nobody cares about them. You don't know what's in it. You have to have no ownership. You just put some of your salary away, and it goes in this mythical thing that you probably assume won't be worth as much money as you hope it is. That's what that's become. And you put it in every month. Why do you do that? Well, because you're averaging all of the highs and lows over time because markets tend to do this. So, you're kind of indifferent. In fact, you love it when it falls because you're buying more units at a lower price because the whole game is to own as much as you can at the lowest possible price. But, if you don't know how to market time and 99.9% of people don't and can't and shouldn't, then you just average in over time and magic will happen. You just average a beautiful price over time. And had you done that in the S&P or anything else, you make money. Now, what's so lovely about Bitcoin is it's not a passive investment like your your retirement fund because your retirement fund you can't access until later. So, you kind of write it off and you you know, everybody's heard that it's never going to be worth as much as it should be anyway. So, it's become a bit of a pain as opposed to a something but this you own. You live and breathe that volatility. And you live and breathe those gains when they happen. And you'll be like wide-eyed. I did this to my sister-in-law. Forced her to do this. I said, "Listen, I'm going to make it easy for you. Just going to open a PayPal account. Start that way." And she had some savings um she could take out of another thing. She had like 5,000 bucks, 10,000 bucks. And she put it in and we got the timing relatively right. So, it shot up a lot. I think she got in about 13,000 in Bitcoin. Wow. And it shot up to 17,000. Yeah. And it shot up a lot. So, she's like, "Wow." And then it falls a lot and she's calling me up saying, "What do I do? Should I sell some?" I'm like, "No. You keep putting in part of your paycheck." And after all of these falls, these several falls, she starts to really understand and when they start falling a lot, she starts doubling the amount that she would have normally invested. And now she's taught herself to invest. Next thing I hear, "Oh, well, I bought some Ethereum." And this is how I'm dealing with that. So, she's now looking at two different things and she's now thinking about the asset allocation. What's going to outperform? Ethereum is bigger. She knew nothing about this stuff. This is a year and a half and she now understands because of that dollar cost averaging and taking ownership that you exactly as you said, once you actually own something, that 401k you don't actually really own. It's like some other guy does something with it and hopefully he makes money. This is you. You're taking responsibility for your own finances. That's so empowering. What does the log chart do? I've heard the phrase, but I I honestly don't know what that means. The scale. So, normally a scale would go like a Bitcoin chart, well, because it starts really low, it might start at $10 and then it's got to go up to $65,000. So, suddenly you're seeing a move, a $1,000 move. Um it looks small, but before it was big. So, what happens is it squashes the chart because most of the price action has happened from let's say $10,000 to $65,000. So, you keep getting this, looks like this at all the time. And so, this is just by stretching out the timeline? No. So, what a log chart does is change the scale where it doubles every measure. So, it goes $10, $100, or it goes 10x, let's say. $10, $100, $1,000, $1,000,000. What that little trick does is smooth out all of this issue. Um so, you'll get comfortable when you look at it just to realize that and look at the scale, look how much changed versus the other scale and you'll see from that it basically compresses all of this. It's the same as if you do use percentages. Because you know, a 5,000 point move now in Bitcoin is not the same as a 5,000 point move when it was at 5,000. It would have been And now it's not. Now it's like whatever it is today, 10%. So, it's it's it's changing that. Um and that that really really really helps. One of the words that we need to define is tokenization. What does that mean? So, remember we talked about smart contracts. Smart contracts are this thing that you can attach to the blockchain, and that contract can be any kind of contract. So, that brings up the word tokenization. Because you can therefore attach anything onto the blockchain because of this contract. Piece of art, fractionalized real estate, whatever. Whatever. So, Bitcoin, okay? That's attached on the blockchain. But now it can be other things cuz the contract will say, "Well, legally has the rights to this." So, it starts off with people conceptualizing about real estate, artwork, other things. Why real estate? This is a really powerful thing. Real estate, none of us can afford the $50 million apartment in Manhattan. But that goes up 100% in 2 years, unlike something in Queens that goes up 20% in 5 years. So, the rich dude's getting richer, while the poor are getting less well off. The rich-poor divide. Once you fractionalize it like you can with Bitcoin, that anybody can own 10% of their net worth in a $50 million apartment, we're all making the same amount of returns. The rich don't get richer. We all get the same. If it goes down in price, we all go down in price. That is what it should be. That is what tokenizing real estate's going to do. And you can do it with tokenizing artwork. So, you're allowing fractionalized ownership of all sorts of things that is recorded. Nobody can take it away from you. It's written and recorded on the blockchain. And on that ledger, it's confirmed by lots of people to say, "Tom owns this piece of this real estate and nobody else can take it." Okay, that's genius. But then what happened was this massive explosion this year in digital art. Or just happened last year. Digital art was where you start tokenizing the recorded ownership of something digital. So, people say digital art, well, it's just a JPEG. Well, a JPEG has no scarcity. Now, it's the same with with graphic arts. So, photographic art has no real scarcity until it's signed. Or you have the negative. Then it's priceless. That creates scarcity. And I collect signed rock and roll photographs um of of music artists signed by famous photographers. Now, because it has scarcity and I like that. Um so, that applies with digital art, too. Because if you say there's only going to be one of this and it's recorded on a blockchain and it's called a non-fungible token, it's a token, then I can sell it to you and you now have the rights to it. We have scarcity. There's one. And this guy called Beeple creates I don't know. I can't remember how many pieces of art, like 14,000 pieces of art. Oh, it's more. So, he did 15,000 pieces of art which was all into one JPEG um which was 13 years worth of daily art. And all incredible. And then he sells it at Christie's or Sotheby's for 60 9 million dollars. And everyone goes, "Oh my god." It's the same when Damien when Banksy started selling graffiti art and everyone's like, "This is ridiculous." And now suddenly everybody wants a Banksy. And it's the same when um Jackson Pollock started spraying paint and now everyone wants a Jackson Pollock. Nobody believes in art until they do. And it's that same human system you talked about. Once we perceive it's got value, it's got value. That's how it's going to be. And we will trade it for whatever it is. So, we can put digital art we can tokenize it and own it. The art market, you know, depending on how how you count or whatever, trillion dollars or less, right? The digital art market, you just said it. OpenSea did $3 billion in transaction volume in a in in a single month. And so, why is Bitcoin better as a global store value than gold? Why is the digital version better than the analog? Well, one, there is uh a digital component to it, meaning that anyone in the world with an internet connection can sign in and immediately start to transact in it. So, there's an accessibility advantage. Two, is there's fractionalization. I don't have to buy a full Bitcoin at 45, 50,000. I can buy a piece of a Bitcoin. Uh three is that I can carry it around really simply on my phone, right? Or on my laptop, rather than lugging around physical gold. So, there's a portability advantage to it. And then, you start to look at it from um a storage cost, etc., right? There's a whole bunch of advantages. Digital version for versus the physical version. What happens with the digital art? It's the same thing. More accessible, more divisible, more portable, all this type of stuff. And so, if we're going to go and move our lives into this like metaverse, digital world, whatever, you know, is the the new way to describe it, why would we leave the assets we care about in the analog world? No, we're going to bring them into the digital world, too. More obviously, it's with musicians and sports stars. You know, if you're Rihanna, you have you're the third largest social media influence in the world after Barack Obama and I can't remember who the other who the next one was. So, it's her and Bieber. She has 150 million followers. Wow. That's just on Twitter. So, her reach is something like 400 million people on a daily basis. They all want to be part of the community of Rihanna. We saw that with Lady Gaga and her little monsters. If you give them a leader, a mission, a set of rules, and then a system of money, you've created an economy, a country, a digital country. And that has value. If you make your society successful, it goes up in value and you create more GDP. So, this is now us getting rich from culture. And that's what people don't understand. All of this is going away. The bankers, the VCs, the private equity, everybody in the middle of this equation, the people like Google and Facebook who monetize your community and my community and make more money out of it than we will. They That goes away because we have direct relationships with our community because they're token holders. And the community benefits because they make money out of that because you're stripping out middlemen and the money goes back into the value of the network. So, yeah, I mean, it's And this is I'm talking quite a lot about this right now and I get a lot of people going, "I don't quite get my head around it." Cuz people are still trying to get their head around the digital asset space, but this is even bigger because you won't even know it's crypto in the end. It's just like your membership points to communities that you're part of and you'll realize that you're part of these nations and it might be the nation of Rihanna and you might be there for 20 years. What if I don't want to buy? The easiest example is these like media subscriptions. I don't want to spend 30 bucks a month for a media subscription, but I really want to read this one article. I'll pay you 10 cents for it. And what if I can just simply do that automatically? Mhm. Rather than have the $30 thing. They actually probably will make more money doing that than forcing people into the monthly subscription. This is where the more you're in the NFT world, you begin to realize like the ultimate fantasy for anybody selling anything is to have you just connect your wallet and then it's especially if you still in your own mind sort of denominate in dollars, it's like oh yeah, I've got these, you know, Ethereum coins, whatever they are and I can click this and it's only point 04, you know, whatever ETH. It's like oh, that doesn't sound so bad. And you just you end up buying way more than you would. It is so effortless. The wanting to having is like so quick. And so to your point the number of times I've gone to read an article and I'm like you've got to be kidding. Like even the thought of having to open an account and put in my credit card, no way. So even if I could get that article for 10 cents knowing the sort of traditional hoops I'd have to go through, I'm not I'm not typing my name or any of that [ __ ] But now with a MetaMask wallet, you go literally it prompts you connect, you hit connect and then it's like you want to buy this? Yes. Two clicks and now you're reading the article for 10 cents. I mean that I had never thought of that but that would be it it will increase spending tenfold, twentyfold. Be crazy. I I when we agreed that we were going to do this, I think it was going to be more of a conversation but I'm going to pull you down the rabbit hole cuz I could tell you're intellectually interested in this stuff. I'll give you another use case that I think will have a profound economic impact globally. Historically an employee gets paid every two weeks. In the four largest banks, this this data comes from I think 2019. They made $8 billion in overdraft fees. So an overdraft means that they tried to debit your account Mhm. and you didn't have any money in there. Yeah. So, the four largest banks made $8 billion from people that didn't have any money. There's all kinds of ethical and then questions and whatever. Part of the problem is when you start to un- unlock this and look into it is uh the folks at a Bridge, another company I invested in, um they went and did a whole deep dive. Why are these people why don't they have money? What is it? It's usually not cuz they don't have money. It's because they get paid every 2 weeks. So, I get paid on the 1st and the 15th. On the 10th I went gro- grocery shopping. My car payment's on the 11th. My Netflix hits on the 12th. Oh, I made a purchase on the 13th. Overdraft. Yep. If I get you don't real-time updates, by the way. So, you don't even know where your account is. You think you're fine. Like trying to track all the mental math or write it down, get out of here. So, when I get paid on the 15th, what do I do? I pay for the the things that I need. And then I just have budgeted in an overdraft fee. And my $35 overdraft fee every month adds up and so does all the other millions of Americans and ends up being $8 billion for top four companies. Oh my god. Now, why can't we pay people at the end of every day? Why when you leave work today don't you get paid? Why does it only once, you know, or twice a a month? It's a technology problem, right? And sure, there is economic reasons why the company wants to hold the money rather than give it to you and they earn interest or or whatever, right? But it's mainly a technology problem because there's two components. One is how do I actually pay you every day? What am I going to wire? Am I going to run payroll every day? Like that's pretty crazy, right? That seems inefficient. And two, how do I keep track of it? How do I do the accounting around Well, did Tom get paid? Did he actually get it? Yeah, okay, he got it. All right. Who who didn't get paid today? Who didn't come into work? Okay, we don't pay them, whatever. So, when you bring the cost of sending small amounts of money to zero and you do it in a frictionless censorship resistant way, you get what you call streaming payments. So, kind of the most economic prosperity is now I can pay every one of my employees at the end of every day. Well, if I do that, how much better financial position are they going to be in? Just that alone would drastically lift millions of people around the world into a better financial position. Just pay people at the end of every day. So, one of the things that the NFT market has taught me is that in fact, I wrote my rules. I They were tongue-in-cheek when I wrote them, but I think I should publish them. is that everything you think is cool is going to go to zero, and everything that you think is dumb is going to moon. And I've just seen that play out over and over and over again. It's really hard to predict what other people are going to think is cool because it's really a moment is created, energy is orchestrated somehow through this It's not an invisible hand cuz there are some people that are really good at it, but they can get the energy moving towards a project for whatever reason. Like, I don't know if you paid attention what happened with Loot. Mhm. So, um the guy that I consider my king of alpha, David, um he sent me a tweet. Like, I was about to go to bed, and he was like, "Hey, Tom, this thing called Loot is popping off. Look at it." I looked at it, and I'm like, "This is white words on black a black background. This doesn't make any sense." And I was like, "But I know this industry, and if people believe that this is like new, fresh, exciting, that at least for a moment there's going to be this influx of attention." Now, that moment could be 10 years, that moment could be 10 minutes. I have no idea, but I'm getting better and better at sort of arbitraging some of these things. So, I bought two of them. And then, a couple days later, if you owned them, you got an airdrop of uh basically their token. And I didn't even know about the airdrop, and the same guy, David, was like, "Hey, Tom, because you bought two, you've been airdropped the stuff. You actually have to go pull it out of the contract directly, and so I'll show you how to do it. So here you go out into etherscan and this is how you do it. And I got it and I got my two bags of gold. And as of that day that thing so I bought the ones that I bought I think I bought it I can't remember if it was 1.9 ETH for the original loots or 0.9 but it was in there somewhere. And at the time I got the gold which remember I didn't even know existed. I was already making money hand over fist just on the actual squares that I bought. And the bags of um their coin that my friend had to tell me were there I went and sold one of the two for $50,000. And I was like I imagine if a friend was like hey dude I know you don't know but in your bread box in the back cupboard a guy just left you 50 grand. You'd be like what just happened? It was so surreal. And I was just like okay. Don't think about things. Think about the nature of things. What about people that look at that and go yes cool you've built this amazing protective layer but it comes at the cost of the environment. The actual cost is um you know nominally 0.1% of the energy used in the world but the economic value of the energy is not even 10 basis points it's like three basis points. So you're talking about like it's almost if you put it on a sheet of paper it would be like a a couple of dots but you can't even see it. The uh the overall energy generated in the in the economy is like 160,000 terawatt hours and the wasted energy is 50,000 terawatt hours and Bitcoin is 120 out of 50,000 wasted energy. So, it it really is insignificant as an energy load on the environment. But, if you dig a bit deeper, you'll find that actually Bitcoin is much cleaner energy than all the rest of the applications. Cars, planes, trains, automobiles. It's pretty obvious uh planes use fossil fuels. There's no hope for them not to. Bitcoin doesn't. Bitcoin is actually something that runs on electricity. It doesn't run on fossil fuels. You know, most cars still use fossil fuels, and even electric cars are charged at charging stations that are charged with fossil fuels. So, so the environmentalists ultimately are going to focus upon the energy grid. And if they want to shut down fossil fuels or change the energy mix away from coal or something, they'll do that. Bitcoin uh is the highest value application of energy on a wholesale basis that we have in the world. There's nothing nothing more valuable. There's no more valuable use of energy than Bitcoin. The latest generation of SHA-256 miners, they will generate almost 45 cents a kilowatt hour in value, which means you can take them anywhere on Earth to the North Pole. You can put a nuclear reactor on the North Pole and run and run Bitcoin mining from it. You can plug them into wind generators a thousand miles out into a desert. You can plug them into geothermal on an island like Iceland. And you can generate 45 cents a kilowatt hour. The typical residential electricity cost is 13 cents a kilowatt hour. Industrial usage in the first world is 11 cents a kilowatt hour. And all that energy has to be co-located with the factories and the people. Right? We don't you know, we don't have an application, an industrial application of energy like Bitcoin that you can put anywhere on Earth. So, what's the result? The result is that Bitcoin is used to recycle stranded energy or wasted energy. If you have um If you have a hydroelectric dam and you have a lot of energy, but you don't have people to use it, well, the dam is generating energy year-round, but the people don't need it but maybe a few months a year or maybe they don't need it in the evening, they just need it during the day to run their air conditioners. Like air conditioning is a great example of a cycling energy use. Bitcoin is perfect a perfect energy uh battery because you can run it at night while the people are asleep and the air conditioning is off. And so, you level out energy consumption on the grid thereby driving on the cost of energy for everybody on Earth. And for any any plant that would otherwise be decommissioned, you have a use for it if you don't want to decommission it. And of course, as you can imagine uh the sun shines in the desert where people don't live and the wind blows in places where people don't live and volcanoes, you know, and geothermal energy exists where people don't want to live. Those are three sources of energy. They're all sustainable renewable energy, but if you know anything about a power engineering, you know, you can't move electricity more than 500 miles on a grid. Period. It's a hard stop, a hard limit. If you happen to find geothermal energy more than 500 miles from Manhattan, we don't need it. And and uh newsflash, we've already got too much energy. Right? So, even if you found geothermal energy in the middle of Central Park, we still don't need it. And so, what if I told you, Tom, I've actually got infinite free sustainable energy and it's a thousand miles away from a city. What are you going to do with it? Well, the I mean the the only obvious thing to do with is Bitcoin mining. So, Bitcoin is migrating to the ends of the earth to the most sustainable energy, which is also the cheapest energy, which is also the greenest energy. And um and it's a solution to the problem of how do we catalyze sustainable energy? How do we get green? It's also a solution to every country's problem. You know, you're you're in the middle of Africa with a waterfall and no industry. What's your best How you going to lift your people out of poverty? Huh? You plug you know, a turbine into your waterfall, you plug Bitcoin mining into the turbine, and now you have cheap uh cheap energy plug that's green that's plugged into a clean hard currency exporter that pays taxes that elevates you out of poverty that's environmentally friendly. In the beginning, all the legacy players wanted nothing to do with this. And and a lot of my time was focused on Bitcoin, cuz that was really the only liquid true asset they would even you have a conversation about. All the billionaire investors, not interested. All the big Wall Street banks, not interested. All the um you know, institutional investors, not interested. Almost to a T the best in the world have changed their mind. They continued to get new information and they changed their mind. And now some of them are the largest investors in the industry. And so there's a level of intelligence and intellectual humility it takes to get new information and change your mind. You've talked about Bitcoin is going to become the global reserve currency. I don't think that governments go down without a fight. Yeah, so global reserve currency uh for falls like a term that everyone talks about, but what is a global reserve currency, right? Um there's two ways to look at this. One is the legacy terminology of global reserve currency, which is the most dominant military basically puts the uh the currency, you know, in place and then enforces that across the world. The dollar's you know, a pretty good way to uh to use that as an example. Every economy has a reserve asset. The US economy is based on the US geographic uh players, right? People within the US uh geography and the reserve asset is the US dollar. If you go to Mexico, the Mexican economy has a reserve asset, the peso, etc. And you go through the world, this is true. There's an economy though that has been created. It's actually the largest economy in the world and it doesn't have a reserve asset, it's the internet. The digital economy does not care about where you physically are. Geography does not matter. It's unhinged from the the geography. What's the reserve asset of the digital economy? Well, most people would say, "Why use dollars?" Right? That that seems to be one of the more popular ones. But that's cuz we live in the developed Western world. People on the internet in India don't use dollars, right? They use their local currency and you go around the world and you see this. What happens if we all just used one currency and all the units were the same? Okay, that'd be interesting. And so, the reason why I say that it is going to be a global reserve currency is actually don't think it's nearly as competitive with fiat currencies as people think it is because ultimately what happens is the digital store of value, I want to protect my assets. And so, what we're moving towards is a multi-currency world, right? Right now you and I live in a single-currency world. You get paid in dollars, save in dollars, invest in dollars, and then you also pay taxes in dollars. If you want to go to somebody else's single-currency world, Mexico, you have to convert your dollars to pesos to operate within the the Mexican uh economy for the most part. Well, when you make that conversion, it's actually very difficult. Go to the bank and you try to withdraw it, it's got to be large sums. Or you go to like a currency exchanger at the airport and rip you off, right? Like like it sucks. What happens if all of a sudden the friction and the cost of transacting between currencies or switching the switching cost goes to zero? And now I get paid in dollars and with the click of a button I can change my dollars into pesos or into Bitcoin or into a digital euro, etc. Well, now the technology is the exact same. The only difference, the only competition between the currencies is at the monetary policy standpoint. They're all digital currencies. So, the digital dollar, the digital peso, and Bitcoin are literally all the same technology-wise in that steady state. But there's competition at the top layer. At the monetary at the monetary policy layer. What is monetary policy? All fiat currencies have the same monetary policy on on a structure standpoint. They're all inflationary currencies, meaning that there's constantly more printed of it. It's got a variable monetary policy, meaning that uh it constantly changes. Sometimes they're uh expanding, sometimes they're contracting, but the reason why the dollar is guaranteed to lose value is cuz they have to continue to create more of it, right? Same with the peso, same with the euro, etc. So, if you actually take all the fiat currencies and you put them in a bucket, there is a non-consensus or a different currency structure, which is Bitcoin for example. And so, if it ends up being right, it's going to be wildly valuable. It's non-consensus and right. But two is if I'm looking to store value, if I'm trying to save, I'm not going to save in the fiat structure. It regardless of the currency, it doesn't matter dollars, euros, yen, whatever. I'm going to put it into an asset where it protects my purchasing power. And if the switching cost is zero, and I can switch back and forth very easily. So, you can see a world where my employer pays me in dollars, it auto converts into Bitcoin, I sit it there, and then I got to pay my taxes in dollars. I convert back into dollars and I pay. Well, I'm saving in Bitcoin. I'm storing value in Bitcoin. What do people do? Well, historically, maybe I would have to buy real estate to do that. So, my employer paid me in dollars, I took the dollars, I converted it into real estate, I sat there, and then all of a sudden I needed money to pay my taxes, I could sell the real estate, get it, and pay it back. Now, that's a ridiculous, you know, uh order of events if I'm simply going to use it as a saving mechanism to then pay my taxes, you know, later this year. Because there's cost, there's time lapse, etc. But, there's no difference between doing that with real estate or doing it with Bitcoin. It's just now all of a sudden I can do it instantaneously. I can do it with a digital asset that protects my purchasing power, and the switching cost is is zero, essentially. And so, when we move to a multi-currency world, actually in some crazy way, the fiat currencies may become more valuable. And this is, uh not everyone agrees with this. I was going to say, I'm so intrigued. It's like the restaurant problem, right? If I put a restaurant on a intersection, it's the only restaurant, it gets, let's say, 10 people a day. If I put a restaurant across the street, many times people will say, "Oh, that's competition. Now, that first restaurant's going to suffer." If I put a third one there, people say, "Oh my god, that first one's screwed." A fourth one, "Oh my god, the first one is out of business." In reality, what happens is all the studies show, when you build density at the intersection, everyone actually gets more traffic because that that becomes known as restaurant intersection. That's where all the restaurants are. I'm hungry, I don't know, let's just go down there, we'll figure something out. And so, actually the first one benefits from having the others move in there. There's two arguments when it comes to Bitcoin and the fiat currencies. One is that they're in direct competition with each other, Bitcoin wins, fiat currencies lose, game over, right? And in that scenario, governments absolutely do not want this to happen. The governments that embrace the technology that ends up being the winner first will drastically outperform those that are last to adopt it, right? The second one is this argument of no, actually a multi-currency world, all boats rise together. Now, you know, I talked earlier about I don't want to be a market predictor. What I find right now is as technologies are being digitized, actually increases the accessibility of them for people around the world. So, take that second example. I'm in Venezuela. The bolivar ends up getting devalued away. I know I got to get out. Really, really hard for me to get dollars. I can try through the bank, but there's limitations. I'm worried about confiscation by the government, etc. The black market is really pricey in terms of it could cost me a lot to actually go buy it, and it could actually be physically dangerous. So, why do I want dollars? Well, there's safety in the dollar in my mind. There's stability. There There That's the best currency. My currency sucks, this one's great. Let me go buy this one. Okay, dollars are hard to get. I'll get gold. Well, hard to find, can be physically dangerous, could be confiscated, etc. Okay, well, what can I do on the internet? If all of a sudden I think, let's say Bitcoin's too volatile for me. I want dollars, but the dollar isn't digitized on these platforms, but China takes their currency and they create a digital currency. It's better than nothing. So, what do I do? I buy the digital currency of China. And it's just a pure accessibility thing. So, I think ultimately the incentive is that everything will be digitized, right? You'll get digital dollars, their euro, yen, etc. And some of that will be because people believe that there's some sort of internal domestic advantage to it. But also some of it's going to be just simply the game theory of we have to digitize our currency so it's accessible to people around the world and so we can drive more adoption and more more value. But the second that everyone has digital wallets, everything becomes a currency. Right? How many people say to themselves, oh I own that piece of real estate, I need to sell it to get dollars to then go buy something. Well, what happens when I can just take the real estate and buy directly the asset, I don't have to go to the common unit of account of a dollar? All the technology is the same. The value just is different. And so you get this really weird world where like I don't know what's going to happen in the future. But you can clearly articulate two or three different versions and in every single one of those versions, Bitcoin specifically is valuable. I've got a very clear idea of what what where I think it's going and how it's going to go. So I have my thesis. And when everything starts falling apart like the market starts moving, A, I look like how has it moved in the past? And it it's done similar things, right? And I've been telling everybody who's ever got into the space, you need to expect a 50% correction in a bull market and you might see a 70% bear market and over 5 years, you'll have still made more money than you can imagine. So you have to accept those things. So this thing starts tanking, Bitcoin starts first and then Ethereum rolls over later and it all and it's all down 50%. And I said I I've got this weight on my shoulders. I've got all of these people that have been following me. I have been telling them this but you know, it messes with your mind. And I pick out the one chart that matters to me, which is the adoption chart. Is anything that's going on with China and mining and this and that changing the adoption curve or not? No. So then as you said, the relentless rise of technology continues. So, la la la, I can't hear it. So, I turn around to my wife and I'm like, "You know, you know, it's fallen 50% everybody's freaking out." And she just looked at me and goes, "You are all so ridiculous." She said, "You said you should expect this. Now it's happening, everybody's freaking out." And she just walked off and said, "Don't be so She just said, "Don't be so stupid." and walked out of the room. And I'm like, "Yeah." Just, you know, Twitter is somewhere sometimes or Reddit or whatever whatever forum you're on is sometimes your enemy. I could talk to somebody all day long and they could tell me Bitcoin's not valuable. The best retort to that is it's a trillion-dollar asset that has tens of millions of people around the world holding it and it does more uh transaction volume than some of the card networks. Sure, maybe it's not valuable, right? But like yeah, but the market has determined that that is valuable. And you just work your way through the assets and what you find is asset after asset that some group of people think is invaluable. Well, the market's decided it has value. You could argue that the market is wrong or mispricing it or whatever and there's arbitrage opportunities, etc. But ultimately, I think that um we're really bad at predicting the future and so the more that you can be a market observer rather than a market predictor, uh you start to just understand uh crazy stuff happens.