Bitcoin, The US Election, and AI w/ Bill Barhydt | EP #113

In this episode, Bill and Peter discuss the latest Bitcoin price drop, why it happened, how the upcoming elections might affect Bitcoin and future crypto legislation. Recorded on August 6th, 2024 Views are my own thoughts, not Financial, Medical, or Legal Advice. 05:42 | The Volatility of Bitcoin Prices 21:39 | Trump at Bitcoin Conference 57:52 | Can Bitcoin Secure Your Retirement? Bill Barhydt is the founder and CEO of Abra, an all-in-one mobile wallet that allows its customers to buy, sell, trade, store, and borrow cryptocurrency. Barhydt is a serial entrepreneur who has worked with NASA, the CIA, and Goldman Sachs. Learn more about Abra: https://www.abra.com/ Follow Bill on X: https://x.com/billbarX ____________ I only endorse products and services I personally use. To see what they are, please support this podcast by checking out our sponsors: Get started with Fountain Life and become the CEO of your health: https://fountainlife.com/peter/ AI-powered precision diagnosis you NEED for a healthy gut: https://www.viome.com/peter Reverse the age of your skin with Oneskin; 30% here: http://oneskin.co/PETER Get real-time feedback on how diet impacts your health with levels.link/peter _____________ Get my new Longevity Practices 2024 book: https://bit.ly/48Hv1j6 I send weekly emails with the latest insights and trends on today’s and tomorrow’s exponential technologies. Stay ahead of the curve, and sign up now: Tech Blog _____________ Connect With Peter: Twitter Instagram Youtube Moonshots Learn more about your ad choices. Visit megaphone.fm/adchoices

Speaker names marked ? are inferred from speaking time and the show’s known hosts — they are not voice-verified.

• 0:00Peter Diamandis?

  What's been going on? We've just seen the Bitcoin price drop from 68,000 down to a low of 49,800.

• 0:07Speaker 01

  This is another example of not understanding the nature of exponential growth.

• 0:12Peter Diamandis?

  What are we going to see over the next few months as we head into the election cycle?

• 0:17Speaker 01

  I do think the tides are changing because they're getting tired of losing.

• 0:21Peter Diamandis?

  It's like, which way is the wind going, right?

• 0:24Speaker 01

  Exactly.

• 0:25Peter Diamandis?

  Five, 10, 20 years from now, where's the price per Bitcoin going to trend towards?

• 0:32Speaker 01

  As we approach this so-called fourth turning, what is the dollar? It becomes easier to define what a Bitcoin is than it does what a dollar is. There's going to be a second coming for crypto when it merges with AI in the next three to five years.

• 0:49Peter Diamandis?

  Hi, everybody. Peter Diamandis here, and welcome to Moon Shots. At this moment, the price of Bitcoin is $56,086, and my blood glucose level, as measured on my Levels app, is 110. And I measure my blood glucose level like I measure Bitcoin because it's important for my health. If you want more information about Bitcoin, you can look at Abra. We're going to be talking to the CEO of Abra in a moment. Or if you want information about Levels, I'll have my team put some information down below. Take a moment and introduce you. Bill Barhydt is the founder and CEO of Abra.

• 1:30Peter Diamandis?

  It's an all-in-one mobile wallet that allows its customers to buy, trade, sell, and store, and borrow against cryptocurrency. He's a serial entrepreneur. He's worked at NASA, the CIA, and Goldman Sachs. I mean, the perfect combination to talk about cryptocurrencies. We're going to do a deep dive right now. What just happened in Nashville with the presidential candidates in Japan in their recent Bitcoin drop, his predictions for the future, and why it all matters, and, most importantly, the merger of AI and crypto. What does the future look like when these two super-exponentials are colliding with each other? All right. If you like conversations like this, please subscribe so I can bring those individuals to you. Let's jump into the episode. Hey, Bill. Good to see you, my friend.

• 2:15Peter Diamandis?

  Where are you today?

• 2:17Speaker 01

  I'm at home. I just got back from my sauna and cold plunge, so I'm good to go. Let's do it.

• 2:22Peter Diamandis?

  Longevity in Bitcoin, abundance in Bitcoin.

• 2:25Speaker 01

  That's what it's all about, right?

• 2:26Peter Diamandis?

  It is. I want to dive in. You know, there's a lot happening in the market. There always is a lot happening in the market, but you were just in Nashville. I want to talk about what you heard there, what the presidents are saying, what's been going on. We've just seen the Bitcoin price drop. I'm not going to call it a crash, as people are. It dropped from 68,000 down to a low of 49,800. It's recovered since then. We're at 56,000 at the moment. But it's always been moving back and forth in that, in that channel. What's your reaction to people who are like calling this a crash and are just, you know, flummoxed about the price coming down 10K?

• 3:05Speaker 01

  Yeah, I mean, this is another example of not understanding the nature of exponential growth. And, you know, if, if, if you're looking at something in a base 10 chart and it's growing exponentially, you get a lot of noise, right? So what you need to do is zoom out. My favorite chart is the 15-year log chart for Bitcoin because it basically looks like a straight line up and to the right, which is exactly what you would expect when you have something that shows exponential growth over time, which I know your audience loves to hear about because, you know, we're all about exponential technology and Bitcoin is one of the best examples of that in software that we've ever had. So we get these oscillations. The short-term oscillations are a function of market liquidity.

• 3:48Speaker 01

  You know, this past week, we had this so-called carry trade in Japan, which blew up, which we can get into if you want, which basically was a result of, of long-term interest rates in Japan being out of whack with the rest of the world, which traders were taking advantage of, as traders are known to do. And when that blew up, guess what happened, right? So, so, so there's these short-term fluctuations that are always going to happen. I think that ultimately Bitcoin as a scarce asset, guaranteed scarce, is going to act as a liquidity suck for non-scarce assets. I can give you other examples of that in history. We didn't invent this idea. We invented the digital version of this idea, right?

• 4:30Speaker 01

  Ask any family that has intergenerational wealth why they collect art. Why did they not leave the money in Y mark papers? Or, or, you know, other currencies that don't exist anymore. Right. Because they knew that those things were not only scarce because the dead artists couldn't make anymore. Right. Uh, but the paper that they, that was their alternative was likely to fail eventually because all government issued currencies eventually fail. So we just have a much infinitely better version of that now.

• 4:59Peter Diamandis?

  Well, well, listen, I, I want to just, you know, start by saying, thanks for joining me on Moonshots to discuss this. Uh, for those of you, this is not financial advice. This is a dear friend of mine, Bill and I. Uh, educating each other on what's going on and hopefully you as well. Um, you know, I, I, I do want to say full disclosure. Uh, I hold all my Bitcoin on Abra where, uh, where Bill is the, is the CEO. Um, and so that's the disclosures I wanted to make upfront here.

• 5:28Speaker 01

  You know, I'll also say that I don't, I'm not here to give, uh, financial investing advice. Uh, consider it entertainment value or informational value. Uh, go to abra.com later if you want, you know, to talk to an advisor, but this is not that.

• 5:41Peter Diamandis?

  So I, I want to start with some fundamentals here. What moves the Bitcoin price? You know, I have to believe, I have to imagine from my perspective. You know, we're coming into the halving, uh, the supply is, is dropping. We're starting to see presidential candidates and financial institutions talking about, uh, you know, buying up Bitcoin. I thought this was the perfect conditions for there to be this massive escalation. You know, I expected it to be, you know, north of a hundred by now, and then we see it drop down to 50. Um, I do want to get a little bit of understanding. What's driving this? And, you know, we'll talk about where you expect Bitcoin to be in the long term, the fundamentals of, you know,

• 6:25Peter Diamandis?

  and I've had conversations recently with Kathy Wood on this subject, uh, and Michael Saylor. And, and now you, I'm hitting the triumphant, uh, triumvirate here. Uh, so what's, what drives the price when it goes up and down? Is it just supply and demand? Why, why are we not seeing up and to the right?

• 6:41Speaker 01

  Yeah. So, so again, I would, I would posit that over the right timeframe with the right perspective, it is up and to the right. What happens though, when you zoom in, there's a lot of noise. Okay, so let's talk about the noise. Where does that noise come from? Why does it not look like that on a line chart base 10 as opposed to an exponential, you know, log chart when you zoom out? Okay?

• 7:03Peter Diamandis?

  Right, right.

• 7:04Speaker 01

  The idea is very simple. You have something that has a fixed supply. And you are valuing that in something that has an infinitely growing supply, namely the US dollar. Okay? And the rate at which that supply is being created is actually increasing. Which is not supposed to be able to happen because it was originally supposed to be based on gold. But we no longer do that, so we can more or less, we, meaning our overlords, can more or less create dollars at will as often as they want. Which is what they do. Right? So, I think during the COVID lockdowns, we printed something like 25% of, or we created 25% of the new money supply versus all dollars that had ever existed since, you know.

• 7:46Peter Diamandis?

  It's nice to be the king.

• 7:47Speaker 01

  Yeah, well, okay, I guess, but they have the same money we do. And, and so they're being devalued the same way we are. It's just, I'm guessing that they're wealthier than a lot of the people at the bottom of the US income pyramid who uh, don't have assets they can put those, those dollars into. Okay, so, so back to Bitcoin. So, so the reason that the price fluctuates is, is a couple of things. One, right? Bitcoin as a scarce asset generally will act as a liquidity suck for dollars that are floating around. Most scarce assets eventually do, right? Artists, you know, dead artists are notoriously uh, good at being captured by the wealthy over time because it, it was one of the best scarce, long-term assets we ever had.

• 8:28Peter Diamandis?

  Central Park real estate, yeah.

• 8:30Speaker 01

  Central Park real estate, exactly. So, so for the first time, we have a digital version of this that's mathematically provably scarce over time. So naturally, it's going to act as a liquidity suck. However, it's a new asset. 15 years in the big picture is nothing. Okay? You know, we, we have to go back, you know, to oil as, as kind of the, the latest and previous new asset class. I mean, obviously, oil's been around forever, but it wasn't as important to society until we had combustion engines that would need it. And all of a sudden, it became, you know, the, the liquid gold, right? So now we have a digital gold, if we want to focus on its, its, its, you know, value, its, its use as a store of value. And it's still new. 15, like I said, 15 years in the big picture is, is, is not a long time.

• 9:15Speaker 01

  So, you have the trials and tribulations of The fact that this is a new asset class, people are still learning, people are still coming in, right? It is not a hedge against anything yet because it's too new, right? And so we're still at this point where it's being hoarded by the masses. There was a book written in the seventies by an Austrian economist, even before the internet existed, who predicted that if we had private money that was sound, it would slowly be hoarded by the masses before it became useful. And it's astounding to watch Bitcoin play out his kind of playbook, almost to the letter fifty years before, forty years before the internet. So, so that's what's happening. But in between,

• 9:59Speaker 01

  the government adjusts the liquidity of money, right? So as inflation started rising, the government tried to take liquidity or money out of circulation, right? By, by basically, you know, selling assets on its balance sheet. During COVID, it was buying assets onto its balance sheet, which had the wonderful effect of, of, you know, lowering interest rates. So, anyway, so, so this has the effect that risk on assets, risky assets, will go up and down in value based in the short, in the short term, based upon these changes of liquidity. Neither of us would argue that the, one of the most important, you know, public investable technologies right now is AI. And AI stocks got hammered in the past few days, right?

• 10:43Speaker 01

  Does that mean that AI is now worthless? No, if you look at the same log chart that I was talking about, you know, I would posit over the next, not the last few years, in the next ten years, it's going to look like, I predict, a straight line up and to the right with a lot of noise in the middle. The noise tends to be more micro-driven. What is the government doing? What is the Federal Reserve doing? What are bond markets doing? The average person doesn't understand those things, so they look at the news as the next best thing to try to interpret what's really going on. But, you know, outside of a president getting shot or going to war, like really big macro shocks, the daily news is not the biggest driver of these, these micro movements up and down. It's things that the average Joe public investor doesn't understand, right?

• 11:28Speaker 01

  Which is why I always say your time horizon should be as close to forever as you can make it. Because historically, this, by the way, I don't know if you know this, people think Warren Buffett is the best investor in, in history. He's not. In my list, he's number three. Number two is politicians where illegal insider trading for us is legal for them. And number one is dead people who actually their families don't know that their investment accounts are still open, find the investment accounts 20 years later, and they're up and to the right because they can't screw with them.

• 12:01Peter Diamandis?

  That's so funny.

• 12:02Speaker 01

  Right. So that's my point, right? It's like if you have the right time horizon, the noise dissipates.

• 12:07Peter Diamandis?

  You're your own worst enemy. Yeah. And so it's really returning to the fundamentals of what Bitcoin is and believing in it and ignoring the news and ignoring what's going on. Is the right mindset then to basically just accumulate over time? I mean, do you see people with strategies where I'm going to take 10% of my paycheck every month and put it into Bitcoin and just hold on to it?

• 12:35Speaker 01

  So we see, I mean, we see three things, right? There's the active traders, and let's put those people aside. That is not something that I would, even if I was giving investment advice, I would recommend that you not do that unless you really know what you're doing because your chances of losing money are very high. Then there's the people who already have accumulated wealth and people who are in the process of accumulating wealth. And usually the people who have wealth are also accumulating more wealth, either via cash flow or whatever. And what we see now is more and more people who have accumulated wealth saying, okay, I get it. What percentage of my wealth should be in Bitcoin?

• 13:12Peter Diamandis?

  Well, let's answer that question. What's the advice that people are giving? I don't want to necessarily put you on the spot, but is there an ethos out there?

• 13:23Speaker 01

  So I look at it this way, right? I don't perceive risk the way the average person does. I'm well educated. I have an engineering degree. You know, I'm an entrepreneur for 30 years, so I don't see risk the way the average investor sees risk. And I think most people have risk defined incorrectly. So let's put that aside for a second. So I'll try to leave my personal bias out of this. The older you are... The more dependent upon dollar-based cash flow you're going to be, you know, unless you're, I guess you would say unless you're under 60 and maybe you'll be alive still when we reach longevity escape velocity. But for other people, they have they have a cash flow concern to live out their

• 14:03Speaker 01

  remaining years. And so, you know, putting 10% of their wealth in Bitcoin is a relatively safe bet, in my opinion. And if you had done that over the last 15 years, it would have had a huge outsized impact on your investing portfolio. And in my opinion, the younger you get, the more you should be considering putting your portfolio, putting Bitcoin, or potentially something like a Solana, but but let's just focus on Bitcoin for now, in your portfolio. And I think that, given that we're in this, what I call, late-stage debt cycle, and that Bitcoin is actually less risky now. To me, the biggest risk with Bitcoin, when I was having the same

• 14:43Speaker 01

  exact conversation with others eight years ago, was technology risk. And so, that technology risk, as it relates to Bitcoin, has been mitigated, in my opinion. You know, we could talk about quantum computing and stuff like that, but, you know, I think even that will be addressed over time, you know, via other encryption schemes and digital signature schemes. So, as you get younger, right, I actually think the percentage of your holdings that you should put in Bitcoin goes up. And, you know, obviously, between 10 and 100. And, you know, if you're a computer scientist, the math-oriented person who can really dig in, do the thousand hours of digging in that Michael Sale and, you know, others have talked about, it's going to be very

• 15:26Speaker 01

  hard for you to become unconvinced that you shouldn't be putting a, you know, a big chunk of your net worth in this, the younger you are.

• 15:33Peter Diamandis?

  Well, put differently, it should be the place that you are storing your net worth, holding your net worth, in Bitcoin versus anything else.

• 15:42Speaker 01

  I think about my net worth in terms of number of Bitcoin now, not dollar value.

• 15:46Peter Diamandis?

  I think that's an important point. I have to say, I do, too. It's my single largest holding, other than the equities in my venture companies and my venture funds investments. But me personally, it's my single largest holding. And I think about that. I think about what I could have done if I had started 15 years ago.

• 16:13Peter Diamandis?

  But you know, my time machine is broken. You were just in Nashville to hear RFK and Trump talk about Bitcoin. Let's jump there. How much did that surprise you? And how meaningful is that to everyone listening here, anyone who's a Bitcoin holder?

• 16:32Speaker 01

  Let me talk about RFK first, even though I think it's obviously, well, not obviously, a million things can happen between now and November, but it's highly unlikely that he would win. But having the first presidential candidate speak was astounding. And the reason that it was astounding is, he was not pandering. I mean, this guy has gone deep. He has a huge Bitcoin holding personally. He was describing the technology. I have friends that have spent time with him on this. He's done many podcasts in my kind of crypto sphere where he's gone deep on broken money and, you know, it's truly astounding, the degree to which he

• 17:10Speaker 01

  has dug in on not only the history of our fiat system, and how Bitcoin works, but how Bitcoin can complement the dollar, or any fiat system, for that matter, or other commodity-based system. And he's gone super deep. And his presentation and his recommendations for the governments to hoard Bitcoin were not realistic, by the way, but if we got a fraction done of what he was talking about, it would be astounding. I mean, his idea, which is bold, and I love bold ideas, I know you do, was, you know, we should basically have equal percentage of the world's Bitcoin in the US reserves as we do in the world's gold.

• 17:55Speaker 01

  I actually don't agree with that, which I can explain why, but my opinion is less important. What's important is, to your question, we had a viable presidential candidate saying that for the first time. Now, the first person who was on a presidential ticket of any kind that I heard talk about this was also there, and that's Vivek Ramaswamy. A lot of your audience may not even know who Vivek is. He is, and among libertarians, he's a hardcore libertarian.

• 18:20Peter Diamandis?

  And a very persuasive speaker.

• 18:22Speaker 01

  Very, I mean, unbelievable. I mean, I am mesmerized when he talks, and I am not easily mesmerized. It's truly, like, his knowledge of American history, I've never heard anything like it.

• 18:33Peter Diamandis?

  It's amazing.

• 18:34Speaker 01

  I wish, I have a minor in history of science, I wish that my knowledge of scientific history was one-twentieth of his knowledge of American history. Anyway, he has been talking about fixing, you know, ending the Fed, fixing the money. And the problem is, is that these all seem like crazy ideas to the average American who's just not informed on this stuff. And they're really not that crazy ideas. We didn't have a Federal Reserve for the first half of the existence of the United States, and we survived just fine without trillions of dollars worth of debt. So you could actually make a case, well, maybe we were better off without a bunch of private bankers. By the way, the Federal Reserve is run by private bankers, right? So, you know, they do report to Congress, but it's basically private bankers who basically

• 19:18Speaker 01

  decide to increase and decrease the money supply largely to their own benefit, right? So, anyway, so the third person who was on a presidential ticket that spoke was obviously President Trump. Now, behind the scenes, myself and a few others, and full disclosure, donors, whatnot, have been talking to him, courting him, to say, "Look, you know, I hate to make this all about politics, but our space, our industry, has been attacked to no end the last four years." I've never seen anything like it. I've been involved in venture capital investing since my Netscape days. Even when I was at NASA, you know, I had friends who were doing VC, so I knew about it, I knew how it worked.

• 20:03Speaker 01

  So I'll give myself a little credit and go back 30 years. I didn't know what a Wells notice was. Until I got into the crypto space, even though I've done dozens of venture deals over time, all of which have, you know, are registered deals with the SEC, you're issuing private stock, it gets registered with the SEC, companies go public, registered with the SEC, never heard of a Wells notice. Almost every major company in the crypto space that I'm friendly with has either received a Wells notice, has received a subpoena threatening a Wells notice, or is in the process of being investigated, potentially leading to a Wells notice, or has already passed that point and is now fighting in court or settlement.

• 20:46Peter Diamandis?

  All right, so tell us what a Wells notice is.

• 20:48Speaker 01

  A Wells notice is basically the SEC's informing you of their intent to sue you for some securities violations, and I'm not a lawyer, so I'm giving you the bill speak on this. And mathematically, okay, what are the odds that our one space has found every fraudster, every evil CEO, every lawbreaker, and managed to put them all in one space and wait for 35 years, when all of tech in Silicon Valley where I've grown up, right, physically grown up, because I've been here most of my life now, has never heard of a Wells notice? I would say the odds of that are zero. So clearly, there's something else going on here.

• 21:31Peter Diamandis?

  How do you spell witch hunt? Right, right.

• 21:34Speaker 01

  Exactly, exactly. And so, you know, strange bedfellows, right? So now we come back to President Trump speaking in Nashville, and behind the scenes...

• 21:43Peter Diamandis?

  And by the way, Nashville was the Bitcoin conference.

• 21:47Speaker 01

  Yeah, it's the largest, there are multiple Bitcoin conferences in the US around the world, Bitcoin is not a company, it's not owned by anyone, so there are lots of them. This happens to be the largest, run by Bitcoin Magazine, David Bailey, he's been a longtime friend, great, great guy. He was instrumental, by the way, in what we call in our world, orange pilling President Trump, and not only basically arranging for influential donors like the Winklevoss Twins and others in our space to spend time with him, but to explain to him and to actually get his feedback in a very engaging way on why this has been a problem, why we're being attacked, why this has to stop.

• 22:29Speaker 01

  So he got on stage, and he didn't really know how, I guess he was coached, you know, SEC's been a problem, like, I guess he can relate to that. But, but, you know, he went on stage and said on day one, now he said, he said a lot of things, okay, about crypto, about Bitcoin. Some of the Bitcoin maxies don't like the word crypto, by the way.

• 22:49Peter Diamandis?

  They don't want to be, they don't want to be mixed up in the, in the crypto shitcoins, right?

• 22:54Speaker 01

  And, and I don't agree with that. It's, it's a word. And, and so it's meaning, it's intent, it's context is what matters. But, but anyway, so he got up there, said a lot of interesting stuff, was clearly prepared. And, and, you know, he rambles a little bit like, like President Trump is known to do. And then he says, and on day one, I will fire Gary Gensler. And the crowd of 8,000 people literally goes bananas and loses their mind. Now, he had no idea. He was like, I don't even know if these people know who Gary Gensler is, because I'm guessing right now, a lot of your audience is Googling, who is Gary Gensler? Gary Gensler is the, is the chairman of the SEC. The, the SEC, I believe, is run by a commission of five commissioners and, and presidential appointees, I believe,

• 23:37Speaker 01

  and, and one is based upon who is in power in the executive office is made commissioner. And so he's the senior executive for overseeing the securities industry in the United States. And, and so, you know, he is basically, let's, for all intensive purposes, an Elizabeth Warren appointee, hell bent on killing our industry. And again, I'm not here, it's not about politics, it just is. I don't want this to be true. I've voted Democrat before in my life. I don't really care that much about the difference, but they both print money ad nauseam. Right? So, so, so for me, it's about, why are you killing this technology that is the future of money and banking? And, and so, you know, it's, and so he was blown away.

• 24:20Peter Diamandis?

  I think, I think he was so, so blown away that he said it again, just to get another reaction.

• 24:24Speaker 01

  And, uh, yeah, he was taken back. Like I said, he probably believed when they told him to say it. Are you sure these people even know who this guy is?

• 24:32Peter Diamandis?

  I'm curious, I'm curious in your opinion, for both RFK, for Vivek, and for, for Trump. Is it the size of the population holding Bitcoin that they're focused on getting the attention of, or is it the long-term benefit for America and humanity of Bitcoin? How much, what's the mix there?

• 24:54Speaker 01

  Okay, let's, I think it's three things, and, and, and, and I'm, I'm gonna be brutally honest, some of it is money, right? I mean, you know, like, he's got large donors in my world now, Trump in particular, right? And Vivek did last year as well, when he was running, uh, in the primary for president, um, you know, he was the first person willing to stand up for us, and, and it got him a lot of attention, which I think helped propel him into Trump's arms, and I wouldn't be surprised if he has a cabinet position, or an economic position in Trump's cabinet.

• 25:22Peter Diamandis?

  Agreed.

• 25:23Speaker 01

  And I hope he does. So, so, but I think it's three things, right? I think the first is, is money. Uh, I think the, the second is, you know, you know, I think that the Democratic Party underestimated the number of crypto holders who not only hold this, but truly care about this, and believe it's important.

• 25:45Peter Diamandis?

  So what, what is that, what is that number right now, you think?

• 25:47Speaker 01

  Well, crypto holders in the US is probably 50 to 70 million.

• 25:51Peter Diamandis?

  50 to 70 million individuals?

• 25:53Speaker 01

  Individuals?

• 25:54Peter Diamandis?

  That's a lot, that's a significant amount.

• 25:56Speaker 01

  It's a lot, and thank Robin Hood for some of it, right? Coinbase, obviously, you know, I mean, we don't deal with the small dollar retail, but they've done a fantastic job in, in making that available, uh, even PayPal, right? That is easily, now, now, for all those people, they're not single-issue voters, right? But, but you can only push a cat into a corner so far before it's gonna try to scratch your eyeballs out. And, and so, so I think that when you factor in the other issues that matter, the percentage where this is single-issue voters, I think we represent three to five percentage points. I really do. That's insane, for a space that didn't exist, you know, a few years ago. They totally underestimated that.

• 26:39Speaker 01

  Now, the third part is, and, and, and honestly, for me... There's another announcement that happened afterwards that that was just as important as the president speaking, but for me, it's clearly about the future of of money in this country and and the world, right? I mean, the United States basically has the the dollar, the global reserve currency, and as a result, you know, the the military industrial complex to support it. That's coming to an end, whether we want it to or not.

• 27:06Peter Diamandis?

  There's a lot more conversation, yeah.

• 27:08Speaker 01

  Right. The question is, what is it going to be replaced with? It is going to be replaced with something, all right? And how does that replacement happen? If you read Ray Dalio's book, his last book, it's not a very pretty picture. Historically, it's replaced via via wars, right? And and I don't want that to happen. I don't, this isn't just about, you know, this is cool technology to me. So so long with the way of saying, you know, people are starting to get it. And and of the three, clearly RFK had the most impassioned kind of plea for why this technology matters. However, when they were done, immediately, Senator Loomis, the the senior senator from Wyoming, got on stage and blew us all away.

• 27:53Speaker 01

  She introduced legislation that would cause the United States, for the first time, to start adding Bitcoin effectively to the country's balance sheets or reserve assets.

• 28:05Peter Diamandis?

  Has she always been a strong proponent?

• 28:08Speaker 01

  Huge.

• 28:08Peter Diamandis?

  Is is this recent, or it's been for some time?

• 28:11Speaker 01

  A few years. So Wyoming has very interesting, unique bank license regimes specifically for digital assets. Most states and and the federal government have existing bank charters, money transmission charters, where they've kind of made crypto and digital assets a part of those existing regimes, which is complicated. You know, a lot of these laws go back to the 1930s and 40s. What Wyoming did... And she was part of this, even though she's a, you know, a national senator, is they created legislations specifically contemplating digital asset banks, banks. And, you know, there are a few of those licenses have already been granted. And so she's gone knee deep

• 28:55Speaker 01

  on this issue for years. She's appeared on crypto podcasts, you know, Fox, talking about crypto, CNBC, talking about crypto, et cetera, et cetera. And, and so clearly this had been in the work for months, if not years. Right? And you can see the legislation, if you just go to her Twitter feed, Senator Lummis, you can actually go to the webpage and read the legislation. Now, look, I don't, you know, if Trump wins, it might have a reasonable chance of getting signed, but we would need both houses because I don't think, I don't think a Democratic, you know, Congress would, would vote for this right now. And I'm not even sure the timing is right in the magnitude of a number she's talking about. But the fact that we're now having this conversation, that we've had

• 29:40Speaker 01

  three people on presidential tickets, a sitting senator, multiple congresspeople, and from both sides of the aisle, right? Because, you know, Ro Khanna, the, one of the most technologically astute people in Congress from, from here in Silicon Valley, also spoke. And he, you know, I give him credit because, you know, he took his lumps right now, given, given, you know, his, his peers' stance on this. It's, it's incredible that this is even a conversation.

• 30:07Peter Diamandis?

  Real quick, I've been getting the most unusual compliments lately on my skin. Truth is, I use a lotion every morning and every night religiously called OneSkin. It was developed by four PhD women who determined a 10 amino acid sequence that is a senolytic that kills senile cells in your skin. And this literally reverses the age of your skin. And I think it's one of the most incredible products. I use it all the time. If you're interested, check out the show notes. I've asked my team to link to it below. All right, let's get back to the episode. You know, it's interesting, years ago, I forget exactly when I was on

• 30:47Peter Diamandis?

  I think it was CNBC and talking about the six, the six Ds of exponentials, right? Digitize something in the early days, it's deceptive, eventually gets disruptive, but it dematerializes, demonetizes and democratizes products and services. And I was talking about Bitcoin in that regard. And of course, it's exactly what it does. We've digitized money. It's been a deceptive growth. It's now beginning disruptive and it's dematerialized, demonetized, democratized. A whole part of the, of the financial industry. And I remember, you know, a conversation about what would we be looking for?

• 31:26Peter Diamandis?

  And it was the adoption of different segments of society along the way, right? It's, it's going from the entrepreneur to the high net worth individual, to the family offices, to, and then, you know, financial institutions, sovereign wealth funds, and then governments eventually. Where are we? Where are we in that, in that progression? What have we seen? Obviously, we're seeing this incredible, you know, you know, meaningful conversation on the presidential stage, but we've, we've started to see the financial institutions begin to adopt it and promote it to their customers. Yes, we've, where are we in that? What do we, where are we now and what are we looking for next?

• 32:10Speaker 01

  Okay. So I mentioned earlier that I've been watching Bitcoin play out this kind of playbook from, from Hayek's book in the 19, Friedrich Hayek, who is, you know, considered kind of the, one of the founders of modern Austrian economics, wrote this book called The Denationalization of Money. And, and it was basic, the premise was, we need private money to compete with government money. And in the US, historically, that's illegal. You can't, can't do that. But we have one you can't stop because there's no off switch. So it's ones and zeros, which turns out are protected free speech, which is a nice, interesting way to get around the problem of making something illegal if you make it protected free speech. The Supreme Court's already opined on this issue. So that, that's good, right?

• 32:54Speaker 01

  We can't stop it, right? So where are we? What does it mean from an adoption perspective to your question? I actually think that, you know, having like a Bitcoin ETF, you know, governments holding Bitcoin, I think these things are interesting from a marketing perspective, but I don't think that they actually solve long-term real problems for anyone. Okay, you know, obviously, if RFK got his way and the government bought 20% of Bitcoin, the value Bitcoin would go up to $100 trillion. And so for those people who hold Bitcoin, congratulations. Okay, that's not the point of Bitcoin. Right. The point of Bitcoin is that we now have a global system with no off switch that allows you to store value and move value with no financial intermediary.

• 33:39Speaker 01

  Okay, that's the value of Bitcoin. The fact that you can hold it in a vault and trade it, you know, via security, which is what ETF is, is interesting. It makes it accessible to more investors, which is fine if you're hoarding it. It's just another way to hoard it then, right? But long term, it's not why I got into Bitcoin, right? I got into Bitcoin because it solves the problem I'm talking about. So I think what ultimately matters and what I look at is, okay, family office is hoarding it, awesome. You know, hedge funds, you know, mutual funds buying it, fantastic. Right? We're going down that and now with the ETFs, you get to kind of middle-class retail, IRAs, 401ks.

• 34:22Speaker 01

  Now, what I'm looking at are what's happening in Africa? What's happening in Southeast Asia? What's happening in the poorest parts of Latin America? Venezuela, which used to be one of the wealthiest countries, right, in the South American Peninsula, via these moronic, idiotic, you know, communist policies, has become one of the poorest countries, right? Where are we with Bitcoin adoption? There. What Mile has done in Argentina is interesting to me. He basically saved that country, if you look at what's happening economically. Right? That's where I think Bitcoin adoption and crypto adoption,

• 35:04Speaker 01

  you know, Bitcoin as money, crypto as potentially, and DeFi as the future of banking. That's where I'm looking next, right? Government adoption, I like that for two rea... I like government adoption and that discussion for two reasons, right? It's great marketing and it takes the heat off of us, given everything that, you know, we've been going through for the last five years. Sure. Right? So maybe not the answer you were expecting, but for me, if it really is the kind of the people's money, right? And I don't really look at it myself that way, but it's a good way to capture the idea, right? Does everyone have access? Can everyone use it? And right now, that's not true. Not everyone can.

• 35:45Speaker 01

  But we're inching closer to that. We've made huge strides in making that happen, not just with Bitcoin as money, but this new kind of DeFi or decentralized finance, which we can talk more about later, as the future of banking.

• 35:58Peter Diamandis?

  Yeah, and for me, it is the abundance thesis, right? It's the means by which we create global abundance accessible to all. I want to talk about a little bit of near-term elements and then jump in some questions from my, I have to still call it my Twitter ecosystem, it's hard to call it my X ecosystem because it doesn't sound right. I told Elon, I need a verb, Elon, I need a verb. Give me a verb, please. So, the fear meter. So, I mean, we've talked about this before. There's a meter in the economy and in the Bitcoin and crypto ecosystem about fear versus greed. Where are we there?

• 36:42Speaker 01

  In regards to just the investment cycle?

• 36:44Peter Diamandis?

  Just Bitcoin right now, people?

• 36:47Speaker 01

  Oh, fear. You know, I mean, I think the last few days, like around the time we're recording this, we went from euphoria, when the time the ETFs were released, to kind of sideways for a few months, to fear the last few weeks or last few days. And a lot of that is coming out of Japan.

• 37:07Peter Diamandis?

  So, let's talk about, I want to talk about Japan then, in that. I want to talk about Japan and the impact on interest rates on Bitcoin, yeah.

• 37:15Speaker 01

  Economies work in cycles, and one of the most important functions of those cycles, because of the fact that the government controls the printing and the amount of money in circulation, is what the Federal Reserve of the United States chooses to do as the largest of the world's government banks. And the Federal Reserve basically sets monetary policy, the most important being the Federal Reserve, the short-term rates, the rates at which banks can lend to each other, among other things. And these rates basically can can cause money to enter into society at a faster rates or or pull money out of society and they can change the rate of that. And that velocity of money is a is a huge factor in how these cycles work.

• 38:00Speaker 01

  Now, there are a few other things that matter here. One is, that's not the only key tool in the Federal Reserve's toolbox. They also have the ability to buy assets. So during, if you remember during the lockdowns, interest rates got so low that you effectively couldn't lower interest rates unless you started giving people free money, making them negative. And so what they started doing is buying assets. Okay. So when they started buying assets, and when you buy bonds, right, you're creating demand for the bonds artificially. That drives the price of the bonds up, right? When bond prices go up, the rate of the bond action that the bond provides effectively goes down. Bond prices versus the rates move in opposite directions, right?

• 38:43Speaker 01

  So by buying those bonds, creating artificial demand, they were actually driving interest rates down even closer to zero than where they were. Right? And in some ways even negative, depending upon how you, you know, how you look at it. So, so they have that trick in their toolbag, they have interest rates, right? And they can also coordinate with international governments or treasury, right? So there's other, you know, so they have some, some tricks there. Japan, as some of your, your viewers may, may know, basically had a multi-decade deflationary hangover from its exuberance from the eighties and nineties, and their interest rates have been near zero for a very long time. Okay?

• 39:21Speaker 01

  And, and so this created an opportunity for traders to potentially look at free money. Because they could go into the Japanese market and borrow dollars or yen, in this case, at very low rates, right? Even if they're going to invest in dollars, the cost of pegging or hedging the interest rate or the currency fluctuations is relatively low. And then invest in other assets that would generate cash flow or, you know, potentially Nvidia, it turns out.

• 39:51Peter Diamandis?

  Seems like a logical thing to do.

• 39:53Speaker 01

  Very logical thing to do, especially if your goals, your only goal is, is to make money. So this arb trade is known as a carry trade in the hedge fund world and the trading world, and this has been going on for a long time to the tune of probably trillions of dollars. I've heard numbers as high as 20 trillion. I don't think it's that high. I think it's probably a fraction of that, but certainly trillions, single-digit trillions. That's a lot of money. So last week, the Bank of Japan announced that they were raising their baseline interest rate by 25 basis points or a quarter of a percent. And that sent shockwaves through the investing world because not only were investors taking advantage

• 40:33Speaker 01

  of this, they were leveraging themselves. Okay, so when you are levered, right, a small loss gets magnified.

• 40:40Peter Diamandis?

  Yes, yes.

• 40:41Speaker 01

  Right? And so the idea here that all of a sudden, if you're buying an asset, leveraging that asset to borrow more money in Japan and doing it over and over again, we don't know how far the leverage went. But what we do know is, is that the unwind started last week. Okay, and it went into overdrive on the week, the first weekend of August.

• 41:01Peter Diamandis?

  So connect that now to Bitcoin for us.

• 41:03Speaker 01

  Sure. So as the market basically becomes fearful and, you know, traders, hedge funds, whoever, becoming fearful, this will have an impact on all risk on assets. Because people are basically fearful that, you know, this unwind is just going to push people towards cash and cause a flight to safety and everybody's going to be selling and it just kind of propagates and it becomes its own thing. Right? And so that weekend, this past Sunday, when, in the US, which is mourning in Japan and Asia, immediately, we saw a big drawdown, one of the biggest we'd ever seen, as a matter of fact, in the Nikkei.

• 41:46Peter Diamandis?

  So people are selling assets to get cash to cover their shortfall?

• 41:49Speaker 01

  And, yes, or they're fearful that they may basically be suffering from the hangover of what everybody else is doing.

• 41:56Peter Diamandis?

  Is there psychologically a point at which people are then going to flee to Bitcoin?

• 42:00Speaker 01

  Eventually. We're not there yet. That's the difference between being an asset for a thousand years like gold and being an asset like for 15 years. I think there's the promise of what Bitcoin will become as this hoarding that I talked about and the creation of this private money happens over the next decade or two. And we get the benefit of that for being early. Right? Because that will be the stable

• 42:25Speaker 01

  Measure of of of value fifty years from now, right? In the meantime, we get the benefit of the fact that it's on its way there.

• 42:33Peter Diamandis?

  You know, it's fascinating how um public reactions and fear. I mean, it's in the financial industry. It's, you know, traders are are watching the financial tickers and news like minute to minute. And um not not the world I want to live in. And I, you know, the the advantage of of buying my Bitcoin, you know, putting it into Abra and just forgetting about holding it uh is a psychological peace of mind in that regard. But um what what are we going to imagine? What are we going to see over the next few months as we head into the election cycle? And and where where do you imagine Democrats are going to come out on this?

• 43:16Peter Diamandis?

  In particular, on uh the the Democratic ticket. Is there? Has there been any any softening in in their point of view on on Bitcoin?

• 43:28Speaker 01

  Let me kind of connect the dots here. So so as I said, these are these this kind of moves in cycles, right? And and and Federal Reserve interest rates, market liquidity, that those are the biggest contributors to those cycles. And what happens is is that in in sometime early in two thousand twenty-two, because of the inflation that was going on post-COVID, the government was really trying to force interest rates up and take dollars out of circulation to basically get prices down because, you know, bread was super expensive, going out to dinner was getting expensive.

• 43:59Peter Diamandis?

  Toilet paper was expensive.

• 44:01Speaker 01

  Yeah, right? And and so we're still suffering from the overhang of that. It's just that the prices aren't increasing as fast as they were. So when people say inflation has come down, what they mean is they don't mean the prices have come down. They mean the rate of increase has either slowed or stopped, right? And it hasn't stopped, but it's back down to probably like one and a half percent for most staples right now. There are other things like housing that skew it higher. Okay, so, so that's fine, mission accomplished, but that's a cycle, okay? So now, in, in late 2022, the Fed said, okay, we're probably at the bottom of that cycle, right? We, we, we, we think that inflation is moving in the right direction and it'll take 18 months to get there, and they were mostly right on that.

• 44:45Speaker 01

  Okay, so then, what you want to do is you want to slowly start loosening the purse string on the mon- on the money, because if you don't, what's going to happen is people are going to start, stop borrowing, businesses will stop growing, small bus- and medium-sized businesses, which are, you know, the heart blood of, of, of, you know, new job creation historically, are going to stop being created, right?

• 45:06Peter Diamandis?

  Right.

• 45:07Speaker 01

  And so they have no choice but to predict, to some degree, when these cycles are going to happen. So slowly, liquidity was coming back in, uh, which is one of the reasons why Bitcoin and, and tech stocks had a booming 2023, if you remember.

• 45:20Peter Diamandis?

  Yeah, it was, it was an amazing year.

• 45:22Speaker 01

  Right, and, and it was the velocity of money, even though conditions were still tight, dramatically flipped, um, and, and from, from ridiculously tight to a little tight. And, and again, at the edge, it's that velocity of money that, that moves markets, okay? And so, that slowed late last year, right? And so it looked like, you know, Bitcoin was going to be flat for a while. The reason, if you remember, early this year, a lot of assets, except for, you know, a few, few stocks, were very flat, except for Bitcoin, which was up and to the right. Why? Well, that was the ETF. Okay, so the ETF, at that moment, that liquidity was drying up a little, created incremental

• 46:04Speaker 01

  demand for the Bitcoin itself, because now 401Ks and IRAs for the first time could, could, could allocate. Okay? So, for the last few months, liquidity has been very dry, because the Fed has been very concerned about making sure that they really got this inflation under control.

• 46:24Speaker 01

  Right. Now, it's clear that not only do they have it under control, at least in the short term, right, because you can't have it under control forever, but the economy's slowing dramatically. And again, it doesn't matter in absolute numbers, it matters about the rate of change. And it's clear that they've turned the Titanic slowly, and if they don't basically start thinking about the direction of the Titanic now, it's going to be a problem. So, a lot of people are predicting that you're going to see interest rates come down quickly over the next few months, and then the discussion is turning to, okay, we're seeing employment's numbers, unemployment numbers start to trickle up. Are they going to be able to steer this Titanic quickly enough to stave off a recession? Or is it going to be a small recession, or is it going to be a big recession? So staving off a recession is almost impossible.

• 47:09Peter Diamandis?

  If the interest rates do come down, what will that mean to the Bitcoin price?

• 47:14Speaker 01

  So historically, like I said, you know, risk on assets act as a liquidity suck for dollars sloshing around the system, which is why the price of Bitcoin was skyrocketing during COVID, because it was the fastest we had ever printed money and put money proverbially in circulation in United States history, actually world history. And so, it won't be, you know, that much money, but we have two problems. One, we have to stave off this recession, which means a lot of money is going to come into the system, and risky assets are going to act as a liquidity suck for that. Stocks, crypto, I think crypto will be, you know, number one in terms of percentage gain, technology stocks number two, small cap stocks number three, et cetera, et cetera, down the pipes.

• 47:53Peter Diamandis?

  So, is the, you know, the word on the street, so to speak, that it's going to be a strong fourth quarter for crypto and Bitcoin?

• 48:02Speaker 01

  Yes.

• 48:03Peter Diamandis?

  Let's get back to, what are you hearing from the democratic conversation? I mean, are they going to come out in favor of Bitcoin as well, or are they going to stay flat on this conversation?

• 48:15Speaker 01

  I think they have no choice over time. But to soften their stance, they're losing court cases right now, like important court cases. Um, and, and that's why we got the ETFs. They tried to fight the ETFs. They, they, they denied the applications for six or seven years. And finally, um, which is what we predicted, somebody, I, I went on CNBC and said this, uh, you know, BlackRock filed and, um, took, you know, Grayscale took them to court and said, hey, you know, this is, you have to allow this. I mean, this is perfectly legal. I mean, there's nothing, there's no, there's no legal reason for you to deny this. And the court agreed with them. That's how we got the ETF. Right? So, so I think what happens here is when you start losing these court cases,

• 49:00Speaker 01

  it does send a message because, you know, the, the lawyers making these decisions are also people. I mean, they don't want to get their asses kicked regardless of what their subordinates are telling them to do time after time. Right? So I, I, I think that is trickling down now to congresspeople who are also hearing it from their constituents. Right? So there's these, um, draconian rules in the U S right now that, that make it extremely difficult for banks themselves to hold crypto on their, on their kind of, let's call it the bank's balance sheet.

• 49:28Peter Diamandis?

  Mm hmm.

• 49:28Speaker 01

  Okay. Which is crazy. It's just an asset. Right? And, and so there was legislation introduced, um, a few months ago to undo this S E C rule that made it difficult for banks. If S E C should have nothing to do with what banks can, can't hold on their balance sheet, by the way. Nothing as far as I can tell, but they have this, they managed to create this rule that prevented banks from doing it, even though banks are overseen in theory by different regulators. The legislation was passed, but it was vetoed by President Biden. I think if this happened again, under a different administration, Democrat or Republican, it would have a very good chance of getting signed. I think they regret not signing it actually. Um, and, and so.

• 50:10Speaker 01

  That's a long-winded way of saying, I do think the tides are changing, both because we were now just not, you know, just taking it on the chin and we're fighting, but also because they're getting tired of losing. And they're also seeing, they're also seeing in, in, in, you know, the donations that are coming in.

• 50:27Peter Diamandis?

  Which way is the wind going, right?

• 50:29Speaker 01

  Exactly, right, you know, and so, um, it's just common sense that at some point, I don't know if you remember this whole Clipper Chip nonsense from the 90s with the encryption, um, back in my Netscape days, the Clinton administration was trying to backdoor the ability to read encryption in all new hardware.

• 50:46Peter Diamandis?

  Oh, yes, I do remember that, yes.

• 50:47Speaker 01

  Yeah, and we lost our collective minds in Silicon Valley. I was working on SSL, you know, HTTPS back in my Netscape days and

• 50:53Peter Diamandis?

  Right.

• 50:53Speaker 01

  Uh, we just couldn't believe it. We're like, well, this defeats the purpose of everything we've been trying to do to create e-commerce online. And they eventually figured it out and they got it and they acquiesced and, and, and everything was fine. Uh, this isn't that, unfortunately. Um, it's going to be a harder fight, but eventually, one, it's not going to matter long-term anyway. It's just not.

• 51:11Peter Diamandis?

  Yeah, Bitcoin, Bitcoin will outlast a multitude of administrations.

• 51:16Speaker 01

  Me, you, presidents, whoever, doesn't matter. Uh, and by the way, we're 300 million, 400 million people out of, what, 8 billion, so.

• 51:24Peter Diamandis?

  By the way, what, what countries, what countries are the biggest Bitcoin holders by percentage of population?

• 51:31Speaker 01

  You know, I don't know the answer to that exactly, but I have, I think I have anecdotal evidence. Um, it's, it's interesting. It's places like Nigeria, um, Philippines, Argentina, uh, the US, um, historically, I think, India. Um, let's see, what else comes to mind that I know?

• 51:51Peter Diamandis?

  Interesting.

• 51:52Speaker 01

  UK. So, you know, it's, it's an interesting mix. Argentina has been, always been, look, if you're in Argentina, this is a very interesting, a very easy discussion to have. Because if you're over the age of 40, you have lived through so many currency failures, so much corruption, that this is just obvious.

• 52:10Peter Diamandis?

  Yeah.

• 52:10Speaker 01

  Right? That's why Mile is a hero now.

• 52:12Peter Diamandis?

  Yeah.

• 52:12Speaker 01

  Right? Because he, you know, he took the, the VecPlay book, which is, look, the only way to stop this corruption, corruption is to shut it all down. And he did.

• 52:19Peter Diamandis?

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• 53:01Peter Diamandis?

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• 53:46Peter Diamandis?

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• 54:30Peter Diamandis?

  healthy lifespans. Go to fountainlife.com backslash Peter. It's one of the most important things I can offer to you as one of my listeners. All right, let's go back to our episode. Let's, let's look forward, you know, I have to ask this question. It's the most popular question asked, you know, five, 10, 20 years from now, where's the price per Bitcoin going to, you know, trend towards?

• 54:52Speaker 01

  You know, it's, it's hard to answer in dollar terms because I do think that-

• 54:55Peter Diamandis?

  A Bitcoin will equal one Bitcoin, right?

• 54:57Speaker 01

  Obviously, yeah, that's, that's the easiest and most important answer, I, I hope. But, but as we approach this so-called fourth turning, right, what is, what is the dollar? It becomes easier to define what a Bitcoin is than it does what a dollar is. So now, let's assume nothing changed, and the chances of that is zero, but I don't know how else to answer your question, right?

• 55:17Peter Diamandis?

  Fair enough.

• 55:17Speaker 01

  So if we keep creating, increasing the money supply by 6% a year on average, which is more or less what we've done since the 50s-

• 55:25Peter Diamandis?

  What is gold increase? Gold increases by some percentage points from mining-

• 55:29Speaker 01

  Yeah, it more or less matches, matches price inflation plus a couple of percentage points over time, is my understanding.

• 55:34Peter Diamandis?

  Yeah.

• 55:34Speaker 01

  But if you look at stocks over time, right, and I know Michael Saylor's talked about this on other outlets as well, if you look at the rate of average increase of stock prices over decades, it matches the rate of increase of the money supply. Is that a coincidence?

• 55:51Peter Diamandis?

  Wow.

• 55:51Speaker 01

  I don't think so. And, and so, what does that tell you? I mean, it's kind of a scary thought, right? So, so anyway, whether it's scary or not, if nothing changes, at a minimum, it should stabilize in terms of exponential adoption at some point. And then the question is, what are we measuring in? Well, if we're measuring it in dollars, it should at least go up 6 to 10% a year because we're adding 6 to 10% more dollars every year, right? So if you do that math and basically assume that, you know, for the next 10 years, it goes up by 20 to 25% because we're still getting the exponential adoption, and then after that, it basically starts to become a slightly better liquidity suck than, than equities, because you can always create more equities, right? People create companies,

• 56:32Speaker 01

  they can get more shares, right? Can't issue more Bitcoins. So, so Bitcoin should do better, right? So let's say it's 10%, right? So you do that out for, you know, 20 years, the numbers are astronomical.

• 56:45Speaker 01

  You know, no company has ever grown that fast for that on that sustained basis in in corporate history.

• 56:50Peter Diamandis?

  I mean, the way you know, others look at it is it should be equal to half the value of holdings in gold or 10% of real estate or whatever the case might be.

• 57:05Peter Diamandis?

  I mean, the question becomes ultimately, how much has the global economy inflated at the same time?

• 57:10Speaker 01

  But but remember, we we we increased the the supply of gold. We find, we don't increase the supply of gold. We find more gold that's usable at the rate of about 2% a year.

• 57:20Peter Diamandis?

  Right, right.

• 57:21Speaker 01

  In commodities, we call that the stock to flow ratio of of of of gold. So every 50 years, we double the supply of gold. In 50 years, the supply of Bitcoin will not have doubled. Okay, we can build up for new property. Right? So so those are assets that, you know, while historically they have been good liquidity sucks for intergenerational wealth. They're not, they're still not optimal. Bitcoin is optimal for storing intergenerational wealth because you you are mathematically certain how scarce it's going to be.

• 57:52Peter Diamandis?

  Let me ask this question. It comes over from from X from a pick doc 581. He says, do you think Bitcoin's price could go higher than what experts predict using the power law and stock to flow models? Specifically, do you think Bitcoin might see bigger price jumps than usual? Parenthesis power law, or that its value might increase more than expected because of the limited supply?

• 58:16Speaker 01

  Yeah, so so there's two ways to look at this. You know, one is the last question, which implies dollars. And there I would say, well, what happens if we start printing dollars like crazy again? Because we're trying to, you know, deflate our way out of this debt crisis, right? And of course, at that point, the the price of Bitcoin is going to outpace the power law. Has to, right? There's just not enough to go around. The more important question becomes purchasing parity, meaning what am I buying with the Bitcoin? And if I was to buy, you know, a commodity that we we we know more or less what it should be worth?

• 58:49Peter Diamandis?

  Starbucks coffee or McDonald's burger, whatever it might be, right?

• 58:52Speaker 01

  So if I, if there's the same number Starbucks, same number employees, like, like, how much Bitcoin am I using to buy that cup of coffee in 10 years, 20 years, 50 years? Like, I've seen people. Do this with the Ferraris in the houses where you see basically how many Bitcoin it took to buy a Ferrari in, you know, 2013. Well, it took all of them. And then, you know, and you can see that like how much Bitcoin it takes to buy a Ferrari now. And the number is just going down, right? Because it's a deflationary asset. It's the opposite of the way we're taught to think, which is the value of money should go down because you're inflating it. We made that up.

• 59:28Peter Diamandis?

  Right.

• 59:29Speaker 01

  We literally made it up. And so what we did is we made up something which is more sound, right? So it's the answer to that question should be, I think Bitcoin follows the power law relatively closely over time. So it's a good question. And what that implies to me is that its purchasing power should increase versus, you know, other things that you would want to buy with it. Dollar is a different story because we can't trust the government to responsibly do anything with the dollar and they'll just inflate it to infinity. And so as a result, the price of Bitcoin on a dollar basis could go to infinity. What does that mean?

• 1:00:05Peter Diamandis?

  Yeah. Here's a couple of questions I find fascinating. This one is from MAGA10424. Bitcoin doesn't create a source of income for retirement. So, and I want to talk about that. I mean, if you're holding Bitcoin, how do you create, how do you make it a source of income, right? So let me just finish your question here. So what would be the strategy to use BTC for retirement? Is it work, borrow, die, or sell a little bit each month?

• 1:00:32Speaker 01

  So, so that sounds morbid, work, borrow, die. But hopefully it's work, borrow, longevity.

• 1:00:38Peter Diamandis?

  Yes.

• 1:00:39Speaker 01

  Yeah. And so let's assume it's work, borrow, longevity for a second. And I think the answer to this question becomes even more interesting. It's the same answer either way, by the way. I'm not trying to be cute. I am, but I'm just, just for effect. So, so I think that the future of Bitcoin as it relates to the dollar, and this is part of why, you know, I love Michael Saylor. He is highly incentivized for the dollar not to fail. Okay? And it's partially related to the answer to this question, which is that, you know, the right way to think about how to generate a yield versus Bitcoin is not, you know, my cash flow on Bitcoin. It's if my purchasing power on a dollar basis via Bitcoin is going up really past,

• 1:01:22Speaker 01

  really fast, what I should be doing is borrowing against that Bitcoin. And if I borrow at a low enough LTV... In theory, I may never have to pay back the loan. Okay, now let me unwind that one step at a time.

• 1:01:33Peter Diamandis?

  I want to go deep into this personally and for a number of the questions from the community here.

• 1:01:38Speaker 01

  Yeah, okay, let me let me paint a picture that that that is relative to historical finance using your your home, which everybody understands, okay? If you have a house that's worth a million dollars and it's completely paid off, okay? And, you know, housing prices in your area have been relatively stable. There's a bunch of banks that will probably lend you forty percent of the value of that house. Okay, it doesn't matter if they will or won't. Let's just assume for the sake of this discussion, they will, okay? So you have now a loan for forty percent of the value. Historically, with housing, the value of the house only goes up a few percentage points a year. But let's say you keep the loan and you're making interest-only payments on it for a few years. But you wait like ten years and for whatever reason, the value of the house is now two million dollars.

• 1:02:23Speaker 01

  Well, forty percent is now double what it was before. But you have a loan to pay back from before. What if you could basically, you know, reset that loan with the same bank so that you're now borrowing eight hundred thousand dollars because it's still forty percent of the loan-to-value? Okay, so you would still have to make the interest payments in this case because the price of the house isn't going up very fast, or at least not compared to other assets. But you're now you've now drawn more money out of the house. Okay, now let's think about it in terms of Bitcoin for a second. Bitcoin is historically going up between, on average, you know, twenty to forty percent per year if I factor in the standard deviation. I predict that I commit, well, I shouldn't say I predict.

• 1:03:05Speaker 01

  I make a good case, I think, that we could see twenty to twenty-five percent increases in value for the next fifteen years. Let's say twenty-five percent, I think, is realistic. I think there'll be years where it's higher. But then I think it, you know, kind of goes into that ten percent in dollar terms for the reasons we talked about before, because of the government money printing and the fact that things like gold and and real estate are in a fixed float, right? We increase the value, we increase the amount of that float, whereas with Bitcoin, we don't. So it should get a higher rate of of increase over time. So what does that mean in terms of lending? Let's break it down. If I let's say I have a million dollars worth of Bitcoin. And I conservatively borrow 20% of that value in dollars. I borrow $200,000.

• 1:03:49Speaker 01

  Okay, let's say that my Bitcoin increases in value the next year 25%. So I now have 1.25 million dollars. Okay, the loan to value ratio that I have has gone down. Right, so that means that if I want to stay at 20%. Right, I can now borrow 20% of 1.25 million. You follow? So as the price of Bitcoin keeps increasing, the amount that I can borrow against this also continues to increase. Now, with the traditional banking system, the banks need you to make that interest payment. That's how they make their money. That's how they make their money.

• 1:04:34Speaker 01

  But that's not the way DeFi works. Okay, so with these DeFi loans, right, you set a loan to value ratio. So think of this as an online marketplace, right, where you're effectively borrowing from the internet itself. All right, we can come back to the mechanics, but basically you're borrowing from the bank of the internet. However it works, all right, you do the same loan that I just described. Okay, Bitcoin goes up another 25%. So you can actually borrow at least 25% more and keep your loan to value ratio the same. Right. With these DeFi systems, if you're borrowing dollars against something like Bitcoin,

• 1:05:15Speaker 01

  you can actually increase your loan to value ratio to something like 60 to 65%. That high. Until such that if the price of Bitcoin starts to fall, which would make your loan to value ratio go up. Right, they might automatically sell some of your Bitcoin, and that's what you're trying to avoid. You don't want to sell your Bitcoin. Right. So if you kept your loan to value ratio low for the initial loan.

• 1:05:40Speaker 01

  Let's say thirty percent, twenty to thirty percent to keep it conservative. Bitcoin is still increasing, right? You can now not only continue to borrow if you want to and maybe make interest payments, or you can roll the interest payments over into the principal of the loan, which would increase the loan to value ratio. That makes sense. But you're still far away from sixty-five percent in most cases because the interest payments today, the rate, you know, might be between six and ten percent, just depending upon the market gyrations, right? So, but you start to see a model which says you can hold a deflationary asset, Bitcoin, borrow in an inflationary asset, the dollar, right?

• 1:06:23Speaker 01

  And if you have enough of this asset that's deflationary, in theory, you can borrow forever, depending upon the math between the inflation and the deflation, right? So, we now have clients who have figured this out. You know, and the only reason that they haven't figured it out from Abra yet is because not everybody's heard of Abra. And so, part of my goal is for everybody who's, you know, trying to figure out how to manage their money long-term relative to the answer from Maggie's question, that they see that this is a viable model for leveraging your Bitcoin to live and still not have to sell your Bitcoin.

• 1:07:00Peter Diamandis?

  Yeah, I mean, I think that's one of the important, another friend, Claire, is asking basically the same thing. I don't want to sell my Bitcoin, but I want to be able to borrow against it, earn yield on it to, you know, to fund my life. So, let's talk about, what is, what are you doing at Abra to enable that?

• 1:07:20Speaker 01

  Well, we call these lifestyle loans. And if you're holding, like I said, it's the same example I gave you. If you're holding millions or hundreds of thousands of dollars to millions of Bitcoin, millions of dollars worth of Bitcoin, we will set up borrow facilities for you using our registered investment advisor. It's a, basically, these are separately managed accounts, which are similar to separately managed accounts you would get in the equities world. And that's important because you're not giving your Bitcoin to Abra, you're actually retaining title to the Bitcoin. But if you want to borrow against the Bitcoin, you'll place the Bitcoin into a collateralized contract using DeFi and then receive stable coins, which you can use as stable coins or convert to dollars, doesn't matter, they're the same.

• 1:08:04Speaker 01

  And again, depending upon how low that loan to value ratio is, right? You can even roll the interest payments over into the principal. You can make the interest payments if you want. And if the price of Bitcoin is growing faster than the rate of interest, right? Your LTV is still going down, even though you haven't been paying the interest, which is super interesting, right? So if you have conviction for these markets, the way I do, and I think the way you do, this model makes perfect sense, right? Michael Saylor's talked about it, I've heard others talk about it. I think we're the first ones to come close to perfecting it. We've worked on this for a long time.

• 1:08:47Speaker 01

  And, you know, it's still early, it's still new, but it's working.

• 1:08:51Peter Diamandis?

  And in terms of getting yield on Bitcoin, what kind of numbers are you seeing in the marketplace?

• 1:08:56Speaker 01

  Yeah, it fluctuates. It's supply and demand. So, you know, we've seen everything from, you know, there's months when it's zero to months when it's 15%. And so, you know, I think steady state over time for the next kind of cycle, the demand will probably put it in the 4% to 6% range, which is pretty good. But again, these are DeFi-based systems. So the important message here, because everybody wants to know about risk, right? Is, well, okay, well, what risk am I taking?

• 1:09:26Peter Diamandis?

  Sure.

• 1:09:26Speaker 01

  You're not lending Bitcoin to Abra or another company. You're not taking corporate counterparty risk. When you deposit money in a bank, your asset becomes a liability on the bank's balance sheet, right? That's why the FDIC exists, to address exactly that problem, right? So this isn't a bank. You are holding your assets. If you choose to put them into the DeFi marketplace, the risk you're actually taking is technology risk. It's not mostly technology risk. It's not counterparty risk to Abra. And that's a big breakthrough, because all things considered, no offense to my peers in the banking world, I would rather trust the open internet if I could than the banks.

• 1:10:05Peter Diamandis?

  And just to be clear, Abra... Was last man standing in the category that you are today and you you basically redefine yourself. Can you speak one second about the process you went through because I think it's important people to understand it?

• 1:10:21Speaker 01

  Yeah, sure. So we were a part of the first generation of crypto lending companies. You know, we were doing the opposite of what I just said. We were basically, you know, people were lending money to us and then we would generate yield for that in kind. And, you know, so if you deposited Bitcoin, you would get more Bitcoin back. And the counterparty to those transactions was Abra. And my opinion as to the legality of that doesn't matter. The government didn't agree with all that. So, you know, we're the last man standing because we weren't doing a lot of the shady stuff that others were doing, in my opinion. But regardless, just from a regulatory perspective, you know, we had

• 1:11:05Speaker 01

  a long to do with the SEC, which we've settled several states, which we've settled, and then we migrated to this registered investment advisor, which is an SEC-registered entity, which then gives you these individual separately managed accounts so that you're not actually lending your assets to Abra anymore. So if Abra goes away, you've still retained title to your assets. Okay, that's the that's the breakthrough. It's as close to the mantra of not your own keys, not your coins, as you can get.

• 1:11:32Peter Diamandis?

  Yeah.

• 1:11:32Speaker 01

  And still have somebody helping you.

• 1:11:34Peter Diamandis?

  Yes, I completely get that. I mean, the other option, and personally, you know, the way I way people listening should think about this, you can go buy ETFs as one point. You can do something like what Abra does. You can get yourself a hardware wallet and hold on to it yourself. And it's a matter of how technically literate you are and how much attention you want to pay to this.

• 1:12:00Speaker 01

  Yeah. Like, I have a degree in computer science, Stanford PhD dropout. I'm telling you, I still like get cold hands when I sweaty palms when I have to deal with a lot of that stuff.

• 1:12:09Peter Diamandis?

  Your hardware wallet, shit, I remember, I remember these keys. Talk one second about the wash rules one moment. So people need to know this. If if

• 1:12:22Peter Diamandis?

  Bitcoin drops substantially, you're able to take the loss and rebuy the Bitcoin and take the loss on your stocks, unlike with a normal, you know, stock where you can't rebuy it and take the loss right away on your stock, on your taxes. So, do you think that that situation will last for a while longer?

• 1:12:47Speaker 01

  I have seen no indication that it's going to change. You just, my knowledge, you described it perfectly, meaning you can take the tax, you can get the gain, the tax write-off immediately, even if you rebuy the asset within minutes. That is my understanding, and I'm not a tax expert, but I know many people have taken, including myself, have taken advantage of it over time. I suspect at some point they would be incentivized to close that loophole. By the way, one of the things that Kennedy proposed was that there should not be any capital gains taxes on selling, you know, crypto assets that are commodity assets. And I agree with him on this, I think it's ridiculous. This is a store of value.

• 1:13:30Speaker 01

  So you're effectively getting taxed twice on the same thing. So basically, we're paying a tax on the fact that you're decreasing the purchasing parity of the dollar at my expense, so I've chosen to put my stuff in another digital currency that doesn't have that problem, and now I have to pay you extra for the right to not have my purchasing parity fall when I've already paid tax on the wealth that I generated in order to get the Bitcoin in the first place. So it doesn't make any sense, right? I mean, obviously, there's a million things about our tax system that don't make sense, but this is way at the top of my list.

• 1:14:03Peter Diamandis?

  Did you see the movie Oppenheimer? If you did, did you know that besides building the atomic bomb at Los Alamos National Labs... That they spent billions on biodefense weapons, the ability to accurately detect viruses and microbes by reading their RNA. Well, a company called Viome exclusively licensed the technology from Los Alamos Labs to build a platform that can measure your microbiome and the RNA in your blood. Now, Viome has a product that I've personally used for years called Full Body Intelligence, which collects a few drops of your blood, spit and stool, and can tell you so much about your health. They've tested over 700,000 individuals and used their AI models to deliver members' critical

• 1:14:47Peter Diamandis?

  health guidance, like what foods you should eat, what foods you shouldn't eat, as well as your supplements and probiotics, your biological age, and other deep health insights. And the results of the recommendations are nothing short of stellar. You know, as reported in the American Journal of Lifestyle Medicine, after just six months of following Viome's recommendations, members reported the following: a 36% reduction in depression, a 40% reduction in anxiety, a 30% reduction in diabetes, and a 48% reduction in IBS. Listen, I've been using Viome for three years. I know that my oral and gut health is one of my highest priorities. Best of all, Viome is affordable, which is part of my mission to democratize health.

• 1:15:32Peter Diamandis?

  If you want to join me on this journey, go to viome.com/peter. I've asked Naveen Jain, a friend of mine who's the founder and CEO of Viome, to give my listeners a special discount. You'll find it at viome.com/peter. You mentioned DeFi. For those who don't know what DeFi is, can you give us a 101 and what you think about DeFi on Bitcoin?

• 1:15:58Speaker 01

  Sure. This is one of my favorite topics. So, DeFi is short for decentralized finance. The basic idea of decentralized finance, or DeFi, is to take all of the components of banking and financial services, lending, savings, certificates of deposit, yield, more sophisticated instruments like derivatives. And make all of those capabilities available using this latest smart contract technology, which is software. But what's unique about this software is, is that it runs on the open internet, just like Bitcoin, in a way that it can't be shut off. There's no off switch.

• 1:16:36Peter Diamandis?

  Mm hmm.

• 1:16:37Speaker 01

  Right? So there's no company that owns a DeFi system. So there are DeFi systems now for borrowing and lending. Right? So that's the marketplace where, on the one hand, I might deposit Bitcoin into the DeFi marketplace to earn yield, and the other side, I might be borrowing it, but it's over-collateralized in dollars, so I'm not losing money. And if the LTV gets too high, they're automatically converting those dollars back to Bitcoin for me. So I'm not taking a risk of losing my Bitcoin. So, so these marketplaces now manage tens of billions of dollars just for borrowing and lending, yield, and, and, you know, borrowing against your Bitcoin holdings. That was the kind of first generation.

• 1:17:18Speaker 01

  We're already on like generation four of DeFi, where, you know, these kids are now developing, you know, sophisticated derivative systems, sophisticated, you know, yield generation systems, to the likes of which the world has, has never seen before. We're basically wholesale rebuilding the entire banking stack, the entire stack of capabilities of the banking system, one layer at a time, over the last five or six years. Ethereum was the first system that we could use to do this. Now we have Solana, which is gaining in popularity because it's more performant than, than Bitcoin, and scales better. So you can actually, in theory, with the upgrades coming to Solana, get almost Visa-like

• 1:18:03Speaker 01

  numbers in, in transaction processing. And remember, banks are open 35 hours a week, maybe some are open an extra five hours on Saturdays, so 40 hours a week. Right? These systems are open 24/7, 168 hours. They're, they don't close, there's no holiday, right? And, and so, you know, this weekend, when, you know, markets went hate wire, people were able to access their Bitcoin. Right? So, so I think this is the future of banking.

• 1:18:35Peter Diamandis?

  Do, do you see Bitcoin getting integrated into the traditional financial systems?

• 1:18:39Speaker 01

  Um, it's hard because...

• 1:18:43Speaker 01

  You know, the way Bitcoin settles is very different than the way traditional asset movement works. And so you get into all these hypothecation and it's complicated, I apologize, but these rehypothecation issues with related to leverage and other things we talked about earlier that don't reconcile well with banks. The problem is not Bitcoin, the problem is the arcane banks.

• 1:19:03Peter Diamandis?

  Yeah.

• 1:19:03Speaker 01

  Bitcoin works just fine. So, yes, you can do it. It's my concerns are not related to the things that the government would have you be concerned about. My concerns are more related to the issues with the banks themselves. But I actually think the banks are going to be rebuilt faster than people think over the next 10 years leveraging this technology. The problem that regulators have now is that these systems have no off switch, no borders, they don't know anything about draconian banking laws, they've never heard of the Bank Secrecy Act or KYC rules, they just run. Right? I'm all for following the laws. I have no problem with following the laws as a company. I do.

• 1:19:45Speaker 01

  I have a team of lawyers that make sure that we do all these things legally. But when you implement something in software and put it on the internet, they're not asking for permission anymore. It just runs. Right? Nobody asks for permission to put Bitcoin out there, it just runs. Right? So these DeFi systems that, you know, lend and borrow money and generate yield for people, they just run. And so this is the future. So I can't really see a model where, you know, the laws and regulations exist the same way they do today in 25 years. It's just, it's actually not possible. It doesn't really make any sense. I think the borders as we know them, related to finance, are going to disappear, just like they have for messaging on the internet, or video streaming, or Zoom calls. It's just another protocol. Right?

• 1:20:29Speaker 01

  So we created a protocol for accessing text, hypertext, HTTP. Well, we've now created protocols for money. First with Bitcoin as the money itself, and then protocols for banking. And I think Bitcoin is now being integrated into those protocols. The first generation of DeFi or these decentralized finance systems didn't really use Bitcoin. The next generation actually do, and the merger of the two is incredible. Right? That's when you start to, when you can start to see a world where you don't ask yourself anymore, what is this worth in dollars, but what is it worth in SATs or Bitcoin?

• 1:21:02Peter Diamandis?

  You know, switching topics slightly, we've been in the midst of a, an AI explosion, right? Anyone who's not been hiding under a couch at the same time that Bitcoin has been making headlines, AI has been just moving at not exponential, but a hyper exponential speeds. We've seen compute, you know, what was Moore's law, 2X every, every couple of years now 10X every year. You know, Elon was at stage at the abundance summit this year saying he's seen 100X in a year and expects that for next couple of years. And then we have, you know, AGI sometime in the next one to five years. And then, you know, digital superintelligence.

• 1:21:47Peter Diamandis?

  There's a lot happening there and you've got to be thinking about how AI and crypto slash Bitcoin, you know, intersect and transform each other. Speak to what's on your mind there. What do you find exciting? I mean, are we going to see AI agents transacting, you know, basically buying and selling? And, you know, I assume that crypto is the unspoken additional layer on top of the internet for financial transactions.

• 1:22:19Speaker 01

  Yeah, let me, let me, it is, let me try to make it real and tangible for people. I'll give you some, some real world examples. So, so I believe we had this idea during the kind of You know, the last crypto summer we had when when everybody was going crazy during covid, this new concept of a DAO was created. This it's called a DAO is a decentralized autonomous organization.

• 1:22:42Peter Diamandis?

  Yeah.

• 1:22:43Speaker 01

  And you can literally build an organization in software and a lot of these DeFi systems are basically DAOs. And it this the system has software-based governance built in.

• 1:22:53Peter Diamandis?

  There's no people, there's no necessary people involved. There's no, it runs on a set of rules.

• 1:22:58Speaker 01

  It runs on a set of software enforceable rules based upon who owns potentially the tokens in the system. And maybe you earn more of those tokens as yields, you know, there's different aspects to how the governance can work. But but what's important is is it's not people based, meaning there's no, once it's a DAO, you can't have a DAO that's a company, but it doesn't really make sense, in my opinion. People are trying. The beauty of a DAO is no off switch and and, you know, it's not run by politics.

• 1:23:27Peter Diamandis?

  No, no, no opinions, no opinions.

• 1:23:29Speaker 01

  But now merge that with AI, and I've spent a lot of time on this lately. So so I think that we're about to enter into a universe where we have billions of DAOs. And what we defined as a DAO in the first generation, and what you're talking about as autonomous agents, which is also the phrase we use at Avera, basically become the same thing. And and there's DAOs everywhere. So so take, take Elon, the robot taxi model that, you know, that Tesla's close to finally announcing, right? So I think what you're going to see is you're going to see the corporate version of the taxis that Tesla owns, and you're going to see the ability for people to own taxis, because that's what people can get their arms around right now. That's not the scalable model, in my opinion. The scalable model is, is the taxi, the car itself isn't owned by a person or a company. It's

• 1:24:14Speaker 01

  actually part of a DAO. And it drives itself around, right? And you automatically pay using crypto, probably stable coins or Bitcoin via Lightning, whatever. And there's rules in the DAO via software contracts that decide what the car has to do in terms of, you know, where do I go to automate getting charged?

• 1:24:35Peter Diamandis?

  If it needs servicing, it goes.

• 1:24:37Speaker 01

  Exactly. What do I do for for maintenance?

• 1:24:39Peter Diamandis?

  Yeah.

• 1:24:40Speaker 01

  How do I distribute the profits to the token, people who own tokens? Right? So All of this is happening, right, without governance. Now, this is a lot easier when all cars are, you know, automated.

• 1:24:54Peter Diamandis?

  Robotics.

• 1:24:54Speaker 01

  Because the biggest challenge with all this right now is people.

• 1:24:57Peter Diamandis?

  We get in the way and we screw things up.

• 1:24:59Speaker 01

  And so, but eventually, you can see where I'm going with this. I just gave you one quick example, which was a car that owns itself, and then eventually it'll end of life itself. And you've made all your money back as people who invested in the car via this token issuance, right? And that's how DAOs are created. You have a token issuance where you deposit money as stablecoins or Bitcoin into the DAO, and then the software rules determine how it gets used. Well, it automated buying the car, it automated setting this up, and it automated the token distribution back to the people. There's a million other examples. What if I have autonomous agents that do, you know, video content distribution and basically determine, you know, out in the cloud, you know, I created a smart contract out in the cloud to sell my movie,

• 1:25:42Speaker 01

  and it's automatically going to give the money to this group of investors that invested in the movie based upon how the distribution rights work, and then at some point the price is going to come down for watching the movie, and then eventually it ends of life itself and it's just open source content, you know, something like that. I can give you thousands of examples of these.

• 1:26:00Peter Diamandis?

  Sure.

• 1:26:00Speaker 01

  Crypto and smart contracts become the transactional layer for all of these autonomous agents, DAOs. I think, you know, I was listening to Elon's Lex Friedman interview where it was, they were in Memphis, you know, these massive compute centers. You need them now, but, you know, if you look at the amount of compute, you know, my laptop here that we're talking from that sits idle, this is all going to become compute in globally decentralized AI systems. Remember years ago when SETI was basically letting you install software in your laptop? Yeah, I remember from my NASA days, right? And so, so...

• 1:26:41Speaker 01

  We're wasting so much compute that is eventually going to become part of these decentralized systems and it's all going to basically use a smart contract based layer on top using technologies like Solana, Ethereum, et cetera, et cetera, so that these systems can communicate contract to contract. Having a person who speaks, what do they say, at eight bits?

• 1:27:06Peter Diamandis?

  Yes, eight bits per second, yeah.

• 1:27:07Speaker 01

  Yeah, process transactions makes no sense, right? Visa, when every single person on the planet is, or I'm sorry, there's a lot of religions. When every person is buying at Christmas time, there's a couple of billion people that shop over a one week period. That's Visa's peak transaction processing. That is a roundoff error compared to what's coming.

• 1:27:27Peter Diamandis?

  Yeah.

• 1:27:28Speaker 01

  Okay, so, so people can't manage that. Oracle, an Oracle database can't manage that. You need a globally decentralized network that can process transactions to manage that. That's what DeFi enables, right? It gets us out of the way.

• 1:27:44Peter Diamandis?

  It's gonna be an exciting, exciting few years ahead, you know, as they say.

• 1:27:49Speaker 01

  Yeah, it's awesome. There's gonna be a second coming for crypto when it merges with AI in the next three to five years. You know, we've made some token investments in Abra in this area and I'm really excited about it.

• 1:28:00Peter Diamandis?

  And that is the timeframe, right? It's, it's not 10 years or 20 years. It's, it's the next five years and maybe even before that with the speed at which, which things are moving. Bill, where do people go to find you on social? Where do they go to learn more about Abra?

• 1:28:14Speaker 01

  Yeah, sure. I'm Bill Bar X on, on Twitter. X, sorry. We do need a verb. Abra.com. You can, you know, sign up. You can get more information. I'm on the interwebs all the time, relatively easy to find. We have our Money Talks podcast every Friday. I think we're taking this week off for August, but, but most Fridays we have Money Talks online via all the normal channels where I give you the kind of macro latest on what's going on related to crypto and other things related to exponential tech and all this stuff. So, so you can check that out, but we're, we're pretty easy to find.

• 1:28:47Peter Diamandis?

  Fantastic. And Bill, love you having, being part of the abundance community and thank you for, for joining me each year and, and sharing your wisdom and your technology. And yeah, super pumped for our conversation and for where things are going. I'll see you soon, pal. Thanks, bro. Take care.