290: Aleks Svetski On Why Bitcoin Is A No Brainer

Aleks Svetski is the cofounder and CEO of Amber, a mobile company focused on making exposure to Bitcoin and the new wave of digital assets as simple, low risk, and automated as possible. In this conversation, we discuss the Bitcoin halving, how natural systems function, why quantitative hardening matters, and what Ray Dalio is missing on his analysis of Bitcoin. =============================== BlockFi allows you to keep your crypto, put it up as collateral, and receive a USD loan funded directly to your bank account. They do loans ranging from $2,000 to $10,000,000, and they're perfect for helping you reach your financial goals of all sizes. Visit BlockFi.com/Pomp to learn more about putting your crypto to work without having to sell it. www.blockfi.com/pomp =============================== Pomp writes a daily letter to over 45,000 investors about business, technology, and finance. He breaks down complex topics into easy to understand language, while sharing opinions on various aspects of each industry. You can subscribe at www.pompletter.com

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

• 0:00Anthony Pompliano?

  This is Anthony Pompliano. Most of you know me as Pomp. You're listening to the Pomp Podcast. Simply the best podcast out there. Let's kick this thing off. Alex Zvetzky is the co-founder and CEO of Amber, a mobile company focused on making exposure to Bitcoin and the new wave of digital assets as simple, low-risk and automated as possible. In this conversation, we discuss the Bitcoin having, how natural systems function, why quantitative hardening matters, and what Ray Dalio is missing on his analysis of Bitcoin. I really enjoyed this episode with Alex, and I think you will as well. Before we get into the episode, though, I want to quickly talk about our sponsors. The first is BlockFi. They allow you to keep

• 0:41Anthony Pompliano?

  your crypto, put it up as collateral, and receive either a US dollar loan funded directly to your bank account, or interest in an interest-bearing account. They do all kinds of loan sizes, and they pay up to 8.6% APY in their interest-bearing accounts. I'm a user, an investor, and a huge fan. They're perfect for helping you reach your financial goals of all sizes. Visit blockfi.com/pomp. Again, blockfi.com/pomp to learn more about putting your crypto to work without having to sell it. blockfi.com/pomp. Lastly, don't forget, I write a daily letter to over 45,000 investors about business, technology, and finance. I break down complex topics into easy-to-understand language while sharing opinions on various aspects of each

• 1:23Anthony Pompliano?

  industry. You can subscribe at pompletter.com. pompletter.com, or go into the description and click the link. All right, let's get into this episode with Alex. I hope you guys enjoy this one.

• 1:35Speaker 01

  Anthony Pompliano is a partner at Morgan Creek Digital. All opinions expressed by Pomp or his guests on this podcast are solely their opinions and do not reflect the opinions of Morgan Creek Digital or Morgan Creek Capital Management. You should not treat any opinion expressed by Pomp as a specific inducement to make a particular investment or follow a particular strategy, but only as an expression of his opinion. This podcast is for informational purposes only.

• 2:03Speaker 02

  Alright guys, bang bang, Alex here. I'm super excited to do this. This is round two, my friend. You ready to go?

• 2:11Speaker 03

  I'm ready to go. Cripple, non-cripple, whatever way, I'm ready.

• 2:17Speaker 02

  Let's start off with, for those that didn't listen to the first episode, or don't remember, maybe just give us a quick two minutes on your background and then what you're doing with Amber.

• 2:27Speaker 03

  Cool. So two minutes, I guess I'm a, I would fit into the camp of, you know, toxic Bitcoin maxes, or whatever the hell they're categorizing ourselves today. I think the last podcast that you and I did, we were talking about the importance of Bitcoin as being, you know, this intolerant minority, standing in the middle and not giving ground. And I think that's an extremely important function of any system. You know, there's got to be a group of people who just won't bend. And I think that's what, you know, I kind of align with those Bitcoiners the most. And, you know, through that, you know, I really think Bitcoin is the most important thing happening in the world today. And my,

• 3:12Speaker 03

  you know, I've got a philosophical expression of that through doing the writing and podcasts and all that sort of stuff. But my entrepreneurial expression of that is a little product called Amber. And Amber is designed to be a Bitcoin accumulation app. So I kind of differentiate it from, you know, the coinbases of the world. It's not a trading app, you know, it's not designed for you to sort of, you know, trade shitcoins, or, you know, like, it's not, or to, you know, buy and sell and all this sort of stuff. It's really designed to accumulate Bitcoin in a fashion that's as automated as possible. So we kind of led the whole DCA move, and there's a lot of people now doing DCA.

• 3:53Speaker 03

  And we're doing some cool things now with, we're going to introduce a premium feature to Amber that'll make sat stacking smarter, more automated, and cheaper for everyone.

• 4:10Speaker 02

  So we are, we're investors. I don't even know if we've announced that yet.

• 4:14Speaker 03

  We haven't yet.

• 4:16Speaker 02

  We just did. And so give us an update, just kind of any metrics or data so people know how it's going.

• 4:23Speaker 03

  Yeah, so we're in, we're in Oz at the moment. We've got almost 5,000 users there. We're about to roll out, I guess, I'm putting the final touches here on this Europe situation, which has proven to be, you know, interesting at the very least, dealing with, you know, compliance and banking and all that sort of stuff. So we're down to now selecting the bank that we're going to partner with, which is good. So very shortly, we'll be able to deliver this now to Europe. I'm hoping for June. That's the plan.

• 4:58Speaker 03

  And yeah, man, we'll be able to really deliver a nice, clean way for people to accumulate Bitcoin in a broader region. And then from there, we're just like, I want to hit South Africa. And then want to look at some other markets as well.

• 5:15Speaker 02

  For sure. And so the, the big debate right now or conversation is we are, what, seven, eight days away from the Bitcoin halving. And this has historically been a major moment. I'll go as far as to say historic moment. What's kind of your general thoughts about the halving and how that's going to kind of affect the entire industry?

• 5:35Speaker 03

  Yeah, look, I, I, I wrote an article recently, you know, about the halving and just sort of talking a little bit about,

• 5:44Speaker 03

  you know, I, I wanted to take a different spin on all the conversations going on around the halving. So obviously Plan B really brought the, the concept of the halving to the fore with the stock to flow model and all of that sort of stuff. And I think a lot of the conversation has been really around price and price targets. And, you know, this model about, you know, how to get rich tomorrow by buying Bitcoin. And that's fine because, you know, Bitcoin is a, it's a monetary beast, right? So the more capital we get flowing into this thing, the better, and it just makes it stronger. But what I, what I kind of wanted to focus on was the

• 6:28Speaker 03

  This divergence in philosophy. So, you know, the world we live in today has become, you know, one of more, more, more, now, now, now with, you know, blind access and complete disregard to like the consequences, the cost, the ethics and sustainability of the decisions we make today, um, which, you know, every decision comes at a cost, you know, and th- those decisions that we make today are generally at the, at the expense of the future. So, you know, we've, a- and Co- COVID has been like a really another one of these, you know, knee jerk reactions, you know, my exponentials and, you know, taking things to an extreme in the way we, um, deal with them, uh, because we're so, um, easily triggered and we,

• 7:13Speaker 03

  we don't stop for a moment to, to think about the longer term ramifications of anything we do. And, you know, here you've got this incredibly symbolic event in the halving, you know, I kind of like to say that whilst the world is, you know, doubling, tripling and going exponential, uh, Bitcoin is, you know, halving and, you know, going towards a finite, you know, end supply. And, and that's such a divergence in philosophy. Like, you know, here we are, everything is becoming abundant and, um,

• 7:51Speaker 03

  you know, cheap, whereas we, we've forgotten what is scarce and valuable. And, you know, Bitcoin kind of stands alone as the, the pillar of, um, you know,

• 8:06Speaker 03

  tr- traditional, the, the traditional way we, um, we understand value, you know, something that is unique. Um, you know, I could use an example of, you know, a fine piece of art, like, you know, that there is one Mona Lisa or, you know, Your mother, you've got one mother, she's fundamentally valuable to you because she's fundamentally unique. Like if you could just print your mom, you know, a thousand times, like she's not gonna be as valuable. So these things are, th- this is such an interesting, to me, philosophical divergence. And um, it's just funny to see how the world is forking um, at this point in time with, you

• 8:48Speaker 03

  know, Bitcoin being this thing on one side where, and all the madness that's happening on the other side. So tha- that's kind of how I envision the halving. And um, and I think it's, yeah, I, I, I think this is probably the first halving. Like the last halving was, yeah, you know, not many people knew about it. I think this is the first one that's getting a bit of airtime. I don't know, my guess is twenty twenty four, it's gonna be like, it's gonna be like one of those New Year's Eve events, you know, that everyone's sort of watching and counting down for. It's gonna be really interesting.

• 9:21Speaker 02

  Yeah, one of the best frameworks that I've heard for this is, uh, while the world is quantitative easing, right, and kind of expanding that sheet, uh, that the balance sheet, uh, Bitcoin is quantitative hardening.

• 9:32Speaker 03

  Yeah.

• 9:33Speaker 02

  Uh, and to me, like, that just puts, uh, this whole concept in the same terminology that, uh, financial experts know and understand, right? And kind of the people in the traditional world, when they look at it that way, it's like, okay, hold on a second, quantitative easing versus quantitative hardening, uh, one of those sounds a lot better than the other, right?

• 9:53Speaker 03

  Absolutely. And tha- that's sort of, tha- that, again, ties up with, you know,

• 9:59Speaker 03

  easy versus hard. Like, you know, there's, there's things in life, like if, if you wanna be, um, let's just take happiness as a, as a thing. If you wanna live, um, a life of, um, happiness, you can either go and grab some heroin and start shooting up and just, you know, be in bliss the whole time, um, and, you know, probably die from an overdose. Or you can take the hard road, which is live a life of meaning. Um, and to live a life of meaning, you're gonna have to go through, you know, pain, suffering, sacrifice, loss, and lots of sorts of, but it's gonna build depth in your character. It's gonna build strength. It's gonna, you're, you're gonna grow as a

• 10:40Speaker 03

  human being. And, and that is the harder path. Um, it's the, you know, it's the path of the, um, Of a stoic, you know, it's um, but it's it's sort of been drummed out of society, you know, like everything's apparently got to come easy, um, whether it's our money, whether it's our, um, you know, the five minute abs or whatever other bullshit is sold to us, you know, the cheap plastic shit, it's just, it's just crazy. So I, I really love Bitcoin for, for that shift in ideology. I think that's where, um, where not, not enough of our focus goes when we're thinking about Bitcoin.

• 11:21Speaker 02

  What, what do you think it's going to take for this to go from what I'll call kind of a niche community in the global world, right? You know, maybe 1% of the world's population is even kind of using Bitcoin, bought Bitcoin, hold Bitcoin, uh, and out of that 1%, I don't know, let's say 50% really, really understand. And that's probably me being generous, right? In terms of uh, kind of the, the framework and the, and the difference. Uh, what does it take for that to grow on a percentage basis? So, uh, people who already hold Bitcoin go from, let's say, 50% to closer to 100%, but also how do we get from 1% of the total global population to 10%, right? And, and kind

• 12:05Speaker 02

  of, I'm thinking of it almost like a penetration of a market. What, what's kind of the thoughts there?

• 12:09Speaker 03

  I think so. I've, I've got the, the, the pain and curiosity theory, I kind of call it. So I think people come to Bitcoin for, um, for two reasons, pain or curiosity. So curiosity in the sense that, um, you're interested in what this technology is, you're interested in, you know, money. Um, I, I guess you could probably add a third one there, greed, um, you know, and greed, I think gets a bad rap. It's a, it's a greed is a, an interesting thing. I've, I've, um, got Gordon Gekko actually in my, um, in my article where, you know, greed is actually fundamentally good because it's a driver for, for human progress. Um, and it, you know, helps us thrive. Now greed

• 12:52Speaker 03

  unchecked, um, just as anything else, um, is bad, you know, like food is a good thing, but if all you do is eat all day, you're going to get fat, right? So a, as with anything, you know, there's, there's a sensible, there's a sensible medium. But, um, I think greed. Uh, curiosity. So those who are curious enough to want to inquire about what is Bitcoin? Or what is money? Or how is society shifting? What's going on? We're gonna get into it, but I think unfortunately, more people will discover Bitcoin because of some level of pain. Um, and maybe, maybe fortunately, unfortunately, I don't know. But that's not, I guess, my place to judge, but I think the, the pain piece is probably, um,

• 13:34Speaker 03

  you know, gonna be the, the largest driver, and that may be pain from, I don't know, watching your currency collapse, like what's happening in Lebanon now, um, watching, you know, your own personal finances collapse. So let's say you're, you know, living in America at the moment, and you're forced to stay home against your will, even though you're young, fit, healthy, and you have a very minimal chance of some invisible virus coming to get you. Um, but you're forced to stay home and go broke, and you get given some measly little twelve hundred, you know, US dollar check, and that's apparently gonna last you ten weeks, right? Um, you know, so, so, you know, that pain is gonna drive you to say, well, this is fucking bullshit.

• 14:18Speaker 03

  And then, you know, whilst that's happening on one side, you know, the prices of your goods are going up because production stopped and money's losing its purchasing power. So at some point, something's gonna snap, and you're like, you know, I, I need to, something's gonna drive. So it's kind of like a carrot and a stick. You know, the, the carrot is probably the, um, the curiosity and greed, and the stick is the pain. And as we know throughout society and throughout history, it's usually the stick that drives the most change. Um, and I, I think we're just sort of lucky in the, the period of time that we live in, that, um, we have something like Bitcoin as a, as an exit strategy, um, for that, because people in the past haven't had this.

• 15:03Speaker 02

  Yeah, and this isn't like academic theory, right? Like, we're literally seeing this play out in Lebanon right now.

• 15:08Speaker 03

  Yeah.

• 15:08Speaker 02

  Right? Where literally the national currency has lost, you know, almost 50% of its, uh, its purchasing power in a very short period of time. The banks implemented all kinds of capital controls, so you can only withdraw a certain amount every day. They won't let you withdraw in any currency other than the Lebanese currency. And then on top of that, uh, it's during the coronavirus where people have lost their jobs. And so what ends up happening is people literally go to sleep. When they wake up in the morning, they have two questions. How much of my wealth did I lose overnight because I lost, because I lost actual purchasing power? And then two is, do I have enough money to go buy groceries? Because at the same time that you're losing the value of your currency, food prices and other prices are skyrocketing.

• 15:51Speaker 03

  Yeah, exactly. It's mental. Absolutely mental.

• 15:55Speaker 02

  What is the catalyst, do you think, like, or the tipping point where we go from, you know, it's happening in Lebanon right now? And I genuinely believe most people, they want to be happy and they want to have some level of freedom, right? At the end of the day, that's what they want. And that manifests itself in a whole bunch of different ways of life. But ultimately, they want to be able to spend time with their loved ones, be free, you know, not have to worry about access to food or shelter, kind of the basic needs of, of a human life. But if the current system makes that hard, we see it on a micro level, do we have to wait for that to happen on a macro level? Where it's happening in multiple kind of global superpowers in order for people to wake up and shift over?

• 16:38Speaker 02

  Or can we go kind of population by population, uh, and slowly but surely you get some people who say, hey, I don't want to, you know, participate in this Lebanese pound mirage anymore. I'm gonna opt out. I'm gonna opt out. I'm gonna opt out. And then after decades, you get kind of a, a majority of people who have opted out.

• 16:56Speaker 03

  Yeah, I, I was writing a piece, so yesterday I released, um, my little piece called Correcting Dahlia. After his little second chapter that he wrote about changing world powers and any... Um, I, I, one of the sections I wrote in there was about these, this idea of a phase shift. Um, so if we think about water, for example, um, you know, it's got, you know, these three primary forms that it comes in, solid, ice, uh, liquid, water and um, gas, steam, right? And, you know, as the temperature increases, um, you know, it, it remains in its state,

• 17:40Speaker 03

  but there's something happening, you know, at a molecular level, uh, that's sort of basically invisible. And then you, you have this situation where it's like slowly, slowly, slowly, but all at once. And then the, the phase shifts. And my, my guess is that, um, society is probably very similar, um, in that sense is, you know, we, you know, you, you have this undercurrent of change, you know, that, that's sort of like the zeitgeist of the time that, you know, that is happening. And because societal shifts are, um, are much longer, uh, in nature, you know? And, and I'm not talking about Dalio's seventy year debt cycle. I'm talking more like societal shifts of like, you know, the, the separation of church and state five hundred years ago, you know?

• 18:23Speaker 03

  Now we're sort of seeing the separation of money and state, like the, the, this is a, this is a multi-year, multi-decade transformation. But, you know, that, that sort of, um, phase shift period, um, I think, you know, has an undercurrent, but at some point, um, and, and I think Connor Brown used to have this on his, um, on his, uh, Twitter profile. It's like slowly, but all, then all at once. Um, it's, I think that's gonna be the situation where it starts to cascade and, you know, I mean, when is anyone's guess? Um, like, the, oh, I was gonna touch on something there. Um,

• 19:07Speaker 03

  this.

• 19:10Speaker 03

  This, oh fuck, where was I going with this? I had a point.

• 19:16Speaker 02

  So I think part of it, though, is just like the gradually, but then all at once, or slowly, but then suddenly, I think is another one like Unchained Guys use. The idea really comes down to,

• 19:30Speaker 02

  what are the accelerants? And at some point, do you hit a point of no return? Right? Like, I call it like burning the boats. Right? The whole idea of burning the boats is when you go and you find new land, you know, back in the day, you're not actually committed to staying until you burn the boats. When you burn the boats, like, you can't go back. Right? So when do we get to that point?

• 19:52Speaker 03

  Well, here we are burning the boats right now. I think COVID was an example of burning the boats, right? It's, you know, we, we just burnt the, you know, the, the interest rate boat. Then we burnt the QE infinity boat. So, so those two boats are burnt now. What else is there? Like, the, the number of boats that are available to burn to, to basically discredit the existing system,

• 20:18Speaker 03

  you know, are becoming less and less numerous. I mean, I always say COVID was the, one of the best marketing campaigns for Bitcoin in history. Because like, these are the events that, I just remember what I was gonna, the analogy I was gonna use earlier was the smartphone analogy. Like, we can all remember a time before smartphones, like when we all had flip phones or the shitty Nokia banana phones and all that sort of stuff. We remember the dumb phones. And we remember when that was ubiquitous. And we also remember when, you know, modern times now, like when smartphones are completely ubiquitous. But that transition period, I can't exactly remember that.

• 20:58Speaker 03

  I don't really, I'm not really clear on when we had like a real good mix of smartphones and dumb phones at the same time. Like, that, that phase shift like happened so quickly. And I think, you know, we, we're obviously not at that point yet with Bitcoin. But I think over the next decade, the, the question is gonna shift from, you know, people asking today is like, why the hell would you have Bitcoin? To sometime in the next decade, the question will be, why the hell don't you have Bitcoin? Like, so that strange look, like, the, the question will change. And, I mean,

• 21:36Speaker 03

  Maybe, maybe the trigger is gonna be something as crazy as, um, another friend of mine is another Bitcoiner in Australia, Haas McCook. Um, he, he put a tweet out a little while ago saying, "My prediction for next year is, uh, forty thousand in the Dow and forty percent unemployment." Um, and that, that to me, like, I mean, as crazy as that sounds, like, what we're seeing right now with these supposed solutions to the COVID problem is, you know, all this printing of money, bailing out of the big boys and all this sort of stuff is, we're actually tearing society apart. Um, and where, you know, we, we have this illusion of prosperity in the stock market, you know, basically the NASDAQ's almost back at all time highs.

• 22:18Speaker 03

  I mean, Shopify has blown through its highs, Amazon's blown through its highs, Tesla's basically back at highs. Um, you know, Uber and Lyft are back at, you know, beyond their December prices. It's such insanity. But at the same time, we've got almost thirty percent unemployment in the US. Nobody's working. Everyone's at home and, you know, everyone's living on a twelve hundred dollar, um, you know, handout. It's like, so, Main Street and Wall Street are completely diverging. It's madness. And, um, and maybe, maybe that's what triggers people to say, you know, I've had enough.

• 22:57Speaker 02

  And I keep thinking about, just like, the virus itself, uh, has done two things. One, it's accelerated a lot of trends. One, you just mentioned of kind of the wealth inequality gap, right, is, is definitely getting accelerated right now. Um, but by kind of the government's response to this virus. Uh, but also the virus has exposed many shams in society, right, whether it's higher education and, you know, all the, the kind of the structure of that, uh, or other things. And the part to me that, uh, I have, um, I've thought very critically about this and, uh, shied away from, um, really talking about it too much because it's so sensitive. But ultimately, uh, here in the United States, what we see is, uh, there's federal income tax.

• 23:41Speaker 02

  But if the government can print whatever money they need.

• 23:46Speaker 02

  Why are people paying taxes? Right? It's kind of like a business saying like, why do I actually charge the customers when they come in? If I can just keep editing my bank account and making my bank account have more money in it? Like, then I don't actually need to sell anything. I can just give away the goods. Right? I don't understand why am I actually charging people for it? Same thing here is like, why is the government charging federal income tax if they can just print whatever they want? What are kind of the thoughts there?

• 24:13Speaker 03

  Well, dude, that's that's one of those boats being burnt, right? It's, you know, this idea that it's funny that you mention that because I was during this lockdown period, I was stuck with one person who's got a really different viewpoint than me about, you know, how the world works and very kind of like call it a socialist viewpoint, right? The government's going to save us all and all this sort of stuff. And then when I sort of asked, when I bring up this point, like I got her straight around to my level of thinking. I said, so tell me why you're paying taxes? And she explained, oh, you know, the hospitals and this and that. And I said, we do realize that, you know, more was just printed in a couple of days than taxes gathered in a couple of years

• 24:58Speaker 03

  to apparently bail us out. So I go, why don't they just do that and build the hospitals? And she was like, that can't be right. That shouldn't happen. Like, so it doesn't make actual sense when you think about it for a second. So it's, I mean, this is, this is the, the issue, I guess, that Bitcoin was originally designed to solve. A lot of people, and this is where I scratch my head at like the B-caches and all the other crypto people who are running around promoting faster payments and all that sort of shit, which is nothing, none of that matters when you look at why Bitcoin was designed in the first place, which is to remove.

• 25:37Speaker 03

  Concentrated control or concentrated ability for the um for the resource through which we measure society uh to be managed by someone. So like when you remove that, then you can't play these games where, you know, a business instead of selling products just edits their bank account. Like, you know, what we're doing is we're disincentivizing real production, um which is effectively the driver of economies. We're we're taking that out of the equation and we're just making fucking numbers up. Like, how deranged does one have to be to think that this is normal?

• 26:18Speaker 03

  In no way is it normal. That's not economics. That's not society. That's not capital. And the funny thing is people try and call it capitalism. It's like, that is not capitalism, dude. Like, that's not the definition of capitalism. The definition of capitalism is build capital through production and through adding value um and through creating efficiencies whereby you can, you know, create profit. And profit is just a it

• 26:46Speaker 03

  measures how much um relative value you've added in or relative input you've had in society. Like, that's a good thing. And people are trying to sit here and, you know, blame capitalism and support the government just making up numbers in their own ledger. It's completely wild.

• 27:06Speaker 02

  My favorite way to articulate this is Marty Bent says, fix the money, fix the world. Right? And it literally is so many problems in the world derive from this money issue.

• 27:18Speaker 03

  They do. They do. Because here's the thing, like, if money is the the the board is is the um the board upon which we play the game of life or the game of society.

• 27:32Speaker 03

  If one player or a couple of players can just change the rules whenever they want, but the rest of us have to play by those rules, you tear apart the board, like it's no longer the same game. We're playing two different games and you're going to de-balance the whole thing. And, and this is what people don't get, but the, the, the problem is the, the guys who are, um, get to change the rules for themselves, um, they're actually part of a bigger game, which they can't get out of, which is they live in the same world as we do. So at some point, when you tear apart the fabric of society by distorting through things like, oh, yeah, we're gonna, you know, you, you and I, Pomp and everybody else who's listening to this,

• 28:15Speaker 03

  we have to go out and we have to trade our two finite resources, time and energy, so that we add value to society in order to be rewarded with this unit called money. Whereas a couple of people in society, they get to just make it up out of thin air. You, you start to break the game down and what you end up doing is you create ramifications such as forty thousand Dow, forty percent unemployment, like you, you basically make the whole thing fall apart. Uh, but once the whole thing fall apart, they basically fuck themselves over and they fuck everyone else over in the process. Um, and it's just such a,

• 28:57Speaker 03

  I don't know, short-term viewpoint. It's, it's such, it's such an arrogant way of thinking. Um, but unfortunately, um, that, that's what happens when, I mean, when the needle is so close, right? You know, when you've got a junkie and the, the temptation to feel good is right there. Uh, you know, they're gonna use it. So the, the best solution is get rid of the temptation altogether. Throw, throw that out and that's, you know, as Marty says, fix the money, you fix everything. So you throw the temptation to fuck with the fabric of society out the window. When that is out, when you cannot do it, guess what? Your energies go towards some form of productive action

• 29:41Speaker 03

  and that starts to coalesce and converge to a more structurally functional society, not one where, you know, a group of people can change the rules in their favor.

• 29:54Speaker 02

  And so I guess as as part of this, then it happens all over the world. It's not just a US thing. It's not just kind of a global superpower thing. This literally happens everywhere. And so my guess is that we're going to see people, regardless of geography, start to wake up and slowly move. At first, it'll be percentages of their wealth. Eventually, it'll be larger and larger and even into the majority, overly decentralized, you know, kind of digital. What does that infrastructure look right now? Can we handle kind of another 2017? And if not, what do you think we need to actually change or improve in order to be ready for that?

• 30:37Speaker 03

  That's a good question. Okay, so I think we're definitely ready for another 2017. I think the, you know, the onramps are better. You know, there's, you know, whether we're talking about Amber or whether we're talking about, you know, the boys at Swan or River and all this sort of stuff, there's a lot better Bitcoin onboarding services these days. So I think we can structurally have that. You know, SegWit's broadly adopted. So, you know, we're not going to get those ridiculous spikes in fees. Wallets are smarter, so you know, you're not going to get that. So I think that's fine. And I personally believe we'll probably see a run, you know, later this year or next year. In my mind, again, it's going to be a price-driven run.

• 31:20Speaker 03

  So I think this rise in Bitcoin is going to be probably more, like if we think about those drivers of, you know, pain, curiosity, greed, it's probably going to be another greed-driven driver at this point in time. Because I think, you know, as much as these stimulus packages and all this sort of shit haven't solved the problem, they, I think they've managed to at least give a sense of.

• 31:50Speaker 03

  Solution like it feels like there's been a Band-Aid applied to, you know, um, some of this apparent bleeding. So I think, you know, Bitcoin fundamentally, you know, does have the infrastructure from an onboarding and from a functionality standpoint to support um, another big run. And yeah, I, I, I think it's really going to kick off once we pass the old all time highs. So once Bitcoin's beyond 20,000, what we'll probably have is a period of disbelief. So maybe, you know, it crosses 20,000. People like, you know, oh shit, that Bitcoin thing's back at 20,000. Oh, it's going to fall again from here and then I'll buy some and then it'll, you know, probably reach 25,000. They'll be like, oh man, I can't go any higher than this.

• 32:35Speaker 03

  You know, this is another bubble. It'll hit 30. And I think that's when we'll start to get some serious FOMO and that's when we'll start to see, you know, retail market and all that sort of stuff. Um, come in. Uh, does that sort of answer the question or?

• 32:48Speaker 02

  I, I definitely think so. Um, what, what are you excited about kind of post having, right? So, so we're going into this event. Kind of how, how are you thinking about once we get past that? Um, and what are you looking forward to?

• 33:01Speaker 03

  Hmm.

• 33:03Speaker 03

  I

• 33:08Speaker 03

  I guess the, um, the told you so moments. So I think the, um, the classic, you know, all, all the, the Rubenis of the world and all of that sort of stuff. We've just said that this thing's gonna, you know, whether go to zero or it's never going to pass the all time high. It was just a chill bubble, all that sort of stuff. I think that's really, and, and not from an arrogant place, but just from a, um, rewarding place. Like, you know, we've stood strong this entire time, like all the people who've stuck with it in the bear market, um, particularly the people like, you know, that came in in 2016, 2017.

• 33:49Speaker 03

  Like this sort of, you know, we call it the, the class of, you know, this epoch, right? It's, um, you know, there was the, the class that came before that was sort of between 2012 and 2016. They've already seen, um, a bear market. You know, the, the, the people that have come in between 2016 and 2018, or between 2016 now have seen this new bear market and coming out of that on the other end and sort of being, um, Proven right, not to gloat, but to sort of inspire more people to come in. That's probably what I'm looking forward to um

• 34:24Speaker 03

  to the most because then then guess what? We we basically enlarge the circle of hodlers, of believers, of that critical mass of people, that intolerant minority that won't um bend over or that won't go back to the old system. I was speaking to someone yesterday on a on a fintech podcast and you know, I was kind of just saying, you know, when I first got into Bitcoin, my my idea was to sort of get in and get out and make money and make dollars. Now, it's not, I'm trying to gain territory on Bitcoin. So for me, it's like a one way street. I'm going in, I'm I'm not coming back out, like, you know, why would you, you know, move to a new like

• 35:10Speaker 03

  place which is beautiful, that has everything you could one day need um just to move out again, like, it makes no sense to me. So like, you know, we're pioneers in this new world and I think we're just gonna, this post post halving is gonna validate a lot of the things that we've been saying to people for the last year or two or longer.

• 35:30Speaker 02

  One of the best ways I've heard people talk about this is everyone understands the concept of land, right? They're not making more of it and owning land has value. Um if you can break that model to or bend that model to understand digital land, right, or digital property. And you say, hey, there's only twenty one million acres, right? And you can buy one right now for eighty nine hundred dollars, right? Uh, do you think they're going to be worth more or less in the future, right?

• 36:02Speaker 03

  Simple, yeah, yeah.

• 36:03Speaker 02

  And and by the way, look, just like land, uh, there's price fluctuations. Sometimes certain areas, there it's more valuable or less valuable, right? But generally, over long periods of time, the scarce assets rise in price. And that has to do with uh, one, there being more desirability, but also, two, it's actually the currency being devalued against the scarce asset, right? Meaning that the US dollar or whatever is is losing purchasing power. And so it takes more of those dollars to buy that same asset. And when people hear that, I think that kind of clicks and say, oh, wait, that is interesting. Explain that more.

• 36:35Speaker 03

  Yeah, so we've got, so you you just mentioned two forces there that um that basically are inversely correlated, but they drive each other, which is the the the devaluing of the current currency that we're using to price this new thing. But also the um the scarcity and the fixed supply of this new thing, which can't, you know, once people understand that it can't be printed or you can't make more of it, you know, the the the common sense thing is, all right, well, infinite, finite, you know, that that's where more value is. But then you've also got the um the third piece, like, yeah, you know, let's argue that someone could create something that is finite in supply, but it's completely useless.

• 37:19Speaker 03

  Now, that that probably won't accrue value. So like, if we look at Bitcoin, um it is fundamentally useful. You know, it's digital, divisible, portable. It's got all these sorts of um incredible primitives. Um another one that I was discussing yesterday with someone was, and and this is something that I've experienced firsthand as a as a fintech company. For us, for example, to be able to accept a credit card payment to help people buy Bitcoin. Man, I'm about two and a half or three weeks through a due diligence process with so much paperwork, so much checks, so much garbage that like, I I can't even explain to you how much time and effort has been wasted

• 38:01Speaker 03

  just to give us as a company the permission to help somebody buy a product called Bitcoin. Like, i- if in a world where Bitcoin is a functional money, that permission doesn't need to be, you know, chased, like, you you don't you don't have any of that. So all of that friction, all of that wasted time, energy, resources, shit that doesn't actually add value to anything is gone. Like, you literally throw that out. Like, I think even Jack Dorsey was talking about it. He was saying, you know, Square is a fintech company, but it's fundamentally um. Unable to operate like an internet company because of all of these jurisdictional limits

• 38:46Speaker 03

  that exist because of the current fragmented, you know, horse and buggy financial system that we have. Like Bitcoin is completely and entirely different beast. It's that, I mean, coming back to a Peter Thielism, right, is that it's the zero to one. It looks nothing like the existing financial system. And that therein lies the innovation. It's not, you know, all these fintech bros running around trying to, you know, augment the existing financial system and make some things faster and, you know, you know, build some new API and all this. That's, I mean, that's all cool and well, you know, it's, it's cute basically, but it's not a fundamental reinvention.

• 39:29Speaker 03

  It's nothing new. It's not, it's not an iPhone versus a Nokia banana phone. Like, it's, it's a, it's a complete reinvention of money, payments and all in the one stack. And that, I think, when you layer that on top of the, the land argument. Um, so you've got this thing which is not ten times, but a hundred times more superior. And then you say it's finite in supply. Um, and then you say that you can show that this other thing that we're using at the moment is not only infinite in supply, but it's also devaluing, it's broken and all this sort of shit.

• 40:09Speaker 03

  Like, you, you, you literally have to be a maniac or a moron or ignorant, or I don't know what you have to be to sort of dismiss Bitcoin as a scam. Like, I, I, I, I literally don't get it anymore. Like, it, I, I see no reason why, um, someone shouldn't have, not, not only, you know, some of their wealth in Bitcoin, but any wealth that they actually value in Bitcoin. Simple as that.

• 40:40Speaker 02

  Yeah, it's this whole idea of get off zero, right? I mean, look, we went around the country, the United States and even internationally, and just over and over and over again, get off zero, get off zero. Because there's two things. One is there's obviously a exposure to the upside that has a material impact on a portfolio. But two is once you have kind of skin in the game, you start paying attention. And I literally used to tell people, take a hundred dollars, put it in Bitcoin, and think of it as you just invested in an education. Because I promise you, you'll pay attention, right? And I think that that works for people.

• 41:13Speaker 03

  Yeah, it works for absolutely everyone. Like, my mom, who's got no financial literacy whatsoever. I got her to buy some Bitcoin, and I get these random texts from, like, my mom's the kind of person where when she saw the whole Libra news last year, she was like, oh, Facebook is setting up their own Bitcoin. Like, that's the kind of, you know, comment that I would get from my mom, right? But even she's like messaging me saying, oh, you know, that coin's gone up again. Like, it's just, it's such an interesting thing to see. But that's, that's what skin in the game does to you, right? It's, you know, when you start to, yeah, when you have some skin in the game, you've got something to burn. And then all of a sudden, it becomes important to you.

• 41:59Speaker 03

  You know, when, when there's an ability to feel pain, and this is why pain receptors are such an important piece of, of any system, like, you know, tying it back to this whole COVID thing and how, you know, we're in a society now that wants to eliminate any form of pain. You know, we, we feel a little bit sick, we hit ourselves with painkillers, you know, we, we, we, you know, painkillers or medication or antidepressants or, you know, the economy is down a little bit, let's print more money, let's artificially drop interest rates. Like, all we're doing is we're masking the problem, we're slapping these random Band-Aids over problems.

• 42:41Speaker 03

  And every single time, you know, particularly from an economic standpoint, I think that's where we mess with things the most. Well, maybe not, maybe we mess with things practically everywhere, but every single time these complex natural systems, biological, economic, or whatever, try and correct themselves, try and come back to their own natural equilibrium.

• 43:05Speaker 03

  In we come with some sort of intervention to apparently fix it, right? Like, um, you know, the, these, these interventions that people say are so necessary. Like, the market was so overextended and, and not just talking from a, um, oh yeah, the market needed a crash, you know, standpoint, but

• 43:27Speaker 03

  everything was overextended, like whether you talk about supply chain and just in time, like there was no savings, there was stock buybacks for the sake of stock buybacks. All of this stuff was so overextended. And fundamentally, the economy needed to take a breath. And Corona was an opportunity to take a breath and come back to some equilibrium. And therein, that was the solution, that the fall was the solution. And we've somehow been taught that the, the correction or that fall or that crash is the bad thing, that the solution is pumping more drugs into the system to inflate it back up.

• 44:11Speaker 03

  And it's become such a backwards, um, kind of, you know, level of thinking because, you know, corrections, equilibrium, pain, death, that they're necessary in any system, you know, whether at the cellular level, the atomic level, through to the economic level, through to the societal level, up through to the interstellar, you know, cosmic level. Like, you know, life and death, they're symbiotic and the more we try and avoid death, the more we try and avoid pain as if it's a plague, the more we actually damage life. Um, you know, Jordan Peterson talks about this, um, the forest fires, you know, forests have natural fires that burn regularly all the fricking time.

• 44:55Speaker 03

  Um, and by doing that, you, you know, you have these spores that are released, you know, that only are released during these fires and all this sort of stuff. Then, you know, humans come in and we're like, oh, fires are a bad thing, you know, like a blanket statement, we stop the fires from happening. And then all of a sudden you have this one big fire that comes and destroys everything. And not only burns everything down, but it burns the topsoil. So now the forest is a freaking desert and you've destroyed it. It's, it's such a, the more you, you play with these levers of a complex system, the more you have these, um, Exogenous events that you are, you just can't measure. And you actually destroy the system itself. Instead of allowing it to correct.

• 45:39Speaker 03

  And this is, it's just, it's just crazy, man.

• 45:44Speaker 02

  It's how natural systems function, right? It is, you gotta kind of let them do what they do for the most part. And the more you interfere, the more issues that you can cause. Yeah. But before we finish up, I wanted to spend some time. You recently read Ray Dalio's new chapter that he released, chapter two for his new book. And you wrote a pretty deep dive on basically why you, what you think he got wrong. Right? So let me spend a little bit of time kind of talking through that. I know you mentioned it earlier, but just, you know, what your takeaways were and kind of what do you think he got wrong?

• 46:18Speaker 03

  Well, I, I think so. I'll, I'll hit on a couple of pieces. Number one, he, he talks about, you know, understanding money, debt and credit and all that sort of stuff. But then, you know, he, he starts with that, but then he gives like such a really weak definition of what money is. He's like, oh, you know, money is a medium of exchange and it's also some, some, sometimes used as a store hold of wealth. I was reading that, I'm like, what? Like you can't exchange something that doesn't, that's not, you know, valuable in the first place. So it's like, you know, it doesn't make sense. And I sort of argued that unless you give, you know, a, a much deeper definition of money, the whole argument that is entire chapter sits on just falls apart.

• 47:02Speaker 03

  So, you know, I kind of like to define money as something deeper. It's, you know, it's a mechanism via which participants in society can effectively collaborate. Like if, if you don't have that mechanism, society goes out the window. You can't like, you know, money is used to represent the product of one's time and labor. In other words, you know, their work. And, and if you don't get that depth, you don't appreciate how important money is. And then you can, you know, call it something as stupid as I, it's just the medium of exchange. So that's sort of where he starts off. Then he starts talking about, you know, you know, yeah, money doesn't have intrinsic value, blah, blah, blah.

• 47:43Speaker 03

  But then he turns around and starts to talk about how gold became money because it has intrinsic value. And then I was like facepalming myself again. I'm like, okay.

• 47:55Speaker 03

  There's no such thing as intrinsic value. All value is subjective. Simple as that, like, and like, the example that I like to use is, you know, we all value air, right? Like, the ability to breathe. But if you have a child, and you're both, let's say, in a, in a car accident and you fall off a bridge and you're in the water, and only one of you is going to be able to breathe, what are you going to value more in that moment? I know this is a brutal example, but you're going to value air or you're going to value your child's life? So it's a very, what that means is that at that point in time,

• 48:37Speaker 03

  the value you place on air is much lower than the value you place on, you know, your child's life, for example. So it's, all value is subjective. Now, gold didn't become money because of some notion of intrinsic value. It has specific attributes that we converged upon as human beings to say that, hey, that is a really good object to represent the time and work that I'm trading for money. So that was another area. Then there was a couple of sections that me and him agreed on. He talks about how

• 49:13Speaker 03

  central banks are able to rig the game, and he's a hundred percent right because that's one of those things where I can see it was highlighted in my article, you know, whilst the rest of us idiots spend our two finite resources, time and energy to receive money in return. You know, there's a few organizations who just get to change the rules for themselves at the expense of the rest of us. It's just, it's madness. Then, what else did I hit?

• 49:45Speaker 03

  Things about, where he talks, okay, so he mentions a section in there, while the virus triggered this particular financial and economic downturn, something else would have eventually triggered it, which I agree with, and regardless of what it did, the dynamic value would have basically been the same, because only intervention would have worked to reverse the downturn. And I kind of really like poked at that, which is, we didn't actually reverse the downturn. I actually think we've just accelerated the downturn. By intervening again, we didn't actually fix anything, we broke the shit even more than it was broken before.

• 50:25Speaker 03

  So, the correction, or this Corona crash, or whatever we're gonna label it as, was the system fixing itself. And instead of getting out of the way and allowing the system to fix itself, we just doubled down on breaking the fucking thing. And for me, when I see someone who's supposedly, you know, as intelligent or whatever as Ray is, to assume that these interventions are some form of solution, just baffles me, because that's, it's not what we're doing. Like, we can't perpetuate that narrative, because all we're doing is running the same game again.

• 51:05Speaker 03

  Like, the narrative has to be, the system is fixing itself by correcting, and we are breaking it more by intervening, not the opposite way around. And until we do that, we're never gonna fix it.

• 51:22Speaker 02

  Why do you think that he hasn't, at least publicly, kind of crossed the chasm and said, hey, this Bitcoin thing is real? Do you think it's that he doesn't understand it, he doesn't believe in it, or it's more of a sleight of hand, and actually, he's doing one thing behind closed doors and not talking about it publicly?

• 51:40Speaker 03

  Yeah, dude, this one's one I've battled with for a long time. So, I mean, most of the writing that he does, like particularly prior writing, this one, I think there was a lot of...

• 51:53Speaker 03

  If you asked me that question six months ago, I would have probably said it's the latter. I think that, you know, there's a bit of sleight of hand going here and he's buying up Bitcoin like a boss in the background. But reading this one, I was like, you know, man, he's actually missing a few really fundamental pieces, like, you know, intrinsic value being one of them and, you know, presuppositions around, um, you know, he's right about credit cycles, but he's defining everything within that paradigm. And, you know, he talks about these paradigm shifts, but he seems to be unable to, um, to acknowledge that Bitcoin is

• 52:34Speaker 03

  an example of a paradigm shift, you know, or a phase shift, something that is different to what exists. So he's either, um, there's either something really, really, really not clicking for him with respect to Bitcoin. Or, um, he's just, because he's got such a, I guess, a public presence, um, it may be dangerous to, you know, publicly promote Bitcoin because, I mean, you know, you've got this hundred and, what is it, $200 billion asset now, which, I mean, if he turns around and says, you know, Bridgewater is allocating to Bitcoin, you know, we're probably gonna,

• 53:20Speaker 03

  we don't need the halving, it'll be called the Dalio inning.

• 53:24Speaker 02

  Renaissance came out and said that they're gonna start playing, right? Now, they're a market maker, so they're gonna be less buying old, but still, I think there are definitely firms that are waking up to, uh, to what's happening here.

• 53:36Speaker 03

  Well, there's another example of that slowly and then all at once, right? It's at some point, the game theory is gonna suggest that, you know, everyone piles in and, um, it's gonna be mental, man, when the actual, that thing starts to actually happen. Yeah, I don't know, man, Dalio is an interesting, um...

• 53:58Speaker 03

  An interesting case. I feel like you should know better, but maybe, maybe it doesn't. I don't know.

• 54:05Speaker 02

  Listen, we're gonna find out for sure. With Amber, you guys are not yet available in the United States. You're gonna be available in Europe soon. For people who want to find out more and kind of see what you guys are doing around DCA and the various features that you've built, where can they go to learn more?

• 54:28Speaker 03

  They can go to amber.app, so A-M-B-E-R dot app. That'll redirect to our normal site, which is actually getamber.io. So we haven't switched it to the new thing yet, so don't freak out when you see it. But yeah, amber.app, all the stuff's there. And then on Twitter, it's theamberapp. That's the tag, so T-H-E-A-M-B-E-R-A-double-P. So that's where people can find out. I would suggest we're gonna, I'm gonna release an article probably in the next week or two, once I get some more solid dates around Europe. So people can keep track of when we're gonna be live there. I know we had a recent casualty in Europe.

• 55:06Speaker 03

  One of the DCA services called GetBitter decided to shut down because, as you know, in the infinite wisdom of the Dutch regulators, they decided to introduce some ridiculous new licenses, which basically made it unfeasible for GetBitter to operate out of Holland where they were. So unfortunately, they're out of the market. So you know, we're now trying to make sure we can get in there to service people that are no longer able to be serviced in Europe.

• 55:41Speaker 02

  Yeah. I'm gonna leave you with one question. You have no clue that I'm rational. What is the one piece of content or writing that you wish somebody else or yourself would write? So what's the one thing that hasn't been really heavily scrutinized, debated, kind of laid out, that you say, "I would love to see X"?

• 56:08Speaker 03

  Shit, that's a, that is, I, do you know what I thought you were gonna ask me? I thought you were gonna ask me, "What is the one piece of writing that I would recommend as indispensable"? Shit, this is a good question.

• 56:24Speaker 03

  It's hard for me to say because I I I've recently just started reading Rothbard. And just, you know, the his libertarian manifesto and it's absolutely brilliant. And I would have said, um, a real like my answer to your question would have been a whole analysis on whether a completely free market system with no governments is actually possible and what that would look like. Um, I would love to see something like that, but now that I'm reading this book, I see it's already been written forty years ago. So, um, yeah, I don't know, man. And and so much good Bitcoin stuff has already been written.

• 57:06Speaker 02

  Um.

• 57:14Speaker 02

  I stumped you.

• 57:15Speaker 03

  Yeah, you stumped me, dude.

• 57:18Speaker 03

  You you stumped the fuck out of me. I have zero idea.

• 57:21Speaker 02

  You know how much pride I take in stumping people sometimes?

• 57:26Speaker 02

  All right, we'll have to do a third one at some point and you got to come with an answer for for that question because the reason why I like that question is, uh, one, it draws on, uh, the ability for you to understand what's already been written, which obviously you have. And then two, it's what is like the the intellectual frontier that has not been, uh, explored yet, right? It's really kind of what the the question's asking. And, uh, and part of the beauty of, uh, those frontiers is sometimes we know what they are, right? And so it's, uh, it's very easy to say, um, you know, hey, we want to go to this place or we want to do this thing. Uh, but other times, uh, you actually explore and discover, uh, by accident, right?

• 58:08Speaker 02

  You know, the the, uh, kind of canonical example is, uh, Christopher Columbus. He wasn't looking for, uh, for the new world. He was trying to get to Asia, right? And then he just happens to find this other thing. And so I think that's part of, um, you know, but part of the question. But, uh, what next time we come to it?

• 58:28Speaker 03

  Do you know what? Now that you say that, there might be one thing I could say, and I'm sure this has been explored, but, um, maybe something, may maybe a modern libertarian manifesto like Rothbard's, but, um, using Bitcoin as the, um, as the.

• 58:51Speaker 03

  The core piece of um

• 58:56Speaker 03

  C- C- Because Rothbard's entire writing, I guess, is built on the principle of private property. And and with that core principle, um, he starts to build all the rest of the philosophies, you know, off the off the top of that. So, you know, maybe a more modernized version of those philosophies, but using Bitcoin as the source of um,

• 59:19Speaker 03

  you know, private, like, real private property that um, that that that can't be um manipulated. So so that that'd be, I guess, an interesting thing because I I guess you could almost blend that with the sovereign individual and Bitcoin and sort of say like, what what would a future look like where um where the world functions as a truly pure capitalist free market um

• 59:52Speaker 03

  you know, society where you don't have the state, you don't have these coercive um infrastructure um that we have today. Um, and at the core of it is these um property rights that are hardcoded into, you know, the source of wealth, Bitcoin. Um, and then you have a voluntary society built around it. So so that'd maybe that's a really long convoluted answer to your question, but I think that's something that um has, that's probably, I think, where a lot of the frontier thinking of Bitcoin is now is like, yeah, yeah, Bitcoin's gonna go to the moon, it's gonna be worth millions of dollars one day, but what the fuck does the world look like when that actually happens?

• 1:00:33Speaker 03

  So, yeah, ma- maybe that's the area that we need more exploration of. So, let's say I'm half-stumped.

• 1:00:39Speaker 02

  I I love it, man. I love it. Let's um, let's wrap up there. I think this was a great conversation. I think people found a lot of value in it. And uh, we will definitely send some people over to check out Amber, uh, and then just keep doing you. It's uh, it's always fun to see you uh, kind of putting those ideas out there in the world, and I think we need more people doing it. So we'll we'll have to, again, maybe towards the end of the year.

• 1:01:00Speaker 03

  For sure, brother. Thank you for having me on again, man. Appreciate it.