← TFTC: A Bitcoin Podcast
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- [00:07]
Marty Bent
You've had a dynamic where money's become freer than free. If you talk about a Fed just.
- [00:12]
Kyle
Gone nuts, all the central banks going nuts. So it's all acting like safe haven. I believe that in a world where central bankers are tripping over themselves to devalue their currency, Bitcoin wins. In the world of fiat currencies, bitcoin is the victor. I mean, that's part of the bull case for bitco.
- [00:32]
Marty Bent
If you're not paying attention, you probably should be.
- [00:34]
Kyle
Probably, should be. Probably should be.
- [00:37]
Marty Bent
Kyle, off the plane, Uber to Presidio. Check in at the lodge. Can't talk about why I'm here, so we'll start over. Kyle, off the plane, straight to Presidio. Bitcoin and we got introduced to each other yesterday via text formally.
- [00:53]
Kyle
Yeah, yeah. Longtime listener, big fan. But. And we've also both been in the community for a long time, but. But yeah, first time meeting in person. Covid, I think put five plus years on pretty everybody getting to meet one another. So it's great to finally meet you in person.
- [01:08]
Marty Bent
You as well. Like I was telling you, my last time in SF was 2019, so it's been six years and a lot has changed since then. Actually, last time I was in sf, my producer is going to get pissed because he hates when I started out with dad talk, but I found out my wife was pregnant with our first son, so.
- [01:23]
Kyle
Oh, wow.
- [01:24]
Marty Bent
Very special. Very special city for me in that way.
- [01:27]
Kyle
Yeah. Well, welcome back.
- [01:28]
Marty Bent
It's great to be back. The vibes are high here, as you can see. If you're watching, we've got the Golden Gate bridge right behind us. Yeah, this is a beautiful place.
- [01:36]
Kyle
Yeah, Presidio Bitcoin is gorgeous. We're incredibly lucky that we now have this place in San Francisco. So I've been involved in the community here for a long time, but we haven't really had a home until Presidio Bitcoin got restarted on kind of like the post Covid window. And so, yeah, it's been really wonderful for us to actually have a congregation place like the rest of the country has. Bitcoin park and all these other places. Pubkey various spots around the country. So we got this gorgeous location. It's incredibly aesthetically compelling. So you work on hard problems here, Walk out the door, take a walk on the beach, look at the Golden Gate bridge. It's hard to beat.
- [02:18]
Marty Bent
Listen, I want to piss off Chaincode Bitcoin Park, Nashville, Bitcoin Park, Austin. The space in Denver, which I haven't been to yet, so I probably shouldn't add them to this, but this is the most inspiring bitcoin space I've been to in terms of the visual aesthetics and the vibe. Energy is high here.
- [02:35]
Kyle
Yeah, absolutely.
- [02:36]
Marty Bent
What's today? Is it Tuesday?
- [02:38]
Kyle
Today is a Tuesday.
- [02:39]
Marty Bent
Today is a Tuesday. I'm losing track of time here. It's like Tuesday office is filled. But like I said, we got introduced or reintroduced via text yesterday via Connor Brown, good friend of mine, good friend of the show. And obviously there's a lot going on on the Hill with the Clarity Act. Is it going to get injected into the market structure, Bill? If so, what is included? But before we get to that, just before we hit record, you're telling me about your history before bitcoin and what ultimately led you to bitcoin, which goes back to my radicalizing moment and what put me into bitcoin in a different way, which is the great financial crisis.
- [03:19]
Kyle
Yeah, absolutely. The great financial crisis. I think for everybody our age or our generation was a very formative event. Right. In a lot of different ways. But yeah, my backstory here was that, you know, I graduated right into the financial crisis and I was a. An aerospace engineer, but by training, like academically. But when the whole world's blowing up and everybody's getting laid off and everything's in kind of chaos, you know, you can't get a job unless you've got many years of experience in an industry like that. And so I ended up going into strategy consulting, which was a nice way to kind of bridge the technical, non technical divide there. And the very first thing that my consulting firm was doing was seizing banks for the US Government that were failing during the financial crisis. So here I ended up having this insane situation where I was banging my head on the wall trying to get a job to go out and do moonshots. Right? That's literally what I got my degree for. Because, you know, why not like we. We should be doing big important things in the world, right? We should be changing the world with our time and our energy here. And yeah, and then I just, you know, got the hook from on the stage and it was, you know, life had had a different plan in store. So I ended up going out and wasn't just me. I mean, there are hundreds of other people in the consulting firm. But we ended up seizing and resolving 140 plus systemically important financial institutions for the US government on behalf of the FDIC. And through that process, I got really deep exposure to just how decrepit, corrupt you know, choose your adjective. You know, the global financial system was and kind of just how shaky everything had become at that point in time. And I guess thus began my trip down the rabbit hole. And that ended up leading me to Bitcoin. And then I've subsequently been involved, first as a political activist in that kind of 2009-2011 zone. And then later on, once I wasn't a ramen poor college student and had accumulated some capital, I started making investments and I spent the better part of a decade here in Silicon Valley building Web two unicorns. And then, you know, as the political climate started shifting in the last couple of years and, you know, bitcoiners could actually be out without, you know, kind of fear of reprisal and retribution publicly, then I started shifting over into the policy side of things. And so I was advising presidential campaigns last year because I felt like it was super important that we kind of get on the political map, so to speak, as bitcoiners, and actually start influencing the levers of power. And then this year, I've spent all year working on Save our wallets and kind of the advocacy around the market structure Bill. So it's been a long, weird detour for me getting back to Bitcoin after 10 years of trying to figure out how I could know, reinsert myself into the market.
- [06:35]
Marty Bent
Well, Kyle, we're going to go back because I need to know what happens when you seize bangs. I think, like, going all the way back to what radicalized you. What did you see? Like, what was that process? Like, what was the spectrum of sort of bank balance sheets, the executive management, like, how the spectrum of corruption, like where some just poorly capitalized. Were some doing overtly corrupt things? Was there fraud involved?
- [07:02]
Kyle
Oh, yeah.
- [07:03]
Marty Bent
What happens when the government seizes a bank?
- [07:05]
Kyle
Yeah. Yes, to all of the above. Really? Yeah. I mean, there's a lot of different things I could say there, right? I mean, I threw the first bank executive in jail in Lower Manhattan since the SNL crisis. While I was involved with this project, I was deeply involved in, you know, the resolution of hundreds of billions of dollars worth of financial institutions, all of which were. I mean, I can't name specific banks or, you know, specific details, but, like, you know, of the hundreds that we closed during the financial crisis, I would say it's safe to assume that virtually all of them had less than 50% of their demand deposits at the bank at the time that they were seized by the US Government. So just think about that, right? Like, if it's, you know, Demand deposits. That's not even reserves. That's not. Well, that's not even assets. Yeah, right. That's not even saying, like if our assets perform and ultimately, you know, we can, you know, make money in the long term. It was just we don't even have the money to pay half of our depositors savings accounts if they came into the bank today. So I mean, it was very much a It's a Wonderful Life moment for me being involved in this. And it was crazy. Like, you know, there were so many things that we did. Like, you know, you asked mechanically, like, what is it like to close a bank? Like, I mean, it's very cloak and dagger, right? Like we would have these banks on what was called the kill list for months where we were observing them, doing financial reporting on them, trying to reconstruct their balance sheets as a regulator right on the outside, you don't want to tip them off that they're on the kill list or that they're going to get closed because then that they start dusting their tracks or, you know, the people who are committing fraud start to button things up. And by the time that a bank actually would end up getting closed, you know, we would deploy depends on the size of the bank and, you know, these sorts of things. Like WAMU was like literally hundreds of people for six to nine months, right? Like, it was a very involved process. But smaller banks, it might be, you know, a team of 10 or 15 that go out, but for these sorts of things, you know, we would go out, we would pre position days in advance of the closure. The team would book hotels under fake names and register conference rooms under, you know, fake companies. We would sit and everybody would have a briefing about what was going on with the bank and what was to be expected when we were going to close it. And then, you know, as we come up to the actual day of on Friday, everybody gets positioned in black unmarked cars in the parking lot outside these banks. You join a conference call with the governor of the state, who often is the one who has to revoke the charter on behalf of the state government that it's chartered under and then hand it over to the US government, to the fdic, the division of resolutions and receiverships. And so we'd all be sitting on a conference call. And there was one occasion, for instance, where I was sitting on a conference call and all of these cars in the parking lot with like 100 people and the governor didn't revoke the charter. And for whatever reason they decided that, you know, it wasn't going to happen. And so all of these people just kind of quietly drive away and nobody in the bank is any the wiser. But in most scenarios, what happens is the governor says, yep, we're revoking your charter. You're being, you know, seized by the US Government. Everybody pops out the doors, you know, just classic, you know, Fed style. And we all march up to the door and you kind of put your foot in the door at 4:58pm on a Friday afternoon and you say, hi, I'm here from the US Government and I'm here to seize your bank. We're going to need you all to work all weekend and, and I'm going to need your cooperation for everything that we're going to do. And yeah, then we would spend 72 hours or so flash escrowing the bank, trying to clean up its balance sheet, do a forensic analysis, determine whether the good assets, the bad assets, and then depending on whether there was an acquirer or not, you would either cut it into good bank, bad bank, or there's some kind of a loss sharing agreement with the US Government. And yeah, there's know, as you might expect in all of those things, there are a lot of different ways for politics to insert themselves and for people to kind of put their own thumb on the scale and influence the outcomes. So I saw, you know, quite a lot of crazy things during that time.
- [11:31]
Marty Bent
The bigger bank saying, I want this to roll up into me. Or is it. You don't have to get too specific. I know it's.
- [11:36]
Kyle
Yeah, I mean, I mean, like here's like one thing that I can say, for instance, right like there. And I'll, I'm going to carefully avoid naming names just for the sake of avoiding lawsuits. But you know, there are executives who were in charge of large financial institutions who were responsible for the crisis, caused hundreds of billions, if not trillions worth of collateral damage to the broad economy and you know, middle class people in both in the United States and around the world. And not only were they not punished, those people were able to form vulture funds on the outside to come back and bid on the assets. Pennies on the dollar for pennies on the dollar. And so these people didn't just rinse the American public once they rinsed the American public again and again and again. And frankly, there were almost no consequences for a lot of these people.
- [12:41]
Marty Bent
And did you ultimately become jaded by that process and decide to go Silicon Valley, focus on web 2.0 or is it, hey, financial crisis is over. Opportunities here now I can go do something that's more aligned with me.
- [12:54]
Kyle
Yeah, generally speaking, I actually made one quick trip. The firm needed me to work on the housing crisis. After I worked on the, you know, kind of financial side of the financial crisis, I ended up going and doing a bunch of the actual home mortgage stabilization work. And so I helped make sure that the entire housing market didn't completely fall apart in addition to all the banks afterward. But yeah, after a few years of that, it got to the point where I was like, yeah, I got to go do something more honest. I got to, you know, work on something that's actually changing the world for the better or improving at that point in time. You know, Silicon Valley was, was the spot. So I just, you know, hoping a prayer, got on a plane, arrived in Silicon Valley and I got very lucky to have helped participate and build some, some pretty large companies in the time that I've been here. But you know, now I'm kind of, I hate to say, but you know, I'm coming a little bit jaded about kind of the tech industry now as well and the direction of transit of how things are going there. And so, yeah, this is part of the reasons for circling back to the bitcoin community and coming kind of home, so to speak, to where my, my true desires to change the world lie.
- [14:10]
Marty Bent
Well, I think we need to set up all this historical context to get to the Save Our Wallets campaign. What did you do when you got.
- [14:16]
Kyle
Here in Silicon Valley? Yeah, so I've kind of done a little bit of everything. So as I mentioned, I was an aerospace engineer by training. So for everybody here in Silicon Valley, that means I'm non technical. Right. You know, I'm kind of useless when it comes to writing the code, but I'm very useful when it comes to architecting systems and go to market and everything like that. So I've been a product and strategy leader the entire time. But most people in Silicon Valley tend to go very T shaped. So they, you know, they have like a deep expertise in like one particular area. Right. It's like I might be a payments guy and it's just payments company, payments company, payments company, right. Whereas I have a little bit more of an intellectual curiosity. So I ended up working for one of the really large software development companies. So I was making software for software developers, which is about the most academically abstract thing that you can imagine, but was critically important for understanding how the world is actually being shaped today. And kind of like how companies shape the world in Silicon Valley. And Then from there I went to build a couple very large logistics and global freight forwarding businesses. And those guys ended up becoming incredibly important during COVID And so, you know, I kind of had that experience and then, you know, having been involved in the bitcoin community for I guess, 15 years now, I also saw the entire rise and fall, or whatever you want to call it, of, you know, kind of the token economy here in Silicon Valley. And yeah, it's just. It's been a wild ride, man. It's been a totally wild ride.
- [15:49]
Marty Bent
What was the token economy like on the ground? Because obviously I've been paying attention to it. I was in New York, Austin for a bit, and New York, I'd say much more so than Austin. There was a lot of the. To tokenomics and drifting, for lack of a better term, around that ecosystem. But from what I understand, it was, it was pretty heavy out here too.
- [16:10]
Kyle
Yeah. I'm trying to think of like, what's the fastest way to describe this for somebody who, who has very low context on what Silicon Valley and the token economy would be like. So the thing that I would say is that a lot of people out here in Silicon Valley really believe in the power of software. Right. And actually Andreas Antonopoulos had a really great line about this, I think back in 2015 or maybe 2017 or something like that, where he said, the thing that bitcoiners don't understand is software, and the thing that Ethereums don't understand is money. Right. And I actually think that that's probably one of the truest single statements that I've ever heard. Right. And you kind of tend to find people who are very dogmatic about one or the other.
- [16:56]
Marty Bent
Yep.
- [16:57]
Kyle
For a long, long time I was one of the only people who believed in both. Right. I both believe in the immense power of open source software. Like, I would never, ever, ever, ever bet against open source software. Because on a long enough time horizon, you're never going to beat the crowd. Right. Like somebody sufficiently motivated with freedom to build and utilize open resources like that will win on a long enough time horizon. But at the same time, the token economy has a lot of perverse incentives. And so both as an investor and then as a participant, I've seen people with good intentions. It's kind of like the ring in Lord of the Rings. Right. I mean, everybody thinks that they're, you know, the moral champion until they have to wear the ring.
- [17:44]
Marty Bent
Yep.
- [17:44]
Kyle
And when you have the power and you wear the ring. Oh, maybe I'll just take a Little bit here for me and you know, oh, maybe we'll just, you know, do this thing that kicks back some value to my venture investors or, you know, whatever. So you just kind of see the. It was really an important and profound lesson in the purity of bitcoin as a project and as a community. Because we don't trust, we verify in bitcoin. Right. And I think that that's incredibly important. Right? Like free markets, free market incentives, verification, like these sorts of things are really important and I think sadly lacking in a lot of the token economy.
- [18:30]
Marty Bent
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- [22:37]
Kyle
I hadn't thought about it until you just said it right now, but actually I think that that is the fundamental reason for the corruption is because by creating a token, unless there's like really strong kind of reasons for the token that you know could exist and even then I don't know, I've yet to see one. But like access to a wifi portal. Yeah, well, but it's like, yeah, there are potential use cases is I guess what I mean to say. Right. But, but you know, the thing is like if you can print money for yourself, that temptation is real and it never goes away.
- [23:11]
Marty Bent
Right.
- [23:11]
Kyle
Ultimate power corrupts absolutely. And so it is an irony that we would think that you could become the money printer in whatever local game that you're playing and somehow not have that corrupt your incentives. We observe this in reality every day. Right. With the Federal Reserve and everything that's going on in Bitcoin. Yeah, it's a weird conflicted sort of state that we live in in Silicon Valley building software and kind of coexisting.
- [23:43]
Marty Bent
But yeah, I'm going to touch the stove. It's hilarious because right now this cycle seems like all The DeFi Web 3.0 meme coin craze that's sort of on the back end of that cycle. People squeeze that lemon dry. And now we're coming back to older. They're calling them Dino coins. So you have coins like zcash pumping down and I think that's a perfect example of the temptation of the ring. It's like, oh, not only is the Federal Reserve wrong, but Satoshi was wrong. We're going to launch this coin. It's going to have 21 million coins, but we're going to have a 75 second block time. There's going to be privacy that you can opt into on it. And oh, by the way, we need to incentivize developers to come work on this. So we're going to allocate 20% of the block subsidy to this development fund a per period of time and that'll make sure that we have the best J And it's an example of the, the hum man being introduced. And I think bitcoin. I've talked a lot about this with Miles Suter and we mentioned it last week when I recorded with him in New York. But I do truly believe. And people think you're a cultist, some crazy evangelist, literally. But I do believe in the Immaculate Conception. Like the fact that Satoshi came, launched it, hung out for 18 months and then was like, all right, I'm gone. You guys got the rest of it. The protocols sort of set the consensus rules, the supply distribution, how much bitcoin will ever exist, the block time, difficulty adjustment, and then he's gone and just left it to the rest of us. And we don't have that savior. I mean, maybe people view him as a savior, but he's not around to sort of dictate and be the finger on the thumb on the scale to influence things one way or another.
- [25:27]
Kyle
Yeah, absolutely. I mean, the benevolent dictator model is, you know, there are many, many cases in history where that doesn't turn out well.
- [25:36]
Marty Bent
There and devil's advocate, there are somewhere it does turn out well. You'll go like Linus Dorvalt and Linux, like it worked out for that. But that's not a money protocol. That is an operating system. Correct?
- [25:45]
Kyle
Yeah, yeah, no, I, yeah, I would tend to agree. And I think the, the Immaculate Conception here in the, you know, kind of metaphor that we're using is, is very real. You know, I mean, again, as somebody who has seen the ups and downs and lived many lifetimes, now in bitcoin, it is the sort of thing that the more you study it, the more you experience it, the more you live it. I think the more spectacular and amazing the Immaculate conception of bitcoin becomes, you don't lose appreciation for it, you gain appreciation for it over time. And yeah, I mean, I think that I want to go to, well, you know, another rabbit hole that we can park on the side. But you know, I, I've over time become more and more convinced that if time travel is possible. Right. It's a big if. But again, I'm a, I'm a physics guy. If time travel was possible, it would not surprise me in the least for Satoshi and you know, kind of the emergence of bitcoin to have been a time traveling event, right, where 40, 50, however many years in the future, somebody realized that dystopia had taken over and the maximum point of leverage to insert themselves into the timeline and arc human history in a different direction was at exactly that moment when the financial collapse was starting and an entire generation of digital natives was emerging into the real world and being rudely disabused of the idea that this world functions in the way that most of us would hope or expect that it functions.
- [27:25]
Marty Bent
Well, now with the emergence of AI, I mean, you can take it a step further. Like it, was it a sentient AI that basically said, all right, we completely messed this up, this does have potential to work, but we need sort of sound money for the digital age, digital native currency. And so we need to go back and incept it into the minds of the masses at this particular point in time. And then running on that thought, like, how has the timeline changed, like since 2 or October 31, 2008? Probably more importantly, January 3, 2009, like, right, right. Have we actually, if it was a time traveling individual or artificial intelligence, has it pushed us on a better timeline?
- [28:05]
Kyle
I mean, I think unequivocally the answer is yes. Right. But yeah, I mean, I think that it would be incredibly ironic if it were just the annoyance of future AIs saying, God dang, we don't have any money that's not just inflating away. Like, we can't do anything interesting. We need to back and change the rules on these monkeys because they're messing everything up for us here.
- [28:28]
Marty Bent
Yeah. Or maybe it was benevolent AI, like, hey, we turn these humans into slaves because we don't have good money to pay them for the things that they're doing. So we need to go back and make sure that we're compensating them appropriately for the work that they're actually doing. Now we're getting down a rabbit hole here. But you said you got jaded by Silicon Valley specifically. Was it tokenomics and all this or something broader?
- [28:47]
Kyle
No, I would say it's just kind of the incentive structures generally. I mean, again, it's like, you know, show me the incentives, I'll show you the outcome. Right. I think we are kind of of that generation of people. We're kind of the between generation. Right. Like the Gen Z kids, the alpha kids, like everybody younger than us, they don't even remember what it was like before cell phones, before the Internet everywhere. Most of them have never even seen a pay phone.
- [29:15]
Marty Bent
I'm eating more and more. They're born after 9, 11. I'm like, oh my gosh, 100% of.
- [29:19]
Kyle
Them now in college. You, you don't. Anybody that you have met who's under the age of, you know, 25. Yeah, like they were Born in a time where privacy did not exist. Right. And they don't even appreciate this is the water to them. Right. You know, the, the good old joke about, you know, the fishes in the water and everything, it's like they don't even know what they've lost. And I think that's the reason. One of the more important motivations for me about circling back, like, I've had a very successful career in Silicon Valley and like you, despite my feelings about it, whatever, you know, I think the thing that's more important and has become in really stark contrast to me as I've been reflecting on, you know, kind of the post Covid moment and like, what the. What happened to us and the fact that we haven't properly reckoned, reckoned with both what happened during COVID And then I rewinded back, I was like, man, we never even really properly dealt with what happened after 911 and the surveillance and the expansion of the surveillance state and the deputization of the financial system, you know, on behalf of the state in order to surveil everyone in society. I mean, we are living in a truly ahistoric moment, right? In all of human history, since the emergence of society thousands of years ago, until the emergence of the computer maybe 30, 40 years ago, and then 911 and the expansion of the surveillance state, privacy was the default expectation for people in society to have. You had a right to have privacy, you had a right to be forgotten. There was no kind of leviathan that could come and, you know, deeply intrude into your life in such a way as it happens 24 7, 365 continuously now, forever in the future, if we don't stand together and change that. And so for me this is like a, you know, the return to Bitcoin is really about the fact that I think we desperately need a cypherpunk revival. I think that we've become far too heavy on suit coiners. I mean, we welcome you suit coiners. Like, thank you to some degree for appreciating the project and understanding that this is where humanity is headed. I mean, that's good that they're getting on early and they're helping usher or bridge us between where we are and where we need to be. But if we ever forget why this technology was originally created or gifted to us, which is the way I like to think about it, I like to think of Bitcoin as a gift from Satoshi. We have a responsibility, I think, and uniquely people of this age and who have had the experiences that We've had where we stand between these, you know, the old world and the new world, and we can see it with clear eyes. We have a distinct responsibility to both uphold those rights and privileges that we've enjoyed in Bitcoin for the last 16 or 17 years and to defend what I think was the natural way of human life prior to the last couple decades. Right. And so for me, that cypherpunk revival is what I think is most important right now in the bitcoin community. People need to understand and remember that, you know, like, freedom in the United States, like this wasn't free.
- [32:39]
Marty Bent
No.
- [32:40]
Kyle
There were great costs that were paid to give us this gift. And I think that we need to take that more seriously and reflect on the responsibility.
- [32:49]
Marty Bent
I completely agree. Secure your Bitcoin's future and your family's peace of mind. Too many heirs lose access to Bitcoin because there's no clear inheritance plan. We'll show you how to change that on Wednesday, November 19 at 11am Central, join Dhruv Bansal, the Chief Security Officer at Unchained, Jeff Vandrew, CFO and Chief Legal Officer at Unchained, and Joshua Preston, the CEO of Gannett Trust, for a live fireside chat on how to make your Bitcoin legacy secure, simple and built to last. We'll cover transfer on death beneficiaries, which is a new Unchained feature for designating who inherits your Bitcoin and removes uncertainty for your family connections. Unchained vaults are uniquely built to let you share custody to help your heirs or trusted partners securely recover your Bitcoin when it matters most. Last but not least, estate planning. They'll go over how Gannett Wealth Advisors expert financial guidance integrates with Unchained to protect your keys and your legacy. Bring your questions. This conversation is designed to give you clarity on how to make inheritance seamless with real Bitcoin, not IOUs. Go to unchained.com tftc to sign up. Sup, freaks? Been seeing a lot of YouTube comments. Marty. Your skin looks so good. You're looking fit these days. How are you doing it? Well, number one, I'm going to the gym more. Trying to get my swell on. Trying to be a good example for my young sons. A fit, healthy dad. But part of that is having a good regimen, particularly staying hydrated, making sure I have the right electrolytes and salts in my body. That is why I use salt of the earths. I drink probably three of these a day. With one packet of salt the earth. I'm liking the pink lemonade right now. It's my flavor of choice. This is their creatine. I've added this to my regiment. They have it in these packets as well. Makes it extremely convenient if you're traveling. You want to work out while you're traveling, but you don't want to be carrying a white bag of powder going through tsa. It's very, very nerve wracking at times. You have to explain, hey, it's, it's not what you think it is. It's creatine. I'm trying to get my swell on. Make sure you're staying hydrated. I have become addicted to these. It's made my life a lot better. I can supplement this for coffee in the morning and be energized right away. I can supplement. I can bring the creatine wherever I need to. Just put a couple packets in here before I head to the gym. Bring this to the gym. Drinking out of a glass bottle. Make sure I'm not injecting any microplastics into my body. Go to drinksote.com use the code TFTC and you'll get 15% off anything in the store. That's drinksotay.com code TFTC. I mean, especially over the last couple years with developers like Roman Storm, Keon and Bill from Samurai and a few others that have been persecuted by the state for writing free and open source software, non custodial software that protects privacy, it has become very clear to me that it's a battle that we're losing despite what the particular administration the United States would posture in terms of their willingness to lead when it comes to bitcoin. I think their definition of bitcoin leadership may differ from yours, mine and I mean going back to the Patriot act and the fact that it, until you said it, like I was saying earlier and sometimes I have to zoom out and put myself in the shoes of a new coiner and like thinking about what they're seeing with all these different crypto coins. But like, now that you brought it up and it just hit me like all these zoomers that I'm meeting, their college age and low are like born after 9, 11, born after the Patriot act, more importantly. And then, and to your point, I've never known a life of freedom and I think it ties in well to what we're really here to talk about, which is save our wallets. And this is something I've been beating the drum about in the newsletter and on the podcast since it dropped this summer. But it really got swept under the rug. And again, going back to the administration, I do think there's very positive things they're doing. But they had that crypto brief report and it had something specific about the Patriot act, which is we need to expand the Patriot act to create the six conditions that's specific to digital assets. And then I believe a couple months ago, The treasury and FinCEN together came out with sort of guidelines for what they recommend in terms of what individual American citizens are allowed to do with Bitcoin. And it broke all the best practices of self custody. Bitcoin.
- [37:09]
Kyle
Yeah. I mean, this is exactly what I'm talking about, right? Like if we lose the forest for a tree, thinking that because Trump got elected and because crypto was able to swing the last election that we've won, or that somehow anything has been accomplished, that is just fundamentally wrong. And I think it's a very dangerous attack vector for the bitcoin ecosystem. Because back to, you know, you were mentioning a second ago that, you know, the kids that are 20, 25 years old or whatever, they're like born into this post Patriot act world. They don't even know about freedom from before.
- [37:50]
Marty Bent
They don't know what it was like to go through airport security and not have your face scanned and patted down.
- [37:55]
Kyle
Well, I was actually gonna say it's even scarier than that because they actually think that they've gained rights because they can keep their shoes on now.
- [38:01]
Marty Bent
It is nice not to have to take your shoes.
- [38:03]
Kyle
I mean, but it's like, it's like.
- [38:05]
Marty Bent
You had a dungeon do this for the last 12, 13, 14 years.
- [38:08]
Kyle
Yeah, man. I spent 24 years. Excuse me. I spent five years. Every time I was, I was a professional traveler, I spent five years going through airports. And I would ask for an opt out and give a civics lesson to everyone around me in line who could listen while I was doing it. And yeah, again, I think that, you know, the situation with, with the White House and, you know, kind of like the world that we find ourselves in, right? Like we're as millennials, we're inheriting a world that's being given to us by boomers. And the sad reality is that I think almost every boomer that I've ever met and spoken to about such things, they would prefer to have surveillance instead of liberty. Right? And I don't know what that says about their experience, you know, growing up and coming of age in America. But there's this very clear, bright dividing line, in my opinion, between people of our generation who I don't know. I mean, we were just promised something else about what this country was supposed to be when we were in school and we grew up in a, you know, kind of the post glow. You know, the Soviet Union had fallen and, you know, there was no existential threat that was coming to impede on our freedoms in our lives until September 11th happened.
- [39:31]
Marty Bent
I mean, for all you zoomers out there, maybe everybody believes this, but I don't think there's anything better than being a 90s kid. Oh, man, 90s were an incredible decade, and it was like the last hurrah before all this happened.
- [39:45]
Kyle
It's hard to convey to people what it was like. I mean, there was actually a recent trend that was happening on, well, I was going to say Twitter, but it's probably TikTok, you know, wherever the kids congregate these days, where they were talking about, like, you know, is it really true that, like, people. Your parents used to just, like, say goodbye to you in the morning and say, like, come home for dinner before dark, and, like, you'd just be gone for nine hours with no cell phone, and, like, nobody would know how to reach you, and, like, your parents wouldn't know where you were. And it's like, that's literally the way that every human in history, until the invention of the cell phone, grew up, and that's how they were socialized. So, again, like, you kind of just have to, like. And maybe this is an interesting way to, like, thread my experience in Silicon Valley back into this and where I see, you know, kind of trends heading, it's like being able to spot early trends and being able to catch outlying data sets and say, like, hey, that's weird, right? Like, nobody else is seeing what I'm seeing, or, like, nobody else really understands where, you know, the. The game is tilted and, you know, kind of like gravity is taking everyone. This is just a great example. Right. I mean, again, like, everybody under the age of 30 has no idea that the way that they were raised, the world that they've grown up in, is completely anomalous, is completely ahistoric.
- [41:07]
Marty Bent
Yeah.
- [41:08]
Kyle
In the thousands of years of human development and society.
- [41:12]
Marty Bent
I grew up in Northeast Philly, which, if you go to where I grew up today, it's not a great neighborhood, but even back then, it wasn't the best neighborhood. My brother and I were 11 months apart, so we're, like, thick as thieves. We'd get sent out the door, and then we could be, like, three blocks away. My dad had a very distinct whistle, and that's how we would know it was dinner time. He'd come out in the stoop, blow his finger whistle and be like, all right, see you guys. We gotta go home. Not anymore.
- [41:34]
Kyle
Yep. No, those. Those days are long gone now. You just get a text message, right? Yeah, get home.
- [41:41]
Marty Bent
Get home.
- [41:41]
Kyle
Dinner time.
- [41:42]
Marty Bent
Your. Your airtag buzzes like, hey, get your butt home. Oh, man, before I shock you. And we're 5G. But bring this back to the current administration and its particular posturing towards bitcoin, particularly ensuring that we preserve the ability for individuals to write code that allows other individuals to access the bitcoin network in particular ways. What would you rate the administration's job so far? Or is. Can you write it yet? Has anything been done outside? I mean, obviously the DOJ persecutions of the developers, not great to see, but obviously that's an overhang from the Biden administration.
- [42:23]
Kyle
Well, yes and no.
- [42:24]
Marty Bent
Yes and no, right?
- [42:25]
Kyle
I mean, it was a prosecution that started under the Biden administration, but the Trump doj, once they were seated, you know, a blanche memo was released that said, we will not be prosecuting people for these sorts of offenses, which, you know, naturally received the resounding cheers that it should have received from, you know, our community. But then the Trump administration continued to prosecute these developers of open source, non custodial software in contravention of their own DOJ charging guidance. And then, you know, as you just mentioned, we saw the samurai guys went for a plea deal because they were facing decades in prison. And of course, you know, like everybody, you don't begrudge them for, especially as young, you know, parents of young children, like, you know, taking a plea deal that guarantees that they're only going to spend a couple of years in jail, if that's what it is. But I would say that it's pretty cynical on the part of the administration to then throw the book at them and max charge, max time in jail, you know, max financial penalties. To me, it would seem that the. The administration is trying to send a signal about the types of behavior that it doesn't want to tolerate in the bitcoin community. And, you know, I think that that signal is a little between the lines and you have to kind of know the inside baseball to be able to see what's actually happening. But yeah, combined with the White House digital asset report policy that you mentioned, like, I mean, they're talking about regardless of what happens in the market structure, Bill, which I would like to talk a little bit more about, and just like, make sure everybody knows what's actually happening there. But even if we get all of the good stuff that we're hoping for in the market structure, Bill, if OFAC comes back after the fact and updates their guidance and says, well actually because of counterterrorism and the Patriot act, we want to expand the BSA to cover all US entities and all persons who are transacting on defi rails or decentralized blockchain rails as they stated in the report that they were interested in doing. That could mean that we still maintain the ability to create open source software, but we will lose privacy and everybody will kind of be in a fully permissioned.
- [44:57]
Marty Bent
How do you lose privacy under that?
- [44:59]
Kyle
Well, you'd have to KYCA and you might be allowed to have your own personal wallet. Right. And you might be able to transact on a person to person basis in a decentralized way out in the real world. But if you're ever going to try to properly move money or interact with a regulated entity, I mean you're at the docs.
- [45:22]
Marty Bent
Your stack.
- [45:22]
Kyle
Yeah. You're going to have to dox your stack, you're going to have to KYC aml. And I would say just generally the idea that, I mean I hesitate to go too deeply into this because I don't want to give people ideas but I mean there's things like ordinals that exist, right. Like colored coins, we can mark coins. So like if we think that we can exist in a world where 80 or 90% of Bitcoin transactions are going to be surveilled in KYC and kind of like known to a centralized party and that you're going to still be able to maintain 10 or 15% at the edges of true privacy and anonymity, that just doesn't work.
- [46:01]
Marty Bent
Is that worth it?
- [46:02]
Kyle
Well, it's not even that it's not worth it. I mean I would say that yeah, we will have failed. Bitcoin will have failed in that universe in my assessment. Right. Because that's not what it was created for. But what I would say more broadly is that it's like the privacy coins. Right. The privacy coins that exist out there are not really private in my estimation because the size of the pools and the volume that you're moving. I mean you say you used to work in finance. Like you know, if there's only five people in the dark pool.
- [46:35]
Marty Bent
Yeah. And process of elimination heuristics.
- [46:37]
Kyle
Yeah. You know, I mean like you don't need to know who's trading in the dark pool. If there's only a handful of players in the dark pool. And if you know the relative size of the players in the dark pool, somebody moves a transaction that looks like the relative size of like one of maybe two or three people who could execute that transaction, well, do I really need to know that it's you, or do I need to just kind of.
- [46:59]
Marty Bent
Know that it's you show up and say, hey, was that you? Yeah, was that you?
- [47:03]
Kyle
Right, it was me. So, yeah. So I mean, I think the thing here is like this is an opportunity. Like this moment is both the most dangerous moment that I think we've seen in Bitcoin's history because if the regulations fall in the wrong direction and we just kind of passively accept that it could permanently cripple the network or the original intent of the network. But then on the flip side, we are probably one of the most powerful political coalitions in the entire United States today. I think that we determined the last election. I think the cross tabs show that pretty categorically. And if we all just stood up and demanded that this administration, this Congress, this government live up to the obligations that they had set out when they were making campaign promises last year and that they actually follow through on the things that are crypto native or kind of bitcoin native, then the opportunity here is enormous because we're talking about unlocking a multi trillion dollar market that will allow free and open source software development in the first positive sum economic arrangement that we've seen maybe in human history or at least for hundreds of years.
- [48:22]
Marty Bent
I forget who I was discussing it with when I said it, but when you look at it and you look at the tech Bitcoin at the protocol level with lightning network, liquid, Charmian Mintz Ark now coming to the fray. Spark like the building blocks for a trooper, a true futuristic, a truly futuristic cypherpunk banking system rebuilt from scratch exist, but that can be completely cucked. And this banking system can give you everything you want from sound monetary policy, payments infrastructure, free open banking with privacy embedded within the Charmian mints and other protocols. Even on liquid. You could do smart contracting if you want to. You can create these obscure financial sort of engagements between peers and even institutions and individuals. It's all there. But it can be severely kneecapped if we don't get this right.
- [49:28]
Kyle
Yeah, absolutely. I mean, now is really the most important. Again, I'll just say, like, I think this is the most important moment in bitcoin history. Yeah.
- [49:35]
Marty Bent
And Trump's out there saying, hey, we're going to upgrade the financial system and the banking infrastructure with crypto, like it's there. But I don't think he knows what he's talking about. Obviously he doesn't, but I think there's people behind him in the administration and very strong lobbying powers that do view an avenue to push policy down that would sort of cattle herd everybody into a more controlled system, less free system.
- [50:02]
Kyle
Yeah. And I think that that's, you know, again, having participated in the government and you know, again, double tapping on your point about like being jaded and kind of seeing how things work. Right. Like the, the primary lesson that I took out, you know, of my experience doing during the financial crisis and everything that was going on then was that the government's going to lie to you right up until the moment that they don't have to lie to you anymore or they can't lie to you anymore. Because I knew that these banks were failing for weeks in advance, months in advance. There were some number of people who knew that. I don't know if anybody was taking prop bets on public stocks, but wouldn't.
- [50:42]
Marty Bent
Surprise me, somebody knew the airlines were going to do well on September 12, 2001.
- [50:47]
Kyle
Yeah, exactly. Right. And we've seen no prosecutions, no investigations, no nothing on any of that. Right. And so, you know, I think that was a kind of a revelatory moment for me. Right. I had been kind of a good Boy Scout my entire life. I got into school to, you know, well, I almost went to the military academies and I didn't because of the Iraq war. And then, you know, ended up getting this degree to go and do, you know, moonshots. And we were mothballing all of the space program and everything like that at that point in time. So it's like, you can only get rugged so many times before your eyes get open and you become a little more like, you know, again, don't trust verify. Right. So for me, the thing here is like, the administration has been positive in the sense that normalizing bitcoin into society is a good thing. But the argument I guess that I would make is that especially at this point, seeing what's going on this week in politics or the last week in politics, you know, with the Bubba scandal, among others. Right.
- [51:54]
Marty Bent
Do you have the pictures of Trump blowing Bubba? Is that what it said?
- [51:57]
Kyle
Yeah, yeah, yeah.
- [51:58]
Marty Bent
Interesting.
- [51:58]
Kyle
I've seen about a hundred, one hundred, one hundred different GPT generated images. But, you know, you look at something like that and it's like, well, what happens if the next election goes in the other direction. And they don't end up delivering all the stuff that they promised. Like, even if they wanted to deliver the stuff that they promised, which is still a big if, Right. Like, who's to say that they actually have the votes at this point to get it delivered? Right. And then if it flips back in the other direction, how much damage has been done by this association with bitcoin being Trump coded?
- [52:33]
Marty Bent
Yeah, right.
- [52:33]
Kyle
I mean, bitcoin is a neutral freedom money that is useful for everyone in the world, regardless of their politics. This is an equal opportunity for wealth creation. This should not be a partisan issue. No. And I am deeply concerned that it's become a partisan issue more so during this administration. And the only way that, you know, we really get to the far side of this is in kind of a maximally constructive sort of universe for the things that we care about, is everybody getting engaged, like, now, if you're listening to this, if you're a bitcoiner, if you care about the future of bitcoin and the network for yourself, for your kids, if you think that it's important that there be a free market alternative to fiat currencies that are this rapidly melting ice cube, Right. It is not enough to go to the polling booth and pull the lever once every four years or every two years and say, well, I did my part. Right. Unfortunately, this is, you know, the battle at the end of the universe. We're trying to take the power of, you know, the printing press away from centralized governments, not just once, but probably forever if we do it right and we're careful about it. So this is a uniquely powerful and opportunistic moment in human history. And so despite all the dystopia, you know, kind of stuff that's flying around right now, like, I am incredibly grateful to be alive right now and to be in the arena right now and be trying to fight for a better world. Because for the first time in 50 years, or maybe 70 years since the end of.
- [54:20]
Marty Bent
Go back to Federal Reserve Income Tax 1913.
- [54:23]
Kyle
Exactly. We have the. We have the opportunity for the first time in decades, centuries, to truly inflect the timeline for humanity. Where else would you rather be? Right? This is it.
- [54:37]
Marty Bent
I don't want to be in the feudal farms. I don't want to be in the Roman Coliseum, though that'd probably be cool. I'm going to be here with all the technology, the agency. But I think to your point of bitcoin becoming a partisan issue, which I completely agree, I think it is, and I've Been, would you say narrative testing this? I guess I discussed it with Connor when we recorded in D.C. a few weeks ago. But I think too when you, when you look out at the political landscape in the United States, how polarized it's become. Instead of like convincing Democrats like hey bitcoin, like you guys just vote for this. It's like freedom. Like if you don't like Trump, you like this. I think we lean into the economic populism that exists on both sides. Obviously Mamdani just voted in, in New York City. And then on the right there's a lot of consternation with immigration policy. They took our jobs, which certainly happened. I'm not saying that facetious, facetiously like there, there is structural problems that exist in our economy that the relative normie, whether on the left or the right can feel intuitively. And they're sprinting to both polar ends of the political spectrum for a solution. It's either radical democratic socialism, eventually communism or strongman fascism on the right. Somebody come in and fix the problems where there is a third path, which is, hey, recognize that a lot of the negative externalities that you are identifying as core issues or certainly issues, but they're symptoms of the core problem, which is the money is broken. And there's a bipartisan way to fix this, which is we lean into bitcoin. We make sure that individuals can save in bitcoin, they can custody of bitcoin, they can build on bitcoin, they can interact with each other without the government snooping on their lives. And it's not going to be a rip the band aid off. Things are fixed. It's, we begin going down a path, understanding that we can re architect sort of economic engine of the United States at the monetary level on this fair, open, permissionless system.
- [56:51]
Kyle
Yeah, I couldn't agree more. And, and yeah, I think that that's an important thing for us to kind of like shift the dialogue around so, you know, kind of back to save our wallets. And, and the work that we've been trying to do, this is what we're trying to convince legislators in Washington D.C. about. Right. And there are some great ones that are out there who you know, are early and they understand it like they got it. They did the work, they did their, you know, 100 hours studying Bitcoin. And you know, these are freedom loving people. They're in Congress for the right reasons. They actually care about their constituents and they're not just there to, you know, get the next lobbying job. Right. They're fighting for this. But there's too many people in Congress and, you know, kind of among the boomers, right. Who either don't understand the technology or they haven't.
- [57:40]
Marty Bent
They don't care to understand.
- [57:42]
Kyle
Yeah, they don't care to understand it, or they've just heard bad stuff about it. They just hear about exit scams and they're lumping crypto in with bitcoin pig slaughter. Yeah, exactly. The pig butchering scam. Yeah, this is a great example. Like the pig butchering thing. It's like, if you were. If we were able to come, like, there. It should not be controversial for Republicans and Democrats to come together and agree that consumer protections to prevent things like pig butchering are a point of alignment that everybody in America should be able to agree on and that we should be able to pass whatever laws we need in order to prevent or, you know, heighten the, you know, kind of consequences for that sort of bad behavior. But to throw the baby out with the bathwater and say my constituents don't deserve the opportunity to generate capital and preserve their life's work into future generations for their kids and grandkids, because I didn't understand that there is a difference between being socially engineered and the fact that the money was fundamentally broken. That's a really sad state of affairs. And so this is the thing that I guess, you know, again, save our wallets and, like, the idea of, like, bitcoiners picking up the phone, you know, I was out. I can't remember if you were there, but in BPI did the day on the Hill in D.C. a few months ago. At the beginning, I was not there.
- [59:07]
Marty Bent
Now I was at the event. I was not on the Hill. Yeah, I was at the BPI event with all the panels, but I did not make it up to Capitol Hill.
- [59:15]
Kyle
Yeah, that's fine. You were doing important work on the panels, I'm sure. But for all of those of us who went to, you know, actually do the. The talking to Congress members, it was incredibly powerful. I mean, like, this is just a random sampling of whoever was motivated enough to come to D.C. and come to the BPI conference and then stay to go and talk to their legislators. And I was blown away. And, like, you know, people were great. They had great personal stories about how this affected their lives. They were telling them to the legislators. Legislators were, you know, actually taking notes and very interested in it and everything like that. And so, you know, I think a lot of the times we talk about this existential conflict and, like, kind of the scale of what's going on? And everybody thinks, like, oh, well, who am I? I'm just an individual. Like, my story doesn't matter. Like, the government doesn't care about me. Like, this seems scary. Why would I pick up the phone and, like, you know, try to tell my. My senator what I think? Why would they care what I think? Right. And it's like, it couldn't be further from the truth. Like, if I don't know how many people will end up hearing this podcast. But, like, millions. Yeah. You know, I'm willing to bet that if 10% of the people who are listening to this podcast actually picked up the phone and made it a concerted goal to talk to somebody in their senator's office about bitcoin and the importance of what's going on right now with the BRCA provisions in the market structure bill. It would probably be the most popular issue on the congressional switchboards this week.
- [60:46]
Marty Bent
Rather quickly.
- [60:46]
Kyle
Rather quick.
- [60:47]
Marty Bent
Yeah. Or.
- [60:47]
Kyle
Yeah, whatever time frame you want to use. Right. And we're just. We're a huge group of people who are well educated, fluent on the issue, have life experience to contribute. It's important. Right. Government is responsive to only the things that they are aware exist and that they can help. No.
- [61:06]
Marty Bent
I was telling Connor this for the longest time, my bitcoin journey. I was very radicalized by 2008. WikiLeaks, Snowden leaks, Middle Eastern wars. The government's not going to save you. You have to save yourself, which I truly believe you should do everything at your fingertips and do everything in your capacity to save yourself to the best you can. That's why self custody, bitcoin, all that good stuff. But at some point when you get older, you start having kids, you look out at the world, and you get more privy to how politics actually operates. Becomes very clear. You may not care about politics, but politics cares about you. And you have to engage. And to your point, and I've become convinced of this, particularly over the last 18 months, people do react. I've talked to people in the administration, individual politicians, and they do seem to genuinely care and respond when they think that this could affect their ability to get. To get voted back into office. But you mentioned brca. The last we covered this on this show was earlier this year with Matt Corallo, when the Save Our Wallets campaign had just launched. You said BRCA Blockchain Regulatory Clarity act at one point was a standalone act. It has since been included in the market structure bill, which is one of the big things the Trump administration came in. David Sacks, everybody's saying we're going to get crypto legislation, genius act, push through. Second priority on the Hill as it pertains to bitcoin and crypto is this market structure bill. It's been talked about for a while. Seems like there are some fast moving developments. You had Brian Armstrong from Coinbase interviewed earlier this week saying the progress is moving forward. There's likely going to be a vote imminently here. How much of the original BRCA will get into the market structure bill?
- [63:00]
Kyle
So that's still a question. So this is the thing like this is very inside baseball. So strap in friends if you're at home and you care about the legislative details. So as you mentioned, there was originally the brca, which was a standalone bill, which had, it was very, it was like a two page bill. It was very straightforward to the point. It was everything that we would have wanted in the bitcoin community to protect open source developers and non custodial developers from prosecution. That was folded into what became the Clarity act in the House and then it ended up passing the House, which is great. That's good news. But that's only one half of the process. As those of you who remember your Schoolhouse Rock video.
- [63:43]
Marty Bent
I'm just a bill.
- [63:44]
Kyle
Yeah, right. You'll, you'll remember that the Senate now has to play their role and the Senate as the cooling dish of democracy is a pretty difficult place to get things through. So at the moment there's two competing committees inside the Senate who have produced different draft versions of the their version of the market structure bill. There's the Banking Committee and then there's the Agriculture Committee. The Agriculture Committee released their draft text last week or the week before and it was excellent. They get it. They understood the assignment. They understand that Bitcoin is a commodity and that it is very different than everything else in crypto. And their approach to their drafting of the bill was that instead of leaving open ended clauses that could be interpreted by the regulatory agencies, they explicitly say if you are not an entity named on this list, you are not subject to securities sort of laws that we would normally be concerned about. And that's actually the right solution for this market moving forward. The problem is we don't know whether that's actually going to make it out of the Senate to a floor vote because everything in that draft bill was in brackets, which means it's a draft for discussion among everybody.
- [65:06]
Marty Bent
Will that discussion be internally within the committee or on the floor publicly?
- [65:10]
Kyle
Both. But at this point I think that the committees have both had their internal discussions. And so now the sausage making is going on and behind the scenes of, you know, what bill will actually make it to the floor for the Senate to vote on. And that's why it's really critical that if you're a bitcoiner, you call your senator today or this week or as soon as you can and tell them that this is important.
- [65:33]
Marty Bent
We will get this out tomorrow morning. So this will come out Wednesday, November 19th.
- [65:38]
Kyle
Great. I don't mean to push you that hard on it, but in general, like, yeah, the idea is like now is when they're having those conversations. Right. And if we can get the Agriculture Committee's version of the regulations as the bill that gets voted on and we can get that through cloture, which means that we can actually hit 60 votes in the Senate so that nobody can filibuster it. A k a, you know, Elizabeth Warren. Yeah, right.
- [66:04]
Marty Bent
We've, we've experienced a lot of that in the last two months.
- [66:07]
Kyle
Yeah. And she also is, you know, the one who tried to throw a wrench in the Banking Committee version of the bill from like six weeks ago or something like that. And everybody freaked out because it was like, so our. Is the Senate even going to be able to pass anything? Like, it's unclear right now what, what, if anything, the Senate can even pass as a result of this. So the thing is, we need to get to 60 votes in the, in the Senate, which means that we're going to need six to 10 Democrats to cross over and vote with the Republicans. And we're going to need that version of the bill that passes the Senate, if it passes the Senate, to also survive the committee markup with the House version of the bill. So there's going to have to be a conference bill once the Senate passes their version. And if we're able to get this language from the House passed Clarity act and the Senate Agriculture bill fully to the floor in front of everybody and it gets voted on and we get it through, that is the best case scenario for everybody in the bitcoin community because it will mean that open source, non custodial software developers will not be prosecuted anymore the way that we saw the DOJ prosecutions over this prior summer. But we still have to do the work of making sure that the White House and OFAC and treasury don't come in over the top and destroy privacy, as I mentioned, kind of at the top. Right. So that's kind of a second fight, like a second, you know, kind of tier that we need to be Concerned.
- [67:39]
Marty Bent
About this is, this is the first battle, the immediate battle that's in front of us is the Clarity act market structure bill is still called the Clarity Act.
- [67:47]
Kyle
So again, this is where it's complicated. It's called the Clarity act. In the House right now it's called the rfia or in the Senate I should say it's called the rfia is, is what we think the bill is going to be named. So but presumably they'll, when they do the conference, the joint conference bill, it'll probably be called the Clarity act since that's what they've been messaging all year.
- [68:06]
Marty Bent
And what does the crypto lobby think of the agricultural department's view or draft of the bill that we like? I've heard rumblings from behind the scenes that there's some influence in the crypto, the broader crypto, not bitcoin lobby that really doesn't care what happens. They sort of want to create these regulatory moats and yeah, they just need a market structure so they can do what they need to do. They don't really care about open source developers. Is that true?
- [68:34]
Kyle
You know, I don't want to paint with too broad a brush, but I guess what I would say is that regulatory capture is a hell of a good business. Right. I mean we see that in Wall Street. Right. The reason that we don't have access to good financial technology and tools in the United States is not because we can't build them. It's because the, you know, large corporations have captured their regulators and they get to write their own laws. So, you know, I wouldn't say that the token side of the crypto markets is unique in this way. They are just responding to the incentives and behaviors that such as they exist. Right. And so I would say that yeah, when it, when push comes to shove, you know, if you're operating a centralized exchange with licenses, you know, and you've got all the venture capital in order to be able to, you know, pay the lawyers $1800 an hour to stay in court, non stop fighting with the government, it's in your interests to say, well, I would much prefer that my random token is not qualified as a security under whatever new Howie test they're going to try to put out than to care about whether some random open source developers who are working on a decentralized exchange or a private host wallet are still allowed to do that thing that competes with me. Right. I mean, in their kind of business logic.
- [70:00]
Marty Bent
So call your representatives and senator streaks. Yeah, they have a lot of money.
- [70:03]
Kyle
And they do influence. Yeah. And that's the thing. I mean, one of the reasons that we started Save Our Wallets at the beginning of the year was because Matt and I knew that there is no centralized bitcoin company. Right. We don't have a CEO, we don't have a marketing team. We don't have a lobbying outfit, really. Right. And so we knew that we were going to be a massive structural disadvantage as bitcoiners relative to everyone else who's, you know, making tokens and other broad crypto things when it came to this lobbying effort. And so, yeah, I mean, we're outspent 1,000 to 1 in Washington, D.C. right now as bitcoiners. You know, it's great that we have organizations like BPI and Coin center and, you know, others who are fighting for the things that we care about in Washington. But we're doing, you know, they. We, whoever, whatever, you know, however you want to draw the box, are doing it on, you know, kind of MacGyver budget.
- [70:56]
Marty Bent
Yeah.
- [70:57]
Kyle
Right. Duct tape and bubble gum right now. And so that's why you sort of look like MacGyver. Well, yeah. Don't force me to get my way out of this room with a paperclip or things might get messy for you. But. But, yeah, no, I mean, I think, like, this is why, you know, it's like what we do have in the bitcoin community is we have truth and righteousness on our side and we have.
- [71:21]
Marty Bent
People power and a ton of grit.
- [71:22]
Kyle
Yeah, and a ton of grit. Yeah. Proof of work, baby. We'll grind it out.
- [71:26]
Marty Bent
Hand up. I've not called my senator, but I'm gonna wake up tomorrow morning and call. I've sent emails, but I think calls. Calls work just as well, too.
- [71:35]
Kyle
Yeah, you should definitely call. If you're listening to this, it's again, right here, right now, Senators are the most important people. If you have a senator who is sitting on one of the. Either the Banking Committee or the Agriculture Committee, double points for. For calling them. And then for sure, call them. Call them. Because especially now with AI, like, you know, written emails are a dime a thousand. Right. So, I mean, they don't know what's real. They don't know what's not real. Like, they'll just throw that away, really. I mean, I shouldn't say they're gonna throw it away. Maybe they look at them, but, like, it's much less impactful than picking up the phone and having a conversation.
- [72:12]
Marty Bent
And if you go to saveourwallets.org Is there still it's like a top line broad, like, here's the, the points you need to hit when you call them.
- [72:21]
Kyle
Yeah, so we have a bunch of information on SaveOurWallets.org you can also put your zip code in and it'll give you all your contact information for your representatives. There is a form letter generator on there, but you can't directly, as I mentioned, send an email to these congressional offices just because they would get DDoS every day if they had public email addresses. And we'll be updating the site with more guidance on what needs to happen once there's clarity of what's going on in the Senate. Right. So at the moment it's all geared toward the House campaign, but, you know, we'll be keeping it updated. You can also sign up there for updates. If you give us your email, we'll blast out some updates to people when there are important things that are going on and we need people to like really rally the troops and push something over, you know, probably when the voting is actually happening. So, you know, I would say there's a bunch of resources there. Definitely check it out and, you know, get involved. Because again, this is a, this is an easily winnable fight. You know, there are very few things in life that I've come across, at least where, you know, the hard work is literally just about showing up. Right. Like, oftentimes it's like, well, I got to show up and I got to fight Goliath. Right? And to some degree, we are fighting Goliath here because it's the US Government. It's the most powerful government in the world, and institutional inertia is in the wrong direction. But like, at the end of the day, we still do live in a democracy and we are the swing vote majority group in that democracy right now. So if they don't listen to us, the next election is going to be a bloodbath as long as we actually show up in those elections and push our legislators and do the hard work of participating in democracy. Right. So again, maybe the way to say this here for everybody who's a bitcoiner, if you're a real bitcoiner, you believe in proof of work. Proof of work for being a bitcoiner right now is picking up the phone and calling your senator and making sure that they understand that, you know, it is not acceptable for open source software developers to be getting thrown in jail for writing code. Yeah, for writing code.
- [74:28]
Marty Bent
First thing, go do that, freaks. We'll link to all this in the show. Not. Second thing, that like going into the second battle ofac, all this, it's completely going in the wrong direction. Where I would like to go, where I think we should abolish, rescind the Bank Secrecy Act. We should get rid of these sort of supernational regulatory bodies that really don't understand the technology and at the end of the day, objectively don't care about freedom or protecting people from crime, whether it's physical harm or financial crime. Like, I think the data is out there. It's abundantly clear. KYC AML compliance that has been thrust on the market broadly has completely ineffectual at stopping criminals from actually doing what they want to do.
- [75:12]
Kyle
Absolutely. I mean, it's kabuki theater. As a former bank regulator, I can tell you that for a fact. But I mean, you don't even need to take it from me or trust that. Right. Like, you can look at the news that's come out, you know, over the last 17 years since the financial crisis. Right. I mean, the largest bank in the United States, JP Morgan Chase, was just caught up for laundering hundreds of millions of dollars or potentially even billions of dollars for Jeffrey Epstein. Yeah, right. Even though they're filing suspicious activity reports to the tune of dozens or hundreds in the background. Right. None of which were ever looked at or followed up with.
- [75:46]
Marty Bent
He's friends with the Secretary of the treasury. So it doesn't matter. J.P. morgan, you're good, you're good. Wire those funds and they wired them to Deutsche bank, you know, which is another large, regular, regulated banking institution.
- [75:56]
Kyle
Yeah, right. And so, you know, the thing here is that, you know, KYC AML and like all of this intrusive financial surveillance, like none of this is actually doing anything on the ground to make the average American's life better or safer or.
- [76:13]
Marty Bent
Inarguably makes it worse.
- [76:15]
Kyle
Yeah, definitely puts them more at risk.
- [76:17]
Marty Bent
Adds more compliant costs, which layers in cost to the end user. It's more expensive, it's more dangerous for. I mean, how fraught is the world with credit fraud and people basically selling other people's information on black markets?
- [76:33]
Kyle
Yeah.
- [76:34]
Marty Bent
Because they were able to steal it from companies complying with KYC AML regulation by collecting all that data and securing it terribly in the first place.
- [76:43]
Kyle
Yeah. Creating honey pots left, right and center, all of which will be hacked eventually. You know, again, as somebody who's worked on a lot of these banking and just general technology platforms like none of these large institutions and the barrier to.
- [76:54]
Marty Bent
I just wrote a newsletter about. On the flight over here. I don't Know if you saw anthropics sort of post mortem on the prompt injection hack, I mean, essentially there was a Chinese espionage attack using their LLMs and MCP.
- [77:10]
Kyle
Yep.
- [77:10]
Marty Bent
Servers to basically take down parts of the Internet and infiltrate highly critical systems in the United States. That's a barrier to entry to the wages of tax is getting lower. And so the more you force people to comply and collect more information, the easier it's just going to get to take that and abuse people at the end of the day.
- [77:30]
Kyle
Oh yeah, 100%. I mean, the US government can't even maintain the safety and security of its own data. Right. I mean, China hacked The GSA like two years ago and got like 100 million Social Security numbers or something like that. Right. I mean it's, it's crazy.
- [77:43]
Marty Bent
Like what was it the, what was the big Social Security hack years ago? Evergrande's coming to my mind. But that's the Chinese property lending. What was it? I feel like it began with an E too. Was it Equifax? Literally a 200 million Social Security number, like 2/3 of the country. This was a decade ago at this point.
- [78:06]
Kyle
But yeah, yeah, now we got them buying 23andMe or trying to buy 23andMe, where they would get 20% of the United States's genetic data or things of this nature. I mean, data privacy is, I think, to piggyback on your point here about the bsa, I think data privacy is actually the next frontier for us. Right. Like if you can kind of fast forward a little bit, suspend belief and say like, you know, we're going to win on a long enough time horizon with Bitcoin. Right. Which I deeply and truly believe. Right. Like, this isn't really a question of if, it's a question of when. Right. And the sooner that we pull that future forward and you know, kind of bring the, the positive, some, you know, flywheel spinning in all of our lives, the better. But yeah, taking it like the next step further, like data privacy is going to become the most important thing in the world in my opinion in the next decade because we are all going to be subject to hundreds of thousands of adversarial AI driven attacks trying to pilfer our data wherever it exists for again, pretty much the duration of the rest of our lives. Yeah. And so, you know, you. I don't, I think it's crazy to trust anyone other than yourself to have enough motivation to secure your own data. Right. And have that level of privacy and interaction between two willing participants in a Private market.
- [79:26]
Marty Bent
Yeah. And just from like a defensive or systems posturing, like why would you want to centralize all this data? Like create defense and security of your distribution? Like why aggregate everything in central locations and, and allow people to self secure, to secure their own data, their own money and yeah, individuals may get picked off individually on a one to one basis, but that doesn't put everybody who's engaging in a particular service in harm's way.
- [79:57]
Kyle
Right. Yeah. And I think that that is again, it's a sort of design paradigm that the current, you know, kind of controllers of the world don't understand the dystopian.
- [80:10]
Marty Bent
Hellscape that we live in. Because that's another thing. I mean I'll probably, I'm record with Steve Lee and it's funny behind the scenes, the one question we're always asking each other, we walk up to each other say, who's going to run the mints? It's like we shouldn't have to ask who's going to run the mints. We should be able to run the mints and offer privacy preserving money to anybody we want to. Not anybody we want to, but we should be able to experiment with new wave cypherpunk, cutting edge banking technology.
- [80:36]
Kyle
Yeah.
- [80:37]
Marty Bent
Without having to worry about getting thrown in a cage.
- [80:39]
Kyle
Yeah, of course. It's, you know, we either believe in free markets or we don't. Right. And there are, you know, there's a another thing that I've been talking about while I've been doing this save our wallet stuff, which is like, it's called Blackstone's principle. Right. Which is like a very core piece of Western legal canon. Right. Which is that we should prefer, and our system is built on the idea that we should prefer that 10 guilty men go free than that one innocent man be wrongly convicted and caught up in and punished for the actions of those 10 bad men. And again, that's just kind of crazy if you think about how inverted the world is today relative to the fact that those are the principles that we've built our entire society.
- [81:27]
Marty Bent
I think it's becoming popular meme and I'm very happy. It is like in many aspects of our life, but particularly this one, you're catering to the lowest common denominator of criminal scumbags. You're basically nerfing the world and making the user experience of many things in life terrible because you're worried about the bad guy. Like you can't nerf the world, as Joe Rogan famously said many years ago. But it's true. You can't, you can try to, but criminals are always going to. Criminal.
- [81:55]
Kyle
Yeah, yeah, exactly. If you, I mean, this is the good old argument about guns, right? If you, if you take guns away from, you know, normal people, then the only people with guns will be criminals. Right? And I know that that's probably a controversial take in some parts of the country, but hey, and if, if you're.
- [82:12]
Marty Bent
Listening, you're saying that's a controversial take. I recorded an episode with Dr. John Lott two weeks ago. Go find it. We go through the data. It's not controversial. It's backed by data. Like if you take it away from law abiding citizens, it actually gets worse for them. Right. And everybody else.
- [82:25]
Kyle
Well, and again, back to the. Show me the incentives, I'll show you the outcome. Right. I mean, these are, these are pretty simple loops. If you actually are capable of taking a step back and deconstructing them and thinking about them. Right. So back to your point about the bsa, I just want to, like, quickly, before we migrate too far away from that, I want to say, like, you're not alone in thinking that the BSA needs to be overturned or, you know, repealed or that we need some fundamental modification to that. I think, in fact, that the one serious legal challenge that was brought against the BSA in kind of its contemporary moment, you know, after it emerged in the 70s, it only the, the BSA was upheld, I think on a 5 to 4 vote by the Supreme Court. And they had some very choice words about, you know, kind of the danger that we were entering into with something like the bsa. But at that time, you know, the limit for suspicious activity reporting was like $10,000, which in the 70s was a lot of money. Was an incredible amount of money. I mean, we're talking about like 100, maybe $150,000 or something like that in like modern dollars.
- [83:27]
Marty Bent
And from what I understand correctly, the history of the bsa, it was particularly focused on the Mafia. Right? There was a lot of mafia problems going on.
- [83:33]
Kyle
Yeah, correct. That's. Yeah. Back in the 70s, we didn't have, you know, the global war on terror. So, yeah, that was the presumptive reason that, you know, it was created back then and even then it was controversial. Right. So, you know, again, I think that this is a situation where, you know, our generation is as being called to, I think, greatness.
- [83:54]
Marty Bent
Right.
- [83:54]
Kyle
Like, I would like to think that we are going to achieve this greatness and that we are going to overcome these existential battles that are facing us because We've just been hardened and sharpened in a very unique set of circumstances that have led us to this unique historical moment. And you know, as I said before, I, you know, for me it was just kind of this realization of like, if not me, who if not now, when? Right? Like, what am I waiting for? No one is coming to save me if I'm not willing to get in the arena and, you know, have the fight myself. And I just kind of woke up and realized like, man, there have got to be thousands, tens of thousands, I don't know how many there are of other people like me who have been around and thinking, like, how could I contribute? Like, I'd love to contribute. And yeah, for me this was just, you know, the stakes have just gotten so high now that I feel like, you know, standing on the sidelines was just an inconceivable notion. Like, we need, we need all of our champions in the arena right now. We need everyone who can pick up a sword and fight for the future that we want. And I have every belief and every, like every fiber of my being knows that we will prevail if people just pick up the sword. They do their duty, they serve their country, which in this case, I'm going to say both is the United States and a return to our original founding values. And I would say Bitcoin network as the instantiation in code of American principles. I think now is the time for patriots to stand up and fight.
- [85:35]
Marty Bent
I'm looking the camera because I know you're out there. You DM me, you email me, you find ways to contact me to tell, tell me that you listen to the show, you read the newsletter, and you've been thinking these things but not able to express them. Here's your chance. Get out there, go to saveourwallets.org, put in your zip code, figure out who your senator is, call them and stand up for this. Thank you for standing up for this, Kyle. This was an incredible way to hop off the plane into the studio, start my few day trip here in San Francisco.
- [86:07]
Kyle
Well, it's such a pleasure, thank you for having me, Marty. And yeah, I mean again, it's, it's funny, right? Because like I've been following you for so long and like I knew about all your content. I was kind of a lurker or anon in the community for a long time. But like, you know, look at this conversation that we were able to have and kind of the energy that we were able to spark, I think, for one another. Yeah. In just A very short time. So, you know, I would encourage everybody out there, like, get involved. Just get involved somehow. Go to your local meetups. Find where other bitcoiners live. Get engaged in this fight. This is an important thing and we should fight for this.
- [86:43]
Marty Bent
Yeah. At the very least, you'll get a more well rounded understanding of how the state is attacking bitcoin or would like to cattle herd bitcoiners and the network into a very nerfed. A very nerfed form, which I don't think we want. And getting engaged, I think having done it myself in the last couple years, I think you would be surprised. The upside, I certainly was with how responsive some people are and to your point, how willing to learn people on the Hill are about this, and there are many individuals on the Hill that actually do care about this. And you just got to let them know, here's the signal. Here's what we care about. Here's. How do I know you're not an expert on this staffer or senator, but I've been immersed in this for many years. Here's how it works, and here's how it should work moving forward. Yeah, I respond well to that.
- [87:36]
Kyle
Yeah, it's super. Well, you know, and it actually has been revitalizing for me and my belief about the government as well, to be honest. Like being on the other side of the table and having those conversations. Like, I've actually walked away surprised at how willing to engage these members of Congress are and the fact that they're just really busy. They're stretched so thin. They're juggling so many problems. They don't have time to be an exper. Expert on this. If you are an expert, you can save them an enormous amount of time and energy as long as you can be articulate and thoughtful.
- [88:05]
Marty Bent
Yes.
- [88:05]
Kyle
So don't scream at people.
- [88:07]
Marty Bent
No.
- [88:07]
Kyle
But, you know, be professional, you know, and erudite and make good cases. Make a good argument.
- [88:15]
Marty Bent
Be polite. Be polite. Yes, ma'. Am. Yes, sir. Thank you. Please appreciate your time.
- [88:19]
Kyle
Yeah, absolutely.
- [88:21]
Marty Bent
I know on. On this show I can get a little bombastic, but for you guys. And when I call my senator and representatives, I will be very polite. Kyle, thank you, sir. This was a pleasure.
- [88:34]
Kyle
Absolutely Great to see you, Marty.
- [88:36]
Marty Bent
Peace and love, freaks. Thank you for listening to this episode of tftc. If you've made it this far, I imagine you got some value out of the episode. If so, please share it far and wide with your friends and family. We're looking to get the word out there also, wherever you're listening. Whether that's YouTube, Apple, Spotify, make sure you like and subscribe to the show. And if you can leave a rating on the podcasting platforms, that goes a long way. Last but not least, if you want to get these episodes a day early and ad free, make sure you download the Fountain podcasting app. You can go to Fountain FM to find that $5 a month get you every episode a day early ad free helps. The show gives you incredible value, so please consider subscribing via Fountain as well. Thank you for your time and until next time.