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The Peter McCormack Show
Bitcoin, A Fiduciary Duty with Nik Bhatia - WBD350
01:08:39
Location: El Salvador Date: Saturday May 8th Project: USC Marshall School of Business Role: Adjunct Professor of Finance For a long time, asset managers in the traditional finance world have largely ignored bitcoin. Often using outdated and debunked...
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- [00:04]
Peter McCormack
If you're ignoring bitcoin now as a growth manager, you are ignoring that an.
- [00:10]
Nick Bhartia
Alternative monetary reality has come into existence on this planet.
- [00:16]
Peter McCormack
Hello there, from Guatemala. I have come over here from El Salvador to see what's going on with the bitcoin scene. I met some Guatemalan people over in El Salvador and they invited me over, so I've taken the trip. It's been a long day, but it's great to come over here and see what's happening. Wow, what a crazy week. Never a dull moment in bitcoin. Thank you to everyone who sent me Great feedback following my thread addressing some of Elon Musk's criticisms of bitcoin. I didn't really think it through too much. I didn't expect him to read it, but I wrote it anyway. I was just a bit annoyed at the criticism of bitcoin and the promotion of doge, especially seeing out in places like this, the very hard work people are putting into creating a bitcoin ecosystem and using what is the best and hardest money to try and change people's lives. It was a bit frustrating. It's now become a crazy week. Mainly positive feedback. I've had a few hundred emails and thousands of DMs.
- [01:08]
Nick Bhartia
I can't even get through the DMs.
- [01:09]
Peter McCormack
I'll try and do my best over time. I do want to say thank you to the people who've been positive. A few death threats and a few people telling me to go kill myself. So obviously they disagree, which is fine. We. We can always debate these points. Anyway, how are you all? Welcome to the 350th episode of the what Bitcoin did podcast, which is brought to you by Gemini, the only place I use for buying bitcoin. I'm your host, Peter McCormack, and today I've got another interview with Nick Bhartiar. But before that, I do have a message from my show sponsors. Okay, first up today is Sportsbet IO, the best place for online gaming, because they accept bitcoin. And we have a big competition coming in Miami. They're going to be giving away a Lambo, but there's going to be an extra edge to this competition, which every bitcoin is going to love, every one of you. So it's very cool. I'm very glad to be working with them on this. Now, with Sportsbet IO, you have every market you could possibly be interested in. They cover football, tennis, American sports, motorsports, even esports. And for new customers, they always have a range of promotions available. So if you want to find out more, head over to SportsBet IO promotions, which is s p o r t s bet IO promotions. Next up, we have Exodus Wallet, who I am using as my mobile and desktop wallet for Bitcoin. And someone asked me recently, they said to me, pete, what are you using Exodus for? Explain it to me. So I have this problem that I've been increasingly using Bitcoin for my business. I get paid in Bitcoin and I pay people in bitcoin and my accountant was always at the end of each.
- [02:35]
Nick Bhartia
Month saying, pete, I have no idea.
- [02:37]
Peter McCormack
What these payments are for. What are you doing? So when the Exodus guys reached out to me, I checked out their wallet. They have this advanced feature where I can add notes top for all of my transactions so I can keep my account unhappy. But the wallet's awesome. They've crushed the ux, so I love using it. But if you want to check it out, please head over to exodus.com or search for Exodus in the Google or Apple app stores. Next up we have Casa, the very best in Bitcoin security. Now, if you had a good year, if you are sat on a decent stack of Bitcoin and you aren't custody in it, or you have it all on a single wallet, it is probably time for you to consider Casa. And now, I know what you're thinking, do I really need this? It's going to be a pain to set up. Maybe some of you are thinking, what the hell is a multi sig wallet? I don't know what that is, Pete. I know I had all the same questions, but honestly, it could not be.
- [03:21]
Nick Bhartia
Easier to set up.
- [03:22]
Peter McCormack
And once you've done it, you will have so much peace of mind with your Bitcoin because a multi sig wallet allows you to custody your Bitcoin but only move bitcoin by signing transactions from multiple wallets, ones which you distribute into different locations, which protects you from a range of mistakes, errors and vulnerabilities.
- [03:39]
Nick Bhartia
If you've got questions about it, you.
- [03:41]
Peter McCormack
Can reach out to me. You can drop me a DM or drop me an email and I'll answer every question I can. There is no better time to upgrade your bitcoin security and get total peace of mind. If you want to find out more, head over to Keys Casa, which is K e y s ca s a. Okay, so onto the show today and I have my buddy and incredible bitcoin author Nick Bhartia back on the show. A few months ago, Nick came on to discuss his new book, Layered Money. And that book has gone down an absolute storm. And now just a few weeks ago he released another article called Asset managers owning bitcoin is now your fiduciary duty. And of course I had to get him back on the show to go through that. Now we did record this a couple of weeks ago when bitcoin was sat at about 66k and before all the Elon Musk FUD. And we do talk about Tesla a bit. So if you wonder why we don't.
- [04:27]
Nick Bhartia
Talk about the FUD or everything that's.
- [04:28]
Peter McCormack
Happened since, that's why I always love talking to Nick. I think he is an excellent writer and this conversation was no different from previous. But if you do have any questions or feedback, you can always reach out to me. You know that my email address is. Hello?
- [04:39]
Nick Bhartia
What?
- [04:40]
Peter McCormack
Bitcoindid.com. okay, I'll let you go and enjoy the interview now.
- [04:44]
Nick Bhartia
Nick, man, good to see you again. Sorry we keep delaying this interview.
- [04:48]
No worries. Great to see you.
- [04:51]
So firstly, tell me how the book is going.
- [04:54]
It's going Great. We're over 18,000 copies worldwide now, which is really, really exciting. That includes some first run orders from Korea and China. Both of those foreign translation rights have been signed and first runs have been ordered. So I'm really excited about the Chinese version. Partnered with Social Sciences Academic Press, which is a publishing arm of the Chinese government. And so they are fully embracing the idea of bitcoin as an investment, which is something that I'd love to get into a little bit more today. Not necessarily as money or as a competitor to their currency, but just as an investment. And the book has just gotten great feedback around the world. So I'm just really excited about where it's going.
- [05:47]
What's it, what's it meant for you though? I'm assuming since the book's been released, your DMs have been on fire, your, your emails on fire. I'm assuming a lot of people to get in touch. How's that affected your time and kind of what you're doing and focusing on?
- [06:01]
It's changed everything for me because up until when the book was published, I.
- [06:07]
Peter McCormack
Was still trying to find my way in the new bitcoin career.
- [06:12]
Nick Bhartia
I worked for a couple startups, as you know, writing for them. I wrote the book, I've been writing blog articles for a few years, but I left the bond industry for good in late 2019. And so the book, getting a strong feedback and actually selling copies and bringing in some revenue has brought me private consulting and writing contract Gigs. But it's also encouraged me to become.
- [06:43]
Peter McCormack
An author full time.
- [06:45]
Nick Bhartia
And so that's what I've decided to do. And the second book is officially underway. And I haven't told anybody about this yet, but exclusive. This is an exclusive year.
- [06:59]
Peter McCormack
The book is going to be focused.
- [07:01]
Nick Bhartia
On bitcoin, as, you know, layered. Money was in large part a history book to give the backdrop for bitcoin. But the second book is going to be 100% on Bitcoin and looking to the future.
- [07:15]
Amazing. Amazing. Well, congratulations on getting the book out. I know a lot of work went into it and I know it's been well received, but I think the coolest thing out of this is you've got that thing that a few of us have been lucky to get. I think it's a very lucky thing and fortunate place to be in life where you get complete, 100% freedom and control over your time. Like, you get down to wake up, don't you, every day and just choose to do what the hell you want to do.
- [07:40]
That's absolutely right. And, you know, working in the bond.
- [07:43]
Peter McCormack
Market here on the west coast means.
- [07:45]
Nick Bhartia
A 5:30am start on the desk every day, which means, you know, an alarm.
- [07:52]
Peter McCormack
Well early into the four handle.
- [07:54]
Nick Bhartia
And, you know, that life, while it gave me so much background and knowledge and experience, there's nothing like working for yourself and setting your own schedule and deciding what, you know, how you want to allocate your time. So I have lots of contract work on my plate, which keeps me pretty busy, but I get to decide when and where I, you know, I get to do it from. So it's great.
- [08:19]
Yeah, yeah, it's pretty amazing. I. I put out a tweet once. I talked about things like the two most important scarce properties in life is bitcoin and time. And I don't know how old you are. I'm 42.
- [08:33]
I'm 33.
- [08:34]
Oh, you're a baby. I'm looking at like, shit. This is kind of career wise. I'm in like the final stretch now, like the last 10 to 15 years. I said, I said, I'm out here with Jack Mallows. And, you know, he's 27. He's an entrepreneur. And I'm thinking I'll never get to do that again. But I'm like, in that final stretch. And just having that control over your time, I think is probably the best thing you can have in life. Your health's important, family's important. But just on a personal career thing, that control over time did yeah, it's awesome.
- [09:12]
I worked on the road a couple weeks ago and that was really awesome. Just to be able to look at the ocean while riding and, you know, little things like that. Being able to take a bunch of Fridays off this year just because I need a little bit of time to reset, especially when thinking about the next book. That's not something that can happen with a really crowded mind and a really busy mind. So I need that, you know, that time and that freedom to do the research, to get back into, you know, one of the, one of the ways that I do research is just read late, late into the night and if I have an early alarm with work to do in the morning, I can't have that freedom to do that. So I've started that already, that sort of pre research phase right now.
- [10:03]
Are you, are you a reading guy or an audiobook guy reader?
- [10:07]
So I, I will say that during.
- [10:10]
Peter McCormack
My bitcoin rabbit hole phase, which was.
- [10:14]
Nick Bhartia
You know, 2016 to 2018, it was.
- [10:19]
Peter McCormack
All podcasts for me.
- [10:21]
Nick Bhartia
So that was like the way that I learned about bitcoin, because bitcoin itself is, is right now. And so there's no book that's going to bring you up to speed. You know, you had to be in.
- [10:34]
Peter McCormack
The moment, living through the segwit battle.
- [10:37]
Nick Bhartia
All of that stuff. It was podcasts, just, just POD at pod after pod after pod, but for research and just overall big picture thinking reader. And I've transitioned from physical books to the Kindle app now.
- [10:53]
Yeah, I've toyed with the idea of the Kindle. I'm an audiobook person just because of a lack of time. I tend to listen to a book while walking. Most of my interviews tend to be evenings because when I'm back in the UK and I'm interviewing people in the States, it's my evenings and then I've got the kids and. And if I try and read a book, when I try to go to bed and read a book, I get about three pages in and pass out. So I tend to do audiobooks now in the morning. But the problem with an audiobook is you hear something, you're like, oh, that's like a key moment. Or actually it's the same with podcasts that. Did you listen to Breedlove with Friedman?
- [11:26]
No, I haven't gotten to. God, that was the four hour marathon, right?
- [11:32]
Peter McCormack
Yeah, I think the last hour isn't.
- [11:34]
Nick Bhartia
As important because that's a bit more about their own working styles. Although they talk about note taking in that. But there were so many gems that Breedlove was coming out with, like, just. Just like cannonball after cannonball of amazing kind of. How do I put it? It's just like, specific things he was saying. I was thinking, oh, shit, I need to note that down. I need to have that ready, because if somebody asks me a specific question, I could say, well, Breedlove said, this is. This is what you need to hear. And. And I've, like, been trying to figure out a way of note taking, but you don't really get to do that with audiobooks. But I was told I really need to get onto a Kindle because there's ways of highlighting things and referring back to your notes. I guess that's what you're doing.
- [12:14]
Well, my.
- [12:15]
Peter McCormack
My reading style is.
- [12:16]
Nick Bhartia
It's actually kind of seasonal, where, you know, when I'm.
- [12:19]
Peter McCormack
When I was writing Layered Money, like.
- [12:21]
Nick Bhartia
For the last several months, I didn't.
- [12:24]
Peter McCormack
Read a single thing. It's.
- [12:25]
Nick Bhartia
It's all writing. There's no reading involved. So that's what I mean by seasonal, where, you know, I don't read for a while, but then I pick up some books. And the Kindle allows me to cycle through three or four books at the same time. I also can put my. Like, download research from my academic journal resources and then send those to my Kindle app, so I can have different things, you know, in the works. And I like the naval style of reading where, you know, it's not about reading to completion necessarily, but it's just about reading. Reading to capture what you need to capture. So, you know, I'll read the same 10 pages 50 times in a book because it's what I need to capture, and then, you know, move on. So the Kindle allows me a lot of freedom with that, and also it allows me to, you know, read late into the night, you know, in bed.
- [13:18]
Right. Well, let's get into bitcoin. Man. What a time. What a time. Fucking wild right now. I was. I did an interview yesterday with David Bailey and prep for. Are you coming to Miami?
- [13:30]
Peter McCormack
I'm not.
- [13:33]
Nick Bhartia
I thought we would have a beer. All right, man. Well, listen, I did an interview with him in prep for that, and we were talking about, like, how wild it is right now. And I was saying, I remember back in about 2017 when I first heard the term hyper bitcoinization, and I read the piece on it on the Nakamoto Institute, and I, like, completely honest, I was like, yeah, bullshit. Like, yeah, bitcoin's core is this digital money, right?
- [13:58]
Peter McCormack
Yeah.
- [13:58]
Nick Bhartia
And it's great and we can move it around and we can. We have all these great properties, but there's no chance that like bitcoin becomes this global reserve asset. Like, I admire the ambition, but I was like, yeah, bullshit. Obviously, like any person who has a doubting moment over time, you get proved.
- [14:20]
Peter McCormack
Wrong again and again.
- [14:21]
Nick Bhartia
And we're living in this moment where I feel like. I just feel like we're teetering on the brink of an absolute explosion. I don't feel like what's happened so far in the last year is the explosion. It's amazing, but I feel like we're teetering on this moment now. It's a bit like tipping point, right? Everything is lining up geopolitically, economically, infrastructure wise. All the banks, I mean, did I read something about Nydig and now helping all the banks to set up so that customers combine custody bitcoin? And I just feel like we're teetering on this explosion. How are you feeling, dude?
- [14:58]
Yeah, I feel the exact same way. I do agree with you that the.
- [15:03]
Peter McCormack
Move that we've had so far is not the explosion.
- [15:06]
Nick Bhartia
It's kind of bringing us back right up to speed. And the explosion is yet to come.
- [15:13]
Peter McCormack
It comes from adoption.
- [15:15]
Nick Bhartia
Every incremental person that comes into the network or comes into the denomination strengthens that case. The supply is inelastic, as we all know. And so the amount of bitcoin that is available, you know, the supply side relative to the demand explosion that we're experiencing, it just. It's very exciting and it does feel like we are at the tipping point. And something that I want to talk.
- [15:46]
Peter McCormack
To you about and ask you about.
- [15:48]
Nick Bhartia
Is you're interviewing people every day. You're with Jack Mahlers right now in El Salvador and SE is building this behemoth bitcoin infrastructure company. And you sat down with Cameron and Tyler and you're seeing how the world.
- [16:08]
Peter McCormack
Is becoming a bitcoin world right in.
- [16:10]
Nick Bhartia
Front of our eyes, really. And, you know, relative to two years ago where, you know, it still feels like the pure counterculture. And so maybe I do really agree with this idea that bitcoin still is the counterculture. When I'm out talking to normies and, you know, regular people and pre coiners and no coiners, I still get the sense that people have no idea that money is changing or that bitcoin is being introduced as a base technology, kind of like the Internet was 20 years ago. So, you know, what, what are you seeing? Like, what is the most exciting thing to you out There.
- [16:49]
That's a good question. There's so many bits to delve into in that. I feel like there's two worlds of Bitcoin. The inside world and the outside world. And I feel like the people on the inside, we're looking out everybody who's the no coiners, those who don't see it yet, and we're like, what the fuck? How do you understand this? And all the no coiners on the outside looking and going, what the hell is this about? This seems dumb. There becomes a time when it clicks. It's a bit like, have you ever learned to code, like, be a computer programmer?
- [17:24]
So I'm not a coder, but my.
- [17:27]
Peter McCormack
Experience really is in Excel.
- [17:29]
Nick Bhartia
So when I'm. I do think of myself as a coder within the Excel program because I'm building tools that turn X into Y and. But. And, you know, a little bit of Visual Basic, which is like the code in the back of Excel. But like, I failed all my coding classes in my master's program, so it just. No, it's not. It's not my skill set.
- [17:54]
Well, my coding career was very short back in. When I was 20. So 22 years ago, I needed a website and wanted to build one. So I bought this book on HTML and I learned it. And HTML is very easy. It's just a markup language. Opening tag, say it's a bold tag. Opening tag, closing tag, and that bolds it. It's very basic language to learn, but the next step up was to learn JavaScript. And I bought a JavaScript book and struggled with it. But what I did do is I was also building things in this thing called Flash. Do you remember all the Flash crap that was on the Internet? And it has a language behind it called ActionScript. And I struggled, I really struggled to understand coding. I really struggled to understand the way it worked. But then just one day, it clicked. One day I was like, building a script to do something and the logic of how a script is executed in order for it to create the outcomes that you want. And then once I did that, it was like, oh, it's very easy. I would learn to build objects and blah, blah, blah, all this stuff. I mean, I can't remember it now because I ended up thinking, I don't want to be a coder. But one day it clicked. And I think there's this thing with Bitcoin. It's like, when you're an outsider, I think you can have a number of perspectives. You can look and go, right. Is it just some like weird digital money, you know, doesn't mean anything because it's not backed by anything. Like you see all those kind of stories, you can't make sense of it because in your world money is issued by government online. Money can't mean anything, right? And then some people get dragged in for whatever reason, they go down the rabbit hole and suddenly it clicks. It just clicks and there's that moment. So I feel like there's like this line and we're side of it and sometimes we don't understand each other. So I sometimes think bitcoiners aren't patient enough to try and help people on the outside coming in with the perspectives they come in. And I also think people on the outside aren't patient enough to go in and learn. So there is these two worlds. But I tell you what, coming downhill to El Salvador has been a mind blowing experience. I came here 18 months ago, I was bitconf in Uruguay and I met Michael Peterson who runs bitcoin beach. And he was like, we've got this little bitcoin project happening in El Salvador. Can you come and see it? And I was like, yeah. So I got a flight, came out to El Salvador and basically someone had donated some bitcoin. And he set up this program where to keep kids out of gangs. He would give them jobs and pay them in bitcoin. And then he got the local shops to accept bitcoin. Like, you know, I think there was like a hairdresser and a couple of stores and that was like kind of cool. And I was, oh, that's kind of interesting. But you know, good luck, that's going to be a struggle. Blah, blah, blah. We've had a pandemic. This is my first time back. I've come back so I can get into the US So I just thought I'd come and chill somewhere for two weeks. And I've come back and it's entirely different. Every single. They've essentially had micro, hyper bitcoinization. Here in El Zonte, every single store pretty much accepts bitcoin. Everybody locally wants bitcoin. Everywhere I go, I went yesterday, see this specialist about my back, went to payer, she said, oh, can you pay me in bitcoin? Everywhere we go, like the coffee shops, everyone accepts bitcoin, everyone wants bitcoin and everyone is using bitcoin. And that for me was the moment. It's like, this actually can happen. This actually can work. You can build an economy based purely on bitcoin.
- [21:08]
Peter McCormack
So this to me right now, what's.
- [21:10]
Nick Bhartia
Happening here in El Zonte, it's little tiny surf town in El Salvador is the most important thing on my mind right now. Honestly, it's blowing my mind. Nick.
- [21:20]
That's absolutely incredible. And it really speaks to the different use cases for bitcoin because in United.
- [21:28]
Peter McCormack
States, everyone's so focused on the dollar price and is the dollar price going.
- [21:33]
Nick Bhartia
Up or is it going down? And what's the cycle?
- [21:36]
Peter McCormack
What's the target price in the, you.
- [21:37]
Nick Bhartia
Know, in dollar terms, but in different parts of the world, it's like our currency sucks. We need a new one. This is, you know, the, a path to the future and then bringing back China they're looking at and they're like.
- [21:53]
Peter McCormack
That appears to be the greatest investment.
- [21:56]
Nick Bhartia
Opportunity in the world. They're not thinking of it as an alternative money and they're not really even thinking of it as, oh, the price is know, volatile, it's going to go up and down. They're looking at maybe that might be just the best long term investment for us as a people. So everywhere that you look, there's a different use case. But the network effect of everybody knowing bitcoin is just getting stronger and stronger.
- [22:25]
Peter McCormack
As we, as we move forward.
- [22:26]
Nick Bhartia
And it's just, it's really exciting. And it's why that I've chosen to just keep writing about bitcoin because there are so many questions that need to be answered. Everyone gets caught up in the altcoin hype cycle every few years. But none of that is cognizant with this narrative that bitcoin is a base technology for the next several decades. I mean, it is and it's here to stay. And the, the, the network effect of it is getting just so strong.
- [23:03]
Well, the people down here in El Salvador, what's really interesting is they've learned why they want bitcoin. It's just clicked for them. They've learned why they want it. They've crossed that line to go, when you pay me, please pay me in bitcoin, they don't want the dollar. And they know bitcoin's volatile. And yes, we're in a bull market, which has been great for a lot of them, but at the same time they want bitcoin. They know they need bitcoin, you know, and they transfer some of it back to dollars because some places they need dollars, but they want bitcoin. And yeah, I find it so super interesting, but. And then I go back home and all my friends know I've got a podcast. Not only do they know I've got a podcast. They know I've got like a podcast that's like, been really successful this last year. They know what the topic is. Do any of them own bitcoin? Nope. Do any of them care about it? Nope. Because I think they haven't been through enough pain yet with money. They've lived through fairly insidious, slow debasement. You know, you don't really notice the debasement from month to month. You get paid, you go to the pub, you pay your mortgage, blah, blah, blah. That's pretty much what it is. They've never had issues moving money around. You come to a place like El Salvador, they have issues getting money, moving money. I mean, there's no cash. The funny thing about El Zonte is there is no cash point here, but there is a bitcoin cash point.
- [24:26]
Incredible.
- [24:28]
I think where you have pain with money or difficulty or you learn about bitcoin, it becomes easier. I think generally speaking, you in the us, me in the uk, people in Europe, we've had it too easy. So essentially the only people who've really benefited from bitcoin are those who've got in early enough, done the work. I also say we're a bit lucky in some ways. I feel lucky to have discovered bitcoin. It's been life changing. But I don't know how we get that kind of explosion in places like the UK where everybody suddenly says, oh, shit, we need this. And I'm assuming it potentially comes with a massive increase of inflation soon. I mean, we've got a massive debt issue in the uk. You have in the US we perhaps see it then. I don't know, man. What do you think?
- [25:20]
I don't.
- [25:20]
Peter McCormack
I don't agree with that. I don't think that inflation gets out of control in the UK or the United States to the point where it.
- [25:28]
Nick Bhartia
Drives people into realizing bitcoin is their savior.
- [25:31]
Peter McCormack
I don't agree with that narrative at all.
- [25:33]
Nick Bhartia
It's part of why I wrote Layered Money, because the book doesn't even have the word inflation or deflation in the entire book. I don't feel that it's relevant to explaining the story of bitcoin. Debasement is right. And debasement is another way to describe the word inflation, because inflation can be described as monetary inflation. But the price inflation aspect, which is what, you know, you're referring to, and.
- [26:04]
Peter McCormack
A lot of the narrative is, you.
- [26:05]
Nick Bhartia
Know, is around that, oh, as prices go up a lot, people will realize that the currency sucks and drive them into bitcoin.
- [26:15]
Peter McCormack
That is happening already in different parts.
- [26:17]
Nick Bhartia
Of the world, like in Latin America and Africa. But I don't see that as something on the immediate horizon in the United States. And it is part of why people in the United States, like you said, they haven't experienced the pain.
- [26:33]
Peter McCormack
They'll be some of the last people.
- [26:35]
Nick Bhartia
To own Bitcoin, and they might not ever even own Bitcoin, but rather they'll own a stock market portfolio that has a lot of exposure to Bitcoin because the companies themselves have anchored themselves to Bitcoin or are holding Bitcoin on their balance sheet as a treasury asset or other things like that. But other countries that are more familiar with either history or currency debasement are going to be quicker into investing in.
- [27:08]
Peter McCormack
Bitcoin or converting their savings into Bitcoin.
- [27:11]
Nick Bhartia
Like you're seeing in El Salvador. And so the, the, the thing that drives the people in the west to it is the fomo. It's the, it's the returns that's really.
- [27:22]
Peter McCormack
What drives, it's not what drives people.
- [27:24]
Nick Bhartia
In El Salvador which are, which are going into it because it's the, it's the most real thing that they can get their hands on, monetarily speaking. It's monetary reality for them.
- [27:37]
Yeah, interesting thing. On the debasement, I really like what Breedlove was saying recently that money printing is. Or debasement, it's legalized counterfeiting.
- [27:48]
Of course it is. I mean, because if you think about.
- [27:53]
Peter McCormack
The people that hold the unit of account, dollars or pounds, they're not agreeing.
- [27:59]
Nick Bhartia
To debase the currency or to print the money or to issue reserves or to do qe. That's a decision that the central bank.
- [28:08]
Peter McCormack
And the government makes.
- [28:09]
Nick Bhartia
So the government is debasing the currency. They're counterfeiting the money because they, I mean, I guess they're counterfeiting it because nobody else is approving it but them.
- [28:23]
Peter McCormack
Right.
- [28:24]
Nick Bhartia
But you know, again, the money printing doesn't drive the price of bitcoin up. The money printing and the, and the actions of the central banks drive people.
- [28:38]
Peter McCormack
To seek an alternative to that system.
- [28:42]
Nick Bhartia
And some of those people end up in bitcoin.
- [28:44]
Peter McCormack
Some of those people end up in other things. Like if you think about a lot.
- [28:49]
Nick Bhartia
Of American investors that are so focused on the real estate component, they're making plenty of money right now. Real estate prices are going up.
- [28:58]
Peter McCormack
The people that want to own stocks.
- [29:00]
Nick Bhartia
Instead of bonds or anything that's a, you know, a fixed deposit, those people are also seeking an alternative to the debasement. And so if you're long stocks or you're long real estate, that's also an expression. It's an expression of your position against what the central banks are doing. So bitcoiners have that same position. But I, I hesitate to just like correlate money printing, inflation, bitcoin price going up because it's not really the case.
- [29:33]
Peter McCormack
Everywhere you look, not everybody that's buying.
- [29:35]
Nick Bhartia
Bitcoin is doing it because money printer, money printer go bur, you know.
- [29:40]
Well, I, some claim they are. I mean if you look at the. I think, if you, I think it was, was it Tesla who mentioned it when they purchased. They were worried about dollar debasement. And Danny Druckenmiller, he mentioned it in their report. So people are raising it, people are reason.
- [29:58]
Peter McCormack
And, and of course it drove me.
- [30:00]
Nick Bhartia
Into the, it, the, the QE itself.
- [30:03]
Peter McCormack
Drove me into studying gold and it's.
- [30:06]
Nick Bhartia
How I found bitcoin and it's why bitcoin was so obvious to me at that point because I study what the Fed does. So I'm not saying that it doesn't, it drove me, you know, myself, the qe, the money printing, it drives people to find an alternative to the system and bitcoin is that outlet. But if you look at the way that prices go up in certain aspects of the economy and stay put in other aspects of the economy, inflation is still at 1% in Europe. Statistically speaking, that, that's not enough statistical inflation to drive people into like, I have to own Bitcoin or else my currency is going to go away tomorrow. It's just not that to me. Yeah, go ahead.
- [30:51]
I was going to say it depends how you measure it. The house price inflation we're seeing in the UK right now is, is way above 1%.
- [30:58]
And so it, and so is it.
- [30:59]
Peter McCormack
Here in the United States.
- [31:00]
Nick Bhartia
That's the, that's people trying to escape the unit as their denomination.
- [31:06]
Peter McCormack
They'd rather just own property.
- [31:08]
Nick Bhartia
And it actually brings me to something I've been thinking about, like as bitcoin becomes more and more popular, it becomes more and more adopted and the price goes up. What are bitcoiners going to focus on at that point? I think that they're going to be more focused on other forms of property rights because bitcoin is the most magnificent.
- [31:29]
Peter McCormack
Advance in property rights in human history.
- [31:31]
Nick Bhartia
Right. That's why I'm in it. It's part of why I think it's.
- [31:36]
Peter McCormack
It underpins a lot of the reason.
- [31:38]
Nick Bhartia
That people own it. It's just this is this advance in property rights that nobody can take it away from you. It's digital and it's scarce in a very measurable way. And so. But bitcoiners are already talking about citadels.
- [31:52]
Peter McCormack
Why?
- [31:53]
Nick Bhartia
Because they want to live in a place where their property is valued in.
- [31:59]
Peter McCormack
The same way that or protected in.
- [32:01]
Nick Bhartia
The same way that bitcoin protects them, monetarily speaking. So, you know, I think we're going to transition into this. You know, bitcoin is the model for property rights and you know, just changing the way that we think about that. And you know, people that are seeking.
- [32:17]
Peter McCormack
Bitcoin, again because of the QE directly.
- [32:20]
Nick Bhartia
I sympathize with them because it's part.
- [32:23]
Peter McCormack
Of my narrative too.
- [32:24]
Nick Bhartia
But I think it's a little, I think it misses a lot of the important narrative as well.
- [32:33]
Peter McCormack
Next up, I talk to Nick more about bitcoin, a fiduciary duty. But before that I have a message from my amazing show sponsors. And first up today is Ledger, the world's most popular hardware wallet. Now, a hardware wallet allows you to take custody of your bitcoin and I have been a Ledger customer since early 2017 and I'm still using the Nano.
- [32:51]
Nick Bhartia
S I bought back then.
- [32:53]
Peter McCormack
Ledger makes it easy for you to safely manage your bitcoin using their Ledger Live software which interfaces directly with your device. You can also connect your Nano s to an Android phone to manage your bitcoin on the go. If you want to find out more, please head over to ledger.com which is ledger.com Next up we have Gemini, my new exchange sponsor who I am now using for buying and sending. Well, I say selling bitcoin. I've not sold any bitcoin through Gemini yet. I'm only hodling. I'm going to be hodling all the time. We only hoddle right now. I've started using the Gemini app for buying dips, but I've also set up my DCA with twice monthly buys of bitcoin and I'm yet to see a better and easier interface for buying bitcoin. Now I do always want to give a massive shout out to Cameron Tyler for supporting the show. I've been super impressed with everything they've wanted to do to help bitcoin. They are sponsoring devs but they are open minded to other project ideas which is really cool. If you want to check out Gemini, if you want to find out more, please do head over to gemini.com, which is g-e m I-n I.com and today we're going to be finishing off with Blockfi, the future of bitcoin and financial services. And they offer a number of products for bitcoiners. So with a BlockFi interest account you can earn yield on your bitcoin. I've been a customer using their interest accounts for nearly two years and letting my bitcoin work for me. And with a bitcoin backed loan, you can also borrow against your bitcoin without selling. And you can now register for the BlockFi credit card which launches imminently offering 1.5% rewards back on all card purchases. If you're interested in checking BlockFi out, I recommend you do your own research and then head over to blockfi.com, which is b l o c k f I dot com.
- [34:27]
Nick Bhartia
Okay, so listen, you said you've been writing, you wrote a new article. I've got it written here. Asset managers owning bitcoin is now your fiduciary duty. There are certainly still asset managers out there who are in denial about bitcoin or still don't believe in it. Some of them are about 97 years old, which I think is quite funny. I think it was a Seder who said you don't go to your great grandfather for advice on technology, but you're saying it's a fiduciary duty. As in, bitcoin is a home run now. It is a proven asset class. It is, is a proven part of the system. So how do you actually, how do you actually articulate that it's a fiduciary duty though?
- [35:12]
Peter McCormack
Yeah, I'll explain. So the managers that I've worked at.
- [35:14]
Nick Bhartia
In the past are fixed income managers and their mandates or their responsibilities to their investors. Their fiduciary duty is to make sure that capital is returned and that, you know, income is sought. And so for those types of managers.
- [35:34]
Peter McCormack
It'S not their fiduciary duty to own bitcoin. That's not what they promised their clients.
- [35:39]
Nick Bhartia
So I just want to be a little bit more specific about that. However, if you're an investment manager that.
- [35:45]
Peter McCormack
Has promised your clients growth. So let's say you invest in tech.
- [35:50]
Nick Bhartia
Stocks and that's like your mandate is to find stocks or equities or other investments that you think can have a very large growth opportunity. So venture capital funds fall into this mix as well.
- [36:04]
Peter McCormack
If you're promising your clients growth, that's what you're promising them, that you're going to go out and seek and for some reason you're ignoring bitcoin, then you're ignoring your fiduciary duty to your clients.
- [36:20]
Nick Bhartia
Because of something that has arrived.
- [36:22]
Peter McCormack
And that's really the point here, is that if you're ignoring Bitcoin now as.
- [36:27]
Nick Bhartia
A growth manager, you are ignoring that.
- [36:31]
Peter McCormack
A monetary reality, an alternative monetary reality.
- [36:35]
Nick Bhartia
Has come into existence on this planet. You have just told me about a town in el Salvador where 100% of or 90 plus percent of the people are using Bitcoin as a currency, as a system, and where now anybody that owns a portion of The S&P 500 has some exposure to Bitcoin on their balance sheet because of Tesla. And you're not at least paying attention to it. It is as if you were not paying attention to the Internet 20 years ago.
- [37:07]
Peter McCormack
It's a violation of your fiduciary duty. Can you imagine being a growth manager 20 years ago with no exposure to the Internet?
- [37:15]
Nick Bhartia
And you called it a bubble, but.
- [37:17]
Peter McCormack
Then you didn't own Amazon as it.
- [37:19]
Nick Bhartia
20X over the next, you know, several years. Like Amazon wasn't a bubble during the tech bubble in 01, right? It was just a preview because now, you know, Amazon is almost a $2 trillion company in market size. So it's not.
- [37:38]
Peter McCormack
Calling it a bubble is no longer an excuse.
- [37:42]
Nick Bhartia
It actually shows that you're not doing any research whatsoever. And again, I'm not talking about a.
- [37:50]
Peter McCormack
Manager who has to go out and buy government bonds and make sure that.
- [37:53]
Nick Bhartia
They return par and a couple percent on top. That's not what we're talking about here. But if you're ignoring Bitcoin, then to me, you are ignoring your fiduciary duty to those seeking growth type returns.
- [38:10]
Well, what's the violation? Ignoring it or accepting it? But dismiss, like if you accept Bitcoin, if you do the work but you still dismiss it, are you still violating your fiduciary duty? Let's say you're saying there's no such, there's no argument against Bitcoin now.
- [38:26]
Peter McCormack
Well, let's say if you haven't at least read one pro and one con.
- [38:32]
Nick Bhartia
And done the analysis yourself, then you've.
- [38:35]
Peter McCormack
Ignored your fiduciary duty.
- [38:36]
Nick Bhartia
Because if you look at it, I'm saying that if you are not analyzing.
- [38:43]
Peter McCormack
Bitcoin, then you are violating your fiduciary duty. That's the point here. If you've made this conclusion that, okay.
- [38:49]
Nick Bhartia
I've read a lot about Bitcoin, I.
- [38:52]
Peter McCormack
Don'T think that it's the right idea.
- [38:53]
Nick Bhartia
For my investors, for my clients, because of xyz, that is, that is doing Your duty. Right.
- [39:00]
Peter McCormack
You've. You've made the analysis and all that.
- [39:02]
Nick Bhartia
Kind of stuff, but it's not what I'm seeing.
- [39:04]
Peter McCormack
I'm still seeing just recycled old narratives.
- [39:07]
Nick Bhartia
Because you read a headline like, at.
- [39:09]
Peter McCormack
Least buy a book about it.
- [39:11]
Nick Bhartia
At least read one book about bitcoin at this point. And if you haven't, which book? What are you doing?
- [39:18]
Which book should they read?
- [39:20]
Peter McCormack
It's called Layered Money.
- [39:21]
Nick Bhartia
I mean, it's called Layered Money. Buy the fucking book.
- [39:24]
It's so obvious right now. But, you know, that's why I cited one book in my book, which is Andreas Antonopoulos's Mastering Bitcoin, because at least.
- [39:35]
Peter McCormack
At least try to understand what's happening here.
- [39:39]
Nick Bhartia
And, you know, the fact that it's.
- [39:40]
Peter McCormack
Also above a trillion dollars.
- [39:42]
Nick Bhartia
Pete tells me that, you know, if you still haven't picked up a book about it or at least tried to understand the bull case for it, then you just got your head in the sand.
- [39:55]
Peter McCormack
Yeah.
- [39:55]
Nick Bhartia
And you say that volatility isn't a risk. But, but a drawdown is a risk. And the reason I ask this is that, like I say, I feel like we're on the tipping point of some kind of explosive growth. I expect us within the next, I don't know, let's be broad, let's say the next three months to breach $100,000. I think there's so much stuff happening. But say at some point during the year, let's say it's towards November, bitcoin's amazingly, at something like $200,000. And your firm suddenly thinks, yes, we need to get into this and put some percentage of their treasury into Bitcoin, and then say we go through another 70, 80% drawdown. Where does that sit with their fiduciary duty?
- [40:41]
Peter McCormack
And it's a great point.
- [40:42]
Nick Bhartia
And it's actually, when I give my presentations now, the volatility is the only risk that I acknowledge, because if you, in your mandate, you know, promise to have a standard deviation of returns within a certain range, an allocation to Bitcoin.
- [41:02]
Peter McCormack
Can actually knock your expected deviation of.
- [41:06]
Nick Bhartia
Returns outside of your promised number to your client. And so for that reason, bitcoin can be skipped in portfolios because that's what you have a promise to your.
- [41:21]
Peter McCormack
Your clients.
- [41:22]
Nick Bhartia
You know, they can't afford an 80% draw down, even if it's in a 2% position, because it actually, you know, it knocks them. It knocks all the returns that they were expecting off. So I do, I do completely agree.
- [41:36]
Peter McCormack
With you that the volatility it precludes.
- [41:39]
Nick Bhartia
A lot of investment. And that's okay for those managers that are making that analysis. And, you know, but if you are.
- [41:49]
Peter McCormack
Blaming other things that are not the.
- [41:52]
Nick Bhartia
Volatility, it means that you're just not doing your homework yet. Like the. Here's the other side of it, too. A lot of the investment world, and I do contracting work in this world now, too, is focused on the green future, esg, environmental, social and governance aspects of companies and also countries, too, that they're investing in. And so if this ESG wave is.
- [42:17]
Peter McCormack
Actually meant to include the diversity and.
- [42:21]
Nick Bhartia
Inclusion wave of, you know, that we see taking over the planet over the last couple years because of social unrest in different parts of the world. And you're not looking at the people.
- [42:31]
Peter McCormack
In El Salvador that have empowerment now.
- [42:34]
Nick Bhartia
Through bitcoin, have freedom from their government's oppressive currency regime or freedom from theft by inflation.
- [42:43]
El Salvador is an interesting one because it's a dollarized country, so they're actually subject to the oppressive regime of the US well, well, they're not. They're not getting any stimulus checks here.
- [42:53]
Peter McCormack
Well, in Zimbabwe, they use the dollar as well.
- [42:56]
Nick Bhartia
And so it still is an expression against what your government is doing, because the government can come in and introduce a currency in the future, but it.
- [43:06]
Peter McCormack
Doesn'T mean that people will have to.
- [43:08]
Nick Bhartia
Use it because they have an alternative. And, you know, so, you know, I do think that the empowerment component of bitcoin plays directly into the diversity and.
- [43:21]
Peter McCormack
Inclusion theme, which is a direct part.
- [43:23]
Nick Bhartia
Of the ESG theme that is sweeping.
- [43:27]
Peter McCormack
The investment public as well.
- [43:29]
Nick Bhartia
And so if you're just like, bitcoin.
- [43:31]
Peter McCormack
Is boiling the oceans, I'm not going.
- [43:33]
Nick Bhartia
To, you know, invest in it. But ignoring the empowerment. And this is also something that I'm reading now. Every single one of these releases, like the. The DALIO employee that just went over.
- [43:47]
Peter McCormack
To nydig, the cfo.
- [43:49]
Yeah, I know.
- [43:50]
Nick Bhartia
They.
- [43:50]
Peter McCormack
They use the word empowerment in every press release now.
- [43:53]
Nick Bhartia
So, hello, the empowerment component of bitcoin.
- [43:58]
Peter McCormack
Is front stage and center.
- [44:01]
Nick Bhartia
So you have to acknowledge that this.
- [44:03]
Peter McCormack
Is a force of good for many.
- [44:05]
Nick Bhartia
People in the world.
- [44:07]
Dude, we all know that empowerment just going to jump in. That empowerment, that kind of like. It's like that inner strength you get from knowing you have this asset that cannot be taken from you. We had a thing that came out in the UK recently that we're going to have to declare our bitcoin holdings to the government, which I'm like, fuck off. And, no, I'll leave the country. But that kind of. When you talk about bitcoin being the best form of property rights, when you realize that when you actually take custody and you hold it and you own it and you realize you can send it to anyone without any. Any middleman, there is that empowerment it gives you as an individual.
- [44:50]
Oh, absolutely. I always, you know, recall my first few bitcoin transactions, and they were, of.
- [44:57]
Peter McCormack
Course, sending it from one wallet to another wallet.
- [45:00]
Nick Bhartia
So I was sending them to myself. So I wasn't engaging in the bitcoin economy or whatever. You know, it's just, you know, oh, I'm toying with this wallet. I want to toy with that wallet. I want to try sending it, test transactions. It is incredibly empowering. And it's just. It's a very. It was a very new feeling, you know, at that time. Be like, wow, this is.
- [45:25]
Peter McCormack
This is truly a new form of money.
- [45:28]
Nick Bhartia
So people that haven't actually used bitcoin could never understand that empowerment.
- [45:34]
Well, that's like that first thing, you know, people, I hate that question, what is bitcoin? Right? I just hate the question because there's so many different ways you can attack the answer. And when people do ask me now, the first thing I say is, just get some. Get a wallet. I'll send you some. I'll send you some SATs. Just like, watch this. Like, I'm get. You hold your phone. I'll hold up my phone. I'm gonna send you it. And then I explained to them that happened without any middleman. There's no. There's no company in between that makes this happen. Like, this just happens on the bitcoin network. And I always think that's like a little bit of a light bulb moment. I did it with my assistant, right? And then you had the funny moments, like I said, of 50 bucks, and then she came out. She goes, it's now worth 60 bucks. So that's like. That's. That's like that second effect that you get. You get from bitcoin. But it is empowering. Again, I've refer back to my interview with David Bailey yesterday. He's like, talking about Miami is like, we're all coming together. You know, this. Bitcoin is so important now. You know, this is a force for good now. It is empowering, like you said. But it's like, why we've all come up. We will come up with this similar attitude, this kind of like, fuck you attitude, but it is empowering. And that's a really interesting thing on the guy going over to Nydig Because I didn't know he said that.
- [46:49]
Peter McCormack
You know, it's in every single press release now.
- [46:52]
Nick Bhartia
Like the video game. The video game company that just recently announced a Treasury position.
- [46:58]
Peter McCormack
Yeah, they use the word empowerment.
- [47:00]
Nick Bhartia
I mean, this is actually now my problem with, you know, those that are.
- [47:07]
Peter McCormack
Still dismissing or like, I like to.
- [47:09]
Nick Bhartia
Say, the naysayer, then the naysayer coming with, you know, really all of the fud now it's just like, hello, there's a. There's this. There's an empowerment aspect here and you can't keep using the same recycled stuff. And a lot of it stemmed from.
- [47:31]
Peter McCormack
A panel that I was going to.
- [47:32]
Nick Bhartia
Be on a couple months ago and somebody told me, you know, that the.
- [47:38]
Peter McCormack
Other guy is going to be a bitcoin naysayer.
- [47:41]
Nick Bhartia
And I literally, like, fell out of my chair with excitement because I'm like, I can't wait to talk to a naysayer in April 2021. It's just like, what are you reading? What are you reading?
- [47:57]
Peter McCormack
What arguments are you still coming with?
- [47:59]
Nick Bhartia
I'll give you three minutes for a volatility ramp, but the other 57 minutes, you're in trouble. You're in trouble. So he had some sort of conflict, and so I didn't get to do any of that. The guy that they plugged in worked at a distributed ledger company, so he was fully versed in the technology and he had bitcoin stuff behind him on his desk. So he was a bitcoiner too. So it was a good team. Yeah.
- [48:30]
Nick, I think the naysayers come from. There's two general positions they come from now. I think there's genuinely people who come from the position they missed out. There's certain journalists who will write negative bitcoin articles, and they've been in bitcoin for a long time, and I feel like they missed out because they didn't get in. I think I've been very disappointed with the trajectory of, say, Nathaniel Popper's career because the first thing I read was Digital Gold. And I loved that book. Loved, loved that book. And I've seen see him get sucked into this woke journalism, attacking bitcoin companies, yada, yada. And I just feel like sometimes it's like this negative internal feeling because it's like, shit, I could have bought this. And they didn't. Whereas you got someone like Rizzo who's maintained a really. He's actually become a much better journalist over time, like really diving into bitcoin. Like the stuff he did on the last days of satoshi was incredible. But I think there's. That there's people who've just missed out, actually, I think there's three. I think there's people where bitcoin doesn't fit in their own model of economics. The Keynesian people who regularly put out the same tripe on Twitter that they've always been putting out. Is it Hanke that this guy's always going on about? And I just think they can't fit into their model. I also think there's this other model of people, and I think it's a political angle. I think the acceptance of. When you accept bitcoin for what it is, you have to accept that you lose the centralized aspect of government, redistribution of income. And for some people, that's a real struggle because some people, even if they're not like strong socialists, they still believe in that social safety net. And you don't get that with bitcoin. Bitcoin is a pure voluntary social safety net. I mean, I've just contributed to the fund that my souter is raising for down here in El Salvador for the surf team. It becomes purely voluntary. And I think that last one's a real struggle for people because we have essentially eradicate the centralization of redistribution of income.
- [50:42]
Peter McCormack
Yeah, I do, I do agree with you.
- [50:44]
Nick Bhartia
And none of those categories of people prevent adoption, which is, I think the.
- [50:52]
Peter McCormack
Most important thing here is that you don't need to convert.
- [50:56]
Nick Bhartia
You know, I don't, I don't love.
- [50:59]
Peter McCormack
The, the whole SATs narrative.
- [51:01]
Nick Bhartia
While SATs are a unit within Bitcoin and we. I use the word SATS when I'm.
- [51:06]
Peter McCormack
You know, charging people in for invoices.
- [51:09]
Nick Bhartia
And, you know, or quoting an amount of bitcoin. Now, you know, I use the word sats, but like, trying to convert people by, you know, saying, oh, it's not about bitcoin, but it's about SATs and, you know, convincing of them of the unit bias or convincing them that, you know, bitcoin is actually an empowering technology or convincing them that they shouldn't be.
- [51:32]
Peter McCormack
Beholden to their government debasing the currency.
- [51:35]
Nick Bhartia
It's just like, why do you need to convince everybody?
- [51:38]
Peter McCormack
We've already gotten the adoption curve underway.
- [51:45]
Nick Bhartia
People are spreading the word about bitcoin, Naturally it's being adopted and, you know.
- [51:52]
Peter McCormack
Not everybody is going to hop on board.
- [51:55]
Nick Bhartia
But that won't prevent bitcoin from changing.
- [51:57]
Peter McCormack
The world in the same way that the Internet did.
- [51:59]
Nick Bhartia
Like, there were still people that didn't.
- [52:01]
Peter McCormack
Do a website for their company.
- [52:03]
Nick Bhartia
You know, years and years after the.
- [52:06]
Peter McCormack
Internet had gone, or people that still weren't on email.
- [52:09]
Nick Bhartia
But eventually everybody has to use the technology that's being used by the world. And I think ignoring bitcoin is also ignoring geopolitics. So bitcoin is macro. Now, if you look at populism and geopolitics around the world, you have to.
- [52:26]
Peter McCormack
Put Bitcoin into your model.
- [52:28]
Nick Bhartia
It just, it is a natural evolution of the way that the world is moving now.
- [52:32]
Peter McCormack
You can't ignore it.
- [52:33]
Nick Bhartia
It's just some fringe technology or some alternative money either is going to play a role in the way that governments evolve. You know, I always think back to a cousin of mine, years ago asking me, he was like, wait, so, but if people can just send bitcoin to each other peer to peer, doesn't that affect the way that governments will be able to collect taxes in the future? I'm like, you got it. Bingo. Like, bitcoin changes everything. And so bitcoin isn't changing tax collection today, but I guarantee you it's going.
- [53:11]
Peter McCormack
To have a role in the future.
- [53:12]
Nick Bhartia
On how governments are trying to collect it.
- [53:14]
Peter McCormack
When everyone's using Bitcoin, how are they.
- [53:16]
Nick Bhartia
Going to tax, how are they going to spend in the same way that they do today? We don't know.
- [53:23]
Okay, there's a couple of things to dig into. Let's do the SATS thing first. So you're referring to this kind of sats, the standard, trying to get exchanges to pricing in sats, blah, blah, blah. Is that you. Is your concern there is that it undoes some of the great work in building up what is the brand of bitcoin.
- [53:39]
Not necessarily. It's my personal preference.
- [53:42]
Peter McCormack
So when I give Bitcoin 101 presentations.
- [53:45]
Nick Bhartia
I try to ignore the price altogether.
- [53:48]
Peter McCormack
And focus on the market cap.
- [53:50]
Nick Bhartia
I call it the total market value so that people know exactly what I'm talking about, the size of bitcoin, because that's how you put it in context with gold, with the treasury market, it's how you get to $10 trillion bitcoin, $30 trillion bitcoin, which translates into, you know, $500,000 price, you know, to a couple million dollars price for Bitcoin per bitcoin. But if I'm trying to ignore the price altogether and focus on the market value for context for my audience, you know, what good does saying that, you know, a thousand sats can be bought for this many dollars?
- [54:28]
Peter McCormack
And it doesn't serve me any purpose.
- [54:30]
Nick Bhartia
To explain bitcoin or to convince People that it's not too early in bitcoin. Telling somebody that, oh, you can buy this many SATs for a dollar is.
- [54:42]
Peter McCormack
Not going to convince them to buy bitcoin.
- [54:44]
Nick Bhartia
Relative to saying bitcoin is only $1 trillion, but there's $400 trillion of investable assets out there. It doesn't serve me any purpose. I use the word sats in my book. I explain that, you know, the satoshi.
- [55:02]
Peter McCormack
Is the smallest unit within the bitcoin software.
- [55:05]
Nick Bhartia
And you know, it's, it's, sure, it's an important detail, but you know, sats the standard or getting people to think in SATs so that, you know, we, you know, $60,000 doesn't scare people. I don't agree with it.
- [55:19]
Yeah. So the second point to then dig into, you asked me earlier about interviewing all these people, kind of like what's on my mind. Also, you mentioned earlier some people might not have direct, might not directly own bitcoin, but will have maybe exposure via the stock market. And then you also talk about what will happen to currency when governments can't tax, etcetera, Etc, etcetera. I'm not an anarchist. I've been very clear about that. I definitely theoretically buy into the narrative. I'm just not there yet. There's certain aspects, I guess, if anything, I'm a supporter of small limited government. One of the things that's going through my mind is do we eventually see currencies collapsing or will we always see say a dollar next to the bitcoin? And that's where I'm wondering what happens. Because if, if bitcoin does continue to grow and people keep wanting to exit the dollar like they're essentially doing here in El Salvador. What does that actually mean? Do we actually get to the point where bitcoin is just the currency people are using? What are the implications? Can people actually get their hands on sats? What happens to dollar? So that's really on my mind. I'm not articulating it very well, but I think you can probably understand the kind of head space I'm in the area thinking.
- [56:33]
Absolutely. And my outlook, Pete, and my opinion on that is that unless we have.
- [56:40]
Peter McCormack
World peace, you're going to have government currencies.
- [56:43]
Nick Bhartia
And so, and so as long as there's competition between countries, there's going to be government currencies because currency is a policy tool. It allows countries to do things. And so I definitely see central bank digital currencies being introduced, it replacing those.
- [57:02]
Peter McCormack
Old currency systems altogether over the next several years.
- [57:06]
Nick Bhartia
And it functions side by side with bitcoin. Again. That's why I'm starting to think of bitcoin more as an investment, not less as money. It's still money. And that's what it was invented as.
- [57:21]
Peter McCormack
As an alternative form of money.
- [57:23]
Nick Bhartia
But it also just serves as an investment alongside government money for a lot of people. And I think that it will continue to do that over the long term so that the dollar won't go away. I do feel like we will have.
- [57:41]
Peter McCormack
Less currencies around the world in 10.
- [57:43]
Nick Bhartia
Years than we do today as weaker currencies succumb to the dollar. And bitcoin and the Chinese renminbi, if they're in that sphere of the world where like in El Salvador or Zimbabwe they're using dollars, other countries in Latin America are doing the same thing. And so I do feel like currencies will die in countries that just have less stable regimes and less stable currency history.
- [58:14]
It's a really interesting period of time to live through. There is absolutely zero chance I could have predicted this five years ago. I'm not in bitcoin. I have no expectation of a new global currency to exist. And now we're living through and watching happen in real time and getting to sit on the front lines of it as it happens. I think it's really interesting. I do worry sometimes about the implications of this. What is the net outcome? Does bitcoin cause the world to become a little bit more unstable on the path to a bitcoin standard? It does weigh on my mind how this all plays out, how this may become a very unstable time geopolitically, economically. What are the implications on people? It weighs on me, but I don't know how to look at it. Sometimes when the price goes up, I get very excited because I hold a bit of bitcoin. But then other times I'm like, shit, what are the implications of this? What are the real implications of this? I think overall it's net positive, but I'm just not fully sure my position yet.
- [59:29]
Yeah, it is tricky, but I do.
- [59:32]
Peter McCormack
Think that geopolitically we are in a very unstable world.
- [59:36]
Nick Bhartia
So the bitcoin price going up and people coming into the ecosystem is in part a result of that instability. And you know, I in layered money, I talk about how the dollar system fragility is what in part drives people into bitcoin. But geopolitical instability as well does drive people into bitcoin. And so how will the US and China engage over the next few years and or what's going to happen in the Middle east or what's happening with religious wars. You know, I, all of that stuff is already going on and I don't think bitcoin itself exacerbates any of those problems.
- [60:19]
No, I didn't mean like that. I mean, I just worry generally speaking about what's going to happen over the next few years and people potentially, because if the governments can't tax and they can't redistribute income the way they have, there's this kind of gap between people being used to living in social programs or having a social safety net and that may be disappearing and how that transition happens. It's not that I blame bitcoin, it just weighs on my mind because we do live in a world where most countries have some form of social safety net and those could eventually dissipate. And I just worry it weighs on me what the transition is, what that means for people. It's like even you talk to the libertarians and I spoke to Scott Horton once and he said, I don't want the big red button to switch off government. It needs to be a transitionary period.
- [61:15]
Yeah.
- [61:16]
Peter McCormack
With 8 billion people on the planet.
- [61:18]
Nick Bhartia
It'S okay to worry. I worry about the same thing. We both have kids. It's like you worry about what's going to happen in the future. But I still, like, I, I've become more optimistic, you know, as opposed to, you know, 20 year old me who has much more like extreme views. I now I just see that there.
- [61:46]
Peter McCormack
Are so many people around the world that are driving the change for good.
- [61:50]
Nick Bhartia
That I just, I believe that it's gonna all work out and that bitcoin will serve this purpose, purpose that transitions us into a more equitable future doesn't.
- [62:01]
Peter McCormack
Mean that it's going to be without government.
- [62:04]
Nick Bhartia
And you know, I don't even know, you know, if it does have any larger effect on the government's ability to function in the future. Governments might exist in the future the same way that they do today in terms of their function, but the monetary system that underpins it has changed and maybe takes away a little bit of their power. But again, it's so far into the future, I don't know how it's going to play out. But I do think that bitcoin serves this role as an equalizer as it doesn't allow the bastardization of money as much as we've seen over the last few hundred years.
- [62:43]
All right, look, the last thing I wanted to raise with you before we finish is the Lightning Network. And I remember last time we spoke, I said, I'm pretty sure I said to you, I pretty much dismissed the Lightning Network for a long time. Just like, okay, I'm not really spending my bitcoin. I don't really use my bitcoin. So very occasionally I send some. I always send it over the base layer. I have no need for the Lightning Network right now coming out here. I absolutely see the need for the Lightning Network for people to be able to move money very, very quickly. Like, you know, when you're going into a store and you are paying with bitcoin, which people are doing, you know, you absolutely fundamentally need the Lightning Network. I know you've spent a lot of time looking at the Lightning Network. How do you feel about it? Do you see the use case now for it really starting to explode?
- [63:36]
Well, absolutely.
- [63:37]
Peter McCormack
And the Lightning Network is an acceleration of the velocity of Bitcoin by participants already in the network.
- [63:46]
Nick Bhartia
And it's just, it's so important to strengthen the network effects of Bitcoin itself. Because if you're a bitcoin user and I'm a bitcoin user, we should in theory, never be doing on chain stuff with each other.
- [64:01]
Peter McCormack
On chain should be reserved for the.
- [64:03]
Nick Bhartia
More, you know, the larger, you know, transactions and larger final settlement. But in a bitcoin economy and especially in the digital world, streaming money to each other is going to be the norm and you need Lightning Network to do that. That's why when I saw segwit happen to Bitcoin, I was like, this is a legitimate upgrade for Bitcoin because it allows Bitcoin to be used instantly by.
- [64:35]
Peter McCormack
Participants that have already bought into the narrative.
- [64:38]
Nick Bhartia
And so, yeah, Lightning Network is here to stay.
- [64:41]
Peter McCormack
It's growing.
- [64:42]
Nick Bhartia
The technology is rapidly evolving. It also is a capital markets framework for Bitcoin. Like the team at Lightning Labs is building products that have the idea of capital leases or roast beef and is working on something that is going to.
- [65:00]
Peter McCormack
Build a zero coupon yield curve on.
- [65:03]
Nick Bhartia
Bitcoin, which is a very technical sort of thing. But it really shows that Lightning Network.
- [65:11]
Peter McCormack
Brings all these additional characteristics and metrics.
- [65:15]
Nick Bhartia
To Bitcoin that make it so much more usable for people that are already in the network. So it's just like if you were.
- [65:23]
Peter McCormack
To say, why would we need Venmo when we have cash?
- [65:27]
Nick Bhartia
It's like there are different functions for different softwares. And Lightning Network is basically a software that uses the bitcoin software. And so it's a very useful software that I'm Extremely optimistic about.
- [65:43]
Yes, me too. Well, Nick, it's always a pleasure to talk to you. I love having you on the show. You know that if I can ever do anything to help you, you should let me know when you want to come and promote the next book. I'd love to read it first, but people should buy your book. Tell them where they can get it.
- [65:59]
Yeah, you can find my book.
- [66:00]
Peter McCormack
It's called Layered Money on Amazon Worldwide.
- [66:04]
Nick Bhartia
Just Google it. It's. It's everywhere now. The audiobook is also available, read by Guy Swan and it's. It's a great listen. He did a fantastic job and I wrote the book, absolutely convinced that I was going to ask Guy to read it. So the book is going great. You can find it on layered money.com.
- [66:25]
Peter McCormack
I have all the links there and.
- [66:26]
Nick Bhartia
You can find me on Twitter at time value btc. Pete, I really appreciate you having me on and I'm. I hope that we can do this in person soon this year at some point.
- [66:37]
Yeah, well, we did get to do our first ever interview in person. I've missed doing in person interviews. I really struggle remotely. It's so much easier in person to have the dialogue going. I feel a lot more comfortable. So hopefully I'm going to get back.
- [66:50]
Peter McCormack
To that at some point.
- [66:50]
Nick Bhartia
I'm thinking of getting myself a studio in Texas, in Austin at some point. And I can go out there every couple of weeks and record a bunch of interviews. So fingers crossed that'll happen as well. But listen, look, appreciate you, dude. Appreciate everything you're doing. Anyone listening? Come buy Nick's book. Come on. It's an amazing read and yeah, hopefully this year we'll get to hang out.
- [67:08]
Love it. Take care, Pete.
- [67:11]
Peter McCormack
Okay, how do you enjoy that one? I know some of you really enjoy the Nick shows. The downloads of them are always great. Nick is smashing it at the moment. His book, Layered Money is absolutely flying. And this article was another banger. And if you haven't checked it out, there are links to both in the show notes. And if you want to hear more from Nick, then go and listen to episode 281, which was one of my.
- [67:29]
Nick Bhartia
Favorite interviews of last year.
- [67:31]
Peter McCormack
If you want to get in touch or you want to jump in the Telegram channel, please do just search for what Bitcoin did or you can hit me up at hello@whatbitcoindid.com if you want to support the show, can you go.
- [67:39]
Nick Bhartia
And leave me a review?
- [67:41]
Peter McCormack
Just head over to Apple Podcasts. Those reviews help with the listings. I'm doing pretty well with them at the moment, and that's down to people like you. Leave me a review. 5 star if it deserves it. I also read the 1 star ones. If there's negative feedback, I do listen to that. I do always want to make the best show possible. But yeah, if you can go leave me a review, that would be very cool. I'm out here in Guatemala. I'm out here checking out what's going on with some of the bitcoin peeps out there. It's very interesting. Think I'm going to record a show here with some of the people I've.
- [68:05]
Nick Bhartia
Met, some really interesting stuff and, you.
- [68:06]
Peter McCormack
Know, quite a tragic story about what's going on here in part of Guatemala. So I do want to cover that.
- [68:11]
Nick Bhartia
And hopefully support the people here.
- [68:13]
Peter McCormack
All right, have a great rest of your week and I will see you all on Friday.