← The Peter McCormack Show
The Peter McCormack Show
Gradually then Suddenly Pt 3 - Bitcoin is Common Sense with Parker Lewis - WBD381
01:32:49
Location: Remotely Date: Tuesday 3rd August Company: Unchained Capital Role: Head of Business Development For people new to bitcoin, it can be confusing at first. From public key cryptography to mining, block sizes to nodes, there are many new ideas...
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- [00:03]
Parker Lewis
Everyone is afforded equal rights under the law of bitcoin. Nobody gets to print money. When The Fed prints $3 trillion, they hit a button on a computer screen and suddenly $3 trillion appeared. Did that create any economic value?
- [00:18]
Peter McCormack
Hello there from Bedford in the United Kingdom, the bitcoin Mecca of the world. How are you all doing? Now listen, next week I'm going to be heading off on a well needed two week holiday with my kids. But don't worry, I am loading up on interviews so you won't miss a thing while I am away. And then after that I'm going to be heading into the States. I'm going to be planning on visiting a whole bunch of places. I'm going to be hitting Houston, Dallas, Austin, Boston, Ohio, New York, Miami, Louisiana and Vegas. It's going to be a crazy busy schedule, but I hope to bump into some of you, maybe even grab a beer, maybe grab a coffee. Anyway, welcome to the what Bitcoin did podcast which is brought to you by Gemini, the only place I'm using for buying bitcoin. I'm your host Peter McCormack and today I have part three of the gradually Then Suddenly series with Parker Lewis. But before that, I do have a message from my show sponsors. And first up today it is Revolut. Now, as many of you know, Lloyds TSB, my bank of over 25 years, closed down all my accounts recently. They clearly don't like bitcoin. So inter Revolut, they reached out to me and they said, pete, come on, sign up to Revolut. We like bitcoin. We got you covered. So I did, I signed up, I moved everything over and did it within a couple of hours. They like bitcoin, they want to support bitcoiners and they want to make it easier for you to trade bitcoin. And now Revolut are offering $20 or 20 pounds to all new customers that sign up and complete three card transactions. It only takes a few minutes and you can create a card and add it to Apple. Pay immediately and get that cash in your pocket asap. Now this is a new relationship and I'm working with the Revolut team to help them build a bank which is bitcoiner friendly. They're there is a lot to navigate but we got this. If you want to find out more and if you want to get that bonus, please do head over to revolut.com wbd that is R E V O-L-U-T.com wbd Next up we have Blockfi who are pleased to announce that they have launched their BlockFi Rewards Visa Signature Card. Now for people in the US who own or are interested in owning Bitcoin and stacking more sats, the BlockFi rewards card provides the easiest way to unmute Bitcoin because you get 1.5% bitcoin back on on all card purchases. And you know what? There's no annual fee. This is the smartest way to stack sats by earning Bitcoin on every card purchase. And you know what? You also get 3.5% back in Bitcoin during your first three months of card ownership. And everything you spend over $50,000 every year will get 2% back in Bitcoin. It's the coolest way to stack sats. And you can find out more at blockfi.com, which is b l o c k f I.com and next up we have Ledger, the world's most popular hardware wallet. Now listen, a hardware wallet allows you to take custody of your bitcoin and I have been a Ledger customer since early 2017 and the Nano S I bought back then. You know what, I'm still using that bad boy. Now Ledger makes it easy for you to safely manage your Bitcoin using their Ledger Lie software which interfaces with your device and you can even connect your Nano s to your Android phone to manage your Bitcoin on the go. If you want to find out more, please do head over to ledger.com which is L E D. And also let's talk about Gemini, my exclusive exchange sponsor. The only place I am using for buying and selling bitcoin. But I have not sold a single SAT through Gemini because we're in a bull market and you know I don't want to sell my Bitcoin. I like my Bitcoin. I'm not selling any bitcoin. Now listen, I have been using the Gemini app for buying the dips, but I also set up my DCA with twice monthly buys of Bitcoin. And you know what? I am yet to see a better or easier interface for buying Bitcoin. With their streamlined trading view, you have access to all the tools you need to understand and start investing all through one clear, attractive interface. If you want to find out more, please head over to gemini.com which is G-E-M-I-N-I.com okay, so onto the show today and we are back for the third installment of the Gradually Then Suddenly series with Parker Lewis, all based on his writings which you have not checked out. Please do it will all be linked in the show notes. Now, in the first couple of episodes, we got into some of the FUD that surrounds bitcoin and also the monetary economics. And if you haven't listened to those, please do go back and check them out because Parker absolutely crushed it. But today we're going to get into why bitcoin is common sense. Now, for people who are new to bitcoin, it can be quite daunting. You hear about all these foreign concepts like public key cryptography, mining hashray and loads of other intimidating things. I know, I get it, I get it. I get I'm not a super nerd. I find it hard myself. Now, listen, it is easy to get caught up in the weeds of this, but Parker brings it back to some of the most fundamental concepts in bitcoin. Quite simply, with the insane amounts of money printing happening around the world and that debasing your currency, moving to bitcoin, a fixed supply, hard money, is just common sense. Parker killed it as ever. So I hope you enjoy this, but if you do have any questions, you know, you can jump into my telegram group or you can hit me up on my email. That is hellohotbitcoindid.com and if you do reach out to me, listen, I do reply to everyone, so feel, feel free to drop me an email. Anyway, over to Parker. I hope you enjoy this one. Parker, man, how are you doing?
- [05:20]
Parker Lewis
Well, good to see you again.
- [05:22]
Peter McCormack
Well, I'll see you in person soon. Gonna be in Texas in a few weeks. We'll grab a steak and then we'll just make an excuse to talk about something else because we can sit down with some mics, which we haven't done in a long time.
- [05:34]
Parker Lewis
Yeah, I've seen some of your in person interviews that you did recently. So we're gonna have to do one of those. The the right way.
- [05:41]
Peter McCormack
Jazz it up, man. We'll jazz it up. All right, listen, look, we've done two shows of your Gradually Than Suddenly series. We killed the FUD and we cover first principles. They've been really popular shows. People really like them. The feedback is awesome, especially on the YouTube. YouTube comments have been universally brilliant. So very excited to cover this now that we're going to be looking at monetary competition. Also, I think the timing is really good one for this one, Parker, because there's a lot of conversations happening right now. I've recently reviewed the Talib white paper with Lyn Alden and we're going to be making a show soon discussing criticisms of bitcoin and Being as critical as we can be. And we've now got. We've got bitcoin become a legal tender in El Salvador. So I think it's a good time to be discussing this. I think it's the right time. We've got a few bits we didn't get to cover in our last episode because we did a monster two hours. I missed some bits. So I'm ready for this. So we kick off. Let's kick off with something we didn't get to cover in the last show, which is an important thing. Important part of something you were talking about is like bitcoin being a rallying cry, bitcoin being a fight for freedom, which I think again right now is especially important with all the crazy shit going on in the world. Bitcoin, for someone like myself, just appears to be that lifeboat, that thing we can refer to, that one thing we have in this world. Well, there's a few things, but one of the few things we have in this world to say this is ours. You can't touch this. So let's talk about that, man.
- [07:09]
Parker Lewis
Yeah. So bitcoin as a rally cry is something that I wrote, I think, in the two weeks after the March 12, 2020 crash, where Bitcoin crashed from 8,000 to 4,000. And I oftentimes, I always key everything back to first principles and that when bitcoin crashed from 8,000 to 4,000, I asked the question, did anything about this change anything about bitcoin's ability to credibly enforce a fixed supply of 21 million? If no, I will buy more bitcoin. But you can consider the, you know, people's, you know, that was more of just a fun piece that I wrote because everyone needed a little bit of a pick me up. But it's, but it's also symptomatic of what happened in March of 2020. Again, there's the history will be written dating back to the financial crisis and then the lead up to the financial crisis that this all ties together, but that there are certain moments like, you know, Lehman Brothers failing or Bear Stearns. March, March of 2020 was one of those. And that it wasn't just the price of bitcoin crashing, it was that the Fed came out in three different series, I believe. One on March 12, where they announced, my memory isn't great on this, but it's like, I think on March 12, 2020, they announced a 1.5 trillion increase to their repo program to provide emergency funding in the repo markets. They then came out. A week later, the market saw it, puked. Week later, Fed came out with a 700 billion QE program. Market kind of rallied and then puked. And it's like, if the Fed knew what it was doing, it would have a solution. It's literally just reacting to the market. And then I think on March 26 or March 22, then the Fed came out and they basically announced an unlimited qe. Like, we're going to go bigger and badder than we've ever done. We're not going to put any constraints on it. And it's going to be. It's. It's going to be awesome. And then everyone else is looking at that and saying, that's crazy. It's not going to end well. And in the financial community, they say, hey, that's crazy. It's not going to end well. But they had to do it. I think in the bitcoin world, what we look at is say, hey, that's crazy. It's not going to end well. And we are not going to put our fate into somebody else's hands. That we are going to take control of that. Enough is enough. And that I really do think about it as the Fed printing money. Whether or not people realize it or not, it's like punching someone in the stomach over and over and over again. And there are these certain ideas, like New Hampshire has the don't tread on me as their motto. It's not that it's Texas's motto, but there's a famous flag from Texas history which is the come and take it flag. That it's a combination of those two things. It's like, hey, you guys thought that you were in control. You thought that you could fix all of our problems. You can't. And you keep fucking things up so bad. We're in control now. We're taking control of our own destiny. And that's really what bitcoin is. It's extremely volatile. The thing goes up and down. But what you are in bitcoin is in control of your own destiny. And I opened that piece. Bitcoin is a rally cry with a quote or a story about Lt. Col. William B. Travis, who fought and died at the Alamo. And he wrote a letter. It's generally referred to as the Travis letter. And he signed it with victory or death. But one of the things that I recounted was there might have been 300 Texan fighters in the Alamo or somewhere there around order of magnitude. There were 10x the number of Mexican fighters. And they demanded Travis's surrender from the Alamo. And he recounts it in his letter. He said, the enemy have demanded surrender. I returned their demand with a cannon shot. And I. And I really do believe that that is. It's kind of against insurmountable odds. It's when. When, when. When the. I don't want to call the Fed the enemy, but when. When there is a force that is working against you, that is working in direct opposition and. And it feels insurmountable, that's what someone new to Bitcoin thinks. But someone that's been in bitcoin that's been hardened by it sees. They're like, no, this is just part of the process. This is all just part of the process. And this is our only way to freedom. This is the only way to solve the fundamental structural problems, economically, societally, that we need to get money out of the hands of government. We need to put destiny in our own hands. We need to be able to. To rely on the fact that if we create value in the world and that we can store it in a form of money that can't be debased. And that might seem like a far cry from someone fighting at the Alamo, but it is the most fundamental element of freedom. That if I contribute value to another human being and I can preserve that into the future, and that some government crony can't choose to make my money just because they think that it's best purchase less over time. Because what it ultimately means as you multiply it out, is it ultimately ends with Venezuela. It ultimately ends with wealth being destroyed, with people that formerly had wealth being descended into extreme poverty and ultimately violence. And nobody wants that for themselves. And it's like bitcoin is that flag to say, like, enough is enough. The adults thought that they, you know, could, like, fix our lives from central command. They weren't actually the adults. They were just a bunch of crazy people. And we're the sane people, and we're not going to take it anymore. But it also extends to. We want everyone to learn about it. Because the more that you learn, the more that you understand about Bitcoin, the less that you look at the volatility of March 12th or when Bitcoin crashed from 40,000 to 30,000. It's just noise. And that the real signal are all the fundamentals. And that nothing about that noise ever changes bitcoin's fundamentals. It just continues to get stronger over time. And you figure out how to live with what seems to be chaotic, but it actually simplifies everything. About money and everything about how you deliver value and how you store value into the future.
- [13:49]
Peter McCormack
Do you think there could be or do you think you'll start to see state responses to this, especially with conservative states? And I'm thinking just a couple of examples. The federal government still classes marijuana as illegal, yet some states initially started to legalize and decriminalize. And now broadly across the US in most states now, marijuana is legal or certainly decriminalize it at least. And also we've seen during the COVID crisis, some of the governors start to do things in opposition to what the federal government wanted people to do. I saw it in Florida, I've seen it in Texas, where the governors removed state mandates for masking schools and started to open up their economies faster than say, some of the blue estates. Do you think you'll start to see a response to this with regards specifically to money, specifically to the impact on this continual printing of money that states themselves want to start to protect their own constituents and therefore start to consider what their options are now? They can't really. It'd be very difficult for them to create their own currency. But being more liberal towards Bitcoin in specific states would be one response.
- [15:00]
Parker Lewis
Yeah, I absolutely do. I think that it's getting to such an extent of risk, truly risk. I think that it's that line of again, you will hear it over and over if you either talk to somebody at an investment bank or talk to someone at a hedge fund, which are not the people in the real economy. But what, what they will say over and over again is it's crazy, it's not going to end well, but they had to do it. And there's not that there's not a logical connect connection there. And I think that what these states are realizing is like initially they even played along states of, you know, Texas and Florida, a few others. The one that didn't, that doesn't get as much credit as she should is Kristi Noem in, in South Dakota because they never lock down. But I think that that when it comes to the context of money, that it's similar that like there was an initial reaction to Covid and the lockdowns to not necessarily to play along, but there was this uncertainty and we're going to have these reactions. But then as they were able to think about it more and what we were giving up, they said, hey, this doesn't make sense and we're not going to do it anymore. And that the states actually had to step in to lead because the federal Government was encroaching. And I think the same exists with money. That it was kind of like everyone was willing to go far out on the ledge. And after the financial crisis, it was the same thing. It was crazy. It's not going to end well, but they had to do it. When you do that more than once, then everyone else starts to look and say, hey, the people in the real economy, our livelihoods are at stakeholders. If you keep printing money, I know that you think that you can play like you're God, but we're all adults. We know that money doesn't grow on trees. We know that there's not any such thing as a free launch. And if you keep doing what you're doing, you're going to destroy our economies. And we're not just going to sit back and allow that to happen. We're going to put protections in place that allow people that live in our states to have an option. We're going to protect an option. And so I do expect the governor of Texas, I expect the governor of Florida, I expect other governors. I don't think that it should be political. I think maybe the opening salvo will appear to be, but that people will start figuring out that they need to assert their rights and that my understanding is that it's technically illegal for a state to issue a currency and also for a good reason. But if a state adopts Bitcoin as money, they're not issuing a currency. They're just using a currency that exists in the world. And so I think that that would fit under, basically, that would be the defense that a state would say. It's like, hey, being able to use Bitcoin the way it's going to be treated for tax purposes. There will probably be a fight, you know, as to how Bitcoin is treated for tax purposes between state and federal governments. But I do think that we're getting to the point. It's not like, you know, I'm not signaling alarm bells. I think it's just a natural order. It's going to be a natural course that strong states that have a lot to lose from currencies being debased will embrace and. And protect the rights of their citizens to be able to freely use Bitcoin. And then what will happen is all bitcoiners will come, all people who desire and appreciate what freedom affords will go to those places. And that's part of the benefit of being in the United States that you can have. We're a republic, we're not a democracy. You can have competition. Now that competition gets muted and threatened the more that federal government overreaches. But I do think at a fundamental level that the governors of the states will start to become active as some of the overreach in this infrastructure bill as an example starts to come out, that states will take it into their.
- [19:06]
Peter McCormack
Own hands and help me understand. I've got a basic understanding of how the states operate as a republic, how the different states offer competition. I understand the no state tax, for example in Texas is one of the benefits to go and live there. But in terms of the federal budget and the Fed printing money, does that cause a particular burden on different states? Is the burden shared? Do other states particularly benefit from the money printer? Does that cause any kind of conflict between states?
- [19:36]
Parker Lewis
I don't. I mean I would say you could make an argument, but that argument would not exist at the most foundational level. I think that it's it at the most foundational because you could make an argument that New York, because it controls the banking system, benefits more from printing money like that. That argument, the Cantillon Effect, is real. You can make that argument. But truthfully, everyone loses via the printing of money because it might feel good. I'm not a drug user, but it's like the first hit might feel good. If you keep using drugs, you're going to, you know, it's a descent down a very bad path that, you know, the first time that you print money it's not, it's not going to cause the whole thing to come down. Second time, not going to cause the whole thing to. You keep doing that and you get addicted to it and then the whole thing falls. And economies are not zero sum. So everyone literally pays the debt of money printing. And everyone will, even bitcoiners to an extent. Like there will be things that don't necessarily happen as you know, freely or easily in our lives because they won't be able to be delivered. Because economies can both grow and shrink. You can have both create wealth and destroy wealth. We all benefit from wealth being created that you know that in a functioning economy it's almost path dependent on more people contributing and more people creating wealth for themselves. So the money printer ultimately leads to Venezuela, right? Like wealthy people in Venezuela, like might have done better off better than like the people down the line. But many of them are no longer in Venezuela, right? Like they're either dissidents or they just can't be where they're from. So. So is that really a good outcome? Would they rather still be in Venezuela having a reliable form of money living like where they grew up. Everyone pays debt for when currencies die, basically. And that is the end conclusion of printing money, right? If it costs zero to print a dollar and it costs zero to print $3 trillion, that's where the value of the dollar is going. And when you destabilize, whether it's the United States or Europe or China or Japan, Venezuela, Turkey, Zimbabwe are at different points to curb Argentina, that is the ultimate end game. So we all pay that debt. So when I think about it relative to the United States, it's like, hey, all it does is allows us to assert different rights if they are constitutional, right? There's a, there's a U.S. constitution that the states like, there's this. There's a constitution of the state of Texas that sets Texas law. And Texas law just can't contradict the things that are in the Constitution. It's like anything that's not in the Constitution differs as a state. Now that concept's been probably most people would say bastardized, but what it allows for is in theory, but it has to be actually demanded in practice, is that a state of Texas could say, hey, our citizens have the right to use Bitcoin and that, that anybody that tries to threaten their rights is in violation of Texas law and can, you know, basically be dealt with via the, the Texas judicial system. And that when you, when you have. It's kind of like in bitcoin, right? Where now most people might not know this, but a software fork versus a hard fork, basically states can soft fork, we can make something more restrictive so long as it's consistent with the US Constitution. So if the state of New York wants to keep printing money, there might be something that's constitutionally protected that if they tried to say that bitcoin was illegal in the state of New York, New York state residents could probably go challenge that and say like, hey, there's nothing in the Constitution that prevents us from using this. The state of Texas could do something that says, hey, we are going to certify that using Bitcoin in the state of Texas and how it's going to be treated for tax purposes is X, Y or Z. And then the federal government could challenge it and say like, hey, you're encroaching on your authority. And then the state of Texas would say, well, the IRS treats it as property, we're going to treat it as property. You know, so it will naturally be a battle. But there, but there's a very logical role for the states to play and it's foundational to, hey, we do have this central bank, but if they keep printing money like and our citizens have a path to opt out of that, like there's nothing that you can or should do to prevent that. And if you are trying to take measures that infringe on those rights, we will need to step up and protect them.
- [24:20]
Peter McCormack
And we are seeing that. We are seeing that in Wyoming, we are seeing that in Florida, certainly Miami, and we are seeing that in Texas. So it's really interesting to observe that from afar over here because we don't have a republic. We have one rule for one rule for all. Talk a little bit about Bitcoin being anti fragile again. Good timing having reviewed Nassim Taleb's Bitcoin black paper which was full of errors and mistakes and I'm surprised it's something he doesn't fully understand. But this idea that Bitcoin is anti fragile, specifically when talking about decentralization and also specifically I like this point where you talk about Bitcoin gains strength from disorder. And it is, you know what, Parker? Is something I struggle with sometimes because as a bitcoiner disorder is good for bitcoin. Financial problems within the traditional financial markets. The money printer is good for bitcoin. And I struggle with that just ethically because it's. Sometimes I feel bad celebrating disorder because it's good for bitcoin. I don't know if you probably like that. Shut the fuck up, Pete. Doesn't matter. It's not your fault. But talk about that anyway. Let's talk about Bitcoin being antifragile and why that's important.
- [25:36]
Parker Lewis
Well, one thing I would say is the fall of Nassim Taleb has been less than graceful. First off, he went off to Lyn.
- [25:48]
Peter McCormack
Alden for fuck's sake.
- [25:50]
Parker Lewis
But it's also enjoyable in the sense of Bitcoin will ultimately humble everybody that you have to have some humility if you are going to understand bitcoin. You both have to be genuinely curious and then you have to have humility to question some really foundational principles. And one of the concepts that before his fall from grace that Taleb talked about was this eye of antifragile. And even if Nassim Taleb is fragile and even if he's gone off the deep end, that certain ideas, if you put ideas that are. That are true in the world, then they. They either resonate or they don't. Right. And I think that one of those is, is the idea of the difference between Fragility and resilience and anti fragility. And because I, because I do think that when you. There are certain, you know, maybe if you think about like a boxer, like a boxer can tank a punch, um, now that punch doesn't actually make the boxer stronger, it weakens him to agree. But, but he might be able to take a punch better than I could. You know, like, you land one solid right hook, I'm going down. But, but that, but that, that's the difference between kind of a concept of being resilient and in something that takes punches and actually feeds on attacks or risks or stressors. And I think that that describes bitcoin to a T. I think it's also one of the things that people most struggle with Bitcoin. There's probably three layers of it, which is most people have never consciously considered what money is. What makes something valuable is money. As they start to question that oftentimes something that is natively digital is a bridge too far. Like it still needs to be anchored to something in the physical world to make those other concepts about money in general more tangible. But then there's this idea. Because it is digital and because there's a computer system, I think that people look at it and they think that it could be here today and gone tomorrow. That we could just unplug it and it would fall on its own weight. And that there's something that's not permanent about Bitcoin. And I think just the opposite. It's both that bitcoin is everywhere and nowhere at the same time. And that creates this degree of beyond resiliency. That bitcoin is basically the greatest game of whack a mole that's ever existed. That you can never attack it because both exists everywhere and nowhere at the same time. That there's. That there are nodes running such that if half the world went off the grid, the other half continues to exist. Now, if the world ceased to exist, we don't need money and it's not a big deal. But that bitcoin is a monetary network. It is designed in such a way that has such high degrees of redundancy that there is no head that you can cut off. And that if you are actually attempting to cut off the head, that the system itself recognizes that. And because it's not possible, because you're like, oh, you're trying to cut off the head of bitcoin and that doesn't exist, but you are presenting a risk to me. So I'm going to immunize the threat I'm actually going to respond to it and I'm going to, you know, like, an example of that would be if, like when, you know, not that this was like an intended attack, but like when Mount Gox got hacked or got stolen, that everyone looked at that and said, hey, we're not going to let that happen to us again. So that spawned a massive investment in hardware, wallets and a promotion of self custody, you know, kind of education and then the hardware itself and running nodes and. But that, but that was really accelerated because a bunch of people lost their bitcoin separately. When China bans bitcoin mining, like bitcoin mining doesn't go away, everyone then looks at it and says, hey, you know what, if a government is not conducive or creating rules that make it friendly to bitcoin miners, we need to go places to where they are. So let's consider that before we invest the equivalent of $100 million today in a bitcoin mine. If a politician comes out and says that we're going to do X, Y or Z with bitcoin, then it also ushers in that idea, hey, we need to actually custody our own bitcoin because we can't be reliant on an institution. And that whether it's actual attacks on bitcoin, whether it's an institution failing like Mount Gox or recently there was a South African exchange that none of those things kill bitcoin and all those things make bitcoin stronger. When Bitcoin crashes from 40,000 to 30,000 in like 30 seconds, or whenever that happened a couple weeks ago, or from 8,000 to 4,000, it literally shakes out weak hands, it shake out the weakest of hands, and the people that step in are stronger. And then people learn, oh, bitcoin didn't die. And then when people learn bitcoin didn't die, that helps them. They understand something about bitcoin that they didn't understand before. But for the people that are really finding the signal, they then say, I need to actually go figure out why bitcoin didn't die. There's the actual signal of the fact that it didn't. But then it elicits more a response. That is, people figure out that they need to educate themselves. So whereas people look at bitcoin from afar and think, you know what, there could be a silver bullet that just causes bitcoin to die. It's like, that couldn't be further from the truth. It's like any bullet that's shot at bitcoin gets absorbed and it is that actual act of attack that causes the bitcoin network to accelerate its immunization of more and more threats. And it's like until a threat is presented, Bitcoin cannot immunize around it, but it will immunize the threat. And as it gets larger and larger, it becomes more and more capable for immunizing larger and larger attack vectors and threats.
- [32:11]
Peter McCormack
And do you think the reason bitcoin has become stronger with all these attacks is because it is decentralized, which forces the network to respond more as a unit of people and code rather than because I would imagine if it was centralized, these attacks would be easier. I guess the best way I'm thinking about it is that if I consider something like the block size wars, which funny enough, some of the people who listen to this might not even know about them or not fully understand what happened back in 2017, but what I learned from that is that it made bitcoin a lot harder to change. The benchmark, the kind of like the line for wanting to change something. Bitcoin became a lot harder. The process of submitting a bip, getting it approved, people agreeing to a change became a lot harder. And I think that's, to me, it's because it is decentralized, because all decisions are decentralized. Is that what it comes down to?
- [33:11]
Parker Lewis
Yeah, I think at its fundamental core it. But, but that plays out in a number of ways, right? So in the case of, of the like mining S2X block size war, it was people tried to change consensus rules, right? And that bitcoin, because it was decentralized and because it had become so sufficiently decentralized that it wasn't able to be co opted by a small number of interests and that what, what then that what happens from there is not everyone sees this at the same time, but certain people look at that and say, ah, I get it, I was wrong. You know that they say bitcoin is about consensus. And the fact that bitcoin couldn't be changed in this way is a feature. Now other people will find it out for different reasons, but in 2017, the Bitcoin network was a certain size. Now it's much larger than that. More people have adopted it, more businesses, more individuals, and that it's. As bitcoin gets larger, it gets more decentralized. If you have 10 million people in a monetary network versus 100 million people in a monetary network, it's incredibly difficult to change. Like if just look at the political landscape, right? Like, I mean the World's never been more divided, seemingly like even within single countries. But if there's mass polarization, even if it's 55, 45 or 60, 40, that as the number of people grow from 10 million to 100 million to a billion, the ability to form an overwhelming consensus, that which I would define is like over 90% is impossible on any marginal issue. So it is impossible to change Bitcoin in a way that would change consensus code. The things that define what is and what isn't a bitcoin. It would be impossible to change that if not for something that is like a critical failure where that if everyone looks at it and they're like, oh, unless we do this change, Bitcoin fails, right? So if it's a block size war or how some non consensus code piece is going to be implemented, that like anything that's marginal or even like a future block size increase, that will always be a marginal issue because that by definition the bitcoin network is functioning. And that what we saw with the block size war, which again you have not seen in the last four years, someone in any meaningful way propose a hard fork. Why? Because they saw a fail, they experienced it, they saw that it didn't work and then they learn from that and then they know that four years later the Bitcoin network is 50x the size. So if it didn't work when it was 1 50th the size, it's certainly not going to work. So our time would be best spent figuring out how to work within the constraints of Bitcoin. And that very process helps build Bitcoin's immune system.
- [36:20]
Peter McCormack
Do you know an interesting thing that goes with that is that I think as an individual, as a human who interacts with bitcoin, who uses bitcoin, if you stick around for the journey, because some people, like you said, weak hands get shaken out when the price drops. But I've done coming up to be four and a half years now properly in bitcoin, not back when I first discovered it, but properly in since early 17, buying, holding, fucking up with shitcoins, become a bitcoin, essentially a bitcoin maxi. I find that as an individual you also become more antifragile along with Bitcoin, you become more antifragile in terms of your kind of approach to the world, your thoughts on money, your thoughts on the economy, a little bit more disciplined. I just generally find that you as an individual become more antifragile as well.
- [37:14]
Parker Lewis
I agree with that. I would say when I think about but in this concept of anti fragility kind of this idea that as stressors get applied to bitcoin, either small stressors through the course or big stressors in terms of big period bouts of volatility or hacks of exchanges or attacks from governments, coordinated action, that when we think about bitcoin, just the volatility as an example, I don't get joy out of knowing that there was some poor SAP that panicked and sold bitcoin. That does not give me joy that somebody just got wrecked. But I do look at that from a practical perspective and say the herd just got cold. And if somebody is looking at it and trying to understand what's happening, they're like, when bitcoin like and I'm talking about that, that there was a period where bitcoin crashed from 40,000 to 30,000 and it happened in like two minutes where it was like teetering like between 38 and 39. Then it just like snapped down. Somebody stepped in and bought bitcoin. So you have the weakest of the lots selling and the strongest of the lots buying someone that that really gets it. And that when you can appreciate that and you start to tie that idea to why bitcoin never dies, to why every time that it falls, someone's always buying. Because more and more people figure out the fundamental. Because it's easy to buy bitcoin when it's going up. It's difficult to buy bitcoin when it's crashing and when it's a falling knife. But through that process, you have to understand that the bitcoin network is tangibly getting stronger as a direct result of that volatility of the, of a direct result of the volatility and the herd being cold. And that when I think about it from an individual level, it's like think about a universe of people that are being born of volatility, of constant uncertainty versus the opposite extreme, the Fed system, which are bubble boys, which are like any appearance of the market cycle turning, we're going to print some money to make the very short term more comfortable at the expense of the long term. So I view the Fed system, which is inherently fragile system, as basically sacrificing the short term or basically sacrificing the long term for the short term, basically creating long term pain for short term gain. And the bitcoin system, because it does harden individuals. When you have to live with that volatility, you have to plan your life around it. And you have to say like, I am going to be okay if if, if 90% of my wealth cuts in half tomorrow, like I'm okay, I'm gonna survive that. Like, maybe I have to change my behavior, maybe I have to save a little bit more. Maybe not buy this, but that, but that. When you have those two extremes, a bunch of bubble boys in the Fed system and then a bunch of people that are hardened by volatility. Yes. Like when you add up a bunch of people that on the individual level have been born of volatility, been born in the stressors, you know, lived with the chaos that over time, that's how you actually get stability, by, by adding a bunch of those, you know, kind of individual instances, individual learnings. Because if you, if you tolerate short term volatility, which we do in bitcoin, we know that what we get for that is long term stability. But you have to understand the fundamentals for that. And it's, it is the polar opposite. The Fed system is prevent short term volatility for long term volatility. The bitcoin system is tolerate short term volatility because it's actually a benefit that the more that we can tolerate the volatility in the short term, the more stability that we have in the long term.
- [41:03]
Peter McCormack
Well, one of the things I was thinking about though, purely on a personal level, was that if I had discovered bitcoin, I'd still be working in advertising, whether I run my own agency or work for somebody else. But I'm working in a pound based system and I'm tied to that system. I'm tied to the office, I'm tied to the staff and I'm tied to the people. Now I flip that and look where I am now. I've done my four and a half years in bitcoin where I've been stacking. So I've gone through essentially been through two bull runs. So financially I'm in a position where bitcoin has afforded me better purchasing power than I would have had if I'd have held my money in pounds. But add to that the fact that if my attack is failure of the pound, failure of a government, attacks from my government, I'm essentially more in a better position because I am antifragile, because I've got the wealth protection of bitcoin, but I've also got the ability to move geography. If I wanted to get out of the uk, I can just, I can get up, I can move, I can come and, come and sleep on your couch in Texas. I could go to El Salvador, I could go to another jurisdiction which is a bit more bitcoin friendly and not have that fear of being stuck within the system. I can operate my business from anywhere in the world because it's a bitcoin based business. But also add to that another thing that I'm thinking about, these attacks. I mean I recently made a show with Katie the Russian and I'm considering that second passport, having that flag that can put in another country. Bitcoin on a personal level has made me consider the attack vectors that risk my own ability and my family's ability to survive and live. And I'm putting in place these alternatives. But that wouldn't have happened without bitcoin. I wouldn't have been making these considerations. And that's why I talk about on a personal level becoming more anti fragile alongside bitcoin. Because it makes you rethink a lot of things.
- [42:58]
Parker Lewis
Yeah, it definitely makes you rethink things. It makes you question things, it makes you approach literally everything that you do with a, with a sharper pen or sharper pencil, I should say. And that, you know, I think that there's, there's a spectrum between not having any self awareness of the, the magnitude of what's happening in the world in terms of the, the consequences of governments printing money and what you have to do out of necessity to protect yourself. That there's that one end of the extreme just kind of becoming, being not self aware at all and having no appreciation to preppers that kind of are on the other side. But where bitcoiners I think sit is we see things that are inevitable and we see things at the foundation of a lot of problems. And that we understand that bitcoin is the solution to that. And that once you start to see that, then you start to see well, what do I have to do to protect this? Right. Because what my money represents is the surplus of everything that I've produced in the world that I haven't consumed. And by definition almost you're producing for others, but you haven't consumed that of others. And that you need that necessarily to store and maintain its value over time. Otherwise why would you continue to, to coordinate and to deliver value to others. But in bitcoin, like you said, you start to think of those things like it is not crazy to think that when I say that bitcoin can't be banned, it's not that some government is not going to be crazy and try to limit their people's ability to use it. That will certainly happen in certain kind of chaotic places that don't have respect for rule of law. But it's that that is a scenario. And if I have done all of this to protect my wealth, and I don't contemplate that as a scenario, it doesn't mean I necessarily have to call on it, but I need the call option. But it also translates to holding your own keys. You're like, yeah, Maybe there's a 10% chance that Coinbase suddenly locks out everybody from their bitcoin. That is a ruin event. If they do do that, I cannot afford that. And I know that I'm gonna have to take on some responsibility to control my own keys. And I'm willing to do that because I understand risk better. I understand risk better. Now by understanding Bitcoin better, I understand what isn't risk holding bitcoin and what is risk investments and kind of contributing my time and labor to having an enterprise at Unchained Capital as an example. But that once you question some very foundational principles and start to understand that the experts aren't experts and that all this other world that seems crazy actually is, and it doesn't have to be, then you very naturally, out of self preservation and self defense, think about, well, if I've gotten all of this, if I figured all this out, that is precious and I have to protect it. So even if it's 1% probability or 5% probability or 10%, if it were to happen, it becomes untenable and I have to protect myself against that. And that is part of the process of as individuals and ultimately, when you add them up into communities, states, countries, societies, that when you have more and more people that are hardened, that are taking accountability and personally responsible, that the ultimate outcome for everybody is better in those environments.
- [46:41]
Peter McCormack
Next up, I talked to Parker more about his Gradually than Suddenly series. But before that, I do have a message from my show sponsors. And today let's talk about casa, the safest way for you to store your Bitcoin. Now listen, forgotten passwords, SIM swaps, phishing attacks, there are way too many ways for your bitcoin to get lost or stolen. But with casa, you never have to worry about your bitcoin again. Because with a CASA multisig wallet, you, you can take custody of your bitcoin, but you only move bitcoin by signing transactions from multiple wallets. And you get to distribute these wallets into different locations, which is going to protect you from a range of mistakes, errors and vulnerabilities. Now, I've been a customer for over a year. I absolutely love the product and I am renewing if you've got any questions about this, you can hit me up in my DMs or drop me an email. There is no better time to upgrade your Bitcoin security and get total peace of mind. You can find out more at Keys Casa, which is K e y s ca s a. Next up, we've got Sportsbet IO, the very best place for online gaming because they accept Bitcoin. And now, with the Olympics in full flow, sportsbet has got you covered. They have prepared an amazing calendar for you where you can complete daily missions and get rewards in return. All you have to do is complete the mission of the day. Once done, you'll get that reward on the next day. So hurry up. This is going to be running to August 8th, and it will help you enjoy the Olympics that little bit more. If you want to find out more, please head over to SportsBet IO promotions, which is S P O R T S B E T IO Promotions. And lastly, this week we have Exodus Wallet, who I am using as my mobile and desktop wallet for my Bitcoin. Now, as you know, UX is super important to me. So when Exodus reached out to me and said, pete, we want to sponsor the podcast, I was like, well, you got to let me play with it first. And I did. And you know what? They crushed it. Which is why I'm always happy to recommend Exodus to you, my friends, and my family. Now, the Exodus desktop wallet gives you a way to secure and manage your Bitcoin in one beautiful application. And with their mobile wallet, you can send and receive safely using a QR code or address. Knowing that Exodus automatically checks all addresses for errors, make sure you check it out yourself@exodus.com or search for Exodus in the Google or Apple app stores. Okay, let's talk about Bitcoin being common sense. And again, it's good timing because Our favorite critic, Mr. Peter Schiff, up here, he put out a tweet, I think it was yesterday, referring to Michael Saylor's position, saying that, I can't remember, it was a thousand hours to understand Bitcoin. Not that I fundamentally agree or disagree with Saylor, but you refer to Bitcoin being common sense. I think it's. It can be. I don't think it's straight away. That's one of the things. It's almost like when Neo sees the Matrix. You have to get to that point where you see it and there's a different trigger point for different people. Certainly didn't happen for me straight away. I was buying Bitcoin because I just thought it would go up. But it comes a point where it starts to make common sense. When you hit. When you hit that trigger point, whatever it is for you, and then you. You cannot unsee it. All that happens is whatever you're doing, whether it's a Jerome Powell being interviewed, whether it's a news report, whether it's inflation, prices coming in, whatever happens, you start to see things and put them in the context of Bitcoin and you can't unsee this. And then Bitcoin is inevitable. Bitcoin does become a common sense.
- [49:59]
Parker Lewis
Yeah. And the idea that I try to draw out in Bitcoin is common sense is that oftentimes people say that bitcoin is an IQ test. And I don't see it as an IQ test. I think that a lot of people overthink it, that, that people that, you know, might score high on an IQ test, they'll sit at Bitcoin and they'll stare at it and they'll stare at the components and they'll fail, fail to see the forest through the trees. And then you'll have someone else come along and be like, oh, wait, like, there's only going to be 21 million Bitcoin. And like, the government's printing trillions of dollars. Like, yeah, like, what do. What do I have to lose? Like. Like this makes sense. Like, this makes more sense than that. And so there was a pamphlet or essay written by Thomas Paine before the American Revolution which was titled Common Sense. And I think the opening line of it, which I include in my piece, talks about how these ideas, kind of essentially communicating that the ideas that he's going to put forward are not yet commonly accepted. And that oftentimes time, rather than reason or logic, makes more converts. That it's just something you have to experience. It's something that you have to feel and see, and then it makes sense rather than you can't just overthink it. Now, coincidentally, or he basically then makes a logical case as to why it's obvious that we have to have an American Revolution. But when I think about those ideas in Bitcoin, it's that. That more often somebody just has to have an experience that makes Bitcoin make sense. That might be somebody gets censored by their bank and they get a letter that says, hey, we're closing your bank account tomorrow or in the next 30 days, you're no longer a customer. And you're like, hey, I think it was like a Sequoia partner, or there was A major Silicon Valley VC who got a letter. He had been a client of either bank of America or Wells Fargo, one of those legacy banks that they were shutting his bank account down in 30 days for no apparent reason.
- [52:08]
Peter McCormack
Dude, it happened to me. I had my Loyce bank with 25 years. I mean, I've talked about this a million times, but I was with them for 25 years. They phoned me up and they wanted to go through all of my payments and explain what they were basically the exchange transfers, it was the bitcoin stuff. And I just said, look, it's none of your business. I'm a 42 year old adult, I'm a parent of two children. I don't need a parent from you in the bank. I'm not overdrawn. I don't owe you any money. I'm not telling you this. I got a letter, my bank accounts were going to be closed down in six weeks after 25 years of service. And that was it. I was done. And that, despite that was only this year. And I had masses of conviction already, but that was like, holy shit, now I can lose my banking services. What if they, what if I lost my banking services and they refused to give me my money back?
- [52:57]
Parker Lewis
Right, because it's not actually your money, it's their money. They just have a liability. And it was interesting how you said that after 25 years of service, because that's literally what it is. You served the bank for 25 years and then they just told you, hey, you're out. And so it's either an experience like that or it's somebody in Argentina that's seeing their currency hyperinflate. And maybe we're not truly at hyperinflation yet, but that's where it's going. And they say, okay, like, I don't have to understand everything about Bitcoin, but I'm looking at it and it's holding its value, it's functioning and this other thing isn't. It's an AB test. And there's a few principles that I talk about in Bitcoin is common sense, which are two truths. Money doesn't grow on trees, and there ain't no such thing as a free lunch. That those are things that we are taught as kids and that we fundamentally know. Like money doesn't grow on trees and there ain't no such thing as a free lunch. Somebody has to make it that when you start to realize what's happening today, the government's printing trillions of dollars. And I, and I try to quantify it for people, right? In the three months from March 2020 to June 2020, the Federal Reserve printed $3 trillion digitally created, however you want to think about it, the digital equivalent of printing 3 trillion of base money, effectively doubling the amount of money that was actually in the banks, in the banking system itself, not necessarily the total base money supply, but almost doubling the actual dollars that the banks themselves have. And that this month, like the last week, if you go back and look at it, the Fed right now is printing over $100 billion a week, or at least they did last week, that it is common sense that if you are going to contribute eight hours a day to somebody else, which is what you're doing when you're doing work, that it doesn't make any sense to have somebody else in a land far away to be able to print the unit of currency that you're being paid in. Like, that doesn't make any sense. And that in Bitcoin you can basically either recognize that the old system is a world where somebody gets to print all the money and it's just not you, or you opt into the system where no one can get to do that, including you, right? And so it's like, that is the idea that people key in on where it's like 21 million, it's fixed. Everyone has the, is afforded equal rights under the law of Bitcoin. Nobody gets to print money. And that when they, you know, whether or not they understand the, how that's possible, it's just a common sense test. It's like, hey, the government printed $3 trillion last year. They're printing $100 billion a week this year. Which one do I want? Like, like I can see the market test of bitcoin holding its value over time. I don't need to know how the telephone works to be able to use the telephone. And so, but, but they key in on that common sense idea of like, money doesn't grow on trees. And there's this other idea that I talk about in the piece, because most state status is a pejorative term, but most people that are apologists for the Fed system that believe the Fed is, is doing some good in the world, I would argue the opposite. I would just argue that they're, they're not doing it intentionally. They're not trying to make people poor, even though they are. It's that if you think that the Fed is doing some good, actually go all the way down to the operation of when The Fed prints $3 trillion, like they hit A button on a computer screen and suddenly $3 trillion appeared. Did that create any economic value? Like it didn't create any jobs. It was just like they literally, like when the Fed creates $3 trillion, they literally hit a button on a computer screen. It's like, did something fundamentally change about the economic system or did it just be co opted to change who gets to allocate the money? Because it most certainly is the latter. And that changing of who gets to allocate the money actually itself becomes destructive to the economic order. It actually makes it function less well. And then the second, well, there's a.
- [57:23]
Peter McCormack
Bun fight as well. Right prior to the pressing of the button. There's a bunk fight between the Democrats and the Republicans about how the money will be used.
- [57:32]
Parker Lewis
Yeah, absolutely. And that also isn't the actual people who are doing the work who are contributing value to society by actually producing things of real world value, of tangible value. And so then, so when we, when we bridge together that idea of, you know, money doesn't grow on trees, which is true, and that there ain't no such thing as a free lunch, where it's like, hey, you just made lunches for somebody and they just gave money to somebody else that made the lunches that you created today worth less. And someone has to figure that out by having their actual stored labor, which is what money is degrade over time. Which again people will say inflation is theft or whatever it is. I would just think about it as like, I produced something for somebody yesterday and now they get to buy it from me for less today. Why does that make sense? Or I have to buy something that has of lesser value than I've already produced in the world and that it doesn't make sense. And that the operation of printing money does not actually create economic value, it actually degrades it. And that when people zoom out a bit rather than key in, you can focus in. But how does, how does Bitcoin credibly enforce fixed supply of 21 million? How does it do that? That's a really hard equation to solve. And can it possibly be the more that it's possible to know? And I help people almost every day help understand the how Bitcoin credibly enforces a fixed supply of 21 million. But I also tell people, before you try to zoom in on that problem, first zoom out and understand the why. Because the why is common sense. The why of the common sense is we all need something that is an alternative to what exists today. And what exists today doesn't make sense. And over time, it is going to be looked back upon as, oh yeah, it will be the most obvious thing that's ever happened. Like in 40 years. When we look back on these days of bitcoin, they're going to be like, how the hell did people not see this? Right? And that it is those kind of foundational building blocks of realizing that money doesn't grow on trees. There ain't necessarily as a free lunch, the government is printing trillions of dollars. Bitcoin is offering something in stark opposition to that. And all it is is a system where people can't print money. And you've got to understand how it's possible for something digital to be money. And that's where I send people back to our priority, the prior episode of what bitcoin did to understand some of those foundational principles. But it's like, don't overthink the problem. This is common sense. It's not an IQ test. Like a billionaire can look at bitcoin and not get it, which they often do. Mark Cuban, Warren Buffett, Charlie Munger, any name them. They are the type. Well, they will. They high IQ people, they will stare at this equation. They will, they will miss it. And then someone that's working on the line will look at it and be like, holy shit. Like, this is awesome. 21 million. You're telling me that it's possible that I can be paid in a form of money that the government can't debase. I'm kind of distrusting of that whole printing trillions of dollars. I don't particularly seem to benefit from it. Yeah, I'm in. That's the idea.
- [60:53]
Peter McCormack
Especially if you're in Argentina or Lebanon. It's a lot easier to explain somebody that may be in the US or the uk. I mean, we've discussed that before. If you've had your money destroyed by the government through hyper inflation or high inflation, I mean, we're seeing relatively low inflation right now. But if you've had that experience, I think it's a lot easier to understand. I also think just my starting point always is these days. I used to say to people, you need to get a bit of bitcoin, you need to experience it. I actually tell people now go and read Vijay Boyer parties Bullish case for bitcoin. And specifically look at the chart he created which grades every form of money based on its properties. Just look at that. That's all you need to know. Just look at that chart. And that's why I hold back bitcoin. And I Think that chart itself explains the common sense. Okay, cool. Let's talk about Bitcoin fixes this, because sometimes thinks it's an overused term and you and I had a disagreement with regards to Venezuela. I've said I think I might be wrong. I'm ready to have a beer and a steak and discuss that again with you. Because last time you're like I said bitcoin won't fix Venezuela and you disagreed with me and I think we're going to have that conversation. But generally speaking, I sometimes think the bitcoin fix of this term is overused. But I generally support the idea of Bitcoin fixes this. I think it is healthy. Let's talk about this.
- [62:04]
Parker Lewis
So in the piece Bitcoin fixes is, I specifically talk about quantitative easing as an idea. And I think that when bitcoiners joke about, I wouldn't say necessarily joke because there's truth to it, but when they meme that bitcoin fixes this, it's with this perspective that so much of what's broken about our economic structure, but that it seeps into more of a societal structure is because our money is broken and that we don't necessarily know exactly how Bitcoin is going to fix something or that it, you know, when it's going to be fixed or exactly how. If we key in on that some problems ties back to the foundation of money and the monetary structure being broken, then Bitcoin fixes it. We don't necessarily know what the solution is, but we know that the root cause is something to do with money, money being broken, governments printing trillions of dollars and monetary debasement. Because you, because once you start to understand Bitcoin, you can start to see those things. Like if we think about the fact that 50% of Americans don't have savings. Well, if you have a form of money that degrades in value and that you incentivize spending of it, and everyone becomes trained not to save because it's not in their interest to do it, because their money will literally purchase less in the future, then what do you get? You get people that don't have savings. But if you have a form of money that incentivizes savings, that increases in purchasing power, then every single individual that's saving in that currency will think long and hard about whether they actually need that cup of coffee, whether or not they need the house. That's as large as it is because every economic decision changes based on the calculus of well, rather than the default position. They're going to purchase less in the future anyways, might as well spend it now. It turns to, oh, this is actually going to purchase more. I need to make sure that I really need this. And so that's just one example, but that if you trace it all the way back to its, I'd say where the spring comes out of the ground, it's that we're talking about a fundamental problem of governments being able to print money and that bitcoin fixes that, and that everything else that bitcoin fixes is a derivative of something that stems from the monetary structure. Not just having a crack in the facade, but truly being falling on its own weight at the current moment. And so I also though have a recognition that most people, when I throw the term around quite liberally and frequently, QE quantitative easing. Most people don't understand what quantity quantitative easing is. And so I, I talk about in, in that piece, Bitcoin fixes this kind of an architecture of what QE is and why it fundamentally causes imbalance and why it ultimately breaks the, the both the monetary structure and the economic structure. And then some of the consequences of that.
- [65:26]
Peter McCormack
Well, it's one of the biggest impacts that bitcoin had on me is that consideration around spending. Because you know what, Parker? I've never been financially responsible. I've always just spent, spent and enjoyed life and got to the point where I'm in my early 40s, I don't have a pension, I didn't have particularly strong savers. Well, I say I'm in my 40s now, but I was 37 when I got back into bitcoin. And that it does, it does reconsider things because it's like, do I purchase this or do I hold sats? And if I hold those sats, where do they sats put me on later on? I think that's a really important, important thing. And that misallocation of resources, I mean we talked about that in the first episode we made. And it also makes me think of this other thing with regards to CBDCs. I don't know if you've seen it. I think it's. China is talking about, with their cbdc, they're putting, talking about putting a use by day on money. A fucking use by day or you don't have it anymore. I was like, what the fuck? And actually, so that's like next level encouragement to spend.
- [66:24]
Parker Lewis
I would check on that. Like that seems like, I mean, I will not be surprised by anything with how crazy people are getting today. Like the world's gone mad. But like if they do that actually you're like, do you have no self awareness? Like, have you, have you totally lost your mind? I think the answer is yes. But like I would look at something like use by date as like someone I could understand how someone truly fucking batshit crazy could think that's a good idea. But that, but that at all. Those are the type of things that cause people to wake up out of the Matrix to be like, holy shit, like they just did that here.
- [66:59]
Peter McCormack
I mean, I've got it. Digital currency yuan comes with an expiry date. Spend it or it will vanish. Keynesian dream to boost the velocity of money may finally come true. China has explored expiration dates with his upcoming digital yuan, which mean the currency will expire if it's not used by certain time frame. And look, link that in with your social credit score. Jesus Christ.
- [67:20]
Parker Lewis
But so these are the things where you say you kind of feel bad about governments. Printing money is good for Bitcoin. There's something I don't want to see the U.S. economic system or any economic system destabilized because that's literally how wealth gets destroyed. But it's also out of our hands that if you do crazy shit and print lots of money, sorry, this is what happens and the history is already written and we're all going to have to live through it. So thank you. But that instances like what you just read, it's like there are crazy people in the world that have no goddamn common sense that are making decisions that, that truly are life and death. Like people. Yeah, I don't want to have like the meme of like people are dying. But like, like Venezuela, right? Like when it, when, because it's not funny. It's like when money fails, wealth is destroyed. And what wealth destroyed means is that people's quality of life and ability to access basic health care, food, water, medicine, power, like all those go away. Because that's what we're talking about. But when you have people that will literally think through and say, I'm actually going to say this, that we're going to put money out that expires and if you don't spend it and they, and they have no ability to think through the first order, second order, third order effects of what is going to happen to a society when you do that, that people are not going to plan for the long term. That, that when you. When I think about Bitcoin, it's difficult to articulate these ideas, but it's almost like there's A like, it's like a Y axis and on one side of the Y axis, it's money slowly increases in purchasing power versus the alternative of money slowly decreases in purchasing power. Now we fundamentally know why ultimately money can't just slowly decrease in purchasing power, that eventually it will break and it will no longer be valued. And that will happen in a very rapid descent. We've seen it play out in history and we know why that will happen. But if we just assume in this instance of everything degrades slowly or everything increases in purchasing power, which is what will happen if you have a neutral supply of currency like bitcoin, a finite supply because of the incentives of the currency. Think about 7 billion people operating with a calculus of my money will purchase more in the future versus less versus the opposite. My money will purchase less in the future versus more that you have. It's not just 7 billion people, but it's every financial decision, every economic decision. What they build, how they build it, how they save, how they consume it sharpens literally 7 billion pencils multiple times a day that it has people. And safe. Dean talks about this quite a bit. It necessarily causes people to wait the future more than the present. And when you have people that are waiting the future more than the present, and you're not adding those up in ones and twos, but in millions and 10 millions, 100 millions and billions, then the actual output of that society will be far greater, more peaceful, more functional, less divisive than what we have today. When you have everyone that's being forced onto a hamster wheel, that necessarily causes people to make short term decisions at the consequence or at the expense of long term stability. That is what you get. And that is this kind of like, that's like an inception of this meme of bitcoin fixes it that if you just, it's like if you hack the system, if you just flip that script, flip it from everything marginally degrades to everything marginally improves. It changes everything at a very fundamental level. And that is ultimately kind of the alternatives. The A B test that people have in bitcoin, they can either stay on the hamster wheel or they can get off.
- [71:26]
Peter McCormack
All right, let's talk about bitcoin being the great definancialization. And the one bit that stood out for me in this really was a light bulb moment is where you talk about risk taking being productive. Risk taking is rewarded. And it makes me think of things like the FDIC insurance program for the banks that allowed them to take massive risks and Lending money out to people who could not afford properties. Well, the banks take massive risk and lend out my money to properties they couldn't afford, knowing that the FDIC would bail them out, as they did in 2008. And to me, this also the really interesting part about this is it's only a few people really get access to these kind of risks, these kind of benefits from taking this risk. And it puts the whole system at risk from complete collapse by a few bad players. I mean, also, do you know what I did? It really makes me think of the Big Short. It's a brilliant film. It's a film that means a lot to a lot of people in Bitcoin. But it's the bit actually at the end. It's where the family pack up and they get in their car and they've lost their home. We know, like, I can't remember, what was the number of. Was it 6 million people lost their home in 2008? I can't remember the number. I'd have to dig it out, find out. But what it makes me think is that there's a few risk takers that are impacting the lives of millions of people. People.
- [72:48]
Parker Lewis
Well, I would, I would think about it as maybe the, the. The. There's a certain class of individual or a certain train of economic thought which. And I'll just throw Joe Eisenthal under the bus because he's a Bloomberg talking head, but they say pe. They, they look at like, say an interest rate that's paid on a deposit and they say people shouldn't be rewarded for not taking risk. Basically, it's like, if you just have money in the bank, why should you be paid an interest rate? And they use that as a defense for this truly bankrupt and broken idea of negative interest rates. That's like it, it should be a privilege for you to have somebody else hold your money and to have them already lent it out. And you should actually pay them for that. Like you should pay them for the right to have already lent your money out and to already take risk and that the best case scenario is they have to give you less money back in the future. The worst case scenario is that they gave it to someone and you're not going to get any of it back. I'm sorry. And, and that. It's like people are living, you know, maybe it's the Matrix. It's just like they're living in a world where like they're devoid of reason. Where it's like, no, that's my money and I And I key in on this point of Bitcoin is the great definancialization that if you are to have have money, you have already taken some risk, right? You've already invested your time and energy. Whether you did something speculatively or you worked behind a counter, you contribute your time and it was based on a promise that you would be paid at some point in the future. But for most everyone, they're paid two weeks in arrears, they're taking some risks if I contribute my time and energy. But that also starts far beyond when the work is actually contributed. So most people have to study decade prepared decades. Going back to middle school, when people start to become conscious of cause and effect. And middle school for us is right between elementary school and high school, seventh to ninth grade, where it's like the decision that I make today are going to dictate whether or not I have a home in the future or I'm comfortable or my life is good. And that if I think about that in a more tangible way, it's like think about someone that trades, that has a craft that is learning to play the violin, or an NBA player, an NFL player that are making sacrifices for a decade so that you can show up to the stadium on a Sunday and cheer and be inspired by speed and strength and kind of be invested there, that they put in 10 years of work to get to that place and that's their craft. And so the risk taking is devoting their time and energy and life to something that delivers value to other people. And that by the point that you get paid money, you've already taken the risk, you've now been compensated. And that what our current economic system and monetary system cause is that it forces people onto a hamster wheel by which they perpetually have to take risk. Because if I've invested a decade to get paid money, which is the output of risk taking, that if I am immediately put in that position of now, that's going to degrade 2% a year that we've been lulled to sleep. Basically we are the frog that as the water boils where we've been like, oh well, it's just 2%. But everyone if they sit back and they say, well, what does that mean over a decade? 2% over a decade compounded is just under 20% compounded over two decades, it's just over 40%. Imagine having to the consequence as an individual, always think about it as the individual and then multiply up or aggregate up to a collective. But if each individual is put in the Situation where they had to invest their time, energy, take risk, be paid in the form of money, and then over the course of a decade, they have to replicate or replace 20% of the surplus of what they've provided to somebody else. Because that's what savings and monetary form is. You've provided value to somewhere else and you have consumed less from other people. If you have to replicate 20% of that over a decade or 40% over two decades, you start to make very bad individual decisions. You start to take risk rather than save. And you're only taking risk for the purpose of maintenance, of replacing what you've already saved. And then when you take that from an individual level and you add it up, you start stacking up tens, hundreds, thousands, millions, tens of millions of people. You get very perverse incentives and outcomes ultimately. And that people have to understand that there is a difference between savings and investment and risk taking. Like I think about savings as monetary risk taking is putting monetary savings at risk with the goal of producing something of value. Like, think about it as the entrepreneur, like I, I see a problem. It is that it's difficult for people to custody bitcoin themselves. I am going to endeavor my life, my time and energy to helping build a solution that makes it easier for people to custody their own Bitcoin. That's what we're doing at Unchained Capital. Now if I'm wrong about that, if that, if that's not what people actually want and they just want to custody with a third party, then I've devoted my time and energy and I'm not going to ultimately be paid for it in the way that, than I expect to be and expect to be that. Like that is, that is trial and error and that's risk taking. I'm risking my own time, which is my ultimately, my own labor, which ultimately my, my life right now. That's a decision that I'm making and I'd only be pursuing that endeavor if I expect to be rewarded for it. But I'm, but I'm putting my own capital at risk and putting my own time, my own energy at risk. But I've got bitcoin. That's my savings, that's my fallback. So that if this doesn't work out, I've got, I don't have that ruin event. Now what people have had to be trained into is that when they invest in the stock market, that that's a form of savings. No, no, no, no. That's risk taking. You've put your money at risk, but they do that. And that doesn't mean that all investment, like investment is incentivized. Because I'm incentivized to go out and take risks. Because if I deliver value to people that they didn't even almost understand that they needed before they needed it, and I built the architecture and the infrastructure to provide them a service, I get rewarded in more Bitcoin than I would otherwise get if I didn't do that. Right? And so that people have to understand that the lines have been blurred in the existing and the legacy world. But it goes back to that idea of it's like the drug dealer, right? They create their own market, they give their first hit away from free, and then, and then people get addicted to it, right? And that's the 2% inflation that causes purchasing power to degrade. Where it's like if you just looked at it as one year it might be able to overcome, but then they start gearing their entire lives around maintenance of replacing what otherwise is degrading. And it's only degrading because the Fed is literally printing money, because someone in a faraway land is just deciding to degrade all the value that they've already contributed to the world. And so when people start to key in on this idea that savings is fundamentally different from investing or risk taking, and that most of what people perceive to be savings in our current legacy system is not actual savings, but that they've actually been forced onto that hamster wheel because they've been told that they have to make their money grow. Why do they have to make their money grow? Because it degrades in value. Why does it degrade in value? Because the Fed prints it and then it's like, oh, wait, but I don't have to exist in that world anymore. There's this other alternative that I can opt out of that world and I can just save in a form of money that doesn't get debased, that life becomes much more simple in that world. And that what people are going to realize is that all of these financial assets that have become monetary substitutes or near stores of value are in fact risk taking endeavors. And that Bitcoin is superior in performing the function of what they are actually trying to solve for via these financial assets. And that over time people will look at that and they were like, why am I holding a junk bond that's returning 4% in a currency that is being printed at faster than 4% a year? And they will say like, I'm out, eject, give me Bitcoin. And then they will look at stocks too and they will say like wait, this stock has like a dividend yield of 1% or this stock doesn't even pay a dividend and it's, and it's trading at 100x times earnings. Why do I own this? I only own this because it's part of a blue chip 401k plan. I'm out. Give me Bitcoin. All I need is a better form of money that doesn't lose value. And that as more people figure that out, this idea of the difference between savings and, and risk taking in investments, they will realize that they don't have enough money, that what they actually have is at risk and that they're incentivized sooner than the next guy down the line to get out of the financial aspect that is highly levered and get into a form of money that can be fully reserved, that can be out of anybody else's control. And that as they do that is part of the Bitcoin monetization process, is part of the process that will cause Bitcoin to become less volatile, to become a stable day to day currency. And that there is, it's one of the lines that I, because it's something I think people feel once they get into Bitcoin, that there's two ideas. There's something deeply cathartic about beginning to save in a form of money that works in your favor rather than against it. It's like an 800 pound gorilla being taken off your back or, or somebody's foot being put on your throat. They're like, when you take that off and you're like oh, you know what? I've got the best form of money that I could possibly have or that's ever existed. I can go focus on my day to day life, the things in my personal life, creating value for other bitcoiners at Unchained. I can do that and I don't have to worry about that, that that's there and that's always going to be there for me. And that if something doesn't work out in the risk taking endeavor that I'm currently pursuing, I've got that and I know that it's secure and it actually also allows you to think about money less. We might talk about bitcoin and the ideas around bitcoin, but when you have a form of money that does its job, that works in your favor rather than works against it, that you actually get consumed less in the day to day about needing more, if your money is going to hold its value better. You almost definitionally need less of it. And as you need less of it, you think about it less and your life can be devoted to actually delivering value to other people rather than just making money. It truly is. It's a little bit mind boggling the effect that bitcoin has on you once you start to get beyond the break, essentially once you get past the kind of beginner stage of adoption and it starts to become intuitive that you realize that bitcoin is the solution to a lot of problems. But in a world that's dominated, that has been hyper financialized, that is all part of a hamster wheel that has you believing that you need to make more money or that you need to make your money grow. And it's really, you don't need to make your money grow. You just need a better form of money. And that life becomes so much more simple when you do get that better form of money. And it is bitcoin.
- [85:39]
Peter McCormack
Well, that's a great way to finish it. Parker. Can't really add much more to it than that. It's really strange listening to it all though, because as you talk through gives me the feeling of this is everything I've been through over the last four years. This better understand. And look, I'm not the smartest bitcoin ever. I mean I don't understand it technically like others, but I do understand simple things about why I should hold bitcoin rather than other assets. It's why I've gone to that point where I'm like 90, 95% in now. Why I only hold 8 weeks cash flow in pounds for my business. And personally, and I've gone down that path and everything you've talked about like accepting volatility considering your purchases, I've been through all of that and I feel in a much healthier place personally than I was prior to bitcoin. I financially certainly. And I feel, like I said before, I feel more anti fragile myself. So listen, I really appreciate you coming on and doing these shows and explain it to people. You explain bitcoin in a way that other people don't. You've always got that consideration for what money is and what makes good money. And that's always a lens through everything you seem to do or that's certainly the lens I see it through when you explain it. So I really appreciate it. Man. Certainly should tell people a little bit about what you do because you've put the effort in for me here. Tell people a bit about Unchained.
- [86:59]
Parker Lewis
Yeah, well, so one Kind of Unchained is based in Austin, Texas. We host the Austin Bitcoin Developers Meetup. Always recruiting bitcoiners and bitcoin companies to come to Austin and Texas. Because I do think that coming on these podcasts and helping to educate about bitcoin, helping to accelerate the, the, the path down the rabbit hole or the adoption curve to someone really understanding at an intuitive level that what we're ultimately doing here is, is building a monetary network and unchained capital in our own way are helping to build a piece of that which is helping to standardize and institutionalize collaborative custody. Basically helping create a bridge between a world of you're on an island self custody and you're checking all of your rights at the door with a full custodial solution. Something that puts keys in people's hands, but has a trusted partner to be there alongside of them to help them secure their assets, but ultimately putting them in maximum control where people are sovereign over their wealth. So that's, that's really the core foundation of our, of our platform. It's built on multisig, it's built on the idea of collaborative custody. Our clients have two key, we have one, but then that serves as the foundation for what we think is a more anti fragile financial institution that should be kind of built tailored to the bitcoin world. But I think about it as a much broader piece that we're doing kind of one thing in the bitcoin space, but what we're all doing in aggregate, literally anybody that's just adopted bitcoin, people are producing content, people that are building infrastructure. It is most people from the outside looking in, see a price trading on a screen and it feels like a stock. What is actually happening is a monetary system is being built from the ground floor, that individuals and businesses are building that and that we're doing that in Austin. I have an incentive personally, professionally, but ultimately because I think that it's important for bitcoiners to be around and to be places where they can come together and talk about ideas and talk about what they're working on, because the network doesn't get built without it. So if you're, if you're a bitcoiner that is thinking about making the move to Austin, there's a lot people are getting off the boat every day and it's only gaining strength. So beyond what we're doing at Unchained, there's something that's special happening in Austin. And if you are having fomo, you should be. And the next awesome bitcoin developers meet up is August 19th. And then there's a lot happening in the state of Texas. Not only is it the great mining migration, the great Chinese mining migration of 2021, and many, many miners are coming to Texas. But BitDevs Austin is August 19th. Pleb Fi Austin is the 21st and 22nd. We're hosting an event, I believe it's at our office. It might be on campus for UT students, Texas, University of Texas students, to help them understand bitcoin. One of our interns is going to be leading that. And then we're going to go down and that's the 24th. We're going to go down to Houston for the Houston bitcoin meetup. The Houston bitcoin meetup, I believe is already the second largest meetup in the country. And then we're going to complete the Texas triangle, going up to Dallas for bitblock boom, which is a 26, 29th. So there's a lot that's happening in the state of Texas in general, but particularly this month. So if you are thinking about coming to Texas, you should probably come check it out this month in August, there'll be a lot of bitcoiners around all over, all over the state. And we just want more and more bitcoin and bitcoiners here.
- [90:47]
Peter McCormack
Well, you've been hammering me to move there for a long time and I'm getting closer and closer to certainly spending more time there. I told you, I'm going to spend quite a bit of time next year. I'm coming in in three weeks. I'll come to Houston, I'll come to Dallas and I'll probably buy the biggest steak I can find you because I certainly owe you it. And we'll have a proper catch up, talk bitcoin and eat some steak and drink some whiskey, man.
- [91:07]
Parker Lewis
I'm looking forward to it.
- [91:09]
Peter McCormack
All right, brother. Listen, appreciate you and everything you're doing and I will see you in a few weeks.
- [91:13]
Parker Lewis
See you soon.
- [91:16]
Peter McCormack
All right. What did you think of that one? Do you enjoy that? Parker smashed it. As ever. He is absolutely one of my favorite bitcoiners to talk to and I hope and sit down and record with him while I'm out in the states next month when I hit Texas. That and Parker trying to convince me to move to Texas like he does every time we hang out. He's literally been telling me for like two years. I think it will happen some point. I think I'll become a Texan. Now listen, as I said in the intro, he dropped a ton of knowledge over the series. So if you haven't checked out parts one and two, make sure you go back and listen to episodes 358 and 370. It was meant to be a three parter and I think we're gonna make a part four. I know you'll love that, right? We should do it, right. Of course we will. Anyway, I'll be back on Friday. We have some pretty juicy shows lined up that I can't wait to tell you about. But in the meantime, if you want to reach out to me, just jump into my telegram channel or hit me up on my email. That's hellohatbitcoindid.com. outside of that, if you want to support the show, you know what I'm gonna say. Say every show. And if you haven't done it, why not? If you listen to every show, you haven't left me a review. Come on, head over to Apple Podcast. Go and leave me a review. Hopefully you think the show does that, deserves five stars. If not, so be it. But at least go and do it. Go and leave me a review. Anyway, it's sunny here. I'm about to go for a walk. Love you all and I'll see you all on Friday.