E (3:27)

Good morning, Dave. And good morning, Scott.

B (3:30)

Yeah, so good morning.

E (3:32)

Good morning. Good morning. On this quantum thing, I mean the amount of compute it would take to break bitcoin when you have so much other low hanging fruit that if, if the quantum attack becomes a realistic threat vector, I think any smart hacker would first attack the banking sector, the finance sector, I mean, for crying out loud, you still have the majority of banks that are providing consumers two factor authentication over SMS text message. Are you really going to deploy that much compute power against the bitcoin blockchain when you have so many softer targets you could exploit? And look, if we get to the point that everything is susceptible to a quantum attack, then we're pretty much going back to the stone age anyway. So it doesn't much matter what your magic Internet money's worth at that point. And I think there are enough resources being deployed in advance of this that I feel confident there'll be a solution. If I'm wrong about that, then we are all fucked on the stablecoin front. Yeah, I'm very frustrated. I put out a piece this morning again.

A (4:43)

Yeah, let's stay on Quantum for a bit and come back.

E (4:47)

Yeah, for sure, for sure.

A (4:49)

Armando, I saw your hand up.

E (4:54)

Armando.

A (4:55)

Armando, you there? Behind. Yeah.

F (4:57)

Hey Dave. Hey Scott.

B (4:59)

Yeah, I hear you.

A (5:00)

Yeah, we hear you.

F (5:00)

Yeah, I just want to piggyback on the quantum comments. I mean my, that's how I got into crypto. I was studying software security at USF and that's when I discovered cryptography and also later on cryptocurrency and, and I want to just, I guess add on to the previous Speakers points. Uh, first of all, if quantum computers do come to, to a point to where they can hack material networks, everything's, it's all over. You know, it's not just crypto. That's the last of our concerns. And two is what a lot of these people who are commenting on this situation or talking about. They don't understand how evolution of tech works. Things don't develop in isolation. There's always defenses developing alongside of it. People aren't going to, I mean the big players, the banks, the, the billionaires that have crypto, they're not going to sit on the sidelines and just wait to be hacked. They're working on solutions right now. And that's how it's been since the beginning of computation is that whenever there was a method that could hack or break or make something obsolete, there was always defenses developing alongside. Just like in the military, right? With defenses that we have anti defense weapons, well, we make better planes, but we make better planes, we get better anti defense weapons. And that's how it happens in tech slot. It's way overblown and it's meant to just scare people away and cause panic and fud.

A (6:20)

Really? Yeah, I think that that is a, a, a. Well, well said. The, the, the expression I've seen on, on crypto Twitter recently is it is easier to encrypt than to decrypt. And the, the defenders of Bitcoin need to use replace elliptic curve cryptography to, but that's not nearly as hard and there are a bunch of solutions for that. The, the sole real issue is the, the, the problem with, with this, the quantum narrative is people have, are breaking an overarching problem and they're phrasing it in one big thing. And there's really two separate issues, right? Separate issue. One is elliptic curve cryptography moving forward. The ability for people who have updated, who still have control over their Bitcoin to be able to adapt. And you know, I don't hear a whole lot of people, I mean, I think it's extraordinarily fringy that people think that that could be driven, that that could be destroyed, that that won't be able to be adapted to. And I think that's important. The second issue, which is one where I actually have expertise is what happens if 6 million coins, and it's probably a lot less than that, but that's the highest number I've seen. What happens if it's really like between 5 and 6 million coins on old wallets that won't get adapted that people have lost control of it. What happens if that gets. I don't even want to use the word hacked, we'll say reintroduced into the float of bitcoin. And honestly, that narrative is stupid. These are. These are people who are panicking on the basis of right now. If a satoshi coin move, the market would drop a bunch because people would be terrified. But the truth is, if it actually happened in a coherent manner, it's not that big a deal. Arguably, you know, it's a 40% maybe drop from wherever it is at that time, but it's easy to say why that might be bullish. So I want to break the conversation into two pieces. The old wallets pushed off to the side. I think it's pretty clear, Amanda, that you're right on the. On the ongoing utility of bitcoin. And that's important, because if you're not investing in Bitcoin because you're afraid of old wallets, that's a timing issue. If you're not investing in Bitcoin because you're afraid of the utility of bitcoin, well, that's a real serious issue. And I think most people believe the latter is just bullshit. Do you agree with that?

F (8:51)

Yeah. Yeah, I agree with that 100%. And it's just. I think right now, it's just narrative. It gets a lot of views. It gets a lot of, you know, comments. People like to talk about it. It's an easy narrative that the average person can understand the threat. So, you know, it's very simplified. So I think there's really more of a, you know, like, news media type thing than an actual threat.

A (9:16)

Yeah. Okay. We got a bunch of hands. I saw the order I saw was Panos, then Carlo again, then Constantine, and then Tom.

E (9:23)

Or maybe I'm a legacy hand.

A (9:25)

You're a legacy hand. Okay. Panos, Tom, then Constantine.

G (9:29)

Yeah, I was just gonna say what kind of. Kind of to go off of what Armando said. I. I think a lot of it is just fud. Like, the threat has always been there.

A (9:39)

Right.

G (9:39)

We've been speaking about, oh, when quantum computers reach a certain level, blah, blah, blah. But if you speak to any developers on the blockchain, they will just tell you, well, we can just, you know, update all these systems to. To stop that. I think the bigger threat from quantum computers is not actually hacking into wallets or the blockchain or doing any damage to the blockchain itself, but hacking into people's computers that have bad opsec and taking private keys that people have stored on Their computers. I think that's the, the threat that people should be thinking about when it comes to quantum computers.

B (10:21)

Who's next?

A (10:21)

Tom?

F (10:22)

Yeah, I, I just want to touch on that. I agree with that. That's something I'd even think about. So I want to just thank you for opening that, you know, possibility, because I never even thought about that. That's a very good point.

A (10:34)

Yeah.

C (10:34)

So I think the nuance here is traditional finance and big tech. Obviously Google published this paper, are deeply thinking about quantum and putting concrete timelines so we can upgrade all of the backend technology, not only in the financial system, but the tech system as well. Now the biggest concern that I hear folks voicing, which I think is legitimate, is that most of crypto and up and above big tech and banking are taking this threat seriously. Obviously the Ethereum foundation is with a clear timeline to upgrade the protocol by 2029. Solana and others have put out thoughts and how they would upgrade. And then you have even a few blockchains who are already post quantum that are not super relevant. But Algorand and others. Okay, great. The concern is that bitcoin devs are just not taking this seriously. I mean, Nick Carter has been sounding the alarm and I thought it was a little bit hyperbole, but I think it's something that should at least be considered. And the response from the bitcoin community is that it's so far off that we shouldn't even consider it, or that

B (11:38)

they take it as religious criticism against the cult and religion that there could ever be anything wrong with Bitcoin and don't even address it because it's too emotionally difficult.

C (11:48)

Exactly, exactly. And the problem is, even if we started today and how we could upgrade Bitcoin, there would have to be this broader consensus and agreement which, Scott, as you alluded to, is really hard to move. I mean, one of the key and core components about Bitcoin is sort of ossified already. So how do you do that? And even if we did come to a conclusion, it would take months and months of completely full blocks of transactions to actually update the protocol. And that's not just like, hey, person who lost their keys or mom and pop investor who has a few bitcoins lying around. It's institutions, it's, it's custodians, it's all of these big folks who have, you know, fiduciary responsibility to, to upgrade and, and reduce the risk profile of these assets when they can. So the conversation needs to happen almost immediately for bitcoin and that's really where the problem is, is that the core devs don't really seem to think this is a threat at all. And whether it's a threat in 2029 or 2032, it's a long conversation and it's a long upgrade period. So we need to start seriously addressing right now.

A (12:48)

Yeah, the only problem with that, Tom, is I've been on spaces with core devs, and so that. That narrative is not really true. I mean, it. What is going to be really, really hard is. And I keep bifurcating this, this process, because this is really the issue. What is going to be hard, in fact, maybe impossible, is to come to a consensus on what to do about old wallets where people have absolutely no control over them. That is difficult. I fully understand that the 100% that is going to be hard. What is not going to be hard is protocol updates that move from elliptic curve cryptography and. Or how to hide public keys and solutions. And I've seen and heard of solutions. I don't care who you want to listen to. There are lots of people and they all seem. The consensus seems pretty strong that that's much easier to change. And so when you make the statement, well, they can't agree. Well, that's true. They can't agree on something that is important but not existential. But I do think that there's agreement or an easy path to agreement on an existential solution. I don't know if that makes sense, Tom, but I think it's really important because the fact is that we're talking around this on this space, and we all kind of understand what we're talking about now try talking to an investor. And I think that, Scott, you've seen investors who don't want to invest because they don't understand for sure. And I think that's the biggest difference here.

C (14:12)

I Talked to an $8 billion RIA the other day, and the first question they had for me is, when is Quantum going to break Bitcoin? I hear about it so much and I don't see anyone addressing it. So whether or not they're actually exactly. One of the big components here that is not being addressed is that perception is reality and they need to be more vocal about it. And even things like the Bitcoin mailing list and other forums where they still kind of actively publicly communicate, they haven't even addressed Quantum. So, okay, maybe they're telling us in spaces or whispering about it behind the scenes, but great. You have to tell people or it doesn't really matter.

A (14:47)

Cool. Yeah, I think it was Constantine next.

D (14:52)

Yeah, I you know, to anyone who's like to the point, Tom's point. If I already is asking if when this quantum breaks bitcoin, I will rebuttal like you know, when is quantum like you know, breaks dollar right. So to Carlos point, like, you know, we have much, much bigger problems to have. But since we're talking about like just to stay on topic, specifically on bitcoin, I don't think either that quantum will kill bitcoin because first of all, you know, it will probably only improve the consensus in a way that we will have to like, like have a massive debate on what to do next. First of all, if ECDSA like breaks you know, trillions of dollars, they they're not stolen, they become just economically obsolete.

A (15:33)

Right.

D (15:33)

Which is again not a, a perfect solution. When bitcoin signature scheme is vulnerable. Very shorts algo what it reveals. We talked about it really briefly, but it reels only public keys. So basically they're immediately at risk that the one that has already spent like you know, and revealed their addresses, then touched UTXOs that are never spent. They're safer for longer. So basically trillions, they don't just like vanish and like in nowhere right Overnight. They're they like think about it as a, like we need to think about as a hedge fund and, and yeah, we have the opportunity to upgrade. I mean we've seen it and we've seen it in examples. Maybe not the best examples like when bitcoin cash or like satoshi version like sv. Like there's a lot of criticism and some people migrated to the new chain, some rest loyal to the initial bitcoin chain and I think the hash rate it migrates to more secure chain. We will have to have a proper chain discussion and the capital flow will decide who's going to win. Let's say we decided the new quantum resistant chain will be more, you know, will be more secure and whether 1 million of Satoshi Bitcoin or 4 million like bit BTC that are lost, you know, they're not removed. Right. You know, so well, guess what then the new float will decide the price. The new float will decide like the scale and the trust predominantly.

H (17:06)

Right.

D (17:07)

So, so I'm also very, very confident that as we upgrade to this problem like we will find the, the solution and the migration. It will not be optional. It will be probably just like pushed upon because there will be no, no other choice.

B (17:29)

CJ yeah,

H (17:32)

yeah, just a, just a couple points here. I think I have to back up Dave on his counterpoint to Tom, which is that nobody's talking about this, which is just not true. Thankfully in bitcoin everybody doesn't become a doctor when it's time to give your opinion on medical advice. And nobody and not everybody becomes a lawyer when it's time to give legal advice. So 999 out of 1,000 Bitcoin users aren't qualified to talk about this. So they probably should keep their mouth shut and let the real people do the work. And by the way, Strategy just created a, a security chair and is investing in, in solutions. Blockstream has already put out BIPS and is and is has 30 or 40 engineers working on solutions. So bitcoiners build first and talk later and I think it should stay that way. But the, the more interesting thing I think that Dave brought up is going to be the second and third order debates that come along with these solutions specifically to the, to the old coins that don't move. And really it comes down to property rights, you know, because I think one of the biggest things is going to be hey guys, when we do this upgrade, why don't we take the Satoshi coins, why don't we take the coins that haven't moved in 15 plus years or whatever, whatever date range they pick and why don't we put that back into the security protocol for, for continued issuance and push out the issuance schedule to keep miners incentivized. That is going to be a very interesting debate and argument over the eventual change that is implemented because I'm sure some, some people are going to push for that. And now it becomes, the question becomes well how do you determine whether that person is just a long term holder or whether it was actually satoshi or we should move those coins and is that the right thing to do is because now we're infringing upon property rights. So I think, you know, I'm not worried about quantum because the whole system will break down. Like Carlos said, there's much lower hanging fruit than bitcoin. There's much more valuable fruit than bitcoin. But what I am worried about is the split the rift kind of like the big blockers versus the small blockers. Decentralization is important versus no, we want smart contract capability. All that's going to get washed up again when these solutions come brought to be. Because much like in Congress when a bill gets brought to the floor, it's never a one item thing, other gets attached to it all the time and tries to get forced through to push other people's agenda. And that's the real risk. We just need to, we need a one item solution, fix it and be done with it. But I think that's going to be the real question. Do we, do we protect property rights and stay true to free market or do we try to get fancy and fit in some security schedule, issuance, extension or something like that? Along those lines, Yeah.

A (20:22)

I asked the question yesterday and it's funny, the answers are amusing. I made the point with Scott on his show that if someone leaves the door open in their house and a pile of money inside the house and you walk into the house because the door is open, take the pile of money and leave, it's not like you haven't committed a felony, right? So, you know, if you quote, hack a wallet that somebody has that, you know, even if it's easy because, or because you spent billions of dollars to do it, it's still a crime. Now does that mean state actors, bad actors won't do it?

E (20:52)

Of course not.

A (20:53)

People commit crimes, right? You know, only an idiot leaves their front door open with a pile of money on the inside. You know, it's just not something that's smart to do. You wouldn't do it. So it really does open up a lot of questions. But the point that you made is one that I've said many times, it's about property rights. And there is precedent. I mean, let's call it what it is. I see these breathless tweets all the time. You see it all the time, that, oh, so and so California law says that crypto left on exchanges for three years without claim are forfeit. Guess what? Every single state has the exact same rule. And it's not just crypto, it's bank accounts. It's everything, right? Things that are non claimed assets that are not used. Our unclaimed asset laws are on the books everywhere. And so there is a precedent here. Now, do I think it's right? I mean, I don't know what the hell's right. It's like it ranges. Remember these quote unfound coins range from satoshi, which is one thing, and whoever satoshi is, and that's a different debate. But that's a million coins. But there's another few million that haven't moved and a lot of them are presumed lost, including the guy who, you know, has, you know, close to a billion dollars or whatever, it's probably half a billion now sitting in a dump somewhere in England that he gave up trying to find. Well, I mean, does he have claim to it? Could he show what the public key was? If he can under Quantum maybe, you know, he makes a deal with the, the first Quantum computer to recover his keys, recover his coins and, and move forward and they split, and they split the difference. I mean, there's going to be all sorts of crap like that, C.J. don't you think?

H (22:36)

Yeah, absolutely, absolutely. That's, to me, that's the more interesting angle because the solution is going to be created, we know that. But what's going to try to be added on to the solution and how does Bitcoin want to as a protocol and as a community? What is it? What a signal to the world and, but you're right, Dave, there is, there is very strong precedent to go in and to take those coins and put them back into the security budget and then reissue to minors. That's a, that's a very strong argument that I feel like could actually win out. And you could see people.

A (23:12)

It depends who's voting, doesn't it? I mean, certainly the holders, the large institutional holders who understand what you and I are saying. You know, I don't know who's going to vote. BlackRock's, you know, whatever, it's your holding doesn't do it. It's the node operators that are voting and the security operators voting. When you start seeing a trend of institutional holders operating more nodes and more and more of it, it's a question of who's voting. Because from a price perspective, I mean, if you just, let's just be simple. We all know that if a headline hit that Satoshi's coins start to move or start to get sold, people will panic and there will be a drop in the price. And I'm not going to argue that it won't happen and chances are it'll overreact beyond what it would be. But if you saw a different headline, which was, you know, Satoshi's coins will be put back into the security budget, as will all these other ones that haven't moved. I mean, the price would, would it double? I mean, it would certainly go up a huge amount because losing that overhang will be one of the most bullish things that could possibly happen. Now, I am not, look, talking my own bags, that's how I would vote and et cetera, but I don't know that people will do it because it is so against the ethos of bitcoiners to do this. I, I, I wouldn't want to handicap it, but it is important that there's nobody pricing any of that in.

H (24:27)

Right, right. And the one thing where I think, I think Tom makes a good point is that we should as a community use this opportunity to let people know that, hey, there is a fast approaching vote that's going to need to be taken in the next five years or so. And in order to vote, you need to run a node and it can be a great opportunity to increase the decentralization of the network and get bitcoiners who are self custodying their own Bitcoin to take that next step and to run a node because it's such a critical core component of the network itself. And I don't think enough bitcoiners take advantage of it.

A (25:07)

Exactly. Anybody else on the quantum subject before I unleash Carlo to vent on the banking system? Okay, Carlos, floor is yours.

E (25:20)

Thank you. Yeah, this is becoming a broken record for me of late, but I, I put out a piece today again talking about the fact that it's wonderful that all these backdoor meetings are happening and all this alleged progress is being made on the Clarity act, but we still as consumers have yet to see exactly what the hell is in the markup. And I'm urging all the senators on the Banking Committee to be transparent,

F (25:51)

maybe

E (25:52)

release it and don't release it at the 11th hour right before it goes into a committee meeting. Let's look at it and let's break down exactly what consumers are losing out on here. And let's give consumers an opportunity to push back against all of this. To me, this process has been hijacked by two sides of the coin. I think they both have their bags and their interests in this debate, and I understand that they both have a vested interest in the outcome of this. But what frustrates me is I think that lawmakers have largely let these massive influential institutional groups dictate the terms of this and they're forgetting who elected them to office and who they're supposed to ultimately be accountable to. Because what we're talking about is, we're talking about denying a vast swath of people the opportunity to earn yield on digital dollars, to protect banks and their fee structure and their fee extraction model. And on the other side of the token, coinbase and other players are frustrated because they want to continue to be able to incentivize holding USDC in a passive way. The thing that's the most frustrating about this to me is we still don't have a clear definition on exactly what use cases are, quote, economic equivalents to holding coins in a bank style depository. Fashion. This vagueness is going to be a problem going forward for the industry players and the lawyers who represent them because they're going to be very reticent to offer bold and ambitious rewards programs for fear of getting crossways with very vague language. And again, I can only speculate because for some reason it's just too inconvenient to show people what the hell's in this thing. That's my rant.

B (27:44)

Yeah.

A (27:45)

Yeah. Okay, well, cool. So look, at the end of the day, I'm not surprised, right? You know, let's just call it what it is. As much as Coinbase on many of these topics has been, you know, fighting quote for the industry, I think Coinbase right now is fighting for their own profit margins. And remember, Coinbase has first mover advantage. You know, a cynic will tell you, and I am a cynic, that if I were sitting in the executive suite at Coinbase, I'd be thinking maybe this Clarity act thing isn't such a good idea because it's going to allow a lot of other people to compete with that vertically integrated model. And we're kind of past the point where we're really at risk is I have the legal team, I can fight it, I can offer what I want to offer. So maybe we just kind of leave this thing sitting. And if nothing happens. Let's be clear, Carlo, if nothing happens, the Genius act is still in force. If nothing happens, the banks have no method to block paying rewards.

E (28:41)

Exactly.

A (28:42)

So nothing is very good for large established players. And honestly, the CFTC and SEC are moving forward on a bunch of stuff. And yeah, it's going to be harder to attract new capital in the space. But if what you want to do is delay innovation from inside the space. If I'm sitting on Coinbase board, I mean, I don't want to get the. I don't want to make people mad enough that they pull their money from me. But if I'm, if I could do so in the back ways, I would do the same thing they're doing. Look, I did it for years. I mean, I know this stuff. I know what happens inside the room where there's no reporters when you're sitting with regulators or with staffers in on the Hill. And trust me, you know, people's real agendas come out and it's only when there's witnesses that you don't see it, you know? You know, you know that they go away and it's a smile on one side and a frown on the other.

E (29:39)

Is this what's interesting to add to that too, Dave, is the regulators will hash this out. Obviously the OCC has put out their proposed rules and their, the window that's closing May 1st and the banking lobby is trying to extend that comment period in another attempt to stall this process because I think they're, they're very concerned that Clarity may, may not make it across the goal line and they're trying to hedge their bet by continuing to drag out the regulatory rollout agenda.

A (30:11)

But that's, but that's a delaying, that tactic. That's if you were medieval warfare. There was the expression rear guard action. That's where you have the people, the cavalry go out and, and sweep around to allow the infantry to kind of retreat. They are retreating on that. That is not a winning strategy. That is a delaying strategy. And you have to realize that's how banks are going to operate. I mean, the thing about clarity that's most important for all our listeners is a Clarity act will attract a fresh wave of new capital into crypto related businesses and will allow, provide the ability and the legal air cover for token issuers to change their models to, to provide value. That is the thing that's the biggest thing for clarity from a Bitcoin perspective. The Clarity act will allow new models and new entrants to offer Bitcoin in innovative ways that will attract people into Bitcoin and that's why that matters. Honestly, I think Quantum is a bigger, resolving quantum in the public mind is a bigger deal for Bitcoin than the Clarity Act. Although there is money on the sideline waiting on that too. It is not really a big deal for the institutional players that are already moving. I mean a bigger deal for a lot of people is will Kraken, will they be able to fight Kraken's license, will Coinbase getting a National Trust license matter? Will they be able to, you know, et cetera. These are the things, the details that will allow stuff. So it's a question of what matters versus what doesn't. From the perspective of people's crypto bags, it depends on the token. But clarity matters a lot more to tokens that don't seem to be providing, quote, the fundamentals. And the reason for that is often because people don't believe that the token holders get a portion of the fundamentals. So I think that it depends on what you're looking at. And so it's nuanced and yet it doesn't get portrayed that way. I mean, do you agree with me, Carlo, or am I on drugs?

E (32:08)

Yeah, I think there is much more to be gained by the altcoin market from the Clarity act than. I think the hyperbole around this yield debate is revealing. The yield debate has largely been hijacked by two competing interests. But I agree with you. There are bigger things at stake in Clarity. And the fact that we're in this intractable moment here where neither side is happy and neither side wants to give up ground on one nuanced thing, which, frankly, is. Is a sideshow from what the real purpose of the Clarity act should be, tells you everything you need to know about how the sausage is made in D.C.

A (32:53)

sad but true. Sad but true. Yeah, I really don't know. Don't know how else to say. Say it. You know, it's. It's like you look at this market and. And you see, you know, bitcoin has basically been. I mean, I don't know. I haven't measured the volatility, but if. I think if there was a. A way of quantitatively looking at volatility of an asset related to overall volatility and uncertainty, I'd say bitcoin is at about as low as it's ever been. Maybe. Maybe the lowest. Right. You know, based on, you know, you see extreme fear. You see all these other markets, you know, oil and gold flipping all over the place. And bitcoin's been. What have we been in a $3,000 range for the entire war? Yeah.

B (33:39)

I mean, now we get excited between 66 and 68.

A (33:43)

Anyone who gets excited when you comical. I mean, I'm looking at. All I could tell you is I have to squint, because the way my setup here is I have a portable monitor just to show the market because I'm not generally trading, so I'm not staring at it all the time. And I'll see what looks like, oh, my God, look, during the show, we've had a big green candle. Then I look, lean over, and I see, oh, the big green candle is from 66, 80.

B (34:06)

So, yeah, half a percent.

A (34:07)

950. Not even $150. I mean, it's like, what the hell? Are you kidding me? And that's the world we live in. Bitcoin is at equilibrium price at this point relative to all the people who have already sold and the sellers that are exhausted. And as Tom pointed out, and I think correctly, a lot of people who are waiting to see how some of these narratives resolve. Plus war. Everybody, you know, it's. People ignore the fact that during a war, you know, when this shit is happening. Nobody, no asset allocators are making big decisions. So we saw the news about Fidelity, you know, saying that whatever, I'll bet you none of those triggers are being pulled right now. People are waiting to see what the hell happens. Are they going to need to, you know, build a fallout shelter with their money? I mean, you know I'm joking but I'm not joking, right? I mean C.J. you know, you're talking to people every day. I mean your business is obviously, I don't know, you would think there's no relation to your business but is your business being impacted?

H (35:08)

I, I would say that there's a little bit of, of hesitation from big investors to take chances right now. I absolutely have to agree with that and that's just due to the uncertainty and it makes perfect sense. Sense. I think an advantage that my business has is that the shadow banking cartel and what's going on with private credit is just creating I, I, I would say that's creating more panic than the war itself because there's been a lot of capital going into private credit and nobody really knows what's under the hood. And when you can get marked down from a hundred cents to zero cents that's a problem. When BlackRock can get duped by collateral and, and literally loan against fake collateral, that's, that's a really big problem. So from the people I talk to, the, the people in, within my network, yeah the war is a concern but it's, it's kind of has its own little stand, you know one of those countdown timers on it. It's, it's limited. The straight has to be reopened. I think it's easier to resolve in one's mind that the, the war will eventually come to an end and that the fear of the, the escalation is probably minimized at this point. But everybody who's stuck in private credit right now with the gates being closed on them, I think Blue Al had upwards of 40% of their nav. Trying to, trying to leave that to me is with the people in my circles is causing more issues but you know with people's Reserve we have a really interesting ecosystem and, and TRUFI is our structured credit fund and they issue our private label mortgage backed security that we call a collateralized sound money obligation. And it's actually created interest for us because people want to see, they want 247 transparency and audibility. They want to know what they own and a lot of times in private credit you can't get those answers. And 100 cents not mark to market can turn into zero overnight, but a mark to market product. Again, it's just, it's just about transparency and it's about being able to understand the truth. Right. And that's one of the things that these public ledgers allow us to do. They allow us to display the truth and they allow for that 24 7, 365 transparency. So, you know, the problem solution type thing going on right now, yes, people are afraid. No, big, big, big checks are not being written right now. But as things calm down, I think everybody's on the sidelines, they're ready to write those checks. What they're waiting for is let's watch the war wind down. Hopefully private credit can, can wiggle out without it being printed over. And then most importantly, when am I going to be incentivized to become an investor again with, with the front end of the yield curve being stated back down lower. Those are the three main points for the people I talk to.

A (37:54)

Yeah, I think those are. There's a lot there to unpack. The, the, the private credit, it's not private credit, it's private investments, full stop. Are not marked to market. Right. So any private investment, it's not marked to market. You don't know what the value of the collateral is. That's one of the reasons that, you know, we toss it. You and I toss off the same expression all the time. And people kind of, you know, in the bitcoin community are like, oh, hypothecation bad, blah, blah, blah, blah, blah. But we'd say bitcoin is pristine collateral. Why bitcoin is pristine collateral? Because it is mark to market 24 7, 365 with absolute certainty. And that's something that no other investment in the world basically has today. But you know, there are some that can come close. I mean, gold bars, I suppose, if in fact you can, you have assayers on hand and you know, and you can, you know, cut them open and make sure and you know, yada yada yada. But it's that being pristine collateral is a huge deal. The fact that it is the only asset on the planet that trades 365. Right. You know, all the time. That is totally verifiable. There's, you don't need intermediaries to prove to you that you have good title and own. It matters. What you're talking about, however, is what's causing problems in the economy is that people have accepted collateral from the literal, worst possible collateral, that is private investments that are not mark to market that could be gated on you and yet they're used as collateral within the system. So you know, that creates what's called systemic risk. Now how am I landing this plane? Landing this plane, Simple. And that is the one thing that everybody agrees upon is the next big liquidity pump is going to happen when something breaks in the financial system. And when we say break, what do we mean? We mean that collateral fails and needs to be shored up. And that's what happened literally in 2008. That's what happened literally during the pandemic. That's what happened when SVB was, you know, they opened up this, this facility that was effectively a mass, you know, saying, okay, your us, your treasury bond, long bonds, we're going to guarantee their collateral value Even though they're 20% less valuable than you thought they were. Right. And what are we saying with private credit and private, and what's going on? It's going to be commercial real estate. By the way, is another one of these where there's funds that are in commercial real estate. You don't mark the building until you go to sell it. All of this is going to result at some point in, to quote our friend Larry Lepard in a big print. All of this will and it is as certain as we're standing here. There's no question that this is going to happen. I mean, I'll give you another one that's going on from the war. You're saying, well, people don't worry about it. Well, there are a lot of people who are worried. I mean I've talked to them about Dubai real estate and not just Dubai, but the entire region. I mean the entire GCC economy and economic value and a lot of money has been put into Bitcoin from those places. Will it have to be pulled out to shore up real estate? That is a real fear, right? That is a real fear that people have. Is it true or not? I have no idea. Personally I suspect that it comes out stronger than it ever was when all this is resolved. But that's dependent upon what I, I, my best guess of the outcome is going to be. You know, the market doesn't know how to price this.

H (41:07)

Dave, that is, oh my goodness. If you guys are in this space right now when you're listening to Dave speak, you got to understand you are a fly on the wall in some of the biggest, most well funded funds and richest people in the world. Just, just, just know that, Just know the value you're getting out of what Dave is Telling you right now, we've had people approach us about starting an international fund and TRUFY isn't even live yet. And it's because of the, the risk that we see in Dubai and all over the world and these. You know, it's funny when you look at the mortgage backed security market, the United States is $12 trillion plus. You know, internationally it's less than $1 trillion. So, so international real estate, it just from an investment standpoint is, is always much riskier than US Real estate. And when you put a pristine collateral component into a mortgage backed security and then you use geographic diversification and you put some properties from Dubai and Singapore and Thailand and Hong Kong and you start to do these things, there's a chance to make this real estate less risky. And that's a real conversation being had right now by people with billions of dollars in their bank accounts excited about the growth in Dubai, excited about the growth that we see in these international tech hubs, but also a little bit scared about the rate and pace of the expansion of the supply of those properties. And inserting a pristine collateral component can solve that problem and reduce the risk and make that international real estate much more investable. And that also translates to US Real estate. You think Donald Trump would have to come out and tell Fannie and Freddie to buy $200 billion of mortgage backed securities if people actually wanted to buy them? So how do we get interest rates down without forcing government agencies to buy debt? You have to reduce risk. It's not always about the supply of money and the demand for loans. It's about counterparty risk and inserting fusing the pristine collateral layer into mortgage backed securities. I think it's the solution for de risking international real estate. And here domestically in the United States, I think it's the solution for actually sustainably lowering interest rates.

A (43:23)

Yep. Well, I agree with that and you know it. And you add to that asking for hundreds of billions of dollars more in deficit spending to fund the war in the United States. You have all of this stuff going on. It is amazing how markets are more or less depending on the market, not ignoring the news, but it's not priced in. It's rare when you get these opportunities and you get an opportunity to invest in something with a narrative that makes sense, where people are waiting on the sidelines. It's almost like a game of musical chairs. When the music stops, everyone's going to rush for the chair that you want. Right. And I think that that's what's going to happen here and that's kind of why you saw the weirdness. We saw not weirdness, we saw the stupidity of Trump announces he's going to speak to the nation. Markets rally. Trump speaks to the nation. It's like, oh, you didn't say anything. New markets dump. I mean, it's like, Scott, you and I joke about, you know, the truth. Social post is, is the bane of anybody taking a position right now.

B (44:29)

Yeah.

E (44:30)

The tough part, too. Sorry, Scott,

A (44:36)

Go ahead.

E (44:38)

The tough part too is that, you know, the administration is really boxed in here because they've triggered, with this war, incredible pressure on treasury rates at the exact time that they need to borrow historic amounts of money to keep up with not only the deficit, the money that they need to print to shore up the economy and this new proposed defense budget of 1.5 trillion. This is a very difficult time to advance an agenda where you're going to be able to cut rates and grow the economy. Simon put out a really compelling piece of an interview, a segment of an interview that he put out the other day where he kind of broke down how this is probably not going to fare well for the United States because we were set up, presumably perfectly, to push with this new Fed chair for rate cuts, albeit maybe they weren't justified in many people's opinion, but they would have opened the door to the kind of economic stimulus and economic boom that everyone was hoping for this cycle, and that the war and the increased spending and the supply chain disruptions and everything that comes with it has really derailed that. So we're going to have to pay more interest on our debt than ever imagined in order to keep this thing going. And there are people speculating we're going to be at like, what, $60 trillion debt by 2030. This is just madness. And it just makes the case for Bitcoin all the more compelling.

H (46:16)

Yeah. You know what's, what's interesting about that is what, what Dave was saying about the, the musical chairs game because they, they feel like we're in that sweet spot right now, Right. We're, we're at that neutral rate, which of course we're not, but if they lower rates and, and it's just, it's just, it's just a crazy concept. Right? You lower rates, you figure, oh, okay, well, our interest expense is going to go down. That's a, that's a good thing. Yeah. But we got a problem because there's 8 trillion, 7, 7 plus trillion dollars in money market funds playing musical chairs right now. And when the music stops because rates go Lower and they're no longer incentivized to save. They are going to turn into investors. Just like in 2022 when they were incentivized to save, they stopped becoming investors and started becoming savers. That's where all the capital came from. That's where the flows came from. So they're the musical chairs game is ongoing. And if you lower those rates, I don't know what that magic number is going to be. We're already at 375 the four zero. Right. So I don't know what that point is. But at some point in time the rate will go low enough where the music stops and trillions of dollars will, will come out of money market funds and those savers will turn back, back into investors. Well, where do you think that capital is going to go? Everybody in this space knows where it's going to go. But what about vice versa? What happens if they raise the rates? Well, as Carlo pointed out, they're, they, they would be. The interest expense would be by far more than Social Security, more than Medicaid probably added together the number one most expensive thing, especially when you're in increasing war budgets and you have to refi 8/trillion dollars of, of debt that's coming to maturation and at that same. So you can't raise rates, you can't lower rates. They're just like holding on. They're hot. Talk about hodlers. I'm not even sure the bitcoiners are the Hodlers anymore.

A (48:04)

The problem with the Fed is they don't. They have their heads up their asses collectively. I mean you got 20,000 people working there, 900 some odd PhDs. And between the, between them I'm not sure that they could pass Economics 101 taught by someone who actually knows how the markets work. I mean it's really sad. I mean, I know I'm being bitter and I'm being dismissive and yeah, I know I out IQ most of those people and that's actually factual. So that's just before people can say I'm a kook. The truth is there's no relationship whatsoever between rates and supply chains except for the opposite of what they think. Meaning that lower rates helps you to start getting investment to address supply chains. Higher rates actually cause the opposite of what you want to cause. Oil's an external shock and supply chains are an external shock. In what happened in the pandemic was they handed money directly to people at a time. You know, it was all the stimmy checks at A time when the supply chains are constrained. Now, if you do that again, consumer inflation is going to go crazy. Fed printing has been more or less consistent throughout this period, but the rate rises were to choke off consumer demand. Well, oil price rises chokes off consumer demand. So I don't understand what the hell they would be doing now. I actually believe that Warsh understands this. I know Moran does because he's written papers about it. And the truth is, what we're really wondering about now, based on the last speech, is will the Senate actually be able to confirm Warsh to take a seat in May? I mean, it's unthinkable. But the fact is, is we don't have a Senate who's willing to do anything that Trump wants to do. And that, that, that's inclusive of the fact that Republicans have the majority. That's the real threat. The real reason is if, like, if you told me today that we are absolutely certain that Trump's new pick will get through nomination, will go through confirmation hearings and get nominated and get, get confirmed in May so that Powell doesn't stay on too long, then I would be extraordinarily bullish because I believe that the Fed wouldn't be stuck like they are stuck today because I think Powell is thinking about it the wrong way. I don't know what people think, but I think that's a very big deal. And anyone who was listening to the press conference, Scott, you were nice enough to publish it so that we could all listen to it really easily. The fact that Powell made the point that he's willing to stay on as long as necessary until there's a new one, that was not an accident. And I think a lot of. Sorry, what'd you say, Scott? That was so weird.

B (50:35)

Such a strange.

A (50:37)

Well, it wasn't weird. It's like, if you haven't noticed, every single thing in Washington is you're seeing trial balloons. Nobody does. They don't do anything without floating it first. So if you think that's not the Democrats and the Rhino Republicans basically saying, okay, Jerome, what happens if we can't? If we think that putting a Trump yes man's a bad idea, we want to go to delay and we're going to delay this. I mean, if you have to understand, there's some stupidly high number of Trump appointees that have not been confirmed. And Thune has been cooperating with Schumer to not allow Ben, you know, recess appointments. I mean, this has actually been happening. A lot of people don't talk about it, but it's been happening. It's a very big deal. So that was not weird that Powell said that. That was a trial bulletin to see. Would people. What do people think about Powell as, as dictator for life of over our money or at least until after 2028. And I hate to say it, but it's, it's, it's obviously, it's not democratic, obviously, it's not accountable. People will be outraged if you phrase it that way, but that's my fear.

D (51:44)

May I ask, in this context, Dave, like, since we were talking about this, like, you've seen the appointment of Todd Blanche, right? As opposed.

A (51:51)

As opposed to not an appointment. He's interim. That's interim. He hasn't got to confirmation.

D (51:57)

So the question is, do you think it's. It's like acceptable from where we are, like.

E (52:03)

Or.

D (52:03)

Or it's like a. It's a. It's a bad move. Just out of curiosity, since we're talking

A (52:07)

about it, I think that you need to have a Attorney general who is running the doj, who is. Goes through confirmation, has full powers. We already saw. I don't know if you noticed, Constantine, did you see that Leticia James, who did literally, much worse version of what Trump was, was convicted of doing, having her conviction thrown out, not because it wasn't indictment thrown out, not because it wasn't legitimate, but because the attorney, the U.S. attorney was not in this was not official because they had a US Attorney who was on an interim basis for too long a period of time. And so that's why she's actually able to run for office again. I mean, it's beyond the technicality. So the answer to this situation, not being able to get appointees through, it's actually a serious. It really should be a constitutional crisis. Just no one's talking about it. And I for one don't understand why no one's talking about it.

B (53:03)

Should we just get the one who will give US More than 3% of the Epstein documents?

A (53:08)

That would be good. Well, I mean, we'll see. I mean, we should get all of them because there's no way. Look, here's the argument, Scott, and it drives me crazy. I mean, you and I are on the same page on this, but let's just dive in because you mentioned it. They always claim they can't give out documents that pertain to an active investigation for pursuant to criminal action. Let's just admit that isn't going to happen and let the public have it all. And then when the public has it all, then the public will ostracize and take care of the people the way it is. And once it's out there, does that necessarily really make it a criminal problem? I don't know. But I do know that that's the thing that the shield they hide behind. And it's disgusting. But the same is true for all of this. Whether it's Epstein files or interest rate decisions, it doesn't matter. The fact that our process is broken because half the country thinks that the election shouldn't matter. That's where we're at. And by the way, if it were relitigated today, the election will be the opposite, because nobody wants to be at war. So, you know, so be it. So anyway, it's all, all of this stuff is connected. Constantine is the short answer to your question. But, you know, do I think that she was doing a terrible job? Yeah, objectively, for the same reason Scott just said it.

B (54:23)

I think Tulsa Gabbard's next.

A (54:25)

By the

E (54:28)

that's the rumor is that

B (54:29)

Tulsi Gabbard will be next. It seems like any woman in the administration is okay.

D (54:36)

I hope Tulsa Gabber will, will stay, actually. I think she's doing a phenomenal job as opposed to, you know, others, but

B (54:43)

not a matter of the job they're doing. I'm saying that it was actually in the news yesterday that she'll be kicked.

A (54:50)

Well, I mean, we don't know what's going to happen. I, you know, it's like once again, it could be a trial balloon. You know, I hate to say it, but, you know, it's all narrative. How outraged would people be if they, if they systematically get rid of all the women in the administration? And maybe that's, who knows? I, I, I, I don't want to speak about it, but the fact is with all this dysfunction, let's bring it back to crypto and bring it back to bitcoin with all the dysfunction. And is there anybody out there who believes that our governments are getting, going to get more functional right now? And if you don't, then what's the antidote? And what, and what do you want to hold? And that's why the, the quantum thing is such a big deal, because it's really a question of relative functionality. If people believe that bitcoin's going to stay dysfunctional, okay, fine. Then it's not the antidote. If people believe that that is not the case, however, then it is the antidote, right? I mean, I'm not going to say bitcoin fixes it, but it is Certainly from an investment point of view, if you know that all roads lead to monetary inflation, then you need to hold something. I mean, I'll continue to say that. Look, I, I thought gold was going to bounce. It did. It's, you know, wherever it is. I thought silver was going, was, was in its range. It's kind of sitting where it is. You know, it. But, you know, what else do you buy? Right? That's the question, and that's what investors have to have to grapple with.

B (56:16)

Great way to end it. You buy bitcoin and you wait, call it a day. CJ Asked how you lift your mic. I hope I said exactly the same thing.

H (56:26)

Yeah, no, I, I, I just quickly. I think that the narrative that Dave is pointing out is so important because it's the narrative that's really leading to the mispricing and that's creating for the opportunity everybody in this space has right now to load up on bitcoin. And the narrative of Warsh being a hawk and, and like that is simply them floating that out there for narrative control. You think Trump would complain about Powell, tell him that he's too late? Tell him he needs to lower interest rates and then go pick a hawk? No, not at all. But they have to sell him as a hawk. He, he wrote papers about how AI is deflationary and that can lead to lower rates, but they have to sell him as a hawk because it's more about narrative control than it is anything else. And ultimately, that's the real opportunity for everybody in this space. Ignore the narrative. Look at the fundamentals. Bitcoin, gold, silver, it's all there. And if you position properly, when all these narratives get destroyed by reality, you will be the benefactor.

B (57:22)

I think C.J. just wrapped us. Dave, what do you think spells good as it gets?

A (57:27)

Exactly what I was thinking. Have a great weekend, everybody.

B (57:30)

See you guys Monday.