1
00:00:00,000 --> 00:00:16,620
You can probably hear in the background the sound of traffic, dogs barking, the occasional

2
00:00:16,620 --> 00:00:19,560
crack that we hope is a firework, not a gunshot.

3
00:00:19,560 --> 00:00:21,860
And it's because we are in San Salvador.

4
00:00:21,860 --> 00:00:26,940
We've been in El Salvador for 10 days, and we didn't talk about it on our first day in

5
00:00:26,940 --> 00:00:29,620
Bitcoin Beach when we recorded our episode.

6
00:00:29,620 --> 00:00:33,540
Because I wanted to sort of let it settle, kind of have an impression and not just give

7
00:00:33,540 --> 00:00:34,540
a hot take.

8
00:00:34,540 --> 00:00:36,260
Especially at that time when I was rather sick.

9
00:00:36,260 --> 00:00:38,260
My take might have been a little more pessimistic.

10
00:00:38,260 --> 00:00:40,460
It would not have been fair and balanced.

11
00:00:40,460 --> 00:00:42,580
I wasn't feeling very good.

12
00:00:42,580 --> 00:00:44,420
And we hadn't experienced the full flavor.

13
00:00:44,420 --> 00:00:47,620
El Zante is, you know, it's out there in the country.

14
00:00:47,620 --> 00:00:49,580
It is not like San Salvador.

15
00:00:49,580 --> 00:00:51,800
It's a very different vibe here in San Salvador.

16
00:00:51,800 --> 00:00:57,320
And to be frank, as a tourist, if you go to El Zante, there are two reasons to go where

17
00:00:57,320 --> 00:00:59,160
you'll feel like you got your money's worth.

18
00:00:59,160 --> 00:01:05,440
If you want to go and surf and surf some sick waves, El Zante is great.

19
00:01:05,440 --> 00:01:10,560
If you want to experience a Bitcoin community, El Zante is great.

20
00:01:10,560 --> 00:01:15,480
Aside from that, it's frankly overpriced, I think, for what you get, at least the hotel

21
00:01:15,480 --> 00:01:16,480
rooms.

22
00:01:16,480 --> 00:01:18,960
Yeah, but if you go by the price in the States, it's still a good deal.

23
00:01:18,960 --> 00:01:19,960
Right.

24
00:01:20,120 --> 00:01:23,120
Compared to a hotel room anywhere in the States.

25
00:01:23,120 --> 00:01:25,920
But it's tourist priced for El Salvador.

26
00:01:25,920 --> 00:01:27,000
And it's very basic.

27
00:01:27,000 --> 00:01:30,640
I think that El Zante has definitely played Bitcoin the right way.

28
00:01:30,640 --> 00:01:33,520
They used it to become an international name.

29
00:01:33,520 --> 00:01:36,640
Their roads are being paved for the first time right now.

30
00:01:36,640 --> 00:01:40,880
So that's, on the one hand, a measure of how low the level of development is, temper your

31
00:01:40,880 --> 00:01:41,880
expectations.

32
00:01:41,880 --> 00:01:43,840
Do not drink the water.

33
00:01:43,840 --> 00:01:48,880
On the other hand, you can see that they're definitely experiencing benefits, likely due

34
00:01:49,080 --> 00:01:51,280
to the tourism associated with Bitcoin.

35
00:01:51,280 --> 00:01:52,360
I mean, it's not just the roads.

36
00:01:52,360 --> 00:01:54,600
The whole place is a construction project.

37
00:01:54,600 --> 00:01:58,000
They're fixing up buildings that look like they haven't been touched in 30 years.

38
00:01:58,000 --> 00:02:01,280
They're laying down infrastructure to improve some of the Internet performance.

39
00:02:01,280 --> 00:02:03,240
I mean, that's good to see.

40
00:02:03,240 --> 00:02:07,280
In a year or two, it's going to be a different town, as long as this kind of tourism money

41
00:02:07,280 --> 00:02:07,960
keeps flowing in.

42
00:02:07,960 --> 00:02:12,760
But if you are a Bitcoiner and you bring your family, frankly, I would not recommend it

43
00:02:12,760 --> 00:02:16,480
because the El Zante beach is a freaking death trap.

44
00:02:16,480 --> 00:02:18,280
There's no way getting around it.

45
00:02:18,280 --> 00:02:20,640
We had two near misses with your son.

46
00:02:20,640 --> 00:02:24,040
I mean, I went on the beach once, sprained my ankle.

47
00:02:24,040 --> 00:02:25,240
That was also due to your son.

48
00:02:25,240 --> 00:02:28,720
Yeah, he's a lot to keep up with, that's for sure.

49
00:02:28,720 --> 00:02:32,040
I could see if you just love the ocean and you didn't want to get in it and you wanted

50
00:02:32,040 --> 00:02:36,200
a nice, chill hotel to stay at that is going to pamper you a little bit and you get to

51
00:02:36,200 --> 00:02:38,120
just hang and spend your sats.

52
00:02:38,120 --> 00:02:39,840
Yeah, it's not you're not going to go do a little swim.

53
00:02:39,840 --> 00:02:40,960
And there's not a lot of services.

54
00:02:40,960 --> 00:02:44,320
So when I did get sick, you know, we couldn't really even get like Pepto-Bismo.

55
00:02:44,360 --> 00:02:49,520
It was hard to get our hands on just the basics and to do it, you have to network.

56
00:02:49,520 --> 00:02:53,640
You have to know somebody who knows somebody who can then call somebody to go get a car

57
00:02:53,640 --> 00:02:55,400
and grab something for you from someplace.

58
00:02:55,400 --> 00:02:55,920
Right.

59
00:02:55,920 --> 00:03:00,400
And that's very kind of third world budget vacation.

60
00:03:00,400 --> 00:03:01,640
So plan accordingly.

61
00:03:01,640 --> 00:03:04,840
Yeah, I mean, your money goes further and the people are really nice.

62
00:03:04,840 --> 00:03:07,600
I know it's cliche to say, but everybody was very helpful and very nice.

63
00:03:07,600 --> 00:03:14,200
And actually, just an anecdote, I was walking on the side of a highway because I

64
00:03:14,200 --> 00:03:17,920
was getting you some medicine at the pharmacy and some guys pull up.

65
00:03:18,080 --> 00:03:21,080
And my thought is, oh, man, am I getting kidnapped?

66
00:03:21,080 --> 00:03:22,560
Did I did I do something dumb?

67
00:03:22,560 --> 00:03:25,160
But instead, they were, hey, what's going on?

68
00:03:25,160 --> 00:03:27,200
You going somewhere like what?

69
00:03:27,200 --> 00:03:29,280
You know, and I said, oh, yeah, I'm going to the pharmacy.

70
00:03:29,280 --> 00:03:30,160
I need to get some medicine.

71
00:03:30,160 --> 00:03:31,400
They're like, oh, what do you need?

72
00:03:31,400 --> 00:03:35,920
And they went and they got everything I asked for with very limited Spanish.

73
00:03:36,080 --> 00:03:37,200
And they did a great job.

74
00:03:37,200 --> 00:03:39,920
And rando strangers on the side of the road and a pickup truck.

75
00:03:41,120 --> 00:03:41,760
That tells you, right?

76
00:03:41,800 --> 00:03:44,480
I mean, that's that is a great anecdote of how kind people are.

77
00:03:44,560 --> 00:03:47,920
And it's clear that it's a culture that's relied on each other for a long time.

78
00:03:47,920 --> 00:03:49,400
They haven't been able to rely on anybody else.

79
00:03:49,480 --> 00:03:53,400
So they've built this sort of network that, I mean, it's not anything like at home.

80
00:03:53,520 --> 00:03:56,160
I'll tell you that I just at home, you just put on, you pull up the Uber

81
00:03:56,160 --> 00:03:57,160
eats app and order something.

82
00:03:57,360 --> 00:04:03,160
And I think that gets to the extremes of El Salvador because we're now in San

83
00:04:03,160 --> 00:04:05,840
Salvador, it's the one major city.

84
00:04:05,960 --> 00:04:07,720
It's higher elevation.

85
00:04:07,720 --> 00:04:08,440
It's cooler.

86
00:04:08,480 --> 00:04:09,680
El Zante is really hot.

87
00:04:09,720 --> 00:04:10,840
This is a cooler place.

88
00:04:10,880 --> 00:04:12,600
It's in this sort of volcanic valley.

89
00:04:12,600 --> 00:04:16,800
We're looking across this striking cityscape with green mountains in the

90
00:04:16,800 --> 00:04:18,360
background, but also a lot of smog.

91
00:04:18,440 --> 00:04:25,680
And we're on top of a very kind of luxury apartment building on the hills, looking

92
00:04:25,680 --> 00:04:29,240
out, you know, there, there's sort of luxury villas underneath us and around us.

93
00:04:29,440 --> 00:04:34,040
And you look further and you see corrugated roofs and people living in

94
00:04:34,040 --> 00:04:37,040
conditions that are not legal in the United States.

95
00:04:37,080 --> 00:04:37,680
Oh, absolutely.

96
00:04:37,760 --> 00:04:38,680
No running water.

97
00:04:38,720 --> 00:04:39,880
Yeah, yeah, definitely.

98
00:04:40,000 --> 00:04:44,880
Um, although that said, we have so far between all of us counted one homeless

99
00:04:44,880 --> 00:04:46,960
person, there's complicated reasons for that.

100
00:04:46,960 --> 00:04:51,800
Some of them good, some of them bad, but it's definitely a developing country.

101
00:04:51,880 --> 00:04:55,560
And I think there are challenges for everyone here.

102
00:04:55,600 --> 00:04:59,680
The Bitcoin law we think has been an unequivocal good.

103
00:04:59,840 --> 00:05:01,600
Yeah, it's hard to twist it any other way.

104
00:05:01,600 --> 00:05:02,320
I mean, sure.

105
00:05:02,320 --> 00:05:06,160
They haven't, they haven't gotten huge returns on their bag necessarily, but I

106
00:05:06,160 --> 00:05:10,920
think the data in the overall tourism suggests that El Salvador has become a

107
00:05:10,920 --> 00:05:14,480
brand name now that just a few years ago, it wasn't even on anyone's map.

108
00:05:14,560 --> 00:05:14,760
Yeah.

109
00:05:14,760 --> 00:05:17,160
And things sort of took a hit during COVID, but they're bouncing back.

110
00:05:17,320 --> 00:05:18,560
I was just looking at the numbers.

111
00:05:18,680 --> 00:05:20,720
El Salvador has exceeded its projections.

112
00:05:20,760 --> 00:05:24,840
They've had 1.6 million visitors as of June, and the country received through

113
00:05:24,840 --> 00:05:30,640
that about 1.6 billion in foreign currency by June for a $20 billion economy.

114
00:05:30,680 --> 00:05:31,360
That's a lot.

115
00:05:31,440 --> 00:05:36,080
And their target they're on track to reach 2.9, so $3 billion.

116
00:05:36,240 --> 00:05:39,080
In money brought in by tourism, $3 billion.

117
00:05:39,200 --> 00:05:41,080
That's got to shut, that's got to move the needle for them.

118
00:05:41,120 --> 00:05:42,400
Just for context.

119
00:05:42,400 --> 00:05:43,560
I'm going to mention this later.

120
00:05:43,600 --> 00:05:49,600
The 2023 budget for the U S secret service that mainly is spent on protecting the

121
00:05:49,600 --> 00:05:54,560
U S president and past presidents and their families was about $3 billion for the

122
00:05:54,560 --> 00:05:55,960
secret service, 3 billion a year.

123
00:05:56,240 --> 00:05:56,800
Let's be honest.

124
00:05:57,080 --> 00:06:00,880
The secret service, not our biggest agency, not our, not at all.

125
00:06:02,120 --> 00:06:04,320
And quite naughty whenever they travel.

126
00:06:04,320 --> 00:06:07,560
There's always a scandal about parties and call girls in hotel rooms.

127
00:06:08,800 --> 00:06:09,720
Well, it's not an easy job.

128
00:06:09,720 --> 00:06:10,080
I'm sure.

129
00:06:10,160 --> 00:06:12,600
So it's been a really interesting, interesting perspective to come to San

130
00:06:12,600 --> 00:06:14,440
Salvador and see a little more Westernized area.

131
00:06:14,440 --> 00:06:17,000
You know, they got a McDonald's here and Wendy's and things like that.

132
00:06:17,080 --> 00:06:21,000
And you got Uber and Uber eats, but everything's just a little different still.

133
00:06:21,000 --> 00:06:25,080
It's been, it's been one of the exact experience I wanted is we've read so much

134
00:06:25,120 --> 00:06:27,280
about Bitcoin and El Salvador, good and bad.

135
00:06:27,280 --> 00:06:30,160
And we've read so much about McKelley and how the people respond to it.

136
00:06:30,280 --> 00:06:34,280
And actually being here, having all the conversations we've had, seeing it, being

137
00:06:34,280 --> 00:06:36,400
on the ground, it's been a great education.

138
00:06:36,480 --> 00:06:40,800
I'm tempted to say something controversial in that if you were thinking about moving

139
00:06:40,800 --> 00:06:45,800
to El Salvador, because you're really into Bitcoin, I wouldn't do it because this

140
00:06:45,800 --> 00:06:49,040
is still a place in political transition.

141
00:06:49,080 --> 00:06:53,160
But Kelly has a lot of approval, but there are reorganizations

142
00:06:53,160 --> 00:06:54,800
within the Buckeye regime.

143
00:06:55,040 --> 00:06:57,360
There's that risk, although I don't necessarily feel like you

144
00:06:57,360 --> 00:06:58,760
don't have that risk in the UK.

145
00:06:58,760 --> 00:07:00,040
You kind of have that risk in the States.

146
00:07:00,040 --> 00:07:02,400
It's not at the level where it's smaller.

147
00:07:02,400 --> 00:07:03,840
So it's easier for you to stand out, right?

148
00:07:03,840 --> 00:07:07,160
Like this is your really would be a nail sticking out on the board, but there's so

149
00:07:07,160 --> 00:07:10,760
many, it feels like there's so many of those same kinds of risks, even back home.

150
00:07:10,840 --> 00:07:16,480
In the UK and the US, I think your risk as a Bitcoiner is violating some arbitrary

151
00:07:16,480 --> 00:07:21,120
enforcement of money transmitting laws, which could absolutely wreck your life.

152
00:07:21,160 --> 00:07:26,440
Here, I think your risk is a more systemic political risk, a country in

153
00:07:26,440 --> 00:07:32,840
transition, violence down, but driving from the coast to San Salvador, we saw

154
00:07:32,880 --> 00:07:37,960
soldiers just deployed along the side of the highway, some with armored vehicles,

155
00:07:37,960 --> 00:07:39,760
with machine guns mounted on them.

156
00:07:39,880 --> 00:07:45,320
And they're there to provide a visible presence of a law and order crackdown.

157
00:07:45,400 --> 00:07:46,160
That's not cheap.

158
00:07:46,240 --> 00:07:47,480
You don't spend that money.

159
00:07:47,480 --> 00:07:48,880
You don't deploy those resources.

160
00:07:48,880 --> 00:07:53,080
You don't take the risk of arming huge numbers of people who could, you know,

161
00:07:53,080 --> 00:07:57,720
turn independent if things deteriorated, unless you really needed to.

162
00:07:57,800 --> 00:08:02,800
And so I think that is a, a data point in evaluating the overall security.

163
00:08:02,840 --> 00:08:05,920
Now, when we talk to the locals, they like it now, that's such an interesting

164
00:08:06,000 --> 00:08:09,640
perspective to me, because I see cops with ARs and shotguns and I think,

165
00:08:09,720 --> 00:08:11,040
woo, that's a little intense.

166
00:08:11,080 --> 00:08:14,920
I don't know about that, but to them, they feel like it's a sign of safety.

167
00:08:15,200 --> 00:08:18,360
I mean, I haven't talked to a single local that doesn't like the presence.

168
00:08:18,480 --> 00:08:23,280
And that I think is a sense of the, the low bar that El Salvador is coming off

169
00:08:23,280 --> 00:08:27,200
of, and things are definitely looking up in many ways for El Salvador.

170
00:08:27,280 --> 00:08:28,880
Tourism revenue has been up.

171
00:08:29,200 --> 00:08:30,480
Their credit rating just got upgraded.

172
00:08:31,080 --> 00:08:32,120
That's all positive.

173
00:08:32,240 --> 00:08:36,680
Unfortunately, it seems absolutely clear at this point that we are

174
00:08:36,680 --> 00:08:39,360
entering the next great recession.

175
00:08:39,480 --> 00:08:44,480
And I'm going to make an argument based on this week's research that we appear

176
00:08:44,520 --> 00:08:49,440
to be heading into a financial crisis that will absolutely dwarf the 2008

177
00:08:49,480 --> 00:08:54,000
great monetary contraction and for places like El Salvador, that's going

178
00:08:54,000 --> 00:08:55,520
to be incredibly difficult.

179
00:08:55,560 --> 00:08:57,000
They're already dollarized.

180
00:08:57,080 --> 00:09:00,400
They are mainlining the global financial system.

181
00:09:00,400 --> 00:09:01,480
There is no escape for them.

182
00:09:01,480 --> 00:09:06,200
There's no escape for anyone, but for developing countries reliant on tourism,

183
00:09:06,280 --> 00:09:10,800
this is going to be a very challenging period because whenever there is

184
00:09:10,880 --> 00:09:14,880
recession, contraction, tourism revenues just hit the floor and keep on going

185
00:09:14,880 --> 00:09:17,400
down. So that is definitely going to be a shock.

186
00:09:17,600 --> 00:09:19,600
It will get into it further as we get into the show.

187
00:09:19,600 --> 00:09:23,120
But I think it's sort of pressure that we're sitting here looking out over the

188
00:09:23,120 --> 00:09:25,680
Capitol right now, literally from like a bird's nest view.

189
00:09:25,800 --> 00:09:29,160
And what we're about to talk about today, this place could be, it could be a

190
00:09:29,160 --> 00:09:30,800
totally different country in a year.

191
00:09:31,560 --> 00:09:38,400
This is the Bitcoin dad pod recorded on Friday, November 10th, 2023 from San

192
00:09:38,480 --> 00:09:41,400
Salvador. I am here as always with me.

193
00:09:41,400 --> 00:09:43,880
It's Chris. Hey, hey, hello from San Salvador, everybody.

194
00:09:43,920 --> 00:09:45,600
Thanks for joining us on today's show.

195
00:09:45,640 --> 00:09:50,720
We are going to discuss the adopting Bitcoin conference that we just attended

196
00:09:50,720 --> 00:09:54,040
and hosted a stage at in economic news.

197
00:09:54,200 --> 00:09:59,080
Germany has been in recession for over a year and is going deeper into

198
00:09:59,080 --> 00:10:01,800
recession. We have just had a U.S.

199
00:10:01,800 --> 00:10:07,320
Treasury auction fail, not in an unequivocal way that some won't deny, but

200
00:10:07,360 --> 00:10:09,360
it was a failure. This is the end game.

201
00:10:09,600 --> 00:10:13,440
Let's talk about that. Arthur Hayes has a new article called The

202
00:10:13,440 --> 00:10:18,520
Periphery, which is one of the most terrifying pieces of analysis and

203
00:10:18,520 --> 00:10:21,600
speculation I have read in the past 10 years.

204
00:10:21,760 --> 00:10:25,480
I'm honestly worried. And I think that he does a great job of tying together

205
00:10:25,600 --> 00:10:31,840
multiple macro and financial trends and geopolitical ones into a compelling

206
00:10:31,920 --> 00:10:34,680
bear case for basically everything.

207
00:10:34,720 --> 00:10:40,800
In privacy, the UK has pulled the trigger on KYCing every crypto

208
00:10:40,800 --> 00:10:43,160
transaction for travel rule compliance.

209
00:10:43,160 --> 00:10:45,560
Remember, the travel rule comes from the U.S.

210
00:10:45,640 --> 00:10:48,120
This is definitely coming to the U.S.

211
00:10:48,160 --> 00:10:52,240
The next wave of operation choke point financial surveillance.

212
00:10:52,280 --> 00:10:54,360
It's here. It's going to get up a notch.

213
00:10:54,360 --> 00:10:59,120
If you have not taken care of your financial on-chain privacy at this

214
00:10:59,120 --> 00:11:00,560
point, I don't know what to say.

215
00:11:00,680 --> 00:11:04,560
It is too late is perhaps too pessimistic, but you need to do this

216
00:11:04,560 --> 00:11:07,360
now. Giving that advice might be illegal under the travel rule.

217
00:11:07,400 --> 00:11:11,200
I don't know. We have some altcoin shenanigans that we may or may not

218
00:11:11,200 --> 00:11:13,480
get to. It's silly.

219
00:11:13,600 --> 00:11:15,280
It's to be expected.

220
00:11:15,280 --> 00:11:18,160
It's shot in Florida. We might need a pickup after the main show.

221
00:11:18,200 --> 00:11:21,800
And then in Bitcoin education, there are some changes to the Bitcoin

222
00:11:21,800 --> 00:11:27,560
dev mailing list and also an interesting proposal on increasing

223
00:11:27,600 --> 00:11:32,320
lightning efficiency using covenants, a subject that we also discussed

224
00:11:32,320 --> 00:11:36,120
with Waxwing in an upcoming interview that will release soon.

225
00:11:37,480 --> 00:11:39,840
And then we've got some boosts and that's our show.

226
00:11:39,880 --> 00:11:42,640
Yeah, it is. And we've got a noisy road.

227
00:11:42,920 --> 00:11:44,520
So maybe some listeners down there.

228
00:11:44,560 --> 00:11:46,560
Maybe they can hear us. So they're listening live.

229
00:11:46,560 --> 00:11:48,280
It's a live edition of the Bitcoin ad pod.

230
00:11:48,520 --> 00:11:51,600
Let's talk about adopting Bitcoin because we just wrapped that up a bit ago.

231
00:11:51,640 --> 00:11:53,760
This big event down here brought in a lot of tourism.

232
00:11:53,840 --> 00:12:01,800
There were 1100 attendees, 350 from El Salvador, over 150 sessions.

233
00:12:01,840 --> 00:12:06,840
And we mainlined an entire stage because we were the emcees of the

234
00:12:06,840 --> 00:12:12,280
Galoi stage. Galoi is the Bitcoin company that organizes the conference

235
00:12:12,280 --> 00:12:16,160
and is working on Bitcoin adoption worldwide, but especially in San Salvador.

236
00:12:16,200 --> 00:12:19,160
So what were your impressions, Chris, as someone who's been to many

237
00:12:19,160 --> 00:12:21,640
conferences, many Linux conferences of different types?

238
00:12:21,680 --> 00:12:23,480
What kind of a conference was this?

239
00:12:23,560 --> 00:12:24,760
And what did you think?

240
00:12:24,880 --> 00:12:27,360
This was a very busy conference.

241
00:12:27,400 --> 00:12:30,720
You know, I'd say a lot of conferences do this very early on when they first

242
00:12:30,720 --> 00:12:33,040
start is they just really pack in the sessions.

243
00:12:33,040 --> 00:12:36,400
So that way, if you're making the trip, there's going to be something for you.

244
00:12:36,440 --> 00:12:39,280
But the other problem is, is that then there's so many sessions that it's

245
00:12:39,280 --> 00:12:41,040
almost noise and you can't make all of them.

246
00:12:41,040 --> 00:12:42,680
So there was a little bit of that problem.

247
00:12:43,040 --> 00:12:46,040
If you're OK, kind of picking and choosing and scheduling your time during

248
00:12:46,040 --> 00:12:48,880
the day, it's not so bad, but you see some folks get overwhelmed and they kind

249
00:12:48,880 --> 00:12:50,920
of just end up in the hallway track and stuff like that.

250
00:12:51,040 --> 00:12:54,000
For our room, the Deloitte stage, they packed them in there pretty good.

251
00:12:54,080 --> 00:12:57,600
And I probably would have cut 45% of them.

252
00:12:57,720 --> 00:13:01,840
And then given the remaining another five minutes or so each, and then done

253
00:13:01,840 --> 00:13:04,800
like a five minute transition time between each speaker so they could set

254
00:13:04,800 --> 00:13:07,360
up slides in the laptop, and then I probably would have baked in like a 30

255
00:13:07,360 --> 00:13:09,760
minute lunch and then just gone for more signal.

256
00:13:09,840 --> 00:13:13,040
But I, I've every conference I've ever been to that starts out.

257
00:13:13,040 --> 00:13:14,000
This is always how they start out.

258
00:13:14,040 --> 00:13:15,520
They always do this at the beginning.

259
00:13:15,600 --> 00:13:18,760
And then eventually somebody gets to them and says, Hey, less is more.

260
00:13:18,760 --> 00:13:19,800
And then they internalize it.

261
00:13:19,880 --> 00:13:22,160
And if they make that transition, then the conference really seems

262
00:13:22,160 --> 00:13:23,400
to stay around over the long haul.

263
00:13:23,520 --> 00:13:25,080
And I think it's kind of at that stage right now.

264
00:13:25,160 --> 00:13:27,400
The part that I was pleased to see is more locals.

265
00:13:27,400 --> 00:13:29,560
In fact, there were talks that were entirely in Spanish.

266
00:13:29,560 --> 00:13:32,160
There was an ongoing lightning workshop that students were

267
00:13:32,160 --> 00:13:34,480
involved in all day long, both days.

268
00:13:34,480 --> 00:13:35,680
I thought that was kind of cool.

269
00:13:35,680 --> 00:13:38,520
And then, you know, just seeing more locals showing up that are

270
00:13:38,520 --> 00:13:41,600
trying to adopt Bitcoin because I was told I haven't been to the first two,

271
00:13:41,600 --> 00:13:43,680
but I was told that the first two adopting Bitcoin events, there

272
00:13:43,680 --> 00:13:45,440
was essentially almost no locals.

273
00:13:45,520 --> 00:13:48,880
So to see, you know, a forthish show up being locals that want to know more

274
00:13:48,880 --> 00:13:50,040
about Bitcoin, I think that's a good trend.

275
00:13:50,040 --> 00:13:52,840
And it maybe shows that the adopting Bitcoin conference is serving

276
00:13:52,840 --> 00:13:54,000
the local community more and more.

277
00:13:54,120 --> 00:13:55,800
Miss El Salvador was there.

278
00:13:55,800 --> 00:13:59,920
There was definitely more of a local buy-in, which I thought was fantastic.

279
00:14:00,160 --> 00:14:05,440
I think that like El Salvador, it's important to level set for Bitcoin conferences.

280
00:14:05,560 --> 00:14:09,720
This is still an incredibly small, relatively fringe community.

281
00:14:09,840 --> 00:14:12,400
It is so early in many respects.

282
00:14:12,520 --> 00:14:16,800
And so to keep a conference going for three years at the level of attendance

283
00:14:16,800 --> 00:14:18,640
that they have achieved is a huge achievement.

284
00:14:18,720 --> 00:14:18,880
Yeah.

285
00:14:18,880 --> 00:14:21,040
Especially this year when it's an advertising bear market.

286
00:14:21,200 --> 00:14:22,720
This is a bear market conference.

287
00:14:22,840 --> 00:14:26,760
The fact that Bitcoin is ripping after the conference means that there was

288
00:14:26,880 --> 00:14:30,120
no benefit to the Bitcoin price promotion for this conference.

289
00:14:30,120 --> 00:14:33,080
And so if it had been a few months later, I think it could

290
00:14:33,080 --> 00:14:34,800
easily have been four times the size.

291
00:14:34,920 --> 00:14:37,640
For us Bitcoiners, it's kind of nice because you don't have all of the, you

292
00:14:37,640 --> 00:14:40,040
know, the people that are aping in that just want to talk about price there.

293
00:14:40,040 --> 00:14:42,680
It's a lot more fundamentals about building out and stuff like that.

294
00:14:42,680 --> 00:14:45,400
So that if I was going to pick, that'd be, that'd be the type I'd prefer.

295
00:14:45,480 --> 00:14:48,880
But I think he does speak to the fact that it's, it's holding its attendance,

296
00:14:49,000 --> 00:14:52,800
drawing in more locals and just continuing to go another year in a bear

297
00:14:52,800 --> 00:14:53,760
market is a good sign.

298
00:14:53,760 --> 00:14:56,800
And if, if they can, you know, keep it organized and keep it going, I think

299
00:14:56,800 --> 00:14:58,600
they got something here, I just think it needs a little refinement.

300
00:14:58,680 --> 00:15:04,000
I think that the conference also reflects the absolute grind of adoption.

301
00:15:04,080 --> 00:15:08,720
I attended last year and there was still this momentum and excitement

302
00:15:08,800 --> 00:15:14,040
of the El Salvador Bitcoin law of the potential for the Bitcoin Lightning

303
00:15:14,080 --> 00:15:17,160
network as a consumer and business payments layer.

304
00:15:17,240 --> 00:15:23,680
The technology was hot and it still is, but it hadn't been battle tested the

305
00:15:23,680 --> 00:15:25,320
way it has over the past year.

306
00:15:25,360 --> 00:15:30,360
And it was too early then to see what the pace of adoption in El Salvador would

307
00:15:30,360 --> 00:15:32,880
look like, what that curve, what that angle is.

308
00:15:33,000 --> 00:15:37,360
And I think we can see now that it is a very difficult curve.

309
00:15:37,360 --> 00:15:43,240
It is a grind and Galois announced onboarding a relatively large.

310
00:15:43,240 --> 00:15:43,480
Yeah.

311
00:15:43,480 --> 00:15:49,480
40,000 locations company to use Bitcoin Lightning network for cash management.

312
00:15:49,480 --> 00:15:54,520
It's a local company that moves money around between grocery stores, which

313
00:15:54,520 --> 00:15:58,240
generally settling cash, which means they're trucking cash between each other

314
00:15:58,360 --> 00:16:02,800
in a country where every nice neighborhood has a guard with a shotgun.

315
00:16:02,800 --> 00:16:04,040
And those are not for show.

316
00:16:04,080 --> 00:16:06,640
They have a little pack on their belt that are full of shells.

317
00:16:06,760 --> 00:16:07,720
Those guys are ready to go.

318
00:16:07,840 --> 00:16:08,440
Yeah, I know.

319
00:16:08,440 --> 00:16:12,920
So you can imagine the tactical risk of moving the store's wealth around on

320
00:16:12,920 --> 00:16:16,200
trucks in a country like this, especially where there's roads that are pretty bad.

321
00:16:16,200 --> 00:16:17,320
The traffic's really bad.

322
00:16:17,400 --> 00:16:20,400
There's lots of opportunity for somebody to roll up right alongside that truck.

323
00:16:20,600 --> 00:16:24,840
If I were in that cash truck, it would be like that scene from Sicario when they

324
00:16:24,840 --> 00:16:30,040
rush out of Mexico and then they get stuck in the traffic jam and the hit men

325
00:16:30,040 --> 00:16:32,000
start coming out of the stopped cars.

326
00:16:32,080 --> 00:16:32,400
Yep.

327
00:16:33,280 --> 00:16:35,880
So you could see for them being able to move this all digitally.

328
00:16:36,000 --> 00:16:36,760
That's a huge win.

329
00:16:36,920 --> 00:16:41,640
I think it's actually a bigger deal for the staff of these stores and for users,

330
00:16:41,640 --> 00:16:45,760
obviously, but the staff right now and it's kind of hit and miss very few point of

331
00:16:45,760 --> 00:16:48,320
sales terminals here have lightning integrated.

332
00:16:48,520 --> 00:16:51,920
They might show a QR code for an on-chain transaction, but I don't really feel like

333
00:16:51,920 --> 00:16:53,760
doing that right now with the fees, what they are.

334
00:16:53,840 --> 00:16:59,040
And so it was sort of dependent on the shop owners to have a phone with the Chivo

335
00:16:59,040 --> 00:17:02,640
wallet or some app that when the person asks for Bitcoin, they could go, okay, go

336
00:17:02,640 --> 00:17:03,760
get the Bitcoin phone.

337
00:17:03,840 --> 00:17:05,160
Hey, go get the Bitcoin phone.

338
00:17:05,200 --> 00:17:07,800
And they'd bring over the Bitcoin phone and then they two out of three times the

339
00:17:07,800 --> 00:17:09,080
transaction would actually go through.

340
00:17:09,160 --> 00:17:13,080
It's a step change to integrate it in at the point of sales screen, right, where the

341
00:17:13,080 --> 00:17:15,480
merchant staff doesn't have to do anything.

342
00:17:15,480 --> 00:17:16,400
They just ring it up.

343
00:17:16,480 --> 00:17:21,080
The QR code or whatever it is shows up on the screen that the customer is using.

344
00:17:21,080 --> 00:17:24,280
And if they whip out their phone and scan it, they're doing a Bitcoin transaction.

345
00:17:24,400 --> 00:17:26,880
They didn't, you know, the staff didn't have to go get the Bitcoin phone.

346
00:17:27,000 --> 00:17:30,640
You don't have to do that awkward, um, I know it'd just be easier and quicker to do

347
00:17:30,640 --> 00:17:33,280
cash, but would you mind if I paid in Bitcoin?

348
00:17:33,400 --> 00:17:36,160
You don't have to have that conversation, which is what you do with the smaller

349
00:17:36,200 --> 00:17:38,480
merchants here because they're just mom and pop shops.

350
00:17:38,560 --> 00:17:41,360
Putting it into the system means they don't even have to manage that anymore.

351
00:17:41,400 --> 00:17:41,640
Right.

352
00:17:41,720 --> 00:17:44,720
You just get that point of sales terminal and now you don't even, you don't even do

353
00:17:44,720 --> 00:17:45,320
the implementation.

354
00:17:45,320 --> 00:17:46,720
You don't have to have the Bitcoin phone anymore.

355
00:17:46,720 --> 00:17:47,760
It's just shows up on the screen.

356
00:17:47,760 --> 00:17:49,640
If that's the option the customer selects, they just do it.

357
00:17:49,760 --> 00:17:55,640
I think the fact that Galois was able to onboard a large local company in a bear

358
00:17:55,640 --> 00:18:01,120
market speaks to both the high cost of securing cash in this country and the high

359
00:18:01,120 --> 00:18:06,760
cost of basically financial transmission here and the efficiencies of the lightning

360
00:18:06,760 --> 00:18:11,680
network, because this is a company that will not experience or want any exposure to

361
00:18:11,680 --> 00:18:13,280
Bitcoin price volatility.

362
00:18:13,360 --> 00:18:18,560
And so for these kind of cash management use cases, it's pure efficiency that's

363
00:18:18,560 --> 00:18:19,560
driving the adoption.

364
00:18:19,720 --> 00:18:19,840
Yeah.

365
00:18:19,840 --> 00:18:23,120
And they may be, they may be just converting it right to USD after the transaction

366
00:18:23,120 --> 00:18:24,360
completes. I didn't ask about that.

367
00:18:24,440 --> 00:18:27,320
Or using Galois Stablesats functionality.

368
00:18:27,320 --> 00:18:27,520
Right.

369
00:18:27,680 --> 00:18:28,320
I forget about that.

370
00:18:28,320 --> 00:18:29,200
Yeah, they got Stablesats.

371
00:18:29,280 --> 00:18:29,520
Right.

372
00:18:29,640 --> 00:18:31,000
Yeah, that's probably exactly what they're doing.

373
00:18:31,160 --> 00:18:32,880
Well, you know, it'll be an interesting use case.

374
00:18:32,880 --> 00:18:36,520
And that's sort of Galois' role here is trying to get that business level adoption.

375
00:18:36,760 --> 00:18:39,800
And like you said, that's who's also the main folks behind the Adopting Bitcoin

376
00:18:39,800 --> 00:18:41,160
Conference. It's a good mission.

377
00:18:41,160 --> 00:18:44,240
I think it's, I don't know how it gets turned into a multi-billion dollar business one

378
00:18:44,240 --> 00:18:46,080
day, but I think it's good work getting done regardless.

379
00:18:46,160 --> 00:18:52,280
Honestly, I think that next year's Adopting Bitcoin Conference will probably be one to

380
00:18:52,280 --> 00:18:56,680
watch because we're going to see what the groundwork that Galois and the Bitcoin

381
00:18:56,680 --> 00:19:01,240
community has done in El Salvador, what fruit it will bear as the bull market

382
00:19:01,240 --> 00:19:07,360
returns, as global financial conditions, the economy, everything contracts sharply

383
00:19:07,440 --> 00:19:09,480
because it already is contracting.

384
00:19:09,520 --> 00:19:13,880
If Bitcoin runs in that, in that environment, if it runs, I mean, it's running

385
00:19:13,880 --> 00:19:17,560
right now, but that's because we haven't, they haven't declared that everything's a

386
00:19:17,560 --> 00:19:18,480
disaster yet.

387
00:19:19,280 --> 00:19:23,480
It's interesting, just like you would expect human incentives play out everywhere

388
00:19:23,520 --> 00:19:28,120
around the world. And we talk to people here that when the Bitcoin price is ripping,

389
00:19:28,280 --> 00:19:31,760
it's more popular here and people start aping in and then they ultimately start

390
00:19:31,760 --> 00:19:35,800
aping into altcoins and they start doing arbitrage trades and they're playing the

391
00:19:35,800 --> 00:19:38,960
market like everybody else is around the world when the price goes up.

392
00:19:38,960 --> 00:19:42,440
So in a way, a bear market kind of takes that pressure off.

393
00:19:42,600 --> 00:19:45,640
If the price does rip, it's going to dramatically change things down here.

394
00:19:45,640 --> 00:19:50,040
Now, if it does rip while the dollar is, is becoming a problem, it may actually

395
00:19:50,040 --> 00:19:52,400
increase the price of adoption of Bitcoin down here.

396
00:19:52,480 --> 00:19:57,600
That is a good point. Even though El Salvador is a developing country reliant

397
00:19:57,600 --> 00:20:02,760
on both tourism and cash crop exports like coffee, the exact sort of economy

398
00:20:02,760 --> 00:20:08,320
that is incredibly fragile to global trade recessions also imports a huge amount

399
00:20:08,320 --> 00:20:14,000
of food. This is the World Bank and IMS neocolonial financial model, developing

400
00:20:14,000 --> 00:20:19,840
countries selling luxury goods into markets that have incredible price

401
00:20:19,840 --> 00:20:27,160
volatility and importing food from the Northern European and US agricultural

402
00:20:27,240 --> 00:20:30,280
behemoths. But they have built optionality.

403
00:20:30,360 --> 00:20:34,640
And I think that is incredibly important going forward at the national level, the

404
00:20:34,640 --> 00:20:38,200
community level, and of course, the individual level.

405
00:20:38,280 --> 00:20:42,520
So let's talk about why they might need that hedge against the global euro dollar

406
00:20:42,520 --> 00:20:43,360
system as it is.

407
00:20:43,880 --> 00:20:49,800
Well, over a year ago, German counselor Olaf Schultz made some very bullish

408
00:20:49,840 --> 00:20:52,160
predictions on Germany's economy.

409
00:20:52,200 --> 00:20:56,360
And I believe he said Germany will not go into recession.

410
00:20:56,520 --> 00:20:57,360
It's just transitory.

411
00:20:57,560 --> 00:21:00,760
The irony is Germany was in recession at that point.

412
00:21:01,320 --> 00:21:05,400
And what we're seeing now is something Jeff Schneider has pointed out that

413
00:21:05,400 --> 00:21:07,840
recessions always sneak up on the world.

414
00:21:07,840 --> 00:21:11,920
They always sneak up on economists because what happens is when you see the GDP

415
00:21:11,920 --> 00:21:15,560
numbers or the trade data that comes hot off the presses, there are many

416
00:21:15,560 --> 00:21:18,400
assumptions and projections built into that data.

417
00:21:18,440 --> 00:21:22,600
And then when the recession hits, suddenly you go back a couple quarters,

418
00:21:22,600 --> 00:21:25,920
maybe even years, and it turns out we were in recession the whole time.

419
00:21:26,040 --> 00:21:30,320
Actually, the Japanese central bank just declared that Japan went into

420
00:21:30,320 --> 00:21:34,080
recession in 2019 and has been in recession since then.

421
00:21:34,200 --> 00:21:36,520
Yeah, it's funny how you can just rerun those numbers and come up with a

422
00:21:36,520 --> 00:21:37,600
different answer, boys.

423
00:21:38,200 --> 00:21:41,600
So first of all, what is the scale of the German recession?

424
00:21:41,760 --> 00:21:48,160
It looks like if you calculate year on year drawdowns in GDP growth, Germany

425
00:21:48,280 --> 00:21:53,280
over the past three months is on a negative 14% contraction, which is huge.

426
00:21:53,960 --> 00:21:56,040
Jeff Schneider has also done some research.

427
00:21:56,040 --> 00:21:59,840
I honestly couldn't figure out how he did this, but he actually normalized

428
00:21:59,880 --> 00:22:01,840
German trades by weight.

429
00:22:01,960 --> 00:22:07,240
So he stripped out somehow the nominal price volatility, the fiat inflation

430
00:22:07,240 --> 00:22:08,360
from German trade data.

431
00:22:08,440 --> 00:22:13,800
Germany is exporting the same weight of goods as it did in 2008.

432
00:22:14,800 --> 00:22:20,520
Germany has already hit the 2008 level of economic contraction, and we

433
00:22:20,520 --> 00:22:21,880
haven't even started yet.

434
00:22:21,880 --> 00:22:26,040
We have not yet, and in 2008, that was after the financial crisis.

435
00:22:26,240 --> 00:22:28,520
Our financial crisis is still brewing.

436
00:22:28,640 --> 00:22:29,440
We'll get into that.

437
00:22:29,520 --> 00:22:31,000
They're supposed to be the powerhouse over there.

438
00:22:31,160 --> 00:22:33,120
They're an international powerhouse.

439
00:22:33,240 --> 00:22:37,240
The European union does not work as an economic union without a growing Germany.

440
00:22:37,440 --> 00:22:44,000
And Germany is a temperature for the entire globalization model of trade and

441
00:22:44,000 --> 00:22:47,240
manufacturing, these interconnected supply chain networks.

442
00:22:47,360 --> 00:22:48,800
Germany is a key part of that.

443
00:22:48,920 --> 00:22:51,520
It has massive exposure to China.

444
00:22:51,560 --> 00:22:55,760
There's a symbiotic relationship where China did lower end manufacturing.

445
00:22:55,880 --> 00:22:57,920
Germany did higher end manufacturing.

446
00:22:57,920 --> 00:23:00,400
Germany was shipping a lot of machine tools to China.

447
00:23:00,560 --> 00:23:03,760
This is definitely good for Germany in the short term, but as German firms

448
00:23:03,800 --> 00:23:08,520
discovered, all of their technology was appropriated by Chinese companies.

449
00:23:08,560 --> 00:23:11,520
Great for the world, great for China, maybe not great for Germany.

450
00:23:11,680 --> 00:23:15,680
And they are in recession and the rest of the world hasn't caught up yet.

451
00:23:15,760 --> 00:23:18,640
So they have further and faster to go.

452
00:23:19,200 --> 00:23:21,040
That is pretty, that's pretty striking.

453
00:23:21,200 --> 00:23:25,000
It's, it shows you the edges of this thing, the beginning, early signs of

454
00:23:25,000 --> 00:23:26,480
Western economies that are struggling.

455
00:23:26,560 --> 00:23:30,400
And if you think about being at 2008 levels, what that means, that's after the

456
00:23:30,400 --> 00:23:32,360
crash, when things were at a bottom, right?

457
00:23:32,360 --> 00:23:34,120
That's pretty, that's striking.

458
00:23:34,240 --> 00:23:40,720
But like we mentioned in 2008, Germany's exports, its economy took a nose dive

459
00:23:40,840 --> 00:23:42,640
after the financial crisis.

460
00:23:42,680 --> 00:23:42,880
Right.

461
00:23:42,920 --> 00:23:44,480
Well, I mean, that, that part makes sense.

462
00:23:45,240 --> 00:23:46,440
So that's fine.

463
00:23:46,560 --> 00:23:48,280
We'll just avoid a financial crisis.

464
00:23:48,280 --> 00:23:48,680
That's fine.

465
00:23:48,800 --> 00:23:49,320
No problem.

466
00:23:49,840 --> 00:23:51,200
Well, I have bad news.

467
00:23:51,320 --> 00:23:55,760
As we're recording yesterday, we have experienced a failed treasury

468
00:23:55,800 --> 00:23:58,880
auction, a 30 year treasury auction went terrible.

469
00:23:59,000 --> 00:24:00,960
I'm quoting Lynn Alden on Noster.

470
00:24:00,960 --> 00:24:03,520
This is where she provides her raw uncensored thoughts.

471
00:24:03,600 --> 00:24:06,480
Huge price tail, basically a half failed bond auction.

472
00:24:06,520 --> 00:24:08,800
There hasn't been an auction that bad in many years.

473
00:24:08,880 --> 00:24:13,120
Some people chalked it up to a cyber attack on ICBC, China's largest bank,

474
00:24:13,120 --> 00:24:15,840
which interfered with their ability to do treasury transactions.

475
00:24:15,920 --> 00:24:19,840
While others contested that this was the main issue and instead argue that it was

476
00:24:19,840 --> 00:24:21,600
a lack of demand for duration.

477
00:24:21,680 --> 00:24:23,840
Treasury market liquidity is really weak.

478
00:24:23,920 --> 00:24:28,680
And then an hour later, Jerome Powell was interrupted in an IMF talk by

479
00:24:28,720 --> 00:24:32,000
eco protesters and dropped the F-bomb on a hot mic.

480
00:24:32,080 --> 00:24:34,080
My favorite moment.

481
00:24:34,160 --> 00:24:35,360
Boy, did we enjoy that.

482
00:24:35,440 --> 00:24:36,480
That was so great.

483
00:24:36,560 --> 00:24:38,280
And I have a clip now.

484
00:24:38,400 --> 00:24:40,360
It's getting my own personal collection forever.

485
00:24:40,480 --> 00:24:42,680
I think I liked Jerome Powell a little more than how to use the F-bomb.

486
00:24:42,680 --> 00:24:43,520
That's for some reason.

487
00:24:43,640 --> 00:24:45,400
I like the top comment to her post.

488
00:24:45,520 --> 00:24:49,760
Looks like Jerome closed the fuck or looks like China closed the fucking door

489
00:24:49,760 --> 00:24:51,160
on the U S treasury auction.

490
00:24:51,240 --> 00:24:51,400
Yeah.

491
00:24:51,400 --> 00:24:51,680
Okay.

492
00:24:51,680 --> 00:24:55,160
So just to back up to what you said there for a second, the idea that a

493
00:24:55,160 --> 00:24:58,160
ransomware on what is it like China's third largest bank or something like that?

494
00:24:58,280 --> 00:25:02,040
A ransomware attack basically disrupts a bond auction.

495
00:25:02,160 --> 00:25:05,920
It, to such a degree seems like that would also be a systemic risk, even if

496
00:25:05,920 --> 00:25:09,040
it wasn't because of the rates, if it was just because of that technical issue.

497
00:25:09,120 --> 00:25:11,840
What did you build this financial system out of tissue paper?

498
00:25:12,160 --> 00:25:12,600
I love that.

499
00:25:12,600 --> 00:25:14,400
That's the excuse gas soaked rags.

500
00:25:14,400 --> 00:25:17,920
Oh no, we just almost took out the U S economy because a bank in China had

501
00:25:17,920 --> 00:25:21,560
ransomware and that's, that's, that's an acceptable answer to the problem.

502
00:25:21,680 --> 00:25:27,080
And this is a point I've harped on many times, but the current state of the

503
00:25:27,080 --> 00:25:31,720
global Euro dollar based financial system is a contagion factory.

504
00:25:31,840 --> 00:25:35,400
The more counterparties that exist because no assets are

505
00:25:35,400 --> 00:25:37,160
bearer assets in this system.

506
00:25:37,200 --> 00:25:39,880
Every asset is the liability of another party.

507
00:25:40,000 --> 00:25:44,200
So my strong balance sheet over here that makes me think I'm a rich bank or

508
00:25:44,200 --> 00:25:49,080
financial institution, it represents the aggregated liabilities of banks,

509
00:25:49,080 --> 00:25:53,440
financial institutions, even individuals with mortgages all over the world.

510
00:25:53,520 --> 00:25:57,280
So that means whenever there needs to be a write down, whenever someone

511
00:25:57,280 --> 00:26:01,720
doesn't pay their loan, whenever things go bad somewhere, it directly weakens

512
00:26:01,720 --> 00:26:08,000
the financial stability of every single bank, financial institution and financial

513
00:26:08,000 --> 00:26:10,600
piece of infrastructure in the fiat system.

514
00:26:10,680 --> 00:26:12,040
And that's where we are today.

515
00:26:12,040 --> 00:26:14,600
So explain to me like I'm five, why a treasury auction

516
00:26:14,600 --> 00:26:16,680
failure is a really bad red flag.

517
00:26:16,760 --> 00:26:21,760
I think at a high level, we have to recognize that U S government debt is

518
00:26:21,760 --> 00:26:24,680
the base asset of the world today.

519
00:26:24,920 --> 00:26:29,280
In a certain sense for most financial system participants, it's arbitrary

520
00:26:29,280 --> 00:26:31,080
what you use as the base asset.

521
00:26:31,200 --> 00:26:34,000
It just has to be something people will accept.

522
00:26:34,000 --> 00:26:35,240
It has to be sort of money-like.

523
00:26:35,240 --> 00:26:37,080
There have to be markets where people trade it.

524
00:26:37,160 --> 00:26:41,440
There have to be complex markets where people make contracts around it.

525
00:26:41,440 --> 00:26:42,680
We call this derivatives.

526
00:26:42,920 --> 00:26:47,240
It's a tool for hedging financial risk, for savings, for facilitating

527
00:26:47,240 --> 00:26:48,240
trade, for many things.

528
00:26:48,320 --> 00:26:51,880
But at its core, people need to want this asset.

529
00:26:51,880 --> 00:26:54,080
The system needs to want this asset.

530
00:26:54,360 --> 00:26:58,640
And so when a treasury auction fails, and by the way, this doesn't mean

531
00:26:58,640 --> 00:27:00,320
the dollar is crashing tomorrow.

532
00:27:00,400 --> 00:27:02,400
This is just the spark has been lit.

533
00:27:02,440 --> 00:27:05,600
We'll see if it catches, but the system's made out of gas soaked rags.

534
00:27:05,680 --> 00:27:07,720
So it probably will.

535
00:27:07,840 --> 00:27:12,520
So what happened was the yield on these treasuries peaked towards the end of the

536
00:27:12,520 --> 00:27:16,960
auction and the prime brokers that facilitate these trades and also have an

537
00:27:16,960 --> 00:27:18,560
agreement to buy up any treasuries.

538
00:27:18,560 --> 00:27:22,800
No one wanted, they ended up with about 25% of the auction in 10 days.

539
00:27:23,040 --> 00:27:25,600
These securities will be on the feds balance sheet.

540
00:27:25,840 --> 00:27:30,160
The U S federal reserve, the central bank of the U S indirectly monetizes

541
00:27:30,240 --> 00:27:35,440
U S government debt by buying it from prime brokers after treasury auctions.

542
00:27:35,440 --> 00:27:36,520
They have a cooling off period.

543
00:27:36,600 --> 00:27:41,080
The reason that yield spiked is that there were no buyers at the offered

544
00:27:41,080 --> 00:27:43,240
interest rate for these 30 year bonds.

545
00:27:43,400 --> 00:27:48,280
And so the mechanism of the market meant that the price of these bonds had to

546
00:27:48,280 --> 00:27:51,240
fall, but the yield on them remains the same.

547
00:27:51,240 --> 00:27:55,040
And so this means that the effective interest rate being paid is higher.

548
00:27:55,760 --> 00:27:57,200
It's hard to visualize, but

549
00:27:57,440 --> 00:28:00,840
that's not a, not a very good revenue returning proposition though.

550
00:28:01,000 --> 00:28:05,680
No, it means that these bonds are providing less money to the government to

551
00:28:05,680 --> 00:28:09,760
finance its operations and they have to pay more in interest.

552
00:28:09,920 --> 00:28:11,480
That's not a very attractive market product.

553
00:28:11,600 --> 00:28:12,080
It isn't.

554
00:28:12,440 --> 00:28:17,360
And this failure gets into Arthur Hayes piece, the periphery.

555
00:28:17,440 --> 00:28:18,240
It's a doozy.

556
00:28:18,600 --> 00:28:20,840
If you have the patience, I suggest you take a read.

557
00:28:21,000 --> 00:28:22,200
Your blood will run cold.

558
00:28:22,400 --> 00:28:26,920
Arthur is tying together global conflict, which is undoubtedly on the rise right

559
00:28:26,920 --> 00:28:31,800
now, the political incentives to keep that conflict going, to keep it hot,

560
00:28:31,880 --> 00:28:35,800
especially in Israel, the prime minister of Israel is currently facing

561
00:28:35,800 --> 00:28:37,600
multiple corruption charges.

562
00:28:37,840 --> 00:28:41,840
If he doesn't stay in office and his best way to stay in office is to

563
00:28:42,000 --> 00:28:44,360
prosecute this war with maximum violence.

564
00:28:44,480 --> 00:28:47,360
If he gets, if he's kicked out of office, he likely goes to jail.

565
00:28:47,440 --> 00:28:52,760
So the leader of the Israeli military apparatus does not want peace, does

566
00:28:52,760 --> 00:28:56,560
not want the war to end, does not want this to be a limited operation

567
00:28:56,560 --> 00:28:58,600
that increases Israeli safety.

568
00:28:58,680 --> 00:29:02,520
He wants to prosecute this and rack up as much carnage against

569
00:29:02,520 --> 00:29:04,280
a perceived enemy as possible.

570
00:29:04,360 --> 00:29:08,040
I suppose in the economic context, the concern there is all of

571
00:29:08,040 --> 00:29:09,520
his neighbors don't agree with that.

572
00:29:09,640 --> 00:29:12,440
You know, we've had some conversations with folks from the region here at

573
00:29:12,440 --> 00:29:15,280
adopting Bitcoin and they have a different perspective on it than a lot

574
00:29:15,280 --> 00:29:18,160
of, I'd say the people in the States do and other places, you know, it's a,

575
00:29:18,280 --> 00:29:20,800
they, they feel it, I think a little more viscerally.

576
00:29:20,840 --> 00:29:21,400
Absolutely.

577
00:29:21,400 --> 00:29:25,720
And because this is a hot button topic to clarify, no one likes Hamas.

578
00:29:25,760 --> 00:29:28,960
No one is supporting Hamas, whatever that even means.

579
00:29:29,080 --> 00:29:34,520
And Hamas is a political entity that engages in terrorism and uses the

580
00:29:34,560 --> 00:29:39,440
Palestinian people as a human shield to further the hurt and anger

581
00:29:39,480 --> 00:29:41,280
that fuels their political agenda.

582
00:29:41,520 --> 00:29:46,120
At the same time, as Israel destroys the Gaza strip and creates millions

583
00:29:46,120 --> 00:29:51,560
of refugees, these refugees are politically destabilizing to Egypt, to

584
00:29:51,560 --> 00:29:53,920
Lebanon, to Jordan, wherever they go.

585
00:29:54,000 --> 00:29:58,960
This flow of refugees brings incredible complications for very marginal

586
00:29:58,960 --> 00:30:03,720
economies that are already struggling with inflation, with food prices, with

587
00:30:03,720 --> 00:30:05,120
just sustaining themselves.

588
00:30:05,240 --> 00:30:08,440
No one here in a sense has a choice.

589
00:30:08,560 --> 00:30:12,160
I think about their actions, obviously we all have choices, but there are clear

590
00:30:12,160 --> 00:30:18,360
incentives to not alienate local Arab populations in the Middle East, in

591
00:30:18,360 --> 00:30:24,040
Egypt, in Saudi Arabia, in all of Israel's neighbors, by not doing something

592
00:30:24,120 --> 00:30:27,800
to push back about Israel's treatment of the Palestinians.

593
00:30:27,880 --> 00:30:31,480
Well, there are a lot of energy producers in this region.

594
00:30:31,640 --> 00:30:36,040
Iran is already arming groups that are firing missiles into Israel

595
00:30:36,160 --> 00:30:38,440
at U.S. assets in the area.

596
00:30:38,560 --> 00:30:40,360
The U.S. is definitely getting involved.

597
00:30:40,360 --> 00:30:42,880
It's performing airstrikes in support of Israel.

598
00:30:43,040 --> 00:30:45,760
This is another front for global conflict.

599
00:30:45,920 --> 00:30:50,080
On the one hand, it increases the spending pressure of the U.S.

600
00:30:50,080 --> 00:30:52,280
government. There is absolutely no way for the U.S.

601
00:30:52,280 --> 00:30:56,640
government to slim its budget in a wartime economy, and it is a wartime

602
00:30:56,680 --> 00:31:02,640
economy. Simply providing ammunition for the war in Ukraine is

603
00:31:02,640 --> 00:31:04,640
significantly increasing U.S.

604
00:31:04,760 --> 00:31:06,120
military expenditure.

605
00:31:06,280 --> 00:31:09,320
Prior to these conflicts igniting, the U.S.

606
00:31:09,480 --> 00:31:12,120
for 10 years has looked like a wartime economy.

607
00:31:12,200 --> 00:31:18,040
The budget deficits, the out of control spending on domestic pet projects, the

608
00:31:18,040 --> 00:31:22,760
aging demographics that have required increasing spending on social security

609
00:31:22,760 --> 00:31:25,720
and Medicare, there's absolutely nowhere in the U.S.

610
00:31:25,760 --> 00:31:27,280
budget. There's no flexibility.

611
00:31:27,320 --> 00:31:28,000
What do you cut?

612
00:31:28,240 --> 00:31:29,560
We're totally backed into a corner now.

613
00:31:29,680 --> 00:31:32,160
Everything is essential at this point.

614
00:31:32,320 --> 00:31:34,440
And of course, there's huge amounts of waste.

615
00:31:34,480 --> 00:31:39,600
There's misguided policy that incentivizes investment in solar and wind

616
00:31:39,600 --> 00:31:43,520
technology that does not have the energy density or the efficiency of things like

617
00:31:43,520 --> 00:31:48,920
nuclear. This has actually killed a major nuclear project that could have produced

618
00:31:48,920 --> 00:31:53,680
small modular reactors that could have been the next revolution in green carbon

619
00:31:53,680 --> 00:31:55,880
free energy. And that was killed by wind and solar.

620
00:31:55,920 --> 00:31:59,600
Yeah, it was. A week ago, they announced that that project in Idaho would come to

621
00:31:59,600 --> 00:32:03,360
an end because, well, wind and solar is a more competitive market.

622
00:32:03,360 --> 00:32:05,120
But that's sort of a false narrative.

623
00:32:05,200 --> 00:32:08,440
I mean, it's also the reality, but it's only a more competitive market because

624
00:32:08,440 --> 00:32:10,640
it's been heavily subsidized by the government.

625
00:32:10,640 --> 00:32:14,160
So that action means that subsidies that have been driven by the government, while

626
00:32:14,160 --> 00:32:17,520
it's good to see investments in solar, have led to a decline in investments in

627
00:32:17,520 --> 00:32:20,120
local oil production and, like you just said, nuclear.

628
00:32:20,120 --> 00:32:23,440
And now we just have in the last week or so, the shutting down of that project in

629
00:32:23,440 --> 00:32:25,840
Idaho, and they cited specifically renewables.

630
00:32:26,000 --> 00:32:28,440
So what does this have to do with geopolitics?

631
00:32:28,440 --> 00:32:30,360
We're arguing that the U.S.

632
00:32:30,360 --> 00:32:32,480
government cannot stop spending.

633
00:32:32,720 --> 00:32:35,880
It has the largest budget deficits in history.

634
00:32:35,920 --> 00:32:39,480
We're entering recession and so tax receipts will fall.

635
00:32:39,480 --> 00:32:41,440
Budget deficits will get worse.

636
00:32:41,440 --> 00:32:46,720
And we already have a political pattern where in recession, in economic crisis, the

637
00:32:46,720 --> 00:32:52,120
government enacts direct cash stimulus to citizens, the stimulus checks.

638
00:32:52,160 --> 00:32:53,920
Do you think that that will not happen again?

639
00:32:53,920 --> 00:32:54,920
It must happen again.

640
00:32:54,920 --> 00:32:58,880
If you don't do it as a politician, your opponent will and they will get elected.

641
00:32:58,920 --> 00:33:01,440
Yeah, it's inevitable because once you do it, you have to do it again.

642
00:33:01,440 --> 00:33:02,160
You have to do it bigger.

643
00:33:02,240 --> 00:33:03,960
And we've seen this before.

644
00:33:03,960 --> 00:33:09,160
Now the mentality in the federal government is go big, go strong, overshoot.

645
00:33:09,200 --> 00:33:12,600
Because the lesson from the 2008 GFC is we were too cautious.

646
00:33:12,760 --> 00:33:15,800
And if we would have just printed more money and dumped more money into the

647
00:33:15,800 --> 00:33:17,720
system, we may have had better results.

648
00:33:17,720 --> 00:33:21,280
And so that's literally what they've internalized is when the situation comes

649
00:33:21,280 --> 00:33:22,720
up, go hard, go fast with the money.

650
00:33:22,880 --> 00:33:28,000
And as Jeff Schneider's work on German trade volumes demonstrates, there has been

651
00:33:28,000 --> 00:33:30,960
no growth globally in the past 10 years.

652
00:33:31,080 --> 00:33:36,360
We were fooled by nominal increases in prices, by financial engineering, by

653
00:33:36,360 --> 00:33:42,160
inflation, because let's be frank, at 2% year on year growth of GDP, that's

654
00:33:42,160 --> 00:33:43,800
a fucking rounding error.

655
00:33:43,880 --> 00:33:45,240
The data is bad.

656
00:33:45,360 --> 00:33:47,680
It's hard to do economic data.

657
00:33:47,800 --> 00:33:49,680
It's hard to do the CPI.

658
00:33:49,680 --> 00:33:52,840
There are a lot of complicated incentives on those numbers.

659
00:33:52,960 --> 00:33:54,000
The data is bad.

660
00:33:54,040 --> 00:33:57,320
2% growth is a big fucking question mark.

661
00:33:57,560 --> 00:33:59,880
There is evidence that it was an illusion.

662
00:33:59,960 --> 00:34:04,760
Nothing has changed since 2008, but all of the stopgap measures have further

663
00:34:04,760 --> 00:34:06,480
weakened the financial system.

664
00:34:06,600 --> 00:34:11,520
And now we have a failed US treasury auction and we have to talk to you

665
00:34:11,600 --> 00:34:13,280
about the bear steepener.

666
00:34:13,480 --> 00:34:14,320
That sounds bad.

667
00:34:14,440 --> 00:34:15,640
A bear steepener?

668
00:34:15,760 --> 00:34:17,640
We're just starting to finally talk about a bull market.

669
00:34:17,640 --> 00:34:22,560
So this is probably the worst thing to try to explain without a visual aid.

670
00:34:22,680 --> 00:34:27,240
But when people describe the bond market, they talk about the US treasury curve.

671
00:34:27,520 --> 00:34:32,480
And so on the left side of the chart, you have the three month bill, the six

672
00:34:32,480 --> 00:34:35,800
month, one year, two year, five year, 10 year 30.

673
00:34:35,800 --> 00:34:41,000
So the, the duration of these bonds, they move left to right from the

674
00:34:41,000 --> 00:34:45,800
zero point on an XY axis, you know, down the line, down the line, down the line.

675
00:34:45,840 --> 00:34:50,480
And on the Y axis, you have the interest rate that this security is yielding.

676
00:34:50,600 --> 00:34:55,600
Now this security should be kind of a 45 degree line because if I get a 30 year,

677
00:34:55,600 --> 00:34:57,080
I should see a better return than a five year.

678
00:34:57,080 --> 00:34:58,040
You're taking a lot of risk.

679
00:34:58,040 --> 00:34:59,720
What if I'm not around in 30 years?

680
00:34:59,720 --> 00:35:02,040
What if there's high inflation that needs to be higher?

681
00:35:02,040 --> 00:35:02,240
Right.

682
00:35:02,480 --> 00:35:06,680
And for the last 10 years, this curve has been inferred.

683
00:35:07,000 --> 00:35:10,720
Interest rates have been higher at the short end and lower on the long end.

684
00:35:10,840 --> 00:35:13,440
Not a huge difference, but it's a little bit of a difference.

685
00:35:13,480 --> 00:35:18,080
On the long end, not a huge difference, but still that doesn't make economic sense.

686
00:35:18,120 --> 00:35:19,240
What's going on there.

687
00:35:19,360 --> 00:35:24,080
And the answer is that the U S federal reserve was unwilling to let

688
00:35:24,080 --> 00:35:25,480
short-term rates go negative.

689
00:35:25,520 --> 00:35:29,920
When short-term rates go negative, your financial system explodes because no

690
00:35:29,920 --> 00:35:35,200
balance sheet, no financial calculation can divide by a zero or a negative interest

691
00:35:35,200 --> 00:35:35,400
rate.

692
00:35:35,400 --> 00:35:37,120
All those long-term holders are screwed.

693
00:35:37,320 --> 00:35:41,120
That's a completely financialized economy where money and finance has

694
00:35:41,200 --> 00:35:43,400
absolutely divorced from physical reality.

695
00:35:43,600 --> 00:35:47,280
That's a failure of your monetary system because I cannot do business with you.

696
00:35:47,400 --> 00:35:51,960
If you are telling me that I need to pay you to accept my goods and services pass,

697
00:35:52,080 --> 00:35:53,480
we no longer have an economy.

698
00:35:53,560 --> 00:35:54,600
We've gone back to barter.

699
00:35:54,800 --> 00:35:58,320
And so the market wanted interest rates to go negative.

700
00:35:58,400 --> 00:36:03,480
The fed fought this and that low long-term rate on us government debt.

701
00:36:03,520 --> 00:36:07,320
That was a reflection of very low expectations for growth.

702
00:36:07,360 --> 00:36:12,440
That was a hint that there was no growth in the 10 years after the global monetary

703
00:36:12,440 --> 00:36:13,680
crisis in 2008.

704
00:36:13,760 --> 00:36:18,600
But what's happening now is the yield curve is sort of sorting out the long-term

705
00:36:18,600 --> 00:36:22,640
rates are rising again, relating to the failed treasury auction.

706
00:36:22,720 --> 00:36:24,280
And so this should be a good thing, right?

707
00:36:24,360 --> 00:36:24,680
Right.

708
00:36:24,760 --> 00:36:25,960
The curve looks normal again.

709
00:36:26,000 --> 00:36:26,160
Yeah.

710
00:36:26,160 --> 00:36:27,280
I mean, that's what we want, right?

711
00:36:27,280 --> 00:36:28,600
The long-term bets pay off.

712
00:36:28,680 --> 00:36:29,000
Yes.

713
00:36:29,000 --> 00:36:33,240
And that would be the bull steepener, the bull steepener, which is by the way, bad

714
00:36:33,240 --> 00:36:34,120
for the economy.

715
00:36:34,160 --> 00:36:36,360
That means that we're probably in a recession.

716
00:36:36,400 --> 00:36:40,360
And so there's a whole complexity of what happens with a recession in such a

717
00:36:40,440 --> 00:36:41,800
messed up financial system.

718
00:36:41,840 --> 00:36:44,160
But actually what's happening is the bear steepener.

719
00:36:44,240 --> 00:36:49,000
And so while the curve is coming back to this lower on the left, higher on the

720
00:36:49,000 --> 00:36:53,400
right, 45 degree angle, if you've ever seen an XY chart, you can imagine what

721
00:36:53,400 --> 00:36:54,000
that looks like.

722
00:36:54,040 --> 00:36:55,720
The entire line is shifting up.

723
00:36:56,040 --> 00:37:01,640
Well, what happens when I have all this debt, it's yielding 5% and now at the

724
00:37:01,640 --> 00:37:04,320
next auction, the interest rate is 6%.

725
00:37:04,400 --> 00:37:05,440
What, what, what does that mean?

726
00:37:05,560 --> 00:37:07,760
My debt yields 5, that debt yields 6.

727
00:37:07,880 --> 00:37:10,360
It means that my bonds have just lost value.

728
00:37:10,480 --> 00:37:15,360
All US government bonds in existence are going to be underwater soon.

729
00:37:15,480 --> 00:37:16,200
That's the trip.

730
00:37:16,280 --> 00:37:22,160
And just to give a sense of how big this is, there are currently at least 680

731
00:37:22,160 --> 00:37:25,560
billion in losses only on US treasury bills.

732
00:37:25,680 --> 00:37:30,520
By the way, total equity in the US banking system is only 2.2 trillion.

733
00:37:30,600 --> 00:37:33,720
The financial crisis has not happened yet.

734
00:37:33,800 --> 00:37:41,360
And we can kind of with rough, stupid math, estimate that over 25% of the capital in

735
00:37:41,360 --> 00:37:46,960
the US banking system has gone to zero before we've hit the wall before the

736
00:37:46,960 --> 00:37:47,600
crisis.

737
00:37:48,520 --> 00:37:52,720
This is, so this is in the good times, quote unquote.

738
00:37:52,760 --> 00:37:53,160
Right.

739
00:37:53,200 --> 00:37:56,640
And obviously, obviously I've just said there's bad data.

740
00:37:56,640 --> 00:37:57,720
Think numbers could change.

741
00:37:57,960 --> 00:37:59,680
So I'm sounding alarmed.

742
00:37:59,800 --> 00:38:04,480
I might have egg on my face soon, but putting this together, I knew that the next

743
00:38:04,480 --> 00:38:08,200
financial crisis would dwarf the 2008 crisis.

744
00:38:08,320 --> 00:38:11,280
But the implied magnitude of this is so serious.

745
00:38:11,360 --> 00:38:16,680
The incremental constraints on how people can use financial assets.

746
00:38:16,680 --> 00:38:19,760
The financial surveillance has gotten so much worse in the last 10 years.

747
00:38:19,920 --> 00:38:22,320
I can't imagine how things might go.

748
00:38:22,440 --> 00:38:23,960
And I am deeply concerned.

749
00:38:24,120 --> 00:38:29,000
Yeah, because all of the ways to fix this would cause other problems or would reach

750
00:38:29,120 --> 00:38:30,840
absolute political impossibility.

751
00:38:30,840 --> 00:38:31,040
Right.

752
00:38:31,040 --> 00:38:35,280
Like, so, I mean, obviously the thing to do right now would be for the US federal

753
00:38:35,280 --> 00:38:39,680
government to do emergency spending cuts, try to raise revenue, bring in profits.

754
00:38:39,720 --> 00:38:46,840
But that and give Eastern Europe to Russia and leave Israel alone in the midst of

755
00:38:46,960 --> 00:38:52,240
relatively hostile neighbors, pull out of Taiwan and that quickly building conflict

756
00:38:52,240 --> 00:38:52,680
as well.

757
00:38:52,680 --> 00:38:58,400
While there are reports that China seems to be stockpiling oil and fuel.

758
00:38:58,440 --> 00:39:03,640
Yeah, the sort of thing that you would see if a conflict was brewing.

759
00:39:03,680 --> 00:39:07,760
Yeah, yeah. So that's that stuff's not going to happen and they're not going to be

760
00:39:07,760 --> 00:39:10,760
able to raise taxes right now because everybody's broke from inflation.

761
00:39:10,760 --> 00:39:14,080
And if they did raise taxes, well, that would cause a recession.

762
00:39:14,080 --> 00:39:16,280
So, I mean, obviously there might be a solution here.

763
00:39:16,280 --> 00:39:19,120
I mean, they're always incredible at kicking the can down the road.

764
00:39:19,120 --> 00:39:22,040
But I think we've always wondered what happens after all of the cans have been

765
00:39:22,040 --> 00:39:24,240
kicked. You're totally backed into a corner now.

766
00:39:24,320 --> 00:39:31,200
And just to tie in the Bitcoin ETF news, frankly, if I were paid for my opinion, I

767
00:39:31,200 --> 00:39:36,720
would tell the US president to hurry up and sign that executive order that bans any

768
00:39:36,720 --> 00:39:42,600
spot crypto or Bitcoin ETFs, because in the Bear Steepener case we're describing,

769
00:39:42,640 --> 00:39:47,440
there is no safe asset in the traditional financial system.

770
00:39:47,480 --> 00:39:51,400
This is a financial event that makes JP Morgan insolvent.

771
00:39:51,720 --> 00:39:56,360
There's no financial institution that can escape from this, and there's no longer

772
00:39:56,360 --> 00:40:01,440
an inverse relationship between the price of stocks and the price of bonds.

773
00:40:01,480 --> 00:40:06,800
And this is the core of every single portfolio in the world, barring a few

774
00:40:06,800 --> 00:40:10,440
fringe, highly sophisticated investors and, of course, Bitcoiners.

775
00:40:10,480 --> 00:40:15,800
So if you create a spot Bitcoin ETF in the United States, in the world's most

776
00:40:15,800 --> 00:40:21,160
liquid financial market, you are opening an exit door directly to the largest pool

777
00:40:21,160 --> 00:40:23,960
of capital that could be potentially existential.

778
00:40:24,000 --> 00:40:29,520
If the hard money properties of Bitcoin are misunderstood by investors such that

779
00:40:29,520 --> 00:40:34,280
they think an ETF will provide them safety in the upcoming crisis, I cannot even

780
00:40:34,280 --> 00:40:36,560
imagine how much capital will ape into that.

781
00:40:36,560 --> 00:40:41,080
And that, frankly, could be incredibly destabilizing to the traditional financial

782
00:40:41,080 --> 00:40:46,320
system. And so I think that whether an ETF is allowed or not, it may not be allowed

783
00:40:46,320 --> 00:40:50,680
for long because I think it could potentially represent a systemic risk for

784
00:40:50,680 --> 00:40:51,840
the global financial system.

785
00:40:51,960 --> 00:40:55,880
Wow, wouldn't that be something like a last minute Biden White House swoop in an

786
00:40:56,160 --> 00:40:59,960
EO that prevents the SEC from approving the spot ETF?

787
00:41:00,000 --> 00:41:02,640
That would be dramatic or a spot ETF that rolls out.

788
00:41:02,680 --> 00:41:03,960
They start doing sales.

789
00:41:03,960 --> 00:41:05,800
It's kicking off. Price is roaring.

790
00:41:05,960 --> 00:41:09,680
And then the White House steps in and signs some sort of EO that shuts it down.

791
00:41:10,000 --> 00:41:14,640
I can't believe with what you see brewing that they would give anyone an escape

792
00:41:14,640 --> 00:41:16,800
hatch right now. I just I can't I can't square that.

793
00:41:16,960 --> 00:41:18,960
And there's a lot of spending to be done.

794
00:41:19,000 --> 00:41:22,840
Conflicts are ramping up, military appropriations, budgets are going to be

795
00:41:22,840 --> 00:41:26,120
increasing. The aging of the U.S.

796
00:41:26,120 --> 00:41:29,600
and all developed nation populations is inevitable.

797
00:41:29,680 --> 00:41:32,960
That means more spending on social welfare.

798
00:41:33,040 --> 00:41:38,240
You can't cut that. If you cut that, your pensioners will vote for anyone who gives

799
00:41:38,240 --> 00:41:42,280
them that money back. It doesn't matter what their other policies are.

800
00:41:42,360 --> 00:41:46,560
This is how you get extreme ideology into your political system.

801
00:41:46,680 --> 00:41:49,800
So I'm very bearish on the economy.

802
00:41:50,000 --> 00:41:54,040
I'm bearish long term on the dollar, because who knows, maybe short term it'll pump.

803
00:41:54,040 --> 00:41:59,280
It usually does. And I think that this is going to be a watershed period for Bitcoin

804
00:41:59,320 --> 00:42:02,520
because we didn't have Bitcoin in the 2008 financial crisis.

805
00:42:02,520 --> 00:42:03,920
Bitcoin was inspired by it.

806
00:42:03,960 --> 00:42:05,400
But now we have.

807
00:42:05,560 --> 00:42:07,040
They'll come up with a name for it eventually.

808
00:42:07,200 --> 00:42:08,920
Yeah. Well, we're really going to see Bitcoin tested.

809
00:42:09,120 --> 00:42:11,440
You want to know how it would have done during the 2008 GFC?

810
00:42:11,520 --> 00:42:14,560
Well, take that times it by 10 and let's see.

811
00:42:15,200 --> 00:42:20,880
I remember saying in the past with you that the true Bitcoin bear market is not one I

812
00:42:20,880 --> 00:42:23,080
want to see because it is this setup.

813
00:42:23,080 --> 00:42:25,080
It is a world on the brink.

814
00:42:25,080 --> 00:42:31,120
It is every political incentive pushing nation states towards more conflict, towards more

815
00:42:31,120 --> 00:42:36,920
extreme policies. It is financial fragility to a degree that we couldn't imagine possible.

816
00:42:37,120 --> 00:42:43,800
We're dealing with a 15 year old bandaid on a broken euro dollar system that received

817
00:42:43,800 --> 00:42:47,240
a mortal wound in 2008 and has been bleeding out since then.

818
00:42:47,240 --> 00:42:49,160
We can see that in the lack of growth.

819
00:42:49,160 --> 00:42:53,200
We can see that in the radicalization of politics, basically everywhere.

820
00:42:53,400 --> 00:42:55,640
The absolute financialization of the economy.

821
00:42:55,960 --> 00:43:01,320
And the core political question is the establishment says that things are fine and we just

822
00:43:01,320 --> 00:43:02,960
need to continue as we are going.

823
00:43:03,080 --> 00:43:04,200
But things are not fine.

824
00:43:04,320 --> 00:43:08,040
I think the mainstream narrative is everything will be fine as long as we get inflation

825
00:43:08,040 --> 00:43:10,520
back down to 2 percent. And that's the conversation you see.

826
00:43:10,560 --> 00:43:12,920
If we get inflation down to 2 percent, everything will be fine.

827
00:43:13,080 --> 00:43:20,000
And given the growth in government spending, there is no way to get inflation down by 2 percent.

828
00:43:20,000 --> 00:43:22,400
It's definitionally impossible.

829
00:43:22,440 --> 00:43:24,160
So you got to pivot to tactical, right?

830
00:43:24,160 --> 00:43:29,120
You got to start closing the exits, locking things down, protecting people and their

831
00:43:29,200 --> 00:43:30,160
investments.

832
00:43:30,320 --> 00:43:36,120
And we will see that in internationalized smaller economies, because these are economies

833
00:43:36,120 --> 00:43:38,160
that are more vulnerable to capital flight.

834
00:43:38,200 --> 00:43:43,080
They are very exposed to the dollar and financial system weakness.

835
00:43:43,200 --> 00:43:45,040
And I'm talking about you, Great Britain.

836
00:43:45,880 --> 00:43:48,240
Oh, the UK, how far you have fallen.

837
00:43:48,400 --> 00:43:52,240
This was a this was a real stinker to see exchanges in the UK.

838
00:43:52,280 --> 00:43:58,080
Will KYC every single transaction following the travel rule compliance group, whatever

839
00:43:58,080 --> 00:44:03,360
that is. But even if even if moving, you have to record the recipient, their information,

840
00:44:03,360 --> 00:44:08,480
what it's for. And it essentially restricts transactions to quote unquote trusted

841
00:44:08,520 --> 00:44:13,160
exchanges. So if you're doing peer to peer transactions, those are not safe and blessed.

842
00:44:13,320 --> 00:44:17,160
And that matters when you want to move large sums of money.

843
00:44:17,200 --> 00:44:20,480
Maybe you want to sell some of your stash to buy a house, things like that.

844
00:44:20,600 --> 00:44:25,560
That you essentially if you have, you know, dark, dark Bitcoin, you may not be able to

845
00:44:25,560 --> 00:44:30,400
do that because they specifically in the UK, they'll ask where you got the money for

846
00:44:30,400 --> 00:44:33,320
that. Where it all come in. They look all the way down to the specific transaction.

847
00:44:33,600 --> 00:44:37,080
Yeah, they'll go all the way down to which paycheck did you buy that transaction with,

848
00:44:37,080 --> 00:44:38,960
right? So they'll really go all the way to the bottom.

849
00:44:39,000 --> 00:44:43,280
And if it's now on a non trusted custodian, you may not be able to spend it.

850
00:44:43,280 --> 00:44:45,640
That's where this is going. And it's not even hyperbole.

851
00:44:45,640 --> 00:44:49,080
It's really alarming. And you have to figure if it's happening in the UK, it's probably

852
00:44:49,080 --> 00:44:49,920
going to come to the States.

853
00:44:49,960 --> 00:44:56,320
It's absolutely because trust this industry organization of self compliance with the

854
00:44:56,360 --> 00:44:57,480
travel rule.

855
00:44:57,520 --> 00:44:58,440
Thanks, Coinbase.

856
00:44:58,440 --> 00:44:59,560
Thank you, Coinbase.

857
00:44:59,600 --> 00:45:01,480
Thanks for promoting crypto adoption.

858
00:45:01,520 --> 00:45:02,280
Great job.

859
00:45:02,360 --> 00:45:07,080
That tells you everything. It's an initiative put together by Coinbase of trusted exchanges.

860
00:45:07,080 --> 00:45:09,320
It sounds like an old boy network of exchanges.

861
00:45:09,440 --> 00:45:13,440
And so the real takeaway is if you're listening in the UK and you've got any holdings on

862
00:45:13,440 --> 00:45:16,320
an exchange, get it off before the end of November, because afterwards you won't be

863
00:45:16,320 --> 00:45:16,800
able to remove it.

864
00:45:16,800 --> 00:45:21,240
And if you're listening anywhere else, get it off because this is coming to you.

865
00:45:21,240 --> 00:45:22,080
Yeah, exactly.

866
00:45:22,480 --> 00:45:28,680
If anything remotely close to the financial calamity that seems to be brewing in the

867
00:45:28,680 --> 00:45:34,040
data comes true, do you think that crypto exchanges will be able to stay solvent in

868
00:45:34,040 --> 00:45:36,440
those events? Do you think they're going to have banking relationships?

869
00:45:36,480 --> 00:45:42,120
Do you think they're going to be allowed to act as portals that just take capital out

870
00:45:42,120 --> 00:45:47,600
of a local economy, reduce prices there, increase volatility there and give people any

871
00:45:47,600 --> 00:45:49,480
sort of protection from inflation?

872
00:45:49,600 --> 00:45:56,280
Like TLDR, the only way out for governments that are completely fiscally unsustainable

873
00:45:56,280 --> 00:46:01,160
and are confronting debt markets that can no longer paper over these unsustainable

874
00:46:01,160 --> 00:46:04,160
policies is taxation through inflation and confiscation.

875
00:46:04,800 --> 00:46:06,200
That's why they got to close the existence.

876
00:46:06,200 --> 00:46:09,360
Here's a quote from Gemini, their UK operation.

877
00:46:09,360 --> 00:46:14,480
Quote, from the 1st of December 2023, Gemini may freeze and or restrict users who are

878
00:46:14,480 --> 00:46:19,240
attempting to make inbound transfers to Gemini from a non-trust VASP.

879
00:46:19,320 --> 00:46:21,000
That's one of these participating exchanges.

880
00:46:21,160 --> 00:46:25,000
They go on to write, this is due to these transactions potentially missing the required

881
00:46:25,000 --> 00:46:28,080
information to ensure transparency of the transaction.

882
00:46:28,200 --> 00:46:32,600
So what they mean by that missing information is you got a form to fill out for both ends

883
00:46:32,600 --> 00:46:37,120
of that transaction and you fully KYC, you'd list what the intent is, what the use is

884
00:46:37,120 --> 00:46:40,480
and where it came from before you can do a single transaction.

885
00:46:40,640 --> 00:46:42,080
You got to get it off the exchanges.

886
00:46:42,160 --> 00:46:46,600
This is horrible to see and totally antithetical to the nature of Bitcoin.

887
00:46:46,840 --> 00:46:48,200
And totally predicted.

888
00:46:48,280 --> 00:46:51,760
We've always said that not your keys, not your coins.

889
00:46:51,920 --> 00:46:56,760
And we're all about to discover what coins are ours because you're going to hopefully

890
00:46:56,760 --> 00:47:00,880
listen to this attempt to withdraw from an exchange, anything you're holding on there.

891
00:47:01,000 --> 00:47:05,080
And you're going to find out if the transaction goes through or if you get a little alert

892
00:47:05,200 --> 00:47:06,880
and then you're contacted by a rep.

893
00:47:06,920 --> 00:47:09,640
We need you to fill in more information, scan your face.

894
00:47:09,840 --> 00:47:15,440
This sort of KYC is incredibly dangerous to anybody, but especially crypto holders.

895
00:47:15,600 --> 00:47:19,360
It's pretty big downer, but it is the situation that's developed in the last couple of

896
00:47:19,360 --> 00:47:22,600
weeks. And I think we just wanted to get the word out to everybody as fast as possible.

897
00:47:22,600 --> 00:47:24,520
If you're in that area, this is your last chance.

898
00:47:24,640 --> 00:47:25,720
And it's not your crypto anymore.

899
00:47:25,840 --> 00:47:27,640
You paid for it. It's not yours.

900
00:47:27,800 --> 00:47:29,040
A shout out to privacy.

901
00:47:29,160 --> 00:47:33,680
So if you can withdraw, you probably need some on-chain privacy.

902
00:47:33,800 --> 00:47:35,200
So what are the tools today?

903
00:47:35,320 --> 00:47:38,960
There's CoinJoin, JoinMarket, Samurai, Wasabi.

904
00:47:39,000 --> 00:47:41,640
These are sort of the famous CoinJoin tools.

905
00:47:41,680 --> 00:47:45,600
We recommend JoinMarket because then you don't have to deal with the politics and trust

906
00:47:45,600 --> 00:47:47,760
of the coordinator. But CoinJoin is expensive.

907
00:47:48,000 --> 00:47:49,760
Other options are swaps.

908
00:47:49,920 --> 00:47:52,320
I think Bolts.Exchange has a swap service.

909
00:47:52,320 --> 00:47:54,000
You can swap Bitcoin to Lightning.

910
00:47:54,000 --> 00:47:57,800
I think they also do altcoin swaps or some, maybe Tether.

911
00:47:57,800 --> 00:48:04,440
So these are options for creating a break in the deterministic links between your UTXOs.

912
00:48:04,560 --> 00:48:07,760
But other than that, you need your own wallet for hardware wallets.

913
00:48:07,840 --> 00:48:11,680
We always recommend ColdCard for the power users.

914
00:48:11,760 --> 00:48:16,560
So I guess they have more user friendly options now, like these Sats cards or tap signers.

915
00:48:16,600 --> 00:48:17,600
True. Yeah.

916
00:48:17,880 --> 00:48:21,480
Well, I guess boost in and tell us how you're securing your stash in a way that doesn't

917
00:48:21,480 --> 00:48:24,480
identify you, because I think we should start talking a little bit more about that more

918
00:48:24,480 --> 00:48:27,960
frequently. Like I think we've avoided the topic of multisig a bit on the show, but maybe

919
00:48:27,960 --> 00:48:30,800
it's time to start discussing that a little more seriously as well.

920
00:48:30,880 --> 00:48:33,840
You know, especially as you start trying to secure large amounts, if it does go up in

921
00:48:33,840 --> 00:48:36,720
a bull run, you want to start thinking about how am I protecting my stash?

922
00:48:36,720 --> 00:48:40,000
Not at 30,000, but how am I protecting it when it's 100,000, 500,000?

923
00:48:40,040 --> 00:48:42,360
And I think that's when you start talking multisig and things like that.

924
00:48:42,360 --> 00:48:44,000
I think those could be future conversations.

925
00:48:44,080 --> 00:48:49,440
And even though mempool fees are high right now, the bull market has not even begun

926
00:48:49,480 --> 00:48:51,680
and the mempool is over a gigabyte.

927
00:48:51,840 --> 00:48:53,440
That is a market signal.

928
00:48:53,480 --> 00:48:55,160
No one can control the mempool.

929
00:48:55,160 --> 00:48:57,720
That is organic demand for block space.

930
00:48:57,880 --> 00:48:59,480
I'm not a price talker.

931
00:48:59,480 --> 00:49:03,720
I'm not a trader, but I honestly don't see how this bull market doesn't.

932
00:49:03,760 --> 00:49:07,800
It might be the final cycle because there is a price of Bitcoin where it phase

933
00:49:07,800 --> 00:49:12,040
transitions into a completely different type of asset with a macro backdrop where

934
00:49:12,040 --> 00:49:17,240
there is literally no financial protection from these events other than perhaps hard

935
00:49:17,240 --> 00:49:21,600
assets like gold and Bitcoin that you self custody that cannot be confiscated.

936
00:49:21,640 --> 00:49:22,680
This is Bitcoin's moment.

937
00:49:23,160 --> 00:49:23,920
Yeah, perhaps.

938
00:49:23,960 --> 00:49:26,560
And whatever your security is, it's not enough right now.

939
00:49:28,040 --> 00:49:30,000
And those altcoins, they're not going to do it for you either.

940
00:49:30,000 --> 00:49:33,160
I'm sorry to report, especially those board APE NFTs.

941
00:49:33,200 --> 00:49:34,480
They're not going to really do it for you.

942
00:49:34,560 --> 00:49:35,840
All they're going to do is blind you.

943
00:49:35,920 --> 00:49:40,800
There was a board APE NFT event in Hong Kong right around adopting Bitcoin and the

944
00:49:40,800 --> 00:49:45,080
attendees that used the bathroom were exposed to UV lights that the organizers

945
00:49:45,080 --> 00:49:48,040
thought were black lights, which seeing the pictures, you can tell they're not

946
00:49:48,040 --> 00:49:51,160
black lights. It's obvious they're not black lights, not to make light of the

947
00:49:51,160 --> 00:49:53,440
situation because people who ended up taking a piss and they ended up getting

948
00:49:53,440 --> 00:49:56,960
blinded, at least for a few days and severe skin burns because they installed these

949
00:49:56,960 --> 00:49:59,640
UV lights all over the place at the board APE's party.

950
00:50:00,040 --> 00:50:02,680
And it's just, I don't know, sort of emblematic, I think.

951
00:50:02,840 --> 00:50:06,160
It kind of lets you know what quality of entity you're dealing with there.

952
00:50:06,280 --> 00:50:09,200
Yeah, and maybe don't go to crypto events in Hong Kong.

953
00:50:10,040 --> 00:50:12,920
This episode of the Bitcoin Dad Pods brought to you by my podcast network,

954
00:50:12,920 --> 00:50:14,600
jupiterbroadcasting.com.

955
00:50:14,720 --> 00:50:18,680
We just released Linux Unplugged, which was recorded down here in San Salvador.

956
00:50:18,680 --> 00:50:22,760
And I shared a few stories talking to the locals about their open source and Linux

957
00:50:22,760 --> 00:50:26,440
use. And we also did a review of Fedora 39, which I think was a real nice one.

958
00:50:26,520 --> 00:50:27,640
So go over and check out all the good shows.

959
00:50:27,640 --> 00:50:31,280
We've got Self-Hosted, Office Hours, Coda Radio, and of course, Linux Unplugged

960
00:50:31,320 --> 00:50:33,240
over at jupiterbroadcasting.com.

961
00:50:33,400 --> 00:50:38,720
I was trying for something new running Centos Stream 9 and I really regret I

962
00:50:38,720 --> 00:50:40,720
didn't play it safer and just go with Fedora.

963
00:50:41,600 --> 00:50:42,800
Yeah, it probably would have been easier on you.

964
00:50:42,800 --> 00:50:44,880
Although I think you kind of got it whipped into shape now.

965
00:50:45,000 --> 00:50:45,800
It just took you a week.

966
00:50:45,880 --> 00:50:49,680
It's almost like technical skill doesn't matter and your mental state does.

967
00:50:49,720 --> 00:50:50,400
Yes.

968
00:50:50,440 --> 00:50:54,760
Because the moment that I kind of resolved my conflicted feelings about El

969
00:50:54,760 --> 00:51:00,880
Salvador and travel and both anticipation for the excitement of a bull market and

970
00:51:01,080 --> 00:51:02,840
just the dread for what's coming.

971
00:51:03,200 --> 00:51:06,360
You know, once I gave voice to that, suddenly my computer worked, everything

972
00:51:06,360 --> 00:51:09,040
worked. I didn't even change anything.

973
00:51:09,040 --> 00:51:09,920
It just started working.

974
00:51:10,560 --> 00:51:11,480
It's funny how that happens.

975
00:51:11,480 --> 00:51:12,720
I experienced the same thing.

976
00:51:12,760 --> 00:51:14,240
It must be a new kernel module.

977
00:51:14,280 --> 00:51:14,640
Yeah.

978
00:51:14,640 --> 00:51:15,720
Emotional intelligence.

979
00:51:15,720 --> 00:51:16,000
Right.

980
00:51:16,000 --> 00:51:18,440
It's measuring the temperature of your hands and when they're really hot.

981
00:51:18,480 --> 00:51:21,320
This is the Berkeley packet filter add-ons, right?

982
00:51:21,320 --> 00:51:22,320
The VFs.

983
00:51:23,200 --> 00:51:24,600
You can do it all in eBPF real quick.

984
00:51:25,160 --> 00:51:31,680
So we have a slightly short Bitcoin Optech, but I think it's big news that the

985
00:51:31,680 --> 00:51:36,040
Bitcoin dev mailing list is not long for this world, at least not in its current

986
00:51:36,040 --> 00:51:36,960
form presently.

987
00:51:36,960 --> 00:51:40,120
And well, since the beginning, it's been hosted by the Linux Foundation.

988
00:51:40,200 --> 00:51:44,560
They had or have a lot of infrastructure and they host a lot of mailing lists for

989
00:51:44,560 --> 00:51:45,520
open source projects.

990
00:51:45,640 --> 00:51:49,160
And I always really liked this because I've always felt that the Linux open source

991
00:51:49,160 --> 00:51:52,320
camp and the Bitcoin open source camp could have been closer together, could

992
00:51:52,320 --> 00:51:53,520
always have been closer together.

993
00:51:53,520 --> 00:51:56,640
And so I thought having a neutral party like the Linux Foundation host both those

994
00:51:56,640 --> 00:52:01,000
mailing lists was important, but they have been struggling since about 2017 over

995
00:52:01,000 --> 00:52:04,800
at the Linux Foundation to properly manage their mail system.

996
00:52:04,800 --> 00:52:08,000
And I know they've tried to do an upgrade of their mail hosting software at one

997
00:52:08,000 --> 00:52:10,960
point, which went badly and they had to roll back and they kind of started warning

998
00:52:10,960 --> 00:52:13,200
people back then, hey, we're not going to do this forever.

999
00:52:13,240 --> 00:52:16,720
Well, this previous week or within the last week, they sent notice to the Bitcoin

1000
00:52:16,720 --> 00:52:20,280
mailing dev list to one of the maintainers of the list that they would be

1001
00:52:20,280 --> 00:52:24,080
ceasing. The Linux Foundation would be ceasing all mailing list hosting

1002
00:52:24,080 --> 00:52:25,640
operations by the end of the year.

1003
00:52:25,680 --> 00:52:26,840
That's the Linux kernel.

1004
00:52:26,840 --> 00:52:28,800
That's all the open source projects around it.

1005
00:52:28,800 --> 00:52:31,440
And of course, the other big one, the Bitcoin dev mailing list.

1006
00:52:31,480 --> 00:52:34,400
And they kind of have just a couple of months to go figure out where they're

1007
00:52:34,400 --> 00:52:35,960
going to host this massive mailing list.

1008
00:52:36,000 --> 00:52:39,800
I'm frustrated by it because the Linux Foundation at this point does so little

1009
00:52:39,800 --> 00:52:43,360
for Linux and open source, three percent of their overall budget, less than three

1010
00:52:43,360 --> 00:52:44,800
percent. Really, it goes to Linux.

1011
00:52:44,920 --> 00:52:48,280
So it sort of felt like one of the things they could do is host some damn email.

1012
00:52:48,280 --> 00:52:49,800
And now they can't even be bothered to do that.

1013
00:52:49,800 --> 00:52:54,840
And I think this is a Bitcoin story because without Linux, what do we host

1014
00:52:54,840 --> 00:52:56,520
Bitcoin on? Not Windows, man.

1015
00:52:56,520 --> 00:53:01,400
I'm sorry. If we don't have software that we can run on any device that we can

1016
00:53:01,400 --> 00:53:04,160
own, that we can trust, then we can't have Bitcoin.

1017
00:53:04,160 --> 00:53:06,480
You know, Linux is part of the sovereign story, right?

1018
00:53:06,480 --> 00:53:10,560
It's a sovereign operating system and you don't have to follow the whims of some

1019
00:53:10,560 --> 00:53:14,480
corporate strategy. You can watch the production, the development in the open.

1020
00:53:14,520 --> 00:53:16,400
You can see where it's going before it's gotten there.

1021
00:53:16,400 --> 00:53:18,000
People can fork it if they don't like it.

1022
00:53:18,080 --> 00:53:21,640
It is truly an open, organic platform that lets you be completely sovereign.

1023
00:53:21,760 --> 00:53:28,120
And frankly, it is now easier to use, easier to install than any other operating

1024
00:53:28,120 --> 00:53:30,040
system than Mac OS, than Windows.

1025
00:53:30,320 --> 00:53:33,200
I set up Linux for people who are completely non-technical.

1026
00:53:33,400 --> 00:53:39,600
I have advised my uncle, who knows very little about technical details, about how

1027
00:53:39,600 --> 00:53:42,560
to install Ubuntu using a USB.

1028
00:53:42,560 --> 00:53:44,840
Actually, I think he chose Fedora just because of the name.

1029
00:53:44,840 --> 00:53:49,920
But how to install Fedora using a USB on an eight year old computer.

1030
00:53:49,920 --> 00:53:52,720
And that's such a great that's such a great reason to choose a distro.

1031
00:53:53,880 --> 00:53:56,600
And he is using it as a media center.

1032
00:53:56,600 --> 00:54:00,320
Oh, that's great. We had a conversation about it and I didn't hear back and I

1033
00:54:00,320 --> 00:54:01,280
thought he hadn't done it.

1034
00:54:01,280 --> 00:54:02,560
And he was like, oh, yeah, it was no big deal.

1035
00:54:02,560 --> 00:54:04,120
We're working fine. That's what you want, really.

1036
00:54:04,200 --> 00:54:06,760
This is someone of our parents generation.

1037
00:54:06,760 --> 00:54:08,800
You know, this is not an Internet native person.

1038
00:54:08,800 --> 00:54:10,560
And so Linux is so good.

1039
00:54:10,560 --> 00:54:13,080
And the Linux Foundation does so little.

1040
00:54:13,080 --> 00:54:15,080
And I think, Chris, you have an announcement.

1041
00:54:15,120 --> 00:54:16,040
Oh, yeah, we're going to.

1042
00:54:16,040 --> 00:54:18,200
Well, I haven't I haven't really hired the lawyer yet.

1043
00:54:18,200 --> 00:54:21,480
So if you're out there and you're a Linux open source lawyer who wants to work for

1044
00:54:21,480 --> 00:54:24,760
pro bono, let's launch a lawsuit against the Linux Foundation for not investing

1045
00:54:24,760 --> 00:54:26,240
enough in Linux. I don't know exactly the parameters.

1046
00:54:26,240 --> 00:54:29,440
You're the lawyer. So you figure it out and tell me there has to be something here.

1047
00:54:29,680 --> 00:54:33,400
If it's called the Linux Foundation and less than five percent of their budget

1048
00:54:33,400 --> 00:54:34,960
actually supports Linux.

1049
00:54:34,960 --> 00:54:36,520
Oh, there goes a cool guy.

1050
00:54:36,520 --> 00:54:39,160
That guy's the that's the coolest guy in San Salvador right now.

1051
00:54:39,160 --> 00:54:42,880
Or the least respectful of his neighbors.

1052
00:54:42,880 --> 00:54:47,200
Yeah, I think we should start a campaign for them to rename it to the Free Software

1053
00:54:47,200 --> 00:54:50,000
Consolidation for Commercial Interest Foundation.

1054
00:54:50,000 --> 00:54:51,000
That's more accurate.

1055
00:54:51,000 --> 00:54:52,360
Yeah, I think that about covers it.

1056
00:54:52,360 --> 00:54:53,600
It's just such a shame.

1057
00:54:53,600 --> 00:54:56,040
You know, like these developers have so much on their plate.

1058
00:54:56,040 --> 00:54:57,400
Now they got to go figure out how to host email.

1059
00:54:57,400 --> 00:54:59,000
Maybe somebody will come along and help them out.

1060
00:54:59,040 --> 00:55:03,920
In more positive news, we have another post about covenants.

1061
00:55:03,920 --> 00:55:07,720
Johan Torres Hall, Seth has posted to the Lightning Dev mailing list.

1062
00:55:07,720 --> 00:55:09,320
Again, not long for this world.

1063
00:55:09,320 --> 00:55:14,280
A suggestion about using covenants to aggregate multiple hash time locked

1064
00:55:14,280 --> 00:55:17,120
contracts, HTLCs into a single output.

1065
00:55:17,120 --> 00:55:21,240
It could be spent all at once if a party knew all the pre images or if a party only

1066
00:55:21,240 --> 00:55:24,520
knew some of the pre images, they could claim just those and then the remaining

1067
00:55:24,520 --> 00:55:26,560
balance could be refunded to the other party.

1068
00:55:26,560 --> 00:55:29,840
So would you use this for like, say I wanted to send you some Bitcoin, but I

1069
00:55:29,840 --> 00:55:33,240
didn't want you to spend it for five days and then you'd send it to somebody else

1070
00:55:33,240 --> 00:55:34,360
and they couldn't spend it for five days.

1071
00:55:34,360 --> 00:55:37,040
Like what would be like the most, you know, average use case?

1072
00:55:37,040 --> 00:55:37,800
Do you think again?

1073
00:55:37,800 --> 00:55:42,880
I'm going to show our upcoming conversation with waxwing because currently

1074
00:55:42,960 --> 00:55:48,320
the Lightning Network relies on game theory to enforce game theory is messy.

1075
00:55:48,400 --> 00:55:52,800
It's violent because if your node hiccups and you send a wrong state, then your

1076
00:55:52,800 --> 00:55:54,480
channel partner can take all your money.

1077
00:55:54,600 --> 00:55:55,960
It's not an ideal situation.

1078
00:55:55,960 --> 00:55:59,720
The better situation is that the ownership of funds in Lightning is

1079
00:55:59,720 --> 00:56:01,320
determined by cryptography.

1080
00:56:01,640 --> 00:56:05,640
This covenant proposal would allow Lightning channels to close

1081
00:56:05,640 --> 00:56:07,320
unilaterally in a safe way.

1082
00:56:07,640 --> 00:56:12,160
You'd have more flexibility about fees because when Lightning was invented, there

1083
00:56:12,160 --> 00:56:16,560
was a caveat from the beginning, which was this does not scale to billions of people.

1084
00:56:16,640 --> 00:56:21,400
And that's true because Lightning security doesn't just rely on the Bitcoin

1085
00:56:21,400 --> 00:56:23,840
blockchain on data that's on the Bitcoin blockchain.

1086
00:56:23,960 --> 00:56:28,320
It relies on transactions clearing within a certain timeframe.

1087
00:56:28,360 --> 00:56:33,720
Well, with a one gigabyte mempool, I guarantee we are going to see in the

1088
00:56:33,720 --> 00:56:37,920
near future, people taking Lightning channels because the counterparty

1089
00:56:38,000 --> 00:56:42,320
couldn't confirm a justice transaction for whatever reason, this is a real issue.

1090
00:56:42,400 --> 00:56:47,480
Covenant solve this by adding additional flexibility into the parameters for

1091
00:56:47,480 --> 00:56:49,720
closing, opening and updating channels.

1092
00:56:49,800 --> 00:56:53,720
They allow this to be done in a much safer manner that doesn't require an

1093
00:56:53,720 --> 00:56:56,920
empty or at least a not too full mempool for security.

1094
00:56:57,000 --> 00:56:59,040
So the benefits to Lightning would be obvious.

1095
00:56:59,160 --> 00:57:04,520
And I think it echoes Brandon Black's talk at adopting Bitcoin about covenants,

1096
00:57:05,160 --> 00:57:09,600
about the competing proposals and how this is pretty clearly the

1097
00:57:09,600 --> 00:57:11,680
next upgrade to Bitcoin.

1098
00:57:11,720 --> 00:57:15,680
Yeah, maybe one of the lesser controversial ones in a while, maybe.

1099
00:57:15,800 --> 00:57:19,880
I mean, it's hard to say that now because things change, but it seems like one of

1100
00:57:19,880 --> 00:57:21,320
the lesser controversial ones at the moment.

1101
00:57:21,400 --> 00:57:23,280
Now we do always love hearing your feedback.

1102
00:57:23,280 --> 00:57:26,280
Remember, you can get in touch with the show Bitcoin Dad Pod at ProtonMail.com

1103
00:57:26,520 --> 00:57:30,200
or on WeaponX over at Bitcoin Dad Pod or why not join the real time chat?

1104
00:57:30,200 --> 00:57:32,840
I was just sharing some great fraud and schreuter this morning in the Bitcoin

1105
00:57:32,840 --> 00:57:35,960
chat, throwing in video clips of everybody that said Bitcoin was going to

1106
00:57:35,960 --> 00:57:36,960
zero over the last year.

1107
00:57:37,000 --> 00:57:40,240
And, you know, sometimes we just get great feedback via that Matrix channel, too.

1108
00:57:40,240 --> 00:57:41,240
It's going all week long.

1109
00:57:41,320 --> 00:57:42,120
So consider joining that.

1110
00:57:42,120 --> 00:57:47,040
We'll have links in the show notes and shout out first to our baller booster of

1111
00:57:47,080 --> 00:57:54,600
the week, Baffo, who sent in a big 80,000 sats with the message, Baffo, send Bitcoin

1112
00:57:54,600 --> 00:57:56,640
beach boost.

1113
00:57:56,720 --> 00:57:59,080
Ah, that's a good boost, Baffo.

1114
00:57:59,080 --> 00:58:00,480
Thank you, you baller.

1115
00:58:01,240 --> 00:58:02,280
Appreciate that always.

1116
00:58:02,400 --> 00:58:03,360
Thank you for that chunk.

1117
00:58:03,360 --> 00:58:05,760
I wish I'd seen you at the conference, Baffo.

1118
00:58:05,800 --> 00:58:07,240
Maybe I did, but I didn't know.

1119
00:58:07,440 --> 00:58:08,560
We did meet a couple of listeners.

1120
00:58:09,200 --> 00:58:13,320
Shout out to Hal Was Right, who we ran into at the conference.

1121
00:58:14,120 --> 00:58:16,800
Yeah, it's almost easier when people tell us their boost username, because then

1122
00:58:16,960 --> 00:58:17,800
like that clicks.

1123
00:58:18,160 --> 00:58:22,880
Jordan B came in with a row of McDucks, 22,222 sats using the pod verse.

1124
00:58:23,160 --> 00:58:24,880
He says, Hey guys, keep up the great podcast.

1125
00:58:25,120 --> 00:58:28,400
He says, have you tried out the new Zeus beta features of a trust

1126
00:58:28,400 --> 00:58:29,600
minimized lightning address?

1127
00:58:29,720 --> 00:58:31,120
It takes the form of like an email address.

1128
00:58:31,120 --> 00:58:32,560
My name is Zeuspay.com.

1129
00:58:32,680 --> 00:58:35,760
The way it works is it's using a 24 hour hodl invoice.

1130
00:58:35,760 --> 00:58:41,240
As long as you open the app within 24 hours of payment, it will be redeemed.

1131
00:58:41,400 --> 00:58:42,640
Otherwise the payment will fail.

1132
00:58:42,640 --> 00:58:44,200
It's pretty cool if somewhat controversial.

1133
00:58:44,240 --> 00:58:47,600
And I think they're using Nostra at a station a little bit to do this as well.

1134
00:58:47,600 --> 00:58:50,600
So there's some Nostra magic, kind of put that transaction on the ether.

1135
00:58:50,600 --> 00:58:53,160
And then when your client comes online, it can go find it.

1136
00:58:53,240 --> 00:58:54,800
I think it's fricking brilliant.

1137
00:58:55,080 --> 00:58:59,960
And it's certainly an upgrade to the Albie static lightning address where

1138
00:58:59,960 --> 00:59:01,720
it's basically custodied by Albie.

1139
00:59:01,760 --> 00:59:01,920
Yeah.

1140
00:59:01,920 --> 00:59:04,560
And it has to be, it's online all the time because Albie servers are right.

1141
00:59:04,560 --> 00:59:07,000
But this lets you self-custody in an app that can be offline and you

1142
00:59:07,000 --> 00:59:08,720
can still receive payments.

1143
00:59:08,800 --> 00:59:14,000
But not anymore because Albie has frozen deposits due to high network.

1144
00:59:14,000 --> 00:59:17,400
Yeah, there's that there that is, it does get kind of sketch as everybody adjusts.

1145
00:59:17,720 --> 00:59:21,640
Evan, the developer, the main developer of the Zeus app was at adopting Bitcoin.

1146
00:59:21,640 --> 00:59:22,760
We emceed his event.

1147
00:59:22,800 --> 00:59:25,680
And I think Zeus is the app to beat right now.

1148
00:59:25,880 --> 00:59:28,880
You can connect it to your existing node if you already have one and it'll help

1149
00:59:28,880 --> 00:59:32,800
you manage that just fine and spend your stats from your existing node, or now

1150
00:59:32,800 --> 00:59:36,400
the node can be in your phone with the zero dot eight public beta going forward.

1151
00:59:36,400 --> 00:59:39,360
They actually have a built in fricking lightning node.

1152
00:59:39,440 --> 00:59:42,400
They will do dynamic liquidity channels from their provider.

1153
00:59:42,600 --> 00:59:45,240
I've been using it here in San Salvador for my Bitcoin transactions.

1154
00:59:45,240 --> 00:59:45,800
It's been working great.

1155
00:59:45,920 --> 00:59:47,640
My big Zeus bowl.

1156
00:59:47,920 --> 00:59:52,040
I've not yet used this feature, but I think that we are going to talk to Evan

1157
00:59:52,040 --> 00:59:57,920
when Zeus gets to its 1.0 release, ideally 1.1 maybe, and we can talk about the

1158
00:59:57,920 --> 01:00:00,640
evolution of the product starting in LSP.

1159
01:00:01,200 --> 01:00:05,120
Yeah, he's managing the liquidity for all those clients got it.

1160
01:00:05,120 --> 01:00:07,320
That's got to be serious insight into lightning at scale.

1161
01:00:07,440 --> 01:00:13,880
We also received a row of ducks, 2222 sats from mere mortals podcast with the

1162
01:00:13,880 --> 01:00:18,640
message would love to hear some on the ground info of interesting BTC

1163
01:00:18,640 --> 01:00:21,280
observations, ease of use, local understanding.

1164
01:00:21,280 --> 01:00:22,160
Do you feel safe there?

1165
01:00:22,240 --> 01:00:26,240
I'm looking at going to the Brazilian version of Bitcoin beach next year.

1166
01:00:26,280 --> 01:00:26,760
Wow.

1167
01:00:26,800 --> 01:00:30,040
Well, first of all, mere mortals, thank you for the boost and sorry to hear about

1168
01:00:30,040 --> 01:00:30,880
the recent family news.

1169
01:00:30,880 --> 01:00:31,760
My thoughts are with you.

1170
01:00:32,040 --> 01:00:32,840
Do I feel safe?

1171
01:00:32,840 --> 01:00:33,440
Let's start there.

1172
01:00:33,520 --> 01:00:34,480
Yeah, maybe I shouldn't.

1173
01:00:35,120 --> 01:00:36,240
The wind's picking up out here.

1174
01:00:36,560 --> 01:00:37,920
Everything's blowing around us.

1175
01:00:38,920 --> 01:00:41,200
Maybe I shouldn't, but I have actually felt pretty safe.

1176
01:00:41,240 --> 01:00:43,760
I think I feel just as safe as I do in most downtown cities.

1177
01:00:44,040 --> 01:00:47,120
That's that said, you're not going to walk around at night the same way.

1178
01:00:47,120 --> 01:00:47,440
I think.

1179
01:00:47,440 --> 01:00:48,000
Probably not.

1180
01:00:48,000 --> 01:00:48,200
Yeah.

1181
01:00:48,600 --> 01:00:51,720
Although, I mean, just because it's dangerous on the sidewalks or the

1182
01:00:51,720 --> 01:00:55,640
sidewalks are so janky and the lighting is poor, it's very dark at night.

1183
01:00:55,920 --> 01:01:00,240
Although I have been, so we are Airbnb has a beautiful balcony that looks over

1184
01:01:00,240 --> 01:01:04,160
San Salvador and I haven't been sleeping a lot with being sick and I've been out

1185
01:01:04,160 --> 01:01:05,080
there at night watching it.

1186
01:01:05,200 --> 01:01:08,040
I felt like I would probably walk around at least a little local area.

1187
01:01:08,040 --> 01:01:08,720
So safe.

1188
01:01:08,720 --> 01:01:09,240
Yes.

1189
01:01:09,320 --> 01:01:12,160
But there is probably, you want to exercise some caution because you could

1190
01:01:12,160 --> 01:01:15,800
easily twist an ankle walking around in the dark local understanding.

1191
01:01:15,920 --> 01:01:17,200
I'd say is a hit and miss.

1192
01:01:17,200 --> 01:01:20,400
The younger population seems pretty tuned in on the younger.

1193
01:01:20,400 --> 01:01:23,120
You are the more tech savvy, the more educated.

1194
01:01:23,120 --> 01:01:25,760
These are the people that can take advantage of new

1195
01:01:25,760 --> 01:01:27,400
technologies and leverage them.

1196
01:01:27,600 --> 01:01:31,720
It's just an unfortunate fact that poorer people with less access to

1197
01:01:31,760 --> 01:01:35,880
education have a harder time adapting to these changes.

1198
01:01:36,360 --> 01:01:39,120
And education is part of that solution.

1199
01:01:39,320 --> 01:01:41,360
Building communities is part of that solution.

1200
01:01:41,760 --> 01:01:43,280
Is there a good one?

1201
01:01:43,440 --> 01:01:44,240
I don't know.

1202
01:01:44,360 --> 01:01:45,000
It's hard.

1203
01:01:45,080 --> 01:01:48,840
And the reality is a lot of the business owners are the older generation.

1204
01:01:49,120 --> 01:01:52,200
So that's where you run into some of the Bitcoin adoption, because this

1205
01:01:52,200 --> 01:01:53,720
was a great insight that was provided to me.

1206
01:01:53,720 --> 01:01:57,480
That's so obvious when I say it out loud, but I didn't fully grasp until

1207
01:01:57,480 --> 01:02:00,000
I was here on the ground in the West, in the States.

1208
01:02:00,040 --> 01:02:02,800
I think a lot of us look at Bitcoin as a hedge against sovereign risk.

1209
01:02:02,800 --> 01:02:06,360
We look at it as a, as a vote outside the system, a little bit of protection

1210
01:02:06,360 --> 01:02:07,440
from your local government.

1211
01:02:07,520 --> 01:02:10,640
Some people, I think maybe, maybe a lot of people are buying and stacking

1212
01:02:10,640 --> 01:02:12,680
sats for those reasons in the West.

1213
01:02:12,760 --> 01:02:16,520
Here in El Salvador, they have very good reason for generation after

1214
01:02:16,520 --> 01:02:19,200
generation to have intense, deep distrust for their government.

1215
01:02:19,320 --> 01:02:21,440
And Bitcoin is a government initiative.

1216
01:02:21,560 --> 01:02:24,680
It started in El Zante, but then it was implemented here at the government

1217
01:02:24,680 --> 01:02:26,640
level with Chivo wallet and all of that.

1218
01:02:26,760 --> 01:02:31,560
And so a lot of the older folks, you know, my age and I look at Bitcoin

1219
01:02:31,600 --> 01:02:34,800
as the government money, and so they don't trust it because they

1220
01:02:34,800 --> 01:02:35,960
think it's government money.

1221
01:02:36,080 --> 01:02:38,000
And well, that's factually wrong.

1222
01:02:38,040 --> 01:02:41,120
And so that will probably revert to the mean over time and they'll

1223
01:02:41,120 --> 01:02:43,920
come to a new understanding, but we're in that phase, the young folks, they

1224
01:02:43,920 --> 01:02:45,280
love it, they think it's great.

1225
01:02:45,360 --> 01:02:48,400
You know, they'll take Bitcoin and some of the businesses, absolutely like

1226
01:02:48,400 --> 01:02:50,640
Bitcoin beach and some of the businesses you're absolutely will.

1227
01:02:50,760 --> 01:02:54,720
But I think the older the age gets, the more skeptical you'll

1228
01:02:54,720 --> 01:02:56,120
find the El Salvadorians.

1229
01:02:56,360 --> 01:03:00,720
And there's also just friction because if you have a restaurant and someone

1230
01:03:00,720 --> 01:03:04,640
wants to pay in Bitcoin, it's not going through your point of sale terminal.

1231
01:03:04,640 --> 01:03:06,080
And so that's separate accounting.

1232
01:03:06,800 --> 01:03:07,040
Yeah.

1233
01:03:07,040 --> 01:03:10,640
You know, you, it's not like these operations, I mean, restaurants

1234
01:03:10,640 --> 01:03:12,160
everywhere are super low margin.

1235
01:03:12,160 --> 01:03:15,120
And so it's not like they can just hodl those sats necessarily.

1236
01:03:15,120 --> 01:03:18,160
They have to convert them to fiat to pay people.

1237
01:03:18,160 --> 01:03:19,160
And that is friction.

1238
01:03:19,200 --> 01:03:22,960
That's why the glory announcement with 40,000 merchants was kind of a big deal

1239
01:03:23,000 --> 01:03:27,080
because they're integrating that sats receiving into their existing workflow

1240
01:03:27,080 --> 01:03:27,640
and platform.

1241
01:03:27,640 --> 01:03:29,400
So it'll be just part of their business balance, right?

1242
01:03:29,400 --> 01:03:32,640
They don't have now a cash balance and a sats balance, which was just a lot to

1243
01:03:32,640 --> 01:03:33,920
manage and I wouldn't want to do that either.

1244
01:03:34,520 --> 01:03:35,920
And Hal was right.

1245
01:03:36,400 --> 01:03:36,920
There he is.

1246
01:03:37,040 --> 01:03:41,880
Already given a shout out, sent in 2100 sats with a message, El Salvador

1247
01:03:41,880 --> 01:03:44,960
boost, I hope you are all enjoying your trip.

1248
01:03:45,160 --> 01:03:45,400
Yep.

1249
01:03:45,560 --> 01:03:47,120
I am enjoying it enough that I'm already sad.

1250
01:03:47,120 --> 01:03:48,000
We're leaving tomorrow morning.

1251
01:03:48,760 --> 01:03:52,840
I mean, I'm glad to go home and I got so much stuff to do when I get home that I

1252
01:03:52,840 --> 01:03:55,720
am chomping at the bit to get home as fast as possible, but I'm, it's, I'm

1253
01:03:55,720 --> 01:03:59,800
also torn like every time I step out on the balcony, I'm trying to take in that

1254
01:03:59,800 --> 01:04:02,360
view, just trying to take it in as much as I can every time.

1255
01:04:02,360 --> 01:04:03,800
Cause I, I know I'm going to miss it.

1256
01:04:04,360 --> 01:04:04,960
Absolutely.

1257
01:04:05,360 --> 01:04:07,800
I had a fantastic trip actually.

1258
01:04:07,840 --> 01:04:12,520
There was some rough edges, especially initially, but sorry about that.

1259
01:04:12,960 --> 01:04:14,040
No, it was amazing.

1260
01:04:14,040 --> 01:04:19,680
My son almost killing himself twice and injuring me in the process, but it was

1261
01:04:19,680 --> 01:04:20,240
just great.

1262
01:04:20,320 --> 01:04:24,920
I really had a great time and learned so much this time, just having someone

1263
01:04:24,920 --> 01:04:28,040
else to sort of talk about it with was so valuable.

1264
01:04:28,040 --> 01:04:28,640
Pick it around.

1265
01:04:28,680 --> 01:04:28,960
Yep.

1266
01:04:29,640 --> 01:04:30,160
Yeah, for sure.

1267
01:04:30,200 --> 01:04:34,200
Also, because Chris came, we have interviews this time.

1268
01:04:34,720 --> 01:04:37,120
It's not like last time where I came all this way, tried to do

1269
01:04:37,120 --> 01:04:38,840
interviews, screwed up the audio.

1270
01:04:39,360 --> 01:04:39,880
It's rough.

1271
01:04:40,200 --> 01:04:43,760
It is, it is losing a podcast and losing a recording, especially with a great

1272
01:04:43,760 --> 01:04:46,400
exclusive guest that you went to somewhere to, it's devastating.

1273
01:04:46,680 --> 01:04:47,320
Yeah, it is.

1274
01:04:47,320 --> 01:04:47,840
I've been there.

1275
01:04:47,920 --> 01:04:52,640
Magnolia mayhem comes in with 3,456 sats using the podcast index.

1276
01:04:52,800 --> 01:04:54,800
He writes, Hey guys, stay safe in El Salvador.

1277
01:04:54,800 --> 01:04:55,640
And I hope you all have fun.

1278
01:04:55,640 --> 01:04:56,960
I can't wait to hear about the trip.

1279
01:04:57,080 --> 01:05:04,360
So Magnolia mayhem sent in a long description of a sort of anti Bitcoin show.

1280
01:05:04,720 --> 01:05:07,800
I guess they had a guest on named Phil Ferguson, who is a financial advisor,

1281
01:05:07,800 --> 01:05:10,720
or at least pretends to be one at the host mentioned Phil has a distaste for

1282
01:05:10,720 --> 01:05:14,560
Bitcoin and that sent Phil into a 10 minute triad about how Bitcoin is an

1283
01:05:14,560 --> 01:05:16,400
obvious scam and everyone around it are idiots.

1284
01:05:16,960 --> 01:05:21,800
If you want a good laugh, go look in the Bitcoin matrix chat right now, because

1285
01:05:21,800 --> 01:05:25,280
there's like three or four videos of quote unquote financial experts saying

1286
01:05:25,280 --> 01:05:29,080
Bitcoin is going to zero and all of them said it at the exact bottom market.

1287
01:05:29,080 --> 01:05:31,720
And now Bitcoin is up over a hundred percent since all of those statements

1288
01:05:31,720 --> 01:05:32,840
in the videos in that chat room.

1289
01:05:32,960 --> 01:05:38,840
It is remarkable that these individuals can be steep in this world and not

1290
01:05:38,960 --> 01:05:44,480
understand the difference between block fi and block chain and FTX and Bitcoin.

1291
01:05:44,480 --> 01:05:47,360
Like they, you would think these financial advisors could understand the

1292
01:05:47,360 --> 01:05:51,480
difference between an asset and a company, but they just don't get it.

1293
01:05:51,640 --> 01:05:55,520
Actually, when you say it that way, it makes complete sense in the traditional

1294
01:05:55,520 --> 01:05:59,920
financial system, you know, assets are the liabilities of companies.

1295
01:06:00,480 --> 01:06:02,440
It is a big, a big jump.

1296
01:06:02,600 --> 01:06:05,520
Thank you so much for the boost Magnolia mayhem.

1297
01:06:05,840 --> 01:06:10,720
If you've listened to early episodes of this show, I was just rounding up a

1298
01:06:10,760 --> 01:06:16,160
five year journey to find a very good, thoughtful critique of Bitcoin that

1299
01:06:16,160 --> 01:06:22,280
changed my view that if anything could possibly work as an alternative asset,

1300
01:06:22,280 --> 01:06:27,080
as a way to sort of put money into a lifeboat, send it into the future.

1301
01:06:27,120 --> 01:06:30,720
And I hope the world that we find there is one we want to live in.

1302
01:06:30,800 --> 01:06:31,480
It's Bitcoin.

1303
01:06:31,600 --> 01:06:34,640
It is still ridiculously experimental.

1304
01:06:34,680 --> 01:06:37,880
It works, but it is ridiculously experimental.

1305
01:06:37,960 --> 01:06:39,280
It is still a small community.

1306
01:06:39,280 --> 01:06:41,080
The development community is even smaller.

1307
01:06:41,080 --> 01:06:42,400
There is real risk here.

1308
01:06:42,600 --> 01:06:44,960
You know, this is not something you can just tell people you should

1309
01:06:44,960 --> 01:06:46,040
put your money into Bitcoin.

1310
01:06:46,080 --> 01:06:47,680
That's not a responsible thing to say.

1311
01:06:47,800 --> 01:06:50,800
I think it is responsible to say based on the data, you should put

1312
01:06:50,800 --> 01:06:52,120
some of your money into Bitcoin.

1313
01:06:52,160 --> 01:06:52,360
Yeah.

1314
01:06:52,360 --> 01:06:55,960
I mean, in a way it's more of an indictment of the state of everything else.

1315
01:06:56,120 --> 01:07:00,120
It's an indictment of the economies and all of Western nations around the world.

1316
01:07:00,120 --> 01:07:05,160
It is the fact that we have now been pushed to invest in such a risky asset

1317
01:07:05,200 --> 01:07:08,360
because we have to hedge, you know, just as individuals watching what's going on,

1318
01:07:08,400 --> 01:07:09,560
you can't just sit here and do nothing.

1319
01:07:09,720 --> 01:07:12,760
We are in a world where the craziest, riskiest experiment might

1320
01:07:12,760 --> 01:07:13,960
actually be the safest thing.

1321
01:07:14,400 --> 01:07:17,240
Bitcoin is the shame of the traditional financial system.

1322
01:07:17,360 --> 01:07:21,560
And it's not surprising that people cannot at an emotional level accept it.

1323
01:07:21,640 --> 01:07:23,800
Halleck sent in 10,000 Sats, but no message.

1324
01:07:23,800 --> 01:07:25,200
Thank you though for the support, Halleck.

1325
01:07:25,240 --> 01:07:26,320
Thank you so much, Halleck.

1326
01:07:26,600 --> 01:07:30,040
Adversaries17 sent in 5,000 Sats.

1327
01:07:30,160 --> 01:07:34,400
Hello gentlemen, I'm getting ready to start my stackin' Sats journey.

1328
01:07:34,400 --> 01:07:38,560
I have a node set up and the next step is to get a Sparrow wallet created.

1329
01:07:38,640 --> 01:07:42,600
I'm having trouble deciding on if I must absolutely go full security mode with a

1330
01:07:42,600 --> 01:07:45,840
computer that is completely dedicated to this purpose on a separate VLINE with

1331
01:07:45,840 --> 01:07:49,640
firewall rules created so that nothing else on my network can chat with it.

1332
01:07:50,440 --> 01:07:52,000
A man after my own heart.

1333
01:07:52,720 --> 01:07:57,200
Is this too much or should I start out with using my main desktop PC and start

1334
01:07:57,200 --> 01:07:59,360
heading the full security route later?

1335
01:07:59,440 --> 01:08:01,040
Now remember he's just starting to stack.

1336
01:08:01,800 --> 01:08:05,200
So I think if you're just starting to stack, especially if you're on a Linux

1337
01:08:05,200 --> 01:08:11,800
system, I would consider making a separate user, Bitcoin, Satoshi, choose the name

1338
01:08:11,800 --> 01:08:15,240
you like, and installing your Bitcoin software there.

1339
01:08:15,440 --> 01:08:21,160
That at least provides some separation from processes that you do in your daily

1340
01:08:21,160 --> 01:08:25,000
life, browsing, clicking on links, you know, that user and the Bitcoin stuff in

1341
01:08:25,000 --> 01:08:26,240
that other user folder is going to be-

1342
01:08:26,240 --> 01:08:27,960
It's in its own home folder with its own permission.

1343
01:08:27,960 --> 01:08:29,960
So like the browser can't just read that file.

1344
01:08:30,040 --> 01:08:34,360
If you get an infection, if something's scanning your hard drive, it's going to

1345
01:08:34,360 --> 01:08:36,160
be harder to see your wallet.

1346
01:08:36,320 --> 01:08:41,000
Now I also recommend, I think when you begin, it's okay to have a hot wallet on

1347
01:08:41,000 --> 01:08:45,560
your computer with this setup, but we are entering a bull market, so it might make

1348
01:08:45,560 --> 01:08:50,000
sense to get a hardware wallet that does add more friction to using it.

1349
01:08:50,000 --> 01:08:53,720
You have to sort of figure out how to sign transactions and that's an extra step.

1350
01:08:53,800 --> 01:08:57,400
But I think you also save the complexity of needing, like he's talking about, like

1351
01:08:57,400 --> 01:08:59,720
this dedicated secure computer on a VLAN.

1352
01:08:59,880 --> 01:09:02,640
You don't need that with a hardware wallet in my opinion.

1353
01:09:02,680 --> 01:09:03,440
Yeah, I agree.

1354
01:09:03,440 --> 01:09:06,920
Because that, you know, that transaction isn't happening without the consent of

1355
01:09:06,920 --> 01:09:09,960
that hardware wallet and you could do with like the cold card, you could even do

1356
01:09:09,960 --> 01:09:11,400
an air gap setup if you want.

1357
01:09:11,800 --> 01:09:13,640
And it's pretty straightforward, they'll walk you right through it.

1358
01:09:13,720 --> 01:09:15,600
But I think don't overcomplicate it at first.

1359
01:09:15,600 --> 01:09:19,000
I agree with dad, separate user account and run Sparrow out of that.

1360
01:09:19,200 --> 01:09:20,240
Don't mix the two.

1361
01:09:20,360 --> 01:09:23,840
And then when you get to a point where it's like, this is life changing, I'm

1362
01:09:23,840 --> 01:09:26,600
going to be really sick to my stomach if I lose this money, that's when you

1363
01:09:26,600 --> 01:09:28,280
probably want to start integrating the hardware wallet.

1364
01:09:28,320 --> 01:09:32,680
I think one thing that I learned is I needed to kind of date around.

1365
01:09:32,760 --> 01:09:35,560
I needed to try a few wallets before I was really going to commit to Sparrow.

1366
01:09:35,560 --> 01:09:39,440
You may already be committed, but having having a hot wallet, which is, you know,

1367
01:09:39,480 --> 01:09:43,280
a couple thousand sats and then you can play around with lets you learn without

1368
01:09:43,400 --> 01:09:45,560
losing any serious amount of money.

1369
01:09:45,640 --> 01:09:48,920
And I, I think then you go from there to the hardware wallet as you really

1370
01:09:48,920 --> 01:09:49,680
increase your stack.

1371
01:09:49,800 --> 01:09:55,160
And if you want a few desktop wallets, you could try, you might try Sparrow,

1372
01:09:55,400 --> 01:09:59,080
Spectre wallet, Electrum is the OG.

1373
01:09:59,160 --> 01:10:04,600
Oh, I can't really recommend it because goddamn Electrum, my fucking Bitcoin.

1374
01:10:04,680 --> 01:10:05,600
Yeah, I am.

1375
01:10:05,680 --> 01:10:09,240
I'm not yet at the recommendation phase, but I've been monitoring Nunchuck for

1376
01:10:09,240 --> 01:10:12,520
about 10 months, seeing with how their development process goes.

1377
01:10:12,520 --> 01:10:15,360
And one thing I do like about Nunchuck, and this is, this is a question I get

1378
01:10:15,360 --> 01:10:17,800
from friends and family that are thinking about doing Bitcoin, you can have

1379
01:10:17,800 --> 01:10:21,800
a Nunchuck desktop wallet and you can have a Nunchuck, Nunchuck mobile wallet.

1380
01:10:21,880 --> 01:10:25,520
And people like, especially during price hikes or price crashes, they like to

1381
01:10:25,520 --> 01:10:27,640
fire it up on their mobile phone and see what their stacks were.

1382
01:10:28,000 --> 01:10:31,200
I don't recommend that, but Nunchuck seems like a pretty solid wallet to

1383
01:10:31,200 --> 01:10:31,640
pull that off.

1384
01:10:31,680 --> 01:10:36,920
We also received 5,000 sats from MCKR with no message, but thank you very

1385
01:10:36,920 --> 01:10:37,760
much for the support.

1386
01:10:37,760 --> 01:10:38,280
Absolutely.

1387
01:10:38,360 --> 01:10:38,480
Yeah.

1388
01:10:38,480 --> 01:10:41,000
Thank you everybody who boosted in above the cutoff and below.

1389
01:10:41,000 --> 01:10:42,160
We really appreciate all the boosts.

1390
01:10:42,160 --> 01:10:45,680
We had 10 total boosters, not bad for a little bit shorter recording window while

1391
01:10:45,680 --> 01:10:50,000
we're still here in El Salvador and we stacked a total of 130,201 sats.

1392
01:10:50,080 --> 01:10:51,560
This is a value for value production.

1393
01:10:51,560 --> 01:10:54,440
So if you've got some insights or value, or you think we're helping you sort

1394
01:10:54,440 --> 01:10:57,160
things out and what's coming up, coming up in the world, send a little value

1395
01:10:57,160 --> 01:11:00,240
back our way with a boost, get a new podcast app at podcastapps.com,

1396
01:11:00,280 --> 01:11:04,480
Fountain, Podverse, very popular in our crowd, Castamatic coming in on a strong

1397
01:11:04,480 --> 01:11:07,040
third, and then there's the folks that just want to keep their dang podcast app.

1398
01:11:07,040 --> 01:11:08,800
And they're using the podcast index to do that.

1399
01:11:08,800 --> 01:11:12,560
You get Albie at getalbie.com, you top it off directly or somewhere on chain if

1400
01:11:12,560 --> 01:11:14,920
they're allowing transactions at the moment, and then you head on over to the

1401
01:11:14,920 --> 01:11:17,120
podcast index and you can boost away from their website.

1402
01:11:17,200 --> 01:11:18,520
Same with the Fountain FM website.

1403
01:11:18,520 --> 01:11:19,920
There's more and more websites where you can actually just

1404
01:11:19,920 --> 01:11:21,720
boost from the web using Albie.

1405
01:11:22,120 --> 01:11:23,000
We appreciate all of you.

1406
01:11:23,000 --> 01:11:26,240
And a shout out to Bobbie who also sends us a reoccurring boost.

1407
01:11:26,320 --> 01:11:26,800
Thank you, Bob.

1408
01:11:26,880 --> 01:11:31,160
This has been the Bitcoin Dad Pod, recorded in person, San

1409
01:11:31,160 --> 01:11:34,240
Salvador, on the rooftop, Bitcoin country.

1410
01:11:34,240 --> 01:11:35,240
Can you hear that wind?

1411
01:11:35,240 --> 01:11:36,280
Can you hear that city?

1412
01:11:38,760 --> 01:11:43,200
I've been your Bitcoin dad and I'm here as always with me, Chris.

1413
01:11:43,640 --> 01:11:44,680
See you back from home, everybody.

1414
01:11:44,760 --> 01:11:45,440
Thanks for joining us.

1415
01:11:48,520 --> 01:11:49,520
We'll see you next time.