You are a CFA with 10 plus years of experience.
And in our last conversation, we talked about how, you know, when
you discovered Bitcoin, it went totally against that everything
that was taught to you. And yeah, that you're now a big
advocate for for Bitcoin, which of course for all the
classically educated Cfas is how do you say like a very
triggering, you know, especially on LinkedIn and stuff.
And yeah, I find it really, really interesting to follow
you. And so, yeah, we were thinking
maybe it's an interesting conversation to to, yeah, teach
people how to build wealth with, with Bitcoin kind of coming at
it from your CFA background. And, and maybe that's also a
good way to start, like what is the classical way to to build
wealth? And then after that we can go on
to how Bitcoin kind of like changes that that game.
So in general, I think what you want to do if you want to start
off with personal finance, you want to start with spending less
than you earn. You want to be able to save
regardless of what currency it is you want to be able to save.
And then after you've saved some money, after you've gotten out
of debt, if you don't have debt, obviously avoid debt if you can.
But after you've gotten out of debt, after you've saved some
money, you want to buy some assets.
Because if you just buy, if you just hold on to your cash, that
cash is going to decrease over time in value.
It's going to go down to 0. It's going to keep decreasing
and purchasing power over time because you're going to be able
to, meaning that you're going to be able to buy fewer and fewer
things over time with that cash. So the purchasing power of that
money is going to keep decreasing, meaning that you get
poorer over time. If you were to traditional,
traditionally what you would have to do is if you were to
have savings, you would buy real estate, you'd buy stocks, you'd
buy bonds, you'd buy gold, whatever you want to whatever
you think is more scarce than the dollar or the currency that
you're using. So your goal was to make sure
that you're buying something that will increase in purchasing
power over time so that in the future at some point you can
sell it and then you can buy whatever you want.
Let's say in our case, we want to retire in 30 years.
What we would do is we would buy stocks, we would buy the index
funds. Let's say we buy the S&P 500.
We buy as many shares of the S&P 500 as we can throughout our
career. And then when we retire, we sell
those shares and then we buy the things that we want.
That's the traditional path. Real estate, same thing.
You save, you save up, then you buy real estate, and then you
use the cash flows from that real estate to pay for the
things that you want. You can compound, You can buy
more houses if you want to with stocks.
You can use the dividends to buy more shares if you want to.
You can set up a DRIP dividend reinvestment plan where your
money just automatically gets reinvested.
That's how the old system worked.
That's how it was traditionally done.
And I think people have just accepted it and they don't want
them. They don't want to leave that
system. So I think what they're doing is
they're continuing to do whatever they had to do before.
But now with Bitcoin, the system has changed.
The entire financial system has changed.
The entire method of saving for the future has changed.
Before you have to buy stocks, you have to balance your
portfolio between stocks, real estate, bonds, gold, whatever
you want to. And now we were discussing how
it's changed. Now I think you can get away
with just buying Bitcoin if you want to.
You can hold some Fiat currencies and then you can just
buy Bitcoin. Pretty simple, pretty easy.
But I think most people want, they want complicated.
They don't want simple. They want things to be
complicated because they want to feel like they're doing
something that's worthwhile. They want to feel like they're
putting in effort when they really don't have to.
Yeah, yeah, I like it. I I almost wanted to say like,
well, that concludes the conversation, you know, just
buy, buy and hold Bitcoin. But I love what you added there
because it's not clear for people.
And that's also I think why Bitcoin sounds too good to be
true when you listen to to people like us talking, talking
about it. Yeah, it, it literally sounds
too good to be true because you have been taught that building
wealth, or I think if you rephrase it, like increase your
purchasing power over time, right?
That that has to be complicated. And of course, there's many
course boys, you know, that will teach you trading courses and
stuff like that to make it seem that everything is easy, but
it's kind of like a game that you're playing and a game sounds
or seems complicated and therefore also something that,
you know, a whole industry has sprawled around.
I mean, the whole CFA. But I wanted to go back, I think
two or three steps because how do you explain?
You know, you you quickly went over it, but I think many people
still don't realize it. Probably people that listen to
spot guys do already. But the whole concept of the
money losing value, right? Like when I grew up, it was all
about saving. Like you need to save.
Saving is very important, right? I think a lot of millennials
especially have been taught this.
But saving is broken because if if the money you're saving, if
the the units that you're gathering all the time are
losing value, if each individual unit is constantly using value
because more units are constantly created, then saving
is kind of like that. And it's also kind of futile.
But isn't that part of the Fiat money system to a degree where
because of this flawed characteristic of the Fiat
money, right? Or well, it's on purpose, of
course, but like the whole, the whole debasement part, that is
why all these industries come out.
And there's like more opportunity, actually, to kind
of like, prey on the general public or the plebs that are
trying to find ways to mitigate the fact that saving is dead,
whether they understand that or not.
Is that something that, you know, we can unpack a little?
Because you have to understand that first, right Before you
realize OK, saving is dead, I need to do something.
I think if if a CFA were to listen to this conversation,
they'd get very offended because I genuinely think that I think
that the legacy system is designed to just take as much
wealth from people as possible. Even when you look at something
like low interest or low fee index funds like.
That's 5.0. Yeah, exactly.
Whoa. You have VOO, which is the S&P
500. You can buy as many shares of it
as you want to. There's a very, very small fee.
And you might be thinking, oh, it's not, it's not that much.
But the total, so the total market cap of VOO, the total
assets under management is something like 1.4 trillion.
So it's doing the calculation. The fee is 0.03%.
But they're making $420 million a year.
Yeah, well, $420 million a year from from this fund to that.
People think that is a very low fee fund.
And, and the only reason why it's a low fee fund, the only
reason why I can get away with charging 0.03% is because so
many people buy it. If the, if there were fewer
people buying it, they'd have to charge more because they'd have
to concentrate the theft with a very small group of people.
So when you look at like, let's say there's, I used to work at
TD Bank and we'd have these funds that were labeled as low
volatility S&P 500 funds and they would charge you fees of
like 2% a year, 2% is insane. And the fund, so the, the fund
manager would charge you 2% per year.
And then on top of that, the fund would most likely out the,
the fund would most likely underperform the S&P 500 because
what they would do is I think they would sell calls or
something. I don't know exactly what they
did, but they basically used the, the volatility, they
liquidated the volatility and they gave you maybe a higher
cash flow or something like that, something along those
lines. But the fund manager was making
a massive amount of profit when you could have just held on to
the S&P 500. So the entire system is
intentionally designed to take as much wealth from us as
possible. The low fee index fund is making
420 million. The high fee index funds are
probably making even more, right?
There are index funds that are charging one percent, 1 1/2%.
How much do you think BlackRock has made on the Bitcoin ETFs
just for holding Bitcoin? They literally do nothing else.
They literally just hold Bitcoin.
Maybe there's some UTX or management involved.
You have to pay a salary for that.
But a lot of that money is going to executives, a lot of that
money is going to sales people when people could just be
holding that Bitcoin in cold storage and not relying on
BlackRock anymore. But the entire system, like like
I said, the entire system is designed to take as much wealth
from the average everyday person as possible because that's the
way that the system works. That's the way that our
inflationary system is designed to work.
We need to keep funding it. We need to keep funding this
Ponzi scheme. We need to make sure that it
doesn't collapse it because if we don't, if we don't fund it
anymore, it's going to collapse. It's it's a loser's game in that
sense. And and I kind of always take
like an extreme example where, you know, just general plebs
playing in the stock market are actually competing with, you
know, these high volume traders that have their own satellites,
so they have faster Internet connection.
And they do this all damn day long, right?
And it's just a a group of people that constantly, you
know, talk to each other and optimize and all these things.
And then, you know, when you come back home from your general
job and you sit on your couch and you open your Robin Hood or
whatever and you're like, oh, yeah, I'm going to trade.
I'm going to trade some stocks and mitigate the debasement of
my money. And that's a nice bridge, I
think, to Bitcoin. When we talk about Bitcoin,
when, when the message for Bitcoin is it's a superior
savings technology. Just try to add as much value as
you can in the world, earn Fiat, pay for your home and your food
and whatever's left you store in in Bitcoin.
You don't really have to do anything else.
Yeah that sounds too good to be true if you compare it to the
current game that people know Bitcoin custody is evolving and
while self custody is important, it has its own risks and
trade-offs. Onramp is pioneering a new
standard multi institution custody, which eliminates single
points of failure, adding fault tolerance and redundancy to your
custody setup. Onramp secures your Bitcoin in a
segregated cold storage multi signature Volt guarded by tree
independent institutional grade custodians, none of which have
unilateral control. Your funds are fully auditable
on chain, cannot be re hypothecated and can only move
or withdrawn at your explicit direction.
Multi institution custody removes the technical, mental
and physical burdens of private key management, providing
unparalleled Peace of Mind for you and your loved ones.
Bitcoin is money, and as the price continues to appreciate,
On Ramp helps you seamlessly tap into financial services like
trading, inheritance, insurance, loans, IRA, and more, all
without compromising on security or accessibility.
Check out Onramp bitcoin.com through the link below and
schedule a consultation with the Onramp team to get to know them
and learn more about their offering.
Bitcoin is financial sovereignty, so why compromise
when you need liquidity? Meet Debify, the Bitcoin back
lending platform built by Bitcoiners for bitcoiners.
Debify connects you to institutional grade liquidity
and allows you to borrow Fiat or stable coins all while keeping
your Bitcoin 100% under your control through a non custodial
3 out of four multi sig escrow solution.
Get competitive rates from a global marketplace of lenders
with loan terms you choose from one month up to a year.
No hidden fees, no rehype allocation, just pure Bitcoin
aligned lending with the highest level of transparency and
security. Ready to unlock liquidity
without ever selling a single set?
Visit devafi.com/offers to explore their current lending
offers. That's devafi.com/offers.
Yeah, it is too good to be true. If people do feel like that,
they think it's not going to work that way.
They think that they've already been screwed by the system, so
they'll continue to be screwed by the system.
They can't see a solution because they don't know what the
problem is. They don't know that the problem
isn't the corporations. It's not the corporate greed.
It's not it's not the poor people trying to take away from
the rich. It's not the rich people trying
to take away from the poor. It's none of that.
The problem is that more and more dollars are going to chase
everything that we want, no matter what.
Every single day, one more dollars are being printed, added
to the economy, and then the people who get those dollars are
buying the things that we all want.
They they want to buy houses, they want to buy cars, they want
to buy food, they want to buy whatever they can,
entertainment, vacations. So what's happening is more and
more dollars are chasing those things, and then those things
get more and more expensive no matter what.
It doesn't matter how great we get at producing those things,
those things are going to get more expensive because more
dollars are chasing them. But then when you look at it
from the flip side, so that when you look at it from the Bitcoin
perspective, because U.S. dollars can be created out of
thin air, things get more expensive because Bitcoin can't
be created out of thin air. You can't create as much Bitcoin
as you want to. Things get less expensive over
time because of the people who want to buy those things don't
have more Bitcoin over time, right?
So let's say, for example, if you look at houses, there was a
point when houses were 64,000. The median house in the US in
2011 was 64,000 Bitcoin. So it cost 64,000 Bitcoin to buy
one house. If you had saved the Bitcoin
instead of buying the house today, you'd have something like
$5 billion, so $5 billion versus one house today.
How many houses can you buy for $5 billion?
You can buy probably 15,000 houses for $5 billion, maybe,
maybe 10,000 houses. But the point is that you went
from being able to buy one house to being able to buy 10,015
thousand houses. So you're purchasing power.
If you had just held onto the Bitcoin instead of buying the
house, if you had just held onto the Bitcoin, your purchasing
power would have increased 10,000 times.
And at the same time, keep in mind that the price of housing
has increased in terms of dollars.
It's not like the price of housing has decreased in terms
of it's still gone up. It's still doubled, tripled in
that time, but in terms of Bitcoin, it's dropped 99.999%.
I love that we're having this conversation because I think
there's things that we talk about that we now find normal
and learned over time, but there's little things I think we
should unpack, right? So, OK, let's say there's an X
amount of dollars in an economy and you mentioned, right, that's
the Fiat money that new units constantly have to be created.
So the amount of units of money go up.
Hey, I think, I think it's important to understand that
when governments print more money, it's not like they're
producing more products. They're just creating more money
and adding it to the economy. They're giving more people
purchasing power, but they're not actually increasing the
thing that can be purchased. They're just giving more.
They're, they're actually, they're not even giving people
more purchasing power. They're just redistributing it.
The, the, the, the government is basically just redistributing
wealth from people who are far from the money printer to people
who are closer to it. And that, that's pretty much it.
That's why you don't want to save in dollars.
That's why you want to save in assets instead of dollars.
So you want to save in Bitcoin instead of assets now.
So. So is this this going to keep
growing? Yeah.
So is this the biggest thing that changes now that Bitcoin
kind of like enter the chat, right?
Like Bitcoin exists. It's here.
I generally describe it as like a mirror.
It's like a like a parallel money system next to the Fiat
money system. Yeah.
How do you view that? Like what?
What does Bitcoin? Yeah.
Like how does it stir the pot basically?
The legacy, the legacy financial system is trying to push for
people to be able to delay gratification and get instant
gratification at the same time. So what you can do is you can
basically hold your Bitcoin and you can borrow against it, and
then you can spend that money on whatever you want.
So let's say for example, you have 10 Bitcoin.
You want to buy a car. Instead of ever having to think
about selling that Bitcoin, you can just buy the car.
You can do that with real estate.
Real estate, I mean, it's very well known for that.
You can borrow against real estate.
Real estate is great as collateral.
Banks will give you as much money as you want to against
your house. As long as you want to take 80%
of loan to value, they'll give you as much money as you want.
But you don't even have to think about the you don't have to
think about what you're losing. So what this does is it
concentrates wealth with a very small group of people.
The people who can afford to pay the down payment on a house,
they can buy more and more houses they can keep.
Let's say for example you buy one house.
You save $100,000 for the down payment on the House.
You buy that house. Couple years later the value of
that house has gone up. Now you can borrow against that
first house. You can buy a second house.
Couple years later the value of both houses has gone up.
Now you can buy two more houses. You have 4 houses now.
Couple years later, again the value of the house goes up.
You can buy now another 4 houses.
So now you have 8 houses. So people keep, keep, they keep
buying more and more houses when they don't need them, they buy
them. I, I think they mainly buy them
for the ability to just borrow against them.
I don't even think they buy them.
They, they don't buy them to live in.
They don't buy them to, at least from what I've seen, people
don't even care if they're not making their monthly mortgage
payment with the rental income or their monthly cost.
All they care about is that they own this property and they can
borrow against it. And they know that over time,
the value of that property is expected to go up.
So they'll be able to buy more things by borrowing guess that
house in the future, thirty, 4050 years from now.
So I think what what the wealth you're doing.
And this is something I actually don't like about the narrative
that you don't sell your Bitcoin.
I think what people are doing is they're trying to bring that
that idea, that game of not ever having, having to give away your
assets. They're trying to bring that to
Bitcoin. And I think it'll work for a
little while. People will be able to borrow
against their Bitcoin. People will be able to, they'll
be able to, to have their Bitcoin have their cake while
eating it too. They'll be able to have their
Bitcoin while spending their Bitcoin at the same time.
And I think that's one of the most corrupt things about the
system, right? And the only reason why you can
do that is because of Fiat. You can keep borrowing more and
more against your against your Fiat, but I think that's going
to against your Bitcoin. But there's going to be some
point where people don't want Fiat anymore.
I think we're a long ways away from that.
I don't think that's going to happen like next year, 2 years,
five years from now. I think it's going to take a
long time because most of the most of the world has no idea
what Bitcoin is. Most of the world has no idea
what money is. It's going to take some time,
but eventually it will happen. I don't think I, I don't agree
with with Michael Saylor when he says that Bitcoin doesn't
compete with the dollar, when he says that Bitcoin is not a
threat to the US dollar. I think it is because people can
transact without using Bitcoin. I can send you, sorry, without
using the US dollar financial system.
I can send you money, I can send you value and all you have to do
is you have to show me a barcode.
I don't need to interact with the banking system.
It's competition. And once a system has
competition is when it gets disrupted.
And I think that's going to happen with Bitcoin versus the
dollar. Bitcoin is 10/20, a hundred
times better than the current financial system.
It's just going to get better and better over time.
Over the next 10/15/20 years, it's going to get 10 times
better than what it is today. It's going to keep evolving,
it's going to keep adapting and it's going to take out the US
dollar financial system. I don't quite agree with Sailor
when he says that Bitcoin isn't a threat.
I think it is. It's a, it's a it's a threat and
it's going to break the dollar financial system.
And every time he borrows money to buy more Bitcoin, he's
attacking that system. Due to these unique
characteristics of Bitcoin that are superior to to all other
assets that you can use as a store of value to build wealth
towards the future and lower that uncertainty.
Yeah, it it's, it's actually a very predictable and I'd say as
a risk averse person, a less risky way to build wealth
towards the future. Yeah.
How do you how do you view that? Yeah, I completely agree with
you. I think that is it is a much
less risky way of a building wealth because there's no
counterparty risk. I think that's the biggest issue
that we have in this current system.
We trust way too many people. Every single one of our
transactions is overseen by probably 20-30, fifty different
companies. Every time we send money from
one place to another, it's not as smooth as people think.
There are companies in the way that are extracting wealth from
every single one of those transactions.
So what Bitcoin does is it brings everything back to first
principle as it makes everything simple again without having to
rely on all these different companies and all these
different institutions in the middle that are using our trust
in them to extract wealth from us.
Like most people have no idea that using a credit card cost
them 3%, two to 3% because they they don't get charged that that
amount they don't get it's not on their bill.
Merchant is the one that's adding that cost in the back
end, right? Let's say for example, if
something was going to cost you $57 instead of $57, it'll cost
you $60.00 because of that three, two, 3% fee, whatever the
fee is, you don't see it, but it's being charged to you.
And I've seen some statistics where it said how families for
people who use credit cards on average are spending $1000 a
year just in these fees, in these, in this transaction cost.
And that's going to happen forever.
That that's just a way for them to extract our wealth, to make
our lives more expensive, to make it so that we can't afford
the things that we really need and we really want in our lives.
And over time, it's just going to get worse.
Keep that, keep that in mind, right?
It's just going to get worse and worse.
It's not like it's going to get better.
It's not like they're going to think, oh, we'll take a smaller
cut of their, of their transaction.
They're going to want more. They're going to have to
increase profits for their shareholders.
Yeah, because the numbers have to go up, right?
Right. Exactly.
Yeah. And so if we unpack counterparty
risk, because it's something that, so I don't have a finance
or economics background. This is in my Bitcoin journey
like like that part of Bitcoin has something that I've been
focusing on I'd say the last 3-4 ish years.
But counterparty risk, like just the entire concept I didn't
understand before. I just just didn't know.
Now I kind of translated to, well, if you, you can own
something, right? Like you can own the cash, you
can hold it in your hand, but whenever and even the cash has
to some degree counter counterparty risk because
there's a, there's another party that can just print more.
All right, So what you're holding is being debased.
But let's say that you go from holding something to wanting to
spend it or try to save it, right?
We talked about store value, everything that you can use to
do that is, yeah, permissioned by other parties, right?
So even when you buy a home and you are in the home, right?
Like some people say I cannot live in a Bitcoin.
So they use that as an argument, right?
Like, OK, I'm in the home, I can touch the home, I'm in there,
right? Even the, you know, conceptually
the title deed is some sort of counterparty risk even because
it's a third party that allows you to own that house.
And even I don't know if you would put that under
counterparty risk. But even when you know,
squatters come and they kill you and they take over the house,
you know, like it's still, it's not your house anymore, right?
And even, and that connects back to what you said before.
I had a tweet a few weeks ago. I said like, the price or not
value of your home goes up because your government devalues
the currency you were forced to use, right?
We talked about this. So nominally the price of your
house goes up and everything that's been priced in this
currency goes up, but then the government comes and taxes you
more on the price increase of your home, right?
I think it also applies to stocks, where when you buy any
stock, you're not actually putting it in your own
possession. You have it through a brokerage
if you want to take possession of it.
If you want stock certificates. For example, when I when I
worked at my brokerage job, it would cost you $300 to take
stock certificates into your own possession, $300.00.
That was insane. And I mean, it was, it was
basically just a way to keep people from doing that.
It was a way to keep people from taking full custody of their
stocks because then it can't be tracked.
How do governments know if you take, if you take self custody
of your stock, then how do governments know that you still
have it? How do they know that you didn't
give it to someone else and you didn't pay the tax on it, right?
And it all, it all just comes together.
And then on top of that, there are other layers, right?
It's not like your brokerage is holding those stocks for you.
There are custodial companies that are holding those stocks
for you. So let's say, for example, from
what I know, Bank of New York Mellon is a massive custodian
for stocks. So if they go bankrupt or if
they if their systems get messed up, how does anybody know that
you're holding that stock? How does anybody know that you
it belongs to you, right? It's just the entire thing.
This is a. Yeah, no, this is a great point
to go on to the next part because yeah, fully agree,
right. So let's say all hell breaks
loose and you have to flee the country and you have your stock
brokerage app, right? And it says like, you own this
amount of Microsoft or Tesla or whatever, and then you, you, you
get somewhere and you need food or gas or whatever, right?
And what are you going to do? Like are you going to show your
phone and show like some numbers and letters from a centralized
database, right? Just think about this, like
think about the real event. And then you say like, look at
this screen, like I'm worth this and this much I can pay for this
gas from you or the food or whatever.
Like, yeah, but like, so you can like prove your wealth, but you
cannot like send a stock or something.
And that instantly shows like it's, it's an abstraction.
I call it like, right? Like for a counterparty risk for
me. The other words like
abstraction, like ownership is abstracted away.
Verification is abstract, right? The trade is abstracted away.
Like it's not in your, you do not have the ability to do these
things basically. And with stocks, I think is a is
a great example because yeah, you, you literally do not own
them. So what do you own?
Well, yeah, you own and well, yeah, you have an account that
some stockbroker and the stockbroker has some database on
some, well, maybe locally, maybe own AWS at Amazon, whatever,
right. And they have some database and
in the app connected to your account, they show you the
stocks. But what what kind of right does
it give you? Maybe you have some sort of, you
know, it's in the contract in like Legalspeak or whatever, in
some way you own this these letters or numbers on the
screen. But once you just like peel away
those layers, you basically own nothing.
But then OK, Bitcoin enters, enters the chat.
Like what are the things that people need to recognize with
regard to bitcoins characteristics and how it
compares? That's something I wanted to ask
you and I think this is one thing, right?
So there are multiple things. There's no counter counterparty
risk. You can truly own it yourself.
So you can store it yourself. You can make you are in charge
of sending it to someone else, right?
You're in charge of taking it with you basically, yeah.
What are like other characteristics that really kind
of like shake up this game of ownership and property and and
and all these types of assets, store value assets that you can
use. I think 11 key is that, and this
is something that a lot of people don't really seem to
understand and they don't like it.
They don't understand that it's a it's a feature, not a bug.
They think that's a bug. I think it's that if you were to
mess around, you're going to lose your Bitcoin.
If you, let's say if you, if you need to take self custody of
your Bitcoin, you need to have your private keys, your, your
seat phrase and all that stuff set aside properly.
But The thing is that if you lose that your Bitcoin is gone.
You're never going to get it back.
There's nothing that you can do to get it back.
That Bitcoin is gone forever. You're never going to get it
back. And that's something that people
don't get because in the current system, we all rely on banks.
We all rely on banks basically giving us a reset e-mail
whenever we forget our password when in the Bitcoin system that
doesn't exist. You can't do that with Bitcoin.
There's no CEO, there's no customer service team.
Bitcoin is a network that everybody gets to use.
You get to participate in in it if you want to.
You don't have to participate in it.
Nobody's forcing you to. So if you participate in it, you
have to follow the rules of the network.
If you go ahead and leave your Bitcoin with another party, you
may never get that Bitcoin back because all that is happening
with Bitcoin is Bitcoin is a record and it's a record of
which address owns what. Whoever owns the private keys to
each address can move the Bitcoin within that address.
So let's say, for example, if you leave your Bitcoin on an
exchange and your exchange gambles it away, you're never
going to get that Bitcoin back. There's nobody, there's, there's
nothing that anybody can do to change that.
All you can do is before the exchange gambles it away, you
can put it into your own possession and you can take care
of it and you can put into your own wallet and that way nobody
can mess around with your money. Bitcoin is money that nobody can
mess around with. That's that's the key.
Whether you want to do something stupid or whether you want to
manipulate it, you want to manipulate the network, you want
to try to keep the price low, you want to pump the price up.
Either way, you're going to get wrecked.
You can't mess around with Bitcoin.
All you can do is you can own it and you can use it as a store of
value. You can use it as money.
You can use it to pay for things.
That's something that you need to understand.
A lot of people are worried that if you lose your password, your
Bitcoin is gone. But that's that's like I said,
it's a feature, not a cost. If you have your Bitcoin in self
custody, where are you keeping your Bitcoin seed words?
For me, there's only one way and it's backing up my seed phrase
with stamp seats. It's a single durable plate
without any parts or materials. Stamp your words into solid
titanium, which is fire resistant, water resistant and
built to last. Unlike etching or engraving,
stamp seats better. The tools help you to deeply
stamp every letter for permanent readability, making it easy for
you to protect your generational wealth.
Don't risk losing your seat phrase on paper.
Get a stamp seat plate for unmatched protection.
You can use code Brom that's BR AM for 15% off at stamp seat
dot. Com Yeah, you can hold 12 words
in your head basically, and you own your Bitcoin and you can
move it anywhere in the most extreme form, right?
But because that's possible, you actually have to take ownership,
like true ownership, not only in the, in the property sense, but
ownership of the actual safety and process.
Like how do you handle it? Where do you store it and, and
all these things. And I think that's also what,
when on one side Bitcoin sounds too good to be true, This sounds
very scary. It's very important that you
know, the trade-offs between these things.
So there's stuff that we talked about around Fiat money, which I
think in both of our opinions is very bad and not beneficial for
the individual, right? And there's a lot of good things
about Bitcoin that that mitigates all that bad stuff on
the Fiat money side, but it comes at some sort of cost with
regards to responsibility and, and really, really taking that,
that ownership. And yeah, you have to make that,
Yeah, you have to, to put that against each other before you
really, really go into Bitcoin, I think.
There are always going to be trade-offs though, right?
There's always going to be. Even with the Fiat currency
system, I don't think we would have gotten to where we are now
without Fiat. Fully agree by the way.
Governments have helped us organize and to build our
systems the way that they are. Like for example, in my area,
there's a highway called the Four O 7.
It wouldn't exist without governments.
And the reason why it exists is because or well, the reason why
I think it's so great is because it's a toll road.
People can go on there, they can pay extra money, they can go
wherever they need to. Instead of having to go through
the regular highway system. You have the regular highway
system, you have the paid system.
If, if it weren't for governments, I think we would
pretty, I mean, we would still have roads, but they wouldn't be
the way that they are today, right?
Not everybody would be able to access them.
They wouldn't be as organized. The system wouldn't work.
I also don't think that we would have, let's say the, the, the
way that we have housing. I, I think there's a regulation
is required in certain things. Let's say for example, for
housing, we want to make sure that a house meets the fire
code. We don't want to, we, we don't
want to take the risk of living in a house that can be set on
fire and there's nothing you can do about it, right?
We want, we want those, we want those benefits, but we also want
our own freedom. I think that's what Bitcoin
does. So what you can do with Bitcoin
is you can choose. You get a choice.
You don't. You don't get forced into doing
things one way in the current financial system.
You get forced into doing things the Fiat way.
With Bitcoin you get to choose. You can take self custody if you
want to, but you can also leave your Bitcoin on an exchange.
You can also leave your Bitcoin with an ETF.
You can take multi sig if you want to.
You can use collaborative cut however you want to do it.
You have multiple ways to do it. You get to make the decision
yourself. You have to figure out what the
trade-offs are. You have to figure out what the
benefits are of every single decision.
That's the point though. I think that's the most
important thing. You can give responsibility to
someone else, but you also, you also have the option to take it
into your own hands. And I think that's what the
current system doesn't have. In the current system, you're
forced to do things one way and if you try to get away from that
one way, then you you get screwed over.
You get charged like crazy. Yeah, Yeah, that's, that's what
I mean when I say like Bitcoin is a mirror, right.
It has certain characteristics that work in a certain way,
which in one way shine a light on all the flawed
characteristics of Fiat money. But it also, yeah, shows you
that you have to take way, way more responsibility as compared
to that Fiat money. Yeah.
And that's kind of like the the cost and benefit or risk and
benefit there that I think is just a very personal decision
for everyone. But again, yeah, I would
describe myself as a very risk averse person and bit adopting
Bitcoin and going all in is basically the most rational risk
averse thing that that I could do, right.
And so, yeah, of course it takes some study to to get there and
kind of like integrate that for yourself.
But yeah, for me, that's been really worth it in in that sense
because I feel like I've been able to actually make a
conscious decision about how do I want to, you know, store my
economic energy and build wealth and, and lower my uncertainty
towards the future. And just the fact that I've been
able to do that regardless of Bitcoin price or whatever, I
think that is already a use case for Bitcoin.
Yeah, completely agree. The next part that we want to
talk about is why does everything else trend to zero
against Bitcoin? Like what does that mean?
Like that's it's kind of a meme. It's a saying.
We briefly touched upon it with with the homes, for example.
Yeah. How, how do you explain that or
how do you impact that? I think in general it's just
that everything else can increase in supply at there's
and there's no there's no stopping it.
For example, you can build more houses as.
Money you have right increased demand, right and make sure
there's there's increased. That's it.
As long as you have enough labor
to build the house, as long as you have enough raw materials,
you can keep building more houses.
Unless, let's say, for example, there's regulation, there's red
tape with zoning laws, there's all these random things that
stop you from building houses. Of course that's going to slow
it down. But in reality, you can build as
many houses as you want to. You can grow as many apples as
you want to. You can build as many tractors
as you want to. It's the the limitation is not
the the uses. The limitation is the labor that
stops you from building more of the things that you want.
The the raw materials, the energy, all of that is the
limitation. The difference with Bitcoin is
that there is a limit for how many we can build.
Everything else has no limit. There's a physical limit with
how many things we can contribute, how much energy, how
much resources we can contribute to it.
And that's the limit for how many of those things we can
build with Bitcoin. Doesn't matter how much energy
you contribute to it doesn't matter how much resources you
contribute to it. You can keep contribute, You can
run a billion computers, you can run Bitcoin Core on a billion
computers, and you're not going to be able to change the
difficulty adjustment. You're not going to go to change
the the block time. You may be able.
To have to wait 10 minutes, right?
Yeah, right. You may have, you may be able to
do it temporarily. Let's say for example, if you
run a trillion computers for the next, what is it 1600 blocks or
something, That's when the difficulty adjustment happens
for the next 1600 blocks. You may be able to speed it up.
You may be able to bring the the time per block lower and then
the difficulty adjustment will increase after two weeks or
something like 1600 blocks or whatever it is.
But eventually your power of being able to manipulate the
system is going to go away. You may temporarily be able to
bring up this the the production speed or bring down the
production time, bring up the production speed, but over time
it just reverts to to the mean it reverts to 1010 minutes per
block. You can bring it down to 7-8
minutes temporarily and then eventually it'll come back down,
come back up to 10 with everything else.
If you start getting better at producing those things, you're
never going to bring that time back down or sorry, not not the
time. You're never going to bring that
time back up. So let's say for example, we
went from being able to build a house in a year to then six
months, to then three months, to then a month and a half.
It'll keep decreasing overtime, I don't know the exact numbers,
but overtime, as we build better practices, as we build better
processes, as we learn more, we improve the production of
everything. So what's happening right now is
we can produce more of the things that we want faster, but
we can't produce more Bitcoin faster.
So what that does is it makes it so that fewer and fewer Bitcoin
are chasing the things that we want over time, meaning so that
the meaning the price comes down, the price keeps going
lower and lower and lower until somebody's willing to pay
Bitcoin for the things that they want.
Let's say, for example, a vacation, you may think I'm
going to wait two years. I'll set aside this Bitcoin,
I'll go on vacation in two years.
In that time, people are going to try to incentivize you to
sell your Bitcoin because the price is going to go up.
There's a limited amount of Bitcoin available, there's
unlimited demand. So people are going to try to
incentivize you, entice you to bring that Bitcoin back into the
market by offering you more and more dollars for that Bitcoin.
So what happens is we have less and less Bitcoin available.
We have more and more of the things that we want available,
entrepreneurs that are incentivized to bring more
things that we want into the market.
And it just it it, it's all just supply and demand.
The price keeps decreasing and decreasing and decreasing until
more and more Bitcoin can come to the market and pay for the
things that Bitcoiners want. The entrepreneurs have to
produce actual value. They can't just produce garbage.
They can't just produce more Bitcoin to fulfill their needs.
They have to actually produce goods and services in order to
get more Bitcoin. And it the entire system is like
a cycle over time. We have money flowing from the
things that we wanted previously to the things that we want now.
Instead of governments trying to structure the system a certain
way, let's say they they fund certain projects instead of them
trying to. Instead of them being able to
print more money and fund the projects that they want to fund,
the market figures things out on its own.
And this is where true capitalism, this is where true
capitalism comes into into play. We have people who are willing
to put their time, energy, effort, skills, labor towards
certain projects because they want to, because they think that
there's some opportunity there. And then we have the best.
The best. To earn a good reward.
Right. Exactly.
Once you add a better reward, I have something from the sheriff.
Yeah. When you add a better reward,
you ask for better work. Yes, right.
And if people? It's the incentive.
Yes, exactly. Yeah, yeah, I've shared this,
this, this example many times, but I've, I've wasn't, I think
it was Antwerp. I was in a building that's from
like 15160 and I thought, wow, what what has been built in the
last 50 years that's going to stand for another 500 years, you
know, nothing probably. And that's what I think people
need to realize. So I love, I love what you just
said in the, in the beginning when you started talking, I was
like, Oh yeah, this is like some FUD that we also have to, I
think address because, because Bitcoin sounds too good to be
true, right? And it's a bit daunting to study
about the region of existence of Bitcoin and, and you know, the
trade-offs and all the things I think we, we talked about people
use certain arguments against Bitcoin that they don't really
understand because I think they are easy arguments and easy to,
to dismiss. But some things are, are very
important to, to point out. And you said like, and this is
what Jeff Booth talks about a lot, right?
Like the natural state of or like the, the consequence of
innovation is like deflation, right?
Like what you said that the whole purpose of people is to
become better and more efficient than than quicker and all these
things like that's a natural thing in a total free market in
true capitalism. If I bake better cookies than
you, and you also have a cookie store and people buy more
cookies in my store, then yeah, you go bust.
But that's a good thing because apparently I'm better at making
cookies than you, which is great.
And then you have time and space to try something else, right?
Like that's the whole idea of having the true market function
is that, yeah, the people that innovate that do it better, like
they, they get rewarded, which eventually drives all the prices
down. And what people need to
understand is that why, why is stuff now more expensive than in
1970 or 80 or whatever, right? Like what you said about the
apples. I, I also use it as an example.
Like does an apple need more energy to grow?
You know, no like, like there's probably less people involved
getting also apples from trees that like 30 years ago, right?
So we are more efficient in growing, harvesting apples, but
an apple is probably more expensive now.
And I just saw a tweet. 1970 cost of living New new house
$23,450 new car $34150 movie ticket $1.55 gasoline $0.36 for
a gallon milk, $0.62 for a gallon coffee, $1.90 per pound
eggs. That's a big topic in the US,
$0.59 per dozen, right? And the average income was
$9400. And everyone could have a family
with two children in a car and a home without, you know, just
one, one person working. And all these things were there
50 years ago. And all these things are here
now. But nominally just numbers wise,
they're all priced higher, which if you think about the natural
state of of this free market, right, that the price should go
down with increased innovation. That doesn't really make sense,
right. So these are two forces that are
like fighting, fighting with each other.
And if you think about the price of bread and apples and eggs and
all that stuff, you know, cars and etcetera, you have to,
although I think it's a hard thing to accept.
You have to accept that the side that's winning is the bad money
and you need to get out of the bad money, basically.
Yeah, that's the thing that I think that's the secret here.
If you get out of that crappy money, then you can get ahead.
If you get out of the US dollar, you can finally start putting
your time, energy, and effort towards the things that actually
matter. If you.
It's safety. Dean says it as well, right?
We have people working basically 2 jobs right now.
First they work this job to earn money.
Then they work a job to pay to get that money to stay in their
bank accounts. Cuz if they don't, then somebody
else takes that money from them. No matter how hard you work, no
matter how how much time you dedicate towards your job, no
matter how much you delay gratification, if you save in
dollars, you're going to be more broke than you are today.
In 10 years, 20 years, 30 years, the value of your money is
decreasing every single hour, every single minute, every
single second. It's decreasing by a certain
amount because more and more money is being added to the
system and and whatever you have is being diluted.
So if you don't understand that you can't get ahead, there's no
way to get ahead. If you don't get that, if you
don't understand that your value of the, the value of your
currency is decreasing. If you focus on, like I said
before, corporate greed. If you focus on, oh, my
government is the best allocator of capital.
If you focus on capitalism is for losers.
And we need to get rid of capitalism.
We need to get rid of Bitcoin. We need to make everything
green. We need to focus on the weather.
If you focus on that, then you're not creating value and
you're going to go broke. If you focus on all that, you're
probably also focused on, you're probably not thinking at all
about how the US dollar works. You're not thinking about how
the US dollar is broken. You're not thinking about how to
solve your actual problems. And you're just complaining that
that's really it. So what Bitcoin does is it
brings us back to Earth. It makes us think about the
reality of the situation. If everything is decreasing in
price in terms of Bitcoin and it's increasing in price in
terms of U.S. dollars, what's the main difference here?
Why is that happening? And once you start peeling the
layers back, you kind of start seeing where this is going.
That's why it's even more important, I'd say, to just
realize how predatory the system eventually is because it's it's
designed basically to not survive like any field money
system. Like like no, no money system
like that has ever survived. So you have to accept that you
profited of something that is predatory to other people.
And then you have to also accept that eventually it's it's
assured towards a collapse. Does that make?
Sense predatory, yeah, If it's predatory towards other people,
eventually it'll be predatory towards you.
Yes, right. You may not realize it.
Yes. Even real estate investors, they
think, oh, I'm protected because I own this real estate, I own
all this land, I own all these properties.
But what are you going to do when your government says to you
that instead of just state taxes, we're also going to
charge federal taxes on properties?
That's going to be really fun to deal with.
I think that's going to be absolutely insane for for real
estate investors if that happens.
I'm not saying that's going to happen, but if it happened,
what's going to happen is let's say they they increase your
property taxes from 1% to 4 percent, 5%, what's your
property value going to decrease to?
There's no guarantee that that's not going to happen.
There's also no guarantee that if governments really find an
incentive in trying to make housing cheaper, because now
Bitcoin exists, how do you know that they're not going to start
digging into the ground to build condos and apartments and just
pump up the value of pump up the supply of real estate so much
that prices actually start coming down?
How do you know that if you if you're a real estate investor,
how do you know that your government's not going to start
funding 3D printed homes, prefabricated homes?
How do you know that that's not going to happen?
So the system is predatory towards the poor right now, the
people who don't understand how Fiat works.
And I, I actually think actually, I would say the the
system is predatory towards the people who don't understand how
assets work right now. I think it's going to transition
to being predatory towards anybody who doesn't understand
how Fiat works in general. And most real estate investors
don't actually understand how Fiat works.
They buy real estate because they want the cash flows, but
the cash flows are decreasing in value over time.
They want stocks because they want dividends, but again, those
dividends are decreasing in value over time.
Even what you own with stocks, in real estate, with stocks,
actually, what you own isn't actually there.
People say that they want to own the stock because they want the
cash flow the company is providing.
How many cash flows have you gotten from Amazon?
How many dividends have you gotten?
Yeah, it's, it's all a trap, right?
It's all just a way to keep your money stranded in one location
so that you can't take it out and you can't do anything with
it. If you start taking your 4O1K
out, for example, inflation is going to go up.
That's part of it, right? The goal is to have you delay
spending as much as possible so that by the time you're old, you
want fewer things you want to spend, you have less energy to
spend money. You have, you have less things
that you can actually put your money towards.
The goal is to to kick the can down the road.
They're kicking the can down the road with your kids.
They're also kicking the can down the road with you.
You may think that, oh, it's only the younger generations
that are going to be affected. No, you're affected too.
You're going to be hit just as hard as the previous generations
or the future generations. So let's say, for example, when
baby boomers want to retire and they have tons of stocks,
they're going to to dump their stocks on Gen.
X. Then when Gen.
X is going to retire, they're going to dump their stocks on
millennials. Then when millennials, when
millennials are going to retire, they're going to dump their
stocks on Gen. Z.
At some point, nobody's going to want stocks anymore and the
entire system collapses. I don't know how long that's
going to take, but I think Bitcoin is going to be the
reason for that. I think people are going to want
Bitcoin over stocks. People are going to sell their
stocks. They're going to sell their real
estate to buy Bitcoin. The word timing came up for me.
Right? Like so yeah, like boomers had
real estate and Gen. X had the stock market, right?
You could paint a similar picture here.
If it's like what you said, it's a slow way to drain your wealth.
Just take fees of you. And S&P 500 is flat over X
amount of time compared to the actual debasement of the money,
then yeah, you just paid fees and you thought you were doing
something. But yeah, in that sense you are
then the subject of the game. Yeah, you're the you're the
golden goose. You're going to keep hatching
eggs in the form of taxes and fees for Wall Street and the US
government. They're not going to want you to
go away. They're going to want you to
keep, they're going to want to keep you there.
Basically, them getting you to buy stocks to buy real estate,
them getting you to buy, let's say index funds, getting a four
O 1K. That's them keeping their golden
goose leashed in a small area. Because if you, if you have
those things, you can't just leave.
You have to pay some kind of tax.
You have to pay an exit tax. You have to watch out for those
stocks doing whatever they need to while you're gone.
Let's say, for example, if you want to leave the country,
you're not just going to want to leave all your wealth in that
country. You're going to have to tell
somebody that, hey, I'm taking my wealth, I'm leaving.
You have to be tied to that wealth basically forever.
And if you try not to be, then you lose that wealth.
You would be surprised. I mean, I was actually pretty
shocked when I thought about how many times I would see people's
accounts locked at the brokerage that I worked because they
hadn't paid their taxes. If they didn't pay their taxes,
let's say for example, somebody has a $1 million brokerage
account and they didn't pay their taxes for like 2 years,
three years, however long it is, I don't know what the details
were. Let's say they didn't pay their
taxes for a while. There were actually holds for
IRS bills, right? So the IRS is the Internal
Revenue Service or sorry, the CRA, not the IRSCRA, Canadian
Canada Revenue Agency. So if you hadn't paid your bill,
your accounts would be locked. And that just shows you you
don't own anything, you own nothing.
The entire system is designed to get you to keep paying your
taxes. If you behave badly, then your
money gets taken away from you. If you go against protocol then
you lose everything. All right, let's let's move on
to the the last topic we wanted to discuss and that is
allocation. How do, how do you decide on
like the percentage allocation? Is there a way for people to
think about, yeah, what is the risk with Bitcoin or how much
should you understand Bitcoin and like what, what would be the
main points for people to maybe study or understand before they
can kind of like get to yeah, what type of allocation would be
would I be comfortable with? So I don't really think that
you're going to ever understand Bitcoin 100%.
There's never going to be a time when you, when you do that, but
there's going to be a point where you feel comfortable.
I think there's going to be a point where you finally realize,
OK, this is the thing that's going to be the future, the
future. And that could take a lot of
time, right? Even when I'm, I, I studied
Bitcoin for like 3 1/2 four years and I'm still learning new
things. There's always new ways to think
of things. There's always new technical,
technical things that I don't understand.
I'm, I'm finally learning because of Bitcoin and that's
going to happen regardless. You can't ever know everything
about Bitcoin. So if you think that you need to
know everything about Bitcoin before you buy some, then you're
never going to own Bitcoin. That's the first thing.
The second thing I want to say is that the more you study
Bitcoin, the more you're going to understand how much you
should have. Let's say for example, if you
only understand Bitcoin on a value a very shallow level,
you're probably going to have one to 5%, maybe even 0%.
If you don't really understand, if you just read headlines all
day long, then you're not going to want Bitcoin at all.
But if, let's say, for example, if you, if you listen to a bunch
of podcasts, if you listen to different opinions, if you
different listen to different thoughts, if you read different
books, let's say you listen to Bram's podcast every morning,
listen to my videos every morning.
You, you read the Bitcoin standard, you read all of the
books that Safedeen published at his publishing house.
You read the book behind me, The Internet of Money, all these
different ways of getting information.
At some point, let's say you start with a 1% allocation.
At some point you're going to think, hey, why don't I have a
2% allocation? Then you're going to think, why
don't I have a 3% allocation, 4 percent, 5%.
Nobody can tell you what your allocation should be because you
have to be able to deal with the volatility.
If you can't deal with the volatility, then no allocation
is good for you. You have to understand that you
have to hold Bitcoin for at least four years.
If you don't understand that and you buy Bitcoin, you're probably
going to sell at a loss. I think that's the key here.
If you understand that Bitcoin needs a four year minimum
holding period, you're going to want to put more and more into
it because you're going to see that the moving average price
over time has just increased. And it doesn't really make any
sense for you to hold Bitcoin for a year to put your rent
money into it. For example, let's say hold for
a month, two months. It doesn't really make any sense
because you're very likely going to lose money.
Bitcoin is extremely volatile. Most of the times they go
sideways or it goes down. There are these random explosive
moves up where Bitcoin's prices keeps going up and up and up and
suddenly it stops, it loses steam and then it starts
falling. If you miss that period, let's
say for example, you only want to buy Bitcoin and you want to
deal with the upside. You don't want to deal with the
downside. You're going to lose money.
You're pretty much guaranteed to lose money because you're not
going to be able to time the market, especially if you're new
to Bitcoin. The key here is as you study it
more, you're going to want to allocate more.
You're going to want to go from 1% to 5% to 10% to 20 to 50.
Eventually you'll want to go with 100%.
I, I, I do think that that's, I think that a lot of people are
going to do that. I think a lot of people are
doing that right now. And the, the only reason why
they even get to that point is because they've studied it.
They understand where this is going.
If you don't understand where Bitcoin is going, you're
probably still thinking that 180, you're going to think that
85 K is overvalued. But when you understand Bitcoin,
you realize that even $1,000,000 is undervalued.
So you're going to want to put as much of as much of your
wealth into it as possible. I agree.
I think that's a really good sensible answer, right, like the
the understanding and the conviction.
The understanding comes from studying over time.
And that's also I think what makes your conviction grow.
Maybe that's the last nice thing also to share as like the, the
mirror that it is, right, like in, in my experience, in the, in
the, in the Fiat money financial system and the stocks and all
these things. It's it's about conviction based
on what other people say a lot, right?
Again, that abstraction, Whereas in Bitcoin, you know, I think
even our goal with this conversation is to trigger
people so they study like, please don't build your
conviction just on the fact that we are enthusiastic about this
and that we talk about this like you can actually do your Bitcoin
study yourself. You can verify all the things
that we said for yourself basically.
And I think that again, it's such an interesting
characteristic of Bitcoin that the conviction is not built on
anyone else saying it. It's built on your own
understanding of its comparison with current money, current
store value assets and eventually the use case of, you
know, lowering your uncertainty towards the future, which is
eventually, you know, your, your wealth.
And so I think that's a nice, nice ender.
Yeah. But I want to I want to thank
you for this conversation. I think this went well.
I hope people enjoy it also that watch this live.
We put it live as well. And I I think this also counts
for you, right? If any people have any questions
you can just reach out to us, we're happy to help or point you
in different directions of things to study, Read, listen,
watch. And yeah, man, thanks again.
Absolutely. Thank you so much for having me
man, I really appreciate it. These conversations are always
so much fun. I love the two man thank.
You, I hope you enjoyed this episode.
If you did, you can click here to find more just like it and
click here to find all Bitcoin for millennials podcast
episodes. Also, please like this video if
you want to help shine a light on the message of Bitcoin and
subscribe to my channel to stay connected.
I hope to see you for a next episode.
Bye.