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sad. All right guys, take care and be legendary Anthony pump. Liana, welcome to the show, man. Absolutely, so much for having me, dude. I am really excited. So, there's something my audience has heard me talk about this before. I feel a moral obligation to get people to look at.
At cryptocurrency Bitcoin specifically. And there's a famous saying, I'm almost certain you've heard of before, which is poor people, spend the middle class save and then the wealthy invest, and this is what's going on in cryptocurrency. To me, seems like the first time where the average person, whether you're poor, whether your middle class, doesn't matter. You can actually front run the investor and use whether it's Bitcoin or something else, as that investment vehicle.
To me about the breakdown here in the US of people that invest versus don't invest.
Yeah. So one of the easiest ways I find to talk about Bitcoin is just talking about the Legacy problems and kind of what the average person does and both from those that are successful in those also that are not successful. And so let's start with some statistics around, just the United States, right? 45% of Americans hold no investable assets so
crazy. So right at is an investable assets for people that don't know what that means, a stock, a bond.
Currency, real estate, right? All the things that are basically are not cash that you're buying because you think that they are going to appreciate in the future. And
so, really, that
45% of folks are living paycheck to paycheck. They keep all of their wealth stored in dollars. In a bank account. They tend to be, you know, obviously not very well financially off. But also on top of that, they tend to actually not be nearly as educated about how the system
works. So, there's a wealth inequality Gap,
but there's also a very large egg
He's in gap. And so you think they're one in the same. I
think that the education Gap actually drives, most of the wealth inequality and really it's because of the debasement of the currency.
I've made. That's interesting. So, we'll get to debasement of currency in a second. I've made a statement that I expected to be more controversial than maybe it's become, which is so, I worked in the inner cities, a lot. So, I've I have seen firsthand up close intelligence be evenly distributed, so they can process raw data very quickly. Like you're hanging out with them. You're like, okay, you're poor. You come from a long line of poverty and yet,
You're incredibly bright. Like I am confused. Now, as to why you haven't, you know, been able to achieve escape velocity and get out of here. And then you realize that their frame of reference the way that they think about things is so detrimental, because your behaviors ultimately are all the matter, right? You can think that Bitcoin is the greatest thing since sliced bread, but if you don't actually buy any Bitcoin, then you can't take advantage of the growth. And so I began to realize that or hypothesize, I should say that.
Poverty is a frame of reference problem, far, more than it's a money problem. And that if you took that same person, so they're born on day one. They were born to parents that have, you know, lived in the inner cities forever. They've struggled for Generation after generation and you bring them into a household where they're going to be educated around investing and you know, what the game is that you're talking about that it's a system that works in some kind of way the way it's predictable and it will reward some behaviors and it will punish other behaviors.
And nothing else matters. And if you do that, they will come out just fine. And so I was like, wow, this really is a knowledge Gap problem.
Yeah, I mean, think about it, if I told you to go play a game and I said, but I'm not going to tell you the rules,
right? Be pretty hard to play the game at first. At least, maybe you figure it out. Maybe you don't but you're obviously going to be much better equipped to
play the game if I explain to you how the game works and what the rules are. And so if you think of money or finances as a game, there's really one key.
Rule that everyone has to understand which is the dollars will be worth less in purchasing power terms. Over a long period of time. That's not a negative towards the dollar. That's not a positive towards the dollar. It's just that is a fact and we call it inflation. Yeah, and the system is built that way and the economic argument for why it is built that way is because if I know that my dollars are going to lose purchasing power meaning that today it cost me, you know to Dollars to buy a loaf of bread. In five years will cost me four dollars to buy a loaf of bread. I'm fine.
Incentivised to either invest the money or to spend the money but holding it is a losing proposition. Now, that economic theory is predicated on the fact
that everyone knows the dollars are going to
lose value. Because what ends up happening, is those 45 percent of Americans end up, not investing the money or really spending the money. They're trying to save the money, but it is losing value. And I always go back and I think this generational idea is really can be extrapolated, even further. It's not just folks on the inner city. If you think
Look back, you know, I'm 33, you're in your 40s. If we go to our parents or our grandparents, for the most part, their financial advice was safe, right. Spend less than you make. If you save then you can make your way to Financial Security. That was actually true except for specifically around, our grandparents, generation a little bit for our parents and then Frost not so much. And so, the advice that was passed down was actually predicated on a situation that no longer exists. Because before 1971 there was nowhere near the debasement of the
Currency that there is today because it was tied to Gold. It's a huge piece of it, for sure. Right? Which is basically the fact that we handed over the power to print currencies, right? This is a 50-year experiment that we're in. And, you know, again, there are some very positive impacts of being able to print currency, right? You essentially are able to devalue the currency. You can pay off future debt with kind of less valuable dollars and there's
all this economic theory that really fast. I want to ground. This is something I've heard you say, but okay, which I think it was so simple.
Apple. I was like, whoa, you said if I have a hundred dollars in my bank account and I need a hundred fifty. I can't go in and edit the database and now I suddenly have $150, but the government can. Yes, and I was like, whoa, like when you say it like that and it's like, literally just somebody going into a spreadsheet. I was like, oh my God, and I even do this as recent. So I am. I'm very good at making money and I have historically been very bad at investing money. I'll got now. I've become obsessed with investing now that I'm sort of track because I
I was just trying to get as close to my money buried in the backyard as humanly possible. And anybody thinking to rob me. I don't actually do that. So you will find zero dollars here at my house. But that was my mental sophistication around Finance. I didn't understand it. I didn't want to understand it. Quite frankly. I'd put a lot of energy into just getting good at entrepreneurship so that I could generate whatever wealth that I wanted, but
I came very late to understanding this idea. That one, that the government's can print more. And that imprinting more, you make it less scarce and it making it less scarce you devalue it. And I actually, as of, maybe eight months ago, thought that when they say print more money that they were actually printing more money. And so I'm like when they've got the bag of cash, who are they giving it to I couldn't understand like I was so but like if anybody puts any amount of credibility and
You, whether they think I'm intelligent or not to think that a guy that could build a billion-dollar company as of eight months ago, was imagining somebody from the government walking around with like a bag full of cash. Like, that's how ignorant I was to the system. And that's exactly how people end up getting held back.
I think that, what's fascinating about this is this is not an uncommon story, right? There are plenty of people on Wall Street, Etc, who don't understand, economics macro or micro and also just simple personal finance. That's right. This stuff is
Hard and it goes back to, there's nobody teaching it in school. And so you basically have two ways
to learn, you can learn by doing kind of trial by fire and some people figured out some people don't or you're lucky
enough to have a parent, a friend, a mentor, somebody else who sits you down and explains it to you. And I think that's why we are seeing such an explosion of Interest. Yeah. Sure. The meme stocks cryptocurrencies. It's easy to Mock, and make fun of these young people, but these young people are interested in understanding. How does the market work? How does finances work? How does
Investing work. And so, you know, if you go back to that data, right? We talked about 45% of people have no investable assets, the two stats, that just blew me away. When I start to look at, this was 80 percent of millionaires in the United States inherited zero dollars.
So the narrative is something everyone inherits wealth and is just
passed out. Will 80% of Americans inherited? Nothing, 20% inherited, something 80%, Nothing. The second one is that 33 percent of millionaires in America never made more than a hundred thousand dollars in a single.
Year, so you start to ask yourself. Well, how does it that? Somebody that doesn't make six figures a year become a millionaire. Well, they have to be disciplined and understand personal finance. And so it is possible to do it. It's not everyone, it's hard, right? It's not the easiest thing to do, but it can be done. And so as you start to understand like okay, the education is a huge piece of this. You actually see that the people who are wealthy, some of them could explain to you why they're doing things. They have a kind of a deep level and
Knowledge of the actions they're taking and the reason for it. There's a whole other group of people who are wealthy who couldn't explain any of it too and they just know that their parents told them they buy real estate. Real
estate always goes up,
but they don't understand printing of money. They don't understand quantitative, easing interest rate. None of that stuff matters. It was just they just did the action. And so there's a lot of paths to get to kind of the desired, you know, area if you will, but I do think that Bitcoin specifically what it's done for me. And for other people's, I have economic degree.
Three. Which is crazy because I didn't learn anything, right? Where it was only. Once I started actually invest money that I started to really get the education. So I always say, you know, Bitcoin taught me economics, it taught me personal finance. It's taught me social psychology, you know, all these different things but there's an element of just understanding hey invest because at this point given the inflation and the monetary debasement it is impossible literally impossible in America to get a financial success.
Ready position by Saving. It's just their debasing. The currency 38% of all dollars in circulation were printed in, last 18 months. That's insane.
That's insane. Like, when you think that were over 200 years old as a
country, that's really bananas. 38 percent in the last 18 months.
Whoa, so now as I think about so I'm I'm trying it's funny if people go back and watch all my interviews, they see me from the time that this all kicked off with covid. They see me grasping at straws trying to
Help the sort of average person, find a way through this because I really started to panic as in the right word, but it's like, I was
deeply at
unease because I knew who was going to get pounded, the hardest by what was happening. And I was like, look, I was going to be fine. But a lot of people that I know care about love, we're not going to make it through this thing. And so I started bringing on because of the reach of my show. I was getting on like the biggest macro investors in the world, but because I didn't understand Finance. I didn't know that.
It was the wrong person to go and talk to because they can influence countries and they can help huge hedge funds. But they don't know how to talk to the average everyday investor. And one of my employees, kept haranguing me to look at cryptocurrency and Bitcoin and I was like David. I just don't have any interest in investing. It's not my thing. Like I know how to make money and then end of T's came along and I realized that was going to be the future of my business. So I went all in and like, you started learning all this stuff from investing in crypto. I had to learn
About the blockchain by, to understand and ftes to create content there. That was interesting and compelling. And as I learned about that, I was able to get the first principles because now I understood how the blockchain worked, which led me to what's different about fiat, currency to cryptocurrency. And then all the sudden, you like. Wait a minute. Are you fucking kidding? This is what's going on. Like they can just print money at will, that's insane that also when you start thinking about. So one thing that's always enraged me and this sends me back to my
Is when I was young and broke and I would have, let's say, nineteen dollars in my bank account, not joking. And they won't let you take it out because there's a minimum that you have to have in your account or there's like, $20, minimum at the ATM. And so I'm like, hold on. I'm not going to be able to go like, get a meal right now because of banking rules. So I've developed this, just like internal rage over Banks acting like my money is their money. And so now, like seeing how it's hard to get your wallet set up, admittedly, but once you like, get on the
Rails of cryptocurrency of how easy it is. And so that's really been eye-opening and game-changing now. I think we have to get to all right, you have to get to those first principles to form a thesis and then you can invest based on a thesis. So I want to talk about the thesis around Bitcoin will stay specific to that because I know would you do you call yourself a Bitcoin
Maxi now, so I think there's a separation between there's
monetary component of
this and then there's like a technology or
A corporate component of it. The monetary part. You have to be a maximalist, right? You're a Fiat maximalist. If you're a US citizen, you get paid in dollars, you save in dollars, you invest in dollar-denominated assets, you pay your taxes in dollars. So you're a Fiat US dollar maximalist when it comes to monetary assets. Everyone in the world is a maximalist because that is what you did nominate your wealth, right? Very, very rarely. Did somebody say hey 50% is in this currency, 50% is in this currency and so from a monetary standpoint, definitely a Bitcoin maximalist because
I think Bitcoin is the only one that has an opportunity to actually kind of Ascend to Global Reserve status and end up being the superior monetary form. But when it looks at the technology, I think that there's going to be massive competition on that. So if you look at the technology side of it where you're not talking about monetary asset, you're actually talking about a technology asset. It would be like saying you're an iOS maximalist or your, you know, I don't know, python maximal. It's vary depending on the language, or the platform or whatever. So I think that you've got
Able to separate out and say you know Bitcoin is competing with Fiat, currencies for store value, medium of exchange Etc.
And really fast Fiat. Just means it's
government-backed just government-backed and basically they control it. So the key definitions here or a fiat currency versatile is called sound money. All sound money is basically something outside of the system and something that people can't create more of. So
gold is a analog
version of sound bites of physical form of sound money,
created by stars exploding. Just I mean, when I heard that I was like God,
Yeah, that really is an interesting way to think about why it's scarce. Yeah, and Bitcoin is a
digital form of sound money. And so you can compare the sound money to the Fiat money and, you know, it becomes pretty clear pretty quickly
to people's like, okay, one is
completely abundant and can be created at will 38%. Has been created last 18 months versus one that nobody can create more of. Well, I don't need to know much else. Other than that to know, which one's gonna end up being more valuable. And so if we look over the last 12 years or so Bitcoins,
Sing power and I'll purchasing power means is how much does it cost to buy, you know, a good the purchasing power has appreciated its increased. So all of the expenses around you all the physical items that you buy have, gotten cheaper and cheaper. So it used to cost me one Bitcoin to buy a loaf of bread. Now it might cost me .001 Bitcoin to buy a bread. Okay, that's pretty interesting the dollars the opposite, right? The it cost me more
dollars to buy the bread. So everything's getting more
expensive around me and so ultimately law on hold on.
Like that's, that's
It's so basic and so game-changing to understand. So you've done a mental switch where you now denominator emotionally in Bitcoin akas, satoshi's. And I haven't yet. So as I see the price fluctuate on bitcoin or whatever, I get excited. Well, the funny thing is, I get excited in either direction when it goes up. I'm like texting my wife. Yo in the last like 24 hours, we just made and she's like, you have got to be kidding. I mean, it's
Grazie, yes. Now when it goes down, I'm texting her like yo, we're going in hard, like we're buying this dip. So, but it's really, really interesting. Do you mind saying again, the cost of loaf of bread compared to dollar versus big? So
if I did nominate my life and dollars and let's say I buy a loaf of bread today. It's two dollars five or ten years from now, that loaf of bread May cost me three, four, five dollars depending on the rate of inflation. If I did nominate my life in Bitcoin and today, let's say that it cost.
Me one Bitcoin for a loaf of bread in the future. It will cost me less than one Bitcoin. So it actually become cheaper for me to buy because every asset when you think of price, it's denominated in a currency. So a stock, right? When I, when I asked you, what is Amazon stock price, you're telling me one
Amazon, share over, how many US
dollars, and that's how we get to the actual value. And so when you start to think about that, look at the stock market,
Like Market from 1971 to today's up and to
the right. So perfect, 45 degree angle, right? I know you're about to
say when you dominate it in Gold. It's down. That's is 1971. If you denominated in Bitcoin since 2009 2010, it has crashed aggressively Bitcoin has been the best performing asset, but that's because it's denominated in dollars. And so, ultimately what we're watching is, we're watching an entire generation of people. Wake up to this fiat currency, kind of fiasco.
Go and there's a famous. I think it's Henry. Ford quote, where he said, you know, if people understood how money worked, there would be riots in the street before morning and it's simply again, it goes back to that education Gap. And so the 55% of people hold investable assets, whether they understand why or not, they're actually benefiting from this. And so it's important to remember that. I don't think there are nefarious or malicious intentions or you know, let's screw people at
the bottom of the totem pole.
In fact, sometimes actually the
Opposite, but the system is working as designed. It's a feature, not a bug. And the reason why that's important to understand is because the system is not going to change, right? You and I are not gonna be able to convince anybody to do anything different. They're going to do what they're going to do, because that's the way the system is built. But what you can do is you can change the way that you're positioned. So, you have a choice. I can either suffer at the hands of the system or I can flip around to the other side table and I can benefit from the system.
Every single rich person understands how to benefit from the system, hold assets. Not a currency. Don't hold the dollar instead hold the assets
because it's for one thing. It's to hold an asset that you have a reasonable belief is going to go up in value over time. And one thing I want to go back to. So you said all right, you're the cost of the loaf of bread is going to take less and less of the Bitcoin that you own. That's a prognostication, right? You're hoping that that is true. But one thing I want to point out is the things.
You're looking out into the future and saying that it that the bread will cost more dollars is back to store eclis. So it simply you looking backwards and then carrying that out forwards and the same is true of Bitcoins. Is that you're looking at the Historical performance and projecting it for does not. Like you're just making that up and being hopeful and that is where I think this starts to be important, is one to recognize everybody has to do their own research. You have to figure this out for yourself. You want to understand it to the point where you're not thinking an analogy, you're thinking from first principles. So you understand.
How the game works your you know emotionally riding in the streets as Henry Ford predicted be? I think that that that's an important thing for people to understand. This isn't hope IAM. This is looking at the Historical performance. And in fact, one of my favorite statistics and strike me down if this is inaccurate, but that Bitcoin and this I got from real Paul that Bitcoin is the fastest adopted technology and all of human history.
Yeah, it depends on how
you count. But for sure, and remember Price, Right? Is kind of the best indicator of adoption. If you have a fixed Supply asset and demand for something or adoption for something goes up. The price has to continue to move upwards. Right. Just more and more people want this scarce asset. And so the price goes up, the coin was the best performing asset over the last decade. Now, all people talk about is the volatility. Well, volatility actually, and this is like, when you get a little bit more in the weeds, can be very good for
Fully. Oh, so there's
a this data is
because you have potential, massive upside.
Yes, there's two kind of ways to think about volatility. We think of all Tony when it's talked about in the mainstream media's and negative thing, right? All its volatile. It's volatile. Well, if something goes up in value, it's volatile to the upside. If it goes down in price, then it's volatile the downside. So, volatility isn't good or bad. It's just, is it going in your direction or not? Right? If you're short, an asset and the asset goes up in price?
You hate volatility, right? Because you want to
Go the other way. So volatility being not good or bad as important
because you want it to actually be volatile. If it's going in your direction. The second thing is, I think that this data may be, I think it's 2015 to 2020 and don't quote me exactly on the dates, but
there's a five-year period where
if you invested in a 60/40 global portfolio, 60% stocks 40% bonds, you got a seven point two percent annualized return for five years.
It's about average where we've seen in over.
Two decades.
If you had taken half a percent from stocks and half a percent from bonds. So you had a one-person allocation, the Bitcoin 39.5%, the bonds and 59.5% to stocks. You would have taken that 7.2 percent per year and increased 29.2. So at 200 basis point increase in your annualized return, if that one percent allocation of Bitcoin had gone to 0, you lost all the money. You would have only gone from 7.2 percent to
Even percent. So it's about a 200 basis point or 2% upside for a point to or 20 basis point down side. So 10 to 1
during that five-year
period. Now, the reason why I say that is 1% of a portfolio is not a lot of money for most people. That's kind of a speculative type investment. But because this is so volatile because it has the ability to appreciate so aggressively like you talked about when when lots of people are getting excited. Excetera is it can have a really profound positive impact on
Polio and
still, you only have exposure of 1%. And so, we just haven't seen that many asymmetric assets like this before available, you know, kind of an illiquid market for people to go by and what I think ends up happening, is people come in because of the price. They're like, oh my God, I'm gonna get rich, I did. This is amazing. This
is like the greatest thing ever. It goes up in price, over time, whatever.
But then what happens is as my friend, Marty been always talks about, he's like, you know, you come for the money, but you stay for the money and you came from
Prophets. But you stay because you start to understand Fiat, currencies economics, personal finance, Etc. And you start to realize, wait a minute. I have to do something. I can't sit with cash. And so it's just a very unique asset that we're all kind of living through Global adoption. Right? We've gone from the creation of an asset 12 years ago to now there's a nation state that has bought Bitcoin. I don't think anyone, you know, 10 12 years ago thought that a nation state would buy Bitcoin this quick.
And so you going back to rolls Point, You're Building all of this on top of the internet. And so the internet adoption happened on top of the telephone lines and the kind of connectivity we had. So it had a certain rate limiter to it. It can only grow as fast as we had, you know, kind of communication infrastructure. Now, when this gets built, it's being built on top of the internet. So, look at what is the total internet penetration globally. Well, that's the rate limiter for how fast this can grow.
I don't think we probably talked about it enough, but there was immense work done in places like South and Central America countries in Africa, you know, places like India, Etc. China to really Drive internet infrastructure over the last 15 years, right? Everyone from the Google's Facebook's Amazon's of the world, to kind of the traditional internet providers. All spent billions and billions of dollars getting all that infrastructure installed. And now here comes comes along a technology that is literally just going to ride the coattails of that internet in.
Structure and get adoption. And so that's where you see countries like Nigeria and others that you wouldn't think of being, you know, super for, you know, kind of thinking on technology. Actually some of the highest penetration and adoption that, the macroeconomic problems of the currency and they're watching their currencies, get devalued their watching the dire financial position. They're in and they have the internet infrastructure now and so they're not tied to a legacy infrastructure or financially. So what do they do? They Leap Forward a developed country? And I think I'll
Salvador's got a shot to do that. I think Nigeria is going to do that. So we're just watching, you know, a tale as old as time. This has happened over and over and over again with technology Trends. It just so happens that now it's coming for finance and it's not a powerful influential people who don't like that. Yeah.
All right. So I want to leave some bread crumbs for people that maybe you're in my position, eight or nine months ago. They have no idea. This is so dizzying to them and if they've made it to this point, I'm very impressed because they're investing in their future, but now just a few bread crumbs. So going back.
To you. If you don't understand the first principles of something, what I'll often refer to as the physics of the situation, so, you're as low as you can go. There's your at the sort of axiomatic state, where you just you at some point, have to say, I believe these things to be true. Nobody knows, sort of anything below that. So okay. We're not reasoning from analogy anymore. We're getting to the point where we understand what Fiat money is, its pluses. It's minuses. We understand what cryptocurrency is bitcoin specifically, its pluses, it's minuses and now we can begin to think for ourselves to solve novel problems because we're thinking from
Principles from that they're going to form a thesis and I'll lay out my thesis, be great for you to lay out yours and I'll explain why I'm not afraid of price volatility. Why? In fact I get excited in either direction. When, you know, when it's going up. I'm like, oh my God, I'm getting Richard. This is amazing. And when it's going down in my guy, can buy more. Now. The reason that I want to buy more is the following, I believe this is one of my axiomatic statements. So there's nothing below this one. I believe it to be true. That technology is a one-way street that we will never go backwards. We will never unwind the
We will never be a less digital creature. We will only be more and things like neuro-linker going to become real. And I actually and I don't want to lose people on this, I think in a very far distant future. So this is not in the next 20 or 30 years, you know, maybe this is a hundred years. Maybe it's 300. But there are people already that have Cochlear implants, that give them back hearing. We're working on implants into the eye. They give people back Vision. So it'll start with correcting things, but we will ultimately, as ourselves become.
Really tied physically to technology. So I believe that everything will ultimately get digitized. So what we're living through right now is a really fascinating moment. Where art is now being digitized, money is being digitized and those two, I live at the intersection of art Collectibles and money and watching those go digitized and watching for anybody that wonders. If this if the human mind is just ever going to be into these
Things in the way that they are physical things. I will just say this that in August of 2021 Open Sea, did three billion dollars in revenue, on Purely digital Goods, digital art, digital Collectibles, all of it. And that blew them past Etsy at like day 16 of the month or something. They went pass. I mean just absolutely insane to see how much money is pouring into the system and I think this was only 200,000 wallets. So 200,000 people driving three billion dollars worth of Revenue. All
On digital Goods that have no physical tangible thing in out in the world. Now, there's utility. It's beyond the scope of what we're saying now. So okay. My thesis the world's only going digital. I've all these kind of proof points around it. Now, one of the things that's going digital is money, Bitcoin in particular, has a really fascinating feature, which makes it what you call sound money and that feature is programmatically, it can only ever produce 21 million of these units unlike gold, which for me, and I,
If you'll agree with this, my mind got wrapped around it immediately when it was like, Bitcoin is digital gold because I understood what gold was meant to be. I was never going to carry it around and shave. Some off to buy a loaf of bread. Like it's a thing that I store somewhere else that we all agree. And yes, it only has value in that we agreed has value. It only can be created when stars explode and that Rains Down on the planet and gets embedded into, you know, the Bedrock of you know, the Earth. And so we have to go and dig it out, but we dig it out at a rate roughly 2%.
Percent a year as economic incentives. Go up, we dig out more. And so there is some big question around. Well, if there was enough incentive, could you devalue that more by discovering that there are actually harder to reach deposits of gold? Okay, so I get that. It's capped. There's only 21 million units there for as long as we all agree that that thing has value. It becomes sound money as you say because there can never be any more of it. So the more I can get now in this sort of early phase.
It's sort of a secret in plain sight and which is how I feel every time I buy it. I'm like, why are people selling me this? Like this is crazy because I have sold exactly zero satoshi's. So I keep having a number and I'm like, I can't wait till I have, you know, more than this and more than this and because my thesis is technology, is one way street. We will never go backwards. Money is a value is going digital. The number one, FrontRunner is Bitcoin when the price goes down.
It's better for me because I can buy in and there will come a day. I think we're the predominant trajectory even in the relatively short term will just be up above. So it doesn't make sense to even get excited as the price goes up because it's just almost sad that I can't buy in more at that, you know, the earlier rate. And so, that's my thesis and why I wouldn't sell because it becomes like, Michael Saylor says, it's like buying a plot of land.
Manhattan because you're never going to make more Manhattan. And so that's only going to go up in value over time, which of course is exactly what happened to Real Estate in Manhattan and you can borrow against etcetera. Okay. So what's your thesis?
It really just comes down to this idea of the purchasing power increases versus the purchasing power of the dollar. Decreasing and ultimately, what I think ends up being really important for the conversations. There's a financial component which we're talking about now, right? Is I want to store the value of my time, right? I think this is like a really, really key component of the financial conversation is all money. Is at the end of the day is a unit of time. And this is
Crazy concept until you think about why do you receive money? Because you or somebody you employ or an asset you built or something is exchanging time for money. And so ultimately, if you have lots of money you end up having leverage on your time. If you don't have lots of money, you have to spend time to get dollars. And so money is just a unit of time. And so when I think about that if I
Expend. Let's say an hour of work today and I get paid ten dollars an hour, and then you tell me that I took that unit of time. I put in my bank account and then in the future, I would have to work two hours to get that same $10.
Well, that actually doesn't feel that
great, right. In terms of its, it feels like I'm, I can't keep up. I've got, I only have so much time in a day and I'm constantly falling behind. But if instead, you said to me, hey, if you work an hour, you get $10 and then you put that money in a form of an asset. That is only
Going to appreciate its purchasing power. Then wait a minute in the future actually don't have to go
work for three or four hours
because now I have that $10 at saved from the time. I originally spent. And so this idea of like a unit of time, becomes really fascinating, because what a rich people understand. Don't get in the game of trading your personal time directly for hours, right? They either employ other people or they own assets that deliver them some sort of financial return. And so, when you look at Bitcoin specifically,
And it has a financial component. That is unavailable. In other assets. It is systematically built to continue to protect your purchasing power and protect could also just be going sideways. Right? Just it doesn't degrade. It happens to be going up a lot now because it's being repressed by the world, but at some point it will reach some stable value and it'll kind of just go sideways and will protect that. Purchasing power really important concept. The second is this idea of sovereignty. So like you talked about putting that nineteen dollars in the bank and you couldn't get it out.
Huge problem, right? A lot of people don't know. I've Got a Friend. Marquess Co who talks all the time about. Like, when you put money into a bank account, it's not your money anymore. That's crazy. Right? It's an IOU. They're supposed to give it back to you. But we seen in very kind of outlier events, like in Cyprus in 2013. I think it was where they basically come in. And the government says, you know, what, if you have a hundred dollars in the bank were taken $10, 10 percent tax across the board.
Well, how can I take my money because now your money, right? And so, you end up, not understanding some of that. And so this idea of sovereignty, the ability to hold your assets yourself, right? You talked about, you don't actually have money buried in the backyard, right? That would make you a sovereign individual. It also puts you in a lot of security risk, right? Somebody could come here and dig it up and harm you except ra with Bitcoin what it allows for. Is this sovereignty, you can actually hold on to it. Nobody else is holding it for you. Get to custody the asset and so
In the developed world, we don't think a lot about this, right? We decide put money in the bank. I go to the ATM, I can take it out. I can swipe a card. No problem in the developing world is a huge problem. Right? If all of a sudden I need to get up and I need to flee Venezuela. For example. Well, I have to get on a train, a plane, a boat,
or walk. And at every
single, one of the ports airports train,
stations or border crossings. What are they doing? They're
confiscating people's wealth. And so there's, you know,
report after report, after report
over the last few years.
Ears where somebody went to the airport and they had physical gold in their suitcase and the, you know, government or the military took it from them. Well, you don't have sovereignty over the asset because you don't have the security of it. And so, Bitcoin, having this cryptographic kind of security to it ends up being really, really important on a global basis. Maybe not so much the United States
today, but globally, really
important. And the last thing is, there's this censorship resistance with the payment Network. And so, one of the things that, again, in the developed world, we don't think a lot of
Out, is, if I want to send you money, I basically have too many options, right? I can hand. You physical cash. I can then, do you, I want to ask my youngest brother, how he sends money to his friends. He said, Uber that he said money on Uber. He was well, I split rides with them at the end of the ride
rights as all these ways that we don't think that we send value back
and forth to each other in the developed World. Well, what happens if the government said you can't send Tom money.
And sometimes they do that where they'll say, you know, Tom's are criminal. You're not allowed to do Financial transactions with him. I think generally as a society, we say, there's got to be some rule of law. We agree. Bad people shouldn't be able to launder money or, you know, commit crimes with money, Etc. But what happens if it goes from Tom's of criminal to Tom didn't work out today and Tom's been a bad boy in our society. And so now all of a sudden pump you can't send Tom any money.
Well, what do we do then? Because all of the technology that we use would be exposed to that threat. And so this idea of censorship resistance while I don't think most people around the world today are worried about their government saying Tom can't receive money because he didn't work out today. What we aren't worried about is what happens when all of a sudden a dictatorship says to their citizens, you're not going to be able to get your Capital out, right? Can I'm actually a
little more
Worried maybe then you are. So I am not a very controversial person by nature, but watching some of the controversial, people get shut down. We're like, stripe is like we won't even process your payment account. There are ways to really fuck with people. Now, here in America, like, it gets a little scary.
I usually don't go too far down this Rabbit Hole only because you end up in this weird world where everyone becomes a conspiracy theorist real quick, but, you know, in the last 18 months, a
Out of the conspiracy. Theorists were just early, right? They ended up being right about a lot of things and it's unfortunate. It's not always that that situation but I do think that we are headed towards a world where we're understanding the more power that you give to government's, the more that they encroach on personal freedoms, individual liberties, Etc. And the most extreme examples, everyone can identify. And I think generally in the developed world, we point our finger and
Take it and say, you know, they shouldn't do that. Right, but when you look here in the US, it's always a that could never happen here. And I don't think that there's people who fundamentally believe that it's going to happen tomorrow because it's usually this like slow degradation of freedom, but if all of a sudden they shut people down from stripe, okay?
Well, there was just a guy who was in politics, who Chase Bank, shut down his account for reputation risk.
This isn't somebody who was, you know, out saying crazy conspiracy theories are definitely politically,
controversial, whatever.
But I think, if you and I had to sit down and make a list of all the people who get, you know, financially censored or censored all social media. It's usually kind of the fringes of society, right? As the people who, if I went home and I talked to my mom. She's like, you know, at first a little crazy, right? These are people who are just involved in politics. And so I think that at some point you have to start to ask yourself. Do I want to risk?
Even being exposed to a system where it could happen. It's not saying it's going to happen. It's not saying I have some prediction as to when it happens. It's just why even subject yourself to that risk, and I think it goes back to this conversation around the best investors in the world. For the most part are actually not very
risk
tolerant. They don't want to go and take immense risk. Almost never, will you see one of the best investors in the world? Say, I'm going to take a hundred percent of all of my investable assets and I'm putting on this.
One stock cross my fingers and hope it works, right? It just doesn't happen instead. They think a lot about risk, mitigation. They try to figure out what are the ways that I can basically make investment decisions where there's lots of upside, and there's very little downside. And so I think that as a society were learning, now, that's probably the pretty good way to think, right. It's real pretty good, way to kind of position your life. And so if you're a content creator, don't go all in on only one platform. Why you have platform risk, right? Build two, or three different platforms.
Forms, if you are a citizen with your financial life, don't go all in on One bank or don't go all in on one type of asset. Have some sort of durability to it and so in the u.s. I don't think we worry so much about censorship but in some crazy way. What is a sanction? The United States government runs around the world, sanctioning countries, and they have reasons for doing it in some cases. I think people would agree with them in some cases. People won't agree with them. I'm not here to debate. Should we do, what should we?
Not. But the word sanction ends up being a marketing term censorship would sound a lot worse. Hey, we're going to censor this country that there's a comedian and I wish I could remember who it is. I want to say, it's Chris, Rock has a whole segment around the Iraq and Afghanistan war. And he said the word Insurgent was the greatest creation ever, because I don't know. Any insurgents. Do, you know? All right, kill them. All right. He's but if we'd said, hey, we're fighting humans.
Also wanna say what would they do? Are they good people? They bet, you know, there would be questions. So there you would think
differently about it. But when you use the terminology, that is somewhat, clinical in nature and isn't something that's part of the everyday vernacular you just think differently about it. Right? And it's just human nature. And so I think that
sanctions is another one that kind of Falls in that
of oh, we're sanctioning. These bad people, sanction them, right? Like, what we're centering people will. Who are you censoring? Oh, we're cutting off an entire country's access the global.
Financial system.
All of them or just the bad people, right? It everyday citizen. They get
cut off to, oh, well, maybe they don't get cut off but maybe there's negative ramifications for a lot of nuance in the world. Right? And so I think that ultimately we're moving more towards a world where anybody can use this payment system which at first sounds a little scary to people because that means that the bad people will use it too.
But who's the good person who's the bad person? Well, who gets to decide and I don't think anyone wants to encourage terrorist, financing money, laundering, criminal Behavior or any of that stuff, but the one benefit that this payment system has on top of sovereignty and censorship resistant is that it's done on a public Ledger. It would be like criminals. Basically saying, hey, you know, what we're going to do. We're gonna go and we're going to do crimes, and then we're going to literally write down every transaction we have. And we're
Put it on a website on the internet and anyone can come. Look at it. What a couple sap. I don't want to do that. Right? I actually want to use that bag of cash and no one knows about and I'm going to use physical dollars to facilitate this other stats around.
How much sort of Nefarious stuff is going on with Bitcoin versus u.s. Dollar.
So the stats that I know off top. My head is over two trillion dollars of fiat currency are just money laundering, every year used for illicit purposes, which is about the size of the
Entire crypto industry, not just Bitcoin, but the entire crypto industry, right? So it's a very big number. Some of that is simple things like terrorist financing and then you're literally bringing a bag of cash or whatever. But a lot of it also is a major Banks who end up being caught up in money, laundering situations, Etc. And I'm always careful. I think it's very easy to kind of Point your finger at Banks and say, you know, these are all bad people whatever. I tend to think of it, more as folks with good intentions. They're trying to do the best that they
Hen. Are there situations where they definitely know they're doing it? Of course, but if you had to monitor millions of transactions, a day going through your bank,
they do a better job than I would first. Right? Right. So there's
again Nuance there. So that's the Fiat system and then in the Bitcoin world, so not all crypto, but in Bitcoin specifically, the latest stats that I've seen is, there's a report out that says point four percent. So less than half a percent of all transactions are used for elicitor, nefarious purposes and
There was also a former CIA director who came out and basically published a whole report. I don't remember what exact number. He came up with. It is pretty much in line, you know, definitely less than 1%. And so if you talk to law enforcement, they say all the time. Like if somebody commits a crime, we want their fingers on a keyboard. Why is the digital Trail? It's much easier to track them. It's much easier to figure this stuff out. And so I think what we've seen is just criminals in the early days of 2009, 10 11 12, even maybe 13 14. Oh there's a
Anonymous currency that no one knows about. Like, I'm gonna go do all this crazy
stuff with it. Well, now that we're in 2021 people realize. Oh, wait a minute. I just use this public, you know, Ledger that probably wasn't the smartest idea. But I think that it's important actually, that the criminals in Bad actors adopted it first, because that is the adoption cycle. That every great technology takes whether it's mobile, phones, beepers, the internet, Etc. There's a constant cat-and-mouse game between law, enforcement and Bad actors. And so what a Bad actors.
Constantly doing they're looking for new, innovative ways to use technology to get away from
or obscure law
enforcement from catching them. And so criminals are actually, usually the first adopters of new technology, which again doesn't make people feel good. But if you go back and you look, it's a historical pattern. And so the fact that they were first and then we got kind of the first adopters from a technology standpoint and then we started to get more than mainstream. And now it's estimated that more than a hundred million people globally. Use this stuff. It's kind of like, goes back to yours that high already.
Oh, yeah, I mean coinbase alone. I think they report now that they've got through our the number correctly. It's a 58 million you registered users, just one company and they're not even the biggest exchange right in the month of July. 1.2 million new users came onto the Bitcoin blockchain. So not coinbase, not any exchanger wallet, actual blockchain that stuff. You can see on chain new entities and 1.2 million. New entities came online, which is the
the fastest it's ever grown in a single month. And so what you have is you have a fixed Supply asset that. Now, you've got the most number of entities, ever joining in a month. Of course, the price goes up right fixed by asset demand goes up. Unless you think that Supply demand economics are invalidated, you know, the price has to move to accommodate everyone and so, it's just just a fascinating asset that I think ultimately.
Those that embrace it early one, that benefiting from and a lot of times, as I kind of go down this path, talking about the criminal behavior and you talk about the public Ledger, you talk about the adoption, people, get on easy. They don't like change, right? Humans, hate change, but just like the internet, right? Imagine if we had sat here in the United States, and we had said, this internet thing is kind of crazy. It's a decentralized open thing. Anyone that has an internet connection kind of join and participate and get information asleep.
Get there. Do all the stuff. You know what? I don't think the US should participate. You know, why China? China is going to benefit and North Korea is going to use the internet to and I Ron those bad people they're going to use the internet as well. So the u.s. We're going to set this one out.
Well, people did do that. North Korea. Did that in North Korea would suck to live in, right? It's just they cut their people off from a very important technology. And so when you think about that from my open payment system, right? The idea of an open payment system is so foreign to us because the system that we live in, but anyone in the world can plug into this open system and send value to anyone else without asking permission.
If we sit here and we say, you know what, we shouldn't participate because there's some other country or some other organization that's going to also benefit from it. We're actually get likely to be the ones that get hurt the most by the decisions. Instead. We should do what we do with the internet. Internet's going to be a thing. The United States can be a leader in the internet. We're going to benefit more than anybody else. We're going to use this new technology to our benefit
first. What would that look
like? I think the easiest thing to start with is to use the payment rails, so
Coin as an asset, when people hear Bitcoin, there's a lot of confusion because the asset, the thing that you hold the, the one of the 21 million units, think of that as like a dollar bill, right? In terms of its a unit of currency Bitcoin. The network is the payment rails itself. So more of like a Visa so I send dollars across visas Network right in the Legacy system here. What I do is I send Bitcoin across the Bitcoin Network. So it's a little confusing, the the
So Community has never claimed to be great marketers, but great technologists. And so Bitcoin. The network ends up allowing anyone to use it. So I'll give you a perfect example. Invest in a company called strike and which strike allows you to do is send any currency to anyone else in the world, completely for free instantaneously and they do it without going through any banks. Now, that sounds like a Utopia, right? How the hell do you do that?
What it allows you to do is let's say that I have dollars in my bank or my account. And you want your she live in Europe. I send $20 to you and my $20 ends up arriving to you a twenty dollar equivalent in Euros, but happen instantaneously and nearly for free. How what they're actually doing is they're taking the dollars. They're converting it to bitcoin. They're sending the Bitcoin across the lightning Network and then they convert it back into Euros. Now, the reason why that's so fascinating is if I now can send any currency.
Whether it's dollars Euros, Bitcoin name, your currency across rails. That allow for instantaneous settlement and near zero. If not zero fees. All of a sudden. I don't have to send large amounts your banquet, let you take $20 out of the bank right? Her $19. You needed 20. Well, I can't go wire somebody $5, right if I was the biggest, I want to send a wire to Tom and Europe for $5. So well, the minimum is whatever you got to pay 25 $30.
Fee all the stuff, okay, if I wanted to venmo you but you're not on venmo venmo, doesn't communicate
with revolute or so Phi, or cash app or name your payment system. It's a
closed Network. So, now, what ends up happening is strike and say, hey, anyone with an account can send money to anyone else. Plugged into the system. Tom has Tom's lightning app, right? And you start signing up users people.
Strike can send money to people on Tom's lightning app. Why? Because it's an open payment system. It's an open standard. And so now all of a sudden, you can also not only send anyone do that censorship resistance component, but you also don't have to send large amounts. So now, what I can do is I can send you a penny. I say ten cents, 75 cents. I send you a dollar instantaneously and completely for free. And so when I do that, it unlocks all kinds of new use cases for payments on the
Get right. What if I don't want to buy? The easiest example is these like media subscriptions? I don't want to spend 30 bucks a month for a media subscription. But I really want to read this one article. I'll pay 10 cents for it. And what if I can just simply do that automatically rather than have the $30 thing. They actually probably will make more money doing that then
forcing People Into The Doodly subscription. This is where the more you're in the nft world. You begin to realize like the Ultimate Fantasy for anybody selling.
Thing is to have you, just connect your wallet and then it's especially if you still in your own mind. Sort of denominated in dollars. It's like, oh, yeah, I've got these, you know, aetherium coins, whatever they are. And I can click this and it's only .04, you know, whatever ethos like, oh, that doesn't sound so bad and you just, you end up buying way more than you would. It is so effortless. The wanting to having is like so quick. And so, to your point the number
ER, of times, I've gone to read an article and I'm like, you've got to be kidding like, even the thought of having to open an account and put in my credit card. No way. So, even if I could get that article for 10 cents knowing the sort of traditional Hoops, I'd have to go through. I'm not, I'm not typing my name, or any of that bullshit. But now with a metal mask wallet, you go literally it prompts you connect, you hit connect, and then it's like you want to buy this. Yes, two clicks. And now you're reading the article for 10 cents. I mean that I'd never thought of that. But that would be it will increase spending.
Tenfold 20 volt. Obviously, I we agreed that we were going to do this. I think it was going to be more of a conversation but I'm going to pull you down the rabbit hole because I can tell you're intellectually interested in this stuff. I'll give you another use case that I think will have a profound economic impact globally. Historically an employee gets paid every two weeks.
In the four largest banks. This not this data comes from I think 2019. They made eight billion dollars in overdraft fees.
An overdraft means that they tried to debit your account and you didn't have any money in there. Yeah. So the four largest banks made eight billion dollars from people that didn't have any
money.
There's all kinds of ethical and then questions and
whatever.
Part of the problem
is, when you start to unlock this and look into it is the folks at our Bridge. Another company invested in, they went did a hole deep dive. Why are these people? Why don't they have money? What is it? It's usually not because they don't have money. It's because they get paid every two weeks. So I get paid on the 1st and the 15th on the 10th. I won't go through grocery shopping. My car payments on the 11th my Netflix hits on the 12th. Oh, I made a purchase on the
Overdraft.
Yep, if I didn't even know real-time updates, by the way, so you don't even know where your account is. You think your find like trying to track all the mental math or write it down, get out of here.
So when I get paid on the 15th, what do I do? I pay for the things that I need and then I just have budgeted and an overdraft fee and my $35 overdraft fee every month,
adds up and so does all the other millions of
Americans and ends up being a billion dollars for top four companies now,
Why can't we pay people at the end of every day?
Why when you leave work today, don't you get paid? Why does it only once you know, or twice a month? Was a technology problem, right? And sure there are economic reasons why the company wants to hold the money rather than give it to you and they earn interest or whatever, right? But it's mainly a technology problem because there's two components. One is, how do I actually pay you every day? When I'll wire my run payroll every day like that's pretty crazy. Right? That seems inefficient and to how do I keep track of it? How do I do the accounting around? Well, who did to Tom get paid it actually get it. Okay. You got it. Alright, who didn't get paid today? Who?
Come into work. He we don't pay them whatever. So when you bring the cost of sending small amounts of money to 0 and you do it in a frictionless censorship resistant way, you get what you call streaming payments. So, kind of the most economic Prosperity is now, I can pay every one of my employees at the end of every day. Well, if I do that, how much better financial position are they going to be in just that alone? Would drastically. Lift millions of people around the world?
World into a better financial position, just pay people the end of every day and there's copies at a working on this. Some of them are using crypto real. Some of them trying to other stuff, whatever. But that when you drop the technology cost to 0 to send money is life-changing
for us. Why want people to understand what's going on in cryptocurrency? What's going on in the blockchain in general? It is a technology. Money happens to be one of the things riding on the back of the technology. In fact, this is one of the things we have to talk about. I'll finish that point then I want to get to that is all right. This is a technology, which means I'm I have
Open, not me, of course, but that the creators of which have opened up this toolkit. And now what people do with the toolkit just like when I first got on the internet and I remember 1994 hearing the word email for the first time and I'm like what the fuck is that? And you go from what's that to I live I'm one. My business is almost entirely online to most of the things that I purchase our online, especially now in the middle of pandemic. It's like most of my social interactions are online like
I could never have predicted that. That's where this is going to go is bandwidth gets bigger and bigger as Network effects, you know, take and more and more people are on it. Absolutely crazy. And so now it becomes a question of what is the sort of underlying thing that makes this all magical? The, the whole notion of distributed technology. Like what does it mean to be decentralized?
The whole idea around decentralization is essentially no one person.
Or organization controls the system. That's it. Right? If you think of centralization it's important to kind of recognize why is centralization important or why is it been effective, right? If Amazon wants to be built, or we want to accomplish a lot of the things that have been great throughout this Industrial Revolution. We needed Central order or Central kind of coordination of resources, both Financial Capital, human capital, and also plans and execution.
And so these centralized entities end up being built into hierarchical structures. There's somebody or a group of people at the top and they basically are able to, you know, kind of decree down to the rest of the company. Here's what we're going to work on here. We're not going to work on and that's basically what the corporate world is as we know it right? Jeff. Bezos got immense leverage with Amazon because he had human capital, and financial capital, and a hierarchical centralized structure. That's actually a good thing. We would not have Amazon without it, right.
She's been a huge net positive for the world. In my opinion name, every other tech company. Same thing, right there. All centralized, hierarchical structures. Now, what we're getting though is a technology change that allows for the coordination of resources that doesn't require the hierarchical structure. Instead of one person making decisions. What if everyone gets to make the decision? Well, it depends. What are you trying to accomplish sometimes decentralisation? It's better. Sometimes it's
not right. That there's a very strong argument
that in certain situations centralization is the
More efficient better kind of structure, but now that we have decentralisation with this technology. What you do is you can actually build much larger networks. So the difference between a hierarchical structure of, let's say Amazon that is trying to build out all of these super kind of moonshot type ideas, AWS and Logistics and all of this compared to maybe something, where a network ends up making much more sense, right? So take Bitcoin. Well, there's miners. There's no operators and there's holes.
Verse, there are three different groups and the miners are Financial incentivised to run, computers to run the network. It's pretty interesting. There's a financial incentive for people all around the world. There's literally millions and millions of machines around the world that are all doing is it's the strongest Computing Network in the world. Why? Because every ten minutes or so there is a certain amount of Bitcoin 6.25 Bitcoin that ends up actually, being given out to folks that are running.
That Network. So the people who are running the the Bitcoin blockchain and so that Financial incentive right now, ends up being somewhere 45, 50 million dollars a day in Bitcoin ends up, being given out to these people based on the how much computing power and some Nuance there. So, when you create a network that doesn't have a hierarchical structure, there's no CEO of Bitcoin. There's no marketing department. There was no, here's the master plan. Okay, Tom, you go build the site in Washington state and, you know, Larry you go build the site and
China and Mark, you go build the one in Texas. There's none of that. It was purely Tom says, you know what? I want my piece of the Bitcoin block reward every day and we know I'm going to do I'm going to go figure it out. I'm gonna go get energy or power. I'm gonna buy these machines then I'm going to run this and I'm going to have a profitable business. And so, rather than rely on that hierarchical structure by creating a network. We created the strongest computer network in the world
in 12 years. And is it strong? Because you
Can't break it, there's no person. There's no point of failure. I can't go hack Timmy. I can't can, you know, seduce somebody and like, you know, get their keys to something. And is that what makes it strong just that it is there would be so many people to go
after I think of strength of a network in two ways specifically around this. A Bitcoin one is just a pure qualitative metric or I'm sorry, I'll quality metric. And then one is a quantitative one. The quantitative one's really easy. How much?
- Ray how much computing power is actually running this network and that's can stop a Brute Force attack or anything like that. And so the Bitcoin network has more computing power running it than anything else, right? It's way bigger than any of the largest computers in the world, Etc. So that's a quantitative metric, the qualitative one. I think more a structurally, right. So from a structure standpoint, if you think about other technology networks that have been shut down, right? Napster's always like a really
E-easy one, peer-to-peer, file-sharing
was a great idea. People were
doing it. Obviously, the music industry, didn't like it. How do they shut it down? Well, you can basically go and find out, who's the CEO of the business. Where's the
business? Where their servers,
all this types of? And you can go ahead and you can shut it down. And so when you remove that,
hierarchical structure
and you now have a decentralized structure. The strength comes from there is no single point of failure. So you have a quantitative metric and you have a qualitative.
Kind of framework. The qualitative one is the design of Bitcoin itself and that Network the quantitative. One is just the financial incentives or the economic incentives. That play has drastically out performed in a hierarchical effort. And so, when you start to look at that, you say, okay, that's interesting. Where else is decentralization important? And what you find is, and I think the industry is learning this right now is in some cases decentralization, really, really important, right? We don't want anyone to control this. We don't want anyone to be able to,
Eight more of it. We don't want anyone to be able to censor it or shut it down or whatever, very important. But there's also a lot of people who said, oh we're going to take those same ideas. We're going to apply it to traditional Technology, database technology or whatever. And what you find is, in many cases on that front, people. The end user doesn't care if his decentralized, you're not right there to say. Hey, look, I need some that's fast. It's cheap. It's easy to use whatever and so I think we're watching this in real-time play out some things that are decentralized, don't need to be some things that are centralized need to.
Decentralized writes it. So I think that's ultimately one of the most interesting parts of this industry. Moving forward is just what ends up getting decentralized and what is actually better off being centralized and the markets going to decide, right? Like one of the things I think through my career from investing standpoint is when you're a little bit younger and you're just starting out. You want to be very much of a call like a market predictor, right? I saw a b and c and so that means d e and f is going to happen.
Maybe the almost like the younger the more naive in the
more arrogant. You are like the more you have confidence that that's going to
happen as I've gotten older and just got more experience as I don't want to be a market predict. I'll be a market Observer. Just tell me what the markets doing. And then I want to go wants to react fast. It react fast, but also what you can see is the market is the ultimate referee, right? Is Bitcoin valuable. I have a personal opinion, you have personal opinion. So does, you know, millions of
People,
no one's individual opinion matters. The collective opinion of the market matters.
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When you look at puts a Bitcoin, for example, I could talk to somebody all day long and they can tell me Bitcoins not valuable. The best retort to. That is two trillion dollar asset that has tens of millions of people around the world holding it and it does more transaction volume than some of the card networks. Sure. Maybe it's not valuable, right? But like Robin. Oh,
yeah, but the market has determined that that is valuable and you just work your way through
the assets and you find is asset after asset. That some group of people think is invaluable, welcome.
Has decided has value. Now, you could argue that the market is wrong or mispricing it or whatever and there's Arbitrage
opportunities, Etc. But ultimately, I think that we're really bad at predicting the future. And so the more that you can be a market Observer rather than a market predictor you start to just understand crazy
stuff happens. I want to really differentiate between the two. So if I'm a market predictor, I'm trying to say because of ABC then d e, and f are going to happen as a market Observer. I'm just saying D is happening right now.
Now, and so, therefore I know what to do in this moment based on the fact that D is happening and if, you know, Q starts happening, then I'm going to go and adjust my strategy based on cue.
I'll give you a perfect example. So I do a lot of early stage investing, right? And what I'm looking at early stage opportunities, there's two different types of investors. Some investors, look at a business and they say, okay, you want to build, you know, a with a company that builds some kind of widget. I think
that widget Market is going to grow bigger.
I think that you should do a b and c, I think, right? And they come out very much from here is how I see this happening. And therefore, I'm going to make my investment decision on whether your plans line up with how I think the world is going to move in the future. That is a market predictor your predicating. The investment decision on the prediction of what you think's going to happen in the future.
And I do a lot of that early on. Some of them work some
overtime. What I became as Market Observer, is this person intelligent do? They know how to solve problems? Are they clear thinker? Do they think from first principles? Do they have traction and what they're building? Regardless of, whether I think it's a thing or not, right? There's a lot of people using it. And so what you start to do is you start to become more of an observer and it's if ground you much more in like, humility from an investing standpoint of saying, I don't know what's gonna happen in the future. Could be bullish could be bearish could be
We're in between. But what I do want to see is I want to see the trends things that are in motion stays in motion. And so if there's tons and tons of users flocking to something, who cares, what my opinion of the future is, right? There's plenty of companies that I think we're really stupid, like imagine what somebody came in and said, hey we're going to create a company and we have air mattresses in our kitchen and people are paying us to stay there. And we think everyone in the world can have an air mattress in their kitchen. Why don't? You were like, that sounds, insane. Like that.
It's never going to happen.
Because what are they doing? They're being a market predictor,
but also along with that pitch was,
by the way, there was a conference
this weekend. And at that conference, we had six people, you know, whatever pay for pay us to do it. And so people are doing it. If
you were more from a market
Observer. Oh, that's interesting. Can you do it another weekend? Write the questions you ask are different. It's less about. Where's the world going? And it's more about show me that the observations that I have available to me today that this is working or that there's something here. Yeah,
and if
Market. You see that in a big? What do you mess around with entities at all?
I was very, very early 2nf tease and it's not very popular in some sectors of this industry, specifically, the Bitcoin maximalist excetera. And it's why I make such a serious delineation between monetary maximalism and then like the technology competition, but in May of twenty twenty or so I started to hear about it. Look at it was interesting to me.
Cetera and the more that I dug into it, I realized I was like, this is the same argument as to bitcoin verse gold, right? The digital version of something is always bigger than the analog version.
Right? So the physical version is that just your gut
says, or is there name one asset that you can think of where the physical version is? Not bigger than the digital version. I can't. And you have
just put words to something that I feel but have never had words that feels so true to me. That's why I'm so high.
It's about Bitcoin and aetherium and then ftes is like, dude, the my brain switched over to digital so fast on artwork, I can't tell you. So there was actually, I found myself somebody wanted to send me something and they were like, oh, I, you know, I want to send you, I forget what it was a painting or something like that. And I in my heart was like, oh man has an NFC. I would fucking love it, but I'm like the physical thing. Thank you. It's so sweet as all my God. So can I but you know, go ahead and keep it. It's
It's weird how fast that happened
the the thing, if you just go down a line, so, these examples are shopping, you know, all that type of stuff. Taxis, Uber. The reason why most investors missed Uber as an investment opportunities, they compared boober to the total addressable Market of the taxi industry.
Well, that was actually the wrong analysis. That's really interesting because the digital version of taxis ended up actually not owning any cars, and it was a market expanding technology because it didn't just eat. Taxis. It didn't just eat black cars. There are millions of people in the United States who are young, who don't own a car, and they Uber everywhere. How many people in Manhattan own a car?
Well, most of the young people, it is Uber everywhere or they use public transportation. Right? And so what ends up happening is the opportunity or the addressable Market expanded drastically with a digital version of the analog, the liquid gold gold more caps about 10 trillion, Bitcoin. Today's 1 trillion. I fully believe that Bitcoin is not only going to drastically Eclipse. Gold market cap, but it will be a market expanding technology. If you ask me. Right now, how to go buy gold. I couldn't tell you agreed. I'd have to call a broker or go on a website.
You don't have to figure it out. I don't know how to do that myself and most digital natives know exactly how to buy Bitcoin. And so you, look at that now bring it to art art Market, you know, depending on how you count or whatever trillion dollars or less, right? The digital art Market. You said it open seeded three billion dollars in transaction volume and up in a single month crazy. And so why is Bitcoin better as a global story about?
You than gold was the digital version, better than analog. Well, one, there is a digital component to it. Meaning that anyone in the world with an internet connection can sign in and immediately start to transact it. So there's an accessibility advantage to is there's fractionalization. I don't the by a full Bitcoin at forty five, fifty thousand dollars. I can buy a piece of a Bitcoin 3 is that I can carry it around really simply on my phone, right? Or on my laptop rather than lugging around physical goals as a portability.
To it. And then you start to look at it from a storage cost, Etc. Right. There's a whole bunch of Advantage digital version forces. The physical version. What happens with the digital art? It's the same thing,
more accessible, more divisible, more portable,
all this type of stuff. And so if we're going to go and move our lives into this like metaverse Digital World, whatever, you know, is the the new way to describe it. Why would we leave the assets? We care about
Out in the analog world. No, we're going to bring them into the digital world to.
I'm going to try to touch on something ephemeral to just drive this point home. Have you ever looked at a VV
Vault? Vivi Vault know?
What is it? Hey, this is so crazy. So Vivi is a Collectibles company that has partnered with like DC Marvel to cute but they're there and of T's look like actual collectible. So it looks like a toy. It looks like a statue like it. It's they're going out of their way to sort of literally just digitize the Collectibles chemistry, but they're
The end to move. I'm still dazzled by this is that they gave their users, the ability to create these. It, they've made it right now. I'm sure a future iterations won't, but it looks like a vault. So you're going through a vault door and then you're on the inside. But it's just a virtual space for you to put display all the things you've collected, the level of creativity that people show in placing, their items is insane. So I'll give you one example the the way that they have programmed this space. So
So one of the Collectibles you can buy as the Delorean from Back to the Future and one guy, put it upside down and on the roof. So it's actually outside the Vault, but it plays an animation in the loop of the flux capacitor turning on, which has all this electricity, right? If you remember the movie, all the electricity Sparks and then it disappears so it does that animation. So as you walk through this guy's Vault every 30 seconds, whatever all this electricity just runs around the ceiling because he's placed his collectible and I was like, oh my God if I have the physical
Sing you one. You have to come into my house to see the physical collectible be is not going to have electricity sparking everywhere. It's going to zap some kid walking by. So not only now. Am I only bridled by my imagination but anyone anywhere can come and see this. And so now as a social creature, that wants to connect with my community and I'm giving these virtual tools. I don't need to be wealthy, right? You no longer need a big crazy house to display all of this.
Art.
You can create this virtual thing, put all your stuff in a way that only you have done. It takes time, right? Talk about money. Is this equation 2 times? We know we value time. So when I see somebody who spent their time, creating something like this, I'm just like, oh my God, like this is so much cooler than what Collectibles have ever been ever before in history. And so I start thinking about all right. Now you're going to have companies that spring up that are making virtual galleries where the gallery itself is like this crazy physics defying piece of art. You're not just walking through.
Mimicry of a traditional Gallery, you're on the fucking Moon. You're in outer space. You're inside the body, whatever you want. Like it is the creativity that the digital realm unleashes because you no longer have to obey the laws of physics. It's
just oh my God, I think there's an element of like you don't have to obey the laws of physics. You also don't have to ask permission of any breach, right? So, you know, if you go and you look at an art gallery in Manhattan,
Hatton, for example. How many people really got an opportunity to design the art gallery? Well, they usually people who have some sort of pedigree they got train somewhere, right?
There's like all these like
hurdles to get in and so it ends up being a lot of the same people who all know each other and they're the ones who do it on the internet. Imagine if you had a global competition for whoever could create the best art gallery, right? And there's like a prize for it. You get some really, really cool stuff
because there was no
barriers to become the
Who could do that? That's all this is, is this now, just saying, but you don't have to come to it in Manhattan, like just do it on the internet, and I think that, you know, the best analogy I have for this is think of Twitter. If I said to you, Tom, you know, what? You're going to do every day. You're going to go hang out in this virtual reality Square. You're going to talk to random strangers ebike. Did that sounds like cool to like test one time. But like I got things to do, but what do you do? You go through
the portal, which
is your computer or your
A phone and you go and you hang out in a digital
square
and you talk to strangers like that is in some weird way a version of virtual reality. Right? I tweeted Reese. I said we live in virtual reality already. It doesn't look like the thing that you put, you know, the Oculus headset on and you walk around you can touch and feel things and like like that's like level, you know, two three, four, five of virtual reality, but Twitter created, virtual reality for people and you can go there and, you know, hey,
Today we all come here and meet up again. Right? And you keep going. And then what am I basically doing? I'm basically walking around the square and I'm
saying, okay, Toms talking about this, this person talking about, this is person about this and I have a choice to own a button. The conversation going to reply to on, quote tweet, don't want to
take. Hey, Tom just said whatever. And I gonna tell my friends
that's a retweet button like but you start to think through this and it's like,
Yeah, this is all going to happen. How quickly does that happen Up For Debate. What technologies is it built on Up For Debate? How how should an investor invest Up For Debate? How should you as a market participant? Who's not investors want to be a user? How should you use the stuff up for debate, but I think that one of the trends that every great investor has figured out or one of the activities is just find that kind of direction that the world is moving as being
Understand the world moving this way. And then go and say, okay. Well, what are people use it
to your point about observing it to not judge it. So, one of the things that the nft market has taught me is that fact, I wrote my rules. I they were tongue-in-cheek, when I wrote them, but I think I should publish them. Is that everything you think is cool is going to go to zero and everything that you think is dumb is going to moon and I've just seen that play out over and over and over again. It's really hard to predict what other people are going to think is cool because
It's really a moment is created. Energy is orchestrated, somehow through this. It's not an invisible hand because there are some people that are really good at it, but they can get the energy moving towards a project for whatever reason. Like, I don't know if you paid attention, what happened with loot? So the guy that I consider my king of alpha, David, he sent me a tweet like I was about to go to bed and he was like, hey Tom the same called loot as popping off. Look at it. I looked at it and I'm like
Is white words on black. A black background. This doesn't make any sense. And I was like, but I know this industry and if people believe that this is like new fresh exciting that at least for a moment. There's going to be this influx of attention. Now, that moment could be 10 years. That moment could be 10 minutes. I have no idea, but I'm getting better and better at sort of arbitraging, some of these things. So I bought two of them and then a couple days later, if you owned them, you got an airdrop of
Ali their token. And I didn't even know about the airdrop and the same guy, David was like hey Tom because you bought two, you've been airdrop to stuff, you actually have to go pull it out of the contract directly. And so I'll show you how to do it. So here you go into either scan and this is how you do it and I got it. And I got my two bags of gold and as of that day that thing. So I bought the ones that I bought. I think I bought it. I can't remember his 1.9 eith for the original Lutz.
Or point nine, but it was in there somewhere and at the time I got the gold which remember I didn't even know existed. I was already making money hand over fist, just on the actual squares that I bought and the bags of their coin that my friend had to tell me were there. I went and sold one of the two for $50,000 and I was like, I imagine if a friend was like, Hey, dude, I know you don't know but in your bread box in the back cupboard.
Heard a guy just left you 50 Grand. You be like what just happened? It was so surreal. And I was just like, okay, don't think about things. Think about the nature of things and I was like, this is telling me something about the nature of humans of Creative Energy of attention and how it can be swayed about enthusiasm and how it it moves sort of restlessly, it never lands on one thing and stays and so there's these really predictable.
Curves that these projects go through and I'm like, hold on.
If you do your, you know, 10,000 20,000, 30,000 hours of research and you'd like, really figure this game out. Obviously, never invest a single dime, over what you're prepared to lose. Because, n of teas, are the single highest risk investment. I have ever seen Humanity come up with. I want to make that really fucking clear, but it is so interesting to see how it captures. That same part of the psyche around sports betting, how we're all locked up because of what's going on with covid? Like there's all these factors that
Come into play and just that cryptos taking off and of teas have answered the question of whether there's a real thing there and whether people will value them, but once I stopped judging the market and just started saying this is happening, whether I think it should or not, whether I think white text on a black background, should be cool or not. It is, and it's capturing energy. And dude. It wasn't long ago that I made $50,000 a year. So I was like, this is so crazy. And this comes back to
like my obsession, people need to do their own research. I cannot predict the future. You cannot predict the future. Who knows this? Could all go to nothing tomorrow
that does not seem likely
and given, what's going on today? The nature of the technology, right? Understand it. Think from first principles and it becomes far easier to do novel things, but just looking at what's going on. I legitimately want to, with all the caveats of you have to be. So careful. You cannot go blindly into this, but I can think of few things that are worth people's time and
To understand more than the blockchain and that, if this were a baseball game we are still in the locker room getting ready to come out onto the field. It's like because I mean that from a technology standpoint like even forget just that you could buy Bitcoin or aetherium or whatever today and it will go up in value.
What's going to be built on the back of the technology will create a world. That will be as unrecognizable as a post internet world. Would have been to me. And, you know, 93 before I'd even heard of email to now. I mean, that's utterly just it's a transformation that I could never have predicted.
It's going to be the same thing, but this
one's happening in full view because we already have the internet. So it's already you. And I are talking right now to, you know, hopefully millions of people and then on top of that it's
we've
Seen it happen before so you can say hey guys
remember mobile phones. Hey guys. Remember the internet? This is a big one like that. And so I think this is going to be I'm going to make a statement and you're going to say whether I'm a fool or not. I think this will be the biggest wealth transfer ever that we've ever seen. Like Robber, Baron moment type. Well transfer, but it's not going to go to a really, really small number of people. It's going to go to whoever the fuck takes.
The time to learn about this and go. There's some percent percentage of my daily income doesn't like it will go to people who don't even think in net worth terms yet because this is as real, Paul said, this is the first time in human history where the average person has been able to front run the institutions. So this is a chance for people to get in ten dollars every paycheck, whatever. But like to get in and now whether it just becomes sort of wealth redistributed because so many like the older and more established your well.
The less likely you are to move on this quickly.
Well, you got to think to from an investing standpoint. You've got to ask yourself. Like, who are you, right? Like what type of investor do you want to be? There are some investors who are the most risk. Averse people in the world is I don't want to take any risk. I'm already wealthy in many cases. I want to protect them and capital preservation mode. There's a lot of people who say, no, I mean, capital accumulation mode, right? Is I want to go make money. I need to make money and what you need to seek out.
Out then in most cases is a symmetry. Now that doesn't mean that you shouldn't
do. I have these like five
principles right of from a personal investing standpoint. You need to spend less than you make a kind of a core principle, right? Kind of get out of debt. If you're in debt, the third thing is that you have to get out of cash and you have to invest in assets, doesn't really matter what assets as much more. So, as the action of investing, you got to
be super, super, super
patient right now, you gotta be disciplined and that's it. And if you do that for long periods of time, like you will make money.
And the reason is because the currency, underlying it all going to be devalued. So all of these asset prices continue to go up stock market every single day. It seems like it's a new all-time high, Frank, just continues to go up and up and up. But that's if you're super risk-averse and you say, I'm just gonna buy a low-cost Index Fund, S&P 500. Whenever there are some people who want to take more risk and they want to look for more asymmetry, but I think that the nft Stuff Etc is fascinating because there is a level of wealth.
With that is being created.
But it's not being exchanged. And so this is something that I think a lot of people when they think about. Oh there was, you know, three billion dollars that was put through a system or that person is worth a billion dollars and they made it in crypto. In many cases. What happened is not that somebody gave a billion dollars of fiat currency and received a billion dollars worth of digital tokens instead. What happened is somebody created out of thin air and so now I'll send you have all these
Tokens that are worth a penny. And they start trading one trades at two pennies. And I see, you know, now that market cap of the asset is now 2 x, right. It's no different than companies. So, for example, when Jeff Bezos starts Amazon, right? He says, hey, my company is worth X
dollars. You can buy shares at. You know, why price?
Okay. As the company accrues value based on all these valuation metrics that people have eventually, the company's worth, you know, a trillion dollars and you're like, well,
Did a trillion dollars get paid to you know, I don't think Amazon's ever made a trillion dollars in cash but the equity value which has accrued value over time ends up being a really big opportunity. And so it's fascinating for me to watch people like and take a Jay-Z, as kind of the quintessential example. You can see over 20 30 year period, him wake up to, and understand the power of owning Equity. That's something that was created out of thin air that accrues value based on a certain number.
valuation metrics
and if you're the one holding the asset, you can actually drastically, increase your personal net worth, and the value in cash because actually you have
A lot of that's happening here as well. Right. Is somebody's buying something you bought the loop, which is, you know, kind of disability to play this game or participate in this community. And as more and more people wanted to participate, it became more valuable. And so it's no different than you buy a piece of real estate more people want the real estate into the value, goes up. Now, you're buying this asset and the value goes up with more people want it owning Equity ends up being the greatest way to create personal wealth.
Whether you're owning a cash flowing business, whether you're owning the equity of a payment system, like Bitcoin by holding the actual asset itself and financial exposure to it. You're owning the equity of real estate of a community with a Nifty is, ETC. It's all the same investment mechanism. Now, which ones are true value, which ones don't, why should they accrue value Etc? If you are in a market predictor, you know, kind of seat. Sure. You can speculate based on what you think should happen. What you think is not going to happen through the market Observer seat.
Eat. You simply are saying, look, the loot game. I wasn't really into those types of computer Games, Etc, as the kit, my brothers and I were all playing Madden and, you know, basically throwing the N64 controller at each other, you know, halfway through the game
right before somebody 21d each other, right? So
to me, like, that's outside of my intellectual curiosity, but as a market
Observer, hell, yeah, that's valuable. Right?
There's a ton of people who want to play. There's a ton of people who are running into it. And so, do I know if the prices go up or down, or what?
All of that is almost secondary. And frankly. I don't think anyone can predict as much as being able to observe the fact that I don't know. They, I think the GitHub repository of loot in general was one of the most positive or was one of those popular GitHub repositories last week, so crazy on the entire internet.
And does that mean that it's going to be worth tons of money? No, is that a pretty good data point? That is a lot of developer activity. Yeah, right. Are there a lot of people who are talking about it online. If you go search on Twitter in the Tech Community, whole lot of people talking about it. Again, we've seen things, tons of people talk about and end up going to 0, right. There's no, no one data point is the predictor, but I think if you sit in the market Observer seat and constantly, remind yourself, I do not know the future, but I'm willing to observe what's happening right now. You start.
Understand that there's corners of the internet. That think weird things are valuable. And so, if you can get out of the game of, I see these things, right, and I think I'm at, that
is weird. Why would somebody buy words on a black screen?
I wouldn't buy it,
right? So nobody must want to buy it. Well, no, I'm an idiot. If I think that,
right? Because what ends up happening is, as an observer, you have the humility to understand. There's there's
millions and millions and millions of people on the internet that want to do stuff. I don't want to do.
Do
okay. So you can choose to invest or not invest whatever, but being aware of, and observing what's happening? I think is really important. And whether it's n FTS, whether it's games, whether it's something else, you start to just wrap your head around and say, man. This technology is creating two separate revolutions. One is a monetary Revolution, which is Bitcoin. We've talked about in terms of the fact that nobody can debate this currency, anyone has access to it and has censorship resistant payments and it has sovereignty for those that hold it.
Seems pretty valuable trillion dollar market cap today. How big can it get? I don't know, but I think to be bigger 10 years from now than it is today. Okay. I probably want to own some of that. Right? That's my personal decision. The second revolution is this idea of kind of the digital realm, or the automation that it comes with all of this. And when you start to think about this, you said to yourself, man, there's a lot of people who seem to want to do this, even if I think it's completely stupid, even if I think
that
It's literally the worst
idea in the world.
How do you argue with the market? And so, I think that, you know, there's folks who choose from like a maximalist standpoint to focus only on bitcoin and frankly. That's where I tend to spend most of my time because the monetary Revolution is much more intellectually stimulating for me right now. I'm intrigued by it. It's things. I sit and think about all day, and spend time on
But I got plenty of friends who think that's the dumbest thing in the world like to who cares, right. Like look at this and pick your kind of other area to focus on. And so I think that is really easy online tool. I get caught up a lot. In this idea of one, revolution is important, in one's not or vice versa at the end of the day. It's well, who's asking the question? And what we're watching here is every industry is going to be impacted by this technology. Yes, and so if you're into art,
Should understand it because it's coming art, right? And likely the digital
art, Everything music, all this
stuff. The the thing.
That is most fascinating to me about the entire thing. I've been doing this. Now, you know, five almost six years.
In the beginning, all the Legacy players wanted nothing to do with this. And a lot of my time was focused on bitcoin because I was really the only liquid true asset. They would even you have a conversation about all the billionaire. Investors not interested all the Big Wall Street Banks, not interested. All the, you know, institutional investors not interested.
Almost to a tee, the best in the world have changed their mind.
They continued to get new information and they changed their mind. And now some of them are the largest investors in the industry.
And so there's a level of intelligence and intellectual humility. It takes to get new information and change your mind.
The people who haven't changed their mind for the most part, not everyone. But for most part historically they have been very good investors, that's interesting. And so they just have this rigid way of thinking and regardless of the technology Evolution, regardless of what happens in the market. They just have that rigid, you know, kind of adherence to a framework. And so to me that's been one of the biggest investing lessons is I talk to that guy.
He wasn't like he gave me a 12 minute meeting. He literally could nice to meet you. I basically took the meeting to somebody else. I know told me I should meet with you but like I gotta go to lunch right to now you're a huge investor in this stuff and you're out. You're talking about it and in you're explaining it to people Etc into your what happened. Oh, you're not religious about your ideas. You're not religious about having to be right instead. He said no, it reached a point where it was very obvious that back.
Economic environment was going to continue to be crazy. People were going to want to hold this asset. I understood how it worked. And so I changed my mind by the way. I've been an idiot if I
didn't change my mind. Yeah, the only way to live like that to me as my core life. These this is like I'm not interested in being right. I'm interested in, identifying the right answer faster than anybody else. That's yeah, building your self esteem around. Being right is a
trap and in most people fall into it,
but that's really interesting. It's
also,
If you think about Trends and like, identifying the right answer, a lot of times, if you were to go acid Venture capitals, have to a lot of times understand Technology Innovation. They also have to kind of extrapolate out really, really kind of parabolic type growth Etc. And the best way to do that is actually not to think about it, right? It's not to say you know, what Airbnb is going to go from no locations.
Globally dominant in five years. It's impossible to see that world. The guy has air mattresses on his kitchen. How is he going to go become a globally? Dominant company, Uber has black cars driving around San Francisco. How are they going to go? Literally convince people not to buy cars. Instead use their service. That sounds insane at the time. But what you can do is you can basically identify people who have some for future vision of the world that
Is different. And if successful will end up actually being incredibly valuable, so kind of different in, right? And what you find is, that's why venture capital is make so many bats is because they're building a probabilistic outcome. Okay, if I make 10 of these bats,
four of them are actually going to work the for will pay for the six losers
and all I need to go do find is you know, 10 crazy people who think that they can change the world right now. Sure.
Not everyone invest that way, but you start to realize is rather than try to predict it yourself. Finding the people who know some secret or know some, you know, Future Vision of the world that they're going to go build and create ends up being a way, easier, way to predict the future, then actually sitting there and like pontificating about, you know, I think enough teaser going to be whatever in January day, when think and of T1 nft platform with all three billion dollars worth now. I know I
now, one thing I know that you do.
Predict the future, but that, I, it's the only thing that gives me. Hesitation. So, you're whatever famously, like, 95% of your liquid assets, or in Bitcoin. I'm way, way, way, way, way way less than that, but, my comfort, it started with I'll just do one percent and then I was like, well, that felt good. How about two? And then that was five and now it's like, you know, I'm pacing 10. So about
10% right now.
That's what I'm pacing. I'll be there. Probably. Well, I guess if we dip really hard then I'll race to that if we
Forty dollar cost averaging, but I already sort of planted seeds with my wife. I might be comfortable at 25%. So yeah, that I've really sort of adjust my thinking on that. But the one thing that gives me pause is you've talked about Bitcoin is going to become the global Reserve currency. I don't think that governments go down without a
fight.
Yeah, so Global Reserve currency for Falls like a term that everyone talks about but what is a global Reserve currency? Right? There's two ways to look at. This one is the Legacy terminology of global Reserve currency, which is the most dominant military. Basically puts the the currency, you know, in place and then enforces that across the world, the dollars, probably a pretty good way to it, to use it as an example.
Every economy has a reserve asset.
The US economy is based on the u.s. Geographic players, right people within the u.s. Geography and the reserve asset is the US dollar.
If you go to Mexico,
the Mexican economy has Reserve asset peso exception. You go through the world. This is true.
There's an economy though that has been created. It's actually the largest economy in the world and it doesn't have a reserve assets. The internet. The digital economy does not care about where you physically our geography does not matter. It's unhinged from the geography. What's the reserve asset of the digital economy? Well, most people would say why use
dollars, right?
That seems to be one of the more popular ones, but that's because we live in the developed Western world.
People on the internet and India, don't use dollars, right?
They use their local currency and you go around the world. And you see this,
what happens if we all just used one currency and all the units are the same.
Okay, that be interesting. And so the reason why I say that it is going to be a global Reserve currency is actually don't think it's nearly as competitive with the Fiat currencies as people think it is because ultimately, what happens is, the digital store of value. I want to protect my assets and so what we're moving towards is a multi-currency world right now. You and I live in a single currency Road, you get paid in dollars saving dollars invest in dollars, and then you also pay taxes in dollars.
If you want to go to somebody else's single currency World Mexico, you have to
convert your dollars
to pesos to operate within the Mexican economy for the most part.
When you make that conversion is actually very difficult.
Go to the bank and you try to withdraw, its gotta be large sums or you go to like a currency exchange at the airport that rip you off. Right? Like it sucks, what happens if all of a sudden the friction in the cost of transacting between currencies or switching, the switching cost goes to zero. And now I get paid in dollars and with the click of a button, I can change my dollars in two pesos or into Bitcoin or into a digital Euro Etc.
Well, now, the technology is the exact same. The only difference, the only competition between the currencies is that the monetary policy standpoint. They're all digital currencies. So the digital dollar, digital peso and Bitcoin are, literally all the same technology lies in that steady state.
But there's competition at the top layer at the monastery. Mean at the monetary
policy layer. What is monetary policy? All Fiat currencies have the same monetary policy
on a structure standpoint, thrall is inflationary currencies. Okay, meaning that there's constantly more printed of it. It's got a variable monetary policy meeting that it constantly changes. Sometimes they're expanding sometimes they're Contracting. But the reason why the dollar is guaranteed to lose value is because they have to continue to create more of it.
Same with the peso same with the Euro Etc. So if you actually take all the Fiat currencies, you put them in a bucket. There is a non consensus, or a different currency structure, which is Bitcoin, for example, and so if it ends up being right, is going to be wildly valuable. It's not consensus in, right? But to is, if I'm looking to store value, if I'm trying to save, not going to save in the Fiat structure it regardless of the currency of the matter dollars, Euros, Yen, whatever.
I'm going to put it into an asset, where it protects my purchasing power, and if the switching cost is zero, and I can switch back and forth very easily. So you can see a world where my employer pays me in dollars it auto converts into Bitcoin. I said it there and then I got to pay my taxes in dollars. I convert back into dollars and I pay well I'm saving in Bitcoin. I'm storing value in Bitcoin. What do people do? Well, historically, maybe I'll have to buy real estate to do that. So I employer paid me $1, took the dollars are converted into real estate.
I sat there and then all of a sudden, I needed money to pay my taxes. I could sell the real estate. Get it in, pay it back. Now that ridiculous, you know, order of events, if I'm simply going to use it as a saving mechanism to then pay my taxes, you know, later this year because there's cost there's time-lapse Etc. But there's no difference between doing those real estate or doing it with Bitcoin. It's just now son. I can do it instantaneously and do with a digital asset that protects my purchasing power and the switching cost is zero, essentially.
And so when we move to a multi-currency world actually in some crazy way, the Fiat currencies may become more valuable in. This is not everyone agrees with
us. We're going to say, I'm so intrigued.
It's like the restaurant
problem, right? If I put a restaurant on a intersection. It's the only restaurant it gets. Let's say, ten people a day. If I put a restaurant across the street, many times people will say, oh, that's competition. Now that first restaurant is going to suffer. If I put a third one there, people say, oh my God! That first one screwed. A fourth one. Oh my God. The first one is out of business. In reality. What happens is all the studies show, when you build density at the intersection, everyone actually gets more traffic because at
That becomes known as restaurant intersection. It's all the restaurants are I'm hungry. I don't know. Let's just go down there. We'll figure something out. And so actually, the first one benefits from having the others move in there. There's two arguments when it comes to bitcoin of the Fiat. Currencies one, is that they're in direct competition with each other. Bitcoin wins Fiat currencies lose game over right? And that scenario governments. Absolutely do not want this to happen, the government's that embrace the technology that ends up being the winner. First will drastically, outperform, those that are last to adopt it.
Right. The second one is this argument of no actually a multi-currency roll. All boats rise together. Now, you know our talked earlier about I do want to be a market predictor. What I find right now is as Technologies are being digitized, actually increases the accessibility of them for people around the world. So take that second example, I'm in Venezuela. The Bolivia are ends up getting devalued away. I know, I got to get out.
Really, really hard for me to get dollars. I can try through the bank, but there's limitations. I'm worried about confiscation by the government Etc. The black market is really pricey in terms of a cost me a lot to actually buy it and it actually physically dangerous. So why do I want dollars? Well, there's safety in the dollar. In my mind. There's stability there. That's the best currency. My currency sucks. This one's great. Let me go. Buy this one. Okay. Dollars are hard to get. Okay, gold hard to find. Can be
The dangerous could be confiscated Etc. Okay. What can I do on the internet? If all of a sudden, I think, let's say Bitcoins to volatile for me. I want dollars, but the dollar isn't digitized on these platforms, but China takes their currency and they create a digital currency.
It's better than nothing. So, what do I
do? I buy the
digital currency of China and it's just a pure accessibility thing. So, think ultimately, the incentive is that everything will be digitized. Right? You'll get digital dollars to Euro Yen, Etc. And some of that will be because people believe that there's some sort of
internal domestic advantage to it.
But also some of this going to be just simply the game theory of we have to digitize our currency. So it's accessible to people around the world and so we can drive more adoption, more value.
But the second that everyone has digital wallets.
Everything becomes a currency, right? How many people say to themselves? Oh, I own that piece of real estate need to sell it to get dollars to then go buy something. Well what happens when I can just take the real estate and buy directly. They ass I don't have to go to the common unit of account of a dollar.
All the technology is the same, the value just as different. And so you get this really weird world
where like, I don't know what's gonna happen in the
future, but you can clearly articulate two or three different versions and in every single one of those versions. Bitcoin specifically is valuable. So Bitcoin is valuable if it goes head-to-head with the Fiat currencies. Bitcoin is valuable if the Fiat currencies benefit, you know, and all currencies and up recurring, more and Bitcoin is valuable. If all of a
Every asset is a currency and you can interchange them freely. So from my standpoint, it was actually the least risky thing. I could do personally, was to buy Bitcoin. And I always say that I sit at the intersection of two very, very different worlds. I talk to, you know, friends on Wall Street or these large asset managers and and stuff don't like you are insane having 95 percent of your net worth in this thing and I say, sure, but I think you're insane driving 95 percent of your net worth in dollars or indulged in.
Nominated assets,
right? So, we
see eye-to-eye on insanity is just two different assets. If I go talk to particularly young people in crypto that are on the edges of innovation and really kind of pushing. It, pushing the pace of this new stuff. Like, dude. You are the least risk tolerant person I've ever met. Like
you just hold Boomer
coin right? Like Bitcoin doesn't do anything and so how can it be that the same asset viewed by
Youngest most kind of Forward. Thinking Innovative people is seen as the most conservative, but by the oldest and most successful is seen as the most risky.
It's actually probably where you want to sit, right? Is because you're taking the two worlds and you're kind of meeting them in the middle. And so, when you ask about like allocations and I'll stuff it. I always ask. What are you optimizing for?
I basically built a Venn diagram early on and I said, okay. What is the thing that I think is most likely to be here? A hundred years from now, right? My plan is to hand Bitcoin to my grandkids. Okay. So I need to, I need to be around for a hundred years, the durability of it. And also, what is the thing that has a very attractive return compared to traditional assets? The cleanse compounded at 200% annually for a
decade. That's crazy pretty crazy. Right?
So if it's durable, and it has an attractive return compared to traditional assets,
I'm gonna go get a lot of that and if I did nominate, my net worth in it and my life, I my financial life in it. It actually changes psychologically spending money because it's one thing. If I say, hey, you're going to go spend a depreciating asset to buy a house or buy a car or by whatever
might as well. It's going down to Value. Anyway, your financial incentive is to
do it. Right? He's
literally he's gonna lose value. So you better get rid of
it.
If I say to you, hey, you're going to buy something with an appreciating asset that is likely to be worth more in the future than it is today. Now. I'll say thank you so much. What am I buying? Do I need it? It's going to is an
investment is gonna be worth more than what this is going to be. You start to ask yourself a little
some of the questions you might not have otherwise asked. And so it's one of these things where like, I've basically just throw my hands up and I said, look the world is changing at a rapid Pace. I spend all day on this stuff and I can't keep up. It will look very different.
Years
from now that it does today how lucky are we
that we get a live here that we're
talking about it that we see the opportunities and you know what you and I will make a bunch of investment decisions. Some of them will work. Some of them won't my guess is that by picking the right industry that has a massive tail wind behind it. We would have to be really really, really, really stupid. And then
make really, really, really stupid
decisions. We probably
We still will be okay because you're simply, it's like saying. Oh I invested in the internet in the 90s. I mean you had to be an absolute idiot to not somehow somewhere end up better off after investing the internet than before. I think the same thing is true here so you can make optimizations all that. But at the end of the day, any one is paying attention to the stuff. I think that we find
that is the perfect place to stop boys and girls if you haven't already, be sure to subscribe. Follow this man. Everywhere. Tell them where they can find you just on Twitter
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