In a world of MPC's and centralized control, the most radical thing that you can do is to reclaim your own agency.

In this episode, I'm joined by Eric Yikes, Bitcoin VC and the author of The 7th Property.

We move past number, go up and discuss the monetary revolution that Bitcoin brings.

We explore how immutability is the only thing that can fix our corrupted relationship with value and why Bitcoin, AI and personal hardware are merging to create a world where you no longer have to trade your freedom for convenience, but you do have to act today.

All right, let's dive in.

Eric Yates, welcome to Bitcoin for Millennials.

Ram, my first time on.

I'm ready to rock.

Boom, I'm ready to rock too.

I'm very happy you're on.

Like I just, I, I just said to you before we started recording, I love how you see Bitcoin in the, in the big picture.

And I think more people need to understand the big picture because it's a big battle.

It's slow, it's going to take time.

And I think, I think people need, need more of that.

So I'm happy to, to dive into that with you in this conversation.

And I, I just want to dive in straight and want to mention your book.

And like, one of the big ideas from your, from your book is you've identified immutability as the 7th property of money.

So before Bitcoin, money was always elastic, right?

People could clip coins, central banks could just print, you know, infinite amounts of money units.

Basically, why is immutability, in your opinion, the most important variable for the survival of the money?

And therefore also in the bigger picture, where civilization, the community that's using a certain money, why is that so important?

So I, I wouldn't characterize it as necessarily the most important.

What I would characterize it as is the like the new innovation that has changed money that Bitcoin brought about.

And and that was kind of the primary thesis around my book, other than just being like an educational resource for people who want to understand the case for Bitcoin in general, particularly people coming from more of like a finance background.

To answer this question, it helps to provide context.

And in a lot of what I discuss up in the making this point within the book is, you know, getting into the history of money and some of the technological developments that happened in how society progressed over time.

That gives you the right understanding to say, oh, OK, so This is why Bitcoin was different.

This is why this new characteristic of immutability mattered so much.

And, and it really just starts with, you know, money in antiquity was just like this very private phenomenon.

It was something that was created by people themselves.

It was stored on people themselves.

And then people verified it amongst one another themselves.

And it was something that everybody participated in.

It was like, you know, drinking water or cleaning your house.

It was just something that everybody did and, and it was over time as society scaled and became more structured that we started to specialize more in it.

And as we had like technological improvements in money, it made more sense for certain people to specialize in different functions.

So like those three functions I just described as its production, its storage, and then it's verification.

And it really kind of started on the production side when we had this shift from, you know, commodity based monies like seashells or flints, furs, all these different things that were basically people finding scarce goods that had good properties of money within whatever geography that they lived in.

And, and those eventually, you know, those kind of scaled a bit in like agricultural economies to a specific set of goods like cattle and salt.

And, and it really wasn't until the precious metal era that the production started to become much more centralized.

And it was like, OK, not everybody can go mine gold, not everybody can go buying silver, not everybody can smelt it.

After that whole process was something that started to become entrusted to a smaller group.

And, and the reason that that made sense was because, you know, the precious metals had superior characteristics to prior forms of money, namely they were much, much scarcer.

They held value much better because their supply was much more limited.

We knew that on a year over year basis, the supply wouldn't increase drastically.

And and that evolution was enough for people to say, OK, well, we're going to trust in the production of this.

And that what that's fine in the emergence of it.

But if we look at, you know, some of the like the early societies and like one of the most cited would be like the Roman Empire, we started to see how people would take advantage of that process over time.

And there are there are really like two things.

When the production of money turned into like coinage systems, it wasn't governments, but it was the merchant class that was attributed with creating practices, or just anybody conducting trade really, but primarily merchants of coin clipping where you would provide, you know, you'd paint some sort of coin, a merchant would receive the coin, they would start shaving off like tiny amounts of the coin on the edges of it, and then they give it to the next guy at a slightly lighter weight.

And that was, it was important because that needed happening coinage.

Prior to coinage, people were weighing money.

But once it got into coinage, people kind of trusted the weight because it said so on the coin.

And you could take advantage of that trust as a merchant.

So that coin flipping practice was kind of used as a scapegoat by certain governments and, you know, state authorities to say, no, we needed to actually control this production.

And in the irony was that the government ended up doing the exact same thing.

They like the, if you read the history of the Roman Empire and the hyperinflation that occurred within these currencies, it was largely attributed to the government, you know, effectively diluting its value and the smelting process and mixing it with other precious metals that were not as scarce as gold or silver.

And so that was kind of like that first function of money that ultimately led to this moral hazard that came from trusting people with the process that didn't hadn't existed before.

And then what one of the next major events that caused it was the emergence of banking systems.

And once again, these were a private phenomenon.

These were, you know, a, a lot of it was attributed at least within like Western banking systems to the emergence of the Goldsmith bankers in London.

And and that was kind of a product of, you know, people didn't have a lot of places to store their money at the time.

And they would store it in either monasteries or government institutions.

And then it was under Charles the 1st in London that, you know, the money was actually stolen from one of these government institutions.

And people were like, OK, well, we don't really trust that we can keep it under the control of the government.

We're going to, you know, take our gold and we're going to put it in other places.

And it was these Goldsmiths who had a lot of storage for gold that became the natural storage place for people to be putting it.

And, and that was the, you know, the antiquity of like modern Western banking.

That was the start of it because people realized, well, OK, we now have paper and at this point in time, like a printing press.

And it made a lot more sense for them to say, rather than like pulling gold in and out all the time, why don't we just trade receipts that these Goldsmiths give us instead of trading the gold directly.

Then we can just keep the gold in there.

And then it's way more efficient for us to trade receipts.

And and that was another form of trust and storage.

And then that is what spawned ultimately like fractional reserve banking.

And then once again, when there were issues that have started to emerge in private markets, it was, you know, that was kind of the inception of the Bank of England was designed to protect people and say, OK, well, you know, we can't trust private markets to manage the banking of this.

We need to have a central bank that's making good on this and protecting these institutions.

And then ultimately we want to try to control the Fiat money ourselves or control the money ourselves.

And then they try to convert it into Fiat money to the Bank of England, which ultimately failed.

And, and we had this period of like centuries basically where there was kind of this battle between the central bank and private banking institutions over that control.

And, and it was like, you know, during this period, Well, what we can see the pattern is that as we have technological innovation, you know, as we were able to actually mine and smelt metals that led to 1 innovation and money.

And then we had another technological innovation, which is, you know, during like the paper area of like the printing press and then double entry bookkeeping, accounting, and then like ultimately centuries later, the Telegraph.

And like with the Telegraph paired into that equation, paper money was the ideal medium of exchange because you could move trade all over Europe very rapidly by updating ledgers between different people on paper and settling the physical cash notes in the like a more local area.

So money kind of progressed through this and with each step, it started to become more centralized on these different functions.

And then when nobody was really involved in the monetary process at that point, verification became something that you're kind of trusting to other institutions as well.

So we can, you know, Fast forward that to where we ended up in the US today and what happened when we were on a gold standard and then how that was repealed under Nixon.

And then ultimately, we're just kind of in this Fiat monetary era where everything about money is 100% completely trusted, completely controlled, completely centralized.

We are living in a world that's completely uncharted territory where not only do we have government money, but all of its, you know, unbacked by gold.

And they have expanded debt because of that to the largest proportions of GDP in history.

And there's no end inside as terms of how that's actually going to stop.

You know nothing stops this train.

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Hey there.

Just a quick note before we continue.

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Now let's continue.

And so when when we think about all of that, it's like, OK, so at each step in the monetary revolution, we had these benefits, these things that actually benefited the property of money.

Precious metals made money better than it was before for a variety of reasons, but it required trust.

Paper made money better than it was before.

It made it far more portable than it had ever been.

The problem with paper money was that it wasn't scarce.

Outside of that, it was pretty superior.

So we had to tie it to something that had a scarce supply.

And as long as it remained tied to that supply, it remained scarce.

But it required trust.

And, and one of the key ideas from my book is that whenever you know, it's a very, you know, basic economic construct of the principal agent problem.

Where when an individual trusts an agent to carry out something on behalf of them, but that agent has a conflict of interest with you that that results in moral hazard, AKA they act in their own best interests and not in yours.

And, and, and a good example of that's if you were to hire a Courier to send some legal documents that make no difference to them and you're going to pay them $100, then you can be reasonably assured that they're going to deliver those documents.

But if you hired that same Courier, paid them the same amount of money, and you ask them to deliver, you know, $1,000,000 worth of gold bars, then those gold bars probably are getting delivered.

And and that's where this fundamental conflict of interest exists over the control of money.

And it's been pervasive throughout history.

And that's why financial institutions are arguably the most littered with fraud out of any other category.

It's why it's both heavily regulated system in the world because there's just such an inherent conflict of interest within it.

So that's what society was trading off with all these technological evolutions.

And then we move into the Internet area where everything's on a digital Ledger and it's totally trusted because, you know, money can be created at the push of a button now.

And now that we're in this era, we like the key innovation of Bitcoin was that we found a way to find all these other properties of money that were very valuable, make them even better.

You know, digital money is much better than paper money.

We can move it at the speed of the Internet.

And that's a very, very valuable innovation in the modern world.

And it fits into how people behave in the modern economy.

It's much more durable because you can't shut the Internet down.

You know, it's another very valuable property and and we had all these other properties that were improvements over other forms of money historically.

And it's also immutable.

It's something where we know that it will still remain scarce despite, you know, all of these other things being good as well.

Whereas historically the other properties, there was always some sort of trade off and it was like, OK, well, if you want something that's scarce, it's not going to be as portable.

You got to trade in gold bars.

You know, there's, there's all these trade-offs that you had.

And we kind of removed that trade off with Bitcoin and gave it this immutable property to say, no, you, you actually can't change this.

And you can control and store it on yourself in a very cheap way.

And you can move it across the world in a very cheap way, much better than any other form of money.

And like that, that's kind of like the true innovation that we see in Bitcoin is that it didn't have a trade off.

And like you call that an innovation.

A lot of people nowadays just think like all the money we have today is or we, we organically came to this point in time and collectively we've decided that, you know, This is Money and this is the best way that that money could even work.

So I think in order to get the immutability and like how important it is, you first have to accept that humans are corruptible, including yourself, right?

You have to accept that and that you kind of need this technology that takes that opportunity away away from you.

So that the only logical option and self interested option is to follow the incentive of following the rules of in this case, Bitcoin has money.

How do you think this changes just how people communicate?

We follow an objective truth.

Everyone can verify Bitcoin, the Ledger of Bitcoin instead of this forced trust, right?

Like I'm the central bank, I'm the governor or I'm the king or the OR the OR the whatever.

How do you think about this, this change?

Because I, I think that a lot of people don't really see this.

And it's also hard to see because all we know is just outsource trust to other people that have a certain position.

I, I think that I feel like, you know, 5-10 years from now, we'll be looking at kind of this very specific point in time that we're in and we are going to look back on this is like is really an inflection point.

And the, the distributed world where when we, when I think about what Bitcoin does is money, and then I think about the intersection of that with what's happening with AI, there is a lot more independence that's starting to happen.

I think that we're, you know, a lot of that started with the distribution of media.

I think that we've moved away from a lot of centralized sources of media.

And we look at some of the most influential groups now.

And it's like podcasts, You know, Joe Rogan's podcast has so much, so many more viewers than mainstream media at this point.

And we see all these podcasts emerging all the world where people can get into their own local communities or their own particular interests or people with, you know, similar personality characteristics as them and they can start to follow information within a specific niche.

Information is just so much more accessible.

And and that led to like a more distributed environment of it.

So the production of that information and then the ability to access it is what made it more distributed.

And I think we're kind of seeing a similar thing happen right now where we're witnessing it happen with money and, and I think we're witnessing it starting to happen with like hardware.

I think that people are realizing in the same way that, you know, when personal computing first entered people's homes, that was because people expected a massive improvement in their lifestyle from being able to access a personal computer.

The learning curve and all the effort that they had to put into ultimately learning how to use a computer and access the Internet and all the protocols and behaviors and terminology, etcetera.

People put thousands of hours into getting competent enough to be able to use a personal computer.

And I think we're going to witness a similar thing happen where AI is providing that for people as well.

If you want to use your own local information, you want to run it locally for better performance, you know, hardware is going to be an access point for that.

And then you look at Bitcoin self custody and it's like you want to control your assets here, here, here it is.

And like the way we're, you know, I run a venture fund that invests in like Bitcoin companies and like the way that in some of our research that I qualify this point or not qualified to find this point is what give it any good or service In an economy when it's marginal cost decreases to a certain threshold that it's low enough to where people don't really feel it as much, that's when you start to see distribution happen a lot more.

And that's when you start to see a more decentralized view of the system.

And, and that's kind of what we did with money by lowering the storage costs of it so that we don't have to store, you know, a ton of gold bars in our basement or somewhere else in a treasure chest.

And we can hold it on a USB hard drive and send it wherever we want.

And that lowered the marginal cost of participation.

And holding value.

And that's, that's like the massive, massive innovation that we're witnessing.

It's going to continue to distribute.

I think that right now we're just in very early periods of time where people are still all stuck in this old system.

So the way that they access the new system is from what they already know, and it'll be some time until they go up that learning curve.

And it'll require a lot more negative things to happen with the current system for people to realize like, oh, why do taxes keep going up?

And yet and Social Security benefits are going up and yet, you know, inflation is spiking and everything.

I feel poorer and nobody knows why because it's such a convoluted system, but I think that we'll get to a point where people really do start to realize a pain point when enough of their friends continue over a decade to keep getting rich off of just owning Bitcoin independently and be like, maybe I should on this.

I'm going to learn about what's happening in the in the system.

Like most people will be LED this way, right?

Like they're it's, it's not because they care.

It's because it's just going to be so patently obvious to them at a certain point because everybody around them is going to be doing it.

And so I go, yeah, system scary.

It's like, yeah, man, I wouldn't touch that.

Like I just, I'm just owning Bitcoin.

I controlled myself.

All my data is on my home server and my AI has been, I'm running most of my tasks for me.

And like, it's, it's, it's a completely different paradigm shift of how people are going to be living.

And, and like, I think we're kind of at the inflection point for that right now.

And that that means that communities are going to structure themselves differently.

That means a societal restructuring is going to be happening.

That means new jobs are going to emerge after old jobs die.

And and I think that Bitcoin is going to be the key source of value and ownership within kind of this new paradigm.

So yeah, I guess to like loop it all back to answering your question of, you know, how, how does that really change the way that people communicate?

I think that it increases agency.

I think that when people have enough of a reason to want to take ownership over things for themselves and they can get a benefit from doing that, then that's going to change the way that they're thinking because they're going to be like, oh, well, I did that one thing.

I've been doing this myself.

I learned how to do this myself.

That's benefited my life drastically.

I'm going to keep doing this.

Whereas we've been in this trusted consumer debt based economy for so long where you, you people aren't thinking for themselves as much.

You follow this playbook that's existed for decades.

You spend money on this, you take out debt to go to college, you get this corporate job that you hate.

You act like a drone.

You behave politically so that you can keep that job.

And in like all of these things that are driven by like a fundamental conflict of interest that has emerged from Fiat money.

And that fundamental conflict of interest is that you don't get the fruits of your creation.

So it creates this form of like malincentive within the economy where people don't really have much else to do other than appeal to the structure.

And, and when you do get that agency back and you do find novel ways to actually extract value from your wealth and your time and your resources and your thought, that's when things really start to change for people and people start to become human again from that.

Man, I, I, I love that and I I agree.

But there's one thing that I wonder what do you think like it when you when you think about these technological advancements that we've had before and you you mentioned a few, right?

I always think that the although there were obviously people that shunned the Internet, right?

Or the what did Paul Krugman say something about the fax machine, something like that.

But there are there are always people that dismiss new technology, right?

But I think up until now, a lot of new technology that we use today that replaced old technology actually was clearly better.

Like it improved your life or, or gave you more entertainment or, you know, whatever.

Like it.

It was pretty surface level in a sense.

But with changing the technology of money, I feel the, the, I call this the enchantment of Fiat money, right?

Just the, the ignorance about money, the fact that it's even a technology that it should have certain characteristics, all these things is just non existent on 99% of of people's radar.

Basically they don't, they don't really think about it.

So that's why I, I, I fully agree with you.

But I do think this takes longer just because this disinterest or not knowing or, you know, the enchantment, whatever, it just runs so, so deep that, you know, even even when the bread is 10 bucks or you know what, whatever is fucking, it's expensive that that you want to buy now compared to let's say 5 or 10 years ago.

I still don't really see a lot of people move to to be honest, right?

I see them point towards, you know, greedy companies, billionaires, you know what, whatever all these things where as we know, you can literally just switch to another money, as enormous amount of people have done before us in in different times.

So I, I just wonder how you think true that and and if you agree or if you have another point of view on that.

Yeah, I I definitely agree.

It's it's not a clear path.

There is very entrenched behaviors, incentives, technologies in the older system, a lot of things that prevent their shift over, you know, there's regulations, there's taxes, there's all these things that make this system not want to exist.

And, and I don't see those necessarily going away.

And I see them potentially expanding in certain parts of the world.

What what the clear the clear aspect of this is like the truest thing in the world to people is when you actually make money out of something.

It just like, I, I think a good example is like another way to think about this is like when like this debate about defining intelligence, like what is intelligence?

And some people think like, oh, if somebody's really analytical or they have good pattern recognition or they're highly strategic thinkers or, you know, there's all these different characteristics that you can be good at.

But like on the whole, who's the person that's most intelligent?

And, and kind of the best definition that you can really come up with is getting the things that you want out of life.

Are you achieving the outcomes that you want?

If you're highly effective at doing that, Whoever is best at achieving those things, it's probably a highly intelligent person.

And the, you know, money talks.

Money is the universal mechanism.

And it's just like, OK, whoever is probably best at attaining economic wealth is probably that that's the game everybody's playing.

And they're, you could argue that they're like the most intelligent person in the world because they're achieving the best outcomes.

So I think that, you know, from that perspective, number go up, tech or bitcoins price going up is certainly the thing that's going to be converting the most people over time.

And and I think the reality is, is that it's gone up so much.

It's converted a significant amount of people, it's made material progress.

You know, it's owned by or at least a hundreds of millions of people have exposure to it at this point in time.

And there's very few people in the world you can encounter that haven't heard the word Bitcoin, aren't aware of it at this point.

They have no idea what it is.

But the brand, it's so big that it's just a globally known thing at this point.

So I, I think it's gone very far in terms of its adoption, but to get it to the next level where right now it's $2 trillion asset and what makes it 10 trillion now we're talking about make it the most valuable thing in the world.

You know, we're talking about pretty big numbers that we're going after once we say it's going to attack the market of gold or some other major commodity.

And like we're, we're talking about the top of the billboards.

This is the top of the leader chart.

So big, big things have to be on the horizon to really start moving at that direction.

And, and I see the opportunity for all that.

The way that I think you can directly answer the question is the way that we think about things internally at our firm is, you know, we kind of see like 3 major S curves of Bitcoin that are coming.

And the like the meme of gradually then suddenly is certainly the the mode that it's going to be following throughout each one.

And like the three main S curves are kind of getting a hitting a massive inflection point of adoption across each function that it performs.

So the first one is store value.

For something to become a good form of money has to start is a really good store value.

That's something that makes everybody want to own it over time and, and there's going to be some sort of S curve in that process.

And you know, the best marketing tool for Bitcoin is the the neglect of fiscal austerity the politicians are practicing today.

And there's going to come a point when it hits that S curve, either because of that or because the narrative is simply spreading far enough and people start to realize it preemptively.

Either way, one or the other is going to cost something that direction.

And to look at the trends and think anything else is a very hard argument to make.

But I, I see like the way that we wrote our annual report and we kind of gave our perspective on where's Bitcoin price going, you know, kind of near term.

And I think that we're close.

I think that we're going to look back on 2026.

It won't be obvious by the end of 2026, but I think in like 2028 we'll be looking back and seeing like, oh, this kind of was starting in 2026.

When I think about all these big pools of money that could start buying Bitcoin and drastically move the price upward, these large pools of money all think in terms of the traditional finance Fiat type mindset.

And, and, and I'm not discrediting a lot of it, a lot of it's very true.

A lot of it's still built in a world of Fiat money though.

And it's going to be very wrong because of that.

But within the world that they exist, it makes a lot of sense to behave this way.

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Now let's continue.

And I think the biggest characteristic that's changing with Bitcoin is when you look at its volatility declining and how that impacts major money managers and how they look at the asset as its volatility declines.

Like we put in our annual report this chart that shows that, you know, in the US at least, NVIDIA stock and Tesla stock are owned by about 62% of the population.

This is like a basically a savings vehicle for, you know, US investors.

And the volatility of those assets is higher than Bitcoin over the past year.

And everybody has this perception that Bitcoin is still this very risky asset.

The reality is, is that what majority of people own today is actually riskier.

And there's a lot of assets out there that we can look at the of exposure to that are going to have high volatility.

There's a lot that's still lower.

But the biggest thing is Bitcoin has this very persistent declining volatility and that only increases as it grows.

It only becomes more likely that it becomes less volatile.

And that gives it a deeper capital market, which makes it easier for people to large amounts of money to say like, oh, now that bitcoins, not just $2 trillion asset, now that bitcoins say A5 or $10 trillion asset, I can go liquidate $20 billion worth of it tomorrow.

And it's not going to move the market substantially like that.

That's a really big deal for a nation state when they're adopting something.

Gold today being at the size that it's at, I think around like 30 trillion, probably more because it keeps going up all the time.

But you know, some very large market capitalization.

You can be a nation state and say, I want to go liquidate $100 billion of gold and you're going to move the market much less drastic, particularly much less, and you would move a $2 trillion market like Bitcoin.

Cause $100 billion worth of Bitcoin being sold is a very large amount compared to the supply and the demand.

And so that's how I think a lot of these larger institutions are thinking about things.

And that's one of the main things that we see is looking at Bitcoin today.

It's kind of like, it's like looking at LeBron James when he was in high school.

It's like everything he about him is historically significant in terms of a basketball player.

He's just 14 years old.

Imagine what he's going to be like when he's 20 years old.

And that's kind of what it's like looking at Bitcoin today.

It's just like everything about this asset is superior.

It's just still small and young and it's still growing.

So I I think that like that can cause an S curve and then it's like, OK, and then we get to this point where there's a huge run up of the price because now everybody's like, oh, this asset is much safer.

It's kind of a safe haven or risk off type asset.

And a bunch of money managers start putting, you know, not even a large amount, 1 to 2%.

Go look at our annual report.

We have all these charts that show how much 1 to 2% from a lot, a lot of these money pools could move the price of Bitcoin.

And, and then that's an S curve.

And then all of a sudden it's like, OK, well, a lot of people are going to start owning Bitcoin at this point.

Now it's like, OK, well, we so many people own it.

It's a lot easier to say pay me in Bitcoin because we're creating more on ramps for it.

Most people are familiar with it, have some sort of amount of it.

Most people start demanding it because they're late.

They realize it.

They're like, oh, this thing just went up, you know, 5-10 X.

It was, you know, 2 to 5% of my wealth.

Now it's maybe the biggest position I have in my wealth.

I think about it all the time and people start saying, well, I want to be paid in Bitcoin.

In our annual report, we wrote about like medium exchange adoption for Bitcoin.

It's like people are like, well, nobody's ever going to want to spend their Bitcoin.

And it's like, sure, I mean, I don't even want to spend my dollars today.

I would like to pay you in dirt, but you won't accept dirt.

You want something that you can go trade that's a marketable good.

And and that's what's going to drive demand as a medium exchange is when people start to say no, pay me in Bitcoin, because that's a more valuable asset for me to be holding.

And and I think that starts to happen at that store of value inflection point.

And then, and then that's when you start to see an S curve happen with medium exchange type adoption.

And then it's like when people start trading into so much.

Well, now it's like, why don't we just start denominating our prices in it?

And, and like those are kind of like the three main S curves we see with adoption over time.

So it's like the point is, is today gradually is what creates suddenly like we want Bitcoin to be more gradual because that's what gives everybody who manages a lot of money the all the indications they need to justify within their mental framework.

Oh, I should own a lot more of this because it is a lot safer.

It is a lot more boring.

And then it spikes a bunch and they're like, oh, well, I'm happy that happened too.

It's kind of like we have to, like I was just saying this on Walker's podcast, like it's kind of like when you want a dog to take its meds and you have to kind of force feed it with a candy or wrap it in something that it likes to eat.

It's like that's kind of what's happening is that bitcoins getting into mode where you don't, maybe you don't understand it the correct way, but you're still understanding in a way that you can actually digest.

And that's happening for a lot of people around the world right now.

Yeah, yeah, very interesting because I think when you really dive into Bitcoin and you understand the fundamentals, you understand that it is a very boring thing.

Bitcoin, the promise of Bitcoin in my opinion, is literally, I'm just going to stay the same.

These are my set of rules.

I'm just going to chug along.

You know, like Jeff Booth says, as long as it's decentralized and secure, the the blockchain grows, which makes it more trustworthy, predictable, secure, etcetera.

And in essence, it's extremely boring fundamentally, I would, I would say, right, but maybe because it's boring, right?

And it's so different than everything we know.

It's a total opposite of Fiat money.

You have this difference in understanding of not only people holding it, but also people trading it, you know, gambling leverage of all these things happening within the paradigm of Fiat money losing its value at also well consistently about that different speeds and and rates, right.

So I think fundamentally the the boring part of Bitcoin is very good.

And once you get it, you understand that it's way more trustworthy than any other option.

You have to basically store your store your value.

So it's low risk.

But people seem to think that volatility is inherent risk to to Bitcoin, right?

And they mix these things up as if it's like fundamentally risky, but they're actually talking about market risk.

And I think you argued that the volatility is actually good, right?

So that that stability is an illusion that is only created by manipulation.

They don't really let it run free like in Fiat money, right?

They set rates if capital controls and stuff like that.

So there is not really a free market for money.

But Bitcoin is a parallel and Bitcoin does act in this free market of money.

People are trying to figure out what is this actually.

So can you kind of talk through your, your thoughts around this volatility part and why you think or might think it's actually a healthy thing like how do how do you approach that?

Yeah, Bitcoin volatility is when when I'm when I'm making this point, I'm thinking in terms of the world that thinks in terms of dollar denominated assets and, and how they're perceiving it.

And, and I think that's like a really it's kind of an important distinction.

I think the best way to consider why it matters is that the the perception so important is what I think what I like the black pills of finance.

Like when I was a, you know, budding undergraduate in college, getting my finance and economics degree and I was I was learning about all of it.

And you spend all this time kind of.

Learning about these models and these concepts that we've constructed around here's how markets work, here's how they're supposed to behave.

And, and you know, there's different camps of economists and theorists and philosophers or whatever you want to call them who have different perspectives on what that should be.

And then we look at history and we kind of see how things have behaved.

And, and I think like the real black pillar on finances, like when you get this education, you, you think that there is a should, that there is some sort of thing things should adhere to.

And, and you get, and eventually you kind of realize that it's a mode of idealism.

Like I was trained as a value investor and there's all these fundamental tenants that value investors kind of believe in.

The reality is is that since I graduated college would have been a bad idea for me of to like truly been a value investor for a long period of time.

A lot of other types of investors made more money who didn't adhere to those fundamental tenants.

And the reality is, is that because the system that value investing was designed to, you know, capture wealth from over the long term isn't really the system that we're in today.

And the reality is, is that markets behave in response to, you know, endogenous and exogenous factors that are emerging at any point in time.

And those things are changing with the political environment, with the geopolitical environment, with consumer preferences and, and the black pills that like really today, the way that markets work is based on narrative.

And, and once you once you kind of like really embody that, I think it helps you perceive how things work in this type of an economy where persisting credit and exacerbation of, you know, consumption and investment, things start to just depart from reality.

They depart from what we think they should be.

And the result is, you know, much more speculative behavior and these gambling markets and you know, GameStop and shit coins and, and, you know, overspending and credit card debt and all of these things that I think are really just a product of this like misalignment incentives.

So like when you think about markets today and you could go run a bottle or whatever and say this asset should be worth that, the reality you're going to, you're going to be a lot more on point.

If you could say, oh, I know what the narrative of this asset is going to do in the next year or two and how that'll be perceived.

And I think that that's how a lot of people are making money in markets today is kind of based on this misalignment between what should be and what the reality of perception starts to become.

So that I think is an important aspect for what we think about bitcoins volatility.

It's like when you think about the world from a Bitcoin standard, these things don't matter to you as much.

But to people who still think in these terms, certain narratives are very important to them for them to buy Bitcoin.

And it's like whether you buy Bitcoin because you want to get rich, whether you buy Bitcoin because you want freedom for society and for the world, whether you buy Bitcoin for any reason.

Well, what matters to me is that you're buying Bitcoin and whatever gets people to start buying Bitcoin, I think is generally a good thing.

Eventually they might learn the right reasons.

And there's tons of people that do the right thing for the wrong reasons.

I mean, when you think about how people behave in their lives today to the point about like the lack of agency, most people do things because somebody they know and trust told them to do it or because their parents did it that way and they never really asked questions about it.

And and that's how the majority of people are going to end up owning Bitcoin.

The majority of people are going to do it just because most people around them do it.

And and it's really this early adopter, a group that's pushing these narratives and then big money comes in because it fits into their Fiat narrative.

And their Fiat narrative says it needs to be a risk off asset for it to be a reasonable allocation within my commodity portfolio.

And, and I'm going to wait and see until that happens.

And and they're not the movers and shakers necessarily that are ever going to make outside as well through the people that wait until a lot of the wealth has been had and then they come in towards the end.

But that's just like the reality that we're dealing with.

So it comes down to just like difference in perception.

And that's how I think is less in terms of like what is and what's right and what happened in Weimar Germany when the currency was collapsing.

Does that mean Bitcoin is going to become more volatile at some point?

It's just like, yeah, sure.

Maybe.

But when I think over the next few years and I think about very practical, like who are guys who can push a button and own hundreds of millions of dollars of Bitcoin, and these are the narratives that matter to them before they push that button.

Maybe this was already an answer to to this question, but I I wrote down some Eric Yakes hot takes from your from your Twitter and one of the posts that I really liked was the middle of the bell curve is selling to the tips.

Don't mid curve Bitcoin.

And I just wanted to ask you why is it so hard to grok Bitcoin?

Maybe your answer is, you know, people just are comfortable in their own paradigm and, and, and when there's no need to look outside of that.

Now, maybe that's just it, but my angle on this question was more kind of like the, the size of the idea.

I think more, but I I wonder what do you think?

It's interesting the size I, I, I actually, I think that's a really good point.

Like Bitcoin exists at the confluence of various technologies, various different fields of study.

And that's kind of how I think about its size.

It's like a really big idea that impacts a lot of different things.

And, and because of that, it, it's like when you're starting a new job and they call it like drinking from a fire hose.

There's so much that you have to learn that it gets really hard and confusing and you get, you know, it's so much harder.

Whereas if it's like very one focused, very simple thing to understand, then it's a lot easier to grasp something.

But yeah, you're right.

It's such a big idea.

It's so complex that people can often get, you know, analysis paralysis or, you know, lost in the detail and they ultimately try to, you know, prevents them from fully learning it because they realize how long the road's going to be to getting to that.

Like most people in Bitcoin get it because we're a demographic that was meant to get it.

You know, we are primarily millennial aged men who had some sort of interest in owning assets.

And and like these are things that, like our type of demographic is naturally inclined to do.

There's all these other demographics that just don't know anything about, you know, any sort of investing like, you know, I'll, I'll talk to people all the time where it's just like they'll think Bitcoins like a stock or like even when it comes to financial literacy, you know, they're clues of what a stock really is.

It's like this thing that maybe their boyfriend does or something.

And, and I think that's just kind of the reality is like we're just, it's a, it's a very big idea coming from a very small world.

And, and because of that, it's something where the vast majority of people are never going to care to really learn about it.

And and they're really just, it's the social proof around them that's eventually going to push them to do it.

Like in the same way that the vast majority of these people, you know, want to own a home or want to invest in real estate.

And the reason they do it is because, you know, their parents did it and their parents told them to do it.

They never looked at the historical price returns of real estate.

They don't understand the operating costs of having it.

They don't understand the tax implications.

You know, they don't understand, you know, what geographies and markets, you know, they're, they're not looking at any of this.

They're just behaving in a way that somebody else told them to do.

And it's generally accepted within their community and society.

And, and I I think that's kind of like the biggest reason.

But the reality is, is that, yeah, it just, it's a very hard thing to understand.

I quit my job and basically spent a year of my life to get deep into it.

That was after I already kind of got it enough to want to quit my job, spend another year, you know, reading and writing a book to still be like, OK, there's so much where I have to learn.

And, you know, now I have a venture firm and I work in this industry every day.

And all I think about is how little I know about everything that's going on with it.

And there there's this.

Yeah.

It's just, it's a, it's a revolutionary movement.

It's a new technology.

It's impacting everything.

And very few people are ever going to totally, you know, get a comprehensive understanding of it.

Yeah, When you think about the future you just mentioned, you know, Fiat money will exist for some time, banks, etcetera.

Also, I mean a lot of people in Bitcoin they talk about, you know, and the Fed, they think banks will disappear.

I think you have a bit more nuanced view on like free banking and a free market on monies.

Let's say we get to a hyper bitcoinized world.

Like do do banks still exist?

Does credit still exist?

Will people still, although I think it's a dumb idea, but try fractional reserve banking on a Bitcoin standard, right?

Like they can try to create paper, but I don't think they can create as much abstracted layers as they can create now.

Yeah.

What?

What does that look like?

So when, when answering these types of questions, I would all, I think we're all often see people kind of miss the, the bigger picture is you don't want to think about these questions from your perspective.

You, you don't want to think about from whether or not you would want it or whether or not it's something that needs to exist.

That's probably the key thing needs to exist.

You'd be like in a Bitcoin world, maybe we don't need something like credit.

The reality is, is will the market demand it and, and will the substitutes in the market be better?

And, and I think when you think about it from that framing, it's like, OK, so will the market demand it?

Well, what is credit?

Why would you want credit?

And, and when you contrast something like credit with Bitcoin money or scarce commodities as a form of money, it's a way that you can take value created from the past and carry it with you into the present.

And, and what credit is, is not the same thing.

Credit is a way to take value that could be created in the future and carry it to the present.

It's a, it's a different function.

And, and where they overlap is in that we need to facilitate trade against people in some form.

And depending on the situation one person's in what they have a lot of value they've accumulated from the past, it might make more sense for them to use that to conduct trade.

Or if they don't have that, it might make a lot more sense for them to use value they might create in the future.

And and that's based on this constant market balance, the different market actors are acting around at any point in time.

So for that reason, I think it's like very fundamentally credit will exist in less people have whatever they want, whenever they want it.

Like if we do get into a true form of abundance where the marginal cost of production of any good or service is basically zero, then sure, like credit won't exist.

Money's not going to matter either.

You know, it's there.

It's something where everybody can just like it, snap their fingers and have what they want.

We don't need to trade anymore.

I think that's really the argument.

I think that the fractional reserve argument gets a little bit more complicated and I can kind of like, I'll try to keep it a bit high level and not dive into it too much, but fractional reserve is just a means of creating credit.

It's a means that has existed in markets historically.

So it's not that I'm, I don't advocate for fractional reserve.

What I try to do is try to anticipate what's going to emerge in a market and why.

And, and the best I think way that we can look at that is just like, OK, well, how is fractional reserve emerge historically and, and fractional reserve, when I go back to that talking about the Goldsmith bankers in London, it was a natural phenomenon that emerged in private markets.

And then we also had famous free banking systems that have emerged throughout history, primarily in like 18th century through the 20th century.

And you know, Scotland and Canada are kind of like the two primary ones that are cited, but there is there's a multitude of others and you know, none of these systems really perfect.

But what we can say about them is that we had fractional reserve systems that emerged in private markets and were chosen naturally in those market dynamics.

Now, markets could be very different today.

And I think the argument against something like fractional reserve emerging today is that, well, people in this Goldsmith banker system, it was so much more valuable for them to trade in something like paper because lugging gold around was so much harder to do in this economy.

I, I think you could, you know, you can make a very similar argument today, like one of the arguments against gold bugs saying like, oh, you know, it's a buy gold as our hedge against inflation.

It's just like, well, it's not permissionless because you can't actually conduct trade in the modern economy with it.

Bitcoin, something where you can do that.

So Bitcoin should take the market over time because it's actually a substitute.

Gold isn't a substitute.

It's just kind of a path dependency at this point.

And, and I think that like from from that perspective, when when we think about how fractional reserve could be emerging in the future system, the questions like will the market demand it?

And, and that comes down to, OK, well, if we look at these prior systems and say there is basically this, there was enough reason for people willing to accept that trade off or there wasn't enough information transparency for them to be aware of it in the first place.

And so I think the argument to make of like, will fractional reserve banking emerge on Bitcoin or not?

It's kind of based on one of those two things.

Is there going to be some sort of inordinate amount of benefit that people are receiving from saying, oh, no, it's better for me to store my Bitcoin and take a receipt here.

And, and I, it's a lot cheaper for me because they make money off of senior Ridge from fractional reserve banking.

So this system has been operating that way for a long period of time and I'm comfortable with it, right.

Like, is that one mode of thinking?

And, or the other question is, is like, is, is the fractional reserve something that people just simply still are not aware of and it's just happening in the background the whole time?

So like do you have to make an argument that information is going to get a lot more transparent and you have to make an argument that credit emerging through fractional reserve is not as good as credit emerging in some sort of other way.

And I think you could say it's not as good, like it's just another form of credit.

I can make a credit, I can make a loan out of a fully reserved system.

That system just limits how much credit can come into the system because once the total amount of reserves exist and all of those have been lent, then it's like, OK, there's no more.

We can't fractionalize it in theory, right?

And so fractional reserve allows you to expand that.

And then fiat's like, you know, the final boss of there is no limit.

You can expand it as far as you can basically until hyperinflation.

And yeah, so it's a question of what the market will accept.

And I don't think I'm like intelligent enough to say one way or another.

I can just like, you know, way out the framework.

But I do think that the burden of proof is on Bitcoiners to say that it won't, because history tells us that it will.

And we need to build technologies that don't that work without fractional reserve.

Something like Lightning that can work without fractional reserve and be just as good as a centralized alternative.

If we can build something that's like a fully trustless peg in for Bitcoin and the user experience and the cost of sending transactions is just as good as a centralized institution doing that, then I think the the argument for their ever being fractional reserve is very, very low.

Yeah, I this is one of the topics that I find most interesting.

But it's really hard to predict what that's going to look like, right?

And I think I agree with you when you say there there's a limit that doesn't really make sense, you know, if you want to use credit for people to be productive and build things.

And then on the other side, you could also say like fractional reserve banking has actually worked up until a certain point, right?

It, it worked and it's created growth and increased productivity, people actually doing things in, in, in the productivity sense, right?

But fundamentally it's it's flawed if you don't put on an artificial break, which perhaps is naturally occurring on, on a, on a harder money or limited money standards.

But yeah, maybe that's where the where the moral hazard or the OR the the principal agent dilemma come, You know, where that comes in again, because, yeah, am I the person that's going to put my foot on a break?

You know, if I'm profiting from being part of the system, probably not, right.

So I think that's where that comes from.

But yeah, I think interesting answer and just something to to ponder.

It's really hard to to look at the future like that.

I'm I'm looking at the time I do, I, I have some Eric Yikes.

Hot takes still from your Twitter.

So maybe maybe we can go through them in, in, in kind of a quick, a quick way because I I really want to, I really want to get your take on this.

OK.

When I say Bitcoin trades like a NASDAQ stock, what is your reply?

Yeah.

I mean, yeah, it's true.

So if other people don't understand Bitcoin, I'm going to be bearish.

Can can we I'm, I'm, I'm alluding to someone who talked about Bitcoin like this in a, in a in a recent time.

And I just think it's interesting that if other people don't understand Bitcoin and they trade it like an NASDAQ stock, right or they don't understand it.

So I become bearish because the path is is slower than what I would want.

I would say that this is a signal that we are very early.

What do you think?

Yeah.

I think it's a signal of don't think about things from a trader's perspective that like it is obvious that the vast majority of money that's been made is from people that have held this asset and other assets for extended periods of time and thinking about like the ups and downs.

And, you know, if you zoom out enough and you look at Bitcoin, it doesn't trade like a NASDAQ stock.

But what people mean is that over some shorter periods of time, it does.

But then there are these huge periods where Bitcoin runs up a bunch in price.

And yeah, no NASDAQ stock has been close to that in comparison.

It's the best performing asset in measurable history.

So over a long period of time it trades like the best performing asset measurable history so far.

Yeah, on a recent podcast, I heard you say nobody knows why Bitcoin crashed, and that's exactly why you should buy it.

What's the biggest What's the biggest signal for you that is flashing right in front of everyone's eyes?

Well, what do you mean in terms of like?

Is it like what is so obvious to you that you should buy Bitcoin that other people might not see?

Read our report.

Look at the size of all the potential buyers that are all on the edge.

There's conversations being had in board meetings, there's conversations at government institutions.

All these people are looking into a Bitcoin strategy since the past year.

And if you look at the size of this, these pools of capital, very, very small percentages of that money can move the market a Bitcoin drastically.

Bitcoin is always an everywhere the headline announcement away from a massive run up in price.

And and that's when the vast majority of your gains in Bitcoin come from are from this very small percentage of days when that happens.

So you sit and you wait for that to happen and you understand the fundamentals and you know that it's going to continue to happen.

All right, 22 questions to wrap up.

I think we're arguably in a very dangerous periods where we're by some luck or or not, I don't know, we're living in a transition from a dying field system to a new system and a lot of different people blocks, alliances attempting to, you know, be be the winner of whatever comes after.

We obviously have Bitcoin.

That's what what we are looking at.

What is your biggest fear for the next 5 to 10 years?

And also what's your biggest hope?

My, my biggest fear is Bitcoin becomes just like a digital gold.

If enough of the demand flows through and not enough of through, you know, financial products and not enough happens through creating technologies that allow it to be freedom money, then I think that that would be, I think that's the most likely negative outcome for Bitcoin.

I don't believe that that's the most likely.

I believe it will become freedom money.

But I think if things were to go wrong, that there is other a lot of institutions that support it, like governments, for example.

I think Trump would love for his family and his own family's wealth for Bitcoin to become the new gold.

I don't think he would love if it were to become a substitute for Fiat money.

And so I think that the the interests are aligned for some people to want that outcome to happen.

And, and I think that like building technologies that allow Bitcoin to be moved more cheaply, stored, more easily integrated into more things so that you can use it for things other than just, you know, holding it in a financial product that makes the alternative more appealing than a financial product.

And that's a lot of what we're doing to our firm is trying to like make a lot of that happen.

And then what was the second part of the question?

Your biggest hope?

Oh, my biggest hope.

I, I think that in stranded energy markets we're going to see a large proliferation over the next decade.

I think it when you dig into like the trend with AI compute and what I think it's going to be very good for making large Bitcoin miners turn into AI compute guys.

And it's going to make the case for stranded energy only for Bitcoin mining much greater, which is going to distribute the network much more.

And then I think if you look into like heat reuse applications for Bitcoin mining, that's another great incentive for stranded energy, effectively stranded energy type applications that is going to distribute the mining network.

The more distributed the mining network becomes, the better and stronger Bitcoin is.

And, and I think that that's that's one of the big things that I'm looking forward to.

Yeah, love that.

All right.

My last question, and I ask everyone the same question, which is what is a core belief that you will never let go of?

Oh, core belief is to make decisions based in courage and not in fear.

Never going to let go of that one.

Love that awesome Manuel.

Thanks so much for your time and your insights.

I really enjoyed it.

Hope people found it valuable and yeah, let's stay in touch.

Likewise, Bram.

Thanks man.

Thanks.

Cheers.

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Bye.