Anthony Pompliano | Part 1 | BlockchainBrad | Crypto Interview | Bitcoin | BTC | Gold | SoV | Crypto

by birtanpublished on August 23, 2020

hello it's Brad Lori or blockchain Brad and today I'm speaking with none other than Anthony comple I know he is certainly well known throughout the crypto space it is truly an honor to have you on the channel Anthony thank

You very much your time absolutely for having me no worries make now for those on Twitter for those on all different platforms many have been excited about this interview the objective is to be entirely transparent

And also to be objective when it comes to putting forward different ideas and viewpoints and today I'll be asking as many questions from both the community and myself with regard to BTC and beyond so pomp without further ado let's get

Really stuck into this because it's rare to have you on the channel or indeed on any channel firstly as an introduction off chain it's a well known podcast if you'd like to know more you can certainly go and look at that with with

Pomp and also he is a co-founder of Morgan Creek digital our fund as well so if once again thank you and it's exciting to have you on let's talk Bitcoin let's get straight into it Tom you're an advocate for Bitcoin you speak

Right around the world different conferences you're constantly on Twitter and other platforms but in a nutshell describe to us what BTC means to you free look really simple I think you know Bitcoin is a is an asset that can mean a

Lot of different things to different people but ultimately what it means is it puts people back in charge of their wealth you know the two things that probably mean them to me are the lack of seize ability or censorship of the asset

So people are able to do with their money what they would like to do with their money and the second is from a structural standpoint I've gained a disinflationary or deflationary assets like Bitcoin can really change the way

That inequality has / or even reverse that wealth inequality that spread throughout the world and because it attacks the one thing that they struggle right so previously we've been able to throw the inflationary nature that

Drives wealth and equality and so when I the word freedom that means a lot of different things different people that ultimately I think that's about right well one of the things you do talk about a lot is sov or store a value and I want

To really extrapolate and explore that precisely today can you talk about the distinctions that you often make between store of value and currency particularly in light of a lot of discrepancies from other parties but they have their own

Very strong opinions of what BTC actually is today yeah look a store value is one of two components of a currency for a second as a medium of exchange a medium of exchange is simply a belief system so throughout history

People have used everything from seashells to rocks to piece the paper to gold etc and as long as parties in a transaction believe that something has value and they're willing to transact because their services

It becomes exchange rights Bethlem to me it's pretty straightforward and relatively simple the store value is is much more important for currency mainly because you need more than just the two people in that transaction to see that

It has value right you need kind of a larger buy-in to the store a value so if you look at something like real estate or land that's been a store of value for a really really long time and what are the components of making land valuable

You're able to obviously use it for some sort of utility but also you're able to purchase it and there's only so much of it right so in certain areas land can be much more expensive than others so taking Manhattan for example it's an

Island it's very small lots of people want to live there and so that land is very very valuable if you go to somewhere in the middle of Ohio or Reserve somewhere else it's not that that land is any different from

Actual make up it's just that there's less people who want to live there and therefore the price is lower but that land still owe you because somebody will buy it for some price right and so if you look from a store values to a big

Point I think it has a lot of the same properties in that it has this artificial supply cap and and there's obviously more and more people every single day that are electing to want bitcoiners for

Their wealth a bit for it served as a fantastic store about the West escape all right and it's also interesting we're talking about one of the fundamental properties of money or currencies you mentioned it's one of the

Core functions being an sov of money itself and then you overlap that or overlaid that with the idea of an asset and I made allusions to also investment so we're going to really break this down so we understand that and we allow

People to also do the same and break this down into definitions now with regard to asymmetry you all what you often talk about it Bitcoin being an asymmetrical asset but also you've made very clear allusions to inquire inverted

Correlations to other markets whether that be the SNP or gold so there's a really strong perhaps conflict in those respects because in one breath you have talked about some instances of inverted correlations and then only the same

You've also said in another breath you've said that there's no correlation can you just clarify for us what you mean when you say a symmetrical asset yeah so there's a couple of pieces to that question the first is a you know

What's strictly definitions so a lot of times I will talk about a non correlated asymmetric asset non-correlated simply means that if you compare bitcoins price movements to things like public equities gold etc there's no correlation between

This price that's right so the reason for that is really the drivers of value if you look at public equities for example the drivers of value there are GDP earnings profitability interest rate etc

Bitcoin is unaffected or not driven by those price values and so much more of a network effect type business and so you've got kind of different value drivers so you don't get the correlation that you would see with public equities

In other aspects in terms of the symmetric component what that basically means is the upside is much much greater downside right anytime you make an investment talking about a potential of 100% loss of capital right and so if I

Put you know hundred dollars into an investment whether that's real estate that is a public equity or Bitcoin I couldn't 100% of my kind of a1x downside on the upside if I can only double my money right then basically I

Can double up or I can lose a hundred percent you kind of have this you know balance between the reward asymmetry basically says that I can lose 100% on the downside if I make 10x or more on the upside then there's an asymmetric

Outcome on the positive side compared to the down to break on 10x plus compared to 1×1 the downside run so a big point obviously the technology has that asymmetry now you specifically asked about the difference between non

Correlation and inverse correlation right historically Bitcoin has been non correlated meaning that there's no correlation positive or negative to other assets at times this year when there's global instability take the

Month of May for example when the US was engaging in trade wars lots of kind of uncertainty and instability around the world Bitcoin has gone from non-correlated to actually inversely correlated meaning that when public

Equities dropped in value bitcoins price went up in value where gold extra Bitcoin went up now again it was only for 38 years great but during that 30-day period Bitcoin was up 55% the correlation to public equities was

Negative point 9 and the correlation the goal was negative point a rose to jump in just jump in there though pump I want to ask you though given that the niacin C given this is a very early market as you've mentioned before do you think

That there's some risk so in suggesting in some respects there is that inverted inversion that is that inverted correlation is particularly when for the most part for the more macro assessment there is simply a non correlation of

This at this asset in comparison to others yes so whenever I describe Bitcoin I wish I thought it was an encore an asymmetric acid I'm very careful to call out you know at times it has been inversely correlated right so I

Try to always caveat it with again you know the month of May is only at the 30-day period right mom's happened a couple of times and it means is that the kind of average performance of it over the last ten years but it's important to

Have those data points to understand it's not always you know non-correlated at times even positively Portland right there's been studies that showed that for you know having two to four week periods Bitcoin has moved in lockstep

With gold for example right and so again no kind of perfect science here in terms of a mathematical equation that will get us an answer that everyone will agree on I think that there's a whole bunch of different data points people will cut

That data how they want but but I think that there is some general consensus over a long period of time that the non correlation is a good way to describe it less performance compare other aspects right so in the in the future do you

Expect that there'll be more consistent correlations whether they be inverted or so like and obviously you've mentioned things like gold and things like the SNP do you think that we'll see a shift and if so why yeah again you know my kind of

High level expectation is that we'll see more of the same meaning that you know it'll be a non correlated asset majority of the time at times we may see either positive or verse correlation to specific other assets the reason why I

Think that non correlation will stick is really just again going back to those value drivers right what drives the value there are two different things and so you would expect non correlations from those assets if their value drivers

Are different what I will say is that Bitcoin obviously thrived during you know one of the longest bull markets in history from a macroeconomic standpoint so as we get towards the end of a cycle and there's going to be some turnover

You know what happens is anyone's guess but but to see how people perform during some sort of persist recessionary recessionary period it's gonna be quite interesting and I think that it's something attention to right and I guess

The big question also is to what degree is this circumstantial we really don't know and those that support other schools of thought have suggested that be the case and obviously you don't but with regard to the tech I want to move

To that for a moment because that is obviously fundamental to the integrity of the big billion a little bit as you call them now what are the fundamental technological assets of Beit AC and what makes it stand out

In your opinion yeah so the one big thing to think about here is you know what's the corollary example to meaning the large beet right the system I mean small B being the asset well the Bitcoin network is a settlement

Network whether you're able to send asset settle those transactions without any centralized third party and so the example I always give people is if you compare you know Bitcoin to gold for example right

Gold was money for a really long time at some point we decided that gold was not the most efficient way to move value around the world it's really heavy to shift to somebody you've got to shave off pieces of it in order to pay folks

Etc and so we went to a gold-backed currency meaning that we actually created paper claims on gold right so the gold was still the money but by creating a piece of paper that was a claim on the gold we could then share

Those pieces of paper much easily to transact the cut is very similar in that today if you wanted to send a piece of paper to you know a paper doll or if you want to send it to somebody in another country that's in quite slow you've got

To put it in an envelope you know put a stamp on it you got a mail it'll take three to five business days to get there if you're lucky right and so that's not really a great way to build a financial system by mailing the money around so we

Can electronic system on top of it and by creating that electronic system but now we move as we move one zeros on a screen around the world and the banks set all those transactions either pinned up day and week etc and so pretty day

More efficient user experience for those who are trying to transact right so as you see kind of gold to paper money to electronic money etc all of those layers right if you kind of think of it that way or getting more and more efficient

It's creating less friction for individuals to move value around the world now bitcoins going through the exact same thing where we started out right in everyone who's yelling and screaming it's inefficient we'll compare

This shipping us dollars in physical form around the world it's actually much more efficient right yeah yes it may take ten minutes to actually settle your transaction but that is much faster than mailing a

Letter to you know China Australia Europe etc from states and so on what happened is you see people building kind of layer two technologies eventually they'll be layer 3 layer 4 over time this is only ten years old and so I

Really keep in mind that there's no money in the world right literally no current in the world has simply one layer they all have multiple layers to them and that's because that is how money the evolution of money immersed as

You continue to decrease the efficiency bitcoins at the very early stages of thing right well what's very interesting is that when we see your tweets when we when we see you engage in social media and even in conferences all other

Narrative is actually about that whole philosophy that's to add value yet when we're speaking today we're talking a lot about currency so I really do want to focus on distinguishing those two different camps and schools of thought

Now going back to the asset itself that it'll be some of the things you talk about openly are things like cryptographic security you talk about portability divisibility fixed supply as an asset and then that uncie's ability

As well and transparencies are given in the blockchain it's not really spoken enough of is that a good summary though those points I mentioned or are there any of those that you think really stand out to articulate the fundamental value

Of BTC yeah again going back to this idea of Bitcoin if it's freedom right I think that is the value props different for different people right so if you're somebody who lives in a country where you're worried about your government or

Others using your assets are seizing your wealth to see the non seize ability is really really important and actually maybe the most important thing right if you a country that has hyperinflation right now all of a sudden the

Disinflationary and deflationary structure bit couldn t become the most important thing right if you are somebody who is sending money let's say the your a NGO or nonprofit you're trying to send wealth to those in an

Affected area but you're worried about in fact right now that transparency becomes really really important and so all these different aspects of the Bitcoin to different people or at different times can be the most

Important and so the way that I think about this is there's certain criteria or properties that this asset has each one of them has varying degrees of importance but it's less about what's important to me and it's much much more

Important to the people who are using it right at that time and so we've got to keep an open and flexible perspective on this because the worlds not binary that I try very hard to not get into kind of these answers where people say you know

What is Bitcoin valuable right and as you can see with my answer is well Bitcoin is valuable to different people for different reasons right but here are the properties the asset has and you can see in different examples why each one

Of those properties could be super valuable to somebody and we have to remember that you know in there's seven possibility and people in the world and you're never gonna have a asset that has one single value prop for all seven

Billion people right those people all live different lives and within different environments they live in different cultures and different regulatory jurisdictions etc and they're looking for something that solves right

And if you could have an asset that can solve their problem and not worry about solving everyone's problem then now you become much much more likely to be adopted by that person because you solve their specific problem and ultimately at

The end of the day we're all self-interested individuals and that's what people are looking raaah and you raise an interesting point because again that use case that fundamental purpose for BTC has actually morphed over time

As you'd be well aware from the cyberpunk movement into now and even between that even with international jurisdictional issues and even the agenda of those in developing regions where in many instances their currency

Is so volatile they're looking for hedges they're looking for alternatives the use case the motives are all very different depending on individual circumstances but today pump I really want to get some clarification of the

Asset itself because that is fundamental regardless of the motive of the those who wish to use it for whatever use case and this fundamentals is important so if regard to gold I wonder switch to that from one

Moment because you had many discussions you've spoken to Peter Schiff a well-known component of gold now what are some of the key distinctions between gold and BTC especially in light of the recent move

To tokenize in gold essentially or have a tokenize represent representation utilizing the blockchain a lot of a lot of things happening in the gold camps distinguish then that the I sorry to distinguish and to isolate a clear

Vision for digital gold as opposed to the narratives we see of virtual currencies in BTC yeah so first of all you know I've been very clear from very early on that we have to investment thesis one is that

People will trust algorithms in software with their wealth and obviously you think that that is kind of fermenting itself in Bitcoin itself the second is that every stock on currency in commodity will be digitized in the

Future so these kind of tokenize of gold it's just another permutation of that I think that that type of trend will continue now what's the difference between Bitcoin and gold that the big things here are you know I don't even

Worry so much about like explaining the coins value proposition as much as I try to explain what the challenges with gold right obviously it's heavy it's really really hard to actually transact in gold with other folks but there's more kind

Of structural issues at play that I think people don't really think about so the first is how much gold was produced today right how much gold was actually dug up out of the ground we don't know and not that that's a huge problem but

The lack of understanding and the lack of knowledge compared to an asset where you know exactly there's 1800 Bitcoin that are created in the last 24 hours right but that comparison between we know how

Much is being created versus we don't know how much that's a big advantage the second thing is the divisibility right with the ability to actually with the click of a button change the amount that you are going to send to somebody it is

A huge huge huge component the lack of Caesar ship right so that there was a tweet that went viral on Twitter when a lot of stuff in Venezuela was going on where there was a family who was Airport they were trying to leave it actually

You know taking their wealth put it into gold and they have the gold bar seized at the airport now I don't think that that's something that happens to people every single day right I know it's not but again it's one you know specific

Data point that shows if they had Bitcoin it would not have been seized versus that gold bar and so I think that you can go down the line and kind of illuminate these differences between the two assets right but I always bring it

Back and I say we don't live in a right we do not need gold two quotes in order for a bit going to be successful in fact I actually think that in part of the conversations with Peter Smith and other you know gold bugs is we agree on

Like ninety ninety-five percent of this stuff right in terms of the macro issues at play the fact that some sort of hard money or sound money is really important you know etc and so what you get is that the five or ten percent disagreement is

Just on what is the asset that will be best moving forward right now what I always discuss is this idea that if you look at Bitcoin in gold the biggest difference to me is the asymmetry on the upside right so let's say that full of

Both gold and Bitcoin are successful the odds that Bitcoin is going to increase in value in an asymmetric way versus gold there is much much more confidence than I have and I think many people have that bitcoins price will appreciate at a

Rapid pace versus gold it doesn't mean that gold is bad it just means again what is the risk reward that investors are looking for right I'm very clear that I'm a young guy right I'm able to take much much risk and say somebody

Who's in their 50s or 60s who's looking for wealth preservation versus wealth creation so you've got to understand that you know the assets themselves are not good or bad it really comes down to who is it that's looking at the assets

What are their goals what's their risk profile look like and then you can start to make a decision as to which assets make sense and then also what is your cap allocation of these assets right you don't have to be a hundred percent gold

0% Bitcoin or a hundred percent Bitcoin 0% gold I think that all of these different assets play a role in a portfolio and based on that risk reward potential and an appetite that's really where you get into the cap allocation

Game and you can start to create a portfolio that makes sense for that individual investor right and that's why we start moving in the conversation of portfolios and I do want to get to that with your palm play to ask you those

Direct questions but just going back to some of the things with regard to the discussions and debates you've had with Peter he certainly doesn't have the same position that you have with regard to Bitcoin whilst you may have both might

Lost you both clearly support the value of gold he's made very direct and controversial comments that Bitcoin itself he regards as a non asset and he and one of the arguments he puts forward is that Bitcoin doesn't have that

Physicality it doesn't have that element doesn't have that what he would argue is that true and organic trust built into it but any and he says that you rely too much on cryptographic proof well that can be open is open source and then by

Default can be appropriated quite easily and seamlessly so what do you say to his fundamental argument that the physicality of this really does create a subsequent degree of trust especially when it's coupled with a history of

Aesthetic utility commodity and currency use I think there's two pieces right the the physicality of it and in some cases is important in other cases it's a disadvantage right so physicality can be an advantage or disadvantage you know he

Has said multiple times that he lives in the real world not in the virtual world and we have to understand is that all right so I choke and least I jokingly said to him that you know take Twitter for example you're creating virtual

Messages in the virtual world where you're having a virtual conversation with somebody that doesn't mean that because we don't write the message down on a piece of paper and I send them a letter that all of a sudden the message

Doesn't have value anymore all right so that's kind of a not very you know come legitimate argument in my eyes right and then the second thing is Trump right Bitcoin itself is not built on trust it's built on verification and so the

Idea that you know Peter would take gold he would put it into a vault somewhere and then basically cook trust that the company that's overlooking that felt when they say that it's still there it's there there's a lot of people who do

That what they're well I think what you're seeing is you're seeing a demographic of individuals that are growing up usually younger who say I don't trust right I don't trust this corporation

Whether it's social media companies financial organizations custody companies et cetera but they're saying I want the ability to verify and what you're telling me is true and so again it doesn't mean that because you trust a

Corporation that you're a bad person right what just means is they go comfortable doing that I think there's a lot of people comfortable doing that so they're looking for an asset that they can store

Their wealth in where they can verify Rob Bitcoin provides that right I think that's a huge huge difference well let's talk about you know the trust with regard to his view for a moment because one of the things he does say is that

Custody is not really in the issue because whether or not you choose to have a you know you have gold stored in your own personal vault or whether you choose to obviously use a third-party custody itself is a non-issue for

Arguably for both Bitcoin and for for gold but one of the things he does say very directly is that once again there's this utility peg to gold itself here he goes on about how utility is the fundamental asset you know and not just

In the context of all of us different verticals but also in the sense of the top-down Association it has as a store of value whereby installed the stored among many parties throughout the world as an asset you know in bank vaults for

Example so he really makes the point that there's this top-down support from governments enterprises a couple with historic socio-cultural socioeconomic reverence for this particular utility and assets so he really does explore it

In a different light and then we tend to looking at your argument look at the cryptographic proof which which once again can be appropriated so my concern moreso imposing the questions here pomp is what is the fundamental value when

We're talking about story value what essentially is being stored if with gold for example it's a storage of the the substance itself than the physical property what are you storing when you store Bitcoin yes so again the the idea

That gold is valuable because of the utility is a pretty ridiculous argument because there's plenty of other precious metals that can do the exact same thing right and so if you compare the utility well they all have utility all right

Back to make jewelry out of everything from copper to silver etc gold has a premium over those assets so to make the argument that gold is valuable simply because the utility well then everything should be just as valuable as gold if

Instead like you described there's this quote belief that governments have central banks have individuals have a socio-economic belief right kind of just 5,000 years old has been valuable etc so again the

Value is driven by the belief right and a belief that that gold is valuable drives everyone else to continue to seek it as valuable Bitcoin is no different right as long as people believe that Bitcoin is valuable it will continue to

Be valuable right time.if all of a sudden everyone's look let's throw our hands up in the air bitcoin is no longer valuable and the reason it's not valuable scuzz X Y or Z we're gonna move on to something else then Bitcoin will

Lose value same thing with gold right if all of a sudden everyone did it Gold's not valuable anymore let's move into something else silver is now more valuable than gold right well then gold would lose that

Like right I think that we've got to be very very careful to remember that money in general whether it's everything from gold to dollars to whatever currency money is a belief system right and that is what ultimately drives the value of

These assets now the difference that Bitcoin has is that Bitcoin has a verification that comes with it right you can actually verify the assets on a global basis in real time and there's much more transparency to the system

Than in any other money system in the world right I think I've tweeted one time that's I said Bitcoin is the most transparent money ever created right and again two thousand years ago nobody cared

Right actually they didn't they didn't even understand transparency was important when it came to the money system today it is incredibly important to have a transparent money system like Bitcoin and so I think again you know

It's really hard to argue with data this is a thing that's been around for six months twelve months been around for more than a decade right and there are millions of people in the world who elect to store their wealth in this

Transparent software based store a value and minimum exchange and I don't think that that ain't any time in the future right well let's talk about that in the context of fiat because one of the arguments proposed or put forward you

Know as a converse argument is that fiat is like and more soda BTC than gold to BTC in the sense that both systems were tell Fiat potentially VGC however degree of belief built into them but with gold moving

Back to that physicality despite you know the narrative we hear of utility we move it forward and just talk about the degree of inculcated trust when it comes to that physical asset being utilized in various forms whether that being

Aesthetic whether that be a utility whether that be a commodity or a currency that's built over millennia or proof in a global sense so when we have that couple of physicality as proof of the asset how does that work in the

Context of belief when we know we can tangibly touch use and and still store this asset you know as opposed to something built on belief where either from a cryptographic sense or from a belief system where we print money we're

Talking about a different narrative you could touch beanie babies right they didn't keep that from being valuable forever and so the idea that physicality is a requirement for value is a pretty elementary and inaccurate argument right

Just because other assets have physicality doesn't mean that they have value over long periods of time and so what about what about that coupled with history though if we look at it retrospectively rather than just

Speculate when we base it on what we know empirically isn't there some evidence to suggest that we do actually valorize particular physicality well we didn't have computers right or the internet or a virtual world 60 years ago

Right we got to remember that over a really really long period of time yes there was physical assets in the physical world right but as the creation of the virtual world or the digital world has happened now we have digital

Assets but this is still young in you know the earth has been around for a really long period of time right humans have been around for thousands and thousands of years and so the digital world is about 60 years old that's it

And in that 60 years were starting to see all these digital assets be created and so we can't you know it's unfair to compare 5,000 years of history or more to 60 years of the creation of digital asset

Right you ready is a good point their pomp what about talking about digital gold versus BTC in its digital virtual sense I think that's a really fair discussion to have now since we see quite literally recently the discussions

About tokenizing gold and having a crypto and a gold back crypto asset so while you can send it all about this propensity for change in this direction that Gold's going I think every asset is going to be digitized over time the

Difference is that the assets that exists in the physical world right like gold or stock certificates etc that I've got a buddy Lawson Baker who has a great example of this right it's like when the internet was created and the first media

Company said oh we have a newspaper in that newspaper we're gonna simply copy on a copy machine and we're going to create a PDF they're gonna upload the PDF to a website well that was valuable for some period of time right because

Now all of a sudden which you got to be able to do is if you didn't get the physical newspaper you lured that website and read it the problem was that by simply putting a PDF version of the newspaper online you missed out on most

Of the value of the Internet right and the ability to edit to have multiple contributors to add updates to have dynamic photos right to change around how the text worked right all these different elements that now media

Companies leverage by creating their digital first or digitally needed right and so taking the PDF newspaper and sleeping on line looks too elementary today right rrk and so I think the same things going to happen with assets where

The first steps are definitely going to be let's take an asset and simply digitize let's create a digital representation of whatever that physical asset is eventually though you're going to get digitally native assets right and

I've written previously about this idea of is called digital corporations rather than simply take the stock certificates in the shares of a let's say Delaware C Corp and just digitize them right create a digital representation of the actual

Physical asset what you're going to get is you're gonna get companies that simply incorporate on a block they're gonna issue digital shares those digital shares are going to be created in the digital world they're going to exist

Solely in the digital they'll be governed in the digital world held in the digital world and it will be a fully digitally native corporation right there will not be physical pieces of paper or physical stock certificates

Anywhere all be 100% dish we're not there today right there's a couple people kind of experimenting with that stuff but again over time just like we saw newspapers coming online you get sort of the elementary or archaic

Versions you know in kind of the first implementations but eventually you do find that innovation right and entrepreneurism of founders will drive people to innovate and continuously innovate why do we start into the full

Benefit of this technology and what's clear also in you're alluding to essentially being bullish on the benefits of blockchain for business you know for enabling the SMEs for example or the whole plethora of verticals

Clearly you are supporting that narrative but I want to bring it back to a comment you made recently and that was with regard to BTC in that you felt that it has it yet progress to a clarification or reasonable suggestions

That is yet a currency and that you made the point that there still needs to be significant infrastructural changes developments whether that be layer 1 or beyond layer 2 now going back to sov if that's the case pump and we aren't yet

At ever the empirical evidence of it being a currency if sov is a key current criterion for currency but yet we use the narrative of sov what does it make BTC today if we're not yet at the stage of being a currency why definitely Digg

Is a currency right there's two components to occurrences to store a value in a medium of exchange I know majority of people who are storing wealth there right they put money in they leave it there believing

That it is going to have the same or more value in the future so it's a store value for sure and there are over a million transactions per day where people are sending value they're using it as a medium of exchange so the

Argument that it's not a currency is is absurd and I think that the the belief that you have to you know be on par in a comparison to let's say fiat currencies it is not true right again you need it to be a

Store value in a medium of exchange well Bitcoin has been the best store of value over the last 10 years and it is used is I think it's the 12th most popular currency in the world right in terms of the meme of exchange compliment

And so when you start to see this data right there was more volume than PayPal been low or Apple pay last year right in in 2018 when you start to look at stuff like that it just goes to show again I think that this asset is highly highly

Misunderstood and the public narratives don't align with the data I'm not very concerned with what the public narratives are I'm much more concerned with looking at the data and having a kind of a first principles thought

Process here understanding but my high personal opinion and it is about how the evolution technology will occur how more macro and socio-economic stuff will play out and obviously I've come to the conclusion that this asset is something

That I want to spend a lot of time on and something that I think is going to in the future that's what we're doing right so if it's clearly a currency dopent why why the constant shield from the BTC

Community the Bitcoin is or the maximalists why the current price pushing you know why this application for the an avaricious want for more when essentially currencies it's supposed to move towards a stable scenario for the

Uptake for global adoption well the US dollar has more people shilling it than Bitcoin has shilling Bitcoin but you know with respect to USD it's essentially relatively stable when in terms of its volatility so with respect

To the way in which we see people engage in BTC the narrative today regardless of the graduation towards a more you know more established more empirically evidence currency a lot of people are not even using it that way a lot of them

Are just holding it for once or more the u.s. dollar does not like volatile US dollar since 1913 is down 98% in purchasing power right but the reason why we believe it and it's not volatile is because one dollar equals one dollar

Right we priced the dollar in dollars and look and say oh it's super non-volatile well we did that Bitcoin Eagle in Bitcoin it's not all right what is tile is a the price of a Bitcoin one is exchanged for

Dollars right and continue to appreciate it so Bitcoin has actually gotten more valuable and volatility again right this is really important volatility is not bad in order for things to appreciate in price

You need to have volatility volatility works both on the upside and downside and Amazon is the best example of this since it's gone public Amazon has dropped 90 percent twice the intro year meaning every year the average drawdown

At some point during that year of Amazon stock price has been 30 plus percent that's gone for 20 years that volatility sounds absurd but Amazon has been one of the best performing stocks – one of those valuable companies in the world

Today Roger right volatility is not necessarily a negative thing because you need volatility for appreciation and when you're comparing it to an asset that is guaranteed to lose out right you're guaranteed if you leave your

Wealth in dollars right a hundred percent we're all in dollars you will lose value every single year right that is we get the wealth and a quality gap ended in specifically us and in other places in the world and so I think that

You know when you compare these two from a structural standpoint and also from an actual historical performance standpoint Bitcoin is superior because it has certain criterion properties that dollar does not the question though is it does

Price appreciation really fit with the sov merit narrative many people would argue they are very distinct so does it concern you that quite sincerely let's go to the present day for a moment forget about the future and what we

Envisage for Bitcoin right now there is a propensity for many in the crypto sphere to huddle essentially or to push forward that narrative at the very least there's a lot of evidence to suggest that there is a lot of fake volume in

The ecosystem regardless of the monumental amount of transactions that are happening what trading is a potential potentially serious risk we don't really know how much is actually being transacted for the purpose of

Currency as opposed to purpose of tray for you know essentially trying to capitalize on the volatility so my question is should I say so should it be so volatile again none of that matters right go to the u.s. dollar

How much of the dollar transactions are being used Forex use case why use KZ use case we don't know right that there was two trillion dollars that was laundered last year in US dollars right that is 10x the entire size of the Bitcoin

Market cap right with just 10x of all of bitcoins market cap was laundered in the US dollar system that doesn't mean all of a sudden that the US dollars not valuable right or the fact that we can't actually track all of the physical

Dollar transactions that now we don't know you know how what the transaction numbers are etc again the value of a currency is that people elect to store their wealth as they store a value and that they will use it as a medium of

Exchange Bitcoin is doing that more and more every single day right Brian but according to that point the finite supply though pump with the 21 million to start does it concern you though the people are not just simply treating it

As a currency not today you know they may have adopted that initially the white paper son may still do so but the majority of people are looking at this this as a huddling asset one in which they want to essentially ascribe value

By holding so that other people can essentially join into the ecosystem and increase the value by default through the acquisition of the asset again that those are two different things and you're conflating them right so again we

Don't say to people who save US dollars that oh you're you're participating in a system where saving is bad right actually the structure of the US dollar because of inflation punishes people for saving think about that for a second if

You say your wealth in dollars you are punished that is absurd so instead we now have a currency where people are incentivized to save to not spend their wealth that's not a negative thing that's a positive I understand what

You're saying but is it natural for me to expect in the conversation of currencies to essentially purchased an item or such as an asset such as a Bitcoin and just naturally expect by by default about

Acquiring that as it expends as the ecosystem expands that that particular asset will increase in value because we haven't seen that so much with currencies of the day or even in history are the kind of breadth and

Scope of Bitcoin in this magnet the speed in which it's moved in its value would suggest that the currently buy function and for gold for example gold has gone up 40 X since we build standard right but it's also it's it's not

Treated university globally as a currency why is it not well it's not it's not it's fundamental use case it's using utilized essentially first and foremost as a store of value it does have the functionality of a currency but

The point I'm making is that the paper currencies of the day they replace that as you would be aware and so the expectation globally for most paper currencies is they don't tend to do 40 X and so my concern is if we're moving

Into a digital currency such as BTC is it natural to see this kind of 40 X plus kind of movement with something that essentially we're talking about trying to evangelize trade evangelize you know borderless money yeah again the the

Currencies of today are structured to lose value over time and what that does is that benefits the elites and punishes the average citizen when a structural issue so saying oh but this does something different of course

It does that's part of the value proposition it said it does something different right it it completely allows you to protest the fact that a government can print away your wealth right

Imagine waking up and you know take in Turkey with the the lira recently people went to sleep and they woke up the next morning and if they had a hundred percent of their wealth in cash their cash their wealth was down 25% it's

Incredible right then again if you look at over long periods of time what has every single fiat currency done they've lost value what has hard assets they've increased in value it's because the fiat currency is actually being

Devalued against that weather and we're talking about stocks we're talking about real estate we're talking about gold and we're talking about Bitcoin right these quote-unquote real assets right things that actually are not fiat currencies

They continue to appreciate this is not a Bitcoin specific thing this is a can asset thing and the fiat currencies just happened to be the odd one out not Bitcoin right well let's talk about the the potential triad threat its regard to

The other people's coins emerging enterprise coins such as Libra and then the potential for digital currencies coming from the top down from government arguably and Andreas Antonopoulos would agree these are serious threats

Potentially to the premise of BTC yeah you know if what you say is true where you can have this really interesting interplay between an asset that accrues in value coupled with you know the existence of some sort of finite supply

Driven currency then are you concerned at all about agent centric systems those that have you know opens inflation that aren't necessarily finite by design in monetary policy are you concerned about Libra with their kind of dominance or

Suggestion of playing in space and obviously the government as well for sure and I was I've got about five more minutes here excited we've got over but the my general belief is that two components visual there's the technology

And then there's the monetary policy that dictates or differentiates that the technology right and so I fully believe that the world right people in the world are going to adopt the technology right everyone is going to use digital

Currencies in the future the bigger question is not about digital currencies versus non digital currencies it's about the monetary policy differences between the digital concepts right so you could look at a world where everybody's doing

A fiat currency actually digitizes itself right China's doing this now and others are thinking about it then you have Bitcoin then you have something like Libre then you have I'm sure there will be many others that come along with

It each one of those has a different monetary policy the technology is very similar the same in terms of a digital currency it is the monetary policy were the differences and so what I think that we're gonna have is we're going to have

Competition among monetary policies right it is going to be very easy for an individual to store their wealth in a variety of different currencies right today if I live in the United States through the easiest for my wealth in the

US dollars it's actually really hard for me or there's a lot of friction for me to acquire other currencies well with digital currencies asking to become much easier and so now there's going to be a free market competition among the

Monetary policies and the best one right because people will elect to move to that currency and so I tend to look at this as the monetary policy comp competition is much much more important than the non digital currency versus

Digital currency conversation right now with regard to you know overall the the way in which people call out altcoins obviously you've seen different words come up like shit coin out coin you know a Bitcoin Bitcoin maximalist what is

Your position on this and I you bullish on altcoins are you bullish on the overall ecosystem or are indeed are you indeed a Bitcoin maximalist as many would you know suggest that you either are that or a Bitcoin er yeah so I think

That there's a whole bunch of in there so one I don't really know what a maximalist is right in the sense of I think that there's a whole spectrum of leaf right and in terms of Bitcoin itself obviously I'm very bullish on it

I've articulated my thoughts over and over again as to why that is I mean how I think that this is going to play out right and so that is kind of the first investment thesis that my partners and I have the second is every

Stock bond currency and commodity will eventually be digitized over time right and how that plays out there's a bunch of debate among people but I think we're starting to see that already happening and and so as you look at those two

Things right what I have less confidence in is something like the the utility tokens of today now I say up today because it's very important where if you look at you know a lot of the icos and all the stuff that occurred our general

Summary of it was this is fantastic for the entrepreneurs I think in a raise non-dilutive capital right that they're able to quickly use it as incentives to start or solve the quickstart problem of a cold start problem all these

Advantages for an entrepreneur as an investor horrible investment opportunity right because most investors in the ecosystem raske how high can something go we and our our investors tend to ask how low can it go right and so if you

Look at something like an equity investment we have liquidation preferences there's assets that can be sold later on expansion you have some floor of the investment when you look at something like the tokens that were used

In the ico kind of mania right there was no floor everything could go to zero and so we were less concerned about the upside and much much more concerned about the downside and therefore we chose not to participate right Primus I

Even out to find any I and nei nei cos it does that also include the IES that follow through we haven't done any of them yeah so our whole thing was we wanted to buy things that were equity debt or claims on cash flow right that

Was really kind of our our view of the world and still is today now when we go out and we look at and say you know what could happen in the future I would argue that Amazon AWS kremens is a utility took right it's not actually a token but

It is something that you use to pay for Amazon AWS or is right and it looks just like a gift card if you look at Starbucks right if you use the mobile app in the store right you are essentially using a

Quote-unquote utility token although it's not actually a cryptographically secure token right but has very similar mechanisms to it and so I believe that there will be plenty of examples where people actually end up creating some

Sort of utility or incentive right that is very similar to what we saw utility token space the difference is that there was a lot of greed that was going on with those utility tokens and therefore it wasn't actually trying to solve

Problems right it was more of technology and solutions looking for problems to solve right and those also agree the question of you know fundraising utilizing it both as a fundraising mechanism and then moving forward and

Trying to write as honest hold an ACO right what about any in the context though of the emergence of other narratives we've seen some kanto can suggest they are essentially building blockchain businesses and that they

Potentially can have use cases depending on with their economic modeling matches there's others that are emerging as arguably competitors to Bitcoin in trying to be layer one currency solutions so do you see that playing out

As well do you regard anything of value aside from BTC and do you have that in your portfolio anything other than BTC here's a here's a hot take that I'll leave you with is I don't think narratives matter right the reason why I

Don't believe narratives matter is because narratives are the conclusion of the consensus right so if you think about that that means that a narrative is is derived by a bunch of people coming together and saying we believe

Acts as an investor we know that doing something different than the crowd and being right is where the greatest returns occur and so the narratives I actually believe are a signal as to what the crowd believes and if you're able to

Find something that is different than what the crowd believes and you're right that's where the best returns are and so narratives to me are not very interesting and they don't actually matter is respect isn't belief systems

Essentially type of narrative now if we adjusting the currencies or belief system as you mentioned underpinning that isn't that a type of narrative but but the difference between bitcoin is that bitcoin is valuable is not a

Narrative right it's a data driven argument I can prove to you that bitcoin is valuable how because if a can will go and I will show you data that suggests there are millions of people that are holding this that has value there's a

Market price that is derived by a marketplace etc right that's not I'm here that's right I'm not underpinning that though what's the power of the social phenomenon but it is you know and also with regards to social converse of

This question as well what's the power of the people when it comes to the context of BTC do we actually under undervalue that as something that does sustain and its value but again bitcoin is devalue ball is a data-driven

Argument anything that is why is Bitcoin valuable is a narrative and those narratives don't matter because those near and so the narratives are simply they are attempts by people to explain what is happening but they don't usually

Change what happens right it's not like all of a sudden we start we change a narrative and then there's an explosion of adoption right that isn't really happen instead what happens is there is an explosion of adoption and then

There's a switch in the mirror right and so the narratives are lagging indicators whereas instead I think a lot of people believe the narrative is what drives the activity and so I don't really pay attention to the narratives because I

Have one believe that they're gonna change over time multiple times and then to is the narrative to me it's just what is the consensus belief today and if you can actually do the opposite and you end up being right that's where the biggest

Opportunities lie right and now you can send it although that consensus itself if you're suggesting that it has absolutes and it's finite and it essentially text to the text century context driven some would argue the

Opposite and suggest there are elements of mutability of the consensus itself there are core agents can actually drive that from a social consensus perspective so is it is it by core design vulnerable in itself the

Cause fundamentally the hard cap can be changed the final supply can be changed that the box the block size can be changed there is a degree of mobility with regard to consensus so are you concerned at all that there's those

Social implications as well because obviously we rest on the laurels of the technology we trust that there be immutability but is it indeed the case we don't trust the immutability we verify the immutability there's a huge

Difference there there's no trust that goes on at all but we trust that we trust inherently in the formula that we see presented so if it's socially determined that it can be altered then surely that's a relevant

Argument to put forward it's not relevant at all because you're not trusting anything if there was anything that changed you would see it you would verify it yourself that throws a change respectfully if if it's possible to

Change the fundamentals that you're purporting you know to change the hardcamp to change the block size to change aspects that are fundamentally the asset that you put forward does it concern you that that's possible to be

Done why would that be concerning you would have to get a majority of people to elect to make a change and everyone would know that that change was made and therefore if there was a change made

Then people would have to determine whether they believed that there was value or not right but that's the question I'm making is that is that potential because it can be done is that does that put the integrity of the whole

System at risk because that's exactly why different Bitcoin Forks happened that very reason and the mortgage spoke and all of them are not valuable all right so maybe I have the argument narratives then is it you talk about

Network effects that's part of a narrative in itself is the great value of BTC the network effects a network effect is not part of a narrative a network effect is a data driven argument that can be proven

Okay right if the case is that it has strong network effects what drives that well money is inherently viral right and the network of fact is that every say it's a structure thing right every person who joins let's say as a miner

Makes the network stronger therefore more valuable to every other person on the network so there as you get more and more people to come into the system from a computing power standpoint you're actually making it more valuable to

Everyone else right so that is just the definition of a network that's not there it's just well two definite right so essentially you know the onboarding via the technology the mining essentially that's where you're arguing is the core

Asset but can I ask you why are so many in the crypto space such you know vocal advocates for BTC in this sense we're reasonably it could be deemed putting forward a narrative putting forward their own agenda and really push pushing

For a greater expansion of the BTC ecosystem that there is more narratives and there is more shilling of any sovereign currency than Bitcoin it's not in close right look just look in the United States every single politician

Every single banker every single business person etc they shill the US dollar right they price all their goods and dollars they constantly talk about the dollar they're constantly explaining the value of it we have you know the

President is tweeting about it etc Stewart jill has a negative connotation but instead it said we're talking about Bitcoin very very different conversation because guess what there's much more conversation around the US dollar then

There is Bitcoin well I think that again this is a perfect example of why narratives don't matter is whether people say chill or some other word or whatever it doesn't change the value that Bitcoin has and it doesn't change

The fact that more and more people every single day are choosing to elect them put their wealth in a non-correlated asymmetric asset that's based on saw where that is super super super verifier does it concern you though that there's

An intractable connection between BTC and fears hey I need to go I'm 20 minutes late to this thing yeah do you want to ask one more question to round up no you can just not but is there any white top again license to finish like

So much to including having the time coming later this week I could try to find time that would be awesome that way I'll be all put it all together sounds good cool did you want to just finish it this up again yeah what do you

Want it what do you want me to do well if you're willing just well as you'll be great because right there internet it really it's like it's really bad right it's really the prior to keep going let's catch up at the end of the week

All right sounds good alright thank you say my bye

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