The Last Trade E050: Bitcoin’s Monetary Realities with Bitstein

Brian Cubellis (00:00.622) You're rolling. All right. Well, welcome to this week's edition of The Last Trade. A little bit different format today. Marty is it was unavailable for this for this time in the end. So I'm going to pretend to be Marty as the the pseudo host of the show today. And also this week we have Michael Tanguma, our co -host is is out for a family engagement. So Mitch is joining us in Michael's place. And our guest today is Michael Goldstein, otherwise known as Bitstein, who's a bit of a meme legend and, and I guess curator of important Austrian economics and Bitcoin thinking and writing via the Satoshi Nakamoto Institute. So I'm super excited to have bitsteen here today. Haven't figured out if I'm going to call him bitsteen or Michael. It's going to be a tough one for me since I've only known him as bitsteen on Twitter. But before we get into that, Mitch, how are things for you? What's new with you lately? I think you have some news for our audience. Yes, I've been on the show a few times when I was working at BitGo, but I've joined DonRamp to be chief revenue officer. It's a been incredible last few weeks, you know, working on this side of the business after helping build, you know, the core infrastructure of OnRamp at BitGo. But mostly just wanted to be spending my time helping make and hold the institution, the standard and focusing my energy to make that a reality. So it's been a privilege. Yeah, we're super excited to have Mitch on board. And I think Mitch, like the rest of the team at OnRamp has gotten gotten hooked by the idea of what multi -institution custody can do, can do for Bitcoin, can be for the world and what it can represent for this new era of Bitcoin finance and all the possibilities that come out of it. So, Mitch has the bug like the rest of us at OnRamp do and super excited to have you, Mitch. Appreciate that. All right. So today we have Michael Goldstein and Brian Cubellis (02:25.006) Michael, I'll let you introduce yourself. You'll do a better job than me of all the things that you have done over the years for Bitcoin and what you're working on these days if you wanted to dip into that too. Yeah, the man, the myth, the legend, the best memes, the best meme videos in all of Bitcoin. If you haven't seen them, you probably have seen them and you may not have realized that they're from Bitstein, but Michael, welcome to the show. Hi, Marty. Yeah, thanks for having me on. No, Jesse. Yeah, no, thank you for the kind introduction. Yeah, my name is Michael Goldstein. I've been known as Bitstein for about a decade now, I guess. But yeah, in Bitcoin, what have I done? Mostly just sit around and post on Twitter. But yeah, I founded the Satoshi Nakamoto Institute in 2013 as a way to curate, as you said, the sort of best ideas in Bitcoin and the different intellectual traditions that went into either making Bitcoin what it was or allowing us to sort of best understand what Bitcoin is. And so that's drawing from the cypher punks and the crypto anarchists that preceded Bitcoin. It comes from the Austrian economic tradition, which I think is the sort of best economic school of thought for being able to make sense of Bitcoin thanks to its incredibly brilliant and robust monetary policy, or not monetary policy, monetary theory. And so I... That's what I've done. That was in rather a bit of a dormant state for a number of years. But recently with the growth of Bitcoin and watching Bitcoin actually do what we always thought it would has inspired me to take it on much more seriously. So we've now formed a 501c3 tax exempt Brian Cubellis (04:48.43) a nonprofit, as a vehicle for expanding the Satoshi Nakamoto as it is, it's instituted as it is today, into, hopefully a premier world -class, educational platform. Fantastic. Yeah. And for, for those who, so I wasn't around in 2013, I came, I arrived in the scene 2016, 2017 and the people that had been inspired by Bitcoin in the years before I arrived, it sort of seemed to me that there were a few different channels where they like either got orange -pilled or found the rabbit hole, however you want to describe it. And it seemed to me that those main categories were either Andreas videos, maybe using Silk Road, or perhaps they were originally a cypherpunk. And so then stumbled into it through, through that channel. But then the last big category was the Satoshi Nakamoto Institute and the, the compendium of information that you and, and Pierre Richard put together to present the case in a coherent framework for why this thing makes sense and what, and what it re what it is really, because I think you can speak to this Michael of. Back then, I don't think most people engaging with Bitcoin understood that Bitcoin was digital gold in the spirit of Austrian economics and that that still had to be sort of surfaced and bubbled up to the top in terms of how people thought about Bitcoin and how it fit into the world. Is that a fair characterization? I think there's some truth to it. So we were certainly not the only and certainly not the first to talk about Bitcoin and Austrian economics. If you really go dive deep into the old history of Bitcoin talk forum and such, you'll find plenty of people discussing various ideas in Austrian economics. I think we're among the first to do, I think, more systematic analysis of actually trying to Brian Cubellis (07:13.594) breakdown concepts in the Austrian theory of money and relate it to Bitcoin and show how nicely Austrian economics can explain Bitcoin and also what that means for the future of Bitcoin. We were heavily inspired by pre -existing literature. So there is a wonderful master's thesis by a man named Peter Surda on the economics of Bitcoin. And he did a great job laying out all of these sorts of concepts. And in many ways, a lot of our stuff is kind of lifted from from what we learned from from him. So we were not the first, but we were the ones I think we were probably the most vocal and. Shall I say like hard line, you know, on, on that topic. Yeah. And, and so, so we can, I guess now dig into my favorite piece of yours. and probably the piece you're best known for, which is everyone's a scammer, which is a fantastic title. First of all, it really makes the, sorry, that's my dog. anyway, I think that's a fantastic title and an even better article. And Michael, I'd love to hear your explanation of where that came from. I guess the short synopsis of what that article makes the point about. And then in particular, I'm very curious to see if that has stood the test of time in your views. Was it predictive of the continuing trends in Bitcoin and crypto? Yes, so, Everyone's a Scammer is actually one of the few articles I've written, but people like it so much that they think I've written much more than I have. So I wrote that in September of 2014. So it was a little after I had gotten out of college, which, you know, college was a wonderful time. Brian Cubellis (09:34.606) not because college education is worth it, but because quite the opposite. It gave me way too much free time, which allowed me to deep dive into Bitcoin and these topics. And it was in that time we had a group called the Misi Circle, which is sort of the preceding organization to the Satoshi Nakamoto Institute, and that it was an Austrian economics reading group I had founded to just... dive into all kinds of random topics. When we learned about Bitcoin, it quickly became the Bitcoin circle. And that's where a lot of this thought was fomenting. So over the course of 2013, 2014 was when the bulk of our sort of economic analysis was put together and really just how to think about Bitcoin. And further, why we think Bitcoin is going to go to the moon and why, you know, even in early 2013, as soon as we learned about Bitcoin, there was this feeling, it's like, okay, well, this is clearly the greatest money ever, so it's going to replace the Federal Reserve. Let's get on it. With all of that in mind, you know, by end of 2014, there was this feeling, it's like, if everything we're saying is true about Bitcoin and its potential. You know, there are no backseas in Bitcoin because, or let me step back. Bitcoin is destined to become the global reserve currency. What that means is like at the time the price was, I guess that may have been around the top bubble. So we could even call it as much as a thousand dollars. That is well below what the final price would be expected to be if Bitcoin became the global reserve currency. And this time period that we live in is a very unique one in that we don't experience very much in history the rapid monetization of a new good. And Brian Cubellis (11:57.518) our place in that history needs to be taken seriously because it only happens this once. This is a sort of once in a, I mean, with Bitcoin, you know, it's arguable, but this is a once in humanity event. You know, that's the extremely bullish case, but, you know, that's, that's very well possible. So it needs to be taken seriously. And so everyone's a scammer was a was was basically about taking that very seriously and taking your long term vision of Bitcoin very seriously. At the time, just as there is today, there is this view. But I think it was even stronger back then because there wasn't as much there wasn't as much meaning around like there was no stacking sat meme. HODL was still a new meme. Obviously, people knew to hold, but a lot of these memes that we take for granted today that tell us to stay humble, sex hats and all that, that didn't exist at the time. And a lot of people were under the belief that in order to make Bitcoin become the global reserve currency, you need to start spending it. So you need to go find merchants and you need to be giving them your bitcoins in order to get the economy going and spur adoption and such. And we had written a number of articles that presented a different way of thinking about this. So there was another one with a provocative title of, I'm hoarding bitcoin and no, you can't have any or something along those lines. And it was pushing it back against this idea. saying that actually what drives Bitcoin in the big picture has more to do with the increasing reserve demand, you know, just like demand to hold Bitcoin rather than the trading itself. And in fact, when you're when you're selling Bitcoin, which is effectively what spending Bitcoin is, you are now stating to the market that I value Bitcoin less than whatever it is that you're buying. There can be incidental Brian Cubellis (14:22.926) you know, benefits to adoption when this happens. So maybe a merchant who accepts Bitcoin will be a more steadfast hobbler than you are. But if that's the case, then they're kind of scamming you in the sense that they've gotten you to believe that they are at least they've like enabled your belief that you should want, you know, a Lambo instead of bitcoins for. you know, longer into the future, because once again, it's like, well, if Bitcoin's, I guess today it's, you know, 66 ,000, if in the future, it's going to be 10 million that represents a very large opportunity cost. So, yeah, basically the, the article was a way to, kind of, you know, in a, in a somewhat cheeky fashion, look at all of these, all of these ways in which people, might find themselves putting their short -term interests ahead of their long -term interests. And the heuristic of everyone's a scammer was meant as a way to kind of use your long -term interest as the default and just assume if someone wants my sats, they're probably just like, they're just scamming me out of my sats because I care more about my long -term interest. Now that doesn't mean that there's not a reason why you might want to actually spend your Bitcoin, but you have to keep that in mind very seriously because of that fact that there's no back seas. Once you've spent it is unclear that you will ever be able to get that amount of Satoshi's back because we don't know when the price is going to go up at a meteoric rate, it could happen tomorrow. And so you really have to think carefully, carefully about how you engage with the Bitcoin economy. And that's, that's basically the purpose of the article. Yeah, it does. It's so effective in, in flipping people's natural thought process about, you know, trying to make more dollars, but you know, by speculating on Bitcoin. Brian Cubellis (16:45.934) and instead flip it into, no, this is the gold rush. This is the land grab. This is the thing you want to end up with. And I think that actually, I think it was inspired me in part for when I wrote Bitcoin in the American West, which I dig it did a deep dive into how the development of the Bitcoin frontier is sort of tracking the same sort of trajectory that the American West, the development of the American West over, you know, the 150 years post the Louisiana purchase. Yes. Also, also followed. And, you know, the core theme there is that that that's a ultimately a land grab, right? Where you're people who see the opportunity in the in the American West go and stake a claim. And, you know, we we get we got memes out of that era, too, of. go West young man is sort of the equivalent to stay humble and stack sats in my opinion. because it's ultimately just good advice in an era in a, in a time when the world is changed because of a new, you know, a new frontier, a new asset landscape, that people should, should seize the opportunity of. And it, yeah, weirdly I have to credit, your, your piece for sort of inspiring that like gold rush. mindset of here's the right way to engage with how to think about Bitcoin from a personal financial perspective. And then importantly, how that game theory plays out of like, it's ultimately a competition. We're in a global competition right now for staking a claim to Bitcoin. And know, folks like entities like MicroStrategy are are the ones that understand that and most of the world is still sleeping on it. What I really appreciate about sort of like thesis of the piece and it's a couple of years before, but it does strike some of the nerves that ended up, I'd say impact in the block size war and the clash of store value versus medium of exchange and use cases there. And ultimately if the infrastructure would change. Brian Cubellis (19:10.358) on block side to facilitate medium exchange better compared to store value. So I think it was a couple of years early in noticing that. Yeah, on that theme, Michael, so I think this is one of the harder things to wrap your head around if you're coming from the classical Keynesian understanding of money, that a new monetary good has a path dependent trajectory from collectible to store value to medium of exchange to unit of account. And you have to go in that order in order for it to become, to make it to that next stage. And I think that that's actually something explored well in shelling out, which I read on the Satoshi Nakamoto Institute. I wouldn't have found it otherwise. And that one sure hit me hard. Was that idea of a path dependency of a monetary good understood in the Bitcoin space at all back then? It sort of feels like it's still not well understood that, in my opinion, medium of exchange and getting businesses to accept Bitcoin kind of doesn't matter at this point. And that's because I'm such an adherent to the idea that Bitcoin's big use cases, store of value and being a savings technology that allows people to store their purchasing power today and have it grow over time in purchasing power because of increasing scarcity from the reduction of the block subsidy. But in 2013, 14, did the Bitcoin community have this idea from the Austrian world yet of the path dependence of a new monetary good? Well, I'll start off by saying it's like I don't I don't fully agree with that way of conceptualizing it. I think that there's a lot of I think there's a lot of truths in it, but I don't know that it's necessarily I don't know if that's actually the totally correct way to frame everything. But there's a lot of language in there that I think has to be sort of sussed out and parsed and and Brian Cubellis (21:38.196) And so I love it. Really nail it down. With that being said, I do think that, you know, in the past, there really was this very strong feeling among Bitcoiners that you got to be spending Bitcoin, we got to get merchants involved and so on and so forth. I was basically the same. Like I remember in 2013, anywhere I'd go is, hey, do you accept Bitcoin? Do you accept Bitcoin? And, you know, and everyone worked and there was no reason for them to be accepting Bitcoin for a variety of reasons, especially just not having any clue what it is. If you have to think like today, everyone knows what Bitcoin is, or at least like in the sense that they've heard the word and they know that it's some kind of digital money thing. In 2013, if you said, hey, do you accept Bitcoin? The most common response you would get is, what is that? People had literally never heard of it. And so that is something to know about the difference between then and now. But yeah, at the same time, yeah. So there was a lot of people who were gung -ho on trying to get merchants to accept it because that's how you know something's in money is because people are spending it to buy things. And colloquially, people call that medium of exchange. I... think that these words are somewhat misleading in the sense that a medium of exchange is not based on specifically the thing that you're handing over during a trade per se. Because just as an example is when you go to a store and you swipe a Visa card, You are not handing over dollars. You are handing over like a visa database transaction or something and dollars get settled later. So the medium of exchange in a, in a praxeological sense. So in the study of human action, medium of exchange is more precisely defined as a good acquired for the purposes of indirect exchange. Brian Cubellis (24:02.894) It is a good that you acquire not because you want to use it yourself or not because you want to consume it or put it to work as some capital, but because specifically you believe it's a good that others are going to want that you can then use to trade them for what you need. And of course, there's all the double coincidence of want stuff that I'm sure your listeners are aware of. And so. When people talk about a minimum of exchange versus store of value, I tend to in my head, the way I think about it is not medium of exchange versus store of value, but more method of payment versus, you know, savings vehicle. And I view those like method of payment is just a specific technical way that you're transferring medium of exchange and store of value. You don't literally store value. You can't, you can't like, you know, value is not this, quantifiable, metric, like thing per se. That's like, I'm going to go put value in this box and it's going to stay there. And when I come back, it'll be the same value and stuff. store of value is more of a, it is a, a shorthand that is used to describe a lot of market dynamics that goes into, you know, a good. a medium of exchange, I tend to think about it more in terms of a medium of exchange over the long run. So the reason we have a medium of exchange is because we're uncertain about the future. We don't know. We don't know what's best right now. You know, I could I could go invest in this or I could go invest in that. I don't know. I'm going to hold on to money because that way, when I see something that actually, you know, suits what I need at this moment, I will have the good that is most likely to be accepted on the other side to be able to spend and acquire that good. So store of value is asking the question of when I look at the different potential media of exchange that exists, everything from wampum to cows to shells to gold to dollars to Bitcoin. Brian Cubellis (26:26.766) When I look at that, what are the media of exchange or the specific medium of exchange that I believe will have the most demand in the future when I want to use this thing? And so there's a sort of speculative aspect to all of that is there's a speculative aspect to all of human action. But when you're acquiring a good and you're acquiring it for the long run, you're effectively that is what we kind of call a store of value because it's like you're thinking about what will the value be of this well into the future in the marketplace such that this can presumably allow me to acquire whatever it is that I might need in the future that I don't know yet. So the I don't really see that that path dependency only because at least in those terms, because I think that they're describing just the functions of money as you're always using money. I think that even today, you know, we have Bitcoin as a medium of exchange because I acquire my Bitcoin for the purposes of indirect exchange. It's just not indirect exchange today. It's a quote store of value because of that very fact that I'm thinking about my indirect exchange into the future. So I'm choosing to hold the medium of exchange that I think will best suit that need, not just tomorrow, not just a quarter from now, but 10 years, 100 years down the line. And then unit of account. We also have on the Nakamoto Institute an article called Bitcoin is the best unit of account. And it's about how, and this was written in 2013, it already is the best unit of account. And you don't have to go through this process. That process is more of, the process of everyone realizing that it's the best unit of account because on an individual level, what is a unit of account? A unit of account is me doing my accounting books, you know, taking stock of what are all the, what are all the things I own? What are the, all the liabilities I own. Brian Cubellis (28:44.334) What is my cash flow? And so on and so forth. You know, basically running a business, whether it's as a personal finance matter or as an organizational business. And when you add all of those things up, there's a question there, which is, how do I denominate this? And in the United States and in a lot of the world, people denominate in dollars. It would be very silly of me to start denominating in pesos. I probably would not do very well. in the United States if I was doing it that way, but I could. So people have to ask, what do I want to denominate? Because profit and loss ultimately is a psychological thing. Anything can be profitable if you prefer it, given the subjective nature of value and such. So with unit of account, you are making the decision of how do I want to up my profit and loss? How do I want to determine how I'm doing economically? So everyone today and all the way since January 3rd, 2009 has had the choice of, do I want to use dollars or Bitcoin as a unit of account? Now at the very beginning, Bitcoin probably would not have been a good unit of account because there wasn't even a price attached to it in the marketplace. So you would have no way of doing that accounting. But ever since 2010 or so, there has been a price and you can do accounting. And ever since that moment, if you chose to look at all of your economic activity and price it in Bitcoin and make the decision of today, I want to have more Bitcoin on the books than I had yesterday, instead of the typical, I want more dollars on the books than I had yesterday. Anyone who's done that and done it with a long term view in mind, you know, four to five years into the future, at least all of those people have have done tremendously well relative to had they chosen the dollar as a unit of account. So in that sense, it's like unit of account is not the capstone, except in terms of for the other person that you're trading with. Brian Cubellis (31:06.958) How much can you expect them to also be using Bitcoin as a unit of account for themselves? So there's a bit of that distinction there of looking at it from the individual perspective, which I think all of those sort of functions, so to speak, are already present in Bitcoin, to looking at it from a network perspective of what is it that we can sort of expect the economy as a whole, just the general economy, to be looking at regarding this. The other important thing there, sorry, I see that you're like opening your mouth. It's fantastic stuff, yeah. Okay, okay. So I'll continue. The other sort of important thing here and what was motivating us back then is like, okay guys, you're saying it's a land grab. It is a kind of land grab. And it's like you have this one choice, you know, this one shot, you know, &M's getting, you know, all the quotes in there. You want to make sure you get it right. With that in mind, if you recognize Bitcoin as such, you've studied it, you see Bitcoin a certain way and you make the entrepreneurial judgment based on your knowledge of how money works, based on the current situation of an economy. the economy, et cetera, et cetera. If you've come to the entrepreneurial judgment that Bitcoin is so good of a money that you think everyone's going to want some to, and they're going to use it as their medium of exchange in the future to the point where it's a global reserve asset and so on and so forth. If that's your view of Bitcoin, then obviously you are indeed going to want to grab a lot of land and you're going to go out into, the West and you're not just going to grab, you know, the, you know, 40 acres, you're going to try to grab, you know, a whole territory. And so a lot of the arguments around, you know, so -called Bitcoin maximalism, which we effectively, in a sense championed, it wasn't, it wasn't named. It was, it was, it was named as a sort of pejorative towards you, but, Brian Cubellis (33:30.55) You know, what I've always argued over the years is that it's more descriptive than it is prescriptive. It's not, you know, saying like, you must do this. It's more I believe people are going to have these ideas about Bitcoin and that Bitcoin as an economic good is going to have a given performance such that people are simply going to want to hold it more than more than they're going to want to give it up. And this is something, if you go into the literature, Ludwig von Mises talks about this, Karl Menger talks about this. When a good is being identified as a medium of exchange, a sort of new medium of exchange on the market, entrepreneurs are going to want to hoard a larger amount than they otherwise would. because of this sort of speculative entrepreneurial judgment of what the future holds. And so that is the process of what we've we've seen and also the one that you're probably going to want to make choices based on and why everyone's a scammer if they're trying to get in your way of of getting there. So, yeah, so I actually sort of disagree. Just to sum that up, I kind of disagree with that particular way of At least the labels around the path dependency, I don't think that they're as clear as they should. And that also puts it on me to try to come up with a better way of really nailing that down with the economic terminology and concepts. But at the same time, the basic argument that you're making that the market we would expect it to want to hold more than be spending. I fully agree with that. And I think these are the reasons why. That's fantastic. Yeah, I loved all the nuance in there. And I think ultimately we're on the same page there. And it is around the labels specifically. I agree that I think that objectively Bitcoin is the best store of value, the best medium of exchange and the best unit of account. Brian Cubellis (35:54.958) And I think in many ways to be a Bitcoin maximalist is to recognize that sort of how you talked about it of to be a Bitcoin maximalist is to adopt Bitcoin as your unit of account fundamentally. Yes. A recognition of it is objectively the best unit of account that I could use. And that means that we are as Bitcoin maximalists, who knows how many of us there are in the world? Maybe there's a hundred thousand. that might be generous or might be less. But I think we're the first 100 ,000, the first 0 .01 % of the world population to recognize that this is objectively the best unit of account to reach that end state. But it is simultaneously the best minimum exchange and the best store of value. And I think the store of value function is the thing that imposes itself on the world. as economic reality, specifically because of the halvings. As you may know, Bitzine, I'm a fervent adherent to the importance of increasing scarcity as the prime mover of why Bitcoin gets more valuable over time and induces adoption out of self -interest. And so I think that that objective reality is something that the world is slowly recognizing. And that will be that people will figure out that this is a good store value that helps me grow my purchasing power by saving in Bitcoin much sooner than they will realize that this is the unit of account that I should organize my entire life around. And I think that that how we the labels are the difference here of like. It is a gross generalization to describe the evolution of this monetary good into four discrete buckets like that, when it is really a function of how the bell curve of technology adopters progress through each of those independent stages of how to view Bitcoin. I think a large portion of the world would view Bitcoin as a cute collectible that has some value. So a huge portion of the adoption curve has reached that stage of understanding of Bitcoin, but very, very, very few have reached the unit of account end state. And I think that the... Brian Cubellis (38:19.926) store of value function because of increasing scarcity is how Bitcoin forces the world to adopt it. And then in doing so creates the network effects that are the bridge between store of value and medium of exchange, because it's the intersubjective value of I recognize that somebody else wants Bitcoin that helps change how you transact from dollars into a currency that both sides want, right? The double -sided thing that you alluded to earlier. And so you're right, it's ultimately about labels, but I think we're kind of talking about the same thing from different angles. And ultimately, it's the most beautiful topic in the world because it's the whole story of Bitcoin's monetization and conquest of the financial landscape. I think that... please. Just to pull on one little thread here, the idea that that small group of the Bitcoin maximalists that are living on a Bitcoin standard that understand the inherently in every single purchase or economic decision they're making, they're making a sound economic decision of, is this, do I need this good more than I, you know, where is that more valuable to me than? the idea of holding a Bitcoin for the future with the expected value of what I anticipate that Bitcoin to be. And I think the when you talk about the land grab, there are so few people today that are viewing Bitcoin with that framework that are making that sound economic decision every time that they are transacting. Yes, I invite people to go read a rather long article that I had written called a node world order. They can find it on my sub stack or on the Bitcoin times where it was originally written for. And I kind of in many ways make a high view of my sort of entire Bitcoin worldview in a sense. But one of the things that I always like to do and I try to focus on in the first bits of Brian Cubellis (40:45.07) that article where it pertains to Bitcoin in particular is I always like going back to the fundamentals of economic concepts and such because it can bring us more clarity as we build up and try to understand this. So I had mentioned the concept of uncertainty. And I think in Austrian economics, this is really one of the key things needed. to really understand monetary theory. And it kind of gets to this like core logical reason why we would want to use a medium of exchange at all. And so when you start to put things in terms of uncertainty and how different properties play into Bitcoin's ability to be more certain, the market goes towards the good. that can provide the most certainty around that particular good. And so when you're talking about scarcity as a prime mover, well, one of the biggest uncertainties, especially if like you're holding the dollar is at what point are they just going to print a third of all money that exists? It's like, well, you just wake up and then in 2020, 2021, they do exactly that. And. Today we are dealing with the fallout of such a thing. Whereas the Bitcoin monetary policy has not budged even a single Satoshi. And all of this can be fully verified. And this is why Bitcoin is so important. It's why it's so important that people learn about nodes and why they might want to run a full node for themselves is because it gives them more certainty about the thing that they are trading. which lets them overcome more economic problems that they face into the future. So do I need, I want to have goods that can handle trades that I need to do today. I want a good that I can also hold onto to trade in a hundred years. I want a good that I can trade in very small amounts and I want a good that I can trade in very large amounts because sometimes I want to buy a house. Brian Cubellis (43:08.992) Sometimes it's just, you know, a burger, sometimes it's a house. You know, I want it to, you know, basically all of these different uncertainties on the scales, like on the dimensions of space and of time and of scale play into what good has the properties most capable of handling that. And it's from that that I do fully agree with you. that scarcity is such a core part of what makes Bitcoin tick. And it's why 21 million is perhaps the very most important meme in all of Bitcoin, not because the other things don't matter. In fact, 21 million can only happen because of certain other things. But it's 21 million that is sort of the secret ingredient and that makes it all function together. I love it. Yes, totally agree. It does make me wonder what are your thoughts on the infinity divided by 21 variant of that meme? So it's been a while since I've thought about this, because it's not a meme that's ever really stuck with me. On the one hand, I appreciate the idea of like, well, literally everything in the universe will be priced in Bitcoin. That being said, I don't think that it's an accurate portrayal of what the price actually is because you can have more material wealth than the total value of the monetary economy in that the total value of wealth can be higher because not everyone is selling all of the wealth at all the same time. Brian Cubellis (45:11.694) So there can be a stock of it. Now, if they started selling more stuff, the price of Bitcoin would go up. But at any given time, it's like, you know, I'm I'm I'm on a computer right now having this conversation. It's like as much as I should sell all the chairs and everything, it's like, well, I I actually do want a computer because I want to talk with my my friends online. And so. There's still wealth that's just stored as wealth, and you can price it in Bitcoin, but it's not necessarily representative in. represented in the Bitcoin price itself completely. Or like it kind of is like there is this grand order book of everything is like is this making sense? Like it's like everything is is priced in Bitcoin, but not everything is actually the the the current price of Bitcoin. The actual market price of it does not necessarily reflect. literally everything because the current market price only reflects the people actually buying and selling things for Bitcoin. The small subset of available for sale supplies and doesn't accurately encompass the true the total value of of or doesn't neatly encompass the total value of all the Bitcoin. Yes. So I would just caution people from from treating it as a. literally the prices infinity or something like that, because that's that's not the case. But it is it is true that we we could see a world in which pretty much everything humans are pricing in Bitcoin. Yeah, that's that's interesting. That's a that's an objection to it. I haven't heard before. I agree with you. I actually don't I don't like that meme overall because. But for me, it's because once you introduce infinity, then the implication is that all other assets go to zero value, you know, in the in the in the pie. And Bitcoin becomes 100%. And it's and I reject that. Yeah, right. Anyway, thanks for for everyone letting us get into the semantics. Bitstein and I dove into there. But Brian Cubellis (47:34.158) At this point, I think it'd be really interesting, Michael, to get your perspective on. So you've been in the game for 10 years. You've been in Bitcoin for 10 years and have seen the value of Bitcoin for 10 years. And at the start of that journey, that inherently involves a recognition that this system is better than the current system. And the current system, as of 2014, was in a pretty different place pre -COVID stimulus printing one third of all the money that has ever existed in M2 and all the other things that have happened. I guess would love to hear your thoughts on how your thesis in 2014 has tracked versus reality in terms of the... relative direction of the existing conventional system versus Bitcoin. And I think it also would be valuable to get your thoughts on like what that or I guess personal experience on what that has felt like for you to hold through the FUD and the uncertainties of 10 years of being a Bitcoiner. And, you know, with, in particular, with respect to like, what lessons have you learned about what it takes to hold for 10 years and. You know, has that made you more or less, certain at the end of that 10 years? Yeah. I actually realized that was something that I didn't cover with everyone's a scammer, like how, how it held up. And I will say on that one, I think it held up tremendously. the only, the only caveat is, Ethereum did launch. after the article came out. And so there were a lot of people who did very well against Bitcoin and certain people who held early on. And if they held, they'd still, I think, be up against Bitcoin. But as a general rule, I think the general rule holds. And even so, I think. Brian Cubellis (49:53.358) based on everything we've discussed, obviously, I don't think that Ethereum would be able to maintain that thing. So it's like, yes, if you got in at five cents, you'll probably not get as harmed. But yeah. Well, you're the scammer scamming people out of their Bitcoin. Yeah. Yeah. So that's the one little funny thing is, you know, Ethereum did happen. But I still think that Bitcoin was the right thing. And I mean, that plays into this other question. So funny enough, I when I mean, I was I was young and much more idealistic at the time. So when as soon as I got into Bitcoin, there was a feeling is like, OK, well, everyone else is going to learn this tomorrow. And, you know, we'll have full, full global reserve asset status in five, 10 years, Max. That clearly didn't happen. And I think I had to, I, I had to learn through that process that actually the market is a very dynamic thing. That's, that's what we can learn from the Austrian economists. Like the market is, is, is very dynamic and people are always learning and so on and so forth. But the actual process is not necessarily as fast as you always might want it to be. because the economy is also very large. And so there's a lot of work that has to be done to actually see ideas percolate through the entire economy. And that has its own humbling aspect to it. That being said, at the same time, Bitcoin has done tremendously well because it's grown exponentially since then. And I think I just had in my mind a much steeper exponential curve than the reality. But in terms of thinking that, this thing is going to exponentially grow very rapidly, it really did. It's absolutely crazy to think where Bitcoin is relative to then and not see it as being total vindication that hyper Bitcoinization is completely real. Brian Cubellis (52:20.878) because there's, there's no other way to describe just this, incredible, growth and, you know, seemingly extremely sustainable growth to, the fact that every time someone comes out and they're like, Bitcoin's going to go all the way down to 20 ,000. It's like that you think that's bearish, but when you zoom out enough and you've been watching, you know, for as long as I have, that is incredibly bullish that. you as the ultra Bitcoin bearer, that's the worst you're coming up with, except for obviously the person who just says it's going to go all the way down to zero. Those people are going to just continue to exist. But the person who wants to be super bearish and all they can come up with is 20 ,000 or whatever, that's extremely bullish. And thank you for vindicating me. So I see us as having lived through hyper Bitcoinization, for the past, since 2010 when Bitcoin got its first price. And we just continue to see it. And the way that exponential and hyperbolic functions work is as you go, the slope increases as well. And so we've always been in hyper Bitcoinization, but we can always see more hyper. The other side of it. Another another thing to consider, too, is that I've had to recognize is that, you know, when Bitcoin is, you know, a few hundred bucks or a few thousand bucks, it is good for individuals like individuals can start thinking about it. But a large corporation, a micro strategy, I don't think could have even really happened until micro strategy happened because Bitcoin has to get to a certain amount of liquidity. before an organization can look at and be like, it's possible for me to get in on this without totally, you know, cornering the market. Cause like you want to corner the market in the sense of getting a huge land grab. You don't want to corner the market in terms of like, I just have this big thing. I completely moved the market and, you know, with the money you sort of just, you actually want to get in without affecting the price if you can help it. and. Brian Cubellis (54:48.11) from that perspective, it's like it takes a certain amount of time and growth for it to get to that point. And so I also had to learn that. And so there's a reason El Salvador took until it did. And it stands to reason why it was a country like El Salvador and not the United States, because El Salvador could afford to take on a certain amount of risk at such a low liquidity. Whereas it would make no sense necessarily for the US to take that sort of action, even if I think they should and even if I think that it would ultimately be good for everyone if they did. Yeah, I love that the mental framing of Bitcoin wins from the edges. If you were to, a few years ago, stack rank the economic power of all countries in the world, El Salvador would be lower on the list. And that meant they had a greater opportunity to seize advantage of the Bitcoin opportunity. And similarly, we see politicians from the fringes have been the first ones to embrace Bitcoin. Seeing Senator Lummis have success getting into office by embracing Bitcoin as part of her platform. And then inspired, you know, RFK Jr. and Ted Cruz and even now Trump starting to tiptoe into crypto as part of his platform, which is winning from the edges until eventually it becomes something that the mainstream has to adopt as well. Also, the other thing I wanted to dig into there was I love how you characterize, I think accurately, that we have been living through hyper -Bitcoinization this whole time. Because I think in Bitcoin, people... Brian Cubellis (56:56.43) trick themselves into looking forward to a God candle sort of thing, right? Where overnight the price is going to go from where we are to a million dollars. And I think that the history of Bitcoin shows that this is never how it's going to be. It's a slow iterative process of three steps forward, two steps back. And the volatility being... the human condition, the human psychology that we all bring to trying to understand this thing and price it and speculate on it and trade it. And we are the volatility, not Bitcoin. Bitcoin is certain, as you and Pierre Richard like to point out. And so, yeah, like I think it's hugely helpful mental repositioning to recognize that we are in the midst of hyper bitcoinization. It has been playing out. It stands to. continue playing out. And then the other piece in there that I want to ask you more about is you insinuated that you believe that that rate will accelerate. And with the recent popularity of the power law stuff and kind of stock to flow model being a little bit... passe, I guess, at this point in time in the Bitcoin landscape. What are your thoughts on, do we have diminishing returns? Do we have an S curve that we're where we're going to accelerate faster? Or what do you see for the future of how hyper bitcoinization plays out? I don't know. It's also an impossible question. Yeah, I really don't know. I think Bitcoin will continue to be exponential. And the reason that I think it will continue to be exponential is just simply that it is a network good and networks have a sort of exponential factor to it in the sense that... Brian Cubellis (59:12.814) you're dealing with multiple peers connecting with one another. So it's like the number of lines that connect, when you have an increasing number of dots and you draw lines between all of the dots, that number grows exponentially. And an economy grows that way. And it also means that an economy shrinks that way as people move away from another. So that's been our basic argument as to why. Bitcoin will be exponential is that network aspect of being a network good like money. And so, yes, I think it will be exponential, but what specific exponential curve that will be, I don't know. My point is that exponentials just naturally do sort of speed up in the sense that today, if Bitcoin went up $2 ,000, I mean, just the other day, it went up a few thousand dollars. And it was like, yeah, that's a fun day, but that's also kind of like normal and Bitcoin. Whereas, in the past going up a few thousand bucks would have been, nothing. sorry, sorry. The opposite of not, it would have been like the most insane thing ever. and so in that sense, these, these magnitudes, are, are going up. So, yeah, I don't, I don't know that I want to like get into. prognosticating a particular curve, I just think that it's important to think about these fundamentals. Gotcha. The fascinating thing to me about magnitude going up is less. I mean, I totally agree. You know, thousand dollar swings were definitely harder to come by when we were in price tag like 5K compared to 65K as we are right now. But the magnitude is to me like, What we're seeing on the political spectrum right now, you had the House of Representatives just vote to repeal SAV121. The fact that we actually have bipartisan effort and people who actually care in government right now to put regulation on digital assets and Bitcoin, to help financial institutions step into the industry to mature the asset class. That's... Brian Cubellis (01:01:36.91) That's the magnitude right now that's fascinating to me that you're seeing political chess moves take place at presidential elections. Obviously the Senate's going to vote on it today. Schumer told Democratic senators to go vote their heart. Like there's a real chance that Biden has, if Biden who said he's going to veto any repeal of SAB 121, like that might actually have to happen. over the next coming days or week or so. I can't believe the order of magnitude of how quickly, I'd say, you look at where we've come the last two years from the FTX fallout to now meaningfully impacting elections and dynamics in government. I think it's incredible to see the progress we've made since by that, that low moment. Yes. With, with every step of the way you have that much bigger of an amount of people that can be invited to partake in Bitcoin in a way that they hadn't previously, then, then in the past, you know, in the past, it was just like, you know, at best you're going to like convince some libertarian nerds to put in some money and just kind of see it as this cool thing. But as it grows, you know, different events happen. that reveals something to the world about the world to people shows them an underlying uncertainty within their the way that they're doing things now and gives them an opportunity to learn how Bitcoin can plug up that uncertainty. And that's whether it's like seeing the the fallout, the monetary fallout of the the covid. or even things like Canadian truckers and just continual rising prices and so on and so forth. Each one of these things is an invitation for people to reassess. And it's always like it's a larger and larger pool of people at that point. Because even if people know about Bitcoin, they don't really know Bitcoin yet. Brian Cubellis (01:03:54.574) But this is an invitation and all of that work of them knowing about Bitcoin, it softens them up as well. So yeah, I think it'll be exponential. I'm just not going to comment on what particular curve I think it's going to be because it's just that's that's beyond me. I know. Yeah, I got you. Yeah, suffice to say on a log scale up and to the right and we'll leave it at that. Yeah, it's number go up technology and it's going to continue to function. That I do know. Yeah, I agree with you there. Who knows? Who knows on that front? And yeah, Mitch makes a great point that like it's like a tent pole. Bitcoin can be a tent pole for politicians and political parties. to invite more people in, to expand the tent. And I think and I hope, and we'll see, that the game theory there plays out in a way where all political corners of the spectrum recognize that this is something that they want to adopt as part of their platform, such that it is not a partisan issue, ultimately. Hopefully that's where we're heading. But the Democrats have a little catching up to do if that's going to play out that way. Go for it. I was just going to say, I think any and all politicians should be pandering to me. So I'm fine with that. Yeah, I think right now, obviously, at the presidential level, the dynamic is taking place, that it is becoming a partisan issue. But we certainly do have friends on both sides of the aisle. That being said, the game theory takes place that there's a very real chance that Bitcoin and largely digital assets in general do end up impacting this presidential election. That's the case. If the data is there, the votes are there, the incentive mechanism is in place so that Democrats don't make that mistake again in the future. So I think it's... Brian Cubellis (01:06:08.846) It's as the space matures and as that game theory plays out, I do think it's going to, it's going to have to be table stakes to be supportive of the industry compared to what we've experienced over the last couple of years. That's a very interesting like possible arc for this of like potentially the crypto vote. tips the scales in this upcoming presidential election. And then four years from now, it's table stakes because, you know, they recognize that if they had just pandered to the crypto vote, then the Democrats might have not lost a contingent that ended up being crucial. And it could be table stakes five years from now in the next go round. But in the meantime, there'll probably be a lot of... animosity towards the crypto voters that swung it for Trump, despite being young and typically young people voting for Democrats. Yeah, I personally try to disengage from the political aspect in a sort of direct sense. And rather, this is why I want to do things like the Nakamoto Institute is as... people are finding themselves drawn into Bitcoin from whatever angle it might be, whether it's a democratic politician who just wants to pander to someone, or it's actual business owners and individuals trying to improve their economic standing, or if there's even heads of state out there who are interested in... finally leading a country in a more with more of a long term vision than we see in a lot of modern politics. Whatever case that might be, all of those people have to learn about Bitcoin and they have to actually learn how this thing functions. What is it? And so on and so forth. And so my my goal in all of this is not to not to find myself engaging in the direct politics for. Brian Cubellis (01:08:29.486) providing the educational resources needed for any of those people to really get a sense of the truth about Bitcoin and its potential and why from whatever walk of life you might come from that Bitcoin can be a beacon for a free and prosperous and peaceful future. and kind of help people align with that. You know, there's concern on a few things of people forgetting like the true importance of Bitcoin. So they might get into the politics and such and it just like the politics begins to overtake the underlying idea itself. And that would be kind of, that would be rather disappointing. on that front for that to be the case because it's actually the underlying idea that makes the political idea or the political strategy even one to consider for those who are interested in that. So there's a need to sort of continue carrying that torch and being a good steward for the information that best helps people. Get up and running with Bitcoin as well as add to our stock of knowledge. We don't know everything about Bitcoin even after all these years like I'm I'm but a humble pleb at the end of the day as I think all of us ultimately are and So we also have to we have to we have to take care of the knowledge that we do have and grow it so that in whatever form that Bitcoin continues to grow those new Bitcoiners and have a place to learn about Bitcoin in the highest quality way possible. Yeah, fantastic. Yeah, you're preaching to acquire here for sure of the importance of Bitcoin education. It's paramount in my view. In fact, I think you probably agree with this, Michael, something of a calling once you understand Bitcoin and the mental model that I have of Brian Cubellis (01:10:54.232) what it takes for Bitcoin to win is just to ensure that we have a positive viral coefficient of spreading the word, I guess, the gospel of the facts, really. Let's take religion out of it. But the hard and fast economic facts of how Bitcoin can improve your life. And that's Bitcoin education. And you had a talk. about the, I forget the name of the talk, but about the meme nature and the importance of memes in propagating Bitcoin education and the message of Bitcoin. Do you want to talk briefly on that? Sure. Yes, I gave a talk. It was at Bitblock Boom in 2019 called The Art of Bitcoin Rhetoric, How to Meme Bitcoin to the Moon. And, The talk was basically just looking into various aspects of rhetoric, especially online rhetoric, which we kind of just kind of lump all into memes. That word itself is kind of a broad thing, but it's effectively about rhetoric. And, you know, I do start out saying that Bitcoin is just going to moon as it is. Like the hard economics are such... that there is a sort of natural organic growth to Bitcoin that's kind of bigger than any particular act of trying to educate or persuade or whatever other kind of rhetoric you're engaged in. But I tried to give a talk that was very tongue in cheek, but hopefully very informative talk as well. that helped people think about the sort of battlefield of online rhetoric where you're dealing with many different groups of people who have different interests and motives. You're dealing with people who explicitly just hate Bitcoin and you're not going to convince them in the same mix as you're dealing with people who want to have very strong technical discussion of Bitcoin and also people who Brian Cubellis (01:13:20.334) have no clue about Bitcoin, but maybe want to learn about it and so on and so forth. And there's all sorts of rhetorical battles that sort of have to be thought of a thought in order to get particular signals out through the noise. And so I talk about, you know, different different tactics and strategies, so to speak, to how to think about these things. So, for instance, people find themselves wanting to sort of cave to other people's narratives around Bitcoin that we have fundamentally no reason to have to like cave towards. An example is with the energy debates. A lot of these debates are being done in bad faith where there's lots that we could discuss about, you know, what are the most efficient you know, ecologically friendly ways of mining Bitcoin or something like that. There's many discussions to be had even among people who are completely in favor of everything being fossil fuels. I personally happen to be a huge fan of fossil fuels. I also very much care about, you know, ecological issues. But to even engage in the debate on those terms with certain individuals is to be a seeding a frame where they're able to put you in a spot of weakness as because of the fact that they just hate Bitcoin. They they don't actually the the energy debate is just something that they can try to just run a gotcha on when really, you know, it's not that they are worried that Bitcoin uses too much energy. They just don't like Bitcoin. So it doesn't matter. It doesn't matter how much energy Bitcoin is using at all. they will still think that it's way too much and it's environmentally damaging, even if it was just one guy's laptop, because you could also turn off that light after you leave the room and you'll do so much to help the environment. So a lot of these discussions that people find themselves in, they're very disingenuous. And so I invite Bitcoiners to, I talk a lot about trolling, but Brian Cubellis (01:15:43.022) I also explained that it's like you ultimately the point is to spread the truth. And so the goal of trolling is not literally to be toxic and just be be vile and mean to people. That's that's just being an awful person. I'm not I'm not in support of that. However, understanding the rhetorical battlefield and knowing how to get around these sort of. gotchas that come from bad faith and also, you know, not, not, you know, not being tricked into giving more respect than respect is due, is, is very important to be able to, to, to, to transmit that truth. But I guess the other point that I was trying to make there is that to have the, the actual signal that you're wanting to get out in the first place. You have to truly understand what you're talking about, or at least, you know, try to be truly understanding what you're talking about. And so underneath all of that, your goal should be to understand the truth and then be figuring out how do I get that truth out there? And when someone is coming at me with an argument, be able to identify, is this person arguing in good faith or in bad faith? And if they're arguing in good faith, you should be doing everything you can to help them through. misconceptions. They might even have a critique or two that resonate well. It's like, actually, yes, that is a trade off that Bitcoin has, but this is why that trade off is acceptable. Other things might be like the energy thing. And then, you know, you honestly should just like laugh at it because those people are not trying to have a good faith argument. They're having a bad faith argument. And so you have no obligation to take them seriously and in You know, I see no problem in, you know, throwing around jabs online. But that would also be a call for, you know, if that is not your personality to also do not tailor your message to those people because they are acting in bad faith. You might use it as a springboard to have discussion with people who are of good faith, but do not get trapped. Brian Cubellis (01:18:04.142) by people who are arguing in bad faith. So like I said, it's a very tongue in cheek thing, but a lot of people have really enjoyed it and gotten a lot of value of it. So I'm very happy that I was able to kind of help people see things in a different light. That's part of why it's fun to be in tongue in cheek is because it helps people kind of snap out of their... you know, whatever their sort of current Overton windows, so to speak, or, you know, whatever other term you might, you know, their, their, their current way of thinking of it. If you're able to come at it from a totally different direction, it can kind of snap people out of it and, think outside of the box. And I always like being able to help people, think a little bit outside of the box because that's usually where a lot better answers are. Brian Cubellis (01:19:00.76) Absolutely. Yeah. And it seems to be necessary to even begin to entertain the possibility that Bitcoin's right is that you have to first get outside of the box that you've been confined to your whole life without realizing it. Yeah. I've had to deal with 10 over 10 years now of, you know, every academic journalist, politician, you name it, telling me how how idiotic Bitcoin is going to zero this and that and so on and so forth. It's always been the sort of losing proposition in the mind of the general public. And it requires having a strong resolve and developing a strong resolve based on hopefully a conviction built on firm foundations. But once you're standing there, you know, you can take on the world. Love it. It's fantastic. And I think that creates a nice little segue for us to wrap up here on what's going on currently for the Satoshi Nakamoto Institute, what your plans are, and also what people can do if they want to get involved or support what you're doing with the Satoshi Nakamoto Institute. Any things to say there? Yes. So as I said before, the Satoshi Nakamoto Institute is now a 501c3. tax exempt nonprofit, which means that anyone who's a U S citizen can donate to us with a tax deductible donation. So, you know, that's, that's obviously a bunch more enticing to, for certain people, for certain types of, you know, tax, you know, advantages and such. But then there's, of course, it's like, why would you want to get involved with us in the first place? So, you know, our mission is to advance and preserve Bitcoin knowledge, you know, of its history, of its economics, of its technology, and so on and so forth, and have a place that people can come to and learn all of these things about Bitcoin. And as I've kind of alluded to before, Brian Cubellis (01:21:26.638) We have to think not just in terms of now, but also deep into the future. And so my goal is to be stewarding the finest information on Bitcoin such that new Bitcoiners today and generations to come can still come and learn what they need to know about Bitcoin to best thrive. And Yeah, so ways that you can get involved. First is it is an open source website. So you are always welcome to come help with the code, help with content. Actually, get your hands dirty helps more than probably anything else because it enables the other things. But. We also have launched a translation community. We want our content to be as accessible globally as possible because Bitcoin is global. And it shouldn't just be people who can read English that get to enjoy the wisdom of Nick Szabo and Timothy May and many of the other great thinkers that we've showcased on the website. and so we have a translation community if, if you would like to assist with translation efforts. And finally, there's also, you know, donations. So being able to, you know, you can, you can donate to us, tax deductibly. And if that's the correct term, but, and, you know, with that, that allows us to, you know, pay for our hosting, help pay, for me to, to be able to work full time. be able to expand operations to be able to do more work. Currently, it's mostly a one -man show. So only so much can get done at a given time. But with your help, maybe that can change in the future. Currently, one of our big projects, we unveiled a new logo for the Satoshi Nakamoto Institute. And we have a broader fundraiser going on. Brian Cubellis (01:23:49.006) to help fund a redesign of the website. And the idea here is it's almost like a phase change in a way. Prior, we were targeted towards a lot of nerdy libertarians online. There's only so many people who are going to be interested in Austrian economics or cryptography or what have you. But because Bitcoin has grown to the place that it is, These topics are now tapping into the mainstream and it is something that the whole world wants to know. And so with the redesign, we want a, we're trying to build an aesthetic that helps display to the world our seriousness and commitment to the long -term education of Bitcoiners now and in the future. And so you can find information about this on our newsletter. And if you donate, you can help us get this redesign process going so that we can have the aesthetics that match our long -term vision. Awesome. Yeah, it's fantastic work. It's a vital resource. And everyone, if you haven't checked it out, go check it out and see if you can support what Michael's up to. Michael, want to thank you for coming on the show. It was a great conversation. Really appreciate your time and I look forward to maybe having you come chat wonky semantic stuff about the trajectory of Bitcoin another time in the future. That would be fantastic. Thank you so much for having me. All right, everybody. And Mitch, thanks for joining this week, too. And everybody will see you all next week. Back with the usual cast.