Robert Sykes, Keto savage.com. Today I've got special guest Paul Tansy on the line, and this one's a little bit different than normal. So I've often times got people on the show talking about nutrition, fitness, entrepreneurship, business, all that good stuff. This one was all about currency. We talked about cryptocurrency, we talked about Bitcoin, we talked about the Fiat system, pros, cons, shortfalls, all that good stuff.
And this is an area of, if not my expertise, I don't know anything about crypto or Bitcoin or any of this. So I really wanted to just peel the curtain back and learn. And Paul is an expert in this subject matter. He opened up my eyes to quite a few things. I'm very, very curious about this. Now I'm gonna start doing a deep dive on this topic, but very interesting. I learned a ton.
Hopefully you will as well. So that for delay, sit back, relax, enjoy the conversation with Paul and we are live. Paul, how are you, brother? Doing real well. Thank you, Robert. Hey man, I'm excited to be chatting with you. So just to give the listener some context here, and I have never talked with you before this moment. And we got connected because a good friend of mine that has has helped us with the AI build out
is good friends with you. And he's like, hey, man, if you get any interest in crypto at all, you need to get my buddy Paul on the line, which is why we're here today because I know nothing about crypto, but I feel like a lot of people in the keto carnivore space, this enlightened space, so to speak, is big into crypto. So this is this is going to be interesting man. Yeah, well, I'm, I'm really glad you had me on. Thank you. And yeah, I've known, I've known our friend James since 8th
grade. Actually. We went to his brother's wedding this weekend. So it's been a long time friend of mine. But yeah, to, to, yes, to your point that I almost take offense to, to being referred to as the crypto expert. And we'll get into that. There's a very big distinction between Bitcoin and crypto, and I think that'll be a good one to kind of maybe dive into first. Yeah, Yeah.
So just to kind of set the stage here, I know nothing about any of this like crypto Bitcoin. So like like go as deep as you want to go, but know that I have no prior context whatsoever. Some of the listeners probably do, some of them probably not, but crypto Bitcoin, like it's all third language to me, man. So take it for it wherever you want to start, you just take it from there. All right then I I won't take
the insult too heavily. But basically, yeah, a lot of people see like Bitcoin as a subset of crypto. And it had truth originally because crypto just stands for cryptography, which is kind of using public keys to public and private key pairs to basically store secrets. And in this case, the secret is the ability to send some amount of some token to another key pair. But really, so Bitcoin is unique in the fact that there is no central issuer, there is no central governance.
There's no, you know, CEO, there's no marketing team. It's just kind of this emergent phenomena that kind of like naturally evolves from humanity's desire for a open, free monetary system. But crypto in kind of its current form is just a subset of the current monetary regime, which we call Fiat currencies, which have, you know, central
issuers. They have central governance, a certain number of people, whether it be 1 or 100, can access, you know, the printing mechanism and make more of them. They can change the rules at any point to not your benefit. And so that's why I like to make that distinction between kind of Bitcoin as this, you know, free open economic system similar to like gold. You know, there's no central issuer of gold, There's nobody who changes the molecular makeup
of gold. And then crypto is kind of like unregistered securities and the fact that they're a lot of times the company is raising funds for founders and insiders. And because they're unregistered, they don't really have to follow traditional regulations in terms of access or, you know, moral or ethical ways of acting in public markets. Got you.
So like when it comes to the system, for instance, like the the US dollar as an example, the, the, the negative connotation with that is that, you know, they can simply print more money. It can be a strong dollar, a weak dollar, depending on global economies. Inflation obviously is an issue of variable. And then a lot of the other crypto currencies are similar in
that they can make more of them. There's nothing really backing them per SE. And then Bitcoin, similar to gold, is just like a set allotted amount. They can't make more or less. Is that correct? That's exactly correct. Well, yes, yes, that's correct on the surface. So the cool thing about Bitcoin is because it's open and anybody can access it, anybody can
likewise change the code. You know, if I want to run Bitcoin that has instead of a maximum of 21 million, I want my Bitcoin to have a maximum of 42,000,000. Well, I could do that on my personal computer and I can change, you know, my node that runs my Bitcoin and say, OK, I'm going to have a maximum of 42,000,000 and that extra 21 million, all a lot to myself. I can do that.
But then when I go out to try to send any of, you know, Paul's Bitcoin to other people on the Bitcoin network, it'll immediately get rejected because, you know, there's checks and balances in the system. And one of those checks is, is the maximum amount of Bitcoin in your system 21 million? Is that compatible with the rest of what we call the Bitcoin network? If yes, then you know, your transaction can go to the next
step of verification. If no, then it's just, you know, it's like I, I come and speak in a foreign language. People just look at me funny, but they don't, they don't accept my Bitcoin certainly because it's, it's fraudulent. So that's kind of the cool thing is like, you know, if you want to change the rules, you can. But we have this consensus mechanism that we all agree is the and if we want our money to be accepted by others on the network, we have to follow those
rules. What is the total amount of Bitcoin like? What is the upper, you know, sealing of the total amount of Bitcoin just as like there's a a total amount of gold. Yeah, the current, yeah. So the current limit is 21 million Bitcoin with gold. It's, it's theoretically infinite, but in reality it inflates about 1.6% per year. And there's, you know, no kind of upper cap in our lifetime or in, in any lifetime that we can imagine in the near future. So, so gold kind of is always
increasing. So no individual can have more than 21 million worth in Bitcoin. Correct. And currently somewhere, you know, the estimates vary, but somewhere between 3 and 5 million seem to be lost forever because they haven't moved, you know, since they originally moved. And it's it's estimated that they're lost and can't be accessed. So the the real kind of upper limit is somewhere around 15 to 17 million. And there's not a limitless supply.
So like all 8 billion people on planet Earth can't possibly have 15,000,000 in Bitcoin, right? They can't have, you know, they can't have 15,000,000 Bitcoin. Theoretically, they could have a value of $15 million worth of Bitcoin. You know, if Bitcoin came to represent all of the money on earth, which is somewhere around 900 trillion and we keep inflating the money supply yet, you know, up to 20% per year. Yeah, everybody could have $15 million of Bitcoin, but the
dollar wouldn't get you much. And with regards to the other crypto currencies that don't have this innate checks and balances like Dogecoin, for instance, you know, Doge went up with Elon being as prominent as he is as he is. Is there any value in that or since it can, there's no backing system to that? There's it's kind of just like Monopoly money, right? Yeah, doge is. It's also theoretically infinite. I think there's like 10 million new doges created per day.
I I want to say though, Doge is a proof of work mechanism, which means that it takes energy to mine DOGE and for that reason there's a small tie to like real world economics. Not not every other cryptocurrency is infinite. There are some, there are kind of either limited or have set supply schedules, but what makes Bitcoin unique is that it's policy has never changed. So Bitcoin was the original cryptocurrency, that word gives me the heck, but it was the
original. And so it's monetary policy was set at the beginning. It was 21 million and every kind of offshoot or off brand that has spurred up since then has at its core had change since the beginning. So like Ethereum is probably another one that you've heard a lot about. Ethereum was created by Vitalik, who actually used to work at Bitcoin magazine and saw that, you know, money could be created out of nothing and decided to do
that. And the monetary policy of Ethereum has changed countless times. And the total amount of Ethereum is unknowable currently, which is like kind of profound that you can't even know how many exist. And we, we don't know how many will exist because there's no guarantee that the monetary policy will stay the same than it is right now.
You know, 7th. Iteration or whatever they're on. So this like status quo of a set monetary policy and we all agree to these rules in order to play the game is one of those things that that makes Bitcoin unique. One way I like to describe it is like, you know, basketball, there's pretty standard consensus rules of what basketball is. It's five players on a team, you know, 20 minute halves, 10 foot hoops.
And so if I start a basketball team and I start playing on 12 foot hoops with 16 people on a team and I play, play 40 minute halves, right? And I go and I try to play, you know, someone down at the local youth club or gym or whatever, and they say you want to play, you know, Paul's version of basketball. And then they said, no, I want to play, you know, regular basketball. I want to play 10 foot hoops, you know, this size ball. And so it just, it's you can't coordinate, you can't
interoperate. So yeah, I think that's a. Yeah, that's a good analogy. So I guess give listeners and myself like, why should we even care? Why? Why do we need to focus on Bitcoin? Why do we need to explore that? Like what is the doom and gloom scenario if we don't? Exactly. Yes. And and this is what you know, this is how I got here.
So I graduated college. Six years ago and, you know, I started working my first job in the corporate world and I'm, you know, a single 22 year old and I was making more than I needed to spend every month. And I at one point, you know, knew that I wanted to have a family. I wanted to, you know, have a house. I wanted to. Do all of these things. And I was trying to figure out, you know, how do I save my money that I'm making now so that, you know, in five years I can do
that. And at that point I just started putting money into, you know, S&P index funds. And, you know, that was kind of it. And then I'm working and I'd heard about Bitcoin, you know, here and there in 2017. It really had like a pretty big run and, and was all over the news cycle. And but then, you know, at this point when I started working, it was kind of low, maybe 5 or $6000 coin that it kind of
crashed. And I had a Co worker who would always just kind of bring it up, Oh, Bitcoin this, oh, Bitcoin that. And I was like, man, you got to shut up about this stuff. It's totally over. Can't you see the chart? It's like dead. Then you can take it out back and shoot it.
And but he just kept, it's every couple weeks, he just kept mentioning Bitcoin, this Bitcoin that I said, you know what, I'm going to go home tonight and I'm going to study it and I'm going to come in here tomorrow and I'm going to prove you wrong. And that was like a motivating factor.
And I came home that night and spent 6 or 8 hours on the computer just watching YouTube videos, trying to learn like what really was the kind of fundamental principle of this Bitcoin thing and what made it valuable and was it going to be more valuable in the future. And it really, you dive down this rabbit hole of what is money? And that's a profound question because what we're told money is it has been a lie since the beginning.
You know, these these government debt papers that we call it U.S. dollars called IRS utility tokens. You know, they're, they're a method of stealing wealth because you are exchanging finite time. Human time is the most finite resource we have. And so you're exchanging that through your job and you're getting paid in IRS utility tokens that lose value. I mean, during COVID, they lost value at a rate of almost 20% in
a year. So your time that you have stored up as savings has then been eroded by 20%. And so like what what is the answer to that? And after a lot of searching, the answer is money that can't be fucked with. It's money that is absolutely scarce, that mirrors the absolute scarcity that you have in your human time and that you can store value, you know, for
1000 years. And because currently the US dollar has been kind of. Model 2 or trying to say prioritize storing or moving money across space has been the priority. And so, you know, you want to, OK, originally we had gold and gold is, is a good money for storing time, for storing value across time because it has that low inflation rate of approximately 1.6%.
But to store, but to be able to send value across space, you know, we had a globalized world in the 19th 1900s and you want to send values, say to France. Or to. The Middle East for oil, it's really not feasible to send a whole shipment of gold every time you want oil to be delivered to the US So we have these dollars that come up. And so instead we send, you know, pieces of paper. Those are a lot less costly to move or to guard. And so we can just kind of send this value across space
effortlessly. But the problem was when we moved to dollars and off the gold standard, we lost the ability to store value across space or across time. So because the dollars could be printed for a lot less work or energy than it takes to make new gold pieces, it's a lot easier to make more money in paper form than in gold form. And so that erodes the ability of the currency to to transmit value across time. And so. What we need? Oh, go ahead.
I would say what we need is a money that can do both, one that can store value across time and across space. And that's what Bitcoin is, because it's a purely digital asset. So it, it kind of exists worldwide, but it has this tie to energy because energy is required to secure the history of transactions. And so it has this tie to energy that brings it into the real world. You know, it can't be duplicated
for 0 cost. It requires energy, and that's kind of the the groundbreaking technology of Bitcoin. And at one point, I'm not that kind of reach back in like middle school history here, but at one point the gold that we had in circulation or the the money that the dollars that we had in circulation was backed by the US Treasury in gold. And then they did away with that.
Correct me if I'm wrong here, but they did away with that with the printing of additional money beyond that which they had in stock of gold. So now basically the US dollar is not physically backed by anything of true value then, right? Correct. Yes. So brief history of dollar, I might have the years off here a little bit, but I think it was around the 1930's the Executive Order 61 O2 I believe, was issued and that outlawed personal earnings of gold.
So basically you had to turn in your gold to like the bank or the government or whatever. And during that time gold was valued at I think like $25.00 an ounce.
And so when the government had all the gold and they weren't basically you couldn't turn in your dollars for gold, but they said of our our dollars are backed by gold, then they were able to print more dollar certificates than there were gold to be redeemed by those dollar certificates without anybody kind of calling their bluff because you couldn't go and verify how many gold bars there were or how many total dollars there were. And dollars were basically just
gold receipts, right? So that allowed them to really begin to inflate the money supply. And this was coming out of the Great Depression when the government was trying to, you know, kind of spend, spend us into prosperity. Then around 1971, France brought 2 warships to New York and said, hey, we have all these dollar tokens and we would like to turn them in for our gold that you are holding at Fort Knox. Because a lot of the European gold came over to the US after the wars.
And that's when President Nixon said I am temporarily suspending the redeemability of dollars into gold or, yeah, dollars into gold. And he basically sent these two French warships home. And so since then, it's been like totally de pegged. There's not even a, you know, a hint of gold backing. We just have some gold in a vault and we print as many dollars as we possibly can. That probably pissed Franks off a little bit, I would assume, right? Yeah, but what are they going to
do? Man, so, OK, so we've got all these dollars that are getting printed. I mean, how frequently do they print dollars now? Like is that like is that ongoing is never ending or how how often are they doing that? Yes, it's really insidious. I mean it, you know, there's not like an actual printed press that prints dollars anymore. It's it's all it's kind of shell game and there's really interested, really interesting YouTube series called like the Secrets of Money.
It's like 20 minute episodes. I forget who does it, but it's, it's really fascinating. And it kind of goes into the gory details of how the printing money happens. But essentially the Federal Reserve, the Treasury issues U.S. Treasury bonds, and nobody shows up to bid on these bonds except for a couple of large banks and the Federal Reserve. And the large banks have to use actual, you know, dollars to buy the bonds. And the Federal Reserve pays from a checking account that has
a 0 balance. And that's how the government funds their endeavours is by selling their Treasury bonds to the Fed, who's buying them from an account with a 0 balance and has basically a Amex black card to buy all of the unsold bonds. So this $36 trillion that the US is supposedly in debt at currently, like does that even mean anything like there? Like how could we possibly pay that off? Is there any point in paying an offer that I'll just imaginary
smoke and mirrors? There's not a really good reason to pay it off. I wouldn't say it. It's a lot of smoke and mirrors, but because for every dollar of debt that's created or every dollar that's created. So when the Federal Reserve writes that check to the Treasury and they buy say $1000 of Treasury bills, you know,
it's usually in the pavilions. But that $1000 because it's debt backed requires like more than $1000 is required to service that debt because as Treasury bills pay interest, so the terminal cost of that $1000 of debt is, you know, $1200 over the long term. So it's like you if it you can't really eliminate all of the debt, the debt because you can't create enough other dollars anywhere to pay off the original dollars. Does that make sense? Yeah. So basically we're writing
checks we can't cash. Yeah. It's like, yeah, every dollar that's created creates more than a dollar of liabilities in the future. So what what do you think? Is it going to happen? Like is it going to be like a gradual slow decline in the value of the dollar due to inflation and just continued debt leverage? Or do you think there's going to make this apocalyptic moment where the House of Cards comes crashing down? Yeah, that's a good question.
And one, one note I want to make real quick is inflation. So inflation is the actual original definition of inflation is the inflating of the money supply. So if we had a billion dollars and we printed 200 million, now we have $1.2 billion, right? That's what inflation definitionally means. The inflation that we hear about on the news is actually price inflation. So it's the the prices of all the goods reflecting this newly
inflated money supply. So if we have, you know, $1.2 billion of of dollars and they're chasing the same amount of goods because we haven't, you know, we didn't print new services. We didn't, you know, print an extra couple Netflix data centers. We didn't, we didn't print any goods for the economy. We just printed receipts for those goods.
So now all of those goods have to adjust in price so that they kind of command the same proportion of the economy as they did when we had a billion dollars in the economy. So the inflation is is actually the effect of inflation. Does that make sense? Yeah, that makes sense. And because there's nothing that's backing any of it now. Definition because because everybody knows that they are the reason for that. Like the Fed is creating, inflating the money supply inflation.
But they say that, oh, you know, through this magical formula, the inflation is only 2%. And you know, what everybody should hear when they hear the inflation is 2% is that they're being robbed 2% per year. And the Fed likes that number because that's the number that is kind of psychologically ignorable. So if I say, all right, I'm only robbing you at 2% per year, get over it.
You know, most people do, but then when they get robbed 10% per year, 20% per year, then the Fed comes up and and waves their wand. And so, OK, we will make it go back to 2% and we'll just keep robbing you at 2% because you don't really notice from mine when we run you at 2%. It's like Jerome, or have you pronounce his name, Powell, the head of the Federal Reserve, chair of the Federal Reserve.
Is he the one pretty much waving his hands and saying, OK, this is what we got to reel in or be aggressive with? Yeah, yeah. And actually, there's a really interesting book called The Creature of Jekyll Island, and it details the founding of the the Federal Reserve, which is like peering into the banals of the most corrupt kind of shady stuff that you can ever imagine. But it was created in 1914, and that was the same year that federal income tax was levied.
And the bill was signed on I think, Christmas, either Christmas Eve or Christmas Day. And. There have been all kinds of. Propaganda because it was very unpopular to have a central bank. And so then these big bankers came together and put out propaganda that said that the big bankers were very against the central bank, even though they were the ones creating it.
And so then everybody was very in favor of a central bank because they thought that if the big bankers didn't like a central bank, that it must be good for the people. And so then the big bankers got their way and they got a central bank and they wrote into the founding documents of the Federal Reserve, which is a private institution that has no reserves. So just if you think that you're
being gaslit, you are. That wrote into the founding document that the shareholders, who are unnamed, will receive a 6% dividend from the Fed every year. And so we don't even know who these people are. I mean, probably JP Morgan is one of them, but we can only kind of speculate to to who the others are.
And so, yeah, this Federal Reserve, which is neither federal nor has reserves, pays interest to private shareholders and steals wealth from not only the American citizens, but I mean, the dollar is the the global reserve currency. So worldwide citizens, I mean, it's crazy when you start looking into it. So what what are other countries
think about this? Like if the dollar is kind of like the the, you know what everybody banks everything against and you've got those other countries that can't cash in on the gold because that's no longer backed by gold. Like are they in cahoots with all this too? Like do they have shareholders internationally that are a part of this or how are they benefiting or how does that work
internationally? Yeah. So we've kind of instituted global colonialism through implementing central banking with the world over. And the places that don't have central banks, I think there's five of them now, North Korea, Iraq. I want to say Afghanistan. But you know, it's, it's the places that the US has been demonizing and going to wars with trying to implement central banks. It's it's it's pretty gnarly. But your question was, is the rest of the world kind of in conceits with this?
Or not, and I would say not. I mean, there's a, the BRICS is Brazil, Russia, India, China, and, you know, they're all kind of beholden to the dollar and they don't like it. And currently there's a lot of news about them talking about trying to kind of implement a new currency or trade for oil in different currencies. But the dollar is kind of backed by two things. One is oil.
So we have an agreement. We, I mean the US has an agreement with a lot of the oil producing nations that they will store their oil profits in U.S. Treasuries. And so that creates artificial demand for the dollar and necessitates the dollar as this global trade asset for oil. So that's kind of one part of it. And then the other backing for the US dollar is the US military, largest military in the world, you know, $850
billion a year spent on this. And the military kind of exists to keep these trade routes open and ensure the dollar is the currency that is kind of running the trade. Interesting. So with this talk of like the bricks system, that wouldn't really be backed any differently than the dollar, right? Just like pretty much the the Fiat system through a different entity, it wouldn't have any secure backing as traditionally gold did or Bitcoin does, right? Probably not. I wouldn't think so.
They're talking about some kind of commodity backing, but I think it would be very hard to implement because it would have some sort of. Central issuer, to me it's kind of untenable at that point because you know in any case where you have somebody or some group of people who have the ability to make more monetary units for 0 cost, they will.
I mean it's just human nature. It's happened thousands of times through history, you know, from like wampum shells and to beads in Africa used to be a money all the way back to like yap stones was like one of the first forms of money that we found in these like, remote island villages. So yeah, it's like human nature that this power will always be corrupted. And so the answer is not, oh, let's give this power to some other person or some, you know, group of people.
The answer is let's totally take away this power. And so that's kind of what Bitcoin does is says there's only 21 million. You can earn some Bitcoin by mining, which is the process of using computer power to secure the history of transactions, and you are rewarded in some Bitcoin to do that. And some of that Bitcoin that you're rewarded in is new Bitcoin.
Until we hit that limit of 21 million, then the new Bitcoin issued is 0. But that's a much more fairway because it's distributed across everybody who can contribute computer power. You know, there's not like a spigot the the new money comes out of and we all gather around
that spigot. Currently, that spigot is Washington, DC because being, you know, close to the political center, you can, you know, kind of persuade the politicians or anyone in that sphere to give you newly created money. I mean, if you look up the top 10 richest counties in the nation, it's no wonder that six of them border DC. So is there there's no risk of Bitcoin getting corrupted as is the case with other forms of currency?
Because basically all the other players at B wouldn't honor any form of corruption. Is that kind of right? Yes, yes, that's exactly right. So the really cool thing about the Bitcoin network is that it's very decentralized. So everybody on the network basically exists at the same level. There's no hierarchy. And so in order to get the network to change.
You would need to convince a majority of these people to change, you know, to, to some way that you're interested in and it's probably not beneficial to them, right. So, and there's no way to tell who these people even are. So every Bitcoin node is just a computer that runs the Bitcoin checks and balances basically. And then it it also keeps a
history of all the transactions. So in order to, and This is why like Bitcoin is not going away, because in order to make Bitcoin go away, the entire Internet would have to be shut off and every individual copy of the history would have to be destroyed. And so you can see, like, you know, we're talking about a global network with 10s of thousands, if not hundreds of thousands of nodes. And there's no way to geographically track down all of
these ones. So if you have, you know, one in South Africa that remains undestroyed and can connect to any communications network, even ham radio, you can send Bitcoin transactions over ham radio. Then the Bitcoin network can continue to exist. Got you.
So I, I, I was listening to some Joe Rogan podcast or something and he was talking about the cash app and you can buy and sell Bitcoin. So I got the cash app and I've I've got that open now and it's showing that Bitcoin is valued at $94,835 and 13 based off of USD currency. So for every Bitcoin, of which there is 21 million total, that is worth an equivalent of $94,000 I guess.
Yes, each Bitcoin is currently $94,000, but you know, it's easy to get pulled into unit bias, which is like 01 Bitcoin is 94,000, but a Dogecoin is $0.30 and maybe that'll go to, you know, $10,000 or something. But you have to look at like the market cap or like, you know, what is the total network value? So right now for Bitcoin, that's about like one eight, $1.8 trillion. For Dogecoin, it's like 60
billion or something. So like the amount of units can kind of throw you off when you're like, you know, trying to compare side to side. And yeah, as as Michael Saylor, who runs MicroStrategy, which is the largest corporate owner of Bitcoin currently, he says every every Bitcoin you don't buy today is going to cost you 13 million because his price estimate for the year 2045 is 13 million per coin.
And I, I, I got into it man. I, I invested into Bitcoin and I have a total of $16.29 equivalent USD. So I probably shouldn't retire anytime soon, right? You're on your way, man. Yeah, but it's it's yeah, I treat it like a four O 1K, you know, and dollar cost average. You just, you know, turn it on, set it and forget it and just buy every week as soon as my paycheck hits, you know, convert it to some Bitcoin so that I can actually store that value.
And it doesn't get sent to Jerome Pals personal bank account. But yeah, it's like it's, it's it's just like a savings account for, you know, the wealth you actually want to save. And it performs better than any investment account because over the last five years, Bitcoin's compound annual growth rate is 67% per year. Over the last 10 years, Bitcoin's compound annual growth
rate is 74% per year. I mean, it's unheard of wealth accumulation, You know, if the S&P like this, this current year, it's up something like 30%. So Bitcoin is up double that over A5 year period every single year. And the S and PS compound annual growth rate for comparison over five years is 14%. So Bitcoin beats it by 53% per year compounded. And over 10 years, the S and PS return is 11%, and so Bitcoin beats that by 63% per year, compounded at.
What point do you think the use of Bitcoin as a, you know, monetary value of exchange becomes mainstream? Like when will I be able to go and buy a stake with Bitcoin or go get a haircut with Bitcoin? Yeah, hey, if you want to buy a stake with Bitcoin, I'll send you a stake all day long. But, and actually I think I think KNC. Cattle out of Texas right now. Takes Bitcoin for stakes. Nice SO. Yeah, you can start there, but the money evolves in three stages.
And so the first is kind of this collectible stage where, you know, it's cool, I want to have some and I think it'll be worth more in the future. And so that's kind of where we're at right now with Bitcoin. It's not, you know, everybody doesn't have it. So it's a collectible of sorts and it's future value we see as much higher than it's current
value. So it's not super rational for me to give away the Bitcoin for, you know, something like a consumer good a coffee or whatever, because the the value of the coffee and the future value of the coffee is much less than the future value of the Bitcoin. But after you get through that kind of collectible stage and the money has permeated society such that a lot of people have it, it's value is, you know, an order or two of magnitude higher than when it's just a collectible.
And so then we use it as a means of exchange. And so I say, hey, I'll give you some Bitcoin for the steak. I'll give you some Bitcoin for that coffee. And once that happens, then people start pricing things in Bitcoin. So you know the the coffee, we'll say 200 SAT's per cup of coffee and a Satoshi called a SAT is the smallest unit of Bitcoin. So it's 8 decimal places to the right. It's one 100 millionth of a Bitcoin. Gotcha. Any idea what your estimated
timeline on that would be? It probably takes, I would say like at least a generation for that to like fully matriculate, but Bitcoin's 15 years old right now. Yeah. I think probably, yeah. Maybe by the time it's 30, it'll be pretty like universal and it's and it's we call that unit of account. So you know what? What things are priced in?
Is there? But it could be, it could be a couple generations because you think like for the generation that's say 35 or younger, Bitcoin is kind of a natural evolution of our always connected digital life. But for the couple of generations above that it's it's still like, is this a Ponzi scheme? Is it like, what is this thing? I don't see it. I can't hold it. You know, it's not, they're not
digitally native. So it just doesn't, it doesn't click as immediately as it does for for kind of our generation. Is there any risk of they're being just a totally different decentralized form of currency created? Like for instance, say, you know, the powers that be are like, you know what, we're going to make our own alternative to Bitcoin. It's going to also be decentralized and you can invest in this if you prefer.
Yeah, at this point now because the network affects the Bitcoin enjoys are so large, I mean there's forget the exact estimates, but you know, hundreds of millions of people who have interacted with Bitcoin at this point. There's billions of dollars worth of special compute power known as ASIC miners that have been designed, manufactured and bought and then turned on to secure the network. And currently there's 8 gigawatts of energy back in the
network to power those miners. Estimates range from 8 to 40 gigawatts to an enormous amount of power. So then you have like the monetary network effects over $850 billion has been put into the Bitcoin network. So those people, you know, would be kind of not willing to move that monetary energy to somewhere else. And the other thing is like, you know, we. Have a central. Party creating a new currency or token or. Whatever they're not going to.
Want to give up the power? The whole reason to create a new one is that you control it. You know, they, they wouldn't kind of make that benevolent move of, oh, let's all get together and spend a bunch of money to create this new one that we don't have any control or say over. And then that's kind of what they're trying to do with
central bank digital currencies. And those are like an even more extreme version of fee out money where they can say, you know, this dollar expires on January 1st, 2025 if you don't spend it. And so in that way, they can kind of influence the money supply at a moment's notice. And they can also, you know, spur spending to quote UN quote, boost the economy, which they they think are related. That's what they So no, I think during. COVID right?
Like that's what the the talk on the town was there. Like if they move to some form of controlled digital currency in which you know they had all the power, they could basically turn off your credit card, so to speak, and just control you through and through. Exactly. Yeah. Like if you buy too many steaks this week, we're going to turn off your credit card so that you can only buy, you know, Impossible burgers because we want to save the environment by eating plant slush that comes
out of a factory floor. Yeah, we don't want that. Yeah, it's, it's like total Orwellian control. But I do want to, you know, we got down to Bitcoin rabbit hole real quick. But I do want to tie it back to to keto. I mean, the the parallels are definitely there. So Bitcoin, because it has this tie to the real world through energy use, through, you know, computers that are hashing, we call it a proof of work system.
And so in order to, you know, move Bitcoin, it has to go through this process that is proof of work. And then it takes the the hashing algorithm is basically like find a random number and combined it with the data from these transactions and put it through this one way hash function and make make a number that starts with a lot of zeros. And so that sounds confusing, but a hash function is yeah,
just this like meat grinder. You can think of it, you know, the the data and this random number go through this meat grinder and it comes out and you basically need to start with a bunch of zeros. And if it starts with a bunch of zeros, then it's good. But if it doesn't, then you have
to try it again. And there's no way to go from, you know, the right side of the equation to the left and figure out what that random number is. You just have to try different random numbers until it comes out with a bunch of zeros in the front. But it's very easy to verify, right? So if if somebody says here's a valid transaction, a valid hash, basically my computer can look at it and in an instant, just with one calculation, see yes,
that that is correct. But because the odds of finding something that start with a bunch of zeros is very small, you can only guess and check. And so right now, the entire Bitcoin network guesses 750 * 10 to the 18th times per second, which is a incredibly large number. I mean, you can't even conceptualize it. So every second the Bitcoin miners on the Bitcoin network are guessing 750 * 10 to the 18th times.
And so we call this proof of work because it takes energy to make all those guesses, but then we can verify it by looking at it. And you know, like in bodybuilding, right, this takes an enormous amount of effort to get to the gym everyday, to work out, to eat, right? But then, you know, when you see a bodybuilder, you can recognize in an instant that they put the work in.
Like that is proof of work. And it's really interesting if we think about like the societal implications of a money that demands this proof of work and this like transparent honesty versus a money that requires deceit and lying and has that as it's kind of base layer and theft. So, you know, in a, in a economic system where the money has the deceit and theft and lying, the most expedient way to make money is to cheat, steal, lie your way there, right?
It's to cut corners. It's to basically make things with that are bad quality that don't last. And like if we look around, that's kind of what we see in our consumer products. It's things that. Break things that don't last, things that are meant to be thrown away. But in the in the other perspective where you have truth and honesty and transparency underlying your monetary system, you know you have the golden age. There's a reason it's called the
golden age. You have like social norms that revolve around, you know, society prospering and, and this kind of communal advancement of science and technology. It's just it's really interesting to to see the effects that the money has because you know, money is half of every transaction. And often times we are bartering
with our self, our future self. And so if if we're using, you know, like this tainted communications channel to do that, we come out with some really bad decisions, right? So you can just think about food. If I, if I highly value the future and I can project my kind of economic situation into the future and be able to do economic calculations on what the future holds, then I can plan for it. Then I can set myself up for future success. It's empowering, it's
motivating. But if I live in a world of, you know, 10%, 15% inflation and I can't even make economic calculations into the future because the money that I'm using to do that is so tainted and the signal within the communication channel is just so blurry, then it leads to nihilism. It leads to, well, you know, what's the point of saving for the future? What's the point of planning for the future? You know, I don't even know if I'm going to make rent this week because my rent just went up
10%. I can't, I'm not going to put in an hour to make a nice meal. I'll stop at McDonald's on the way home because that's quick and easy. And so like every decision gets kind of skewed to the expedient, to the easy. To the short term success. And so bringing it back to keto is like the keto community, it's kind of predisposed to the delayed gratification, right? Like eating keto consistently and being disciplined in that is not something that you trip and fall into.
You know, it takes a conscious effort of planning things out of spending the time. And so this like predisposition to thinking long term is exactly the type of mindset that's needed to understand why Bitcoin is kind of the answer. Yeah, no, that resonates for sure. So I mean, I'm assuming there will be like everything in life, this, you know, first mover, early adopter, phenomenal, which is what you're seeing now with the the collectible analogy you
mentioned earlier. And then at some point when it becomes mainstream, when there's enough options to pay via Bitcoin for goods and services and people, I probably just fed up with the loss of value in the Fiat system, They'll just be like this dumping effect of everybody transitioning to the Bitcoin, you know, transactional approach. But the longer people delay, basically the more their their
dollar loses value. So they're just kind of delaying the the inevitable and losing, losing value with every day that passes. Basically yes. And yeah, like the the transactional use case is kind of like the the least interesting to me. The most interesting is this like global reserve asset because. You know the. We already have a transaction network. It's called Visa, it's called ACH. You know we can, we can move money pretty easily.
And for limited. Cost the, the, the problem that we have is that that base layer, the money itself is decaying. And yes, as Michael Saylor says, it's a melting ice cube. And so you don't want to store, you know, your entire life's work in a melting ice cube. You want to store it in this digital vault that cannot be broken into cannot be written written and is the most secure computer network on earth. So that's the high value use case.
That's what's going to command $500 trillion in capital. The the transactions, you know, they'll come. We can, we can keep using Visa for now. But being able to store your human time in a completely finite, scarce, globally available resource is, yeah, that's, that's the golden nugget there.
What happens to the the groups of people, I guess when you extrapolate out this whole haves and have nots scenario and you've got people living in their world countries that don't have any way of accumulating Bitcoin. Like what happens to them? Are they living in a a better scenario now? Because they probably don't have that much Fiat currency anyways, but like what happens to that
demographic? It's interesting you you bring that up because I think that those people have an advantage over the people in the United States in terms of understanding why a fair money is good. Because in most of the third world countries, you know, their average inflation is actually, you know, 10 to 20% reported, which means that the real inflation is even more, up to hundreds of percent. And all you need to interact with Bitcoin is a smartphone or
not even a smartphone. You can send it over text. There's, you know, in Africa, they sent it, they send Bitcoin by text message, But it, it has kind of permeated those areas because they're kind of predisposed to know that their government is fucking them. Whereas in the US we have the privilege of, you know, only just coming to that realization really for most people in the last three or four years.
But these people in 3rd world countries have been, you know, getting robbed at 20% per year for decades, if not longer. Like, intimately understand the value proposition that Bitcoin brings. And I mean, like El Salvador, they made Bitcoin legal tender in 2021. So yeah, they, they almost have an advantage in kind of being the first mover here. And yeah, like El Salvador, their president posted on his Instagram Story the other day.
His name's Naive Buchele that their Bitcoin holdings for the country hit like $573 million, so that's just really cool to see. Yeah, but it makes me sad to me, people like, I feel like there's this implosion on the horizon with our current structure with with everything man, like, like the education system, political system, the healthcare system, like we're we're literally dealing on the House of cards
right now. And, you know, I think back to humanity before all of this regulation and overreach was ever a reality. And it's like people would barter for goods and services, like they would trade, you know, things that they had that were tangible for other things that they wanted that were tangible. And I feel like if we can return to some semblance of that, we're going to be way better off for it. Yeah, yeah.
But barter had one key inefficiency, which is the basically mistiming of wants is like if I want a cow and you want apples and I have an apple tree. But you know, it's spring and my apples aren't going to be ready till the fall. And your cow, like, I'm hungry right now and I need a cow. We can't basically barter in that sense because of this misalignment. So like money, money is an emergent phenomena, meaning like if the conditions are right, something will be used as money
in the economic system. And because money is really good at doing what it does, which is facilitating trade. So, you know, I could give you the $100 for your cow, and then in the fall you could give me you. Know one? Dollar for my apple. Because you don't want every single apple that falls off the tree. You just really want, you know, an apple or a bushel to make a couple pies. You don't want a cow's worth of apples, right? So like. Money is is.
Very good. It's just that the money that we have now is very bad because it doesn't store the value across time like it should, and that value gets usurped. Yeah, so Bitcoin solves that problem. In a fluid manner that allows for that trade to take place in a true form without all this this rigmarole behind the scenes that people aren't even Privy to. Yes, it takes the. Noise out of the. Economic Communication Channel because there is no, you know, the terminal inflation rate is zero.
Yeah, I just bought. Three more dollars Bitcoin as we're talking here. So I'm I'm I'm getting there man. All right, you're on your way, I think. I'm not sure if you can do it with Cash App, but yeah, there's some of them that you can turn
on daily buys there. There was something that was going on. One of my buddies gave me a book on Bitcoin and he was like all hyped about it because like I think two years ago now, there was some some phenomena that was supposed to happen with Bitcoin or maybe did happen. I just wasn't really in the know at the time. But what what was that, that thing that was supposed to
happen? I think it was about two years ago now, but wasn't there some like pivotal moment within the Bitcoin history so. There's 2. Things that that I think you could be referring to, one is called the halving. Is that it Possibly, Yeah, OK. So the other. Thing is the block size World War, but that was closer to like seven years ago. Now that was 2017. Must be the halving that different, yeah. The block.
Size war was like a debate over how large the blocks should be in Bitcoin, but that's a little bit more technical. The halving. Is something that happens every. Four years and that's when the issuance rate of new bitcoins being created gets cut in half, so. In the beginning. Every block reward awarded 50 Bitcoin to the winning miner and then four years later it got cut in half to 12 and or 25 and then 12 1/2 and then six and a quarter and it just got cut again to 3.125 in April of this
year. And it's it's interesting because approximately 6 months after. The halving. The Bitcoin price historically has gone on on pretty big bull runs, so we're kind of in the. Middle of one, right? Now that'll probably go through sometime next year, but like I'm looking up the having date. So when having occurred this year, Bitcoin price was around $63,000 and it's currently, yeah, at $95,000, it's up about 50%. But yeah, if you look at the
stock splits, then basically. Sorry, it's kind of like. The same concept as like. Splitting stocks? Then no. It's like. Because like a stock in a stock split. You know you get 2 stocks. And you used to have one stock and that inflates the. Supply of stocks, but all of the Bitcoin, the 21 million Bitcoin, they're not all accessible right now so in the 1st. Epic. The first ten and a half million Bitcoin were issued, so like over that 4. Year period 10 1/2.
Million were issued then over the next four year period 5 and a quarter Million were issued and then over the next four year period a. Little over two and a half million were. Issued. So that's it. It's like this exponential decay in newly created Bitcoin. Gotcha. And once they've issued the. 21 total million Bitcoin. That's all she wrote. Exactly, Yes. But functionally right now 95% of that 21 million has been issued so and the final one gets issued in the year like 2140.
So, you know, we have 5% over the next century and so like realistically basically they're they're all there. Gotcha. OK, that. Makes sense. That makes sense. And once they're all issued like that, that is.
Truly all short so. Pretty much people have either a share of Bitcoin or none, and you've got to pretty much once, once everything's in circulation, that's pretty much when the rubber meets the road and people actually start accumulating that and using that as the primary form of currency well. That's like. Mining is 1. Way that Bitcoin kind of permeates through society because, you know, new miners come online and then they earn mining rewards.
But you know, the other way to earn Bitcoin is right now to exchange IRS utility tokens or to provide some goods and services to a Bitcoin or who's willing to separate with their Bitcoin. So I wouldn't say that that it certainly doesn't have to wait until the year 2140 for for the rubber to meet the road. I think that we're kind of in
that spot right now. And once they're all issued, the miners still earn rewards from basically finding, you know, that one in a million number that makes the block valid. So it's not like the. Miners will stop getting paid at that point. You know their their fees, which is, you know, a portion of your transaction that you send to the minor for them to include it in the block, they'll still be getting fees and the value of the Bitcoin will be many orders
of magnitude higher. So even if the fees are small in Bitcoin terms, so like one Bitcoin worth of fees, that'll be, you know, an enormous amount of dollars. And you know my estimate is that the amount of dollars will be. You know, half of the world's total. Energy production for 10 minutes. So that's how you can think about like, what kind of value the Bitcoin miners will be taking in. Is 10 minutes worth of probably half of the world's electricity?
Man, this is some trippy stuff. This is crazy though. This is this is interesting. I must be like a deep dive. You get me a that you piqued my curiosity for sure. Where where do people go if they want to dive deep? Like are there any particular resources that you would point out and recommend? Yeah, I. My favorite book is called the. Bitcoin standard and I usually keep like a dozen copies on me to give them out to everybody who's who's interested. I piqued.
And that's by saving a moose. It's a really interesting historical. Kind of look at. You know economics, money, and it describes. You know, primitive economic systems and and money for like the first 7 chapters. And that really establishes the baseline for how to understand Bitcoin because Bitcoin is a very like new technology. That we don't really have a good. Reference point for, you know, saying it's like gold is is like severely insulting to Bitcoin.
Yeah, well, the this appeals. To me, for a lot of different reasons, but like the notion that there was a, that there would be a form of currency which was just standardized across all societies, all humanity. And it it, it just, it just genuinely creates legitimate value as opposed to this inflated value. And then, you know, that kind of equalizes everything. Yeah. And even. You know, like. Henry Ford understood that we.
Needed an energy backed currency and you know he didn't really know how to. Go about that, but. He he saw that we had this need. For a, a. Currency that was related to energy. And then Hayek, who's a economist, economist, he said in 1984, I don't believe we shall ever have a good money again before we take the thing out of the hands of government. That is, we can't take it violently out of the hands of
government. All we can do is buy some sly, roundabout way, introduce something that they can't stop, and that is this. That is, he described. Bitcoin, yeah, that was. 40 years ago and. You know, like I was telling you. About. Kind of the decentralized nodes earlier. Bitcoin at this point is too big
to kill. You would need global cooperation between every single government on earth to invade every single private citizen's home and destroy all the computer and communications networking technology around. And I don't think that's a possibility. You know, we have a president who was just elected who vowed to implement a Bitcoin strategic reserve at the government level. So the odds of him doing that are are pretty slim. And the new class of congressmen like 300 or more were rated as
being. Pro Bitcoin or pro crypto? So yeah, it's pretty hard to imagine a case where where Bitcoin dies at this point. Yeah, well, I feel like it. It's it's own. Innate form of checks and balances like you have to have that and you can't have this monopoly but this creates that from a monetary standpoint.
I mean kind of like the whole thing with like, you know guns like it wouldn't make any sense for them to restrict all guns and remove all privatized guns in America because just so many guns out there I mean I've got who knows how many guns personally. So like same thing kind of goes into effect with the notion that you could control the entire monetary system and white Bitcoin free from planet Earth are just not realistic. Yeah, and.
Yeah, it's, it's the gang. Theory, which is like pops up all over with Bitcoin. But you know the game theory. Is it's much. More profitable to join it than to attack it, yeah. This is interesting man. You have a definitely piqued my interest. I'm going to have to do a deep dive on this. Have to read that book. I think that may be the same book that my buddy gifted me. So I will actually have to crack
the cover and read it now. It's been sitting on my shelf for who knows how long, but I will definitely read that. And we're going to have to well, I have to get you back on the podcast after I read it and I can actually ask legitimate informed questions as opposed to totally ignorant questions. But this this is this is interesting. Man. I appreciate you enlightening me here. All right, awesome. I. Look forward to it. Yeah, we can talk about. Talk about war.
Remote energy production. Because it'd be good ones. Yeah. Yeah. What? So where? Where do people go to? Find out more about you man are you on? Socials I you know. I I really got off. Socials lately, wise man. Kind of getting. Cleansed. You can find. Me on LinkedIn. At Paul Tansy but. That's. About the our place on that right now. Awesome. Awesome, but for for people. That are on Twitter. There is a really good Bitcoin community on Twitter and there's just some fabulous minds.
That's that's where I got started for sure. But yeah, Guy Swan followed. Michael Saylor. There's a lot of good information there. Lynn Holden Yeah. And then podcasts, I mean, there's, yeah, you got to be a little. Careful because. Some people are pushing their own stuff, but in terms of. Crypto, but there's some really good kind of high signal Bitcoin podcasts that exist. Awesome. Well, I will. Start doing a deep dive myself. And immerse myself in this world. For sure, man.
So Paul truly can't thank enough for the time and I appreciate your expertise. I will definitely keep the conversation going. I'll start diving into the books, the podcast, the interwebs, and do some do some learning. Awesome, Robert. Thank you for having me on and. Yeah, I look forward to our next conversation. Sounds good. I appreciate you, Paul. Till next time, man. Take care. All right, take it easy.