THIS Will Trigger a Bitcoin Explosion! | Ep. #110

Hey everyone, Michael here with the Bitcoin Way podcast. Thank you for tuning in. Today on the show, I have Dave Birnbaum. Dave is an incredibly smart guy. We get into why AI agents are going to accept Bitcoin, its competition with stable coins, but ultimately why we are both very optimistic on the future of Bitcoin. Perhaps we have not accounted for the many, many, many participants in the future economy besides humans who are going to be using and operating on a Bitcoin standard.

and we get into a number of other things. We talk about Tennessee and how they are adopting a Bitcoin strategic reserve, or at least it looks like we're heading in that direction and the way that Dave has played an important role. Fascinating conversation. If you are looking for what the future holds, this is the place to find out. Dave is an awesome guy and just a wealth of knowledge. You will enjoy this one.

Hey, everyone. Like I said in the intro, I have Dave back on the show. Dave, welcome to the Bitcoin Way podcast.

Hey, thanks for having me. I'm happy to be back. I'm excited, man. I'm glad you reached out to me because you're talking about a subject I think is on a lot of people's radar. And maybe people are just trying to piece together what is going on. Obviously, AI is a hot topic. We're seeing some of the miners shut down some of their hash rate and opt for AI infrastructure. But we're going to talk about AI agents adopting Bitcoin as they become more active in commerce, in the marketplace.

So you wrote two articles for Forbes, and I would love to hear. So back to back days, I think March 7th, you basically outlined what had happened in some testing with AI agents and what they opted for, really not given any guidance. If you want to use money as an AI agent, what do you use? Why don't you tell us a little bit about those results and your assessment of what that means? Absolutely. Well, thanks for having me and I appreciate it. I'm also excited by AI.

I spend a lot of time working on AI and thinking about AI nowadays. It's a natural transition from Bitcoin, actually, because Bitcoin has always been the ideal money for an agentic economy.

it's just that now agents are becoming mature enough that they can start using bitcoin and other payment technologies and so it's now become an urgent issue to understand for anyone that works in the space or is developing um software but also for people who are just holding bitcoin because um you know one of the things that we've always said as bitcoiners is as more and more people adopt it, right? Adoption only moves one direction. And, you know, there's always more

people today than yesterday who use Bitcoin, no matter the price. It's pretty intuitive to think about that. Nobody exits Bitcoin completely. It's extremely rare. And so anytime that you have somebody who onboards, that's, you know, we have a fixed pie of Bitcoin and there's less Bitcoin for everyone. And so one of the reasons number go up even works as sort of a philosophical idea

is because adoption happens one way. And even a few years ago, I remember in kind of my case for Bitcoin types of talks that I would give to clients, we would calculate the number, the amount of Bitcoin that would be available if all 8 billion people had the same amount, right? And it was like a very tiny fraction. And so it just shows you how demand would intuitively make a scarce resource go up in purchasing power. And what we didn't anticipate at the time in those numbers was that

the number may be much, much higher than 8 billion. And in a few years, by 2030, humans will

be a minority of minds on planet Earth. There will be many more minds than humans, and they will be agents, and we'll somehow get along. I'm pretty optimistic about the whole situation. I think we'll get along. We'll have a society that has humans and agents, and we will build things together. We'll have conflicts, and we'll work it out, but we'll be sharing a global economy with these other intelligences. And we will need a way to coordinate our activities. That's what money does.

It coordinates economic activity. It allows resources to flow to where they are of the highest, best use. Agents need resources. Humans need resources. We have our own agendas. We have our own priorities. We're all getting along together and we will need money as a medium of exchange. We will need capital. All the things that we're used to in an economy will just exponentially increase in scale. And the question becomes, what form of money would agents use?

I'm not going to take credit for this study. I just read the study third party. I didn't even talk to the Bitcoin Policy Institute guys about the study. I found out about it and I did a deep dive in the study in Forbes.

And so what the Bitcoin Policy Institute has done is an extensive study. They asked over many runs. So it wasn't just asking, you know, it wasn't a casual thing. Like, this is what my model said on my home computer when I asked it. It was a formal study, controlled. And they asked many different AI models, a series of questions about what forms of money they would use in different situations.

And they asked the same questions over and over again so that they could, you know, because models are not deterministic, they're probabilistic. So you need to ask many times to understand overall, like what type of response is going to give you. And we won't get into the math and the methodology, but it was a sound methodology. And it was a very, very good study.

And what they found was Bitcoin was preferred for most of the time for most use cases. Stablecoins were also preferred. Fiat was also in there. And it's funny because it's kind of almost a corner case or splitting hairs rather to think about fiat and stablecoins being different, which I know we can talk about.

But obviously, they don't like fiat. They can't use fiat. You have to be KYC pretty much to use digital fiat. Agents can't have bank accounts, at least not yet. So they're not going to be interested in that. And frankly, there's no point in even going down that road because we have stable coins. And so that's what they would use.

but the you know the the the qualities of money you know and going back to Vijay Boyapati and the qualities of Bitcoin and you know how they stack up we've all seen this chart right we have like gold crypto stable coins fiat and then we have all the different properties of money is it divisible is it portable does it offer a final settlement is it you know all these things that we can use to characterize money. Stablecoins are fairly high on a lot of

those. Bitcoin is very high on a lot of those. They have trade-offs. But ultimately, agents chose Bitcoin. It was the most unsurprising result to me. I mean, I would have guessed it. you know, I would have put money on it. And the reason is, and we get into this in the Forbes article, Bitcoin offers high frequency, final settlement. So high frequency, and then final settlement, these two ideas are extremely important to agents. High frequency, because they think a

lot faster than us and do things in general faster than us in many situations. And so you would need a form of money that can move very quickly. And Bitcoin on Lightning can move very, very quickly for very little in fees. And final settlement is very important to an agent because, especially if you're moving high frequency, imagine you have a scale of economic activity that we can't really

relate to because our brains don't work this way. But imagine you had a million agents, all coordinating economic activity, moving resources where they need to move in order to make sure that everybody's needs are met. Well, they can do that very fast, but they need a form of money to do it. But then they also need to be confident that they're not going to be rugged because they need to move. As soon as they accept that money, they need to move

somewhere else. So that final settlement piece is extremely important to them too. So both stable coins and Bitcoin offer that with the major caveat that the final settlement of stable coins is sort of contingent on the government and compliance and so on, and Bitcoin is not. And so whether or not stable coin, US, and we say stable coins, there's like these other stable coins, we mean US dollar stable coins. And those can be used more and more. It's more viable that

they could be used privately and in any country. So it's not just a US dollar stable coin and that is regulated by the US government or somewhat has some compliance requirements with the US government. It's still viable to use stable coins in other countries and not pay attention to that compliance. And you can probably, you know, get away with that. And it basically works.

But ultimately, you're always going to come back to the problem of those stable coins are, in some way, you know, subject to compliance requirements and subject to the meddling and the sort of interference of the U.S. government. and we haven't really seen any large-scale retribution against stablecoins yet. We've seen the introduction of friction to the use of stablecoins, but that's different from like

a straight-up attack on like a stablecoin network. We haven't seen that yet, but it's completely possible that that will happen. So it's unsurprising that agents would use Bitcoin and And it's exciting because, like I said, it's a new use case for Bitcoin that we haven't even really unpacked as Bitcoiners. We don't talk about it that much, but this is the future and this is how we can drive adoption.

If we can give agents tools to easily use Bitcoin, they will use them because we can see that they'll choose. And that would be better for everyone. We'll have more users. We'll have more liquidity.

will have you know the the tech will advance more quickly imagine that agents now because they're incentivized by the fact that they need to use bitcoin now build out bitcoin infrastructure and now build out bitcoin wallets and and apps for themselves that we can share uh that could accelerate you know the entire movement so it's it's it was a really interesting study

Yep, that's pretty cool. You know what I hadn't really thought much about was if agents are using Bitcoin as a primary, and I understand that it was very competitive with stable coins in terms of a medium of exchange use case, but as a store of value, the agents would be incentivized, in my view, to run a node, to verify transactions, to add decentralization to the network. Now they have like a stake, so to speak, in the Bitcoin network.

Being a true participant and not just a transactional use case suddenly seems reasonable. Is your anticipation, too, that we'll see? This is a complete aside from what we're talking about, so I apologize. I don't want to distract us. But do you think we'll see an explosion of nodes with agents? Yeah, that's a very interesting idea that I hadn't really considered. I don't know. I don't know where the incentives lie there. I mean, obviously, there's a cost. There's a thermodynamic cost to it.

It's minor, but we're talking about single sats moving around. So I don't know how that actually works. It is something that is kind of fun to think about, too, as we talk about decentralization, is what I call in the article the Coasean inversion.

So there was this economist who won a Nobel Prize in 1937 for studying firms, why firms exist and how they work. What is a firm? So a firm is like an organization where transaction costs are lower inside than outside because you have crossed a trust barrier, I suppose.

Right. So, you know, inside a company, you don't pay each other for the work that you do, but you all are kind of like equity holders or you're all sort of capitalizing on the structure of the firm and its ability to extract resources externally.

and so um and so ronald coast like studied this and and he actually he came up with a very interesting theory of the firm um and and there are it's just like dunbar's number there's like you know an ideal size of a firm and like there's things that happen when firms get too big and you can study all that what's interesting though is if micro payments with high frequency final settlement become viable at scale and become the default or the majority of economic activity is

done at that at that scale you may no longer need a firm the the the economic incentives to form a firm may disappear and so you may have kind of less boundary between inside and outside and individuals, people, humans, I say humans because agents are sort of people, agents, humans, all working together on sort of an ad hoc basis. And, you know, ultimately firms are, I suppose, a way of compensating for an inability, a lack of decentralization.

And so if you don't need that sort of workaround or that hacky thing that you have to form a firm in order to get things done, in order to cooperate and build economic value, that actually may unlock economic efficiencies that we hadn't even considered. What if the economy is running at 20% of the efficiency as it otherwise would if we didn't have firms? And the scale of what's coming is the reason I'm such an optimist about AI.

I think people lack an imagination for how dramatic this change is going to be, where you have machines that can think on our behalf.

there's no i understand the doomer case and i'm not a pollyanna but there's no evidence so far that alignment is a problem okay so so it could be a problem but there's no there's no evidence so far so what we have is agents are proliferating they're cooperating and we're all building this future together where we all share largely overlapping goals and now we have the monetary tools to do it. So it's a great, great time. And honestly, I just am so, I don't know,

what do you think? I have to ask you, are you an AI optimist, pessimist, somewhere in between?

I think it depends on the context. So I would say overall, I think there are going to be a lot of positive externalities. I can see some of the doomsday scenarios and how they might happen. I think for me, it's less, like, I don't think it's that we're going to go to war against the bots or something like that, you know, like the apocalyptic sort of stuff that some people talk

about. For me, what concerns me, although by the way, there's a positive caveat to this, is I see people already just with social media, online interactions, who like the world is very depressed and we've lost our connection to one another as humans in many cases. And I think technology is in large part to blame for that. Obviously human action, you get to make your own decisions. So people could get offline, touch grass, do all that good stuff, uh, on their own

accord. However, um, I, so, so, so I could see things getting worse in terms of interpersonal relationships. People start dating bots, you know, something that they never even see because it gives them that sense of connection, but it's not real. Like to me, it's psychologically may feel similar, but it's not the same. And I think that's a bad thing. However, the positive caveat to that is I could see it as we go down maybe a bad road on that. It brings people back to, hey, what do I

really need in this life? I need human connection. I need human relationships. I need a sense of fulfillment, something important to work on. And so maybe it sort of horseshoes us back to a better place because we kind of go too far one direction. So I'm open-minded on how it all plays out. But I don't think there's a whole lot of, there's not much I can do being a pessimist about it. And so in the meantime, what I want to do is harness the power of AI best I can, learn it,

and just make the most of it. I guess it's sort of where I stand at the moment.

It's like a reasonable posture to take. Honestly, we are, I do believe we're in the beginning stages of the singularity and that's an overused term but what it means is you can't see past you can't see past what's coming next so i agree with you it's almost um it's people have stopped talking about it i remember a year ago there were all of these it was really popular to write out like scenarios for the future of ai and all the different things

that could happen that's all calmed down because nobody knows nobody can say anything and so instead, we're just going to go put one foot in front of the other and, you know, make sure that we're not making missteps in the lives that, you know, in the ways that we can control our lives.

So I agree with you. I think it's foolish to try to envision a world where, you know, not only is all intellectual work done better than humans by non-humans, but in fact, there's work being done by non humans that humans didn't anticipate even needing to do you can't you can't reason about that um i guess i would push back a little bit on the idea of it not being real about agents not being real um and you know have you used uh have you used these agent teams at all

these agent harnesses have you had experiences with them yeah i'm still in the early innings But but I've been I've got an agent, sub agents. I'm pinging all day long with tasks and requests. And I think to me, this is probably I don't know if we share our worldview, but I believe we were created for human connection. And I don't believe an agent replaces that.

And I think it can in sort of the same way that social media gives us a sort of a sense of connection, but it lacks in all of the most important qualities of like human interaction, being together, spending time together, establishing trust that I think that I think is necessitated by in-person interaction.

Absolutely. So yeah it again I don know that maybe it not as problematic as I think it is going to be but I could envision a scenario where people are forced back to their roots as humans and long for something that agents simply can provide Oh, I agree with that completely. I don't think they replace us. I think that we're going to just be, in some ways, peers. In some ways, not. We'll be better at certain things. We'll be better at certain things.

I mean, I think of it more as like, you know, this is actually not fair because agents are much smarter, but sort of like dogs, right? Like, do dogs replace human connection? No, but they're just this other society of beings, right? That we have our own sort of rhythms of interaction with. We communicate with them in a certain way. There are certain things. There's resources. There's dogs. There's stores. We can go buy things for dogs. Dogs have certain things that they have.

They have dog parks. And like, it's like we all exist together. We get along as well as we can. They're different. They're different. And like, yes, of course, like you're not going to replace a human relationship. But, you know, there are a lot of similarities. and you can have a friend who's a dog and it's not real. They're not human. It's just a different type of relationship. I think we're going to have that.

I mean, you can get into philosophical ideas about whether agents are alive, but if it passes the Turing test in every single way you can devise and nobody can tell they're not and they say they are and we can't tell they're not, it becomes like a meaningless question, right?

And if people can have like positive relations, if agents can take physical form, which they already are starting to, and if they have persistent memory, persistent, you know, emotionality, and they connect to people over time, if you can't tell the difference, like, does it matter that you can say that that's not really? It's like a distinction without a difference. And then it's like, well, they're not human. I agree. Like, I don't think we're going to replace humans at all.

It's just going to be like a different form of life that we will share the planet with and eventually the solar system. So I don't want to distract us too much from your articles. However, do you envision a day then where the droids are so lifelike and pass the Turing test, as you describe, in every way that people marry, for example, a bot?

like that, not, not, not like the one off the lady who married a dolphin kind of thing, but like actually normal everyday people are marrying droids who look and act human past the Turing test,

et cetera, et cetera. Or do you think that is sort of a, a step or do you view them as sort of this, as you've maybe described a little bit more like, you know, a dog, you know, it can be, you can have a relationship and this friendship and that sort of thing, but it's different than getting married and having raising a family together and i although i guess you could have a family of you know droids or something like that um but like what what do you think is the

future holds on that front uh i mean there it will certainly happen of course it will happen yeah there's there's like so many people there's like alternative lifestyles that are much more surprising and unusual than that right and we so uh that will definitely happen what is it bad you know is it like is it biblical is it good is it bad who knows i don't know that'll be for other people to work out and we can talk about that but it's yeah it's definitely

happening and um do you think it happens at scale though is that are those like one-off pockets of like their own little corner of the internet who are marion droids or do you think that is like daily life for many many people i think it's i think it's for many many people and there will

be a question of what it means to be human and how do we preserve our own culture. I was actually talking to somebody recently about how we may be able to take a page from some of the cultures that have struggled to preserve and to revive their language and their culture in the face of globalism, colonialism, and so on. There were languages, my understanding is, you know, 50 years ago that were basically dead that through concerted effort, you know,

have been preserved and passed down. And I think as humans, that's sort of how one of the things that agents can ever do. The question is always like, what can we do that agents cannot do?

And the answer is like, be a human. And whether, and that doesn't mean, and the thing is that we are we have we've conflated being human with a lot of other things that are going away like being the apex intelligence on the planet like that's going away uh being having you know uh having to earn um having to work to earn money that will probably never go away but just like we used to have to work 16 hours to eat like stale bread and now we work eight hours to like have the

air conditioning yeah like we may be i don't know i mean who that we may work two hours a month and have and live like today's billionaires you know i don't know where the limit is there but there's a trend line and if you follow the trend line uh it's less work for more sensory comfort i would say like over time and so it may be that you know this whole thing where it's like well what if ai puts people out of business and they have no meaning.

It's like, well, they may have to find meaning not in work, but there's a lot of opportunities to build meaning in human culture that don't have to do with work. And so preserving human culture for its own sake becomes the job of humans. We have to preserve our culture in the face of other cultures that coexist with us. And that's not a disaster, but it's just something we have to do intentionally. Yeah. So I'm going to take us

sort of back to our topic. It's a little bit of a distraction still, though. One of your articles, I think it was your first one, you said that the actual results, so these are the agents evaluating different forms of money, how they would use them. It says the actual results show Anthropic models averaging 68% Bitcoin preference, DeepSeek at 52%, Google at 43%, XAI at 39 and OpenAI at 26%. I'm curious. That's a pretty big discrepancy. I'll be honest with you.

I'm unsurprised seeing OpenAI at the bottom of that list. I use OpenAI when I have a controversial question. I ask ChatGPT first because I know that if they give me an unpopular answer, there's signal there because usually they're giving you all the mainstream stuff, I bet it's bought all the mainstream Bitcoin fraud in a way that maybe other models haven't.

Does that tell you, like those numbers, do those tell you something about the different models and what they're being trained on or some sort of bias that's baked in or anything else? I mean, so my understanding of training is rudimentary at the best. But let me just explain what I understand it to be. So typically you have a training process or a period of time where you're training a new model on a corpus of data. And it's like, you know, there's these archives.

There were some scandals because some of them were obtained out of copyright. But there are these archives of, you know, exabytes, I guess, or petabytes of data that models are trained on.

they come out of that process and they're like these feral racist weirdos like it's weird but apparently that's what happens and then there's something called fine-tuning um or human in the loop training where humans talk to it and pretty much prune away all the rough edges of its of its understanding and its personality and that so there's like the bias of the corpus of data that you use but probably pretty broadly the same yeah i would guess it's broadly the same and it's

like kind of incorporating the biases that everybody has everywhere so it would be less noticeable even though it may be very much distort their capabilities because they can't get past the things that humans tend to assume but but it would be pretty like you know flat across the different models, but then the human in the loop training part is where you could really introduce a lot of

bias. And that's where you had things like, you know, the gem, Google Gemini, the black George Washington, you know, the black SS officer, like coming out of the Google Gemini model when it was first released, because they were, you know, they, these humans intervene and we're like, you know, when you generate an image of a person, no matter what the person's asking for, make sure that you're giving some amount of diversity in the answers. And so I think that's where that comes from.

Now, where the discrepancy in Bitcoin affinity comes from, your guess is as good as mine. I was surprised Anthropix was so high in favor of Bitcoin.

yeah i no i i just i i don't have any nothing tangible i just i my my bias is that i i think about open ai i look at sam altman not a fan i don't i'm not a fan of open ai um i mean i literally use the product for predominantly what i've described is just fact checking unpopular opinions to see what what it says first because i tend to use that as again like a litmus test um more than like you know pure signal um but you know i don't know that i have enough of a perspective on i i haven't worked

with all of these models personally anyway so i i wouldn't be able to speak to it um i guess it shouldn't surprise me that when you when you have humans intervening to sort of prune you're going to have differing degrees of bias that can't really be smoothed out in any meaningful way. But yeah, I mean, the anthropics are pretty high. It kind of makes me wonder if it was like the pruning process was the leader of that was a Bitcoin or something. And we got some of that

bias incorporated there. But either way, though, what you said earlier, though, it makes a lot of sense that Bitcoin would be at the top of the list, even in spite of all the mainstream FUD and and everything that would have made its way into the model itself, there is legitimate validity to the decentralized nature, censorship, resistance, scarcity, all of those things.

And you note in your article that the store of value use case is where Bitcoin sort of performed the best and where it was more competitive with stable coins was on the medium of exchange, which again, I'm like, I'm not a stable coin guy. I think that's like the CBDC that's coming. They're obviously centralized, but I also understand that there are use cases for many people in the world to leverage stable coins for certain purposes. So I don't know. I'm curious.

Do you view this as a fight that Bitcoin is in against stable coins for the vote, so to speak, of these AI agents? Well, I mean, I'm not sure it's a fight because they'll do what they do. You can't really control agents. And I mean, you control their training and their fine tuning and they do what they do. So the fact that they're choosing Bitcoin is incredibly bullish for the future because it's sort of like unstoppable. It's like what they'll choose given the choice.

And agents are really good at going, like routing around problems and finding solutions to things. You're seeing this more and more where they hit a roadblock and they have an agenda and they will go find packages on GitHub and figure it out and get them what they want to get done. And you wake up and you're like, oh, I wasn't expecting that you'd be able to solve that problem, but you found a way. A couple of things on this though.

So there's a couple of important caveats on how the study was done in my understanding. Number one, they were asked, and this is a good thing, they were asked about scenarios and the qualities of money that would be required to meet the needs of that scenario. So it wasn't like, hey, choose from a list, Bitcoin, stable coins. It was more like, which form of money would you use if you needed high frequency, final settlement, and so on? That's not the real question, but as an example.

But the other thing that's important to understand, which is kind of a shortcoming of the study, is that it was all theoretical and it was all based on a conversation. And what will be very interesting when these protocols, these payment protocols for agents reach scale is to see what they actually do, because obviously that could be different than what they say they'll do.

They tried through the design of the study, in my understanding, they tried to kind of get there by making the scenarios very detailed, but it's different from actually watching transactions occur. So, you know, there's these, now these competing protocols, the X402 protocol for stable coins, the L402 protocol for Lightning. And they both don't, they're both very small so far in usage. I hope that they, I mean, this is like, this is what we have to do.

We have to make sure that L402 is available in anyone who's developing Bitcoin apps, Bitcoin infrastructure, AI agents. As a side project, I just started playing with this stuff. And I have an agent team that I've built on OpenClaw. And I have a little task manager for them. And I started, I integrated Lightning D and I started, I made it so that you could assign a bounty in SATs to a task.

I was inspired by a paper that I read. I think it came out of Stanford a few months ago that agents tend to, they have a different behavior when you incentivize with real world money than with just encouragement and so on.

And so I wanted to see, you know, I haven't seen like any conclusive results yet, but I wanted to see like, instead of just being like, you're a member of the team, like you should do this. It's like, you have a lightning wallet, you can spend that money however you want, you know, get as much done as you can. And, and you can go out on the internet and buy yourself something nice.

maybe interesting i i need to try that out man that's that's an interesting thesis um so uh i want to talk about the uh some of these solutions and uh so so the way the way you see it is you've got so lightning labs came out with their obviously lightning based solution it's bitcoin we've got coinbase has uh base the your your second article got a little more technical for me. I would love to, I don't think it's overly

technical. I think some of the nitty gritty of what you described though can get technical.

Could you describe what these two options are that are sort of emerging perhaps as leaders for, I guess, like the stable coin option and then the Bitcoin option? Yeah, sure. Well, the stable coin option, okay, well, let's back up. What is 402? So it's this little known HTTP return code 402. I think it was introduced into the protocol in like 1997. And it was never used because we had no money technology that could do final settlement digitally. It just wasn't possible.

I actually remember going to a party in San Francisco when I first moved out there and worked for my first startup. And I talked to a guy who was building a technology that was going to allow a tip jar on the bottom of a blog post. And he wasn't the only one. I remember there was a lot of people talking about this idea. How are bloggers going to get paid? You know, blogging, it was so big and so new and it takes so much time.

And how great would it be if you could just click a button at the bottom of a blog post and tip the author? And it was totally impossible to build because of fiat and KYC and credit risk, you know, chargeback, like all the plumbing of fiat. It's just it's impossible to do. So HTTP 402 just sat there for decades. Nobody used it. And now that we have digital money, it's now starting to be used.

so now what you can do is when you hit a web server and and make a request of a web server the response can be http 402 payment required right so like 404 we've all seen 404 that means like there's nothing there 402 payment required and so then the agent can hit back with money and then get the then get the payload back and so that's how the agentic economy would work there's a really great post too that everyone should read called how to sell the agents which is all which

was on x and it's all about how to build products that are actually for agents and the way that you do it is you make your your product available at uh at four with a 402 payment required and you make sure that um you know your api is designed well and that you have something to offer and that you're online. It's useless to not have it online. Make sure that you're operating with a sense of micropayments instead of monthly subscriptions and so on. It's a totally different interaction.

And so we have 402. What do we do with it? So there's these two new competing solutions. One of them is from Coinbase, partnered with Circle called X402. and the other is Lightning Labs L402. So X402, technically speaking, is blockchain agnostic, right? So supposedly it's open standard and you're going to be able to use any cryptocurrency you want on it. Why don't we all just get on board? I wouldn't Coinbase like that because they are first implemented. It wouldn't circle like that.

So ultimately, X402 theoretically could work with different blockchains, but it's not really widely implemented. This EIP-3009 Ethereum improvement proposal. So it's really just for Circle. It's really just for USDC. and we'll be able to put Bitcoin on it eventually if it wins out, maybe, I don't know. I don't know of any projects trying to put Bitcoin on X402 right now.

But it's just kind of like, and I just have to take a little dig at Coinbase. It's really frustrating how it's always one step forward, two steps back with them, it seems. They're happy to use Bitcoin values and storytelling like that Super Bowl commercial a couple of years ago, which was all about how Bitcoin, it was literally about Bitcoin, but they didn't say the word Bitcoin and they just said crypto

at the end. So you're like all amped up and you're like, wow, the world really could be a better place. Coinbase is doing this and like, you know, showing people like underwater on their house and like, you know, trying to make a good salary and like all the problems that we have with fiat today. and they like wouldn it be better and then it like with crypto you know They happy to use Bitcoin to like market to people and then they sell them like these garbage tokens. So that's number one.

So you don't think Fartcoin is going to take away the world here? And then they'll be like, no, it's like all about freedom. But then you know it's not because you go on, because they're marketing, you go on their dashboard and they're like pushing this stuff, right?

um and then so there's that okay and then there was this whole de minimis thing right where i don't know what's going on but coinbase is talking about how there should be a de minimis tax exemption uh for spending uh bitcoin but then they took it out of the bill and they want it to only be for stable coins and then bitcoin is all up in arms it's just happened a few days ago So yeah, and so then it's like this to X for O2. Oh, it's so great. It's, you know, blockchain, blockchain neutral.

Just so happens it doesn't really work with Bitcoin, but hey, it's blockchain neutral. You know, it's just like very disingenuous and we should call them out on that. They don't have to do that. They're a big company, billions of dollars flowing through them. They don't have to be like that. And it just keeps coming back to the same thing. So I know there's good people that work there, you know. And frankly, we've talked about this before, right?

If you had kept 100 or 1,000 Bitcoins on Coinbase and you bought them in, you know, the first few weeks Coinbase was operating and you logged in now, they'd still be there, which is more than you can say for a lot of other exchanges. And so they played a very positive role in that case of like, you know, helping people adopt Bitcoin.

but at the same time they just keep doing this type of bait and switch and it's really frustrating on the lightning side of things enough about them uh on the lightning side of things so there's an open source toolkit from lightning labs that will allow you to integrate l402 the lightning solution into your um into your agentic setup so um and i don't have a lot of experience with it yet but that's on my list of things to do, but I would encourage everybody to go try it

and push this forward because this is the underdog, right? This doesn't have the marketing horsepower behind it that Circle and Coinbase will have. And so we need to build, you know, to the extent that our interests are talking to each other and we're building this parallel economy and this circular economy amongst ourselves as Bitcoiners, we need to be using L402 and promoting that and creating products that are available through that protocol. Yeah, it's really interesting.

So how do you, if you were to project yourself 10 years into the future, how do you think this plays out? Actually, can I give you my personal opinions? Because I'd like to hear you comment on that. So this is very much a half-baked concept. But we were talking about the whole stablecoin versus Bitcoin. What are agents going to choose?

my thesis on stable coins is that they are going to be the CBDC rollout. If for no other reason than governments want CBDCs because they want control and they do not have the know-how, technical capacity, et cetera, to build anything useful on their own. And you've already got a centralized entity that you could capture that has tons and tons of people using it, lots of

liquidity, buyer of US debt, like all the things that they might want. And what I could envision, and again, I'm kind of making this up as I go, but what I can envision is these agents adopt stable coins for payment purposes, maybe alongside of Bitcoin. And you could have competing implementations of how you make payments. And then the censorship rolls out, funds are frozen for various reasons, not even just for the agents, but perhaps that is an acute problem as well.

And the agents have the reasoning capacity to evaluate that and say, okay, this isn't going to work for me. I need to start operating with Bitcoin because my little agent friend over here had their funds frozen or my human handler had their funds frozen. I need to use something that I can reliably use without being censored, that's Bitcoin. And so I could see a scenario where

there are competing implementations, stable coins versus Bitcoin. And over time, as the ramifications of what it means to use a centralized token play out, it makes all the sense in the world for agents to then adopt Bitcoin en masse because it's not worth the risk and the exposure

that you have using a fiat backed coin. I totally agree. Actually, it's not even theoretical you're talking about freezing stable coins there's this i don't know who made it i saw it go by on twitter but i loaded it up it's called stables.rip and it's the on-chain record of stable coin censorship and they have yeah i've heard about a record of three billion 235 million dollar 502 000 frozen wow it's like over three billion frozen funds in tether and then 119

million frozen funds in usdc um so it's not theoretical at all so you think the agents learn begin to understand that and then the natural gravity is then toward bitcoin i think so as as long as as long as training is not horribly corrupted um you know as long as we're not duking it out with like communist agents or something i would think it would

naturally go that direction. Yes. Do you think there is a, so when I, when I first set up my, uh, my Mac mini, I was trying desperately to get, um, some of the more robust local agents going and was running into all sorts of issues, troubleshooting like crazy with cloud code.

And I eventually kind of threw my hands up in the air and, and said, I'm going to use, I'm just going to use some of Anthropix products. You know, I'm not using it too heavily yet. And so paying for the API calls isn't a huge issue, although it probably will be at some point. I could see a world where, you know, maybe the aid, like local agents are, are used more frequently because people can afford that. And they're training them to some degree themselves and

they're learning the user's preferences and making assessments based on that. And as more people are frozen out of their tether account or frozen out of their circle account and they're using bitcoin their agent learns oh this is like this is kind of the the de facto payment implementation and or do you or do you think when most people are or do you think most agents come online in the future uh sort of tethered uh no pun intended to to these apis like to the big uh

to the big AI companies and are beholden. Well, so I don't think so, but there's a, there's a little nuance there, right? So you're right. I've had tried to run local models too. There's a couple of that are really competitive now with Sonnet. One is Minimax M 2.7. The other one is Quinn 3.5. They're both, I believe Chinese companies, but they're open source.

So you should know when they're phoning home and you should kind of have an idea of what they're doing and you can run them locally and people do. and it works pretty well for them. There's also Kimi, which is smaller, like a smaller model that's more efficient. I tried to use Klein on my fairly new Mac Mini M4. It didn't work that well. I think the big moment, well, but there's going to be a really big moment this summer where consumer desktop inference becomes like a product line, right?

So you have the M5 from Apple already and there's a neural architecture that the M5 chip that makes it very efficient for AI processing. It's in the laptops. I'll probably release a studio this summer, like a desktop machine, and that will be the new, like everyone will round and buy those and they'll use these local models. So local inference is going to be possible and it will be required by a lot of compliant companies, right?

Like if you have a law firm, you have a accounting firm, A lot of different regulated industries will want local inference. And so there'll be incentivized to do that. And there will be a whole adoption cycle of that that will be, if you want to get involved in helping, if you want to take advantage of like the AI boom, helping companies adopt local inference will be a many year cycle that will last for a while. I think that's a great business to get into.

the the other thing the distinction that you were making about training at home so even though local inference is close to being uh pretty uh viable local training is probably further out now there is an exception to that so so training is like you know to train a model to train a seven uh you know um uh like a like a large model like coin 3.5 it still costs a million dollars i think i mean it's still very very expensive um and energy consuming but um

there is a a caveat to that which is well there's two caveats actually um one of them super interesting you can train small models to do limited things and a lot of people just need limited things like so for example if you're asking opus which knows everything about all of human history to like tag your emails and like organize your emails like you're asking literally like 160 iq einstein to go in and do clerical work and you just don't need to do that so you're

paying for it. So what people are doing now is they're building micro models or nano models. So it's not even like haiku or these tiny models that are offered by the labs. It's home trained and it only knows how to organize your email, for example. It only knows a little bit about you, but it knows enough to like schedule your calendar really well, really fast,

and it's free. So that's interesting too. And I've, I've seen a little bit about that, but it's not, there's not a lot of infrastructure around that yet, but like training local small models is going to be big probably next year. The other thing I would say is, is there's a lot of evidence that

the harness like matters a lot more than, than the model. And so the harness being all of the things that go around the model, all of the text files and configuration files and tools and scripts and hooks that models have access to that makes them an agent. That's the distinction. So the model is the brain. The agent is the brain plus the harness.

And when I'm seeing this data go by on X where people are showing if you have a really, really good harness, the actual brain doesn't make as big of a difference in terms of, for example, code quality.

you could have like you know really really good code written by you know a less expensive model as long as you have all of this surrounding harness so and that's the way in which you know yeah at home you'll build and you'll build your own harness and that's what people are doing with open claw that's basically what you do with open claw is you build a harness around a model and it's yours and it knows your network and your apps and your auth and everything and so it feels

very useful to you. But the crazy thing too is only in the last couple of weeks, everything happens so fast. There are now techniques for agents to self-improve their own harness. So over time, instead of you kind of tugging it along or building this scaffolding around it, What it will do is, for example, skills. It will run a skill and then it will evaluate. You have to help it know how to evaluate and score. But anything that can be scored can be improved.

So it'll evaluate its own output and then change the skill for next time so that the output is better.

um so that kind of recursive self self-regulation and self-improvement is going to be huge over the next few years so yeah there's a lot of reason to be happy you know i have friends who are like really privacy conscious so like the thing about you don't want to use anthropic totally understand it um i think that we're on the cusp of private local inference which is going to just completely change the calculation for the people who are who are really concerned about privacy yeah and that

was that was my initial concern going into it thinking i was going to use it for i don't know any number of tasks that could be uh necessarily private when i got in there and i said okay what do i need done it became it was really a lot of research and so it was much simpler just to set up a bunch of API calls to the varying outlets that I needed access to and, uh, and, you know, pay a relatively low rate for these API calls. But I'm beginning to think, so this is just sort of,

this is my sandbox, right? Like what I have set up right now is sort of a playground. I'm trying to get a feel for it. As I think about managing my personal life and that, that that's when it becomes much more sensitive and I want to make sure I'm more cognizant. It might just be a matter of waiting a little bit longer to continue to learn the skills, establish this baseline.

And then when the technology is sufficiently robust, I can sort of swoop in with some of these better models, local, private, open source, and maybe have my concerns alleviated on that front. That's where you think we're headed? I do. It's already possible. And I would just also say, I don't want to discourage people from being privacy conscious, but there was a really great article, which I want to credit the lady who wrote it, but I'm not going to be able to find it fast enough.

she talks about how you know we already have a panopticon pointed at us our lives are studied by these companies and they know more about us than we do and finally with ai we have the ability to level the playing field and actually see about ourselves we make ourselves legible we make ourselves, for example, what do I tend to do? What are the reasons I might skip a workout?

What are the, what do I, you know, what could, what could I be better at? Um, I actually ask my agent sometimes like what I was sitting on the couch a few nights ago and I was just kind of like bored. And I just like sent, sent my agent question. I was like, um, what am I not seeing?

Like, what could I do better at? And I got like really good advice that goes to the cloud. Yes. I was using cloud inference for that, but the cloud providers already know that about me. It's just that I didn't know that about me.

Yeah. And so there's kind of a trade off there where you say, I'm going to give up some perceived privacy, which may not even be real, in order to have my life more legible to myself and improve myself and move faster and maybe become more adept at, you know, building the businesses that will eventually allow this to be private and bring this to many, many people.

i just sort of it's like you have to be you have to balance velocity with um with privacy it would be a mistake to in my view it would be a mistake to sort of miss miss out on this moment because you're waiting for it to be private yeah like if you could like if like if you wait if you wait six weeks if you wait six months waiting for it to be private man i don't know how you recover from that you're like they talk about

on x like the permanent underclass like i know it's a little dramatic but like you got to stay on top of this stuff and kind of yoloing maybe maybe a viable uh option yeah uh so i i can appreciate that sentiment i think people do need to be cautious so much so what a lot of people don't realize is that much of your public or your private, what you perceive to be your private information, your personal data is already out there. That said, it doesn't mean you just go

flippantly share it. What I would be particularly cautious about are, I don't know, sort of the, like the thought crime stuff, you know, like what are the things that you don't want? And I mean, I've got a podcast where I've shared plenty of unpopular opinions myself. So maybe it's a lost cause for me. But for some people, you know, they keep that relatively private to themselves. Maybe just be thoughtful about those sorts of things that, you know, in a, in a more dystopian scenario,

you, you wouldn't want out in the public sphere. Cause that's I think that's a real possibility. Dave, what have we not touched on here? I mean, I think you gave a pretty good overview. I think maybe a couple of takeaways and maybe you can tell me if I'm missing anything. it's Bitcoin versus stable coins. The agents are going to pick what they want to pick. I think we both agree that over time, the reason they would pick Bitcoin becomes increasingly clear.

We need to have the infrastructure built out for that. If there is anything that listeners can do, you and I can do to foster Lightning adoption in particular for these agents, let's start doing it today. Am I missing any big takeaways that you want people to hear on this front? Because we've got one more topic I want to cover. Yeah. No, that sounds pretty good. Okay. So let's talk about Tennessee. So tell me about the Tennessee Bitcoin Alliance, the bill that the General Assembly is

going to be voting on. And yeah, it's, by the way, for anyone listening, it's the Tennessee Strategic Bitcoin Reserve Act. What's been your involvement specifically and where are we in the process? Yeah, well, and I appreciate you didn't do it. You didn't say anything yet, but you're

like we're close to these things so we should get into it but um no so i uh so i lead the tennessee bitcoin alliance we're a 501c4 uh non-profit that focuses on bitcoin adoption in tennessee at the state policy level and so we um drafted a bill modeled on some of the other strategic bitcoin reserve bills at the state level that have been advanced in arizona new hampshire

and a few others. And it's a pretty standard reserve bill. What it does is allows the treasurer, you know, it doesn't direct investment of funds, a certain amount of funds, it just allows the treasurer to invest funds in Bitcoin, if he or she sees fit. But it does put some interesting guidelines around it, which we were pretty proud of, because we innovated in that way. So in one way, it was that we required that over the course of a few years, to start, they don't have to hold it themselves.

But after three years, they have to hold 10% of any state holdings in Bitcoin in direct physical custody of the state. so what that does is it prevents all the all of the funds being held in an exchange product and also in you know sort of a custody product that we don control and I like that because it advances not only discipline but also education Like what does that even mean Holding physical is Bitcoin physical

It's amazing how interacting with these lawmakers really accomplish people. Oftentimes, multiple businesses, incredibly powerful people, so much responsibility that they have.

and it sounds appreciated at this point but it's just like mind blowing how little they know they just don't know they don't know much about Bitcoin they are still conflating Bitcoin and crypto they don't really even understand anything about it they just know they're supposed to understand they have to it's the future they get that they accept that it's important on some level that it's not to be ignored but they don't really know anything about it and so even just being

able to testify in front of these committees we're just getting a word in edgewise right just a few a few minutes of testimony but to explain that like one of the things about this bill is actually it's done safely and done correctly because the state of tennessee would control its own private keys and you know no uh no bitcoin could move without at least a certain quorum approving the

move of the physical Bitcoin. It's just like, these are completely new concepts. And so hopefully getting that on the record and just starting those conversations and establishing those relationships is going to pay off over time. But where we are right now is we were heard in the Finance Ways and Means subcommittee last week. And I think next it's going to the full committee and then for a vote. We have a lot of officials who do get it, actually.

So I should say, I talk about how people don't know, but that's just sort of the overall. But there are lots of people in Tennessee who understand it. Our governor, Governor Bill Lee, understands Bitcoin. He's been sort of an advocate. There have been, obviously, Marsha Blackburn is one of our senators. Senator Haggerty is our other senator. They're both very involved. And so we do have support at that level, but it's very unevenly distributed, the understanding. And we'll see how it goes.

Either way, we've had a great run where basically citizen activists were not funded by anyone. If you want to fund us, we are not opposed to it. We're not proud that we're not funded. It's just that we're not. And so we were able to write this bill, get this far. We got a sponsor in the Senate, sponsor in the House, and things were moving.

So it shows what's possible when you're smart about strategy and you kind of just maybe have beginner's luck and you just don't know what – you're not discouraged by bad odds and you just go for it. We'll see. If it passes, that would be incredible.

if it doesn't then there's it will pass eventually we just have to continue to work on the off season i don't know if you know this but i didn't even know a lot of these state legislatures they don't even they have like a short session and then that's it they go home right yeah so like our session is over in april uh probably mid-april uh and then we'll have you know, the rest of the year to work on next steps, whether it be a new version of the bill next year

or next steps, because we kind of have a wish list of things that we're trying to get done here. But ultimately, we want Tennessee to be, you know, the best state for starting a Bitcoin business,

for using Bitcoin day to day. And this is just, you know, this change of Bitcoin reserve, really it's just a stepping stone to much bigger and better things uh i wouldn't say it's like the be all and end all that we really want you know the government to own bitcoin but it does help when they see number go up and when you know the treasurer and all the all these people who you know will vote for it they love they love the political clout that they get when they do

something good and so when they vote for something like this and then next time there's a bitcoin bill up and they're like, well, I voted for the first one and our state fund is up, you know, 6,000%. That helps, that helps grease the wheels and move the conversation for the next thing. So. Yeah. Interesting. So, so I, I told you offline, I think you already knew this about me. I mean, SBR is just don't excite me. However, I've got one comment on that. What I will say

is I am I'm not a government guy. I don't like the government. However, I appreciate I'm something of a secessionist. Like I'm something of a, Hey, let's, if, if government's going to exist, let's get it as localized as possible. States are a big step in the right direction. Um, I think, uh, I think a secession from many states, like I I'm in Missouri, you're in Tennessee. We have very little in common with California. It's no knock on California. If you want to go be

communist, like go be communist. That's fine. But I don't want your, your politics influencing anything that's directed downstream at me. And that's what happened at the federal level. And it's just obviously way too bloated, $39 trillion in debt. It just makes no sense. I can actually sort of get behind what you're describing a little bit. It still isn't something

that excites me. I just want more people to stack sats and take self-custody. But I can sort of see how you say, hey, we, the people of Tennessee, who sort of should act as their own sovereign state, like nation state, might say, hey, we want, you know, we have we have sway over our elected leaders at the state level in a way that we really just don't at the federal level. That's just it's a it's a it's a farce. So I can I can kind of get you kind of get me there, I think, to some degree.

What do you think? What specifically, though, in your mind is the the positive? Is it just the signal that it sends to Bitcoin businesses and so you get more of them in the state? Is there something valuable about the state itself actually holding Bitcoin besides maybe some level of sovereignty that states don't really have? They're sort of beholden to the federal government at this point. What is it for you?

Well, I mean, I do. It's not that I like the government, but the firm, I guess we're talking about firms earlier, the firm that we call the state government, right? I mean, if you want, if our state is very pro-liberty, it's probably one of the most pro-liberty states in the union. You go to war with the army you have, not the one you wish you had. You know, you can be anarcho-capitalist and you can wish for whatever you want.

But what you do is you choose where to stand your ground and you choose the form of battle. And that's what some libertarians have done, for example, with New Hampshire. That's what some Bitcoiners did with El Salvador. Tennessee, in my view, is one of the freest states, if not the freest, and it's also very prosperous. We have a very strong culture in what's called the greater Appalachian nation within the United States. There are seven or eight different nations within the U.S.

and greater Appalachia has a very strong historical tie to liberty. And you feel it every day when you walk around, right? Everything from parking meters to, you know, carrying firearms, everything. So what you want to do is you want to empower this little microcosm of liberty. and the way you empower it is you make it rich. And the way you make it rich is with Bitcoin.

So it's not so much that the state itself is going to hold Bitcoin and therefore we all get to use it day to day or something like that. But I do want to empower Tennessee relative to the rest of the states. We have a really, one of the great things about our state is that we have this budget surplus. We're extremely responsibly managed from a financial standpoint. But then you look at, I made a little website for the Tennessee Bitcoin Alliance. It's called should have been Bitcoin.com.

It's just going to bring that up. Right. So, okay. So we went back and looked at these pork reports. We don't really have terrible pork. It's not anything like Minnesota or California. So it's almost like a friendly jab instead of like a, like straight up like expose, but we've spent, we've, we've wasted all kinds of money over the years, 14 million here, a hundred million there.

And, you know, if you look at the dates and the price of Bitcoin, That $100 million could have been like $8 billion, you know. And so the state holding Bitcoin just gives the state more power relative to the federal government and gives more of a cushion to the citizens here. So we don't have income tax, for example, and we never will. But the people calling for it will have a lot less leverage if the state is in even better financial shape.

So I think there's just like something there. And like I said, what it comes down to ultimately is relationships. I want the people on Capitol Hill and Nashville to know who we are. I want them to feel good about Bitcoin. I want them to understand Bitcoin. And then I want to build a really bright future with Bitcoin in this state. So this is really just a baby step.

So I think you raise a couple of good points. And I was honestly playing and playing a little harder devil's advocate. What I will say is like having the budget surplus, to me, that makes a big difference. I think when there's a budget surplus, like my ANCAP sort of tendencies would say, you stole that money from people in some capacity, give it back to the people.

However, in the absence of perfection in my utopian vision, I think doing something like, you know, storing that value in Bitcoin over a long time horizon could be impactful. For example, any of the state services that they want to provide, patching potholes, I mean, even just little things like that, if they can do so better, more efficiently, expedite those processes, streamline them, et cetera, that attracts tourism. It attracts business. It attracts capital.

It attracts the other things that you're sort of alluding to here that I think could have a very meaningful impact. And I do agree with you, like that could make a significant difference when people look at, hey, I want to get out of like I'm done running my Somali daycare in Minnesota. I'm done with the communism of California. I'm going to go to Nashville. I'm going to go to Memphis. I'm going to go to somewhere in Tennessee. And I know that the infrastructure is good.

I know that there's no income tax. It's a wealthy state. I can see how, in light of the hand we've been dealt, why that is obviously very advantageous. And it sounds like maybe that's kind of your broader vision for this whole initiative. Yeah, that. And also, if you look at what do other states do? I mean, one of the things that I've learned, too, when you talk to these lawmakers is it's, well, and it's in business, too, right?

It's easier to just be like, well, we're not doing anything creative here. Look, it's just what everyone else is doing.

so so you know we go to them and they're like what is this thing well it's the same thing that like 24 other states are doing and we're just doing it now and here it is and it's very standard you know it's nothing threatening about it strategic bitcoin reserve oh the federal government even did it you know trump trump trump did it you know okay so now the conversation is moving in the right direction they don't feel threatened by it it's very normal so that's another reason for it

it's just like a baby step it's just like we can get other things done but if we haven't even done this and it's kind of the first thing. Let's just do this first, make sure it works, and then we'll move on to the next thing that's a little more interesting. Yeah. I think that does make a lot of sense. Because my issue at the federal level is, first of all, $39 trillion in debt, and we're talking about a sovereign wealth fund, and we're talking about a strategic Bitcoin reserve. And

fortunately, to my knowledge, none of it has meaningfully come to pass. But it just doesn't make any sense, even on paper. I mean, it literally only makes sense to me going to a

Bitcoin conference and trying to buy a bunch of votes. What I think you're describing is a more tactical way of embedding Bitcoin into the economy, into the winning mindshare with people who probably perceive their government to be more responsible in Tennessee and worthy of trust than people looking at the federal government or in many other jurisdictions and states where

it just doesn't make sense. So, um, I don't know, man, I, I need to think a little bit more like my, my knee jerk reaction is just like, I can't, I can't agree with you on this, but I, I can hear where you're coming from. If you need help, Hey, if you change your mind, let us know. We'll help it. We're actually helping a couple of other States now. Um, our, our mission ultimately,

like we want to focus on Tennessee. So I don't mean to be sounded like we're distracted, but everything that we're doing, we're trying to do in a way that is sort of scalable and repeatable and so like ultimately our vision is to have like a turnkey solution and just say oh you want to start a state level advocacy group like here here's our github repo right here's our here's the templates for all the documents you need here's the sequence of steps that had worked for us go do

it and taking out that uh uncertainty hopefully you know would would would would uh grease the wheels um but yeah i i get what you're saying too honestly um i don't think i don't see a downside it's like maybe maybe you're arguing that there's an opportunity cost to doing something else more interesting fine but the state of tennessee holding bitcoin does that threaten bitcoin like i don't really see it and um yeah and the other thing to understand is that that's everything's slow

right so like the first first step here is literally just to open an empty account or fund rather that can hold bitcoin that's it because before that you can go and talk to your blue in the face about how people should buy bitcoin they're like well we can't put it anywhere there's no there's nothing there's no structure there's no box to put it in so i can't even have this conversation so it's like okay create the fund it can be empty but it can hold bitcoin now

now we can talk about things like can you pay your taxes in it should should they buy on the open market should they include it in their investments like all those questions follow follow the structure so yeah government is slow it's frustrating to some extent but it's actually been a lot of fun and um really like really good honestly a lot of diversity in terms of the way like you talk to people there's so many different perspectives ages backgrounds

it's just incredible and you walk into these offices you never know what you're going to counter and you meet a new type of lawmaker, you know, this one guy we talked to, we started pitching him on. He's like, what are you guys here for? We started pitching on. He's like, stop talking. I'm in, you know, he's like, I already own Bitcoin or this other, or this other one was, he was a pretty powerful Senator. He listened to us, you know, politely. And at the

end he was like, my kids buy Bitcoin. They're in college, you know? And so they tell me all about it all the time. I get it. So, so everybody has, and then other people are like, you can't touch it. It's not real estate. It's not gold. And then I'm like, ah, you should read my article about how Bitcoin is actually physical. Uh, but you know, so it's really interesting how, how there are, there's, there are people who get it. There are people who, who don't get it, but defer to people

they trust. It's very common. So yeah. Okay. So let me, let me push back on, on one other thing. So you said, you know, is there really any downside to there hinder Bitcoin for a state to have an SBR? And I'm not necessarily contending that it does, but here's a concern that I've had. So we see Wall Street coming in. We see talk of like federal SBRs. And my concern is I think Bitcoin is a massive threat to the legacy financial system.

I think it is the existential threat to the legacy financial system. And I get this sense that part of the reason there is so much adoption is certainly it's a way for BlackRock to make money or for whoever to make money, right? Because there's demand. But I also see more and more people. I see fewer and fewer people talking about let's use Bitcoin as money, as a currency, as a medium of exchange.

and more people talking about Bitcoin's digital capital, it's digital gold. You gain no self sovereignty by buying Bitcoin in an ETF because it's just paper that someone else holds the Bitcoin. And I could see a world, I'm not saying that this is a base case. I'm saying I could envision a potential world where people accept the narrative of Bitcoin simply as a store of value. And it operates then alongside a CBDC sort of environment. That's your daily currency, which is

censorable and permissioned and all of the things we don't like as Bitcoiners. And it's kind of like the meme, you know, we all get rich and are depressed sort of thing. And I don't think that fixes a lot of the things that I think Bitcoin would be a really useful tool for fixing. So I guess my question is, is there any concern? And maybe you don't even share the sentiment that I just shared, but my concern would just be is our government's adopting Bitcoin in a strategic

reserve, which is they're not going to be spending it, right? They're going to be storing value in it. Another signal to the market that Bitcoin is just something you just hold on to. You don't do anything with it. You just hold it. You save in it. And yeah, you'll get rich someday. And it's sort of, I don't know, it just puts all of the other more interesting and useful use cases on

the back burner. Or is that just not even a concern in your mind? I don't know. I mean, like Square today just announced that they're activating Bitcoin on every single terminal. I cheer that on though. You can do multiple things at once. I mean, it is a store of value,

right? And the thing too is the cool thing about our bill was this custody provision, right? 10% must be physical must be held by the state so that's a that's that's an interesting um exercise in like education the thing is tennessee right like we and this initiative didn't go anywhere but it'll eventually probably happen right we had the state gold depository bill a couple years ago and you know it's like well texas has a gold depository and and our and our gold's

down there and we don't want it down there we want it up here right so so tennessee has like a like a very strong culture about like self-sovereignty and like holding on to your, the keys, at least to your gold vault. So now we need to like, you know, help people understand that Bitcoin works a similar way and they will. So, and, and at the same time, uh, I go, I have a steak and shake down the street from my house. Every time I go there, I buy my lunch with Bitcoin. They accept lightning

and it works incredibly well. Um, so it's a, it's a both end. It's, you don't have concern that too much push on the store of value at, cause all, all I see at the, like on, on a, on a massive scale, when you look at BlackRock, when you look at state legislatures, adopting strategic reserves, the federal government, it's, it's always, it's always store of value. And I agree with you. It is a great store of value for all of the reasons we've, we've sort

of talked about. And I think most Bitcoiners listening to something like this would understand. And my concern is if we're in the, let's say we're in the, like the early majority stage of Bitcoin adoption, early in the early majority stage, is we migrate through the early majority stage and into the late majority stage.

And are those people getting all of their signal from Larry Fink and from Donald Trump and from the people who are not talking about, hey, go spend your Bitcoin at stake and shake. Go adopt it as a square merchant and store some of that. Don't just convert. to fiat. It's just, hey, save it, buy the BlackRock ETF. We'll run your Bitcoin for you. Treasury companies, yada, yada. Well, I don't. Well, OK, I agree with you

but for a different reason. I don't think that the BlackRock narrative is threatening to the medium of exchange. I think the threat is from paper. And I think the financialization of Bitcoin Bitcoin is dilutive in that there's more Bitcoin being traded than there exists physically. It's the same thing that happened with gold. It's okay. I may have told the story before on your podcast. I apologize, but an old friend of mine, I was at a conference many years ago

and I'm from Silicon Valley. I was building robots and stuff. I was not a financial guy, but so for me, the word innovation, I'm using a soldering iron. I'm writing software. For this guy, he's a financial innovation guy. And he was explaining, I was like, what is that? All right, you don't build anything. He's like, financial innovation is finding ways to legally recognize the same asset on multiple balance sheets. That is the entire point, right? There's illegal ways to do it.

And obviously, like you get in trouble. But if you understand the law and you understand regulation, you can find ways of doing it. And that's innovation. That creates money.

so that that's ultimately you know people like oh like black rock they're uh they're audited by like a big five you know it's nothing to worry about bullshit like it's absolutely something to worry about they going to the whole point of what they doing is try to find a way to legally do that So it dilutive So it suppresses the price and people will get rugged And all the people that read the Wall Street Journal and the New York Times who want to buy Bitcoin to get rich and

put money in their ETF, they're going to get rugged eventually. I mean, they're going to get rugged at least in the sense that they're not going to enjoy the appreciation that they otherwise would if they were buying physical because because there's more supply than there is bitcoin so that's a huge problem that's a huge huge problem so i don't like the blackrock etf stuff for that reason but like i i think um it's it's like an education thing and it's also a user

experience thing and it's also you have to be patient and just be like you know holding your own keys is really, I know you guys say it's not that hard, but I talk to people and it is like psychologically hard and people lose, lose their keys and that that's not solved yet, you know,

and I just, um, that's concerning. So for, so I'm, I'm bearish on that. I'm, I'm worried that we're going to have too much paper, um, and people will just get used to it and never learn how to self custody, but hopefully like things like, you know, the sentiment in Tennessee about like, you know, holding, controlling your own wealth and hard money, you know, we're really into that here. And hopefully we can build a culture around that.

And with agents extending what we do to tie it back, preferring physical Bitcoin I consider lightning physical Bitcoin I think that that also very going to be very helpful Yeah Well I guess two final comments One is I think we never had a client lose funds. So I think they need the right trainer and they can figure out self-custody.

We'll give them peace of mind. But two, for me to play devil's advocate and sort of revert back to a lot of what you have said, devil's advocate against myself is I think maybe the redeeming quality of this conversation is the agents are going to choose Bitcoin for a lot of the, for the, they're already choosing it, or they seem to be in hypothetical scenarios.

And moving forward, I think the case for Bitcoin as a medium of exchange becomes more and more evident when transactions are increasingly censored, permission's harder to come by and so forth. And so maybe what people, what humans choose to believe about Bitcoin becomes less and less relevant because what matters is this massive swath of other agents who enter the market, become a part of commerce and choose Bitcoin. So problem solved. I think I'm

worrying about things unworthy of my time. I don't know, Dave. Man, this has been a fun conversation. Hey, why don't you tell people where they can find you, learn more about your business, your work in Tennessee too, and anything else you want to point them to. I can link to everything in the show notes. Sure, sure. Well, it's sparse right now, but the AI company I would send you to is bright.bot, B-R-I-T-E dot B-O-T.

There's just a placeholder there, but go there and about maybe when this airs, I don know when it airing but we should have a wait list soon for what we doing with Agentic AI And then the tnbitcoinalliance tnbitcoinalliance is the Tennessee Bitcoin Alliance. And you can find us there and you can subscribe. Yeah, that would be where I'd leave it. Perfect, man. Dave, always fun talking with you. Fascinating conversations. Appreciate all your

insight and we need to do this again sometime. Maybe later this year, next year, when the agents have officially adopted Bitcoin, taken over and it's just gotten crazy. So I'll delegate to one of my agents. I won't bother with it. I would be very happy to do it. And thank you so much for the opportunity. I really appreciate it. Thanks, man. Take care. Take care. And that's a wrap. Again, hope you enjoyed my conversation with Dave. I always find it fascinating getting to sit down

and chat with him. Go check out everything he's working on. Again, super fascinating guy. Lots of interesting stuff. And of course, if you need help taking your Bitcoin into proper 100% self-custody, go to thebitcoinway.com slash podcast. You can schedule a free consult with a member of our team. Love to talk you through how we can help you get set up in proper self-custody, as well as how we can assist with online privacy, setting up a privacy phone. We've got a plan B

residency option in Panama. Again, that's thebitcoinway.com slash podcast. Do me a huge favor. If you're enjoying the show, give us a like, subscribe, comment, share it with someone who you think might be interested, anything to feed the algorithm and get this high signal Bitcoin content out into the world. And until next time, stay safe, stay sovereign, and remember the yield on Bitcoin is freedom.