Austrian Economics, Human Action, Bitcoin Security | Stephan Livera

content for so long. So I'm happy to have you on and dive into kind of this this stuff. And I want to start, well, I guess let's start in the beginning. And you know, as I said, I've been following you for a long time, a lot of people maybe don't know, so just give us a little bit of a background on what you've been doing and what

you're working on. Yeah. Sure. So I am mostly known as a bitcoin podcast, so I interview many of the lading lots in the bitcoin world and also Australian economics, and so I take an approach where I try to interview people who are quite technical themselves, but then try to break that down for people into the at a

level that let's say, the intelligent layman can understand. And obviously it's a bitcoin, you know, focused show, but I try to work in certain economic aspects of it as well, because I think you can't understand bitcoin without meshing a good understanding of the economics and the technology together. And so my show is one of the well known bitcoin specific shows in the space, and I think many people who are themselves bitcoin builders and so on our listeners

as well of the show. So that's probably the main thing I'm known for. And then the other project I have is Ministry of Nerds, which is think of it like if the podcast is for interviews with leading people in the space, Ministry of Nerds is me and my co founder Katan. It's our effits to try to put some of these things into practice for people and give them guides and you know, exact step by step. Here's what you do, Here's how you do it. Here how

you take back your financial self sovereignty. Yeah great, and we definitely need that, and so I want to dive into that song. But before we do it, seems like, as you said, right, you've talked about some Austrian econ and it seemed like you were really focused on that and it's kind of shifted a little bit, but I

want to dive into that first. So I know you've talked a lot about Austrian economics, and so you know, I spend my time talking about why bitcoin is important, and so obviously I spend a lot of time on the economic side, the philosophy side, the politics side, um, And it seems like Austrian economics kind of encompasses most of that. So tell me, I guess how you see that economic philosophy. Um. Hey, just a real quick interruption to let you know that this video is brought to

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block fire. So check them out as as opposed to kind of what we have now and why that system you think might be better? Right, So I came from I come from that perspective in terms of an Austrian economic analysis of the world, and I guess it informs my worldview and that is part of I inject that

into my interviews and people I interview. So in terms of what's different about the Austrian perspective versus let's say the current mainstream perspective is more like Austrians see no role for central banking, as in no productive role for central banking. It's seen as like a political um outgrowth of the state, and that it can cause all kinds of problems in the market, which we call it's referred to as the boom bust cycle or also known as

Austrian business cycle theory. So Austrian economists tend to be you know, they are more free markets. They believe in free market capitalism. They believe and they talk more about this idea of bottom up spontaneous order, right, And if we're going to get a bit more technical, it's more like it's really looking specifically at the choices and actions

that humans make and how can you deduce them. So the methods specifically is kind of more like think a bit more like logically deducing certain truths and understanding and applying those into the into the real world and trying to use that to understand a little bit better what's

going on now in practice. What does that mean? It means anti central bank, anti fet money, generally, pro free market, generally, looking for ways to articulate and explain why we should have free trade, we should encourage, uh, the productivity and production through accumulation of capital, as opposed to maybe a more Kinesian point of view, which is more like consumption first, whereas in Austrian might tend to focus a little bit more on this idea that no, you need to save

and then be able to produce more and then you can consume more. So I guess that hopefully that helps. Yeah, you said something that probably put a whole bunch of people on their head. And you kind of came straight out and you said that no central banks. And then then you said something that even went a little bit further that probably really threw people off, and you said that central banks cause boom and bus cycles. But it seems that the common belief today is that it's free

market capitalism it causes booms and bus cycles. So do you want to explain that? Yeah, sure, that's a great question. And so I think the Austrians, when you read them, it's think of it like this. We would we should expect to see just in normal capitalism, some businesses growing and some failing, just as normal as you would expect.

That's just normal. But why is it that we see a cluster of errors in a certain area over time and so historically, whether that's the dot com bubble or whether it's you know, housing bubble or et cetera, why is it that we see that? And it's actually that there's there's a reason, there's an underlying cause for that. Now, if you listen to the mainstream media, they might say something like, oh see, it's just you know, it just

comes and goes. It's like seasons. It's it's it's it's just going to be with us for all the time, and we just have to deal with it. And the central bank needs to step in and manage it, and they need to try to have stable prices and look after the employment rate and these kinds of things, where from an Austrian perspective is to try and look back and wait a minute, what's the cause of that, Try and trace back what is the underlying cause of this?

And so in the Austrian view, it's more like hold on. It's actually credit expansion that drives all of this stuff. So put simply, government interventions such as the existence of the central bank, the lender of last resort, some of these things. They push the interest rate, they artificially depress it will be below what it would be in a true free market. And so in that sense, it's causes people to get the wrong signal. Right, So prices are

like a signal, they're like an information. They're like saying, hey, come here, use this product, use these resources because there's a profit opportunity. And if there's a profit opportunity, you're being productive for the rest of society's that's kind of one way to think of it. And so central banking is viewed as like a government intervention into capitalism rather

than being a function of capitalism. And so in that view, it's more like central banking helps enable government to kind of take more command over the economy, and so it essentially drives this boom and bust cycle because a lot of entrepreneurs get given the wrong signal. In some sense, it's like that, it's like the markets signals have been messed with, and in doing so, all these entrepreneurs run into a certain area. And you know, for the last forty or fifty years or whatever, it's been a lot

of that has been property. Right, think how many people are property entrepreneurs? Well, it's not clear that that is actually like that that is what would have happened if we were living under a fully free market with zero government central bank. And so I think that is essentially coming around to this idea that if it weren't for government central banking, we would not see this boom and bust cycle that we have seen every whatever six or

seven years historically. Yeah, yeah, I think you know part of it. These are complex subjects to understand because you have to kind of have disciplines in several areas. And so you mentioned earlier, like you know, human action, and so like you kind of have to understand like human motivation and human action in that human intent, because as you said, it is a little bit like cycles, right, cycles do come and go. I love vanilla ice cream, and all of a sudden, I want chocolate. I don't

know why I want chocolate, I just do. And so we're like, we're gonna want different things, and so there are going to be booms and bus and that's just natural. Some businesses starting, some fail. But I think to your point, they're creating this artificial demand which forces everybody or or entices everyone into certain sectors, which caused them to get way bigger and then crash, which leads to bigger booms and busses. That kind of what you're saying. Yes, that's

a great way to put it. Yeah, and uh, and it's complex. But at the same time, it seems like the FED tries to make it so complex that we don't understand and that we have to depend on them, when really it, as you said, if you break it

down into those principles, it's actually pretty easy to understand. Um. It seems like what about as an economic principle, it seems like the FED also is a way that maybe the the elite use it to transfer wealth as opposed and control as opposed to really trying to free the system. Where is as Austrian kind of I guess, as you said, leads to more free market. I mean, there's are a big difference between like free and captured controlled in those

two systems. Absolutely, So the way an Austrian would most Austrian economists would view what's gone on over this last century or so is essentially that the state keeps expanding and that what happens. And this is a bit where this is where it gets a little bit more confusing, because when people look at what we've had, they say, oh, look, look the big businesses are in bed with the government. And in some sense Austrians agree with that because they're saying,

what we want really is less government intervention. But really what happens in practice nowadays is more like big business will lobby with the government and the incentives just kind of work for them to try to set up a system that cacoon themselves from outside competition. And so even things like you know, the Federal Reserve and so on. It often ends up being that the existing big players, once they've gotten big, they try to lobby the government and they will try to say hey, oh and and

they might cauch it in very noble sounding language. They might say like, oh, look, um, it would be very unsafe to not have regulation on this industry. So let's have regulation on this industry. But here's what we're gonna do. We're gonna make the regulation kind of fit just around me and make a nice little cocoon around me so that I can entrench myself against new competitors. Yeah. And in some sense, that happens in many industries, and banking is just one of them. Yeah. Yeah, it seems like

regulations are always meant to kind of entrench those positions. Um, I've seen it firsthand. I was. I was really involved in the early days of the internet, and I remember, I forget what it was called. Now, all these bills,

they're bad, but they have these good sounding aims. And it was a bill that Amazon had put forth saying that in the United States, if you were selling products online, you didn't have to collect sales tax to every single jurisdiction that you were selling to there, there'll be no

way to do that. And so they put this bill and it was like the Fair Tax Collection Act or something like that, and of course Amazon is the one that pushed it, and they said everyone had to start collecting tax but of course the small guy there's no way they could do that. Only Amazon could do that. And so we see that kind of that. That kind

of thing happened all the time. But it seems like it seems like we've moved now to where everybody wants to have like this free or actually say this this risk free, this safe society where everybody succeeds, and Austrian is kind of like it's free, but it's not safe. And so I think it looks like you kind of have to have this trade offs and it seems like more people are opting for safety over freedom at this point.

Is that what you're seeing? Absolutely, and I I am soly in the camp where I guess put simply, yeah, I value freedom over safety is um if you will. Now. I think the irony is, though, is that those people who were saying safety, you know, safety is and people are almost in some way without realizing, they are jeopardizing

their long term safety anyway. Yeah, right, Whereas I think if we were to have that society that prioritized freedom and in this case more specifically private property rights and our rights, I think we would actually, in some kind of counter intuitive way, we would actually make society more

prosperous and more safe. Anyway. It's just that what happens is government becomes this kind of big bureaucracy, if it starts to impose one size fits all rules on everyone, it becomes owners it becomes high tax and so those of us who and you know, want freedom. And it's a weird thing because it's almost like these the views that maybe you and I are talking about now, they might be perhaps in the minority now, but a hundred years ago they probably weren't in that much of a minority.

It's just that of the time, it just the values the culture of society, whether whether in the US or here in Australia elsewhere in the around the world, it's like the values have eroded in some way, and so it's it's it's a tricky situation, but I think there is kind of like that maybe there is a bit of a pendulum sort of swing aspect to this, and I think to some extent, we're seeing the pendulum kind of go to the one end, and I think, now we're gonna, We're gonna eventually it will come back the

other way. There's a book called The Pendulum. That's a great book. I don't know if you were just saying that or if you've heard of the book. I haven't, but it basically talks about it's called the pendulum, and it talks about these forty year swings where we go from a week a WEE cycle, so that's WE collectivism, globalism, and then it swings to a ME cycle, which is individualism, decentralization. So every forty years it goes so it's an eighty

year cycle back and forth. And the last time we when we shifted from the decentralized the ME was at the end of like World War two, which is when the U N God founded, the EU first started getting founded, all those things. And right now I think one is the peak of that WE cycle, and then it starts to shift back to a ME individualism decentralization cycle, and then in the book they trace it back thousands of years.

It's pretty interesting. But um, what I was gonna say is like when you talked about Austrian nicon, you were talking about how it really breaks things down to their most basic basic, right, So there's like natural laws, and it seems like we kind of know this because if we look at nature we can see so if we look at animals, for example, even if you go to the state parks in the US, they did not have a signus says don't feed the animals because the animals

become dependent on the food and they can't go find food on their own, right, And so like we we know this and some some some instance, right, And so I'm just curious, like if you have what what your thoughts are on this, because I look at it like, let's say, if you're a lion, right, Like you're a free lion and you're in the jungle and you have to fight for your territory all the time, and you may starve, but it's a rough life, but you're free.

Or you could be a lion in a cage and get your antibiotics and get your one meal a day, but you're in a cage. But the problem is once you're in that cage for years or a generation, you don't really go back to the wild. And so it's not it doesn't seem like it's gonna be that easy to just like switch it back off, Like do you I mean, have you thought about that? Like, how do we transition out of this? I am it's a hard

question to be honest. I think it's one of those things where you have to laid by example, And so I think to some extent, bitcoin people are trying to laid by that example and say, no, let's take responsibility. We're gonna take responsibility for ourselves. We're gonna try to build our communities and give people the freedom back and encourage them to take their power back where they can and you know, go and live free where you can,

little by little, Yeah, exactly. And I think to some extent it's I view bitcoin as ultimately it is a technology that tips the scales in the favor of the individual. You know. It's kind of like the printing press came out and it tipped this it changed the balance of the power, and I think bitcoin is just like that. It's going to tip the balance more towards individuals and

families and communities versus governments. And so I think what that like because I think of it like you know how people talk about that idea of politics is downstream of culture. I think upstream of culture is economics. And if we have bad you know, weak or sound, you know, not fear out money, easy money, easy money that's easy to create, that causes the cultural degeneration. And then so I think the next swing back is the hard money direction.

So I think it's kind of like you change the economics, you change the culture, and then you change politics, and I think that is sort of the cycle that we're coming back into. As you mentioned, Yeah, that's that's real good. I actually I love that. You know, I'm sure you've seen the same, right, We've seen however, many people coming into bitcoin, and when they change their time preference, it starts to change their whole life. And you see it

over and over. I say it myself other people that it's changed their entire thought process of the way they view the world, the way they spend their money, save their money, work, all these things have changed. And so it really does start with that economic view, I guess exactly. Yeah,

I think it. You know, as as my friend's safety and says, the most important trades are the ones that you make with your future self and you know, you have to start thinking more about, you know, your future and ideally when you have a family, your children and your grandchildren and your legacy and those kinds of things. And many people when they come into the bitcoin will they start really thinking more about these kinds of future opportunity costs because they weren't all that kind of saving

type who thought about the future. But bitcoin kind of forced that cost on to them because now it made it more apparent that, hey, if I spend these bitcoins now I'm Liz, I'm missing out on huge, huge games in the future. So now I need to start really thinking about that. And maybe hey, just another quick interruption to let you know that this video it's brought to

you add free by Block five. Now they allow you to hold onto your bitcoin and your other cryptos for all the potential upside, and at the same time you can earn high yielding interest on it, so it basically cash flows. Now with block five you can earn up to eight point six percent interest. You can also borrow against your crypto as well. It's super fast, it's super easy to set up an account, and right now you can get up to two hundred and fifty dollars when

you set up your account. Check the link in the description that I have for details in order to claim that two and fifty dollars. Because Block five is the future of finance. Just check the link in the description for all the details of how to claim your two and fifty dollars today, eating more healthily, working out, and doing these kinds of things too. Really, we want to play long term games with long term people. Yeah, I'll was listening to Safe today and he was talking about

how time, how everything is built on economic principles. That's kind of exactly what you're saying, and the old and it's all based off of scarcity and the ultimate economic principle, the ultimate asset, the ultimate scarcity is time because time is the only thing we can't go get more of. So I spent my bitcoin, I can go get more bitcoin, right, I can go get more gold, I can go get more whatever, but I can't go back and get more time.

So it's like the ultimate scarcity. And if you look at and so I guess if you changed the economic view and like, look at people, most people today probably don't value their time, right, they squander their time waste or time They don't even know where their time went. They're like, dude, where did my whole day go? U? Exactly? All right? Where did my month go? Or whatever? Right? And so like, yeah, you start to change that economic it changed the world view. I like that. I hadn't

really thought of it that way. Um, yeah, good point. So I'm curious. You used to talk a lot about Austrian economics. I'm curious. Did you come into Austrian economics after bitcoin? Did bitcoin change your worldview into that or you had it before? I was already into it. So the thing for me is I was maybe fourteen or fifteen, and I was like on I r C and this guy kept linking to mrs Daily articles. Right, I was on some politics channel and that that was my first

exposure to Austrian economics. And that from that was how I went down the Austrian economics rabbit hole. And then later in my life, obviously bitcoin came up and I was like, Wow, this is amazing, this is this is it, this is the thing, this is you know, it's not everything we need, but it's probably the most important technology for creating more freedom. So those of us who are more liberty minded, it's a very very important technology. So

for me, I was already into Austrian economics. I was already anti central making and that for me was what helped me see so much value in bitcoin. And so funnily enough, I have a lot of listeners who came in from the bitcoin side, and then because of listening to me and reading safety and you know some of the other people, and you know, reading the work of other people in the space, they also went down the

Austrian rabbit hole. So I see it as part of my role as to help educate my listeners both on bitcoin technology but also Austrian economics. So you know, sometimes it's kind of the balance shifts a little bit and I kind of end up doing more bitcoin text stuff. This is kind of economic and macro and history elements of it, but I try to you know, it's a bit of a balance, um, but certainly it's you know, some people come in bitcoin first and other people were

more Austrian and libertarian first. Yeah, so let's jump into that a little bit, because I spend all my time focusing on the big picture of the y stuff, and I know we had a ton of people that have come into the space recently with the price shooting higher, the number go up. Technology, as we say, Um, and so I'm getting flooded with questions on you know, more technical in nature, so how to store it, where to store it, you know, how to secure all those types

of things. So I guess where where would the average person start? Like, how do you think of Let's let's let's start with storage first. So somebody wants to come in and they buy bitcoin, and they can it's on the exchange. They bought it, and they could either leave it there, or they could take it off and put it onto some sort of a walle at, hot wallet, hardware wallet. All of those things have trade offs and

risks associated with them. So how should the average person think through that and try to decide how they want to move forward? Yeah, great question. So what I would say is for many people, they just start on an exchange, right and fine. Um, what I would say is start small. You know a lot of people get very what's the word, It's like analysis paralysis, Right, They're just like, oh, I don't even know where to start. I'm just not going I'm just gonna leave it there. It's like, no, just

one step at a time. Start small, But I would say, start with a phone wallet, So on your phone, on your if you got an Android phone, go to Samurai wallet. And if you've got an iPhone, look at Blue wallet. So I would say those are some good suggestions, and just start by withdrawing say dollars from your exchange or

brokerage service or whatever. Start with that, and then once you get more comfortable, and once the value, once you your value starts rising in terms of Bitcoin terms, let's say over a couple of thousand dollars, Well, then you want to start looking at getting a hardware wallet. And then okay, now you might look at a cold card, let's say a coin guide dot com, that kind of thing UM or a ledger or treaser and that kind

of thing. And then after that you might want to start learning okay, how do I run it with my own bitcoin node um and some of those elements of it. And then as you get too higher values, well then okay, now you've got to start thinking about multi signature. And so what I would suggest kind of as we speak today January, if you are a beginner or an intermediate level Bitcoin user in terms of your technical ability, I would suggest you look for one of the guided service

providers for multi signature. So this is so like my podcast onnsor is unchanged capital and or another option is cast Us. So they're probably the two big options in terms of guided helping you do it easy with multi signature? How how how much? How much do I need to have before I need to start worrying about something like that? I mean, you mentioned a couple of thousand dollars uh in a heart in a in a in a phone wallet,

and a soft like a hot wallet. Um, so at what level do I want to start worried about like solutions like that? Yeah, that's a hard question. I think it's one of those like how long is a pace of string questions? I think So, I think it really comes down to the person's like own I mean, they

have to decide what their own risk tolerances. So like if I keep it on the exchange, then I don't have to worry about the security, but I have to worry about them getting there, them watching about their security. Right if they get hacked or the government seizes them or freezes them, or they locked me out for whatever reason, I have to worry about that. But if I take it now, I have to worry about security, right, So

like there's like trade offs with each one. Um, so I guess different exchanges have different risk profiles as well. Um right, yeah, yeah, So I would say you just gotta stot and like we in bitcoin with very much encourage, self custody. But it's a learning journey, and I understand it's at the start it can be very daunting. So I guess high level, if I had to give some guidance, I would say, you you want to just take incremental steps, and so going from hardware wallet to thinking about okay,

do I need to start thinking about multi signature. If I had to just kind of pick a number out of the air, I would say maybe six figures. Once you're getting over six figures worth of bitcoin, you probably want to start thinking about multi signature. And then here's the here's the factor, right, because with bitcoin it is extremely volatiles. I'm sure you and the listeners know it can in the space of a few months, it can go ten x and that's not like that has happened.

So let's say you had you had a bitcoin stack of hundred thousand or two hundred thousand in the space of a few months during a bull run that could be a million, two million or more. And so you've really got to start thinking about UM multi signature once you get to those kinds of levels, and so that's

where it's worth thinking about. So it's but it's a journey and you've got to learn about you know, backups and those aspects of it also to make sure and then you've got to like it's there's a there's a pathway, but you have to think about things like backups. You have to think about things like inheritance. If you were to pass, how would your heirs or your family get

the coins. So that's why I would say for a beginner and intermediate level you want to look at using a guided solution, and advanced level you can do like a d I Y multi see like with your own using spector wallet and some of these UM solutions or electroum or so when you say when you when you're breaking those down, you're not talking about how much money you have. You're talking about what your technical ability is.

So if you feel more technically advanced, you might want to set it up on your own UM, but if you're not technically advanced, then you want to host it or guided service exactly. Yeah. And so the way I would see it is if I look at kind of the market and the current solutions, that's based on you know, the current level of support, the current level of ease of use, the current software, the hardware that works with it.

I would say four. Now, beginner, an intermediate level in a technical ability should be you probably are better off with a guided provider. And then yeah, so that and that can help you because if you start using multi signature, it's like you know, those nuclear codes, you need two of two or whatever. So in in bitcoin, the the typical ones that you know, an individual like you and me might be using. You might have at two of three set up, or you might have a three of

five setups. So you might have you know, yeah to um yeah, basically three hardware worlds and you need two of those to spend. And so the idea is that you would keep those in different locations, so you might have say one hardware wallet at home and one in a safety deposit box somewhere or a bank vault or something like that. And then in that example, let's say you went with unchanged capital, then unchanged capital and hold

the third key. In that scenario and then so you could either sign it purely on your own, or you could sign one key and you could ask that that service provider to do the third you know, that additional signature for you. Now, So like I mean, if I if I have enough problems keeping track of one key, now I got to keep track of three keys. So does that I mean, does does that just make it harder? It does, but it also provides you so much more security. It means just so much less likely to get hacked.

You're so much less likely to be stolen from. Because now even if somebody, if an arm armed robber turns up to your house, you literally cannot spend from the setup that you've got. They would have to take you to the bank vault or to the safety deposit box. And that just it just raises the level in terms

of who could easily and feasibly attack you. Now, there's trade offs with all of this stuff, right, because if you use one of the guided service providers, you have to give up some info in terms of privacy, and so you know that's something you have to think about.

You might think, well, you know what, if I'm relatively less well known, maybe I would get away with just using single signature, using my own set up, Whereas let's say, if you're a if you're a public influencer with the name and someone maybe for that kind of person, you really should be looking at multi signature because it just

gives you such an increased level of security. Now, the good the good news here ultimately though, is that bitcoin gives people choices and it makes it so that you have this incredibly asymmetric defensive technology because it's like relatively a small cost for you, but it makes it a very very high cost for the attacker. And so that is the overall good news here that you know you

can do this. It just takes a little bit of It takes a little bit of work and research and personal responsibility, but I think in the end, at the end of the day, it's worth it. Yeah, I mean, and that brings us back to where we started, right, So start being lazy, invest a little bit of your time into improving your life and it makes a big difference. Um, yeah, I'm I'm going down that path on my own downloaded specter and of trying to set up the multi SIGs,

and it's a little overwhelming. I'm not gonna lie and I've been I started internet business in two thousand one, I've been online ever since. I'm pretty technically savvy. I consider myself to be pretty technically savvy. And it's still it's still still a good amount of work. So um for those types of deals, then I guess we could maybe plug your other side, but you actually help people do that as it right? Yes, So Ministry of nons

dot com dotau is the website for that. So Katan and I we basically we just make free guides for people to learn how to self custody. So and we offer just kind of consulting for people who want to do a call with us and help will will help talk them through that if they want to try to do it in a more self sovereign way. Um. So that's just one of the things we offer. And just like other guides and things like that. So is the is the is the security flaw in the vice itself?

So if I use a hardware wall er, whether that's treas or or a ledger, is it is it? Well? I don't know, I don't even know how to ask this question. I mean, I guess there's just so many security holes that we don't know so instead of trusting one device, if we split it up, then we're basically

um splitting up our risk exactly. That's right, and so um probably the relevant interviews, some of them, some of the ones I've done with Michael Flaxman on my show, But essentially that's the point he's making is that theoretically, unless you kind of go to all of these additional steps, it's theoretically possible that the hardware manufacturer was malicious, or that there was some kind of supply chain attack, or

let's say the hardware manufacturer. You know, now I don't think treads or a ledger would do this, but hypothetically, and you want to protect against that risk they might have done uh kind of like a a malicious setup and such that you think you are generating your own keys, but in reality they've got them, or or they've got like a pregenerated set of keys, and you you think, oh, yeah, let me store on my bitcoins on this and then you know, like ten years, five years down the line,

they just pull you know, they just pull the rug and do what's called the retirement attack or like the long con if you will, whereas if you use multi signature it just it just raises the level for them in terms of anyone being able to do that attack on you, because now they have to compromise not just one of your devices, but two of your devices, all three of your devices, and so it's just it just

takes it to that next level in terms of security. Yeah, now let's talk So we talked about the hardware wallets of which protect your keys. Let's talk about the nodes now. So the nodes are really what, um, I guess that's like the next level that you'd want to go to explain what the nodes are and how they work exactly.

So a bitcoin node, the simple way to think of it, it's like a fake bitcoin detector, right, so if you used you know, if you were doing if we were trading gold and you really wanted to check it, you would use that, you know, that machine that checks if it's really gold or if it's not just like tungsten on on the you know, on the inside. Now, a bitcoin node is a way that you can interact with the bitcoin network. And so the way it typically works is any wallet that you use has to be connected

to a bitcoin node. So think of it like if you're not using your own bitcoin node, you're just pushing off that node on running the node onto somebody else. So if you use Treaser or Ledger, just on the default settings, it's just using Treaser's node or Ledger's node.

Where if you learn how to set it up for yourself, and there are probably a few different ways that you can do this, you can achieve more privacy, more functionality, and more trust minimized because now you have your own source of truth, you are not pushing off that trust onto somebody else like Treaser or Ledger or your exchange now, you know. So that's kind of what we talk about. This is idea of holding your own bitcoin keys and then running your own nodes. So people also summarize this

as not your node, not your rules. So historically there have been forks and other events where if you weren't running your own bitcoin node, you weren't as able to ensure that you were on the correct chain and you were, you know, running the rule set that you agreed with. UM, I can tell you, I can talk you through some of the main ways that people run notes if you like, sure, yep, So I would say there's probably two main well probably

three main ways. UM So one is to just run a bitcoin node on your existing computer, and there are little trade offs so you can do to make that easier, like pruning the hard drive down. So as an example, you can run bitcoin coll on your laptop or your desktop and run spect the wallet with that, spect to desktop with that, and you can just periodically sync it

up when you need to do a transaction. So the blockchain is like three gigs or whatever, um, but you can prune that down to like the last five gigs or something like that, and you can just when you do a transaction just periodically catch up there's last few gigs. Um. That's one way to do it. Another way is to do an always on device. So this is where people might use like either a box or they might use

like a raspberry Pie. So some of the well known raspberry Pie full nodes are things like umbrell my Node, Ronando Joe, rasp Pie, Blitz, Starting nine Labs have this one called embassy um what else, There's one called Noddle, So that these are some of the full node you know, plug and play boxes or you can make you can build it as well. And then I guess the other third ways if you're using more like a VPS, a virtual private server, and people use this to do like

a BTC pay and stuff like that. But I would say for most people, you're probably looking at at either option one or option two, which means use your existing laptop and just do it like on the laptop you already have. Or Option two is do the whole raspberry Pie set up and connect your Specter wallet to the

full note on that Raspberry Pie makes sense. Yep, yeah, I think that's the easiest way for most people, especially as you said with the technical thing, you can just buy a device and you can literally just plug it into your Internet and kind of be done with it. Exactly. That's what that's what I've done, and it worked worked

pretty well, so yeah, exactly. And so the difficult thing is, you know, people say, oh, why don't you just do it like it's all free, But sometimes it's like it's about configuring it and making it all work in a way that's nice and slick. And so I think probably one of the leaders in that is Humbrell. So you know, get umbrell dot com. They kind of walk you through how to do it, and they tell you how to

connect your you know, on your laptop. You might run Specter wallet or Spected desktop and connect that through to the Raspberry Pie and then it it's you have your own source of truth. Now, are you okay running that on your normal the Spector desktop on your normal laptop or desktop, or do you run like a special device for that. Okay, so this is another kind of rabbit hole. But basically, if you were more paranoid, then yeah, you

should run it around like a dedicated device. But look, in practice, most people aren't going to buy a hole another whole laptop just to do Spected Desktop on it, or just to do their bitcoin things on it. Um, So look in practice, look, I think it's because it's like a trade off of like ease of use. This is like secure and so for most people, look, you're better off just using the computer used the laptop or

the computer that you already have. And remember, at least the private keys aren't being stored on there, so the private key lives in your hardware device, you know, like your you know, like your treasure or your cold card or so on. Right, Okay, so it doesn't really matter as much. Maybe it's a little bit more secure if you have it on a dedicated laptop. But but it's

not really necessary. Yeah, that's how That's how I would say, because look, in practice, you've gotta be reasonable for you know, for most people, Like they're not just going to go buy another whole laptop and do another whole thing just for this, right Yeah. Yeah, Well a laptop is pretty cheap, right, I mean a laptop is three hundred bucks, so it might not might not be the worst investment in the world. All of this is uh, you know, it's it's extra work,

it's extra time, it's extra security. Um, it's probably not the best set up if you want to trade with a whole bunch of other all coins. Um, this is really for the hoddlers, right, This is if you want to just kind of put it there, kind of set it and forget it. Um. I look at it kind of like you know, money in a in a safety deposit box. It's like you got to go to the bank and it's pretty difficult to do it. Then you can have like a hardware wallet on you know where

it's like your billful. You walk around a little bit of money. If if you lose it, you lose it, not the into the world. Um. So it's it's trading trading convenience for safety, I guess exactly right. And so with most things it's you know, if you make them more convenient, they are less secure. That's just kind of that's just the sad reality of it. But there are you know, um you know, people and projects working on

ways to try and make it easier. And I think spect the wallet is probably one of the good examples in the open source software world of that. Yeah, yeah, it's pretty cool. I've enjoyed working with it so far. Now, running the note also has additional benefits, I think, at least for a public good, right, I mean then we're running additional uh nodes, right, we're running software, so we're

actually helping support the security of the network that way. Yes, So I would say it's kind of the main like, the main benefit is for you, right of it. It's kind of like ultimately it's a selfish act, but in some way you are sort of defending the rule set of the network because you're saying, these are the rules I have chosen. And if somebody else were to try to um change the network, well, you running your node

kind of helps say no, that's an invalid transaction. Let's so, let's say you were to try and receive bitcoin from someone who is trying to maliciously change the network. If you're doing that with your own bitcoin node, in some sense,

you're helping defend the rule set. It's a bit of a meta kind of concept, but it's like this idea of you know, what's good for the individual, and like what's good for the overall system in making it more resilient, more robust, more hard to shut down, and arguably helps kind of the overall system in some kind of loose, sensor resistant way. And I guess you could also think of it kind of like you're seeding a file. You're helping seed that file to other people in some loose,

in a loose way. So then to recap it then, so basically we buy it on the exchange or wherever wherever you buy it, pull a little bit onto a soft wallet, a hot wallet on your phone, and app on your phone a little bit. The next step is then to get a hardware wallet and then eventually try to get a note that you can process your own transactions and then move to a multi sick device. Yes, that's it, Yeah, that's it. Yeah, all right. Well, that that that covers it. I know you have a lot

of help on that. Um, there's a plenty of other videos out there that explain it as well. Is that does that kind of wrap it up? I mean, if people figure that out, that's what they need to know. It's not that difficult. Yeah, And I think ultimately it's just it just takes a bit of research and a bit of time. But you can sort it out if

you are um, if you are motivated. And I think what happens to a lot of people when they start reading and learning about it, is it just it lights this fire in their mind and they're like, well, I just I need to learn more about this. I want to read books, and I want to listen to podcasts, and I want to listen to interviews and learn more about it. So um, But look, fundamentally, you don't have to go all the way. You just have to dot

and take some steps. And I would say for most people, once they get to kind of having a hardware wallet, um, then that's already a pretty good level. And then once you're learning to run your own bitcoin node, now you're kind of being more fully self sovereign. So that's great. Yeah, that's a great point that you just brought up, and I think that's uh that you know, don't feel like you have to do all these things because you obviously don't have to, and you definitely don't want to do

them if it's over your technical ability. So you could be you could be jeopardizing yourself by trying to get safer but actually put yourself in more danger at the same time. So um, definitely don't want to go above your technical difficulty. Well that's good stuff. I appreciate you sharing that with the audience. Like I said, I've been getting so many questions and I don't typically dig into

that kind of stuff, so it's great. Great to be able to have that UM to share UM for people that want to learn more about this kind of stuff, Why don't you shout out some places they can follow you or get more info. Yeah, sure, so you can find me in your podcatcher applications, Stefan the Vera podcast, Stefan le Vera dot com, and then our website, Ministry of Notes don't com dot au is where we offer guides and consulting so people can book on with us

and we can help you out. Currently, we actually just offered that on a pay what you think it was worth basis, So people do a call with us, either me or with Katan, and basically they just pay whatever they think it was worth at the end of the call. That's that's all we that's all we kind of it's like just our way of trying to help the community and help people learn how to take their financial sovereignty into their own hands. That's awesome. That's awesome. What a

good service. Well, Stephan, thanks so much. I appreciate you coming on and talking about that for us today. Thanks very much, Mark, Its pleasure, all right,