I debated a Bitcoin skeptic (who is also a CFA Charterholder!)

Summary

In this engaging discussion, Rajat Soni, a Bitcoin advocate, debates with Justin, a CFA charterholder, exploring Bitcoin's potential as a viable alternative to traditional fiat currencies. The conversation delves into Bitcoin's volatility, its role as a speculative asset, and the broader implications of adopting Bitcoin as a global reserve currency. Both parties present compelling points about the benefits and challenges of Bitcoin in the current economic system, highlighting the complexities of transitioning from fiat currencies to a decentralized monetary system.

Highlights

• Justin, the skeptic, challenges the notion that Bitcoin can replace fiat, citing its speculative nature and volatility 🚀.
• Rajat argues that Bitcoin offers a non-inflationary alternative to fiat, appealing to those frustrated by centralized monetary policies 💡.
• Both debaters agree that the path to Bitcoin's global reserve status is complex and long-term ⏳.
• The conversation touches on the societal and economic challenges posed by both Bitcoin and current fiat systems 🌐.
• A critical point raised is how Bitcoin must prove its utility and gain trust from global users to transcend being a speculative asset 🔑.

Key Takeaways

• Bitcoin's journey from a speculative asset to a potential global currency is fraught with challenges and debate 🤔.
• Fiat currencies are criticized for their centralized control and potential for depreciation through constant printing 💵.
• Bitcoin's volatility and speculative nature are seen as barriers to its adoption as a stable currency 🚀.
• The future of Bitcoin as a global reserve currency depends on widespread adoption and overcoming institutional skepticism 🌍.
• Fiat's ability to stimulate economies during downturns is a key argument against a fixed supply currency like Bitcoin 📉.

Overview

In this lively debate, Rajat Soni, a Bitcoin proponent, engages with Justin, a seasoned finance professional, to discuss the viability of Bitcoin as an alternative to fiat currencies. Rajat emphasizes Bitcoin's potential as a decentralized solution to inflation and central control, while Justin highlights the hurdles of volatility and speculative behavior that Bitcoin needs to overcome.

The debate brings forward the argument that fiat currencies, while imperfect, offer mechanisms for economic stability during downturns. Justin argues that fiat's ability to stimulate economies is a fundamental advantage, contrasting with the fixed supply nature of Bitcoin which doesn’t allow for such interventions.

Rajat counters with Bitcoin's non-inflationary nature offering a store of value independent of central control. Despite the enthusiasm for Bitcoin, both participants acknowledge the challenges in shifting from a fiat-based global economy to one where Bitcoin plays a central role, and agree that the transition requires time, understanding, and strong foundational changes in public perception and trust.

Chapters

• 00:00 - 03:00: Introduction of Guests The chapter introduces two guests, Justin and Rajat. Rajat has appeared on the channel before, while this is Justin's first appearance. Justin shares his background in traditional finance, mentioning he is a CFA charterholder managing investments at a wealth management firm in Minneapolis. He has been in this role for five years, with prior experience in the field, and also has an accounting background.
• 03:00 - 10:00: Discussion on Bitcoin as Alternative to Fiat The chapter opens with a personal anecdote from a speaker who first learned about Bitcoin in 2013 while studying abroad in India. This initial encounter sparked their curiosity, leading to a deeper exploration of Bitcoin's merits and limitations. The discussion invites Rajetta, a recurring guest familiar to the audience, to provide insights into Bitcoin as an alternative to fiat currency.
• 10:00 - 15:00: Speculation and Volatility of Bitcoin In this chapter, an individual with a finance and accounting background, who holds a CFA charter, reflects on their journey with Bitcoin. Initially encountered in 2010, Bitcoin was ignored by the individual until they revisited it in 2013 and again more seriously in 2017-2020 when it started to make more sense to them after dedicating time to understanding it. This chapter likely explores themes of Bitcoin's market speculation and its volatility over the years, as seen from the perspective of someone moving from skepticism to a more studied interest.
• 15:00 - 20:00: Historical Context of Fiat and Credit Systems The chapter provides insight into the transition from traditional finance topics such as personal finance and investing to concentrated discussions on Bitcoin. The speaker reflects on their four-year journey in the financial world, emphasizing the last two years dedicated to creating content about Bitcoin and its impact on financial systems. The speaker's transformation and enthusiasm for Bitcoin are highlighted, marking a clear shift from traditional financial topics to more innovative, digital currency discussions.
• 20:00 - 25:00: Government Control vs. Mathematics in Fiat The chapter titled "Government Control vs. Mathematics in Fiat" explores the debate on whether Bitcoin is a viable alternative to traditional fiat currencies or simply a speculative asset. The discussion between experts reveals a lack of consensus, as there is insufficient evidence to conclusively prove that Bitcoin stands as a superior system compared to existing fiat currencies.
• 25:00 - 30:00: Impact of US Economic Policies Globally The chapter discusses the impact of US economic policies on the global stage, emphasizing the inherent flaws that could be addressed over time. The discussion highlights the critical importance of time in adopting Bitcoin amidst these policies. It also touches on the notion of Bitcoin as a speculative asset, influenced by price action.
• 30:00 - 35:00: Bitcoin's Potential to Replace Fiat Chapter "Bitcoin's Potential to Replace Fiat" explores the dramatic increase in Bitcoin's value since its inception, highlighting the substantial price hikes, particularly around 2017 and 2018 when Bitcoin gained mainstream recognition. The chapter delves into how Bitcoin's price surged from a few thousand dollars to around $20,000, sparking significant public interest and discussions about its potential to replace traditional fiat currencies.
• 35:00 - 40:00: Challenges of Bitcoin Adoption The chapter titled 'Challenges of Bitcoin Adoption' discusses the gradual mainstream recognition of Bitcoin. It highlights the point at which Bitcoin started being tracked by traditional finance channels like CNBC. The chapter also touches on the correlation between Bitcoin's price behavior and market corrections, comparing recent economic shocks, such as those seen during COVID, to past severe events since 2008. Overall, it reflects on the challenges and dynamics involved in the adoption of Bitcoin amidst varying market conditions.
• 40:00 - 45:00: Speculation about Bitcoin's Future The chapter discusses the correlation between Bitcoin and other risk assets, particularly focusing on its relationship with the NASDAQ. It highlights that during periods of market instability, Bitcoin often experiences price drops, similar to other risk assets. The discussion emphasizes how Bitcoin frequently leads these declines when risk assets fall.
• 45:00 - 50:00: Complexities in Bitcoin Transactions This chapter explores the behavior of Bitcoin as a risk asset, primarily driven by speculative actions. Observations suggest that Bitcoin's price action is impacted similarly to risk assets during times of market weakness, indicating a speculative dynamic that aligns with broader risk trends in the market.
• 50:00 - 56:00: Final Reflections and Takeaways The chapter discusses reflections on speculative stocks, particularly in relation to NASDAQ and Bitcoin. It emphasizes that the volatility in Bitcoin's price is due to speculation, which is a common trait for all assets in the short term. The conversation involves addressing previous points made by another participant named Justin.

I debated a Bitcoin skeptic (who is also a CFA Charterholder!) Transcription

• 00:00 - 00:30 Thank you guys for joining us today. So we have Justin and Rajat. Guys, I'm sure you remember Rajat has been in the channel a couple of times. And we have Justin, it's first time on on the show. So do you mind to give us an intro and tell us a little bit about yourself? Yeah, thanks for having me first of all. I'm excited to do this. Uh my my background is very much in traditional finance. So I'm CFA charter holder. I manage investments at a wealth management firm here in the Minneapolis area and I have been doing that for uh five years here and a few years before that. And then I have a an accounting
• 00:30 - 01:00 background as well. So um I should probably note I first heard of Bitcoin in 2013 when I was studying abroad in India with a grad student. He was telling me about it. So that's how I became familiar and then slowly got more and more curious uh to the point now where yeah here we are today uh discussing its merits and and and maybe not. So thanks for having me. It's a pleasure. Rajetta, do you mind to give us an intro even though you've been a couple of times on the channel, so I'm sure my audience is going to recognize you, but take it away, buddy. Yeah, absolutely. I I worked in finance as
• 01:00 - 01:30 well. I have my CFA charter as well. Uh I have an accounting and finance background. I worked in the finance industry for 10 years. I came across Bitcoin at f first I came across Bitcoin around 2010 and I I was super early, but I completely ignored it. I I didn't think it was anything. And then 2013, I came across it again. And then 2017 2020 it finally started uh making a little bit more sense cuz I put in the time. Before that I didn't put any time in. Now here I am. I've been working on this
• 01:30 - 02:00 thing full-time for a pretty long It seems it seems like a long time but it went by so quick. Uh for four years I've just been talking about Bitcoin. I've been posting about Bitcoin. Actually it's been about two years that I've been posting about Bitcoin. Before that, I was posting about personal finance, about uh investing, about how to make sure that your finances are working the way that you want them to. So, today I just regularly post about Bitcoin. I I think I've gotten fully orange peeled and I'm actually ready to see where I'm
• 02:00 - 02:30 going wrong. Thank you both so much for doing this with us today. I guess we're going to go and and talk about where finance could agree or not when it comes to Bitcoin because there is a lot to talk about. If you don't mind, we can just dive into it. And I have one for you, Justin, right away. Is Bitcoin truly a better alternative to fiat currencies or is just a speculative asset? Yeah, I I think as it sits right now, we just don't have the evidence to determine that it is a better system. I
• 02:30 - 03:00 think there are inherent flaws that make that the case. and and maybe those flaws do get addressed over time, but again that that over time piece is is critically important to Bitcoin's adoption too. So I think it's it's very uh it's very important and it's a very important part of this discussion that I think oftent times gets pushed pushed to the side. Um the second piece of your question is is it just a speculative asset? I think the the price action
• 03:00 - 03:30 we've seen in Bitcoin so far lends itself to be just that right to the point where we have seen massive price increases in Bitcoin. I mean since its inception really um but even more so in recent years um 2017 2018 when when Bitcoin first went mainstream um that was part and parcel because the price was going up from whatever 2 or 3,000 up to that 20,000 mark where it really
• 03:30 - 04:00 started to get um mainstream attention right I that's when I remember really seeing it uh catch the attention of traditional finance when you started seeing a Bitcoin tracker on CNBC etc um But what does the price behavior indicate? Right? Every every market correction, every period of of sustained systemic market weakness we've seen, which by the way since 2008 has not been anything that severe. Maybe COVID is kind of the most severe economic shock
• 04:00 - 04:30 we've been through, right? But any type of market hiccup we've seen in the last 10 years or so has accompanied a Bitcoin price drop as well. So I think the correlation piece itself where what we have seen Bitcoin do is correlate with other risk assets right if you look at the NASDAQ like Bitcoin's correlation with the NASDAQ has been very tight especially during these tumultuous periods where if you see risk assets fall bitcoin usually leads actually uh
• 04:30 - 05:00 the weakness but but you do see that behavior where bitcoin is behaving like a risk asset right so I think the evidence right now at least suggests that that is what is driving the price action of Bitcoin. It's speculation. Now maybe there's something more to it under the hood. But all we can take away is what we've seen so far, right? And and it's when those periods of weakness come. Bitcoin is participating with risk assets on the downside. Um just like the
• 05:00 - 05:30 NASDAQ, just like speculative stocks are. So that would be my short and sweet answer to those first two questions. Fantastic. Thank you so much, Vette. I'll let you reply. And for you the same questions if you have any points you would like to rebate. Absolutely. So I wanted to address a couple things that Justin was saying there. Bitcoin's price is volatile and it seems like it's speculative that's because the people who are setting the price are speculating. So in the short term this is actually this actually applies to every asset. I think right now let's say
• 05:30 - 06:00 stocks um bonds gold probably have a very strong foundation uh of people who are not willing to sell. But during times of uncertainty, people do sell those assets because they're I mean it's if you're buying stocks for a day, 2 days, 5 days, you're speculating, right? If you're buying them for a year, you're speculating. If you're buying them based on the price, you're still speculating. I would say that if you just go based on price, everything is speculative. Even something like apples are speculative cuz who knows what the price of apples
• 06:00 - 06:30 are going to be in a year, right? Everything is literally everything is speculative. Even gold in in a way at least in my opinion is speculative because who knows whether the world will know whether the world will assign monetary value to gold in a thousand years? What if gold just becomes a regular metal that we use on a day-to-day basis? And I don't think utility has to do anything with that. I know I know Justin, you didn't say anything about utility, but I don't think utility has to do any has anything to do with that because if it was
• 06:30 - 07:00 utility that that showed you if something is speculative or not, then oxygen wouldn't be free. Oxygen is the thing that we use the most. It's all about supply and demand. With Bitcoin, the reason why the price is so violently going up and down all the time is because it has that inelastic supply. If something has an inelastic supply and there are more sellers than buyers, of course, the price is going to come down. If there's more supply than if there's
• 07:00 - 07:30 more supply than demand. If there's more demand than supply, vi price will violently go up. And over time, what we see is that there are higher highs and higher lows because the foundation is being built. There are people who are buying Bitcoin. They understand Bitcoin and they never plan to sell it again. Of course, not everybody is like that. I think right now the majority of the world does see Bitcoin as a risky asset, a very risky asset. In fact, people see the volatility. They think that Bitcoin is going to zero. They think that they
• 07:30 - 08:00 don't want to hold through the highs and lows. They just want to sell at the high and buy back at the low. So, I think that kind of makes it a lot worse. The volatility, it makes it drop 70 makes the price drop 70 to 80%. And I think that's normal because at a point we are going to see that people run out of money. People who want to buy Bitcoin, people who want to speculate on Bitcoin, they run out of money. On the other hand, the floor is set by people who
• 08:00 - 08:30 have a very strong conviction of where Bitcoin is going. For example, when Bitcoin hit $15,000$16,000 in 2022, the people who truly understood Bitcoin were buying as much as they could. I didn't quite understand Bitcoin. I understand uh I understand I understood a bit of it. I had put in the time. I hadn't completely taken the orange pill, I guess you can say. But I was buying Bitcoin then because I saw the price was low. I wasn't speculating. I I think it depends on the investor, right? You can have
• 08:30 - 09:00 speculators who are buying real estate. People who buy real estate when what I was a realtor in 2022, 2021, I would see people buying real estate and selling within months. Would you say that real estate is speculative? based on those price shifts. I saw people I I used to work at a brokerage. I'd see people buying stocks and selling them at the end of the day. They'd be buying the S&P 500, buying it in the beginning of the day and selling it at the end of the day. Not because the S&P 500 is speculative, but because they were
• 09:00 - 09:30 speculating on where it's going in the future. I think it applies to Bitcoin as well. A lot of people have no idea how Bitcoin works. A lot of people make decisions based on their emotions. And of course, you're going to see that reflected in the price. Yeah, that's a good point. And I would I would counter that, I guess, with when you talk about the speculation around Bitcoin, around other assets. There is a degree of that in every asset class. I mean, we're seeing it in the Treasury market right now where massive speculation and bonds
• 09:30 - 10:00 are driving massive price volatility in the Treasury market, right, which is supposed to be the most one of the most stable markets in the world, right? So I don't think that speculative nature I think you can separate that with traditional assets where it's harder to separate that with Bitcoin like when you use Raja real estate real estate has a tangible use case and a tangible value and maybe Bitcoin does but I guess my question back would do
• 10:00 - 10:30 you think most people buying Bitcoin right now are buying it or huddling it because they get the underlying thesis Or do you think it's part and parcel because they think they're going to make money on it? whether it's because they think the number's going to go up or because they have seen the number go up in the past and they've seen people get rewarded for holding through that volatility because at the end of the day that speculation will go through ups and downs where you know depending on
• 10:30 - 11:00 liquidity in the system. You can have high degrees of speculation, you can have low degrees of of speculation, right? But at the end of the day, what's underlying an asset you're speculating in matters. And especially if you're an investor or a hodler, so to speak, right? Like you your your basic premise is that you believe the value you are um assigning to this asset will be realized in the future. Right? So whether that's
• 11:00 - 11:30 in real estate, you believe maybe not that your house will be worth more, but your house is going to provide you that utility, a roof over your head, a place to be private and you know with your family and to cook meals or whatever. Like that's an inherent value your house gives you. And so maybe there is speculation on your house, but there is an underlying value that you can tie to that if all speculation were gone, those underlying assets would still have value because there is that utility. And I
• 11:30 - 12:00 think Bitcoin could have that, but are enough people convinced and believe in that to where, you know, after quote unquote the dust settles out, what is the real price discovery of Bitcoin? Right? because the speculation is clearly overshadowing that underlying value that there is. So again, going back to the adoption curve too, it's how long does that take for that speculation to kind of get weeded out of the market
• 12:00 - 12:30 and it to be replaced by people that you know believe quote unquote. I mean that process could be multi-deade process, right? So until that point it's like okay for the people that are hodddling bitcoin right now do you have that in yourself right us as humans we are not very good at delayed gratification so again you can believe in the case of bitcoin but do you believe it in enough that you will hodddle even beyond your lifespan that those values then that
• 12:30 - 13:00 you're holding on to to store for future use maybe you don't even get to realize the benefit benefits of them like do we have that in us as a society because I think that is what is going to be required for Bitcoin to achieve the potential that so many people believe it has that's a lot to ask of people I think we do uh if if we didn't have that as a society we wouldn't be where we are today I think we we'd be a lot further back I mean if you think about it a lot of the things that we have today are a
• 13:00 - 13:30 result of years decades of research and the people who did that research probably didn't benefit from that research themselves So, I think that's a that's a that's a really great question. The other part is u how many people do I think are speculating on Bitcoin? I think the majority are speculating right now. I think the majority of people don't understand what Bitcoin is. There's probably a lot of people who own hundreds of Bitcoin, thousands of Bitcoin who don't actually get what it is. They only have it because number one, they got lucky. They didn't look into it after. I was actually having a I
• 13:30 - 14:00 was having a little bit of a conversation with somebody on X. He he had started buying Bitcoin in 2017. He he was buying Bitcoin four at a time, five at a time. So, you know, he has a lot of Bitcoin, but he didn't quite understand what it is. He thought Bitcoin is just uh it can't go above a million dollars. It it's purely speculative. To him, it was just something that he holds because he thinks he's going to be able to get more fiat out of it. The way that I see Bitcoin, I think Bitcoin is going to replace fiat because if you think about it right now, of course, governments
• 14:00 - 14:30 have full control of our money. Central banks have full control of our money and they can print as much as they want to. What is the intrinsic value of fiat currencies? There is no intrinsic value. The only reason why they have any value is because we believe that they'll have value. So I I want to kind of turn that question around with for you. What do you think is the likelihood of the US dollar surviving in a thousand years when every fiat currency has collapsed within the within 50 25 to 50 years? I I
• 14:30 - 15:00 think that likelihood is very very low. That's a great question. I think that gets right to the heart of this issue. So I'm glad we're I'm glad we're going there. And look, Rajat, to answer your question, probably not. Right. I mean, just the odds are that the dollar will not be the reserve currency a thousand years from now if if history is any indication. Right. And to your point, why are why does fiat money hold value? It's because it has to for us to
• 15:00 - 15:30 function in the society. A government has to be able to tell us or does tell us right now what's acceptable for payments. I mean both for taxes and for transactions and goods and services. Like we have to the the most efficient way for us to transact between other people is to have an agreed upon exchange mechanism which is the dollar. That's the best form of it that we have right now. Now the future of fiat right where this steps into play is that has there been a lot of mistakes made with
• 15:30 - 16:00 how we manage our fiat system? Yeah. Yeah. A lot of them. You will not find an argument for me from that. There have been a lot of mistakes in how we've managed our fiat system. But at the same time to look beyond any benefits we've gotten from that system is also disingenuous. Right? like it's not it's not one side or the other, right? Because what what the fiat system or or maybe more broadly the credit system, you could say, is what that has given us
• 16:00 - 16:30 is this ability to kind of shave off the margins both on euphoria and complete depressive economic conditions, right? Where in times of of great trouble, whether you look at I mean 2008 is the easiest and most recent example, right? What happens in that system when we are at the bottom things are very pessimistic people are losing their jobs they can't find new jobs how do you
• 16:30 - 17:00 stimulate if not for the you know the encouragement of credit creation right like how else do you stimulate the economy out of that malaise so the the worry is that and again this gets to the fixed supply part of Bitcoin which if you're a speculator and you think this will be worth more money in the future that fixed supply is a huge benefit. I mean full stop plain and simple absolutely but what the fixed supply
• 17:00 - 17:30 does not provide right is is that mechanism to accelerate growth to enhance growth right because if you get into a period of malaise where money is just not moving around because people are either scared or they don't have the money to transact they don't have a job that just extends that malaise if you cannot somehow stimulate growth and incentiv incentivize people to take economic actions, whether it's business
• 17:30 - 18:00 credits to to start a new small business or whether it's bringing interest rates to zero and encouraging banks to loan, right? that that stimulates the economy and it kind of gets us to this point where we don't extend those draw downs like we did precurrent fiat systems where we had really high highs and really low lows that were really drawn out, right? We've sped up the process. But of course, one of the victims of
• 18:00 - 18:30 that process is your purchasing power in the fiat system, right? So as we stimulate, as we encourage more economic activity, the real value of our currency gets depreciated by our own government, right? And that that is a problem in and of itself. But all I'm saying is there's a good side to that too where you're not drawing out these depressions and you're not you also have a mechanism to you know correct so to speak those euphoria
• 18:30 - 19:00 when they come too. And and I worry that a system based on a fixed supply of a decentralized asset, there are no central actors for better or for worse to try to improve things, right? To try to keep things moving and keep things growing over time. The way that I see it, every action has a reaction. I think that's just that's just how the world works, right? So every time we stimulate the economy, of course, people are going to
• 19:00 - 19:30 benefit from it, but there are also going to be other people who are hurt by that. And I think you made that point. Uh there there's always people around the world who are losing purchasing power when there's stimula when when there's stimulus. See, the issue here is that okay, so we had in during during 2020 2021, we had people struggling in the US, but they were also struggling everywhere else in the world. The US government was able to borrow $1,400 per person and throw them into throw that
• 19:30 - 20:00 money into the market. Trillions of dollars. They were able to borrow as much as they could. They didn't help Canadians. I'm Canadian. I didn't get anything out of that out of the US government being able to print money. I don't think people from Europe really got anything out of that. People from Asia got anything out out of that. Africans got any Nobody got anything out of that except for Americans. Americans got that paycheck. American companies got that stimulus, but nobody else was helped by it. So why do we want one
• 20:00 - 20:30 central authority to control the entire world's money? If it was one central authority and only America was using that money, then that's perfectly fine. You do what you want to. But if the entire world is relying on that money supply, why is it that a few people get to make the decisions for the entire world? To me, that doesn't make any sense. I get it. I I completely agree with you. Without fiat, we would not be where we are today. I completely 100% agree. The reason why we needed fiat in the past is because number one, we
• 20:30 - 21:00 didn't have the internet. If we wanted to communicate with people around us, we really I mean we we really didn't know the people around us. So how who would we trust to issue money? So in the past government issued money has been of course necessary because without government issued money there is no trusted party that we can rely on to issue our money for us. So for example uh would you rely on money that's issued by your neighbor? Do you think that they're going to be able to fulfill whatever obligations they have to you?
• 21:00 - 21:30 So I think because of this because we trust governments because we uh because governments were the only thing that we could widely trust everybody on earth could trust the US government. They all know that they have the assets, they have the power, everything backing them so that they could issue that currency and they would be able to fulfill the obligations that they have from that currency. I think that's the reason why fiat currencies worked really well. And I think without fiat currencies, we we wouldn't have gotten where we are today. I I completely agree with you on that. But let's say for example, if we we started using seashells or or salt as
• 21:30 - 22:00 money, we wouldn't be able to transact. I think the positive of US of government issued currencies is that you can move it much more easily. You can move it over the internet. You can move it over uh you can trust it. Essentially, without government issued currencies, we wouldn't be able to use debit cards. We wouldn't be able to use credit cards. We wouldn't be able to use something like uh checks. In the past, of course, we used gold because gold was completely decentralized. Nobody had to trust gold. Nobody had to um trust some party to uh
• 22:00 - 22:30 to issue more gold. I I if let's say somebody gets scammed in the current system though, it's different. And so we can print more money. If somebody if somebody has their money in a bank account and the bank goes bankrupt, somebody can print more money and make them whole or they can go rely on insurance, they can they can become whole. I I get all that. That's all to the advantage of where we are. That's that's what led us to where we are today and that's to the advantage of the majority of people. But I think we don't
• 22:30 - 23:00 need to constantly be growing. We don't need stimulus all the time. I think with Bitcoin, all of that is built in. So when Bitcoin's price rises, when Bitcoin's purchasing power rises, people purchase things on their own. On the other hand, with US dollars, it's the opposite. The purchasing power is decreasing to force people to spend. And it's not only Americans that are impacted by that. It's Canadian, Canadians, it's Africans, it's Asians, it's everybody. Everybody on earth is
• 23:00 - 23:30 impacted because the US government wants to stimulate the American economy. And I don't think that makes any sense. I don't personally like that idea. Why should one person Why should one person determine my future and the future of the people around me and the future of the people? They don't even know. I think that's I think that's a problem because they don't know everything about what's going on in the world and they're making decisions based on their own experience because based on what they think is right. So let's say interest rates go up, interest rates come down.
• 23:30 - 24:00 How do we know that interest rates are going up and coming down at the right time? How do we know that once the Fed figures out that interest rates must go up? How do we know that they're not too late? How do we know that they're not too early? Right? All all those things have to uh all those things have to be accounted for. There's also the fact that with Bitcoin, we don't need to trust anybody. There's no trusted third party, meaning that we know exactly what our money is. We know that there's no counterparty in this network. The entire
• 24:00 - 24:30 network is just a public ledger. That's it. It's just a public ledger of ownership. That's literally it. So, I don't think we're going to need stimulus because there's going to be a lot less debt in the current system. We need debt. We we need stimulus to account for all of the debt that isn't being paid back. Let's say for example if a bank goes if a g if a bank goes bankrupt because they put money in they they lent money to the US government and now their
• 24:30 - 25:00 depositors want all their money back it that's exactly what happened with Silicon Valley bank Silicon Valley bank collapsed because they didn't have enough funds to fulfill their client withdrawals. So that's the kind of system that we're in because of what we have today. Governments can rehypothecate money. we have fractional reserve banking and because of fractional reserve banking there's a small group of people who are gambling but then everybody else has to suffer because of that small group of people so
• 25:00 - 25:30 I I mean the way that I see it we don't we don't need fiat currencies anymore because number one we have the internet number two we have a decentralized protocol that can be used as money so we don't need to trust governments to issue our money anymore I love that you basically took us to organically you guys took us to the next question I have for you Oh, this is for you Justin. I guess you can you can include the reply to Rajat if you wish to do so. Who should control fiat currencies? Should be mathematics or government? Yeah, that's a great question that I don't
• 25:30 - 26:00 have the answer to. I have thoughts on it, right? But first to just respond a little bit to what you said Rajatu. I mean during during co I mean there were plenty of countries that had a fiscal impulse. The US's fiscal impulse was much larger than almost any other country. Yeah. But at the same time, every other country was well within their bounds and rights to do the same thing. Now, what you might say is, well, they can't because then their currency
• 26:00 - 26:30 just gets devalued even more against the dollar, right? It hurts them longer term net. And that's that's a perfectly justifiable response. Absolutely. But you know what what that stimulus did and right you can say even in the US I mean there's ample evidence to suggest like this was way overdone like we took we took a bazooka to a molehill type of problem right but what does it do right you saw people during that whole period
• 26:30 - 27:00 of time after COVID flood to the dollar right like that was the safety asset the safety trade right all the stimulus that they were pumping out right Now it's led to other issues right part and parcel being our debt from the US point of view and and worldwide too on a developed market basis is now not just growing at a high level it's growing exponentially and then we rate interest rates on top of it. So like this this problem is
• 27:00 - 27:30 snowballing right and we don't know the endgame here but again what did all that stimulus do? It helped the it helped prevent the worst outcome that was possible. Right? If you have a fixed supply decentralized asset, how do the actors decide there's enough confidence to start transacting again? Because you need that velocity to pick back up to see that recovery. Because if everyone just goes out goes into their
• 27:30 - 28:00 holes and just holds Bitcoin until everything's okay, when is that all clear signal? How do you know? what if it takes five years, right? Like what what does that do to people as opposed to overstimulating, right? So, I think there's there's drawbacks to both sides. And I think the drawback with a fixed supply system like Bitcoin would give us as the backbone, so to speak. I think that creates more problems that
• 28:00 - 28:30 the way we've become accustomed to living, those problems become more and more unacceptable because people want those quick recoveries. They've come to expect it. And maybe that's part of the problem, too, where if we run into trouble, we are prone to just take more risk in general because somebody's going to bail us out. And that's been that's been a trained reaction now really since the financial crisis. And there are problems in that in itself. But I think my mind goes to well
• 28:30 - 29:00 what is the alternative that we don't make an effort to to stimulate or at least get people back to where they were before. Right? Because during a depression like economic activity completely grinds to a halt. Like you are losing pace. You're not you're not not growing, right? Like you are shrinking as an economy, as a productive economy, as a productive household, whatever the case, right? if you lose your job, etc. So, I just don't see how some of those backs stops that are for the benefit of people that do have side
• 29:00 - 29:30 effects, negative side effects, some of which we're seeing, but I don't see how that is replicated with a system that can't expand its supply and has to rely on expanding velocity to increase economic activity. Right? So anyway, back back to the the second actual question, who should control the system? I think we're clearly heading toward the path of digital currencies, but digital in the form of fiat, right?
• 29:30 - 30:00 and the the path to Bitcoin adoption as the global reserve currency. Again, just given our current setup and how fiat does dominate the world and is the base case for the world, the path to Bitcoin being the answer is so narrow, right? It's it's Bitcoin or literally anything else, right? Like that's what Bitcoin's proof has to be. That it has to be only itself
• 30:00 - 30:30 and it cannot be anything else. Nothing else that could emerge from maybe a fiat system working to repair itself, right? Like that's an outcome that we don't often consider. We've gotten hooked on this money printing, the stimulus, this expansionary policy. Like what if that is not the case forever? What if people get sick enough of the status quo that the fiat system in some ways repairs itself to the point where we can reverse
• 30:30 - 31:00 some of this policy or at least restore some of that trust that is there? Like that is a pathway that works against Bitcoin. What if something else comes through and innovates just a little bit better than Bitcoin or even alongside Bitcoin's network? That's a possibility that that you know alleviates Bitcoin from being that panacea so to speak. So again I don't know what the future is for fiat currency. I don't know who should control it. I agree with you Rat
• 31:00 - 31:30 that not one party should control it. That's not fair to the rest of the world and that will lead to outcomes that we're already seeing it lead to. Right. But the outcome with Bitcoin being that has similar problems just manifested differently. Right? like wealth inequality is still a big issue um with the adoption of Bitcoin. And then the second piece again like I said is what does it do when things aren't going well? Does it just let the system go and it you know becomes self self-reping you
• 31:30 - 32:00 know because on the margins some of that help we get from the fiat system it helps people on net. One of the problems with having one group of people just controlling everybody's money, of course, to let's say for example for 2008, we the the US government had the ability, the central the Federal Reserve had the ability to kick the can down the road. So they did and they'll keep doing that forever because they have the ability to do so. If you have the option, it's like if you have if you
• 32:00 - 32:30 have a gun in your house and an an intruder walks in or if you have some kind of disagreement with somebody, you have a gun on your body, you're more likely to shoot them than if you don't have a gun. Right? So, in this case, if you have the ability to print more money, to borrow more money, you're very, very likely to do it to solve problems because you don't want to deal with the short-term consequences of those problems. those problems that we have in the first place are created by fiat currencies. So let's say for
• 32:30 - 33:00 example during 2008 the only reason why we could have subprime mortgages is because the US dollar could be printed out of nothing. There could be more dollars created out of nothing. If there was no such thing as the US dollar being printed out of nothing, we wouldn't have these problems in the first place. I think that's the the the first part there. there shouldn't be a central authority that controls everybody's money because I if you want to improve the if you want to improve the economy of the US that's perfectly fine but it's
• 33:00 - 33:30 being done by redistributing resources from other people who don't benefit from the US government stimulating its economy the wealth is being redistributed for example like I said I'm Canadian I have dollar sitting downstairs if the US government prints more dollars and adds them to the economy. I'm hurt by it, but I don't benefit at all. How do I benefit from the the the stock market going up
• 33:30 - 34:00 if I don't own stocks? This is how it applies to the majority of people. Let's say I keep referring to Africa. People in Africa don't have access a lot of people in Africa don't have access to the stock market. If the stock market goes up because the US government printed more money and added to the economy, they don't benefit from it. They are hurt by it. their wealth, whatever small amount of wealth they're able to accumulate is being redistributed to Americans. Can you elaborate on that piece? Absolutely. So, if you, let's say, for example, if
• 34:00 - 34:30 somebody holds a bunch of stocks, if the stock goes up, they're now able to sell their stock using this uh this system that exists with more and more money being pumped into it. They're able to sell their stocks. They're able they're able to borrow more money against their stocks and they're able to go to, let's say, Africa and use that borrowed money to spend on goods and services in Africa. They're able to basically pay the people in Africa with money that they had created out of nothing that they had borrowed that they benefited from with the stimulus and they're now
• 34:30 - 35:00 able to pay these people with that money. So let's say for example, I'll give I'll give you an example. When I went to Mexico, it was uh 2023 I believe it was. The people there were struggling. they were absolutely struggling. But I benefited because I owned stocks. I could sell some of my stocks and I could pay them with the money that I made from those stocks, but they don't have access to those stocks. So the entire system, the way that I see it, I don't know, maybe I'm wrong here, but the entire system is essentially designed to make the wealthy wealthier and the poor poorer because over time,
• 35:00 - 35:30 the people who don't own stocks, the people who don't own prime real estate, they're going to suffer as more and more money is printed and added to the economy. that that's we we've seen that already. We we see that regularly. It's happening already. My parents, for example, didn't own stocks the first 30 years that they were in Canada. I convinced them to start buying stocks more recently. Of course, they're benefiting now, but for those first 30 years, they basically stored their money in Canadian dollars, which were being devalued. People around the world are
• 35:30 - 36:00 using US dollars to store their value, which are obviously also being devalued because they don't have the option to do anything else. So the economy that's being stimulated, of course, it helps the people who own stocks. It helps people who own assets. And we both know this. We both know that if asset prices go up, the people who own assets are going to get more wealth. But that anybody who doesn't have assets is going to suffer. The way that I see it with money that's controlled by by individuals, those individuals are
• 36:00 - 36:30 always going to support their own interests. They're always going to support the people who they know, the people who who can help them. For example, we have I'm not completely I don't know the exact details of this, but we know that there's a revolving door policy with uh members of Congress and certain companies if they vote on something. Like I said, I don't know the exact mechanism of how this works. I've only done I've only read maybe anecdotal uh evidence from other people. But if
• 36:30 - 37:00 you vote a certain way, then you might be promised a job later on. And I think that's a massive problem because those votes are what determine pretty much everything in in in how we do things in econ in the economy today in in in society today. So certain companies are going to get benefits, certain companies are not going to get benefits. It leads to monopolies. It leads to companies having a lot more power than they should. And again, all of that is purely
• 37:00 - 37:30 based on fiat currencies. It's based on the US government being able to borrow as much money as it wants to. It's able it's based on the Federal Reserve uh lowering and increasing interest rates whenever it wants to. It's based on banks creating money out of thin air. So to me, in my opinion, I think the supply of money should be based on math because it shouldn't be subjective how much money we have. It shouldn't be based on feelings. It shouldn't be based on emotions. It should be based on how much value somebody creates. If there is some
• 37:30 - 38:00 kind of crisis that we have to go through, I think we should have to go through it because we created it. It's like if if you get sick and uh and you want to avoid being sick, of course you're going to take medications, there could be some side effects to that medication that maybe you don't know about. And what if you have to deal with that medication in 20 years? Maybe that's what we're going through today with 2008 not getting a lot worse because more money is being added to the economy, more stimulus because 2008 wasn't resolved. We're dealing with it
• 38:00 - 38:30 today, 17 years later, and we're going, if it's not resolved today, it's going to be dealt with in 30 years, in 40 years. If we have the option to keep printing more and more money, if the supply of money is subjective based on opinions, we're going to keep dealing with this and we're going to keep extracting wealth from our future generations. People who aren't even born yet are in hundreds of thousands of dollars of debt because the US government is constantly just borrowing more and more money. And of course, that's that's on the backs of the
• 38:30 - 39:00 people. Yeah, I don't disagree with that at all. But I think we skip I think we skip the step where the populace stands up for itself. Yes. Right. That has to happen. I mean we can talk about I mean just the Federal Reserve itself where you have a board of nine governors that say this is what I think interest rates should be in the economy when Yeah. I mean most market participants would say well we already have an equilibrium interest rate in the
• 39:00 - 39:30 economy. It's like the two-year or the 10-year Treasury yield, right? right? Like the market sets those prices. Therefore, that could be what interest rates are, interest rate policy, right? So, again, that doesn't have to be um you know, a decentralized um effort essentially to you know to to to set policy so to speak. I think there are better ways certainly. I think we also look I mean talking about the fiat system overseas, right? Because you're absolutely right. I have the perspective of a US person.
• 39:30 - 40:00 That's all I've ever known. I've traveled many countries, but I've only ever lived in the US. What we also ignore is what the fiat system and the dollar system, the trust that that had given the world and the the order that had given the world for better or for worse where it sits now is it has given opportunity to other places in the world, right? I mean, and that's not just a US phenomenon. I mean I mean that's a dollar phenomenon where the
• 40:00 - 40:30 global reserve currency is the dollar. I mean we can talk about the Euro dollar market which is I know five ten times larger than the domestic dollar market. That's just the global market for US denominated debt. Right? That's a massive market that funds many things in many different countries. And you could argue that that progression of the fiat system is what let China, you know, come into the WTO and and start their
• 40:30 - 41:00 domestic manufacturing um facilities and processes to give to the rest of the world and literally brought 300 million people out of poverty in China. Now, that is not a thing that the US did, right? That's not what I'm saying. I'm saying a responsible and trusted global financial system backed by fiat currency did that right like that that that happened as a result of the interconnectedness of of trade and money
• 41:00 - 41:30 flows that is a direct result right now again where we are now we've taken it way too far and and the writing is inevitably on the wall and that's probably why we're having this discussion Now, and why this is such a big issue is because people are realizing that that that the system is flawed and exactly like you said, if we can just print money to try to alleviate our problems and there's no better
• 41:30 - 42:00 alternative that can turn around and say, "Hey, US, you're taking this too far. So, I'm going to take it into my hands whether it's the Euro area or the Bank of Canada or something or whether it's, you know, an Asian block of countries or something like they just don't have the trust, the infrastructure or the means to upsert the dollar standing right now. That's another fiat solution. But this goes part and parcel with the trajectory of all of this and
• 42:00 - 42:30 what it's going to require of Bitcoin to get over that hump to be a global reserve currency status. You're going to have to go through many hoops, right? And the first of which is probably the populace getting fed up with this and saying, "Okay, can we stop printing to solve every type of problem?" Um, you know, maybe people don't come out and outright say we need to go through a depression and then we'll reset the system. I don't think people would ever vote for that. But I think the principle
• 42:30 - 43:00 of understanding that what we have been doing has been taken to an extreme and we need to cut it out. I think that happens before Bitcoin kind of comes through as this, you know, quote unquote savior for the monetary system. And if that is the case, again, even if we try that and it fails, that's still a long way away from getting to the point where Bitcoin is the answer, right? And that's not even talking about, right, some of the flaws within Bitcoin and its network
• 43:00 - 43:30 that might prevent it from being that down the road. So again, you know, the the end case where Bitcoin is the reserve currency or or this global backbone of the monetary system, I don't think there's any way around the fact that that's a long way away. So now you're convincing people, hey, for some future way out there, just trust us and keep buying it. Keep making the number go up because at some point that volatility will go away and that use
• 43:30 - 44:00 case will come to the light, right? Like that's a lot to ask of people and that's a lot of hurdles for Bitcoin itself to jump through to ultimately prove that it's better than repairing our system or finding something parallel or completely adjacent to it that does something similar. A couple points there. So you said that uh the last hoop to jump or sorry was it the last hoop or the first hoop to jump would be the populace agreeing. I think that would be the last hoop because I think the majority of
• 44:00 - 44:30 people aren't aware. They the majority of people don't even know how fiat works. So, and and they use it on a daily basis. So, I I know for a fact that the majority of people are never going to understand how Bitcoin works. I know that already. I've I've accepted that. The important thing here is that if people have an option other than fiat currency to save in and they see that this option is better, eventually more and more people will save in that option. They will use that option to their advantage. I also think that Bitcoin's price in terms of US dollars
• 44:30 - 45:00 is never going to be stable. It's going to be volatile forever. But then that's that's the thing. The way that I see Bitcoin versus versus fiat, the way that I see Bitcoin is that it's a completely separate asset. It's completely separate. It has nothing to do with fiat. The fiat price may be volatile, but let's say you have one Bitcoin. No matter what, you'll always have one Bitcoin. Unless you sell it, unless it's stolen, of course, you're always going to have one Bitcoin. one bitcoin equals one bitcoin. The fiat price of that
• 45:00 - 45:30 bitcoin will always fluctuate. And that's always going to happen because fiat currencies are more, I would say, volatile than bitcoin because the supply changes. The demand constantly changes. No matter what happens, we have more fiat currency that we can print and add to the economy to fulfill demand. No matter what happens, that's going to be the case. We're always going to keep adding more and more. So over time, what we're going to see is that Bitcoin's price is going to move up and to the right over the long term, but in the
• 45:30 - 46:00 short term, it will be extremely volatile because again, there's a lot of speculators. Back to what we were saying before, there are a lot of speculators. I think that this is definitely a multi-deade process because it takes a long time for people to go from one form of money to another. It's not going to happen overnight. I completely agree with you. I think it's going to take decades. I think if if anything it could take if anything everybody alive today may have to move on and a new new number of people has to be on earth in order for Bitcoin to be fully adopted. Even
• 46:00 - 46:30 people today who say that they completely understand it. I mean they they they don't they don't understand it right and it takes some time. I think it has to be something that let's say our future generations let's say Jenna Alpha uh from 2025 onward I think it is they're going to be the ones that are adopting Bitcoin. I would just say I mean you had said Rajatu early in that comment right like people will begin saving more in Bitcoin and it's my question would be to what end to to spend it in the future to to pass it on
• 46:30 - 47:00 if if you can't transact in it then you will need a parallel you know spendable currency whether that's fiat or not and if it doesn't manifest that way if it doesn't exist then what are you accumulating for there has to be some purpose to the accumul ulation and if you can't if it remains expensive and and frictional to transact in Bitcoin, there's always going to be that that um you know that that conversion rate, right? So like to what end will they
• 47:00 - 47:30 save? I think the next uh the next the natural next step in Bitcoin's adoption is merchants coming in to accept Bitcoin. Didn't we try that? I mean, I remember in 2017, like I'm a big basketball fan. The the Sacramento Kings said they were going to start accepting Bitcoin at the arena. That didn't last very long. It just it's frictional. There's there's high transaction costs. It's and again if you're saving for your future self, for your future generations that's huge implications or that's huge incentive to not spend it, right? So,
• 47:30 - 48:00 you know, to what end is it? And again, like El Salvador 2021, the Bitcoin experiment, I mean, everyone knows about that legal currency tender. They had like less than 10% of people actually adopt it and use it to transact. Like, it just doesn't work as a transaction mechanism. So the way that I see it, a com a commodity becomes money in stages. It doesn't happen overnight, right? Like let's say for example with gold, it took thousands of years for most people to even see that it's valuable. So right now we're only 15 years necessarily agree with I don't think that's accurate
• 48:00 - 48:30 though. Well, gold had monetary value as early as we can remember because it's a metal that doesn't decay. Doesn't I forget the the word for it, right? It doesn't it doesn't decay. Um, it's malleable, right? Like it's not going to melt in your pocket kind of thing. It's shiny. It's not easy to counterfeit. Like those were the properties that made it spendable as a currency early on, right? It wasn't that people didn't see the value. It was just that was the thing they had that fit all those
• 48:30 - 49:00 properties, those mineral properties. I agree. But in the beginning, gold was used as a collectible. It was used more to make masks. It was used, it wasn't used directly as money right off the bat. People didn't accept it in exchange for goods and services. And I think that's the stage that Bitcoin is in right now. People aren't accepting Bitcoin as in exchange for goods and services. And I I think that's going to take some time. It's going to take if people don't understand what Bitcoin is, then why would they accept it in exchange for their labor, right? The major if you ask the people around you what the difficulty adjustment is,
• 49:00 - 49:30 they're not going to be able to tell you what it is. If you ask them to explain the having to you, they're not going to be able to. So if they don't understand the absolute basics, if 99.5% of the world doesn't understand the absolute basics, how can you accept everybody to accept Bitcoin? But that's what I don't think we can separate. I don't know if we can separate that. Like is a professional athlete accepting their salary in Bitcoin because they believe in Bitcoin or because they think it's a cool thing to do and the number has went up since its inception. So that's what they expect to extrapolate into the
• 49:30 - 50:00 future. In the beginning, everybody gets into I mean, I personally got into Bitcoin to make money in the beginning. And over time, as I learned more about it, as I learned more about it, I figured out that this is probably something that can change the entire world. It doesn't necessarily have to be just to make money. It is money. I I don't want I don't want to give away my Bitcoin to make US dollars because I think US dollars are not as valuable as this thing. I'm going to directly exchange it for goods and services and I'm willing to wait until that happens.
• 50:00 - 50:30 Right? Let's say for example, if my kids, my grandkids, my great grandkids are the ones who have to get who get to use it as money eventually. Who knows? Maybe you're right. Maybe it won't be used as money. I do think that regardless, it's going to be used as a store of value. It's going to replace a lot of the things that we use today as a store of value. So, let's say today people use uh housing as a store of value. Believe it or not, most people buy housing as a savings account. They don't buy it just to live in. At least in my community, I'm I'm Indian. Uh my parents are from India. I was born in
• 50:30 - 51:00 Canada. But the majority of Indian people they see housing as a way to save. Of course housing housing has the utility of being able to live in it. But they see it as a way they see it as a forced savings account because they know that the value of housing is going to appreciate over time. So I think over time what's going to happen is new newer generations are going to see Bitcoin because they're native to the internet. They know how the internet works. They're going to try to find a way to store value on the internet that they can access from anywhere in the world.
• 51:00 - 51:30 And I think that's going to take steps. It's going to take some time. I agree with you. It's probably a multi-deade process. I don't think it's going to happen overnight. But I do think that Bitcoin has the ability to replace fiat because of something like Lightning Liquid. Both of these networks are layers on top of Bitcoin that allow you to more easily transact with Bitcoin without the fees. Even the fees right now. I I know a lot of people are going to say that, oh, the fees are high. The fees are high. But right now, you can send a Bitcoin transaction for like 12 cents. So, I I don't think the fees are
• 51:30 - 52:00 high even for somebody who doesn't have that much money. I think the majority of people say that because that's what they've heard. That's what they think that it that it that the reality is, but it's not. You can send a Bitcoin transaction, like I said, for 12 cents. O over time, of course, that amount is going to go up, but we're going to have better and better layers on top of the base layer of Bitcoin in order to transact. Let's say 20, 30 years from now, it's just going to be better than what it is today. There's going to be more incentives for people to accept Bitcoin, to send Bitcoin. The people who
• 52:00 - 52:30 own Bitcoin today, we see a lot of redistribution right now. The reason why the price went to 100K, then it came back down is because a lot of long-term holders are the ones selling. How many people do I personally know that are long-term holders? Not that many. Because I the majority of people that I know because I only started learning about Bitcoin in 2020, 2021. The majority of people that I know haven't been holding Bitcoin for 10 years, 12 years, 15 years. But I think there's going to be a point in the future where
• 52:30 - 53:00 a lot of people are going to be holding for 10 years, 12 years, 15 years, 20 years. And at that point, their purchasing power is going to be so massively their purchasing power is going to have appreciated so massively that they're going to be willing to give away their Bitcoin. Because let's say for example, if you bought Bitcoin at 100K, at some point it's going to be $10 million. It's going to be $100 million because the amount of dollars that are chasing Bitcoin is going to rise forever. But if you can buy, let's say you bought Bitcoin at 100K goes up to $10 million, you've gotten 100x, you've
• 53:00 - 53:30 gotten a uh what is it? 10,000 10,000% profit. maybe you'll be okay with peeling away a little bit of your Bitcoin and using it to pay for your lifetime to to pay for your expenses because that's what financial freedom is. People think that we have to Bitcoin has to work right now, but it won't. I I I agree with you on that on that side of things. It won't work right now because the majority of people aren't in profit. The majority of people aren't uh they don't have an appreciated their purchasing power hasn't appreciated
• 53:30 - 54:00 while they've held Bitcoin. A lot of people actually started buying Bitcoin at above 100K. So they're at a loss. So would you expect somebody who's at a loss to spend their Bitcoin because they want to grow the economy or do you think that they would hold it? I think right now Bitcoin is in the store of value phase. It's going to take some time and eventually it'll become a medium of of exchange. Eventually it'll become a unit of account. There are areas where people are using Bitcoin regularly. Um there are people who are using Bitcoin
• 54:00 - 54:30 regularly. There are more apps that allow you to use Bitcoin on a day-to-day basis. For example, we have Bit Refill where you can uh give away your Bitcoin, buy uh buy gift cards, and you can use those gift cards for goods and services. They're also going, at least the way that I see it, I think more merchants are going to want Bitcoin. They're going to want to have Bitcoin on their balance sheet because it's the best performing asset in the world, and there's a reason for that. So, I think over time, it's going to transition from what it is today as a store of value to a medium of
• 54:30 - 55:00 exchange, then to a unit of account, but it's going to take time. Like you said, I and I agree with you. I don't think that we should continue using I I don't think that fiat is going to survive because fiat is purely based on trust and that trust can fade. That trust can easily fade overnight. The way that most people aren't figuring out Bitcoin today, they could easily figure out that fiat is a scam. They could easily see that their purchasing power is constantly being lost. They're constantly being stolen from. And once they see that, they're going to look for
• 55:00 - 55:30 a solution. And I think Bitcoin is that that I think all roads lead to Bitcoin. Maybe somebody will go from fiat to stocks to real estate and then to Bitcoin or fiat to bonds and then to Bitcoin or maybe they'll go directly from fiat to Bitcoin. I know a lot of people who have gone through all of those paths. I think Raja we agree on a lot of things about the current system. I think what you had just kind of mentioned the future of Bitcoin and I mean you have to admit this too, right? Like that is speculation. You can't there's no way to say this with certainty, right? And just like I can't
• 55:30 - 56:00 say with certainty that the US dollar as the global hedgeimon is going to continue on forever, right? I mean, there's there's huge hurdles to clear to make it go away. So, it's it's going to be here for quite a while. I mean, almost inevitably. And maybe you're seeing some of that trust start to erode a little bit. But again, the potential to have a correcting mechanism within fiat versus just this jump into Bitcoin, like you said, it might take time. And again, that time is everything else's
• 56:00 - 56:30 asset and it's Bitcoin's liability, right? It has to endure any competition. It has to endure any restructuring of fiat, right? So, that part, the burden of proof falls on Bitcoin and will forever. So anybody like yourself, right, if you're saying like Bitcoin is the only future as far as a new monetary regime, however long that future takes, right? You're very much pigeonholed
• 56:30 - 57:00 into, it cannot be disrupted. It cannot be competed against. The fiat system cannot be repaired or cannot be transferred to another, you know, selfish or singularly actor type type entity like another government or something, right? But then also I mean back to Bitcoin's viability itself and like we're talking about the adoption and everything you had you had mentioned that you know more and more people will be transacting in it and I I don't think we can take that as a given right where
• 57:00 - 57:30 that velocity continues to increase and that turnover continues to increase um and that trust remains in the Bitcoin network I don't think we can take that for certainty right just I mean I know you know Rajat of like the concentration in mining operation, the concentration in ownership, even the concentration of financialization we're seeing with the roll out of ETF products, right? Like the the way the the crypto industry and Bitcoin in particular, the way that's
• 57:30 - 58:00 trending is toward financialization. You know, initial adapters be damned. That's the way it's going to be a more financialized product where you're not actually getting Bitcoin. you're just getting paper Bitcoin with hopefully Bitcoin underlying that position. That makes the pivot again back to like a store of value or a peer-to-peer payment mechanism makes it even a a larger hurdle to climb if the D if if you know, Wall Street is trying to take it towards
• 58:00 - 58:30 this financialization route. And then like I thought it was really interesting when the SEC approved spot Bitcoin ETFs, there was one person at the SEC that that dissented. Everyone else was all all for it, but the person that dissented had some really interesting takeaways. And some of those takeaways were things like I mean over 50% of transaction volumes are are bogus, right? Like they're just they're just this wash trading transactions to create the illusion of volume. Like that's not
• 58:30 - 59:00 a trustworthy system. How would anybody know that? And nobody asked me where where my transactions are coming from. So how would anybody know that those transactions are bogus? They talk to the exchanges. the exchanges gave the SEC their data. How would the exchanges know that those transactions are bogus? Because people can use Bitcoin the way that they want to, right? If I were to pass my, let's say, for example, if I were to send somebody an e transfer and then they sent me back an e transfer, e- transfers are we just it's like zel basically. If somebody sent me an e transfer and then I sent it back to
• 59:00 - 59:30 them, would that be considered a bogus transaction? No. Why? Because it served a purpose, right? No, but it's basically wash trading where I sent they sent me an e transfer, they sent me money, and then I sent it right back to them. It looks like it's a use of that currency, but it's not really because I just gave them back the same money, and there was nothing that I did with that money. Yeah. So, is that a wash trade? Is that I would consider that a wash volume. Is that inflated volume? I didn't understand what you were asking at
• 59:30 - 60:00 first. So, I would consider that a wash trade, right? Yeah. How do we know that? creates the illusion of volume, right? That's not that's not fundamental volume for the purpose of obtaining and holding or selling to do something else economical, right? But if nobody So the people who are saying that this is 50% of it is wash trading, how do they know that it's wash trading if they don't speak to the people who are doing the transactions? I don't know the methodology. I I see I think I think that's I think that's a problem. I think
• 60:00 - 60:30 the people who are I think a lot of the people who are against Bitcoin, they don't actually know. They they don't have proof. They just make things up. How do you know that's not legitimate data? Right. I I don't I don't I completely agree with you. So, I mean, we can throw that, right? I I wouldn't say that. Even uh even one of the biggest exchange traded issuers, I mean pioneering crypto adoption, one of the biggest asset management issue, and you can call them a traditional finance. So maybe they have interests outside of
• 60:30 - 61:00 being, you know, a pure Bitcoin evangelist, so to speak, or a pure Bitcoin believer, so to speak. I mean, even they admitted in this SEC interview that 95% of the data used by market participants are either fake or non-economic use cases. That's an issuer of one of the largest spot exchange products and a huge advocate for the crypto space. So I mean the point is not the data itself. No, it's it's bitwise. The point is I would say is that there
• 61:00 - 61:30 are enough things that are not transparent in transacting in these cryptocurrency. I mean especially Bitcoin, right? Like we just don't know. And that is the point of how much of these transactions are legitimate or how much of it is being enhanced to to to give us this illusion of volume in a really um healthy active market. And then the second piece and you might know
• 61:30 - 62:00 more about this Rajat too because I'm curious about it. The second interesting piece I found was that these exchanges are not operating with um with a counterparty. You're just playing against the house. They're not facilitating transactions. They're just taking orders and and issuing, right? You're trading with the house. You're not trading with an intermediary. So, like, it's it's those type of things. And again, we can disagree again on the validity of the data. Maybe it's not 51%, but it's not zero. And it's
• 62:00 - 62:30 probably not, you know, it's probably not 5% or 10% if they're quoting 51%. Um, especially if they're interviewing 50 to 150 exchanges on on some of this stuff. So the point is that there is enough under the hood that is non-transparent and is fishy enough, right? That would be in my eyes enough for a rational actor to say, I just don't know if I can quite trust it or believe in. And maybe they are people that 10 years from now, 20 years from now change their
• 62:30 - 63:00 mind. But again, those are the people that the Bitcoin network needs to help accelerate this, right? So I think there's enough skepticism and reason to be skeptical that just is a huge huge headwind for the adoption rate. I I think that's a flawed way of looking at Bitcoin though because you don't need exchanges for every transaction. I can send you Bitcoin directly, right? I can I don't need an exchange in the middle to send Bitcoin. So how do they know that? Again, I mean that's what I mean.
• 63:00 - 63:30 I I don't think exchanges are taking care of the majority of volume of Bitcoin. If you if you think that the majority of transactions are going from an exchange to a wallet and then back to the exchange, I I don't know. I don't know if that's I I can't I can't prove that. I don't have no evidence saying that. But the majority of my transactions, the transactions that I have are coming from an exchange to my wallet. I if they could say, "Oh, that's speculative. Um that's just wash
• 63:30 - 64:00 trading." But it's not. It's me taking self custody of my Bitcoin, right? It's me taking ownership of my Bitcoin. They could say that that's that that's wash trading, but I'm I'm telling you it's not, right? It's not like I was asked how many of my transactions were were uh wash trading. How many of my transactions were just me sending Bitcoin from one address to another? So, how how would they know, right? It's impossible because you can't tie an identity to a wallet. So, if you can't tie an identity, I mean, it could happen. I'm not saying that it couldn't
• 64:00 - 64:30 be the truth, but I'm saying that there's no evidence backing that. Yeah. I mean, right. If I mean, if you disbelieve the the SEC's findings, I mean, then the study, but yeah, I mean, that's that's a that's a separate issue. I think it gets to the bigger point of price discovery. And you said it yourself, Rajot, too, that you've studied the area for now, I mean, five years intensely, right? And you've said even people that have done that have a hard time understanding the future,
• 64:30 - 65:00 right? And the potential. No, I don't think people I don't think the majority of people have done that. The people who have done that, I think they they come to the conclusion that they should have more Bitcoin and they they do believe that that's where the future is going, right? I think the majority of people haven't spent that time intensely studying it. But that's it, too. And how much does that feed into people's willingness to want it and to dive into it? Right? If if so much of the action in the market is from uninformed
• 65:00 - 65:30 participants that you know for right or wrong if I disagree or you disagree with their their their rationale that they're just buying it hoping to make money off of it then how do we even know how much it's worth right now? If there's all this speculative activity around it that is also bringing in more participants, right? if you could somehow or somehow it's forced upon the network that all of that is somehow gone or or meaningfully dissipated, how do you actually know
• 65:30 - 66:00 what Bitcoin is worth? And you might just say, well, I don't know more in the future. And that's a valid argument in itself if you believe in the network, right? But again, it's just another huge hurdle for Bitcoin to have to climb. And again, maybe we disagree on this fundamental principle that like I don't believe people, unless they're forced, I don't think people have that delayed gratification in them to say, well, I'm going to accumulate it for my grandchildren because for me to be able
• 66:00 - 66:30 to use this massive wealth that I may accumulate in Bitcoin, it has to happen in the next two or three decades and it may not, right? So, like I think that's such a huge huge step for people to take that just extends that adoption curve even further out. It's hard to it's hard to see the light so to speak. Yeah, I agree. It could take a long time. It could take much longer than we expect, but it could also happen much quicker, right? I think that's that's the that's what my point here is. I don't know if
• 66:30 - 67:00 it could h if it might take 50 years. For all we know, it could take five years. Besides the fact that I want to say to you both, thank you. I I want to underline how difficult for me it was to stay quiet because I I didn't want to go two versus one. I think we need more of this conversation because there is no point in talking to people they they they have the same opinion. It's like an eco chamber is not healthy for us and for for anyone else whether when there is someone who brings in valid points and like you Justin really appreciate having you on the show open to a discussion that's where I I think we
• 67:00 - 67:30 should be. So thank you. Thank you both for doing this with us today. Absolutely. Thank you. Thank you so much Justin. I really appreciated this. I I thought this made me think more uh it make me it made me think more about whether or not I'm speculating. I I don't think I am. I think I'm just going to go deeper into studying how Bitcoin works. That kind of triggered me. And I would say, you know, thank you so much again for having me, Rajad and Mr. Emwood. I just I appreciate and same likewise. I I want to even dig further. I should disclose for everyone here. I do own Bitcoin because I if it if this
• 67:30 - 68:00 is the future, I want to be a participant. But I am obviously uh still skeptical. But regardless, I I appreciate the civility and the good questions and and this was great. It's smart to be speculative because some people uh if you're not speculative, you're going to get into coins, right? You're going to buy random coins that have a re that really have no value. You're going to get stuck and you're never going to be able to sell them again because they're just going to keep going down and down and down. But then not having that speculation is what gets you to actually start buying. I guess maybe that's partly why you bought
• 68:00 - 68:30 Bitcoin because you said, "I'm going to put aside my speculation. and I'm just going to hold it in case it is something that is valuable in the future. And I think I I respect that. Well, yeah. I I'm not one that would have so much self-confidence that I know it won't work or will work. Um, so that is exactly it. It's well, let's put something there and then let's investigate after. Right. So, yeah, which is exactly what any Bitcoiner would say. Don't trust, verify. So, you are on track. Makes sense. Yeah. Well,
• 68:30 - 69:00 and especially too, I mean, I would just one last thing. I mean, I would say, you know, part of why I've dove so deeply into this is because of clients, right, that want to get into crypto. And you have, to your point, Rajat, memecoin coins telling you explicitly that this is just for speculation there. There is no value or purported value to this. It's like, well, why on earth would you go that direction? And so part of it too is just trying to almost protect people
• 69:00 - 69:30 like unless there is a real thesis behind something probably stay away. And with Bitcoin, it's at least there's something potentially there, right? And um that maybe is not the case for other corners even of the public markets that we deal in, right? So it's just very valuable to to dive deep like this. That's the casino lottery mentality. I don't think we'll ever be able to take it off people. People go to the casino and gamble. They buy scratch cards and all that kind of stuff. They now found a
• 69:30 - 70:00 way to do it faster with the crypto casino. So, I think it's going to be very difficult to take it away. I agree with you though. It's uh pure gambling. So, but thank you so much, guys. It's been it's been a pleasure. Like I said, thank you guys. Take care. Cheers. I must.