Anthony Pompliano on the Future of MONEY, and how BITCOIN Will Change The World As We Know It

[Music] anthony pompliano welcome to the show man absolutely thanks so much for having me dude i am really excited so there's something my audience has heard me talk about this before i feel a moral obligation to get people to look at cryptocurrency bitcoin specifically and there's a famous thing i'm almost certain you've heard of before which is poor people spend the middle class save and then the wealthy invest and this is what's going on in cryptocurrency to me seems like the first time where the average person whether you're poor whether you're middle class doesn't matter you can actually front run the investor and use whether it's bitcoin or something else as that investment vehicle um talk to me about the breakdown here in the u.s of people that invest versus don't invest yeah so one of the easiest ways i find to talk about bitcoin is just talking about the legacy problems and kind of what the average person does um and both from uh those that are successful and those also that are not successful and so let's start with some statistics around just the united states right 45 percent of americans hold no investable assets that's so crazy so right what is an investable asset for people that don't know what that means a stock a bond uh cryptocurrency real estate right all the things that are basically are not cash that you're buying because you think that they're going to appreciate in the future and so really that 45 percent of folks are living paycheck to paycheck uh they keep all of their wealth stored in dollars in a bank account um they tend to be um you know obviously not very well financially um off but also on top of that uh they tend to actually not be nearly as educated about how the system works so there's a wealth in a quality gap but there's also a very large education gap and so do you think they're one and the same i i think that the education gap actually drives most of the wealth inequality and really it's because of the basement of the currency i've made that's interesting so we'll get to the basement currency in a second i've made a statement that i expected to be more controversial than maybe it's become which is so i worked in the inner cities a lot so i've i have seen firsthand up close intelligence be evenly distributed so they can process raw data very quickly like you're hanging out with them you're like okay you're poor you come from a long line of poverty and yet you're incredibly bright like i am confused now as to why you haven't you know been able to achieve escape velocity and get out of here and then you realize that their frame of reference the way that they think about things is so detrimental because your behaviors ultimately are all that matter right you can think that bitcoin is the greatest thing since sliced bread but if you don't actually buy any bitcoin then you can't take advantage of the growth and so i began to realize that or hypothesized i should say that generational poverty is a frame of reference problem far more than it's a money problem and that if you took that same person so they're born on day one they were born to parents that have you know lived in the inner cities forever they've struggled for generation after generation and you bring them into a household where they're going to be educated around investing and you know what the the game is that you're talking about that it's a system it works in some kind of way the way it's predictable and it will reward some behaviors and it will punish other behaviors and nothing else matters and if you do that they will come out just fine and so i was like wow this really is a knowledge gap problem yeah i mean think about if i told you to go play a game and i said but i'm not going to tell you the rules right be pretty hard to play the game at first at least maybe you figured out maybe you don't but you're obviously going to be much better equipped to play the game if i explain to you how the game works and what the rules are and so if you think of money or finances as a game uh there's really one key rule that everyone has to understand which is the dollars will be worth less in purchasing power terms over a long period of time that's not a negative towards the dollar that's not a positive towards a dollar it's just that is a fact and we call it inflation yeah and the system is built that way and the economic argument for why it is built that way is because if i know that uh my dollars are going to lose purchasing power meaning that today cost me you know two dollars to buy a loaf of bread in five years it'll cost me four dollars to buy a loaf of bread i'm financially incentivized to either invest the money or to spend the money but holding it is a losing proposition now that economic theory is predicated on the fact that everyone knows the dollars are going to lose value because what ends up happening is those 45 percent of americans end up not investing the money or really spending the money they're trying to save the money but it is losing value and i always go back and i think this generational ideas really can be extrapolated even further it's not just folks on the inner city if you think back you know i'm 33 you're in your 40s if we go to our parents or our grandparents for the most part their financial advice was save right spend less than you make if you save then you can make your way to financial security that was actually true specifically around our grandparents generation a little bit for our parents and then for us not so much and so the advice that was passed down was actually predicated on a situation that no longer exists because before 1971 there was nowhere near the debasement of the currency that there is today because it was tied to gold that's a huge piece of it for sure right which is basically the fact that when we handed over the power to print currencies right this is a 50-year experiment that we're in and you know again there are some very positive impacts of being able to print currency right you essentially are able to devalue the currency you can pay off future debt with kind of less valuable dollars and there's all this economic theory that really fast i want to ground this in something i've heard you say before which i think it was so simple i was like whoa you said if i have 100 in my bank account and i'm i need 150 i can't go in and edit the database and now i suddenly have 150 but the government can yes and i was like whoa like when you say it like that and it's like literally just somebody going into a spreadsheet i was like oh my god and i even dude this is recent so i am i'm very good at making money and i have historically been very bad at investing money okay now i've become obsessed with investing now that i'm sort of tracked cause i i was just trying to get as close to my money buried in the backyard as humanly possible and anybody thinking to rob me i don't actually do that so you will find zero dollars here at my house um but that was my mental sophistication around finance i didn't understand it i didn't want to understand it quite frankly i'd put a lot of energy into just getting good at entrepreneurship so that i could generate whatever wealth that i wanted but i came very late to understanding this idea that one that the governments can print more and that in printing more you make it less scarce and in making it less scarce you devalue it and i actually as of maybe eight months ago thought that when they say print more money that they were actually printing more money and so i'm like when they've got the bag of cash who are they giving it to i couldn't understand like i was so but like if anybody puts any amount of credibility into whether they think i'm intelligent or not to think that a guy that could build a billion dollar company as of eight months ago was imagining somebody from the government walking around with like a bag full of cash like that's how ignorant i was to the system and that's exactly how people end up getting held back i i think that uh what's fascinating about this is this is not an uncommon story right there are plenty of people on wall street et cetera who don't understand uh economics uh macro or micro uh and also just simple personal finance things right this stuff is hard and it goes back to there's nobody teaching it in school and so you basically have two ways to learn you can learn by doing kind of trial by fire and some people figure it out some people don't or you're lucky enough to have a parent a friend a mentor somebody else who sits you down and explains it to you and i think that's why we are seeing such an explosion of interest yeah sure the meme stocks cryptocurrencies it's easy to mock and make fun of these young people but these young people are interested in understanding how does the market work how does finances work how does investing work and so you know if you go back to that data right we talked about 45 of people have no investable assets the two stats that just blew me away when i started to look at this was uh 80 of millionaires in the united states inherited zero dollars so the narrative is interesting everyone inherits wealth and is just passed down well 80 of americans inherited nothing 20 inherited something 80 nothing the second one is that 33 percent of millionaires in america never made more than a hundred thousand dollars in a single year so you start to ask yourself well how does it that somebody that doesn't make six figures a year become a millionaire well they have to be disciplined and understand personal finance and so it is possible to do it it's not everyone it's hard right it's not the uh the easiest thing to do but it can be done and so as you start to understand like okay the education is a huge piece of this you actually see that the people who are wealthy some of them could explain to you why they're doing things they have a kind of a deep level and detailed knowledge of the actions they're taking and their reason for it there's a whole other group of people who are wealthy who couldn't explain any of it to and they just know that their parents told them hey buy real estate real estate always goes up but they don't understand printing of money they don't understand quantitative easing interest rate none of that stuff matters it was just they just did the action and so there's a lot of paths to get to kind of the um the desired you know area if you will um but i do think that bitcoin specifically what it's done for me and for other people is i have an economics degree which is crazy because i didn't learn anything right this episode is brought to you by peak where plants and science intersect go to peaktee.com impact you'll get five percent off your first order and use code impact at checkout to get free shipping enjoy the episode it was only once i started actually invest money that i started to really get the education so i always say you know bitcoin taught me economics it taught me personal finance it's taught me social psychology you know all these different things um but there's an element of just understanding hey invest because at this point given the inflation and the monetary debasement it is impossible literally impossible in america to get a financial security position by saving it's just they're debasing the currency 38 of all dollars in circulation were printed in the last 18 months that's insane that's insane like when you think that we're over 200 years old as a country that's really bananas 38 in the last 18 months whoa so now as i think about so i'm i'm trying it's funny if people go back and watch all my interviews they see me from the time that um this all kicked off with kovid they see me grasping at straws trying to help the sort of average person find a way through this because i really started to panic isn't the right word but it's like i was deeply at unease because i knew who was gonna get pounded the hardest by what was happening and it was like look i was gonna be fine but a lot of people that i know care about love were not going to make it through this thing and so i started bringing on because of the reach of my show i was getting on like the biggest macro investors in the world but because i didn't understand finance i didn't know that that was the wrong person to go and talk to because they can influence countries and they can help huge hedge funds but they don't know how to talk to the average everyday investor and one of my employees kept haranguing me to look at cryptocurrency in bitcoin and i was like david i just don't have any interest in investing it's not my thing like i know how to make money and then nfts came along and i realized that was going to be the future of my business so i went all in and like you started learning all this stuff from investing in crypto i had to learn about the blockchain by to understand nfts to create content there that was interesting and compelling and as i learned about that i was able to get the first principles because now i understood how the blockchain worked which led me to what's different about fiat currency to cryptocurrency and then all of a sudden you're like wait a minute are you [ __ ] kidding this is what's going on like they can just print money at will that's insane that also when you start thinking about so one thing that's always enraged me and this sends me back to my days when i was young and broke and i would have let's say 19 in my bank account not joking and they won't let you take it out because there's a minimum that you have to have in your account or there's like 20 minimum at the atm and so i'm like hold on i'm not going to be able to go like get a meal right now because of banking rules so i've developed this just like internal rage over banks acting like my money is their money and so now like seeing how it's hard to get your wallet set up admittedly but once you like get on the rails of cryptocurrency of how easy it is and so that's really been eye opening and game changing now i think we have to get to all right you have to get to those first principles to form a thesis and then you can invest based on a thesis so i want to talk about the thesis around bitcoin we'll stay specific to that because i know would you do you call yourself a bitcoin maxi no so i think there's um a separation between there's monetary component of this and then there's like a technology or like a corporate component of it the monetary part you have to be a maximalist right you're a fiat maximalist if you're a us citizen you get paid in dollars you save in dollars you invest in dollar denominated assets you pay your taxes in dollars so you're a fiat u.s dollar maximalist when it comes to monetary assets everyone in the world is a maximalist because that is what you denominate your wealth in right very very rarely does somebody say hey 50 is in this currency 50 is in this currency and so from a monetary standpoint definitely a bitcoin maximalist because i think bitcoin is the only one that has an opportunity to actually um kind of ascend to global reserve status and end up being the superior monetary form but when it looks at the technology i think that there's going to be massive competition on that so if you look at the technology side of it where you're not talking about monetary asset you're actually talking about a technology asset it would be like saying you're an ios maximalist or you're a you know i don't know python maximal it's very depending on the language or the platform or whatever so i think that you've got to be able to separate out and say you know bitcoin is competing with uh fiat currencies for store value medium of exchange etc and really fast fiat just means it's government-backed just government-backed and and basically they control it so the the key definitions here are a fiat currency versus let's call it sound money all sound money is basically something outside of the system and something that people can't create more of so gold is a analog version of sound bites a physical form of sound money created by stars exploding just i mean when i heard that i was like god yeah that really is an interesting way to think about why it's scarce yeah and bitcoin is a digital form of sound money and so you can compare the sound money to the fiat money um and you know it becomes pretty clear pretty quickly to people it's like okay one is uh completely abundant and can be created at will 38 has been created in the last 18 months versus one that nobody can create more of well i don't need to know much else other than that to know which one's gonna end up being more valuable and so if we look over the last 12 years or so bitcoin's purchasing power and all purchasing power means is how much does it cost to buy you know a good um the purchasing power has appreciated it's increased so all of the expenses around you all the the physical items that you buy have gotten cheaper and cheaper so it used to cost me one bitcoin to buy a loaf of bread now it might cost me .0001 bitcoin to buy a bread okay that's pretty interesting the dollar is the opposite right it cost me more dollars to buy the bread so everything's getting more expensive around me and so ultimately hold on hold on like that's that's so basic and so game changing to understand so you've done a mental switch where you now denominate emotionally in bitcoin aka satoshi's and i haven't yet so as i see the price fluctuate on bitcoin or whatever i get excited well the funny thing is i get excited in either direction when it goes up i'm like texting my wife yo in the last like 24 hours we just made and she's like you have got to be kidding i mean it's crazy yes now when it goes down i'm texting her like yo we're going in hard like we're buying this dip so but it's really really interesting do you mind saying again the cost of loaf of bread compared to dollar versus big so if i denominate my life in dollars and let's say i buy a loaf of bread today and it's two dollars five or ten years from now that loaf of bread may cost me three four five dollars depending on the rate of inflation if i denominate my life in bitcoin and today let's say that it cost me one bitcoin for a loaf of bread in the future it will cost me less than one bitcoin so it'll actually become cheaper for me to buy because every asset when you think of price it's denominated in a currency so a stock right when i when i ask you what is amazon's stock price you're telling me one amazon share over how many us dollars and that's how we get to the actual value and so when you start to think about that look at the stock market the stock market from 1971 to today is up and to the right so perfect 45 degree angle oh god i know you're about to say when you denominate it in gold it's down since 1971. if you denominated in bitcoin since 2009 uh 2010 it has crashed aggressively bitcoin has been the best performing asset but that's because it's denominated in dollars and so ultimately what we're watching is we're watching an entire generation of people wake up to this fiat currency kind of fiasco and there's a famous uh i think it's henry ford quote where he said you know if people understood how money worked there would be riots in the street before morning and it's simply against respect to that education gap and so the 55 of people hold investable assets whether they understand why or not they're actually benefiting from this and so it's important to remember that i don't think there are nefarious or malicious intentions or you know let's screw people at the bottom of the totem pole in fact sometimes it's actually the exact opposite but the system is working as designed it's a feature not a bug and the reason why that's important to understand is because the system is not going to change right you and i are not going to be able to convince anybody to do anything different they're going to do what they're going to do because that's the way the system is built but what you can do is you can change the way that you're positioned so you have a choice i can either suffer at the hands of this system or i can flip around the other side table and i can benefit from the system every single rich person understands how to benefit from the system hold assets not a currency don't hold the dollar instead hold the assets because that's one thing it's it's to hold an asset that you have a reasonable belief is going to go up in value over time and one thing i want to go back to so you said all right your the cost of the loaf of bread is going to take less and less of the bitcoin that you own that's a prognostication right you're hoping that that is true but one thing i want to point out is the things that you're looking at into the future and saying that it the the bread will cost more dollars is backed historically so it's simply you looking backwards and then carrying that out forwards and the same is true of bitcoin is that you're looking at the historical performance and projecting it forward it's not like you're just making that up and being hopeful and that is where i think this starts to be important is one to to recognize everybody has to do their own research you have to figure this out for yourself you want to understand it to the point where you're not thinking an analogy you're thinking from first principles so you understand how the game works you're you know emotionally writing in the streets as henry ford predicted um but yeah i think that that that's an important thing for people to understand this isn't hopium this is looking at the historical performance and in fact one of my favorite statistics and and strike me down if this is inaccurate but that bitcoin and this i got from raoul paul that bitcoin is the fastest adopted technology in all of human history yeah it depends on how you count but for sure um and remember price right is kind of the best indicator of uh adoption if you have a fixed supply asset and demand for something or adoption for something goes up the price has to continue to move upwards right just more and more people want this scarce asset and so the price goes up bitcoin was the best performing asset over the last decade now all people talk about is the volatility well volatility actually and this is like where you get a little bit more in the weeds can be very good for portfolio so there's a um this data because you have potential massive upside yeah so there's two kind of ways to think about volatility we think of volatility when it's talked about in the mainstream media as a negative thing right now it's volatile it's volatile well if something goes up in value it's volatile to the upside if it goes down in price then it's volatile to the downside so volatility isn't good or bad it's just is it going in your direction or not right if you're short an asset and the asset goes up in price you hate volatility right because you wanted to go the other way so volatility being not good or bad is important because you want it to actually be volatile if it's going in your direction the second thing is um i think that this data may be i think it's 2015 to 2020 um and don't quote me exactly on the dates but um there's a five-year period where if you invested in a 60-40 global portfolio 60 stocks 40 bonds you got a 7.2 percent annualized return for five years it's about average where we've seen it over the last few decades if you had taken half a percent from stocks and half a percent from bonds so you had a one percent allocation to bitcoin 39.5 to bonds and 59.5 to stocks you would have taken that 7.2 per year and increased it to 9.2 so a 200 basis point increase in your annualized return if that one percent allocation of bitcoin had gone to zero you lost all the money you would have only gone from seven point two percent to seven percent so it's about a 200 basis point or two percent upside for a 0.2 or a 20 basis point downside so 10 to 1 during that five year period now the reason why i say that is one percent of a portfolio is not a lot of money for most people that's kind of a speculative type investment but because this is so volatile because it has the ability to appreciate so aggressively like you talked about when it when uh lots of people are getting excited et cetera is it can have a really profound positive impact on a portfolio and still you only have exposure of one percent and so we just haven't seen that many asymmetric assets like this before uh available you know kind of in a liquid market for people to go buy and what i think ends up happening is people come in because of the price they're like oh my god i'm gonna get rich i did this is amazing this is like the greatest thing ever it goes up in price over time whatever but then what happens is as my friend marty ben always talks about he's like you know you come for the money but you stay for the money and you came for profits but you stay because you start to understand fiat currencies economics personal finance et cetera and you start to realize wait a minute i have to do something i can't sit with cash and so it's just a very unique asset that we're all kind of living through global adoption right we've gone from the creation of an asset 12 years ago to now there's a nation state that has bought bitcoin i don't think anyone you know 10 12 years ago thought that a nation state would buy bitcoin this quickly and so you going back to raul's point you're building all of this on top of the internet and so the internet adoption happened on top of the telephone lines and the kind of connectivity we had so it had a certain rate limiter to it it could only grow as fast as we had you know kind of uh communication infrastructure now when this gets built it's being built on top of the internet so look at what is the total internet penetration globally well that's the rate limiter for how fast this can grow and i don't think we probably talk about it enough but there was immense work done in places like south and central america countries in africa uh you know places like india etc china to really drive uh internet infrastructure over the last 15 years right everyone from the google's facebook's amazons of the world to kind of the traditional internet providers all spent billions and billions of dollars getting uh all that infrastructure installed and now here comes comes along with technology that is literally just going to ride the coattails of that internet infrastructure and get adoption and so that's where you see countries like nigeria uh and others that you wouldn't think of being you know super forward you know kind of thinking on technology they're actually some of the highest penetration and adoption they have the macroeconomic problems of the currency and they're watching their currencies get devalued they're watching the dire financial position they're in and they have the internet infrastructure now and so they're not tied to a legacy infrastructure financially so what do they do they leap forward a developed country and i think el salvador's got a shot to do that i think nigeria is going to do that and so we're just watching you know a tale as old as time this has happened over and over and over again with technology trends it just so happens that now it's coming for finance and it's a lot of powerful influential people who don't like that yeah all right so i want to leave some breadcrumbs for people that maybe are in my position eight or nine months ago they have no idea this is so dizzying to them and if they've made it to this point i'm very impressed because they're investing in their future but now just a few breadcrumbs so going back to you if you don't understand the first principles of something what i'll often refer to as the physics of the situation so you're you're as low as you can go there's you're at the sort of axiomatic state where you just you at some point have to say i believe these things to be true nobody knows sort of anything below that so okay we're not reasoning from analogy anymore we're getting to the point where we understand what fiat money is it's pluses it's minuses we understand what cryptocurrency is bitcoin specifically it's pluses it's minuses and now we can begin to think for ourselves to solve novel problems because we're thinking from first principles from that they're going to form a thesis and i'll lay out my thesis be great for you to lay out yours and i'll explain why i'm not afraid of price volatility why in fact i get excited in either direction when you know when it's going up i'm like oh my god i'm getting richer this is amazing when it's going down i'm like i can buy more now the reason that i want to buy more is the following i believe this is one of my axiomatic statements so there's nothing below this one i believe it to be true that technology is a one-way street that we will never go backwards we will never unwind the internet we will never be a less digital creature we will only be more and things like neurolink are going to become real and i actually and i don't want to lose people on this i think in a very far distant future so this is not in the next 20 or 30 years you know maybe this is 100 years maybe it's 300 but there are people already that have cochlear implants that give them back hearing we're working on implants into the eye they give people back vision so it'll start with correcting things but we will ultimately as ourselves become really um tied physically to technology so i believe that everything will ultimately get digitized so what we're living through right now is a really fascinating moment where art is now being digitized money is being digitized and those two i live at the intersection of art collectibles and money and and watching those go digitized and watching for anybody that wonders if this if the human mind is just ever going to be into these things in the way that they are physical things i will just say this that uh in august of 2021 open c did 3 billion dollars in revenue on purely digital goods digital art digital collectibles all of it and that blew them past etsy at like day 16 of the month or something they went past i mean it's just absolutely insane to see how much money is pouring into the system i think this is with only 200 000 wallets so 200 000 people driving three billion dollars worth of revenue all on digital goods that have no physical tangible thing in in out in the world now there's utility it's beyond the scope of what we're saying now so okay my thesis the world's only going digital i have all these kind of proof points around it now one of the things that's going digital is money bitcoin in particular has a really fascinating feature which makes it what you call sound money and that feature is programmatically it can only ever produce 21 million of these units unlike gold which for me and i don't know if you'll agree with this my mind got wrapped around it immediately when it was like bitcoin is digital gold because i understood what gold was meant to be i was never going to carry it around and shave some off to buy a loaf of bread like it's a thing that i store somewhere else that we all agree and yes it only has value in that we agree it has value it only can be created when stars explode and that rains down on the planet and gets embedded into you know the bedrock of you know the earth and so we have to go and dig it out but we dig it out at a rate roughly two percent a year as economic incentives go up we dig out more and so there is some big question around well if there was enough incentive could you devalue that more by discovering that there are actually harder to reach um deposits of gold okay so i get that it's capped there's only 21 million units therefore as long as we all agree that that thing has value it becomes sound money as you say because there can never be any more of it so the more i can get now in this sort of early phase where it's sort of a secret in plain sight and which is how i feel every time i buy it i'm like why are people selling me this like this is crazy because i have sold exactly zero satoshi's so i keep having a number and i'm like i can't wait till i have you know more than this and more than this um and because my thesis is technology is one-way street we will never go backwards money as a value is going digital the number one front-runner is bitcoin when the price goes down it's better for me because i can buy in and there will come a day i think where the predominant trajectory even in the relatively short term will just be up up so it doesn't make sense to even get excited as the price goes up because it's just almost sad that i can't buy in more at that you know the earlier rate um and so that's my thesis and why i wouldn't sell because it becomes like michael saylor says it's like buying a plot of land in manhattan because you're never going to make more manhattan and so that's only going to go up in value over time which of course is exactly what happened to real estate in manhattan and you can borrow against it et cetera okay so what's your thesis it really just comes down to this idea of um the purchasing power increases versus the purchasing power of the dollar decreasing and ultimately what i think ends up being really important for the conversation is there's a financial component which we're talking about now right is i want to store the value of my time right and i think this is like a really really key component of the financial conversation is all money is at the end of the day is a unit of time and this is kind of a crazy concept until you think about why do you receive money because you or somebody you employ or an asset you built or some thing is exchanging time for money and so ultimately if you have lots of money you end up having leverage on your time if you don't have lots of money you have to spend time to get dollars and so money is just a unit of time and so when i think about that if i expend let's say an hour of work today and i get paid 10 an hour and then you tell me that i took that unit of time i put in my bank account and then in the future i would have to work two hours to get that same ten dollars well that actually doesn't feel that great right in terms of it it feels like i'm i can't keep up i've got i only have so much time in a day and i'm constantly falling behind but if instead you said to me hey if you work an hour you get 10 and then you put that money in a form of an asset that is only going to appreciate its purchasing power then wait a minute in the future i actually don't have to go work for three or four hours because now i have that ten dollars that saved from the time i originally spent and so this idea of like a unit of time becomes really fascinating because what do rich people understand don't get in the game of trading your personal time directly for hours right they either employ other people or they own assets that deliver them some sort of financial return and so when you look at bitcoin specifically it has a financial component that is unavailable in other assets it is systematically built to continue to protect your purchasing power and protect could also just be going sideways right just it doesn't degrade it happens to be going up a lot now because it's being repriced by the world but at some point it'll reach some stable value and it'll kind of just go sideways and it'll protect that purchasing power really important concept the second is this idea of sovereignty so like you talked about putting that 19 in the bank and you couldn't get it out huge problem right a lot of people don't know i i've got a friend mark gusco who talks all the time about like when you put money into a bank account it's not your money anymore that's crazy right it's an iou they're supposed to give it back to you but we've seen and very kind of outlier events like in cyprus in 2013 i think it was where they basically come in and the government says you know what if you have a hundred dollars in the bank we're taking ten dollars ten percent tax across the board well how can they take my money because not your money right and so you end up not understanding some of that and so this idea of sovereignty the ability to hold your assets yourself right you talked about you don't actually have money buried in the backyard right that would make you a sovereign individual it also puts you at a lot of security risk right somebody could come here and dig it up and harm you etc with bitcoin what it allows for is uh this sovereignty you can actually hold on to it nobody else is holding it for you you get to custody the asset and so in the developed world we don't think a lot about this right we just i put money in the bank i go to the atm i can take it out i can swipe a card you know no problem in the developing world this is a huge problem right if all of a sudden i need to get up and i need to flee venezuela for example well i have to get on a train a plane a boat or walk and at every single one of the ports airports train stations or border crossings what are they doing they're confiscating people's wealth and so there's you know report after report after report over the last few years where somebody went to the airport and they had physical gold in their suitcase and and the uh you know government or the military took it from them well you don't have sovereignty over the asset because you don't have the security of it and so bitcoin having this cryptographic uh kind of security to it ends up being really really important on a global basis maybe not so much the united states today but globally really important and the last thing is uh there's this censorship resistance with the payment network and so one of the things that again in the developed world we don't think a lot about is if i want to send you money i basically have too many options right i can hand you physical cash i can venmo you uh i once asked my youngest brother uh how he sends money to his friends he said uber i said how do you send money on uber and he was well i split rides with them at the end of the ride right so there's all these ways that we don't think that we send value back and forth to each other in the developed world well what happens if the government said you can't send tom money and sometimes they do that where they'll say you know tom's a criminal you're not allowed to do financial transactions with him i think generally as a society we say there's got to be some rule of law we agree bad people shouldn't be able to launder money or you know commit crimes with money etc but what happens if it goes from time a criminal to tom didn't work out today and tom's been a bad boy in our society and so now all of a sudden pomp you can't send tom any money well what do we do then because all of the technology that we use would be exposed to that threat and so this idea of censorship resistance while i don't think most people around the world today are worried about their government saying tom can't receive money because he didn't work out today what we are worried about is well what happens when all of a sudden a um a dictatorship says to their citizens you're not going to be able to get your capital out right can i'm actually a little more worried maybe than you are so i am not a very controversial person by nature but watching some of the controversial people get shut down where like stripe is like we won't even process your payment account there are ways to really [ __ ] with people now here in america like it gets a little scary i usually don't go too far down this rabbit hole only because uh you end up in this weird world where everyone becomes a conspiracy theorist real quick but um you know in the last 18 months a lot of the conspiracy theorists were just early right they ended up being right about a lot of things and it's unfortunate uh it's not always that um situation but i do think that we are headed towards a world where we're understanding the more power that you give to governments the more that they encroach on personal freedoms individual liberties etc and the most extreme examples everyone can identify and i think generally in the developed world we point our finger and shake it and say you know they shouldn't do that right um but when you look here in the u.s it's always that could never happen here and i don't think that there's people who fundamentally believe that it's going to happen tomorrow because it's usually this like slow degradation of freedom but if all of a sudden they shut people down from stripe okay well there was just a guy who was in politics who chase bank shut down his account for reputation risk this isn't somebody who was you know out saying crazy conspiracy theories whatever definitely politically controversial whatever but i think if you and i had to sit down and make a list of all the people who get you know financially censored or censored off social media it's usually kind of the fringes of society right it's the people who if i went home and i talked to my mom she'd be like you know that person's a little crazy right these are people who are just involved in politics and so i think that at some point you have to start to ask yourself do i want to risk even being exposed to a system where it could happen it's not saying it's going to happen it's not saying i have some prediction as to when it happens it's just why even subject yourself to that risk and i think it goes back to this conversation around the best investors in the world for the most part are actually not very risk tolerant they don't want to go and take immense risk almost never will you see one of the best investors in the world say i'm going to take a hundred percent of all of my investable assets and i'm putting on this one stock cross my fingers and hope it works right that just doesn't happen instead they think a lot about risk mitigation they try to figure out what are the ways that i can basically make investment decisions where there's lots of upside and there's very little downside and so i think that as a society we're learning now that's probably the pretty good way to think right is a pretty good way to kind of position your life and so if you're a content creator don't go all in on only one platform why you have platform risk right build two or three different platforms if you're a citizen with your financial life don't go all in on one bank or don't go all in on one type of asset have some sort of durability to it and so in the u.s i don't think we worry so much about censorship but in some crazy way what is a sanction the united states government runs around the world sanctioning countries and they have reasons for doing it in some cases i think people would agree with them in some cases people won't agree with them i'm not here to debate should we do it should we not but the word sanction ends up being a marketing term censorship would sound a lot worse hey we're going to censor this country there's a um a comedian and i wish i could remember who it is i want to say it's chris rock has a whole segment um around the iraq and afghanistan war and he said uh the word insurgent was the greatest creation ever because i don't know any insurgents do you no all right kill them all right because but if we'd said hey we're fighting humans also well hold on a second what did they do are they good people are they but you know there'd be questions or you would think differently about it but when you use a terminology that is somewhat clinical in nature and isn't something that's part of the everyday vernacular you just think differently about it right and it's just human nature and so i think that uh sanctions is another one that kind of falls in that of oh we're sanctioning these bad people sanction them right like we're censoring people well who are you censoring oh we're cutting off an entire country's access to the global financial system all of them or just the bad people right everyday citizen they get cut off too oh well maybe they don't get cut off but maybe there's negative ramifications for them a lot of nuance in the world right and so i think that ultimately we're moving more towards a world where uh anybody can use this payment system which at first sounds a little scary to people because that means that the bad people will use it too but who's the good person who's the bad person well who gets to decide and i don't think anyone wants to encourage terrorist financing money laundering criminal behavior or any of that stuff but the one benefit that this payment system has on top of sovereignty and censorship resistant is that it's done on a public ledger it would be like criminals basically saying hey you know what we're gonna do we're gonna go and we're gonna do crimes and then we're gonna literally write down every transaction we have and we're going to put it on a website on the internet and anyone can come look at it a lot of criminals say i probably don't want to do that right i actually want to use that bag of cash that no one knows about and i'm going to use physical dollars to facilitate this are there stats around how much sort of nefarious stuff is going on with bitcoin versus us dollar so um the stats that i know off top my head is over two trillion dollars of uh fiat currency are just money laundering every year used for illicit purposes which is about the size of the entire crypto industry not just bitcoin but the entire crypto industry right so it's a very big number um some of that is uh simple things like uh terrorist financing and then you're literally bringing a bag of cash or whatever but a lot of it also is uh major banks who end up being caught up in money laundering situations etc and i'm always careful i think it's very easy to kind of point your finger at banks and say you know these are all bad people whatever i tend to think of it more as folks with good intentions they're trying to do the best that they can are there situations where they definitely know they're doing it of course but if you had to monitor millions of transactions a day going through your bank they do a better job than i would right right so there's there's again nuance there um so that's the fiat system and then uh in the bitcoin world so not all crypto but in bitcoin specifically uh the latest stats that i've seen is there's a report out that says 0.4 so less than half a percent of all transactions are used for illicit or nefarious purposes um and then there was also a former cia director who came out and basically published a whole report i don't remember what exact number he came up but is pretty much in line you know definitely less than one percent and so uh if you talk to law enforcement they say all the time they're like if somebody commits a crime we want their fingers on a keyboard why there's a digital trail it's much easier to track them it's much easier to figure this stuff out and so i think what we've seen is just criminals uh in the early days of 2009 10 11 12 even maybe 13 14. oh there's a pseudo-anonymous currency that no one knows about like i'm gonna go do all this crazy stuff with it well now that we're in 2021 people realize oh wait a minute i just used this public you know ledger that probably wasn't the smartest idea um but i think that it's important actually that the criminals and bad actors adopted it first because that is the adoption cycle that every great technology takes whether it's mobile phones beepers the internet etc there's a constant cat and mouse game between law enforcement and bad actors and so what are bad actors constantly doing they're looking for new innovative ways to use technology to get away from or obscure law enforcement from catching them and so criminals are actually usually the first adopters of new technology which again doesn't make people feel good but if you go back and you look it's a historical pattern and so the fact that they were first and then we got kind of the first adopters from a technology standpoint and then we started to get more of the mainstream and now it's estimated that more than 100 million people globally use this stuff it's kind of like goes back to you is that high already oh yeah i mean coinbase alone uh i think they report now that they've got uh if you remember the number correctly it's like 58 million you registered users just one company and they're not even the biggest exchange right um in the month of july uh 1.2 million new users came onto the bitcoin blockchain so not coinbase not any exchange or wallet the actual blockchain itself you can see on chain new entities uh and 1.2 million new entities came online which is the fastest it's ever grown in a single month and so what you have is you have a fixed supply asset then now you've got the most number of entities ever joining in a month of course the price goes up right fixed by asset demand goes up unless you think that supply demand economics are invalidated you know the price has to move to accommodate everyone and so it's just um just a fascinating asset that i think ultimately um those that embrace it early will end up benefiting from and a lot of times as i kind of go down this path talking about the criminal behavior and you talk about the public ledger you talk about the adoption people get uneasy they don't like change right humans hate change but just like the internet right imagine if we had sat here in the united states and we had said this internet thing is kind of crazy it's a decentralized open thing anyone that has an internet connection can kind of join and participate and get information yeah do all this stuff you know what i don't think the u.s should participate you know why china china is going to benefit and north korea is going to use the internet too and iran those bad people they're going to use the internet as well so the us we're going to set this one out well people did do that north korea did that and north korea would suck to live in right it's just they cut their people off from a very important technology and so when you think about that from an open payment system right the idea of an open payment system is so foreign to us because the system that we live in but anyone in the world can plug into this open system and send value to anyone else without asking permission if we sit here and we say you know what we shouldn't participate because there's some other country or some other organization that's going to also benefit from it we're actually likely to be the ones that get hurt the most by those decisions instead we should do what we do with the internet internet's gonna be a thing the united states is gonna be the leader in the internet we're gonna benefit more than anybody else we're gonna use this new technology to our benefit first what would that look like i think the easiest thing to start with is to use the payment rails so bitcoin as an asset when people hear bitcoin there's a lot of confusion because uh the asset the thing that you hold the the one of the 21 million units uh think of that as like a dollar bill right in terms of it's a unit of currency bitcoin the network is the payment rails itself so more of like a visa so i send dollars across visa's network right in the legacy system here what i do is i send bitcoin across the bitcoin network so it gets a little confusing um the uh the crypto community has never claimed to be great marketers but great technologists and so bitcoin the network ends up allowing anyone to use it so i'll give you a perfect example um i invested in a company called strike and what strike allows you to do is send any currency to anyone else in the world completely for free instantaneously and they do it without going through any banks now that sounds like a utopia right how how the hell do you do that what it allows you to do is let's say that i have dollars in my bank uh or my account and you want euros you live in europe i send twenty dollars to you and my twenty dollars ends up arriving to you a twenty dollar equivalent in euros but happen instantaneously and nearly for free how what they're actually doing is they're taking the dollars they're converting it to bitcoin they're sending the bitcoin across the lightning network and then they convert it back into euros now the reason why that's so fascinating is if i now can send any currency whether it's dollars euros bitcoin name your currency across rails that allow for instantaneous settlement and near zero if not zero fees all of a sudden i don't have to send large amounts your bank wouldn't let you take twenty dollars out of the bank right or nineteen dollars because you needed twenty well i can't go wire somebody five dollars right if i went to the bank i said i want to send a wire to tom in europe for five dollars i said well the minimum is whatever you got to pay a 25 30 fee all this stuff okay if i wanted to venmo you but you're not on venmo venmo doesn't communicate with revolut or sofi or cash app or name your payment system it's a closed network so now what ends up happening is strike can say hey anyone with an account can send money to anyone else plugged into this system tom has tom's lightning app right and you start signing up users people from strike can send money to people on tom's lightning app why it's because it's an open payment system it's an open standard and so now all of a sudden you can also not only send to anyone through that censorship resistance component but you also don't have to send large amounts so now what i can do is i can send you a penny i send you 10 cents send you 5 cents i can send you a dollar instantaneously and completely for free and so when i do that it unlocks all kinds of new use cases for payments on the internet right what if i don't want to buy the easiest example is these like media subscriptions i don't want to spend 30 bucks a month for a media subscription but i really want to read this one article i'll pay 10 cents for it and what if i can just simply do that automatically rather than have the 30 thing they actually probably will make more money doing that than forcing people into the monthly subscription this is where the more you're in the nft world you begin to realize like the ultimate fantasy for anybody selling anything is to have you just connect your wallet and then it's especially if you still in your own mind sort of denominating dollars it's like oh yeah i've got these you know ethereum coins whatever they are and i can click this and it's only .04 you know whatever ethan it's like oh that doesn't sound so bad and you just you end up buying way more than you would it is so effortless the wanting to having is like so quick and so to your point the number of times i've gone to read an article and i'm like you've got to be kidding like even the thought of having to open an account and put in my credit card no way so even if i could get that article for 10 cents knowing the sort of traditional hoops i'd have to go through i'm not i'm not typing my name or any of that [ __ ] but now with a metamask wallet you go literally it prompts you connect you hit connect and then it's like you want to buy this yes two clicks and now you're reading the article for 10 cents i mean that i had never thought of that but that would be it will increase spending tenfold 20-fold be crazy i i uh when we agreed that we were going to do this i think it was going to be more of a conversation but i'm going to pull you down the rabbit hole because i can tell you're intellectually interested in this stuff i'll give you another use case that i think will have a profound economic impact globally historically an employee gets paid every two weeks in the four largest banks this this data comes from i think 2019 they made 8 billion in overdraft fees so an overdraft means that they tried to debit your account and you didn't have any money in there yeah so the four largest banks made eight billion dollars from people that didn't have any money there's all kinds of ethical and questions and whatever part of the problem is when you start to unlock this and look into it is uh uh the folks at a bridge another company invested in um they went and did a whole deep dive why are these people why don't they have money what is it it's usually not because they don't have money it's because they get paid every two weeks so i get paid on the first and the 15th on the 10th i won't grow grocery shopping my car payment's on the 11th my netflix hits on the 12th oh i made a purchase on the 13th overdraft yep if i updates by the way so you don't even know where your account is you think you're fine like trying to track all the mental math or write it down get out of here so when i get paid on the 15th what do i do i pay for the things that i need and then i just have budgeted in an overdraft fee and my 35 overdraft fee every month adds up and so does all the other millions of americans and ends up being 8 billion top four companies oh my god now why can't we pay people at the end of every day why when you leave work today don't you get paid why does it only once you know or twice a month it was a technology problem right and sure there are economic reasons why the company wants to hold the money rather than give it to you and they earn interest or whatever right but it's mainly a technology problem because there's two components one is how do i actually pay you every day what am i gonna wire my run payroll every day like that's pretty crazy right that seems inefficient and two how do i keep track of it how do i do the accounting around well did tom get paid did he actually get it okay he got it all right who didn't get paid today who didn't come into work okay we don't pay them whatever so when you bring the cost of sending small amounts of money to zero and you do it in a frictionless censorship resistant way you get what you call streaming payments so kind of the most economic prosperity is now i can pay every one of my employees at the end of every day well if i do that how much better financial position are they going to be in just that alone would drastically lift millions of people around the world into a better financial position just pay people at the end of every day and there's companies that are working on this some of them are using crypto real some of them are trying to do other stuff whatever but that when you drop the technology costs to zero to send money is life-changing this is why i want people to understand what's going on in cryptocurrency what's going on in the blockchain in general it is a technology money happens to be one of the things riding on the back of the technology in fact this is one of the things we have to talk about i'll finish that point and then i want to get to that is all right this is a technology which means i'm i have opened not me of course but the the creators of which have opened up this toolkit and now what people do with the toolkit just like when i first got on the internet and i remember in 1994 hearing the word email for the first time and i was like what the [ __ ] is that and you go from what's that to i live i'm one my business is almost entirely online two most of the things that i purchase are online me especially now in the middle of pandemic it's like most of my social interactions are online like i could never have predicted that that's where this is gonna go as bandwidth gets bigger and bigger as network effects you know take and more and more people are on it absolutely crazy and so now it becomes a question of what is the sort of underlying thing that makes this all magical the the whole notion of distributed technology like what does it mean to be decentralized the whole idea around decentralization is essentially no one person or organization controls the system that's it right if you think of centralization it's important to kind of recognize why is centralization important or why has it been effective right if amazon wants to be built or we want to accomplish a lot of the things that have been great throughout this industrial revolution we needed central order or central kind of um coordination of resources both financial capital human capital and also plans and execution and so these centralized entities end up being built into hierarchical structures there's somebody or a group of people at the top and they basically are able to um you know kind of decree down to the rest of the company here's what we're going to work on here's what we're not going to work on and that's basically what the corporate world is as we know it right um jeff bezos got immense leverage with amazon because he had human capital and financial capital and a hierarchical centralized structure that's actually a good thing we would not have amazon without it right amazon's actually been a huge net positive for the world in my opinion name every other tech company same thing right they're all centralized hierarchical structures now what we're getting though is a technology change that allows for the coordination of resources that doesn't require the hierarchical structure instead of one person making decisions what if everyone gets to make the decision well it depends what are you trying to accomplish sometimes decentralization's better sometimes it's not right there's a very strong argument that in certain situations centralization's the the more efficient better uh kind of structure but now that we have decentralization with this technology what you do is you can actually build much larger networks so the difference between a hierarchical structure of let's say amazon that is trying to build out all of these super kind of moonshot type ideas aws and logistics and all of this compared to maybe something where a network ends up making much more sense right so take bitcoin well there's miners there's node operators and there's holders these are three different groups um and the miners are financially incentivized to run computers to run the network it's pretty interesting there's a financial incentive for people all around the world there's literally millions and millions of machines around the world that are all doing this it's the strongest computing network in the world why because every 10 minutes or so there is uh a certain amount of bitcoin 6.25 bitcoin that ends up actually being given out to folks um that are running that network to the people who are running the uh the bitcoin blockchain and so that financial incentive right now ends up being somewhere 45 50 million dollars a day in bitcoin ends up being given out to these people based on how much computing power and some nuance there so when you create a network that doesn't have a hierarchical structure there's no ceo of bitcoin there's no marketing department there was no uh here's the master plan okay tom you go build the site in washington state and you know larry you go build the site and uh china and mark you go build the one in texas there was none of that it was purely tom says you know what i want my piece of the bitcoin block reward every day and we know what i'm gonna do i'm gonna go figure it out i'm gonna go get energy or power i'm gonna buy these machines then i'm gonna run this and i'm going to have a profitable business and so rather than rely on that hierarchical structure by creating a network we created the strongest computer network in the world in 12 years and is it strong because you can't break it there's no person there's no point of failure i can't go hack timmy um i can't can you know seduce somebody and like you know get their keys to something and is that what makes it strong just that it is there would be so many people to go after i think of strength of a network in two ways specifically around let's say bitcoin um one is just a pure qualitative uh metric um or i'm sorry a qualitative metric and then one is a quantitative one the quantitative one is really easy how much hash rate or how much computing power is actually running this network and that's can stop a brute force attack or anything like that and so um the bitcoin network has more computing power running it than anything else right it's way bigger than any of the largest computers in the world etc um so that's a quantitative metric the qualitative one i think more is structurally right so um from a structure standpoint if you think about um other technology networks that have been shut down right napster is always like a really easy one peer-to-peer file sharing was a great idea people were doing it obviously the music industry didn't like it how do they shut it down well you can basically go and find out who's the ceo of the business where is the business where are their servers all this type stuff and you can go ahead and you can shut it down and so when you remove that hierarchical structure and you now have a decentralized structure the strength comes from there is no single point of failure so you have a quantitative metric and you have a qualitative kind of framework the qualitative one is the design of bitcoin itself and in that network the quantitative one is just the financial incentives or the economic incentives at play has drastically outperformed any hierarchical effort and so when you start to look at that you say okay that's interesting where else is decentralization important and what you find is and i think the industry is learning this right now is in some cases decentralization's really really important right we don't want anyone to control this we don't want anyone to be able to create more of it we don't want anyone to be able to censor it or shut it down or whatever very important but there's also a lot of people who said oh we're going to take those same ideas we're gonna apply it to traditional technology database technology or whatever and what you find is in many cases on that front people the end user doesn't care if it's decentralized or not right they say hey look i need something that's fast it's cheap it's easy to use whatever and so i think uh we're watching this in real time play out um some things that are decentralized don't need to be some things that are centralized need to be decentralized right so i think that's ultimately one of the most interesting parts of this industry moving forward is just what ends up getting decentralized and what is actually better off being centralized and the market's going to decide right like one of the things i think through my career from an investing standpoint is when you're a little bit younger and you're just starting out you want to be very much of a um i call like a market predictor right i saw a b and c and so that means d e and f is going to happen maybe right that almost like the younger the more naive the more arrogant you are like the more you have confidence that that's going to happen as i've gotten older and just gotten more experiences i don't want to be a market predictor i'm going to be a market observer just tell me what the market's doing and then i want to go once to react fast it react fast but also what you can see is um the market is the ultimate referee right is bitcoin valuable i have a personal opinion you have personal opinions so does you know millions of other people no one's individual opinion matters the collective opinion of the market matters peak tea is your daily antioxidant powerhouse i cannot emphasize enough the importance of gut health for your overall health immunity and energy level and basically every other function in your body my wife lisa is fanatical about her 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look at let's say bitcoin for example i could talk to somebody all day long and they can tell me bitcoin's not valuable the best retort to that is it's a trillion dollar asset that has tens of millions of people around the world holding it and it does more transaction volume than some of the card networks sure maybe it's not valuable right but like probably nothing yeah but the market has determined that that is valuable and you just work your way through the assets and what you find is asset after asset that some group of people think is invaluable well the market's decided it has value now you could argue that the market is wrong or mispricing it or whatever and there's arbitrage opportunities etc but ultimately i think that um we're really bad at predicting the future and so the more that you can be a market observer rather than a market predictor you start to just understand uh crazy stuff happens i want to really differentiate between the two so if i'm a market predictor i'm trying to say because of abc then um d e and f are going to happen as a market observer i'm just saying d is happening right now and so therefore i know what to do in this moment based on the fact that d is happening and if you know q starts happening then i'm going to go and adjust my strategy based on q i'll give you a perfect example so i do a lot of early stage investing right and uh when i'm looking at early stage opportunities there's two different types of investors some investors look at a business and they say okay you want to build uh you know a w a company that builds some kind of widget i think that widget market is going to grow bigger i think that you should do a b and c i think right and they come at it very much from uh here is how i see this happening and therefore i'm going to make my investment decision on whether your plans line up with how i think the world is going to move in the future that is a market predictor you're predicating the investment decision on the prediction of what you think is going to happen in the future and i did a lot of that early on some of them work some did over time what i became as a market observer is this person intelligent do they know how to solve problems are they a clear thinker do they think from first principles do they have traction in what they're building regardless of whether i think it's a thing or not right there's a lot of people using it and so what you start to do is you start to become more of an observer and it's um it grounds you much more in like humility from an investing standpoint of saying i don't know what's going to happen in the future it could be bullish could be bearish could be somewhere in between but what i do want to see is i want to see the trends things that are in motion stay in motion and so if there's tons and tons of users flocking to something who cares what my opinion of the future is right there's plenty of companies that i think were really stupid like imagine when somebody came in and said hey uh we're gonna create a company and we have air mattresses in our kitchen and people are paying us to stay there and we think everyone in the world can have an air mattress in their kitchen a lot of people are like that sounds insane like that's never gonna happen because what are they doing they're being a market predictor but also along with that pitch was by the way there was a conference this weekend and at that conference we had six people you know whatever pay for pay us to do it and so people are doing it if you're more from a market observer oh that's interesting can did you do it another weekend right the questions you ask are different it's less about where's the world going and it's more about show me that the observations that i have available to me today that this is working or that there's something here yeah in the nft market you see that in a big way do you mess around with nfts at all i uh was very very early to nfts um and uh it's not very popular uh in some sectors of this industry specifically with bitcoin maximals etc and it's why i make such a a serious delineation between monetary maximalism and then like the technology competition but in may of 2020 or so um i started to hear about it look at it it was interesting to me etc um and the more that i dug into it i realized i was like this is the same argument as to bitcoin versus gold right the digital version of something is always bigger than the analog version right so the physical version is that just your gut says or is there name one asset that you can think of where the physical version is not bigger than the digital version i can't and you have just put words to something that i feel but have never had words that feels so true to me that's why i'm so hyped about bitcoin and ethereum and nfts is like dude the my brain switched over to digital so fast on artwork i can't tell you so there was actually i found myself somebody wanted to um send me something and they were like oh you know i want to send you i forget what it was a painting or something like that and i in my heart was like oh man if it was an nft i would [ __ ] love it but i'm like the physical thing thank you that's so sweet is oh my god so kind but you know go ahead and keep it it's weird how fast that happened the the thing um if you just go down the line so the easy examples are shopping you know uh all that type of stuff taxis uber the reason why most investors missed uber as an investment opportunities they compared uber to the total addressable market of the taxi industry well that was actually the wrong analysis that's really interesting because the digital version of taxis ended up actually not owning any cars and it was a market expanding technology because it didn't just eat taxis it didn't just eat black cars there are millions of people in the united states who are young who don't own a car and they uber everywhere how many people in manhattan own a car well most of the young people they just uber everywhere or they use public transportation right and so what ends up happening is the opportunity or the addressable market expanded drastically with a digital version of the analog if you look at gold gold market caps about 10 trillion bitcoin today is 1 trillion i fully believe that bitcoin is not only going to drastically eclipse gold's market cap but it'll be a market expanding technology if you ask me right now how to go buy gold i couldn't tell you agreed i'd have to call a broker or go on a website or you know and i have to figure it out i don't know how to do that myself and most digital natives know exactly how to buy bitcoin and so you look at that now bring it to art the art market you know depending on how you account or whatever trillion dollars or less right the digital art market you just said it openc did 3 billion in transaction volume in a single month and so why is bitcoin better as a global store value than gold why is the digital version better than the analog well one there is a digital component to it meaning that anyone in the world with an internet connection can sign in and immediately start to transact in it so there's an accessibility advantage two is there's fractionalization i don't have to buy a full bitcoin at forty five fifty thousand dollars i can buy a piece of a bitcoin uh three is that i can carry it around really simply on my phone right or on my laptop rather than lugging around physical goals there's a portability advantage to it and then you start to look at it from a storage cost etc right there's a whole bunch of advantage digital version versus the physical version what happens with the digital art it's the same thing more accessible more divisible more portable all this type of stuff and so if we're gonna go and move our lives into this like metaverse digital world whatever you know is the the new way to describe it why would we leave the assets we care about in the analog world no we're going to bring them into the digital world too all right i'm going to try to touch on something ephemeral to just drive this point home have you ever looked at a vv vault vv vault no what is it okay this is so crazy so vivi is a collectibles company that's partnered with like dc marvel tv but their their nfts look like actual collectibles so it looks like a toy it looks like a statue like it it's they're going out of their way to sort of literally just digitize the collectibles industry but they're brilliant move and i'm still dazzled by this is that they gave their users the ability to create these it they've made it right now i'm sure future iterations won't but it looks like a vault so you're going through a vault door and then you're on the inside but it's just a virtual space for you to put display all the things you've collected the level of creativity that people show in placing their items is insane so i'll give you one example the the way that they have programmed this space so one of the collectibles you can buy is the delorean from back to the future and one guy put it upside down and on the roof so it's actually outside the vault but it plays an animation in the loop of the flux capacitor turning on which has all this electricity right if you remember the movie all the electricity sparks and then it disappears so it does that animation so as you walk through this guy's vault every 30 seconds whatever all this electricity just runs around the ceiling because he's placed his collectible and i was like oh my god if i have the physical thing you one you have to come into my house to see the physical collectible b it's not gonna have electricity sparking everywhere it's gonna zap some kid walking by so not only now am i only bridled by my imagination but anyone anywhere can come and see this and so now as a social creature that wants to connect with my community and i'm given these virtual tools i don't need to be wealthy right you no longer need a big crazy house to display all of this art you can create this virtual thing put all your stuff in a way that only you have done it takes time right you talk about money is this equation to time so we know we value time so when i see somebody who spent their time creating something like this i'm just like oh my god like this is so much cooler than what collectibles have ever been ever before in history and so i start thinking about all right now you're gonna have companies that spring up that are making virtual galleries where the gallery itself is like this crazy physics-defying piece of art you're not just walking through a mimicry of a traditional gallery you're on the [ __ ] moon you're in outer space you're inside the body whatever you want like it is the creativity that the digital realm unleashes because you you no longer have to obey the laws of physics it's just oh my god i i think there's an element of like you don't have to obey the laws of physics you also don't have to ask permission of anybody right so you know um if you go and you look at an art gallery in manhattan for example how many people really got an opportunity to design the art gallery well they're usually people who have some sort of pedigree they got trained somewhere right there's like all these like hurdles to get in and so it ends up being a lot of the same people who all know each other and they're the ones who do it on the internet imagine if you held a global competition for whoever could create the best art gallery right and there's like a prize for it you'd get some really really cool stuff because there was no barriers to become the person who could do that that's all this is is this now just saying but you don't have to come do it in manhattan like just do it on the internet and i think that um you know the best analogy i have for this is think of twitter if i said to you tom you know what you're going to do every day you're going to go hang out in this virtual reality square you're going to talk to random strangers you'd be like dude that sounds like cool to like test one time but like i got things to do but what do you do you go through the portal which is your computer or your phone and you go and you hang out in a digital square and you talk to strangers like that is in some weird way a version of virtual reality right i tweeted recently i said we live in virtual reality already it doesn't look like the thing that you put you know the oculus headset on and you walk around you can touch and feel things and like like that's like level you know two three four five of virtual reality but twitter created virtual reality for people and you can go there and you know hey every day we all come here and meet up again right and you keep going and then what am i basically doing i'm basically walking around the square and i'm saying okay tom's talking about this this person talking about this this person about this and i have a choice do i want to button the conversation do i want to reply do i want to quote tweet do you want to say hey tom just said whatever and i'm going to tell my friends that's a retweet button like like you start to think through this and it's like yeah this is all going to happen how quickly does it happen up for debate uh what technologies is it built on up for debate um how how should an investor invest up for debate how should you as a market participant who's not an investor wants to be a user how should you use this stuff up for debate but i think that one of the trends that every great investor has figured out or one of the activities is just find that kind of direction that the world is moving as be an observer understand the world's moving this way and then go and say okay well what are people using to your point about observing it to not judge it so one of the things the nft market has taught me is that in fact i wrote my rules they were tongue-in-cheek when i wrote them but i think i should publish them is that everything you think is cool is gonna go to zero and everything that you think is dumb is gonna moon and i've just seen that play out over and over and over again it's really hard to predict what other people are gonna think is cool because it's really a moment is created energy is orchestrated somehow through this it's not an invisible hand because there are some people that are really good at it but they can get the energy moving towards a project for whatever reason like i don't know if you paid attention what happened with lute so um the guy that i consider my king of alpha david um he sent me a tweet like i was about to go to bed and he was like hey tom the same called lude is popping off look at it i looked at it and i'm like this is white words on black a black background this doesn't make any sense and i was like but i know this industry and if people believe that this is like new fresh exciting that at least for a moment there's going to be this influx of attention now that moment could be 10 years that moment could be 10 minutes i have no idea but i'm getting better and better at sort of arbitraging some of these things so i bought two of them and then a couple days later if you owned them you got an air drop of uh basically their token and i didn't even know about the airdrop and the same guy david was like hey tom because you bought two you've been airdropped to stop you actually have to go pull it out of the contract directly and so i'll show you how to do it so here you go into etherscan and this is how you do it and i got it and i got my two bags of gold and as of that day that thing so i bought the ones that i bought i think i bought it i can't remember if it's 1.9 eth for the original loots or 0.9 but it was in there somewhere and at the time i got the gold which remember i didn't even know existed i was already making money hand over fists just on the actual squares that i bought and the bags of um their coin that my friend had to tell me were there i went and sold one of the two for fifty thousand dollars and i was like i imagine if a friend was like hey dude i know you don't know but in your bread box in the back cupboard a guy just left you 50 grand you'd be like what just happened it was so surreal and i was just like okay don't think about things think about the nature of things and i was like this is telling me something about the nature of humans of creative energy of attention and how it can be swayed about enthusiasm and how it it moves sort of restlessly it never lands on one thing and stays and so there's these really predictable curves that these projects go through and i'm like hold on if you do your you know ten thousand twenty thousand thirty thousand hours of research and you'd like really figure this game out obviously never invest a single dime over what you're prepared to lose because nfts are the single highest risk investment i've ever seen humanity come up with i want to make that really [ __ ] clear but it is so interesting to see how it captures that same part of the psyche around sports betting how we're all locked up because of what's going on with kovid like there's all these factors that have come into play and just that crypto's taking off and nfts have answered the question of whether there's a real thing there and whether people will value them but once i stopped judging the market and just started saying this is happening whether i think it should or not whether i think white text on a black background should be cool or not it is and it's capturing energy and dude it wasn't long ago that i made 50 000 a year so i was like this is so crazy and this comes back to like my obsession people need to do their own research i cannot predict the future you cannot predict the future who knows this could all go to nothing tomorrow that does not seem likely and given what's going on today the nature of the technology right understand it think from first principles and it becomes far easier to do novel things but just looking at what's going on i i legitimately want to with all the caveats of you have to be so careful you cannot go blindly into this but i can think of few things that are worth people's time and energy to understand more than the blockchain and that if this were a baseball game we are still in the locker room getting ready to come out onto the field it's like because i mean that from a technology standpoint like even forget just that you could buy bitcoin or ethereum or whatever today and it will go up in value what's going to be built on the back of the technology will create a world that will be as unrecognizable as a post-internet world would have been to me in you know 93 before i'd even heard of email to now i mean that's utterly just it's a transformation that i could never predicted it's going to be the same thing but this one's happening in full view because we already have the internet so it's already you and i are talking right now to you know hopefully millions of people and then on top of that it's we've all seen it happen before so you can say hey guys remember mobile phones hey guys remember the internet this is a big one like that and so i think this is gonna be i'm gonna make a statement and you're gonna say whether i'm a fool or not i think this will be the biggest wealth transfer ever that we've ever seen like robber baron moment type wealth transfer but it it's not gonna go to a really really small number of people it's going to go to whoever the [ __ ] takes the time to learn about this and go there's some percent percentage of my daily income doesn't like it it will go to people who don't even think in net worth terms yet because this is as raoul paul said this is the first time in human history where the average person has been able to front run the institutions so this is a chance for people to get ten dollars every paycheck whatever but like to get in and now whether it just becomes sort of wealth redistributed because so many like the older and more established your wealth the less likely you are to move on this quickly well you you got to think too um from an investing standpoint you've got to ask yourself like who are you right like who what type of investor do you want to be there are some investors who are the most risk-averse people in the world they say i don't want to take any risk i'm already wealthy in many cases i want to protect i'm in capital preservation mode there's a lot of people who say no i'm in capital accumulation mode right is i want to go make money i need to make money um and what you need to seek out then in most cases is asymmetry now that doesn't mean that you shouldn't do i have these like five principles right from a personal investing standpoint you need to spend less than you make like kind of a core principle right kind of get out of debt if you're in debt the third thing is that you have to get out of cash and you have to invest in assets doesn't really matter what assets as much more so as the action of investing you got to be super super super patient right and you got to be disciplined that's it and if you do that for long periods of time like you will make money and the reason is because the currency underlying it all is going to be devalued so all of these asset prices continue to go up stock market every single day it seems like it hits a new all-time high frank just continues to go up and up and up but that's if you're a super risk a person you say hey i'm just going to buy a low cost index fund s p 500 whatever there are some people who want to take more risk and they want to look for more asymmetry but i think that the nft stuff etc is fascinating because there is a level of wealth that is being uh created but it's not being exchanged and so this is something that i think a lot of people when they think about oh there was um you know three billion dollars that was put through a system or that person is worth a billion dollars and they made it in crypto in many cases what happened is not that somebody gave a billion dollars of fiat currency and received a billion dollars worth of digital tokens instead what happened is somebody created it out of thin air and so now all of a sudden you have all these tokens that are worth a penny and they start trading and one trades at two pennies unless you know now that market cap of the asset is now 2x right it's no different than companies so for example when jeff bezos starts amazon right he says hey my company is worth x dollars you can buy shares at you know why price okay as the company accrues value based on all these valuation metrics that people have the company's worth you know a trillion dollars and you're like well did a trillion dollars get paid to you no i don't think amazon's ever made a trillion dollars in cash but the equity value which has accrued value over time ends up being a really big opportunity and so it's fascinating for me to watch people like you know take a jay-z as kind of the quintessential example you can see over the 20-30 year period him wake up to and understand the power of owning equity that's something that was created out of thin air that accrues value based on a certain number of valuation metrics and if you're the one holding the asset you can actually drastically increase your personal net worth and the value um and cash etc that you have a lot of that's happening here as well right is somebody's buying something you bought the the loot which is you know kind of this ability to play this game or participate in this uh community and as more and more people wanted to participate it became more valuable and so it's no different than you buying a piece of real estate more people want the real estate so the value goes up now you're buying this asset and the value goes up as more people want it owning equity ends up being the greatest way to create personal wealth whether you're owning a cash flowing business whether you're owning the equity of a payment system like bitcoin by holding the actual asset itself and having financial exposure to it you're owning the equity of real estate of a community with nfts et cetera it's all the same investment mechanism now which ones are crew value which ones don't why should they accrue value etc if you are in a market predictor you know kind of seat sure you can speculate based on what you think's gonna happen what you think is not gonna happen if you're the market observer seat you simply are saying look the loot game i wasn't really into those types of computer games etc as a kid my brothers and i were all playing madden and you know basically throwing the n64 controller at each other you know halfway through the game right before somebody 21 to each other right so to me like that's outside of my intellectual curiosity but as a market observer hell yeah that's valuable right there's a ton of people who want to play this there's a ton of people who are running into it and so do i know if the price can go up or down or what like all of that is almost secondary and frankly i don't think anyone can predict as much as being able to observe the fact that i don't know i think the github repository of loot in general was one of the most positive uh or was one of the most popular github repositories last week so crazy on the entire internet does that mean that it's going to be worth tons of money no is that a pretty good data point there's a lot of developer activity yeah right are there a lot of people who are talking about it online if you go search on you know twitter in the tech community a whole lot of people talking about it again we've seen things tons of people talked about and ended up going to xero right so there's no no one data point is the predictor but i think if you sit in the market observer seat and constantly remind yourself i do not know the future but i'm willing to observe what's happening right now you start to understand that uh there's corners of the internet that think weird things are valuable and so if you can get out of the game of i see these things right and i think i'm like that is weird why would somebody buy words on a black screen i wouldn't buy it right so nobody must want to buy it well no i'm an idiot if i think that right because what ends up happening is as an observer you have the humility to understand there's pl there's millions and millions and millions of people on the internet that want to do stuff i don't i don't want to do okay so you can choose to invest or not invest whatever but but being aware of and observing what's happening i think is really important and whether it's nfts whether it's games whether it's something else you start to just wrap your head around and say man this technology is creating two separate revolutions one is a monetary revolution which is bitcoin what we've talked about in terms of the fact that nobody can debase this currency anyone has access to it and has censorship resistant payments and it has sovereignty for those that hold it that seems pretty valuable trillion dollar market cap today how big can it get i i don't know but i think it'll be bigger ten years from now than it is today okay i probably want to own some of that right that's my personal decision the second revolution is this idea of uh kind of the digital realm or the the automation that it comes with all of this and when you start to think about this you said to yourself man there's a lot of people who seem to want to do this even if i think it's completely stupid even if i think that it's literally the worst idea in the world how do you argue with the market and so i think that you know there's folks who uh choose from like a maximalist standpoint to focus only on bitcoin and frankly that's where i tend to spend most of my time because the monetary revolution is much more intellectually stimulating for me right i'm i'm intrigued by it it's things i sit and think about all day and spend time on but i got plenty of friends who think that's the dumbest thing in the world like who cares right like look at this and pick your kind of other area to focus on and so i think that um it's really easy online to like get caught up a lot in this idea of uh one revolution is important and one's not uh or vice versa at the end of the day it's well who who's asking the question and what we're watching here is um every industry is going to be impacted by this technology yes and so if you're into art you should understand it because it's coming art right and likely with digital everything music all this stuff the um the thing that is most fascinating to me about the entire thing i've been doing this now you know five almost six years in the beginning all the legacy players wanted nothing to do with this and a lot of my time was focused on bitcoin because that was really the only liquid true asset they would even have a conversation about all the billionaire investors not interested all the big wall street banks not interested all the um you know institutional investors not interested almost to a t the best in the world have changed their mind they continued to get new information and they changed their mind and now some of them are the largest investors in the industry and so there's a level of intelligence and intellectual humility it takes to get new information and change your mind the people who haven't changed their mind for the most part not everyone but for the most part historically they haven't been very good investors that's interesting and so they just have this rigid way of thinking and regardless of the technology evolution regardless of what happens in the market they just have that rigid you know kind of adherence to a framework and so to me like that's been one of the biggest investing lessons is i talked to that guy he wasn't like he gave me a 12-minute meeting he literally nice to meet you i basically took the meeting because somebody else i know told me i should meet with you but like i gotta go to lunch right to now you're a huge investor in this stuff and you're out and you're talking about it and you're explaining it to people et cetera into you what happened oh you're not religious about your ideas you're not religious about uh having to be right instead he said no it reached a point where it was very obvious that the macroeconomic environment was going to continue to be crazy people were going to want to hold this asset i understood how it worked and so i changed my mind by the way i've been an idiot if i didn't change my mind yeah the only way to live like that to me is my core life thesis it's like i'm not interested in being right i'm interested in identifying the right answer faster than anybody else yeah building your self-esteem around being right is a trap and most people fall into it but that's really interesting it it's also um if you think about uh trends and like identifying the right answer a lot of times if you were to go ask venture capitals have to a lot of times understand technology innovation they also have to kind of extrapolate out really really kind of uh parabolic type growth etc and the best way to do that is actually not to think about it right it's not to say you know what airbnb is going to go from no locations to globally dominant in five years it's impossible to see that world the guy has air mattresses on his kitchen how is he going to go become a globally dominate company uber has black cars driving around san francisco how are they going to go literally convince people not to buy cars and instead use their service that sounds insane at the time but what you can do is you can basically identify people who have some future vision of the world that is different and if successful will end up actually being incredibly valuable so kind of different and right right and what you find is that's why venture capitalists make so many bets is because they're building a probabilistic outcome okay if i make 10 of these bets four of them are actually going to work the four will pay for the six losers and all i need to go do find is you know 10 crazy people who think that they can change the world right now sure not everyone invests that way but what you start to realize is rather than try to predict it yourself finding the people who know some secret or know some you know future vision of the world that they're going to go build and create ends up being a way easier way to predict the future than actually sitting there and like pontificating about you know i think nfts are going to be whatever in january did anyone think nft one nft platform would sell three billion dollars worth no way no way now one thing i know that you don't predict the future but that i it's the only thing that gives me hesitation so you're whatever famously like 95 of your liquid assets are in bitcoin um i'm way way way way way less than that but my comfort it started with i'll just do one percent and then i was like well that felt good how about two and then that was five and now it's like you know i'm pacing 10. so about 10 right now that's what i'm pacing i'll be there probably well i guess if we dip really hard then i'll race to that uh if we don't just keep dollar cost averaging but i already sort of planted seeds with my wife i might be comfortable at 25 so uh yeah that i've really sort of adjusted my thinking on that but the one thing that gives me pause is you've talked about bitcoin is going to become the global reserve currency i don't think that governments go down without a fight yeah so global reserve currency uh first of all is like a term that everyone talks about but what is a global reserve currency right um there's two ways to look at this one is the legacy terminology of global reserve currency which is the most dominant military basically puts the uh the currency you know in place and then enforces that across the world the dollar is probably a pretty good way to use that as an example every economy has a reserve asset the us economy is based on the u.s geographic players right people within the u.s geography and the reserve asset is the us dollar if you go to mexico the mexican economy has a reserve asset at the peso et cetera you go through the world this is true there's an economy though that has been created it's actually the largest economy in the world and it doesn't have a reserve assets the internet the digital economy does not care about where you physically are geography does not matter it's unhinged from the the geography what's the reserve asset of the digital economy well most people would say well i use dollars right that that seems to be one of the more popular ones but that's because we live in the developed western world people on the internet in india don't use dollars right they use their local currency and you go around the world and you see this what happens if we all just used one currency and all the units were the same okay that'd be interesting and so the reason why i say that it is going to be a global reserve currency is i actually don't think it's nearly as competitive with the fiat currencies as people think it is because ultimately what happens is the digital store of value i want to protect my assets and so what we're moving towards is a multi-currency world right right now you and i live in a single currency world you get paid in dollars saving dollars invest in dollars and then you also pay taxes in dollars if you want to go to somebody else's single currency world mexico you have to convert your dollars to pesos to operate within the mexican uh economy for the most part well when you make that conversion it's actually very difficult you go to the bank and you try to withdraw it it's got to be large sums or you go to like a currency exchanger at the airport they rip you off right like it sucks what happens if all of a sudden the friction and the cost of transacting between currencies or switching the switching cost goes to zero and now i get paid in dollars and with a click of a button i can change my dollars into pesos or into bitcoin or into a digital euro et cetera well now the technology is the exact same the only difference the only competition between the currencies is at the monetary policy standpoint they're all digital currencies so the digital dollar digital peso and bitcoin are literally all the same technology wise in that steady state but there's competition at the top layer at the moment at the monetary policy layer what is monetary policy all fiat currencies have the same monetary policy on a structure standpoint which is inflationary currencies okay meaning that there's constantly more printed of it it's got a variable monetary policy meaning that uh it constantly changes sometimes they're expanding sometimes they're contracting but the reason why the dollar is guaranteed to lose value is because they have to continue to create more of it right same with the peso same with the euro et cetera so if you actually take all the fiat currencies and you put them in a bucket there is a non-consensus or a different currency structure which is bitcoin for example and so if it ends up being right it's gonna be wildly valuable it's non-consensus then right but two is if i'm looking to store value from i'm trying to save i'm not gonna save in the fiat structure regardless of the currency doesn't matter dollars euros yen whatever i'm gonna put it into an asset where it protects my purchasing power and if the switching cost is zero i now can switch back and forth very easily so you can see a world where my employer pays me in dollars it auto converts into bitcoin i set it there and then i gotta pay my taxes in dollars i convert back into dollars and i pay well i'm saving in bitcoin i'm storing value in bitcoin what do people do well historically maybe i had to buy real estate to do that so my employer paid me in dollars i took the dollars i converted it into real estate i sat there and then all of a sudden i needed money to pay my taxes i could sell the real estate get it and pay it back now that's a ridiculous you know order of events if i'm simply going to use it as a saving mechanism to then pay my taxes you know later this year because there's cost there's time lapse et cetera but there's no difference between doing that with real estate or doing it with bitcoin it's just now all of a sudden i can do it instantaneously i can do it with a digital asset that protects my purchasing power and the switching cost is zero essentially and so when we move to a multi-currency world actually in some crazy way the fiat currencies may become more valuable and this is uh not everyone agrees with this i'm gonna say i'm so intrigued it's like the restaurant problem right if i put a restaurant on a intersection it's the only restaurant it gets let's say 10 people a day if i put a restaurant across the street many times people will say oh that's competition now that first restaurant is going to suffer if i put a third one there people say oh my god that first one's screwed a fourth one oh my god the first one is out of business in reality what happens is all the studies show when you build density at the intersection everyone actually gets more traffic because that that becomes known as restaurant intersection that's where all the restaurants are yeah i'm hungry i don't know let's just go down there we'll figure something out and so actually the first one benefits from having the others move in there there's two arguments when it comes to bitcoin of the fiat currencies one is that they're in direct competition with each other bitcoin wins fiat currencies lose game over right and in that scenario governments absolutely do not want this to happen the governments that embrace the technology that ends up being the winner first will drastically outperform those that are last to adopt it right the second one is this argument of no actually a multi-currency role all boats rise together now you know i talked earlier about i don't want to be a market predictor what i find right now is as technologies are being digitized it actually increases the accessibility of them for people around the world so take that second example i'm in venezuela the boulevard ends up getting devalued away i know i gotta get out really really hard for me to get dollars i can try through the bank but there's limitations i'm worried about confiscation off by the government etc the black market is really pricey uh in terms of it cost me a lot to actually go buy it and it can actually be physically dangerous so why do i want dollars well there's safety in the dollar in my mind there's stability there that's the best currency my currency sucks this one's great let me go buy this one okay dollars are hard to get i'll get gold well hard to find can be physically dangerous could be confiscated et cetera okay what can i do on the internet if all of a sudden i think let's say bitcoin's too volatile for me i want dollars but the dollar isn't digitized on these platforms but china takes their currency and they create a digital currency it's better than nothing so what do i do i buy the digital currency of china and it's just a pure accessibility thing so i think ultimately the incentive is that everything will be digitized right you'll get digital dollars to your euro yen etc and some of that will be because people believe that there's some sort of internal domestic advantage to it but also some of it's going to be just simply the game theory of we have to digitize our currency so it's accessible to people around the world and so we can drive more adoption more value but the second that everyone has digital wallets everything becomes a currency right how many people say to themselves oh i own that piece of real estate i need to sell it to get dollars then go buy something what happens when i can just take the real estate and buy directly the asset i don't have to go to the common unit of account of a dollar all the technology is the same the value just is different and so you get this really weird world where like i don't know what's going to happen in the future but you can clearly articulate two or three different versions and in every single one of those versions bitcoin specifically is valuable so bitcoin is valuable if it goes head to head with the fiat currencies bitcoin is valuable if the fiat currencies benefit you know and all currencies end up occurring more and bitcoin is valuable if all of a sudden every asset is a currency and you can interchange them freely so from my standpoint it was actually the least risky thing i could do personally was to buy bitcoin and i always say that i sit at the intersection of two very very different worlds when i talk to you know friends on wall street or these large asset managers and stuff they're like you are insane having 95 of your net worth in this thing and i say sure but i think you're insane for having 95 of your net worth in dollars or in dollar denominated assets right so we see eye to eye on insanity it's just two different assets if i go talk to uh particularly young people in crypto that are on the edges of innovation and really kind of pushing pushing the pace of this new stuff they're like dude you are the least risk tolerant person i've ever met like you just hold boomer coin right like bitcoin doesn't do anything and so how can it be that the same asset viewed by the youngest most kind of forward-thinking innovative people is seen as the most conservative but by the oldest most successful is seen as the most risky it's actually probably where you want to sit right is because you're you're taking the two worlds and you're kind of meeting them in the middle and so when you ask about like allocations and all stuff it i always ask you what are you optimizing for i basically built a venn diagram early on and i said okay what is the thing that i think is most likely to be here a hundred years from now right my plan is to hand bitcoin to my grandkids okay so it needs to be around for 100 years the durability of it and also what is the thing that has a very attractive return compared to traditional assets bitcoins compounded at 200 annually for a decade that's crazy pretty crazy right so if it's durable and it has an attractive return compared to traditional assets i'm gonna go get a lot of that and if i denominate my net worth in it and my life like my financial life in it it actually changes psychologically spending money because it's one thing if i say hey you're gonna go spend a depreciating asset to buy a house or buy a car or buy whatever might as well it's going down to value anyway you're financially incentivized to do it right he's literally it's going to lose value so you better get rid of it if i say to you hey you're going to buy something with an appreciating asset that is likely to be worth more in the future than it is today and also you think yourself what am i buying do i need it is it gonna is it an investment is gonna be worth more than what this is gonna be you start to ask yourself a little some of the questions you might not have otherwise asked and so it's it's um one of these things where like i basically just throw my hands up and i said look the world is changing at a rapid pace i spend all day on this stuff and i can't keep up um it will look very different 25 years from now than it does today uh and how lucky are we that we get to live here that we're talking about it that we see the opportunities and you know what you and i will make a bunch of investment decisions some of them will work some of them won't my guess is that by picking the right industry that has a massive tailwind behind it we would have to be really really really really stupid and then make really really really stupid decisions we probably still will be okay because you're simply it's like saying oh i invested in the internet in the 90s i mean you had to be an absolute idiot to not somehow somewhere end up better off after investing the internet than before i think the same thing's true here so you know you can make optimizations all that but at the end of the day anyone who's paying attention to this stuff i think it's gonna be fine that is the perfect place to stop boys and girls if you haven't already be sure to subscribe follow this man everywhere tell them where they can find you uh just on twitter at apompliano or search anthonypopliano on youtube there you go you won't regret it and until next time my friends be legendary take care peace i grew up in the world of what is known as macro investing macro investing is when you look at all the asset classes everywhere around the world so bonds equities commodities currencies um credits all of these things and you try and look for what is the best return you can get maybe that's in india maybe it's in china maybe it's in the u.s

Channel: Tom Bilyeu

Views: 169,767

Rating: 4.9199142 out of 5

Keywords: Anthony Pompliano, Off The Chain, Impact Theory, Tom Bilyeu, Conversations with Tom, interviews, wealth inequality, how to get wealthy, how to become rich, how to invest, investment, investment strategy, cryptocurrency, crypto revolution, bitcoin, ethereum, chainlink, metaverse, NFTs, poor people, financial literacy, financial education, personal finance, blockchain, investor, coinbase, Veeva Vault, countries with digital currency

Id: wtIw_9uqKKw

Length: 112min 21sec (6741 seconds)

Published: Tue Sep 14 2021