Transcription complète de Is Bitcoin Going According to Plan? Gold, Saylor, Satoshi | Dan Held

plot. What are we doing here? These influencers are everywhere. Like we have starlings, like the ethos and spirit of Burning Man is gone. It's, it's failed. But then you look at Burning Man, it's like, there's a 80,000 people there and it's, it's growing in energy and it's shifted. And, and this is all, 17 00:05:35.303 --> 00:06:01.898 Always what revolutions do, I think like revolutions moderate as they grow up. And so I don't want to like say that like, oh, the fact that like we are all looking at Michael Saylor and the Bitcoin ETS and we've like lost the plot of not your keys, not your Bitcoin. I don't think that's a fair measuring stick. But I also don't want to lose sight of that either. And I have a hard time doing both. I don't know if you have if you have any reflections on that. 18 00:06:01.898 --> 00:06:17.423 Yeah, this is a, I think this is, I think what you're referencing is what are the KPIs that we would have initially set up to determine, and KPIs, for those who don't understand what that means, it's a tech term to stand for key performance indicators. What KPIs would we have set up to represent the success of the Bitcoin network? 19 00:06:18.031 --> 00:06:45.892 Now, having done this both at Kraken, Uber, and since leaving Kraken, I've had 15 fractional CMO clients. So like I do this OKR KPI process more times than almost probably anyone my age. Setting proper KPIs is really difficult, right? It's not just measuring every single metric we could, right? Because it could be hardware wallet ownership. It could be a private key management, like how many people are self-custodied in their assets. 20 00:06:46.330 --> 00:06:57.890 Usually what we try to do when we create KPIs is we try to distill them down to the really core key metrics that represent success. That's why it's called ePerformance Indicator. It's not a measurement of all metrics. 21 00:06:58.177 --> 00:07:17.768 I would say first and foremost, a nice compression of all of those metrics together is Bitcoin's price because the price represents the aggregate belief that it is a new digital gold or sound money. So the price is a one way hash function of all of the collective belief in it. And that's what the price represents. 22 00:07:17.768 --> 00:07:33.985 So that I think is the number one KPI because price also loops into everything else. It's adoption, it's liquidity, it's resilience, it's narrative, it's all these things combined. So price first and foremost would be probably the top KPI. 23 00:07:33.985 --> 00:08:03.770 From there, you know, obviously self-custody is a hugely important issue. So self-custody would be how many people manage their own private key, whether that be you have a dedicated hardware wallet, which would be ideal, or other setup, which there's a pretty low percentage. And it's not too unsurprising. I mean, I've managed my own private key for 15 years, and honestly, it's pretty stressful. You know, I don't have a multi-sig setup. I do single key because, you know, sitting up a two out of three has its own issues, but I don't want to go down that rabbit hole. 24 00:08:03.989 --> 00:08:33.908 You know, private key management, I would say liquidity is also a function of price. Now, how deep is the market? Like the price could be high, but there's no liquidity. And, you know, if you look across those KPIs, you know, even with private key management, like self-custody, we've seen that improve. But as a percentage of total HODLers, it's still lower than what I'd want. You know, from there, it gets a little fuzzier, right? Like if you measure changes to Bitcoin's core code, you know, that would be a function of, it's really subjective. 25 00:08:33.908 --> 00:08:50.750 You don't want to be like, oh, we should change it all the time, but certainly it needs to improve. So that's a really fuzzy one. I'm not sure how we can actually measure that. But yeah, that's kind of my initial foray into how would we measure success. Yeah. He probably prices the simplest answer just because it reflects everything else combined. 26 00:08:50.750 --> 00:09:10.409 Markets don't move one asset at a time. One day it's Bitcoin, the next NVIDIA, then gold, and then the S&P. But most traders are still managing their portfolio across different platforms, different accounts, and different pools of capital. BitGet just changed that. 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He runs the DeFi Report. This is the guy that sent me a sell alert before the 1010 price drop happened. His cycle analysis has been absolutely on point. I've been following him for years. And this year we started recording weekly podcast episodes. 29 00:10:01.102 --> 00:10:26.431 Each one, we get into his portfolio, what he's holding, the market structure, entry targets, fair market value of Bitcoin and Ether, and where we are in the cycle. There's new episodes that are released every Wednesday. They're 30 minutes. They're short. They're punchy. I think this crypto cycle is harder to navigate than most. So let's do it together.

Go subscribe to this podcast. Search The DeFi Report wherever you get your podcasts. YouTube, Apple, Spotify, or find a link in the show notes. There's a new episode waiting for you now. 30 00:10:26.431 --> 00:10:42.125 I think a lot of people who come into crypto on the earlier side of things, like pre-2020, 2021, you have to have come in it for like the ideology. Like it's, you're not just there for the money. Like you were crazy to be there before 2020. 31 00:10:42.260 --> 00:11:07.133 And that's because you were like ideologically motivated, like, or like some emotional motivation to like be in the crypto space, either in Bitcoin or Ethereum. And I think a lot of it was like, you cited your radicalization because of 2008. And so I think a lot of early Bitcoiners and like people, like for me, believing in Ethereum, it's like, I want to change culture. Like I want to change the world. And now we have this like financial tool 32 00:11:07.133 --> 00:11:31.045 to do that. And like what, what more powerful of a tool to change culture and change, change the world than with money and finance. And I think that's kind of like the potential measuring stick. And I want an old article that I really liked from Nick Carter, where he wrote about how Bitcoin is a peaceful revolution, right? Like you're just demonetizing the nation state's ability to engage in warfare. 33 00:11:31.130 --> 00:11:39.398 Or like that was like one angle or another angle is like, ah, it's just like a check on power of, of central governments, like inflating their currencies. 34 00:11:40.748 --> 00:12:08.390 I don't know if we've been impactful on those fronts. And I know it's early. Like Bitcoin is 15, 16 years old. So it's early to say that like, yo, we're like Bitcoin is going to defund violence. But still, I don't know if I don't know if there's any hints of success on those like big macroscopic ideas that we once had as an industry. Look, we memes when I first got into Bitcoin, it was largely associated with drugs and money laundering. 35 00:12:08.390 --> 00:12:28.471 This is early, early days. I mean, I even went on a date in San Francisco and she said, are you a drug dealer when she asked what I did? So like Bitcoin's improved somewhat from there. Now it's largely perceived as a speculative asset. I would say, which is still a pretty negative connotation rather than a positive one. And it's like freedom money. You know, culture wise, like... 36 00:12:28.808 --> 00:12:52.163 We memed Bitcoin, which is a fucking random ass magic internet money, largely perceived as dirty and filthy and bullshit. We aimed that into what was a tiny obscure community. I mean, in San Francisco, you know, I went to the Bitcoin meetups there in early 2013. It was just Brian and Fred from Coinbase, Charlie Lee, Jed McCaleb, Jesse Powell. 37 00:12:52.163 --> 00:13:20.480 Jared Kenna, who hosted a 20 mission. I mean, there was a dozen of us in a cooler full of PBRs. Like from that into the president is

talking about it and there's a bill in Congress about it. And Goldman, JP Morgan are all like, yeah, this is legitimate. And same with the Fed. I mean, I think we memed it into an existence where people believe it's digital gold. For me, since that was my original thesis, I think we largely succeeded. 38 00:13:20.716 --> 00:13:36.697 You know, does the everyday person see it that way? You know, I think market, last time I checked the surveys around market penetration in terms of what percentage of the U.S. owns Bitcoin, I think it's under 10%. But I might be making numbers up, but I'm pretty sure it's like 5% to 10%. Mm-hmm. 39 00:13:36.697 --> 00:14:06.683 That's not bad. I mean, we convinced, what is the population of the U.S., like 400 million. You know, we convinced 40 million people to buy Bitcoin. And that's just the U.S. numbers. Globally, it might be bigger. From obscurity of this crazy magic internet money into being semi-relevant, I consider that, from a marketing standpoint, that's a huge success. 15 years, people don't wake up and wonder, should I shake my core foundations of understanding what money is? 40 00:14:06.683 --> 00:14:25.280 You wake up and you wonder if you should buy Chick-fil-A or Burger King. You don't want to wake up and be like, let me question the nature of reality, both my God, family and purpose in life. You don't want to go down that rabbit hole. So the fact that 40 million people in the U.S. alone, let's say the 10% number is true. 41 00:14:25.280 --> 00:14:55.267 40 million people woke up and decided to go down the rabbit hole of questioning the nature of the reality so core to them. Like, what is money? I think that's success. But yeah, you know, it's still a battle to be won. I think this is a, you know, I realized a long time ago that this is going to be a generational thing. I don't think the boomers, most boomers, I think, are kind of too far gone. They're too set in their ways. And so as the famous quote goes, science progresses at the death of every scientist. 42 00:14:55.267 --> 00:15:13.610 I think Bitcoin adoption will... I understand that quote slightly differently. The quote that I have in my head is, science progress one grave at a time. Same, same, I think. Same, same, yeah. Basically, the old science. We need the old people to die so the new people can take over. But that's not a revolution. That's just time passing. 43 00:15:14.993 --> 00:15:32.257 Well, I guess every invention before, though, had the same effect. You know, after going through this myself with Bitcoin, and then, you know, six years ago, I invested in SpaceX, which had a lot of similar, I would say, like very, like, a lot of intense feelings in a negative manner towards the concept. 44 00:15:32.813 --> 00:15:59.392 After going through this experience myself, I really have this empathy for every single inventor or artist before us. Like, can you imagine? Most people were never recognized for their contributions, whether it be science or art, until after they died. Imagine living a whole life like this. At least we were validated that we were right. But imagine living a whole life and everyone is just ridiculing you all the time. It's like Bitcoin and ETH being at super low prices your entire life. Right. 45 00:15:59.577 --> 00:16:29.513 Yeah. You know, at least we had moments where like, we definitely had our victory laps where everyone who was a critic was coming back and saying, hey, you guys were right. So yeah. And again, like I said, I have deep sympathy for every inventor or critical thinker or contrarian thinker before us. Yeah. What do you think about Michael Saylor's influence or just role in Bitcoin? Like, I think it's pretty easy to say, like, obviously he's been good for it if our measuring stick is priced because he bought, 46 00:16:29.513 --> 00:16:53.307 $60 billion. He just piled $60 billion into Bitcoin. So how is that not good? But there's also, there's definitely a double-edged sword. And we can talk about that. What do you think just overall about like Michael Saylor and his relationship to Bitcoin? Yeah. First and foremost, I think he's played a really good critical role in advocating for Bitcoin. I've had a lot of time. I spent with him at his place in Miami. We've gone out to dinner quite a few times. 47 00:16:53.560 --> 00:17:15.278 You know, there's some funny things as well where, you know, his proof of work, his whole energy memes. You know, he's mentioned before that like, oh, you know, a lot of what I learned about Bitcoin is from Dan. So I've seen some weird after effects of like, I think his take on energy is a little too cosmic, a little bit esoteric. Let's put it that way. Yeah. 48 00:17:15.278 --> 00:17:31.512 And so, you know, whereas I feel like mine was a bit esoteric, but more for an easy concept for people to digest. But I didn't go a little, I didn't go crazy with the energy meme. I think he's taken some narratives and I think gotten a little too esoteric with them. 49 00:17:31.512 --> 00:17:46.514 So overall, I think he's a net positive. At the same time, you know, he is advocating, ultimately he represents micro strategy. And so at the end of the day, he's sort of not recommending, but advocating for micro strategy. 50 00:17:46.514 --> 00:18:09.312 And as you know, I never got involved in any of the dats. I got offered to be CEO of three of them. Actually, no, I think it's four of them. You know, I could have participated in them, like buying it early. I didn't do that either. You call me old fashioned, but if you want to buy Bitcoin, just buy Bitcoin. And I think a lot of people had this whole concept around like, oh, well, what if we get like a leverage plan on Bitcoin and whatnot? Yeah. 51 00:18:09.498 --> 00:18:36.430 You know, I don't think that, I think Stretch and MicroStrategy, I don't think were represented in the, you know, most accurate way possible. I don't think there was malicious intent behind it. But, you know,

so TLDR, I'm kind of waxing poetically here. TLDR, I think he's a net positive for Bitcoin. However, I would not have recommended Bitcoiners buy MicroStrategy or Stretch or any of those products. 52 00:18:36.633 --> 00:18:52.445 Yeah. My concern is about the role of DATS and the success of DATS is just like the centralization of the supply. Like if you tell me like, okay, what if strategy owned half a percent of Bitcoin? You're like, that's great. 53 00:18:52.445 --> 00:19:21.858 1% of Bitcoin. Yeah, that's great. 2% of Bitcoin. I was like, wow, that's a lot of Bitcoin. It's not 4% of Bitcoin, dude. And at some point, just like as a thought experiment, like what if strategy owned 50%, half of the Bitcoin supply? I'd be like, that's too much. That's bad. That's a bad thing. And I bet you price can't really move too much if one entity owns 50%. Now we're at 4%, so we're very far off. But still, like... 54 00:19:21.858 --> 00:19:51.473 it starts to be a little worrisome that there's just this like one dude. Like the whole like Metcalfe's law interpretation of like networks depends on the Bitcoin supply being diffuse. And so I do kind of worry like at what point is there just like too much attention? Not like there's no risk to Bitcoin because Bitcoin code doesn't care about Michael's strategy. So like whatever. But just like the attention and the branding can be like 55 00:19:51.473 --> 00:20:20.195 captured a little bit. And that kind of worries me. What do you think about that? Yeah, I don't think you're wrong that there could be a narrative that would impact price around concentration risk being like, oh, this people just inherently believe more concentration means wealth inequality, censorship, centralization. So you're not wrong narrative wise, as you mentioned before, though the Bitcoin code doesn't really care, right? Like Bitcoin's proof of work function isn't a proof of stake function. Thinking of proof of stake protocol, that'd be very worrisome. 56 00:20:20.195 --> 00:20:36.833 And a proof of work protocol, it's a little less worrisome. Granted, with someone with that much capital, they could also buy a lot of miners. But, you know, proof of work basically functions. You have all this CapEx, you buy these machines, and the only thing these machines can do is print money, which is Bitcoin. 57 00:20:37.238 --> 00:21:05.875 So if you buy too many of them and then people perceive the network as being centralized, and then you act in a bad manner, like doing 51% attacks, you would essentially destroy the machines that print the money and you've already spent upfront capital. Proof of work is provably burning capital to purchase machines up front. And so anyways, even if they had a concentration of the miners, they would have to be willing to burn the money and be willing to destroy all of their invested capital 58 00:21:05.875 --> 00:21:34.040 if they wanted to manipulate the network in their favor. Yeah, I don't really think it's a technical

thing, though. It's more of like a... It's back to just like... It's a sociological thing. And it's kind of similar in the sense that, you know, the United States has really planted their flag on Bitcoin and cryptos. Like, Bitcoin is... We have a strategic asset reserve, a strategic Bitcoin reserve. And, like, Donald Trump wants to make crypto the capital of the world, crypto capital of the world. And I see, like, well, China... 59 00:21:34.040 --> 00:21:56.062 doesn't give a fuck about Bitcoin. What's China buying? But gold. And so there's like a branding. It's like it's not as credibly neutral. It's not as like permissionless and balanced and harmonious across the globe as it once was. And so it's kind of the same thing with the United States planting the flag. Like Bitcoin is just U.S. coded, which works for me. I'm in the U.S., 60 00:21:56.062 --> 00:22:10.709 Bitcoin is also kind of Michael Saylor coded. And that's kind of like, that's part where I go back. That wasn't the plan. That was not the plan. What do you think about that? Yeah. I mean, first, I'm actually quite surprised that China and other like Russia and China didn't try to buy as much Bitcoin as they could. 61 00:22:10.827 --> 00:22:30.352 Right. I mean, Russia right now is dealing with the consequences of that. With the Ukraine war, they've had a lot of their assets frozen. So the fact that they didn't perceive Bitcoin as kind of a safe store of value is quite bizarre, especially with how fluid they could pay their partners with it. You know, I'm not exactly sure why adoption didn't occur there. 62 00:22:30.352 --> 00:22:47.176 Granted, you know, Bitcoin is pseudonymous, so we don't know exactly how much the Russian government could own and they could make a very concentrated effort to keep it semi-private-ish and just, you know, have it in a bunch of different wallets and distribute it in a way where we wouldn't know true ownership. 63 00:22:47.176 --> 00:23:14.480 But yeah, I mean, for me, Bitcoin is a critically neutral asset. There is a potential negative narrative being associated with both the United States and a certain party. I think the party is more troublesome than the United States being associated with it. The United States has the largest gold reserves in the world. So much so that it's larger than I believe. I believe it's larger than every other gold reserve combined, but it's huge. So the US has the largest gold reserves out there. 64 00:23:15.205 --> 00:23:40.079 Just because the U.S. believes in gold doesn't make gold any less valuable. And also the U.S. is perceived as still the world reserve asset. The dollar is perceived as the world reserve asset. So them adopting Bitcoin, I think, is a positive. I think it being Republican, you know, I'm libertarian, so I dislike both parties equally. But I think that could be a negative narrative here in two years or when Trump would come about two years from now. Two years, yeah. 65 00:23:40.417 --> 00:24:08.800 You know, that could come back to where, especially since Trump, and I find this very distasteful, where he, you know, leaned into largely pump and dump schemes like Trump pouring and all sorts of stuff where I'm like, you know, man, all you had to do is just be a little classy about it. You could have set up partnerships, a venture firm. You could have preferred terms. You could have all sorts of different deals. You could have made your billions in a nice, ethical, clean way. 66 00:24:08.800 --> 00:24:18.622 And instead, it's just really grimy with how he did it. So I think that's going to really come back and bite us. There's probably going to be some investigations after he leaves office. 67 00:24:19.128 --> 00:24:44.609 So yeah, TLDR, we can't really control how Bitcoin gets adopted, like who adopts it, where, who buys it. So I think the U.S. Association is okay. Trump, not so much. When it comes down to concentration, and to answer your first question, concentration and the narratives around that, I think 4% is fine. I mean, it's pretty hard to accumulate a 4% position. It's taken them years. 68 00:24:44.609 --> 00:25:00.472 Years of constant buying, so I'm not too worried about that. Even if it gets to 10%, I still think 10% in most people's minds would sound low. You know, 40%, I agree with you. At those numbers, it just sounds bad. So theoretically, yes, I agree. 69 00:25:00.691 --> 00:25:30.357 you know, practically someone has been trying to do this. I don't know when he began. Was it five, six years ago? It was right around COVID. It's right around COVID. Yeah, so five years. Yeah. So he's sticking up a long time to get to 4%. Yeah, it doesn't seem like he's going to be buying a lot of Bitcoin in the short term either. That's on pause. With the trading below par, not par, they're not really a par on stretch, but trading below the $100 sort of target price, I don't think is a good omen. Yeah, yeah, yeah. 70 00:25:30.357 --> 00:25:56.716 I want to ask about scaling in Bitcoin. Lightning Network, I don't know what's up with that, but I don't see it anywhere on my feeds at all. Has Bitcoin kind of just become indifferent to scaling? Yeah, that's a great question. I think it's, this one, I'd like to go back to the block size wars. Basically, for those who aren't familiar, there's Bitcoin and Bitcoin Cash, Civil War, Bitcoin Broken Half, essentially, in terms of cultural community values. 71 00:25:56.716 --> 00:26:11.161 The small blockers, which was myself and basically what Bitcoin is today, we believe that you can't scale Bitcoin completely on the layer one. So you have to scale it in layers. So you have to build these other layers that eventually net settle in the Bitcoin base layer. For those who don't know what we're talking about here. 72 00:26:11.617 --> 00:26:41.536 For the L2s, basically the community made a promise that we would push all this economic activity to L2s and that we would foster a healthy L2 to L1 relationship. I do

think Bitcoin, the Bitcoin community has failed in that regard. We could have implemented things like OPCAT or other very basic scripting functions in the Bitcoin base layer that would enable trustless L2s. Most of Bitcoin L2s have different security assumptions. 73 00:26:41.536 --> 00:26:57.415 that basically make the process of using your Bitcoin on an L2 less secure than Bitcoin's L1, and we could have made it almost equivalently secure. So I do think that that is a promise that was made back then in the block size wars that we have not fulfilled. 74 00:26:57.618 --> 00:27:17.463 And so I would say that's a big mess because we could have had, and I think the rise of different other smart contract platforms like Ethereum, Solana, and others represent that missed opportunity. I think that the lack thereof of really capable L2s that are anchored really well into Bitcoin's L1 75 00:27:17.463 --> 00:27:34.068 I think because we haven't made those changes happen in the community, I do think, like I said, those protocols represent that missed opportunity. Interesting, interesting. How do you think, what could have that looked like? Like, say, if... 76 00:27:34.068 --> 00:27:59.161 Some of the things that you talked about, like OPCAT and some of the other technical things actually worked out. What would Bitcoin look like? Yeah, it's a good question. It's all hypothetical, right? Can't really what would happen. But, you know, if you have trustless bridging, which means you can take your Bitcoin from an L1 and bring it to an L2 and you don't have to trust the bridge, that changes a lot of things. I feel like that security would change a lot of user behavior around when they operate with this L2 if they trust. You wouldn't have to trust it as much. 77 00:27:59.566 --> 00:28:28.709 There's, of course, zero-day exploits and other functions with an L2 that you need to be aware of, you know, protocol risk. You know, I was saying this five years ago, you know, just because it's DeFi doesn't reduce its risk. A lot of people are marketing DeFi as, yeah, I've reduced my counterparty risk to zero. I'm like, yeah, you did, but you also have... Yeah, your counterparty risk, yeah. Yeah, which isn't a bad or good thing. It just, you just need to be aware of it, right? So I think that, you know, with Bitcoin L2, I think it would have captured a lot of DeFi demand. 78 00:28:28.709 --> 00:28:47.508 Bitcoin's L1, basically, that the community is like, well, look, we're not going to do all the fancy, cool stuff that Ethereum and Solana can do in the L1. And so, you know, we didn't have really robust L2s. And so I think that, you know, we would have seen Bitcoin's market share in terms of like market Bitcoin dominance metric. I think we would have seen that higher. 79 00:28:47.626 --> 00:29:05.632 I think we would have seen Bitcoin absorb a lot of those positive narratives that Ethereum and Solana got around DeFi, smart contracts. You know, that could have floated to Bitcoin, which would I think would have been value accretive to the store of value narrative, like a more useful store of value or a... 80 00:29:05.632 --> 00:29:32.243 you know, a digital goal that's more, you know, more productive, you know, those narratives, I think, would have amplified the digital goal. It wouldn't have been distracting from it. So, yeah, I think that it was definitely a missed opportunity. And that's where I think the market capitalizations of both Slaughter and Ethereum represent that missed opportunity. Granted, those protocols are still a very small percentage of Bitcoin's market cap. So how much of an opportunity did we miss? 81 00:29:32.328 --> 00:29:55.008 I'm not sure, but I do think DeFi is the future. Like seeing Ethereum DeFi summer was interesting. Like as a Bitcoin maxi, I still appreciate it and spent a lot of time exploring why Ethereum DeFi summer occurred. And because A, users want it. B, there's a lot of very basic primitive financial types of financial transactions that people want. 82 00:29:55.008 --> 00:30:24.488 Lending, borrowing, you know, staking, lending, you know, different types of other smart contracts or options, derivatives. These are all productive things. You know, there's a whole host of like, do we need millions of tokens? I don't think so. I don't think that's exactly useful. But taking an asset like digital gold and being able to borrow against it in a trustless manner, there's a massive amount of demand for that. Being able to lend it out in a way that's semi-trustless. 83 00:30:24.860 --> 00:30:54.813 you know, I think is useful. What about privacy? I can't actually remember if Bitcoin had like a commitment to privacy in its culture. I don't think it did. But nonetheless, privacy has always been interesting to Bitcoiners. What is kind of like the idea, the relationship that Bitcoin and Bitcoiners believe about privacy with regards to the Bitcoin protocol? Yeah, that's a good question because the early community, the word cash actually means that. So when the Bitcoin white 84 00:30:54.813 --> 00:31:12.768 which are on the cryptographer mailing list, the cypherpunks don't use the word cash to mean everyday transactions. That's a huge misconception. Interesting. I've never realized that. That's crazy. Yeah, because you had like eCash, hashCash. Why are they using this word cash? 85 00:31:12.768 --> 00:31:37.810 It means a couple different things. It means a one-way function. That means once I make a payment, it can't be reversed. So it's irreversible. That's what a cash transaction is like. If I pay you cash for your plant in the background, you can't ask for that back unless you want to give it back. So it means it's irreversible and usually means that it's private. Between the two parties, yeah. Yeah, that was a big component that the Cypherpunks really cared about. 86 00:31:38.131 --> 00:32:00.777 Now, Bitcoin is pseudonymous. We don't know which Bitcoin address, who owns which address.

But if we ever de-anonymize, if you've owned an address, then we can trace through the blockchain and probably figure out some of your ownership. But it is still difficult. It's not easy. And you can do coin joins. You can do all sorts of other obfuscation. You know, Lightning, which is a Bitcoin L2. You know, that channel activity is largely anonymous. Yeah. 87 00:32:00.777 --> 00:32:20.808 But for the cypherpunks and Satoshi, that was actually a critical component with the idea that Bitcoin would be semi-private or fully private. That's what the word cash means. Not cash in your pocket, not pay for everyday stuff. Now, Satoshi, of course, does reference merchants and paying for things, but the word cash does not represent that because he's writing this to the cypherpunks. 88 00:32:22.242 --> 00:32:38.071 The privacy issue, though, very early on, you know, Satoshi and his writing both on the forums, the peer-to-peer foundation forums rather than Bitcoin talk forums, but also there, you know, he mentions that privacy is a good thing. They want to explore any more privacy. He talks about CK. 89 00:32:39.522 --> 00:33:08.075 You know, Satoshi also had a lot of mistakes that he made with Bitcoin. People forget that too. And there's actually a few things that I would consider Satoshi actually missed on significantly. One would be the units. Why 21 million versus 21 billion? I think he was quite bearish. So he said- Why 21? I actually never figured out why 21. Supposedly, that's like a computer science thing. The 21 just makes it easier from like a sort of like floating point number or something like that. It will be on my plebeian marketing understanding of tech. Okay. 90 00:33:08.075 --> 00:33:36.323 So 21 is like, I guess, a more elegant way to do it. But 21 million versus 21 billion versus 21 trillion. I think he wanted to break the dollar parity sooner. And this is an experiment. He didn't know if it was going to work. Right, right. I think he was a little too bearish. And that unit bias problem, I do think is an issue. Oh, wow. That's novel to me. Right? Bitcoin is just too expensive. Yeah, everyone thinks Bitcoin is too expensive. So I think Satoshi did make a mistake on that, where he put the decimal. 91 00:33:37.353 --> 00:33:55.038 You think Bitcoin should be like $65? Yeah. I mean, you probably would have got a more adoption, but maybe you wouldn't have. We don't know. We can't replay time. Yeah. And then he also had a very aggressive issuance schedule, you know, like to produce that many Bitcoin in the beginning. It was very aggressive. It could have been a much flatter trajectory. 92 00:33:55.038 --> 00:34:19.793 So, yeah, I definitely agree with that. Yeah. And you and I have talked about this extensively, but yeah. Yeah. It's, I mean, outside of the security budget, I'll talk about the security budget in a second, but just like, yeah, just like having like so many coins be mined so early. Like imagine how you could have just stretched the security budget like four times, 10 times further. Totally. Totally. Totally. 93 00:34:20.131 --> 00:34:40.128 Yeah, we'll touch on that if we want to go with that a little bit later. But there's a very clear tradeoff between auditability and transparency. So if it's private, we can't audit it as easily, which we just saw on Zcash literally a month ago. That's not the first time it's happened in Zcash. It's also not the first time it happened in Bitcoins. 94 00:34:40.128 --> 00:35:09.187 It happened in Bitcoin in 2010. However, it was before Bitcoin was worth a penny. It was immediately fixed. And, you know, Bitcoin was a very rough... Bitcoin was a rough code in 2010. It wasn't like a real protocol. Like, not tested, not really... It was very basic. Again, it was before Bitcoin was worth a penny. I think a lot of, like, Zcash people will bring that up, but it's a false equivalency. Yeah, Ethereum people bring it up when Bitcoiners FUD Ethereum about the DAO hack. And they're like, well, you guys did it too. 95 00:35:09.187 --> 00:35:25.437 Yeah, exactly. Exactly. But yeah, I mean, one was a consensus change. One wasn't. Like, yeah, yeah. The Ethereum DAO hack was like saying, oh, this theft is bad. The Bitcoin was like this broke consensus that was 21 billion. Sure. I take that point. I take that point. 96 00:35:25.488 --> 00:35:52.454 Yeah. So, you know, I would say privacy, of course, is something I strive for. Like, I think that's a great value to have. But you cannot have perfect privacy on an L1 and auditability. And Bitcoin's core value prop is around the 21 million hard cap being a credible monetary policy. That's why it makes for a good sound money, not its rate of inflation or deflation, but the fact that we can trust that 21 million won't be changed or has a high credible chance that it won't be changed. 97 00:35:52.454 --> 00:36:19.893 Yeah, so privacy is like an application layer thing, not a protocol thing. Totally. And, you know, we look at the market cap as Zcash and these other coins, and they're tiny. So, like, how much do users truly value privacy? I think it's quite low. Even though I wish from a libertarian perspective that people would care. More people valued it. We don't. You know, and so I also wrote about this in 2020. It's called Bitcoin Privacy. Is it the article I wrote on my blog? Let's say we had perfect privacy on Zcash or Bitcoin. 98 00:36:20.230 --> 00:36:29.545 And we didn't have any auditability flaws. Okay, so I spend it on various activities. And I buy a house. 99 00:36:29.900 --> 00:36:56.326 My house has a title and the title is in my name. And, you know, the IRS and various other entities, anyone in public can walk by my house and see how big my house is or small or whatever it is. The IRS can ask me where I got that money from because they can see that I bought a house. And so the idea that you can live in this perfect level of privacy if we just had a perfect private money, I think is a little bit

ridiculous. Like I think... 100 00:36:56.798 --> 00:37:20.018 you can't have perfect privacy. If you buy any big items, you know, it's kind of impossible. Right. Yeah. Yeah. If you buy any big items, you're kind of like filling in some numbers on a Sudoku puzzle for other people to kind of like figure out. Yeah. Yeah. And like, yeah. And, and also, yeah, I think what, what we're saying and what I, what I understand is like, we enjoy privacy. We enjoy technically strong privacy, but, 101 00:37:20.018 --> 00:37:27.713 But there's a limit as to how safe it is to put it deep into the protocol and we can get privacy elsewhere. I take that point. 102 00:37:27.832 --> 00:37:57.818 In a perfect world, if with no trade-offs, absolutely. It's, you know, and that's where I find the Zcash folks just so dishonest, where they act like we could just snap it with our finger and we could have privacy on Bitcoin's L1. Obviously, we thought about that. This isn't like, oh, yeah, we're just being, you know, curmudgeons and we're like, no, we don't want privacy because we're all institutional now. No, it's not that at all. It's basically there's a huge trade-off and we're like, the trade-off doesn't make sense for us, but you guys go on and do that. Cool. I mean, and then Zcash had that. 103 00:37:57.818 --> 00:38:17.731 you know, the flaw in it with the inflation bug, and we were kind of largely validated by our concerns. Not an inflation bug. An inflation bug inside of the privacy pool. And so not an actual unit inflation bug. Kind of an inflation bug, but not, yeah. Ultimately, the number of Zcash remains the same. 104 00:38:17.933 --> 00:38:43.870 Appreciate, appreciate. But yeah, nuances is hard with privacy. And that's kind of the point, actually. Hey, Bankless Nation, it's David. If you're hearing this, that's because you are listening to the free Bankless podcast feed. Did you know that there is a premium Bankless RSS feed? The premium feed has extra interviews that I do for my own personal research and just deeper questions that I want answered about the crypto industry, questions that I want to answer so I can be more informed as an investor, both at Bankless Ventures and also just in my own personal portfolio too. Also, there are no ads, which is a great question. 105 00:38:43.870 --> 00:39:04.475 which means if you listen to the premium feed instead of the free feed, you'll get about 20 hours of your life back every year because you choose to support Bankless directly. So if you're interested in getting extra content all while skipping the ads, or you just appreciate what we do here and want us to keep doing it, we'd appreciate it if you signed up for Bankless Premium. And there is a link in the show notes to get started. Cheers to a good 2026. 106 00:39:04.475 --> 00:39:23.881 I want to talk about BIPs. What is, what's the current BIPs being talked about? And BIPs are Bitcoin Improvement Protocols. So this is like, for Ethereum people, this is EIPs. The

Bitcoin improvements, what's being discussed in the modern day and age around Bitcoin? Yeah, so, you know, Bitcoin, the BIP is basically a Bitcoin improvement to the protocol that's proposed 107 00:39:23.881 --> 00:39:48.670 You know, there's a couple floating around, I think, BIP 360s around quantum, like improving Bitcoin to be quantum, post-quantum cryptography, basically solving some of the, you know, with quantum, the current issue with Bitcoin is that, you know, when you sign a transaction with your private key, that the private key can get exposed. And if it gets exposed, it can steal your Bitcoin. And so we have to upgrade Bitcoin signatures to post-quantum secure signatures. 108 00:39:48.670 --> 00:40:07.503 Yeah, and we have to pick which signature is the best one, and there's a bunch of trade-offs with each one. A bunch of trade-offs from potential zero-day exploits to large byte sizes. Overall, anything post-quantum is going to be a little much larger in bytes, aka data size, so that'll make Bitcoin transactions more expensive. 109 00:40:07.503 --> 00:40:22.673 Certainly opens up another conversation around Bitcoin block size, though. Yeah, I'm kind of okay with that, actually. I think I was having this debate with Ryan where Ryan was like, oh, yeah, Bitcoiners are going to need to increase the block size. I'm like, I don't know if they do. I think they can just pay the fees. Do you have an opinion on that? 110 00:40:22.673 --> 00:40:49.555 Well, block space currently isn't super busy, so you could probably do the fees. But, you know, in a theoretical world where like a lot of people are trying to do it at once, block size increase may be necessary, but that's a whole can of worms. But anyways, any post-quantum encryption that we select will likely be larger in bytes. There is some improvements that are like magnitude shifts. And I think that's some of the criticism that some folks have is that 111 00:40:49.555 --> 00:41:17.382 you know, we shouldn't make these changes until we, you know, basically have much more data-dense transaction types. Or not data-dense, but just more efficient. So that's BIP-360. There's a couple other proposals as well. There's also kind of a retarded one called BIP-110, which I don't know if you've seen those voices. I don't even know if you even see those people on crypto Twitter, because the Twitter, the nature of Twitter has changed a lot. Yeah, it's very bubbly these days. Yeah, that and like, 112 00:41:17.382 --> 00:41:39.961 I feel like we were all part of the same conversation before and now kind of gets a bit more convoluted. So, yeah, I would say Bit.1.10, basically a bunch of these moronic plebs believe that, you know, we should censor Bitcoin. I was wondering if this was still relevant. Yeah, okay. So this is the arbitrary data. Do we allow arbitrary data in Bitcoin or not? 113 00:41:39.961 --> 00:42:05.138 These idiots don't understand how computer science, aka information theory works. You know,

these are very uneducated. Aren't some of these idiots core devs, though? No, one. There's one core dev. It's a super religious guy? Yeah, he believes that the Catholic Church has perverted Catholicism. He believes in eating cats. Oh, my God. He also believes all sorts of crazy shit. Okay, so we don't take him seriously anymore. 114 00:42:05.138 --> 00:42:32.695 No, no, he's a lunatic. And so you got a lunatic and a bunch of uneducated plebs that are behind him. Right. And they're like, signal for 110, you know, so they're kind of shouting right now about that. And literally every minor and every business is like, what the fuck are you doing? They're like, stop, stop being weird. Yeah, stop being weird. And so they might actually fork off, which would be great. Great, great, great. Let them. I hope they do. I hope they do. Please. Exactly. So BIP 110 is a joke. 115 00:42:32.695 --> 00:42:41.808 1560 is like being considered slash talked about a little bit, but there's nothing that I would say in the immediate short term that's, that's kind of like, 116 00:42:42.095 --> 00:43:09.010 Sure. What about the level of urgency around the quantum bit, bit 360, or just like how fast things are progressing? Because there is like a level of urgency around quantum, right? Yeah, I would say this is the biggest unresolved question. And I would say most pressing issue in Bitcoin. Pressing doesn't mean it's an immediate concern, but pressing as in we need to have, I'd say, some forward momentum. Yeah, we need the foot needs to be on the gas. Exactly. Exactly. 117 00:43:09.010 --> 00:43:31.049 Nick Carter obviously has been kind of ringing that bell a bit. I do believe that we should be making actions now or progressing towards a solution. I don't think that threat's imminent, even in some of the most aggressive timelines for quantum, or what do they call it, the Q events or something like that? Q data, yeah. 118 00:43:31.825 --> 00:43:49.966 I think it's still five years away, probably at a minimum. But even then, it still might take us quite a while to agree upon how we upgrade and the process of migration. You know, if every single Bitcoin address wanted to move over to a post-quantum secure encryption standard, it would take a significant amount of time. 119 00:43:49.966 --> 00:44:15.667 So, yeah, this needs to be figured out, I'd say, soon. In the next couple of years, it'd be great if we had consensus over the next direction. And then we have actions happen in, like, year three. I think that would be, like, an acceptable or good timeline in my book. I think the big concern was that it wasn't being taken seriously as an issue broadly by Bitcoiners. Is that still true? Or do you think everyone has kind of realized that we have to take this head off? 120 00:44:15.667 --> 00:44:31.006 I think that's where like I respect Nick, but I think he definitely kind of exaggerated the level of apathy. It was largely talked about in most circles I'm a part of. I think the

only disagreement was the level of concern. Like how soon does this need to be resolved? I think it's the bigger question. 121 00:44:31.293 --> 00:44:47.375 And Nick was kind of raising the alarm, which I applaud him for his efforts. I also think he was a bit too critical of various efforts that were going on. I don't think people were just like, oh, this isn't a problem. I think it was more of like, it's going to be a problem, but it's going to be a little while from now. 122 00:44:47.628 --> 00:45:07.051 I think game theoretically that given how advanced AI is getting, that the AI coming up with solutions to make quantum computing more effective will likely lead to its adoption sooner than later. So I do think that five-year timeline, while previously was considered extremely aggressive, 123 00:45:07.051 --> 00:45:22.053 I think is a safe one. I think even with AI breakthroughs on, you know, building quantum computers, I still think five years would be pretty aggressive in terms of when we think QDay might occur. Dan, did you watch the Finding Satoshi documentary? I did. 124 00:45:22.053 --> 00:45:38.287 Yeah. Which is good. Do you like agree with the conclusion? You know, I'm kind of a Hal Maxie, like a Hal Finney Maxie. Sure. To me, he embodies it. Which I think you can be and also still agree with the conclusion. So the documentary, we had them on the podcast for listeners who didn't watch it. 125 00:45:38.287 --> 00:46:02.300 in my opinion, kind of does the best job that I think will ever be done about investigating Satoshi and comes to a conclusion that it's both Hal Finney and Len Sassman. To me, the addition of Len Sassman was the curveball. Sassman was the curveball. But my opinion is that I don't think we're ever going to have a more definitive answer than this. Maybe that's what I'll ask you to qualify or disagree about. 126 00:46:02.300 --> 00:46:30.532 Yeah, what's interesting is that I had a question posed to me once, given more and more time, will it become more or less likely that we find Satoshi? Which I thought was super interesting. And I think it's more likely we would have found him sooner. And I think the more time that progresses, it's less likely that we find him. Even though our ability to like analyze his text and look at all the data we have becomes better with AI, there is data decay that is occurring. 127 00:46:30.751 --> 00:46:39.728 emails, written communication, logs that are slowly being deprecated and or erased, that would have been help us definitively find who Satoshi is. 128 00:46:40.522 --> 00:47:03.202 So I would say like the Lynn Sassam and Hal Finney connection, I thought that was an elegant, good narrative. I don't have any strong opinions for or against the argument. It's certainly a lot better than the New York Times one about, oh man, that was so bad. Adam Back? Yeah, that was just so, so bad. Adam Back is definitely not Satoshi. So... 129 00:47:03.202 --> 00:47:23.671 Yeah, I would say like Hal Finney, it definitely feels like Hal Finney wrote the code. Hal Finney fits the bill perfectly for who Satoshi is. You know, the idea that Len Sassaman wrote the white paper. I mean, the idea that like Hal Finney couldn't write a white paper though, that seems a little weak. The idea that he had to bring in Len Sassaman for that. 130 00:47:24.110 --> 00:47:33.863 Yeah, maybe. But white papers aren't exactly rocket science. Yeah. Do you think identifying Satoshi, does that do anything? Or is this just a fun game? 131 00:47:34.268 --> 00:47:56.037 Well, I don't want it. I don't think we should know who Satoshi is. It's a fun game, but it would be negative if we definitively found who Satoshi was because, one, it creates, you know, this basically deity. Now it becomes a cold, hard, real person. Right. It pops the illusion. Yeah. And Satoshi's whole purpose of creating the pseudonym was to be, you know, a pseudonym. 132 00:47:56.037 --> 00:48:20.067 is to be, you know, someone who wasn't, there wasn't a physical representation associated himself with this. It was more of a, I am an individual, I've done my contribution and now I'm gone. Versus you should look up to me, you should ask me what to do next. He didn't want to be that. And so I think it wouldn't be good if we identified who he was. It is still a fun game. I still try to attempt to identify who Satoshi is, but 133 00:48:20.067 --> 00:48:45.295 I don't think it'd be good for the protocol to know who he is, but I don't think it'd be ultimately that much detrimental. Satoshi has likely passed away. And if that's true, then he doesn't really have any say over future direction of the protocol. Four-year cycles, we seem to be doing them. But I kind of want to look at what happens in the next four years, like 2028, but then even into like well into the 2030s, like the medium-term future of Bitcoin. 134 00:48:46.257 --> 00:49:01.293 We got Bitcoin treasuries, corporate treasuries. We got the Bitcoin strategic reserve, some huge wins, some huge dubs for Bitcoin. What kind of wins does Bitcoin, do we want Bitcoin to get in like its next phase of growth? 135 00:49:01.293 --> 00:49:19.855 Yeah, I mean, both further, I would say market penetration of how many people own Bitcoin. Like that's a really important KPI for me. Like how many people across the globe as a percentage of the population own it. Whether it's $100, $10 or a million dollars doesn't really matter because then... 136 00:49:20.007 --> 00:49:48.560 I would prefer to them do self-custody, but it doesn't really matter. They can do non-self-custody and they still, by buying Bitcoin, they have bought into this new financial system, this new belief in Bitcoin. And by believing in Bitcoin, it does make it more real. And it's all a shared aggregate illusion. That's what all money is, both gold, the dollar and Bitcoin. And so the more people that buy into the concept of it, the more it has Lindy, the more longer it'll stick around, the bigger

it'll become. It's a network effect. It's like a social network, but for money. 137 00:49:48.560 --> 00:50:05.924 So the more people that buy into it, the better. It's like a social network where you can plug directly into it, or you can use an app to go access it. Either way, you're buying into this new system, which further disenfranchises you from the existing system and ultimately brings about Bitcoin success as a global reserve asset. 138 00:50:05.924 --> 00:50:22.276 or like a new global money. So I do think buying it, even an ETF, is good. It's certainly not negative. It's good, but it's not as good as self-custaining it. Do you think Bitcoin flips gold? Over a long enough time period, yes. Like a lifetime or like a couple decades? 139 00:50:22.765 --> 00:50:49.124 Well, you know, it depends on the growth rate, right? Like 15 years, we went from zero to 1.5 trillion. I do think what was nice about gold's recent movement is it showed that large market cap assets can still have huge volatility. So there was an argument to be made that like Bitcoin would never have such large movements ever again because like large market cap assets don't move that much. SpaceX, Bitcoin, Apple, I think very much proved that wrong in gold. 140 00:50:49.833 --> 00:51:03.097 So yeah, I do think Bitcoin will eventually flip in gold. I think that's probably at least 10 to 15 years away. You know, it requires more people to believe at a fundamental level what the market cap represents 141 00:51:03.164 --> 00:51:24.832 is do people believe more in gold or more in Bitcoin? And like I said before, this goes back to a generational divide over, you know, world boomers adopt this as they die off. Millennials and Gen Xers bought into Bitcoin a lot more. We start to set policy for different sorts of institutions, both banks and the Fed, etc., 142 00:51:24.832 --> 00:51:45.301 treasury. So through these, I'd say gradual lifetime sort of generational adoption cycles, that's when we should see gold flipping, Bitcoin flipping gold. I mean, gold is a pretty boring asset. How many Gen Xers, Gen Z and millennials buy gold? I mean, it's considered the kind of a 143 00:51:45.301 --> 00:52:03.678 As boomers, which are basically the only gold bugs left, as they die off, I do see gold's value or gold's perception of being a, you know, store value asset slowly fade away, especially as well with SpaceX. SpaceX, as Starship program improves and the tonnage that goes to space improves. 144 00:52:03.678 --> 00:52:27.286 there will be extremely credible opportunities to mine asteroids and return that gold back to Earth in a way that is economically doable. All gold on Earth is from asteroids. So, you know, once we see that become more tangible and people start to price in that future expectation of asteroid mining becoming real, then gold really has a crisis of faith where its supply becomes largely irrelevant. Yeah. 145 00:52:27.286 --> 00:52:55.045 That will happen in our lifetime. So that's where I think 10 to 15 years is when we see the slipping in the gold because that future expectation of 30 years from now starts to get priced into today. I don't think a lot of people really grok how big Starship will be in terms of basically what he's doing, what Elon's doing is he's mass producing spacecraft at such a huge scale that space travel will be as reliable and as cheap as airplane travel. 146 00:52:55.163 --> 00:53:24.458 I mean, the consequences of that are so enormous. And when it comes to gold, it's a very detrimental consequence. Because with gold mining, you know, on asteroids, you know, one asteroid, I forget, it has like four quadrillion dollars worth of precious metals. You know, just harnessing one of those asteroids would essentially, and all you have to do is land a, you know, a small craft that has additional thrust. And it can slowly push that asteroid towards Earth. 147 00:53:24.458 --> 00:53:49.619 And we make it crash into Earth? No, you just push it into Earth or orbit and make it a little bit... Oh, okay. Yeah, because you can't make it crash into Earth because then it's kind of a free-for-all. But I can't imagine what will happen is when you land either... You can either land mining craft on the spaceship, or sorry, mining craft on the asteroid, or you can push it into an orbit and then work on it. But once that happens in any sort of tangible manner... 148 00:53:49.619 --> 00:54:17.513 I bet gold drops 25% of the day. You know, like that's going to be a death sentence for gold. Anyways, I've been talking a little bit too long. I remember when the Winklevii went to Dave Portnoy's house and they were trying to shill him on Bitcoin. This was during COVID, I think, right after COVID. And like they were pitching this, like gold asteroid mining to Dave Portnoy and they were doing a terrible job. And David Portnoy was so turned off. But that was like... 149 00:54:17.513 --> 00:54:44.767 six years ago, because it was like so absurd and sci-fi and crazy. But that was like six years ago. And for some reason, I'm listening to you now and like, this is now we have AI, SpaceX is capturing rockets with chopsticks. It doesn't seem that far fetched anymore. Totally. Yeah, I mean, I saw the first Starship launch in person. I bought SpaceX before they built the Starship program. So that was my original faith, my risk. 150 00:54:44.767 --> 00:55:07.514 was that they wouldn't be able to execute on that. They did. It's pretty cool. I mean, I recommend that everyone go see it because it's, you know, a lot of the things that I grew up watching sci-fi-wise are coming true. And that's one of them, space travel. So, yeah, I mean, look, if Elon's right about this, which is pretty damn right, like this, they did it. Most of the time, yeah. The internship has been built. They caught it with little chopsticks. 151 00:55:07.514 --> 00:55:37.096 you know, it's pretty wild. So I, you know, you're right though. Sometimes being early is the same as being wrong. And if you're really, really early, you look like a lunatic. Yeah, yeah, yeah. Dan, this has been great. Thanks for coming on the show and talking to me. I appreciate your perspective on stuff. Yeah, been too long, David. Glad to get out of here. Cheers. Bankless Nation, you guys know the deal. Crypto is risky. Bitcoin is risky, but that's what we're here for. You could lose what you put in, but this is Frontier. It's not for everyone, but we're glad you were with us on the Bankless Journey. Thanks a lot.