00:01 Hey everyone. Back in 2023, it was
00:04 either January or February of 2023, I
00:07 attended the Satoshi Roundt Conference
00:09 in Dubai. Um I’ve been twice. I think I
00:12 went once in 2023 and once in 2024. Uh
00:15 but back in 2023 when I attended um I
00:18 started before the conference, I made a
00:21 list of 17 things that I did not yet
00:24 understand about Bitcoin that I was
00:26 going to try to get an answer about at
00:28 the conference. And I got an answer to
00:30 most of the items, although some of them
00:32 are, you know, harder to answer. But I
00:34 figured I would go through those 17
00:35 because it would give you a sort of a
00:37 peak into what my mind was uh what was
00:39 going through my mind back in 2017.
00:42 Sorry, not 2017. These are 17 questions
00:44 back in 2023. 2023 uh the 17 questions
00:48 from 2023 that I had about Bitcoin. And
00:51 I thought you might have some of the
00:52 same questions and it might be
00:54 interesting to uh go through them one by
00:55 one. So, I’m going to start and just
00:58 just go through them. And so, question
00:60 zero, I made a question zero because I
01:02 thought of this question and I wanted to
01:03 stick it at the top and I didn’t want to
01:04 re number them all. So, I guess it’s
01:05 technically 18 questions, but I’ll I’ll
01:07 number them uh 0 through 17. Okay,
01:10 number zero. Uh now, at the time of the
01:13 conference, the um the price of Bitcoin
01:16 was between uh
01:18 22,500 and probably 23,500.
01:22 So all of these realize are from a a
01:24 perspective of that you know the price
01:26 of Bitcoin has roughly tripled sorry not
01:30 tripled quadrupled it’s roughly
01:31 quadruple from when I was asking these
01:33 questions and when I attended this
01:35 conference okay so again the Bitcoin
01:37 price was between about 22,000 and
01:39 23,000 at the time I had these questions
01:41 and attended the conference. So question
01:43 zero, will broad will a broad stock
01:46 market crash drag Bitcoin down to the
01:48 bottom with it? And has that happened or
01:50 will it happen? And how does that
01:52 compare to March of 2020? So the general
01:55 verdict from that is sure when
01:57 everybody’s selling everything because
01:58 everybody’s panicking, it drags the
02:00 price of Bitcoin and other assets down
02:02 with it, but it’s temporary and as soon
02:04 as everybody comes to their senses,
02:05 Bitcoin bounces back faster than
02:07 everything else. uh because unlike a lot
02:09 of the stock market uh bitcoin is not
02:12 massively overvalued right now whereas
02:15 most of the stocks and bonds real estate
02:16 and everything else has uh essentially
02:19 the prices are stratospheric and at some
02:21 point if we get a major worldwide
02:23 recession all of those prices are going
02:25 to return to something more normal
02:27 whereas I would argue and so would those
02:28 at Satoshi round table that bitcoin is
02:31 significantly undervalued
02:33 um and therefore um you know it’s going
02:36 to bounce back quickly and the adoption
02:37 will continue, which is what happened in
02:38 March of 2020. It dipped sharply uh in
02:42 the middle of March of 2020, but
02:43 ultimately Bitcoin bounced back much
02:45 faster than everything else and
02:47 ultimately went on a wild tear from what
02:50 was it in the dip of 2020. I think
02:53 Bitcoin got as low as like $4,000. So,
02:56 it’s up like 20x. So, that’s a lot of
02:59 percentage points. 2,000% 20 times your
03:02 money from that dip in 2020. So, that
03:04 was question zero. All right. Number
03:06 one. Number one, is Nick Sabo the real
03:09 Satoshi? Uh, the verdict is no. Um, if
03:12 you ever go on a who is Satoshi Nakamoto
03:15 quest, you will eventually come to the
03:17 conclusion that it’s probably Nick Sabo.
03:19 And then the more you research, the more
03:20 you’ll realize it’s not him and that you
03:23 have no idea who it is. So anyway, uh
03:25 there’s a recent book called uh
03:26 Unmasking. I think it’s unmasking Mr.
03:29 Nakamoto or something like that. Anyway,
03:31 I did a Facebook post about it. It’s a
03:33 super comprehensive, insane 15-year
03:35 journey of somebody doing the most
03:37 in-depth uh writing and reporting that
03:40 has ever been done to try to figure out
03:42 who Satoshi Nakamoto is. They ultimately
03:44 concluded is not Nick Sabo and that they
03:47 don’t know and that nobody knows and
03:49 that may be the case forever. So, I came
03:51 to the same conclusion as soon when I
03:53 talked to at the conference. I talked to
03:55 uh Adam back. I talked to um oh the guy
03:59 from uh the guy that invented Litecoin
04:01 was there at the conference. Anyway, a
04:03 lot of the sort of Bitcoin OGs were
04:04 there and I I talked to each of them
04:07 about all these questions and got the
04:09 you know same conclusion from all of
04:11 them which is you know it’s not Nick
04:13 Sabo it’s not Adam Bach. It’s not any of
04:15 these people. None of these people
04:16 invented Bitcoin. We just don’t know who
04:17 invented Bitcoin. Um, so question number
04:21 two, why 21 million Bitcoin versus 42
04:24 million or some other even number? And
04:26 the answer is Satoshi Nakamoto, the
04:28 inventor of Bitcoin, just picked it. And
04:30 he picked it based on toting up the
04:33 total amount of monetary uh supply in
04:36 the United States and tried to set the
04:38 price of a Satoshi, the smallest unit of
04:40 Bitcoin, 1/100 millionth of a Bitcoin at
04:42 a US cent. Um, now the money supply is
04:46 much larger now than it was way back
04:47 then. Um so the price of Bitcoin um even
04:51 if it gets to uh parody the smallest
04:53 unit is the same as a cent will still be
04:56 uh $1 million Bitcoin. Um but it’s uh
05:00 it’s ultimately uh destined I believe to
05:02 go far higher than that because that is
05:04 only the US monetary supply not uh other
05:07 countries monetary supply anyway. But uh
05:09 the other thing is there’s a floating
05:11 point um there there’s some specific
05:14 amount that if you go above it the math
05:17 gets much harder to do uh due to
05:20 floatingoint math in JavaScript and
05:22 things like that. And so Satoshi both
05:25 wanted to pick a unit which is 21
05:27 million subdivisible into 100 million
05:29 parts each that uh that would roughly be
05:32 equivalent to all of the uh the sort of
05:34 the monetary system he was trying to
05:36 replace. uh but also he was trying to
05:38 stay below that floating point math uh
05:41 difficulty that kicked in if you get got
05:44 above a very specific number which is
05:46 slightly above 21 million. So it looks
05:48 like he picked 21 million bitcoin for a
05:50 combination of that was about the supply
05:53 that he wanted to pick based on uh his
05:55 goal to replace the entire financial
05:57 system and all of the currencies in it.
06:00 uh combined with the need to make the
06:02 software easy to develop for people in
06:04 the future without introducing
06:06 complexity with regard to floating point
06:08 math. So that’s why we have 21 million
06:11 bitcoin. Uh all right. So why eight
06:13 decimal places versus nine? So each
06:14 bitcoin is divisible into 100 million
06:18 units. But that makes it awkward for
06:20 decimal points because mostly you do
06:22 decimal points every three numbers
06:24 instead of every uh two numbers. And
06:27 there are two reasons for that. One,
06:29 people hypothesize that he was sort of
06:31 trying to do it like dollars and cents
06:33 where this, you know, you basically
06:35 divide US dollars into thousands,
06:37 millions, billions, trillions, but
06:39 ultimately the smallest unit on the end
06:41 is only two decimal points instead of
06:44 three, which is there’s not 1,000
06:46 pennies in a dollar. There’s only a
06:47 hundred. So, some people hypothesized
06:49 that the goal was to replicate that
06:51 where Bitcoin was divisible into 100
06:53 million. So each bitcoin would be um you
06:56 know divisible into uh a million units
06:59 and then further subdivisible into
07:02 hundreds like the penny. Uh so some
07:04 people hypothesize that is the reason
07:06 for that. Uh and then the other is again
07:08 it goes back to floatingoint math is had
07:11 there been an extra decimal so that each
07:14 for example each bitcoin was
07:15 subdivisible into um instead of 100
07:18 million a billion for example suddenly
07:20 that creates complexity with regard to
07:22 floatingoint math in certain computer
07:25 programming languages that have a hard
07:27 time holding numbers that have a more
07:30 than a certain number of decimals. and
07:32 he did not want to make he did not want
07:34 to introduce the possibility that sloppy
07:36 computer programming in the future would
07:38 create issues with floatingoint math
07:40 with JavaScript and things like that. So
07:42 whichever of those reasons was the case,
07:45 it resulted in 21 million bitcoins
07:47 subdivisible into eight decimal places,
07:50 not nine decimal places. Um, and I think
07:53 the entire we talk about in terms of
07:55 Bitcoin right now, I think at some point
07:57 when each Bitcoin is worth a million
07:59 dollars per coin, probably everybody
08:00 will start talking about it in Satoshi’s
08:02 because at that point at a million
08:04 dollars per coin, one Satoshi will be
08:06 equal to one u uh one US penny. And so
08:10 it’ll be a lot easier to sort of talk
08:12 about prices as in, you know, something
08:14 that costs $8 is 8,000 Satoshi’s. Uh but
08:17 anyway, that probably is not going to
08:18 happen until Bitcoin uh approaches and
08:20 subsequently crosses uh $1 million per
08:23 coin. Okay. Uh number four, again, it
08:26 started at zero. So technically, this is
08:28 the fifth question, but the number four
08:30 um why having a having instead of
08:32 gradual? So you, Bitcoin could have been
08:34 set up where instead of the uh supply
08:37 issuance dropping by 50% every four
08:39 years, it could have been set up where
08:41 basically every time a a block is mined
08:43 every 10 minutes, it microscopically
08:46 reduces
08:48 uh the total amount of new Bitcoin. So
08:50 it’s like okay for for example right now
08:52 every time you mine a block whoever
08:54 mines the block gets 3.125 Bitcoin and
08:56 then you could have set it up that the
08:58 next block is 3.124 Bitcoin and then
08:60 it’s 3.123 Bitcoin and instead of it
09:03 dropping in half every four years um
09:06 that it’s instead it um it just
09:09 gradually tapers uh which would have
09:11 been smoother than just sort of an every
09:13 four year more of a sort of significant
09:16 drop. Okay. So people have different
09:17 opinions on this uh that of of why it
09:20 was set up this way. The most logical
09:22 one which is sort of the uh you know
09:24 what people talk about with uh you know
09:26 if you hear hoof beatats uh think horses
09:28 not zebras like what is just the most
09:30 obvious reason um is the fact that the
09:33 the uh the computer programming is super
09:36 simple to do that way. It’s like five
09:37 lines of code. So to set it up with
09:39 havingss, it’s literally five. The
09:41 entire monetary sort of issuance and
09:44 monetary policy of Bitcoin is literally
09:47 five lines of code. It’s super simple.
09:49 It gets a lot more complicated if you
09:51 set it up where the block reward, which
09:53 is the amount of Bitcoin that each minor
09:55 gets every 10 minutes. If it if it
09:58 gradually tapers off a tiny tiny tiny
09:60 tiny tiny amount every 10 minutes, that
10:02 is a lot more complicated to program
10:04 from a computer science perspective.
10:06 Other people hypothesized that it was
10:08 not just due to the simplicity and
10:10 elegance, but that Satoshi was trying to
10:13 take a take advantage of what’s called
10:15 the Gartner hype cycle for technology
10:17 adoption, which is that it is helpful if
10:21 periodically to trigger a new wave of
10:24 adoption on, you know, when you’re
10:26 starting from zero, you have a supply
10:28 shock, which means you have something
10:29 that triggers there being a lot less of
10:31 whatever it is, thereby triggering a
10:34 price increase. And the when you add
10:36 that together uh it triggers adoption
10:39 obviously because the you know everybody
10:40 notices the price go is going up. So
10:42 people are not certain you know was
10:44 Satoshi Nakamoto trying to leverage the
10:47 Gartner hype cycle of technology
10:50 adoption by setting up the havings the
10:52 way they are which would basically
10:53 trigger a new wave of adoption every
10:56 four years based on a supply shock or
10:58 was he just trying to make the computer
11:01 science code nice and super simple and
11:03 elegant? I think it’s probably just the
11:05 computer science code, but it did have
11:06 the very helpful effect of making it uh
11:10 adoption sort of naturally kick off a
11:12 new cycle. Now, in the current stage of
11:14 Bitcoin adoption, you don’t need that
11:15 because it’s already one of the 10
11:18 largest assets in the entire world and
11:20 it’s getting adopted organically. But in
11:22 the early days when nobody knew what
11:24 Bitcoin was and it was tiny and nobody
11:26 was sure if it would catch on, it
11:27 definitely was helpful to have this
11:29 every four-year supply shock that would
11:31 basically, you know, force the price to
11:33 rise based on the decrease in supply and
11:36 therefore, you know, suddenly everybody
11:37 would start paying attention to Bitcoin
11:39 again. Uh, but it was probably just
11:41 simplicity of computer science code.
11:43 Okay.
11:45 Um, oh, and I I talked to a guy that
11:48 worked for Bitcoin magazine and I asked
11:49 him all these questions and I said, “If
11:51 you could change anything about Bitcoin
11:53 today, would you change anything?” And
11:54 he said, “No.” This was back in again
11:56 2023. And I came to the same conclusion
11:59 after asking all of these questions and
12:01 originally thinking surely there’s a way
12:03 to improve Bitcoin somehow. Um, I
12:06 ultimately came to the conclusion that
12:07 there is not. And if somebody handed me
12:08 a magic wand literally today and said,
12:12 “You can go back to the very beginning
12:13 and change one thing about Bitcoin,” I
12:16 would literally change absolutely
12:18 nothing about Bitcoin. There is nothing
12:20 you can possibly change about Bitcoin
12:22 that does not make some other aspect of
12:24 Bitcoin worse. Um, and so it’s basically
12:27 perfect in its original design. And all
12:30 of my research had led has led me to
12:32 believe that any change to Bitcoin would
12:34 make it worse, not better. and therefore
12:36 it’s as perfect as it could be from the
12:38 start which is pretty incredible. So
12:39 anyway, uh is the heart hype cycle
12:42 accurate? Uh the answer is yes, but
12:44 eventually uh it will not be relevant
12:46 anymore. If you want to understand the
12:48 Gartner hype cycle of technology
12:49 adoption, read VJ Buaat’s book, The
12:53 Bullish Case for Bitcoin. That book
12:55 again is the bullish b L I case for
12:60 Bitcoin. Fantastic book. it uh it
13:02 explains how technologies are adopted,
13:05 why Bitcoin’s price does what it does,
13:06 and once you understand why the B price
13:10 of Bitcoin behaves the way it does,
13:11 it’ll make you much more comfortable
13:12 with it as an asset class. Um but
13:14 anyway, but over time, the Bitcoin
13:16 havingss have less and less effect with
13:19 each uh having that doesn’t mean there
13:21 will not be hype cycles. It just means
13:23 less and less they will be triggered by
13:26 Bitcoin havingss. Okay. So,
13:29 um what explains the ups and downs of
13:32 the price of Bitcoin? Uh the short take
13:34 is in the near term, it’s uh uh it’s
13:37 basically the same thing. It’s supply
13:38 and demand that affect every other
13:40 asset, which is people one day they
13:42 think Bitcoin’s taking over the world
13:43 tomorrow. The next day they think it’s
13:45 never going to happen. Everybody’s
13:46 speculating all the time. Everybody’s
13:48 guessing what everybody else is going to
13:49 do all the time. And everybody is, you
13:52 know, buying or selling Bitcoin based on
13:53 every random bit of news. and it just
13:55 results in a you know short term a lot
13:57 of volatility long-term all of that
13:59 volatility goes away uh as the asset
14:02 gets bigger and bigger and bigger and uh
14:04 but anyway so in the long terms it’s uh
14:07 it’s driven by the Gartner hype cycle
14:09 although again that is diminishing with
14:10 time in the short term it’s just supply
14:12 and demand doing its thing which is just
14:15 that’s what happens with any asset um
14:17 you know it’s the same reason major
14:19 stocks uh the you know magnificent seven
14:21 stocks go up and down on a daily basis
14:23 even when there’s literally nothing in
14:25 the news about them. I mean, it’s just
14:27 they’re just going up and down because
14:29 everybody’s speculating on what might
14:30 happen in the future and all this stuff.
14:32 Um, okay. Next up, we got
14:35 um what about Fed Federal Reserve
14:38 monetary policy? Yes. So, the biggest
14:40 correlary in Bitcoin uh what Bitcoin
14:44 correlates to more than any other thing
14:47 is the Federal Reserve monetary policy.
14:50 How loose or tight is the Federal
14:52 Reserve? basically where are they on the
14:54 spectrum between printing insane amounts
14:57 of money to just printing a little
14:59 amount of money and that goes up and
15:00 down as they’re trying to contain
15:02 inflation which is entirely caused by
15:04 the Federal Reserve printing money. So
15:06 they print money, it creates inflation,
15:08 then they try to rein it in by easing
15:11 off of that. And so uh Bitcoin is
15:13 correlated to global liquidity, meaning
15:17 how much money the central banks are
15:18 printing out of thin air more so than
15:20 anything else. And uh right now the
15:23 central banks are just ending a
15:25 tightening cycle where they are they are
15:27 trying to suck money out of the economy
15:29 by offering people uh high interest
15:31 rates which is one of the ways they do
15:33 it. They offer very high interest rates
15:34 which encourages people to put money in
15:37 certificates of deposit or store it at a
15:38 bank account where they can get uh
15:40 interest and then eventually uh stuff
15:43 starts crashing because everything in
15:45 our economy is built on debt and as
15:48 everything starts crashing they have to
15:50 uh print a bunch more money to keep
15:51 everything from crashing. So um uh Lynn
15:54 Alden and who was it? It was Lynn Alden
15:57 and Natalie Brunell’s husband uh Sam
15:59 Callahan. So I think Lynn Alden and Sam
16:02 Callahan did a comprehensive report on
16:04 how correlated uh Bitcoin’s price is to
16:08 global liquidity and found that
16:10 basically it’s one of the highest
16:11 correlations that Bitcoin has to
16:13 anything is global liquidity. Um so as a
16:17 result of that obviously um you know
16:20 it’s worth paying attention to that and
16:22 right now we’re just getting to the
16:23 point in uh the cycle and of things
16:26 where the Federal Reserve and national
16:30 uh you know uh central banks around the
16:32 world are starting to crank out huge
16:34 amounts of free money out of thin air.
16:37 Um which should correlate again to a
16:39 significant price rise uh with Bitcoin.
16:41 Okay, let’s see next up here. What about
16:45 inflation and being ahead hedge against
16:46 inflation? So Parker Lewis does a really
16:49 good job of explaining there’s a number
16:50 of talks he’s given where he says look
16:53 um Bitcoin is not a hedge against
16:54 inflation. Bitcoin is a solution to
16:57 inflation. And he explains what that
16:58 means. I’m not going to go through all
16:59 of it other than to say
17:02 um sorry other than to say the um the
17:07 price of Bitcoin is much more correlated
17:09 to global liquidity than it is to
17:11 inflation. Inflation is a lagging
17:14 indicator. When the central banks of the
17:16 world, including the Federal Reserve,
17:18 print a ton of money, that later shows
17:20 up in this form of inflation. So, but
17:23 the price of Bitcoin rises as a result
17:26 of printing a huge amount of money. And
17:27 then when the Federal Reserve and other
17:29 central banks clamp down on the printing
17:31 of money, Bitcoin’s price tends to fall.
17:34 But it tends to fall right at the time
17:36 that the inflation that is caused by all
17:38 that money printing is showing up. So
17:41 often times people are like, “But wait,
17:43 we’re getting record high inflation in
17:44 2022 and the price of Bitcoin is
17:46 falling. How can Bitcoin be a hedge
17:48 against inflation if the price of
17:50 Bitcoin is falling? Uh, you know, the
17:52 price of Bitcoin is falling even though
17:54 inflation is rising.” And the answer is
17:55 because Bitcoin’s price was rising when
17:58 the Fed was printing tons of money. And
18:00 then it starts falling when the central
18:02 banks are trying to suck money out of
18:04 the economy, which again sucks money out
18:06 of everything, including Bitcoin,
18:07 because they start offering ridiculously
18:09 high interest rates in order for people
18:11 to take their money out of the economy
18:13 and put it in uh certificates of deposit
18:15 or for the uh uh banks to store their
18:18 money at the central bank and they get
18:20 paid interest to do that. Um so but if
18:23 again if you want more detail uh read
18:25 Parker Lewis’s work on why uh Bitcoin is
18:28 a solution to inflation not a hedge
18:31 against inflation and he explains what
18:33 he means by that uh and all of that
18:35 which again is probably warrants its own
18:36 video but I don’t have time to do that
18:38 right now.
18:39 Okay. Um why is Bitcoin so correlated
18:43 with the NASDAQ and not the NASDAQ stock
18:46 and other tech stock markets? Uh the
18:48 answer is because in the short term
18:50 people think of Bitcoin like a
18:52 technology stock rather than a new form
18:54 of money. At least some of them do. And
18:57 so speculators and tourists who own
19:01 Bitcoin and don’t understand what they
19:02 own and they’re not sure basically they
19:04 trade it like a stock even though it
19:05 makes no sense to do that. But that does
19:07 make the price go up and down. Over
19:09 time, Bitcoin has gotten significantly
19:11 less correlated to the NASDAQ and it’s
19:14 much less correlated now than back when
19:16 I uh wrote this question down. And so
19:19 you right now it it’s you know less
19:22 correlated and in the in the future it
19:24 will probably be inversely correlated
19:26 meaning um when everybody is scared they
19:29 will run to Bitcoin and when they want
19:31 to speculate on crazy stuff they will go
19:33 from Bitcoin into the crazy world of
19:35 speculating on whatever and then as soon
19:37 as they freak out again they’ll run back
19:39 to Bitcoin. But right now the reverse is
19:41 happening where people are still acting
19:43 like Bitcoin is some sort of a
19:44 technology stock and they’re you know
19:46 buying and selling it accordingly at
19:48 least to some degree. Okay, next
19:51 question. What is the upper one
19:54 second? What is the upper price limit
19:56 base money or beyond? Okay, so there’s
19:58 this con uh there’s concept of base
20:00 money which is tracked by uh porkopoulos
20:03 which is a Twitter handle. I forget the
20:06 guy’s name. It’s Matthew something, but
20:07 anyway, it’s porkopoulos. But anyway, he
20:09 tracks worldwide base money and the base
20:12 money, the last I can remember, is 25 or
20:14 $30 trillion. And then there the M2
20:17 money supply is like $120 trillion. Um,
20:20 so since that question, Michael Sailor
20:23 and a lot of people have done a bunch of
20:24 research that basically says, look, the
20:26 market for Bitcoin is not the world’s
20:30 money supply because people don’t use
20:32 the the money in the world the way they
20:34 should. They basically only use money
20:36 for short-term stuff because central
20:39 banks are constantly printing more of
20:40 it. So they store their wealth in things
20:42 like real estate or the S&P 500, the
20:45 stock market, NASDAQ, all that. Um so
20:47 but ultimately uh since then the the the
20:51 better estimates are uh for example the
20:53 research Michael Sailor’s done which he
20:55 uh I forget the website he publishes it
20:57 all on but it estimates sort of a base
20:59 case of Bitcoin at $3 million per coin
21:01 and a more aggressive case at $13
21:04 million per coin and he’s got all of the
21:06 reasons behind that. Uh the easiest case
21:09 to make is Bitcoin as digital gold.
21:11 Gold, all of the gold in the world right
21:12 now is worth about $20 trillion. And all
21:16 of the Bitcoin in the world is only
21:17 worth $1.6 trillion. So whatever that
21:20 is, 13 14x whatever a million divided by
21:24 or 20 billion, you know, 20 trillion
21:26 divided by 1.6 trillion. Anyway,
21:28 whatever that number is, that is uh
21:30 there’s a bunch of, you know, multiples
21:32 of significantly above 10x, something
21:34 like, you know, whatever 13 14x just for
21:37 Bitcoin to get to the size of the gold
21:39 market. And most people believe that’s
21:42 sort of the starting point. So, let’s
21:44 call it $1 million per coin is sort of
21:46 the base case where Bitcoin has reached
21:48 parody with gold. And at that point,
21:50 it’s a discussion of how much better is
21:52 Bitcoin than gold. I would argue
21:53 Bitcoin’s a lot better than gold. Uh but
21:56 how much better, you know, people
21:57 debate. Okay, next
21:59 up, why
22:02 is the depth chart so symmetrical? I’m
22:05 not going to go into that one cuz it’s
22:07 complicated. But if you uh turn on in
22:09 Coinbase Advanced, the depth chart, um
22:12 the sell side and the buy side tend to
22:15 be relatively symmetrical. Meaning the
22:17 number of people that want to sell at
22:19 $1,000 above its current price tends to
22:22 look similar to the number of people
22:23 that want to buy $1,000 below its
22:25 current price. And it just did not seem
22:28 logical to me that that would be very
22:29 symmetrical, but oftentimes it is
22:30 symmetrical. Um I don’t have a good
22:32 answer to that other than um the
22:35 behavior patterns of humans tends to be
22:37 similar whether they’re buying or
22:38 selling and therefore the people who are
22:40 willing to buy or sell at a given price
22:43 uh above or below the current price of
22:44 an asset tends to look relatively simple
22:48 or similar when you graph it out which
22:50 is what a depth chart does.
22:53 Okay.
22:55 Um, okay. So, at the time, um, I had
22:59 about 60%, this is, uh, again, this is
23:02 January or February of 2023. So, about 2
23:05 years ago since it’s well, a little more
23:07 than 2 years ago. I think it was
23:08 February. So, this was uh, yeah, it was
23:10 definitely February. from February of
23:12 2023 to March of 2025, two years, a
23:16 little over two years, uh, Bitcoin has
23:17 gone from either 22,000 or 23,000 uh, at
23:21 the time of this conference up to
23:24 $82,000. So 22,000 to 82,000. Big big
23:28 jump. Um, and my question was at the
23:30 time I had about 60% 60% of my liquid
23:34 net worth in Bitcoin. And my question is
23:36 when should I put the other 40% in? And
23:38 basically everybody was like, well now,
23:40 of course, like why are you even
23:41 thinking about it? But again, you know,
23:43 I was newer to Bitcoin two years ago
23:45 than I am now. And it’s still I was
23:48 still figuring it all out and everything
23:49 like that. So ultimately between that
23:52 conference in February of 2023, uh after
23:55 uh Silicon Valley Bank and uh Silvergate
23:58 and whichever the third one was, the
24:00 three banks that got took over, two of
24:03 them got assassinated. One of them
24:04 actually uh went bankrupt. So, three big
24:07 banks went bankrupt or sorry, one of
24:09 them went bankrupt in March of 2023. The
24:11 other two were assassinated by the
24:13 government in 2023 and ultimately it it
24:16 turned out that they were solvent and
24:17 the government never should have taken
24:18 them over but the government took them
24:20 over anyway because they were banking
24:21 the cryptocurrency industry. And so the
24:24 government at the time, the Biden
24:26 administration did not like the
24:27 cryptocurrency industry. And so because
24:29 those banks were banking crypto
24:31 companies, they assassinated them bas
24:34 basically they p pulled the plug on them
24:35 and forced them into bankruptcy even
24:37 though they had money and were solvent.
24:39 U but anyway after that happened I
24:41 ratcheted up from 60% to 80% because um
24:45 nobody blamed that on Bitcoin. Obviously
24:47 it had nothing to do with Bitcoin but I
24:49 was concerned people would try to pin it
24:50 on Bitcoin anyway. But that did not
24:52 happen which gave me a lot of confidence
24:54 and Bitcoin went up rather than down
24:57 after those three banks uh were either
25:00 bankrupted or forced into bankruptcy and
25:03 that gave me a lot of confidence that
25:05 you know when the financial system
25:06 became unstable people would run to
25:09 Bitcoin not away from it because that’s
25:10 what happened. So I ratcheted up my
25:12 Bitcoin from 60% to 80% uh as a result
25:16 of attending the Satoshi roundt in
25:19 February of 2023 and then subsequently
25:22 watching things unfold with regard to uh
25:24 the banks that uh blew up or were taken
25:27 over in March of 2023. I ratcheted it
25:30 from 60% to 80% and then ultimately
25:33 later I think in you know April or May I
25:35 ratcheted it to like 87% and then I
25:39 ratcheted you know over the next year or
25:41 so up to 97% which I stayed at a while
25:44 and then earlier this year uh in the
25:47 last month or two I ratcheted up to 99%
25:50 of my liquid net worth. So right now I
25:52 have 99% of all of the liquid assets
25:55 that I own or control are invested in
25:58 Bitcoin and the other less than 1% is
26:01 mostly in Tesla uh to give me some
26:03 diversification. If you consider more
26:06 than 99% Bitcoin and less than 1% Tesla
26:08 to be diversification. Um I just want
26:11 something that I’m not going to have
26:12 heartburn if I have to sell it. And even
26:14 though I love Tesla, uh it does not give
26:16 me the same heartburn to sell Tesla
26:18 stock that it would to sell Bitcoin. So
26:20 by having a emergency reserve fund in
26:23 Tesla, even though Tesla is even more
26:25 Tesla has in my opinion higher risk and
26:28 lower upside than Bitcoin, it still does
26:30 not give me the same heartburn to sell
26:32 it uh in an emergency as Bitcoin.
26:35 Although at some point I might just dump
26:36 the Tesla stock and go 100% Bitcoin, but
26:39 right now I’m above 99% Bitcoin. But at
26:41 the time I was at 60% and I was asking
26:44 that question and the best thing I could
26:45 have done is buy as much Bitcoin as I
26:48 possibly could right then. But like
26:50 everyone, I wanted to get comfortable. I
26:51 wanted to give it time. I wanted to do
26:53 more research. And so, um, while I did
26:55 buy a substantial amount of Bitcoin, I
26:57 think the Bitcoin when I went from 60%
26:59 to 80% of my liquid net worth in
27:01 Bitcoin, it was in the mid to high
27:03 20,000s. So, it was a a couple months
27:05 after Satoshi round table, so the price
27:07 had risen from 22 or 23,000 up to like
27:11 26 to 28,000. uh when I dumped in
27:15 another 20% of my liquid net worth. And
27:17 then again, I did the same thing in the
27:20 40,000s, 50,000, 60,000, 70,000s, and
27:23 I’ve even bought Bitcoin above 100,000.
27:26 So, never a bad time to buy Bitcoin. All
27:28 right, so um next up, question 13. It’s
27:32 really 14, but I started at question
27:33 zero, so number 13. Uh what is your seed
27:37 phrase storage advice? split the seed
27:39 phrase or what is the best approach if
27:42 you have multiple hardware wallets etc
27:44 etc uh this was before the invention of
27:46 bit key uh bit key bit ke.world world uh
27:50 solved all of the problems related to
27:52 seed phrases. So the questions that I
27:54 was asking related to Bitcoin storage
27:56 and best practices on seed phrase
27:58 storage and all of that all of the
27:60 questions I was asking related to that
28:02 became obsolete as soon as the Bitkey
28:05 amazing Bitcoin storage device was
28:07 released which solved all of those
28:08 problems without you the user having to
28:11 mess with seed phrases which is a
28:13 miracle and the way they did it is truly
28:15 incredible. So um that that question
28:18 became obsolete. Okay. Question 14. Uh
28:21 at the time the uh the the main storage
28:24 or sorry the the the same the main
28:27 services out there because Bitkey did
28:28 not exist were Casa CSA Unchained
28:32 Capital and Zapo Bank. Uh and I was
28:35 asking questions about those three.
28:36 Ultimately Zapo Bank does not allow or
28:39 did not at the time allow US citizens to
28:40 have an account. So I could not use that
28:42 anyway. And the verdict from everybody
28:44 was Unchained capital is the a good
28:48 solution for cheap, but Casa is the gold
28:50 standard and more expensive. Um, so
28:53 anyway, so that was the what I took away
28:56 from that was for people with lots of
28:57 Bitcoin that need a sophisticated setup,
29:00 a three of five multi- signature setup,
29:03 uh, the best place to get that was Casa
29:05 Cassa. But again, Bit Key uh, solved
29:09 that problem. Okay.
29:12 Uh question let’s
29:15 see 15. Okay 15. What happens when two
29:19 valid transactions both hit the minimool
29:20 at the same time? Uh the answer is every
29:23 Bitcoin node is going to share every
29:24 valid transaction it hears about with
29:26 every other uh Bitcoin node it’s aware
29:28 of and then the Bitcoin miners are going
29:31 to start mining on whichever block they
29:33 hear about first. So if two valid
29:35 transactions that uh you know that uh
29:39 spend the same bitcoin which is called a
29:41 double spend uh for example I if I um if
29:46 I tried to spend the same bitcoin let’s
29:49 say I’m sitting in Thailand and I also
29:52 am spending the same bitcoin in the
29:53 United States. question is what happens
29:55 because the memp pools on the Bitcoin
29:58 nodes in Asia are going to see one
29:60 transaction and the the memp pools on
30:02 the Bitcoin nodes in the United States
30:04 are going to see a different transaction
30:05 and each of those transactions are going
30:07 to try to spend the same bitcoin. The
30:09 answer is only one of those transactions
30:11 is going to get confirmed on the
30:12 blockchain. So every 10 minutes a
30:14 bitcoin block is mined and that is how
30:16 you know the official record of truth in
30:18 the bitcoin network. So if somebody
30:20 tries to uh do a double spend like that
30:24 uh it will get rejected because uh the
30:26 next Bitcoin block to get mined uh will
30:30 only have one of those two transactions
30:31 in it because the the rules of the
30:33 Bitcoin network state obviously that you
30:35 can’t spend the same Bitcoin on two two
30:38 different things simultaneously. So
30:39 that’s why um anytime you spend a lot of
30:41 bitcoin on something, it’s good to wait
30:43 until after it is confirmed in a bitcoin
30:46 block and things like the bitcoin
30:48 lightning network which was much more
30:50 used for spending of like buying a cup
30:52 of coffee. Uh they work in a different
30:54 way that does not require that. But the
30:55 short take is every mempool is going to
30:58 uh take whichever transaction it hears
30:60 about first. There’s something called
31:01 RBF replaced by fee. And so if a uh you
31:05 can escalate if you want a Bitcoin
31:07 transaction, you can uh push through a
31:09 higher fee of a Bitcoin transaction to
31:11 speed it up. Uh but again, none of that
31:13 is really relevant nowadays. Um because
31:16 you know, everybody uses the lightning
31:17 network to pay for stuff, not Bitcoin
31:19 onchain. So super technical. If you want
31:21 more details, let me know. But it’s not
31:23 really relevant, but it was just a wonky
31:25 techy question I had. All right, number
31:28 16. What does the Bitcoin lightning
31:30 network or other payment methods allow?
31:32 Do they allow contactless payments like
31:34 I can do already with my Apple Watch
31:35 with the Coinbased debit card? Uh the
31:37 answer is all of those technologies are
31:39 compatible with contactless payments,
31:41 meaning one day you will be able to pay
31:43 with the lightning network or anything
31:46 else using your contactless payments.
31:49 You know, tapping your phone, tapping
31:50 your watch, whatever. But um a lot of
31:53 that payment technology and the payment
31:55 terminals that would support it are not
31:57 uh there yet. Uh so in the in the mean
32:00 or in the near term I buy everything
32:02 with a Coinbase debit card which uses
32:04 the Visa network. In the future the
32:06 payment terminals and everything will be
32:07 updated to support the Bitcoin lightning
32:09 network and you’ll be able to natively
32:12 uh transact with Bitcoin. Um and you
32:14 won’t have to use the Visa network. But
32:17 uh all of that technology can be used
32:18 with contactless payments. uh it for the
32:21 most part is not yet because it just has
32:23 not been implemented by Google and Apple
32:26 into their contactless payment which
32:27 uses NFC near field communication NFC
32:30 technology. Okay, next up uh question
32:34 is last one here. Question 17. How does
32:39 difficulty being 40 trillion transa how
32:42 does a difficulty adjustment of 40
32:43 trillion translate into a much higher
32:45 hash rate than that on the Bitcoin
32:48 network? Okay, this is a complicated
32:50 one. So, not sure you want the answer to
32:53 this, but so when Bitcoin was set up
32:56 originally, Satoshi Nakamoto chose a
32:59 difficulty adjustment of one. One means
33:03 that a Bitcoin miner will find a valid
33:05 block every uh 4.3 billion tries. Uh so,
33:10 a difficulty adjustment of one means
33:12 every 4.3 billion tries, which is uh two
33:15 to the something power. I guess it’s I
33:18 forget what it is. 2 to the 32nd power,
33:20 maybe something like that. Anyway, it
33:22 it’s it’s the same with the uh it’s the
33:24 same number of bits as the um the check
33:28 sum. Basically, if you mistype a Bitcoin
33:30 address, there is a 1 in4.3 billion
33:33 chance that it’s valid, but you typed it
33:36 wrong, but it’s still valid. It’s uh the
33:38 check sum checks for that. But anyway,
33:39 uh so the same number of bits is the
33:41 same uh for the difficulty adjustment.
33:43 Again, it means you’re going to find a
33:45 Bitcoin block out of one one of out of
33:47 every 4.3 billion tries. So, um, in the
33:51 early days, he determined that with the
33:52 number of people on the Bitcoin network,
33:54 that would be about every 10 minutes.
33:55 And he needed a difficulty adjustment.
33:57 So, the hash rate is, uh, the hash rate
34:01 is how much total computational power is
34:04 being applied to the Bitcoin network. Um
34:06 there is some complicated mathematical
34:08 correlation between the two because when
34:11 you increase the difficulty adjustment
34:13 uh it you obviously have to the hash
34:16 rate let me put it this way the hash
34:18 rate is going to determine the
34:19 difficulty adjustment. So the difficulty
34:20 adjustment goes up and down depending on
34:22 how much hash rate is on the Bitcoin
34:25 network. So the last time I checked uh
34:27 the difficulty adjustment was 112
34:29 trillion. Uh now to again by to to to
34:33 run the math out there uh a difficulty
34:35 adjustment of one means one every 4.3
34:37 billion. So a difficulty adjustment of
34:40 112 trillion means the number of
34:42 computations you have to try before
34:44 mining a block is 112 trillion times 4.3
34:49 billion because each increment of the
34:51 difficulty adjustment represents an
34:53 increase of 4.3 billion additional
34:55 tries. So um at the time I was uh doing
34:59 this or asking this question two years
35:01 ago uh the difficulty adjustment was at
35:04 40 trillion. Now it is more than 2 and
35:07 1/2 times as difficult to mine a Bitcoin
35:09 block as it was 2 years ago because back
35:12 when I wrote this the difficulty
35:14 adjustment of 40 trillion meant you had
35:16 to try 40 trillion times 4.3 billion.
35:19 Now you have to try 112 trillion * 4.3
35:23 billion. So, the difficulty adjustment
35:25 has increased from 40 trillion to 112
35:28 trillion. Uh, that’s what it was 2 weeks
35:30 ago. I didn’t I haven’t looked. It’s up
35:32 or down a little from there, but it’s
35:33 probably in the ballpark of 112
35:35 trillion. But the short take is if you
35:37 want to know how the difficulty
35:39 adjustment translates into the number of
35:42 hashes required to mine a block, it is
35:45 again, I think it’s 2 to the 32nd.
35:48 whichever one lands you close to 4.3
35:50 billion. I think it’s two to the to the
35:52 two, excuse me, two to the 32nd power.
35:55 But anyway, um so you can look up the
35:58 difficulty adjustment and if it’s 112
35:59 trillion, then you know that it is 112
36:02 trillion times harder to mine a Bitcoin
36:04 block than it was when the Bitcoin
36:06 network launched. Um, it also means
36:09 that, you know, on average they’re going
36:11 to have to guess 112 trillion times, 4.3
36:15 billion times before they mine a block,
36:17 which happens about every 10 minutes.
36:19 And uh, anyway, again, there is a
36:21 mathematical, you know, formula between
36:23 the two because the the uh, difficulty
36:25 adjustment is set based on hash rate.
36:28 It’s set based on how uh every 20 2
36:32 sorry every 20 2016 blocks which is
36:36 every two weeks uh 216 * 10 minutes is 2
36:40 weeks. So every 2016 blocks uh the
36:43 Bitcoin network determines how fast or
36:45 slow the Bitcoin miners are mining
36:47 blocks and it adjusts the difficulty
36:49 adjustment to true it up to an average
36:52 of 10 minutes. So obviously that
36:54 difficulty adjustment has adjusted a
36:56 gazillion times in the last 16 years and
36:59 has gone from a difficulty adjustment of
37:01 one literally one to 112 trillion. Um so
37:06 but again there there’s a direct
37:07 mathematical correlation between those
37:09 but I don’t know what that math formula
37:10 is because it’s not it’s sort of an
37:13 indirect mathematical uh relationship.
37:17 All right so that is the last question
37:19 on my list. Um, so what does all this
37:22 mean? Well, what it means is I did an
37:24 insane amount of research, came up with
37:26 every conceivable question I could to
37:28 try to understand how Bitcoin works and
37:30 whether it was a safe place to
37:32 ultimately store 99% of my liquid net
37:35 worth. The only thing else I own is less
37:37 than 1% which is mostly Tesla and the
37:41 remainder is illquid assets meaning not
37:44 liquid assets like my stock in Prosper.
37:47 Uh, but obviously that’s not liquid. I
37:49 can’t buy groceries with illlquid stock
37:51 and that will only become liquid, for
37:53 example, if Prosper goes public on the
37:56 stock market. So, um, what benefit is
37:58 all this to you? I guess it’s that I’ve
38:00 done an absolutely insane amount of due
38:03 diligence to make sure every conceivable
38:06 aspect of Bitcoin is rock solid,
38:08 bulletproof, and the technical
38:11 fundamentals are amazing. And the way
38:13 Bitcoin works is, I mean, just an
38:15 incredible breakthrough for humanity.
38:17 And anyway, I’m just super impressed
38:19 with everything about Bitcoin. So, uh,
38:21 hopefully my due diligence helps you
38:24 have confidence in Bitcoin, even if you
38:25 don’t have time to do the same level of
38:28 due diligence yourself. And I understand
38:30 most people don’t have many thousands of
38:33 hours to study this sort of thing uh,
38:36 the way I do because I love this stuff
38:38 and I basically listen to audio content
38:41 constantly. Um, so anytime I’m not with
38:45 my family or at church or working on
38:47 Prosper, I’ve got headphones in and I am
38:50 listening to podcasts, listening to
38:51 books, uh, or using a texttospech app
38:54 that, uh, reads me news articles, uh,
38:58 PowerPoint presentations, PDFs, you name
39:01 it. Any sort of written content that I
39:03 find can be turned into audio content
39:05 and can be piped into my ears to feed my
39:08 brain. And so hopefully you can benefit
39:11 from all of that. So uh those are my 18
39:15 most burning questions that I had
39:16 walking into Satoshi round table in
39:19 February of 2023 about 2 years ago with
39:22 the price of Bitcoin between 22,000 and
39:24 20 $23,000 per coin. And those were the
39:28 burning questions I had and I came away
39:30 satisfied with the answers and
39:32 ultimately ramped up the amount of
39:35 Bitcoin I uh my net worth in Bitcoin
39:37 from 60% to 80% and since then have
39:40 ramped it up to above 99%. I hope all
39:43 this is helpful. Have a great night
39:45 everyone. Thanks.
