With Bitcoin, you can be self-sovereign over your own coins. With everything else, somebody else can take it away. Hi, Jimmy! Nice to have you here. Thanks for having me. This is a special Baltic Honeybadger edition of our series. My regular first question is usually what we drink, but most of my guests usual drink some alcoholic stuff, so… You’re drinking water. – Yeah. Can you describe, why, what’s the reason behind that? Yeah, good question. Good question. So, I think it was February of 2018. I went to Satoshi roundtable and it was my first time there, and if you don’t know about it, they bring in a lot of people from the Bitcoin industry, and it’s an all-inclusive resort in Cancún, Mexico. So, I’m there and I’ve been pretty good for a few days, right? It’s all-inclusive, so all the alcohol is free, but I just haven’t really drank. I’ve been, you know, eating meat and feeling good and all this other stuff. And I’m there with Max and Stacy (the Keiser Report), and Jameson Lopp, and we’re having dinner. And Stacy says to me: “Jimmy, it’s been four days. I haven’t seen you drink once, okay? We’re in Mexico. We have to have some tequila”. I’m like: “Alright, screw it, I’ll have some tequila”. And Jameson, who’s sitting next to me, just sort of calmly says: “I’ll go shot-for-shot with you”. I’m like: “All right, let’s do it!” And I had no idea at the time how much Jameson can drink, oh my god. So, anyway, Stacy’s egging me on, Max’s there, Jameson’s there, and over the next hour and a half I think I did something like nine shots of tequila. And because I was, like, uninhibited, I also ate four slices of rich dark chocolate cake. So, it was kind of a horrible horrible thing, and of course, I was also, you know, saying kind of stupid things, and some other people had joined us by that time, and among other people it was Amaury Sechet next to me, and he’s the lead developer for Bitcoin Cash. And I said something really stupid, which was: “Did you guys know that Persians used to debate everything twice, once while sober and once while drunk?”. And of course, Max without skipping a beat goes: “Oh, we have to have a debate then, you guys are drunk right now. Let’s do it, you and Amaury are going to talk about Bitcoin vs Bitcoin Cash” So I’m like: “Yeah, but it’s not fair, he hasn’t drank that much”. So we made him do three shots of tequila and we did a drunken debate which Max recorded on Periscope and posted for all the world to see how idiotic I looked as a drunk person. So anyway, that happened, the next day I fly home and I’m just feeling absolutely awful. And I’ve been on a keto-paleo diet for a while, so, if you do that, alcohol affects you a lot more. So, I got home and I just slept. And I have a family, including six kids and everything. So, I’m sleeping and I still feel awful the next day, and I just don’t want to get out of bed. And then the next day I’m still feeling awful, and I’m still trying to recover, my wife comes in. She’s like, “can I get my husband back? What happened? Like, how did you party that you’re this wasted?” So, around the second day I was just kind of like “yeah, you know, I think I’m just gonna have to stop drinking”. That was so awful, and I felt awful not just for two days, I ended up feeling really awful for four days. Yeah, so I just like… keto, paleo, you know, carnivory – that type of diet along with alcohol, they just don’t mix very well. And it’s just too much, yeah. Can you tell me a bit more? I know that you are carnivore, and not many people even within the Bitcoin itself, or especially who are not familiar with the culture, knows this aspect of the Bitcoin culture. Because, you know, most of the people think that Bitcoin maximalists are about Bitcoin, meat and guns. I will speak about the guns with Jameson, most probably, because he will be here. But I would like to speak about meat with you. You are doing the carnivore stuff, yeah? What’s the reason behind that? Yeah, so there is that, sort of, common culture between Bitcoiners and carnivory people, and there’s definitely a lot of crossover. But I would say that the first thing you do when you learn about Bitcoin is you start questioning money, like how does fiat money actually work, and then you find out and you’re like: “Oh my god, this is a complete scam, like all these people are taking advantage of the power of the printing press to enrich themselves and get them all this other stuff”. So you start questioning other stuff, and you know, one of the big things in life is just food and how you eat, and everything like that. And you start studying food, and at least for me – I realized a lot of the same things apply. We’ve been lied to a lot, there’s a lot of profit to be made by a lot of corporations, and basically we’re the ones that are being taken advantage of. So, my path to carnivory took some time, but believe it or not, I was a vegetarian for 20 years. – Oh! Somewhere around sophomore year of high school, all the way to, I think, it was like late 2012, I was a vegetarian or pescetarian for some moment at that time – I mean, I went back and forth between those two. But that’s what I was for a very long time, and I had been convinced back in high school: hey, you know, eating animals is probably pretty bad for you, based on the studies at the time, it was based on cholesterol and all this other stuff. So, when I finally got into Bitcoin in 2011, I started getting a little more curious because I had sort of stopped thinking about the vegetarianism. And 2012 especially, I met some people that were on the paleo diet, and I was like: “Okay, well, tell me why”. And they gave their logic, talking about all this processed food, especially with respect to refined sugars, refined flour, preservatives and all these chemicals that go into it, and I was like: you know, I think they got something there. So I started studying it and I realized, “I think I cut out the wrong thing”. I cut out meat, but really what I should have been cutting out was refined sugar, flour and all this other stuff. So, January 1st, 2013, I still remember, I had moved to Texas about four months earlier. I was telling my wife: “You know what, let’s start a new year with a resolution or something like that. Let’s start eating meat again, but let’s cut out the wrong stuff, like refined sugar, refined flour, processed food, etc.” And she was like: “Yeah, let’s try it”. So, I still remember: midnight, we toasted each other with beef jerky or something. That’s the first beef I ate in many years. So that’s how I got into the paleo diet, being convinced of the evils of refined flour and all this other stuff. Now, I did that for a few years and I felt fantastic, I started doing powerlifting and I felt great, my body was changing, the composition was changing. I looked better, I stood better, like just all that stuff that you get from taking care of yourself. And as I got more into it, I realized fruit is… And this is in Nassim Taleb’s book, I think, “Antifragile” or one of those other books, but one of the things that he argues in that book is you should you treat apples and oranges and stuff with some suspicion, and his argument was “they were bred to be supersweet”, and I was like “huh”. Well, I looked into it a little bit more, and this is absolutely true. So you look at an apple in the wild, and it’s like this big. Apple in the grocery store, It’s like this big. The seed sizes on both are exactly the same. What the hell happened, right? They are called crabapples, actually, in the wild, but that’s what it… It was fun. So, I looked into it and it turns out farming has only been a human thing for about ten thousand years. And over those ten thousand years what farmers were able to do is take an apple just as big and slowly grow it so it’s like… I mean, in 20 years there probably will be this big or something. But they’re like this big, and it’s mostly fleshy sugar, right? It’s fructose. And every, every fruit basically has the same history, right? Like, in Spain they grew oranges to be sweeter and sweeter and sweeter. And then they spread that out. With bananas, if you look at a banana in the wild, they got all sorts of seeds and stuff. The current strain of banana doesn’t even have seeds. What they do is they saw off or they take off a branch of existing banana trees planted in the ground so it’s cloned, so it’s complete genetic modification. Like, those bananas would never grow in the wild because they don’t have any seeds. So, there’s all sorts of stuff like that, where they’re just constantly bred to be sweeter and sweeter and sweeter. So you can kind of think of them as like Monsanto of yesteryear. They’re just constantly modifying stuff. So I started cutting out food as a result of that, and you know, I’m not gonna say this is the path that everyone’s taking, but this was my path, and when you cut out fruit from a paleo diet, what you end up with is essentially a keto diet, which is meat, vegetables, dairy, eggs, something like that. And then I started studying some vegetables some more, because I was reading some stuff about some carnivores online, about how there’s some chemicals in spinach that if you eat too much of it, it’s actually kind of poisonous. Other vegetables, talking about fiber in particular, human digestive systems can’t handle fiber. This is what goes straight through you. You know, it’s not very… your body doesn’t know what to do with it, so it just gets rid of it. In order to digest fiber and make it into energy you more or less have to be a cow, and cows have four stomachs and they chew for 18 hours a day, and that’s a significant amount of processing that you need to do in order to turn fiber into energy. Now, of course, we’re humans, we only have one stomach and we barely even chew compared to cow. So, you know, fiber is not necessarily something that you need. So really, the arguments for fruit actually apply also to vegetables, a lot of vegetables are actually like bred to be sweeter and bigger and so on. And sometimes for really odd reasons they change… I didn’t know this until I started studying some of it, but carrots in the wild are white, yellow and purple. Those are the only colors that they come in the wild. They’re orange in the grocery store, so what happened? Turns out that Dutch people made them orange back in the 17th, or whenever William of Orange lived to honor William of Orange. You could go look this up, it’s really there, carrots are orange because of the Dutch! So there are Dutch to blame. Yeah. Something about this doesn’t make sense, and you know, if you look at the history of farming and all the arguments for vegetables and all this stuff, it turns out a lot of that is made by the food companies, all of these advertisements and regulations and USDA food pyramid and everything else. They’re the ones that put all of the recommendations out there so that they can make more profit. And you look at people around the world, even like 20 years ago, when I was in Europe, I studied in Budapest for a semester in senior year. I remember thinking: wow, everyone’s just so skinny compared to the US. I’ve come back 20 years later and I’m like: you know, they look about the same. What happened? What happened? Well, it’s that Western food, especially processed food, sugars, all this stuff. It’s all of the stuff that these food companies have essentially propagated throughout the world. They’ve made people sicker, right, and the human body… Well, I’m not sure if this is true, but there’s some good reason to believe that the human body, when it’s being fed poison, stores it in the form of fat because the fat can contain a lot of the toxicity. So, in many ways the problems that we see in society today with people just being massively overweight and not being able to almost even function. It has to do a lot with food. So, in a sense carnivory isn’t about “oh, we just so love meat, that’s all we’re gonna eat”, it’s just cutting out everything else, and what are you left with? Well – meat, eggs, dairy. Yeah, that’s about it, so that’s what I eat. How did you get into Bitcoin, what was that? So, January 2011, I read a story on a techie website called Slashdot, it’s kind of a news website for people like me. Yeah, I’m a programmer, I don’t know if your viewers know, but I’ve been a programmer since I came out of college in 1998, so… What were you doing before joining the Bitcoin? Just working at all sorts of startups. I had been a startup guy for… I was a startup guy for something like 15 years before Bitcoin, and I was at one of these startups when I was reading Slashdot, so reading through all the stories and… yeah, I generally know something about each story. This one story that was on there: Bitcoin has broken one dollar. And I was like: what does that actually mean… I couldn’t even parse it. I was like, how do you break a dollar? Like, is it a change machine? What is that? So, I looked into it and almost immediately I was like, oh my goodness. It’s a digital currency and there’s only 21 million. I didn’t know how any of it worked, but as soon as I heard there’s only 21 million, I was like: okay, if I don’t get some early, then I’m probably gonna regret it if there’s even a little bit of a chance that it becomes popular. So, I went home that night, I was talking to my wife about it and I was telling her about this, and I’m like: “Maybe I should put some money into it”. And she was like: “I don’t know, it sounds a little scammy”, but I was like: “Okay, but just a little bit”. She’s like: “Okay, fine, whatever”, and I looked into buying it, and oh my goodness, it was so difficult to buy like that. So, at the time, the only place you could really buy it or the only place I could find it was on Mt.Gox, and in order to get US dollars into Mt.Gox you have to transfer to this second company called Dwolla, and it took a while for them to verify your bank account and everything else. So, once you verified the bank account, then you could do an ACH transfer over to Dwolla, and then once it’s on Dwolla, then you can link it to your Mt.Gox account, and then at that point you can transfer money over. So I was like: okay, well, that’s too much work. I’m not gonna do it. Probably one of the biggest regrets of my life, I could have bought it at like a $1. Later that year I did finally buy some because there was a pump all the way to $30. I was like: oh, man… I was totally full of moaning. But eventually I bought some, and that’s how I got into Bitcoin. A couple of years later, 2013 comes around, where, you know, going up again, and I decided to buy some more. And that’s when I really got into it as a programmer. And part of it was because some of my friends were telling me in mid-2013: “Hey, there’s some shady stuff going on Mt.Gox, you should really take out any coins you have on there”. Very grateful to that friend, because I did take it out of there. You were one of the luckiest persons. Yeah. That whole summer everyone was saying: something’s wrong with Mt.Gox. And they’ve stopped, basically, fiat withdrawals, so get your money out of there, because that… Even at that point there were so many exchanges that had been hacked, so it was like: “Just be very careful, just, you know, take it out”. And I needed a wallet, and of course, I downloaded Armory. And that’s, of course, where I ended up working. But I was like: “Why is this not working?” So, I was getting very frustrated with Armory at that point, actually. But that’s where I withdrew all my money, into an Armory wallet, and I was like… well, I was frustrated at that time. So I was like: okay, I need to put my development skills to something in Bitcoin. I think it was around October of 2013 when I first started contributing, and it was off of a post on Jobs4Bitcoins subreddit, it was like /r/Bitcoin and then /r/Jobs4Bitcoins. And there was a post that said “Python developer wanted”. I was like: okay, I’m a Python developer. All right, let’s see what I can do. It turned out to be a guy out of the Ukraine. He’s like: “I have this open-source project based on Bitcoin, and I would like developers, I’m willing to pay you in Bitcoin”. I was like: alright, I’ll do that, would love to earn Bitcoin! So, I wrote him back. The guy’s still around actually, Alex Mizrahi. He basically told me about the project and he said: okay, here’s… I believe my first one was “Here are some RPC calls, I would like to implement it in Colored Coins, can you do it?” I’m like, okay. I’m familiar with RPC, I can go look up the spec. I coded for a few hours, sent them back a pull request and he was like: “Okay, this is great! Alright, can you do this one?” I’m like: “Alright, yeah”, I just kept doing it, it kept going. At that point, I think he had like eight people respond to his addon jobs for a Bitcoin. But I kept asking for more work and he was happy to take it, and I was writing unit tests, you know, just doing good development stuff. And he was like: “Yeah, that’s great, just keep doing it, I’ll keep paying it”. And October 2013 was, you know, we were skyrocketing. So I was just so pumped that I was getting paid quite so. So I would work 40 hours during the day, and I would be working 40 hours during the evening, just working on those Colored Coins project, and I just kept doing it. And I learned so much stuff. He’s like: “Hey, can you make a wallet? That’s this new spec called HD wallet”. I’m like: “Okay, I don’t know what that is”. “Here’s the spec, just go implement”, and I was like, okay. I read through the spec, implemented various parts of it, but I was super motivated, so I just kept doing. And at some point something had to give, because you can’t work 80 hours a week and have kids, and do anything productive. So I ended up quitting my job and going into Bitcoin full-time, pretty much. And contributing to other open-source projects, I eventually ended up at Armory, the first wallet that I downloaded, I was a VP of engineering there. I went to another Bitcoin company, Paxos, which you might know better as itBit. – Yeah. Yeah, it’s been kind of a crazy journey, the last six years have been pretty crazy. Yeah. You went to the Bitcoin and you never tried anything else? No altcoins, no shitcoins, nothing like this? Alright, let’s have a little confession here. I did buy some Litecoin and Namecoin back in 2013. And I think… I don’t know how many people know, but back in 2013 Colored Coins was a pretty big thing. And when we were working on that, we asked the Colored Coins community: “Hey, let’s have somebody write a white paper describing what Colored Coins is”. And there was this young kid that was a pretty good writer. Decided to, you know, have him do it, and he came back with a white paper, we looked at the white paper and it was nothing like what we had implemented, there were different trade-offs and things like that. So we’re like: “Okay, can we fix this? It’s not what was implemented, blah blah blah”. He’s like: “No, I think that’s the way it should be”. We’re like: “Okay, what the hell?” And we’re like: “Okay, well, if you’re refusing, then we’re gonna have to part ways or something like that”. “Yeah, it’s fine. I have my own ideas for my own coin anyway”. So that guy left, three months later he launched his own coin, that coin, of course, was Ethereum, and the young kid that wrote the white paper was Vitalik Buterin. So he was part of the Colored Coins way back before. So, when I heard about Ethereum, I knew almost right away, like, there was no way this was gonna work. Because he wanted it to be Turing complete, and it’s like just way more complicated. And I knew how complicated Bitcoin was and how hard it was to secure. So I was like: okay, this is at least an order of magnitude more complicated. And that means at least an order of magnitude more of a security attack surface. And I know how hard it is to secure Bitcoin. How the hell is he going to secure something that complicated? So I refused to put any… I mean, I could have bought 2,000 Ethereum per Bitcoin or something like that when Bitcoin was like $600, but I refused to put any money in because I was like, I don’t believe in this project at all. And you know, at some points in-between, when Ethereum was like a $1000 or something like that, there was some regret. It’s like: oh man, I’m such a dummy, why hadn’t I just put even one Bitcoin in. And then I was thinking: I have never believed in the project, and once it doubled my money or something like that, I probably would have sold, because I didn’t believe in it. And this is the thing about holding that a lot of people don’t understand, is that you really have to believe in order to hold something. And that gets very very difficult. I mean, through Bitcoin’s history, I think… I’ve been holding since 2011. There were times where it’s like: man, it’s tempting to sell, and other times like: man, it sucks to be selling right now. But holding is very hard. So, regardless, I never believed in Ethereum, but I did buy a little bit of Litecoin and Namecoin back in 2013. I did end up selling some of those, I think I converted some Litecoin to Decred at one point, and then I sold the Decred or whatever. And of course, I got a bunch of free stuff from the Bitcoin Cash and Bitcoin Diamond and Bitcoin Gold and Bitcoin Clean and Super Bitcoin and Bitcoin Interest and all these other coins that I sold. But yeah, those are all very…. I mean, those I kind of got in airdrops and stuff. So, I think I had at one point like 30,000 Ripple, because they were giving them away for… on Bitcointalk, if you had an account before. And right away, somebody was offering like half a Bitcoin – “Done, I’ll take it, I’ll take!” Yeah, it’s like, I’ll take that half a Bitcoin any day of the week because this project just sounds incredibly stupid. So yeah, that’s the extent to which I guess I’ve played with them. So, do you actually believe that there’s a future for this multicurrency universe in crypto, or there will be only one Bitcoin? I mean, I try to be careful when predicting things about the future. I think Bitcoin is the only decentralized digitally scarce asset that exists right now. Everything else has some centralized point of failure, and that means that with Bitcoin you can be self-sovereign over your own coins. With everything else, somebody else can take it away. That’s a giant difference, and that’s the big difference between gold and fiat money. If you have the bar of gold, that’s yours, right? No one can really take it away from you. Though they could pass laws, you can at least bury it or something. With Bitcoin, it’s on that same level, and it’s that fundamental difference. And every other altcoin has some single point of failure, sometimes many many single points of failure, like in the case of Ethereum. But that’s the big difference. Now, is there room for something that’s centralized that might take some of the concepts of cryptocurrency and maybe come up with something useful sometime? Maybe, I haven’t seen one, but maybe. I know that Bitcoin is useful and I get to be self sovereign. None of this other stuff really has that. So, for me, you go with the proven use case and not all this other crap. Is it possible? Yeah, it’s probably possible, but I haven’t seen anything that’s compelling in any way, shape or form. Can you say that you’re a Bitcoin maximalist? Oh, absolutely, yeah. But again, that’s more of a description of reality than a political party or something like that. I think that’s the mistake that a lot of people make: “Oh, you’re just like a Bitcoin maximalist!”, as if it’s like a slur, you know, “you just want Bitcoin to win”, as if it’s like Liverpool vs Manchester City or something like that, right? It’s not about cheering on your team, it’s just about how money works. If you think about money, it has a network effect. And right now the Schelling point is Bitcoin. And Bitcoin is where everything’s gathered together. It’s the one that’s actually decentralized, digital and scarce. Everything else is just trying to print your own money or doing something else and trying to convince people. It’s why so many altcoins spent so much money on marketing. And despite my differences with Vitalik, the one thing I have to give him credit for is that he knew how to market Ethereum. And that was his brilliance. You know, he marketed it as a platform for ICOs, as a platform for printing your own money. So, a lot of these other places… even Charlie Lee, right? It’s hilarious. There’s a blog post that I read a while back about a presentation that he gave. You know, Litecoin was created in 2011, but it was based off… before Litecoin came, there was a coin called Tenebrix, which most people probably have never heard about. But it was, I think, one of the first altcoins. So, Namecoin launched, and then ten days later something called Tenebrix launched. And Tenebrix was basically Bitcoin, except they had script as the algorithm and they shortened the block time to five minutes instead of ten. So the thing about Tenebrix though was that the creator decided to premine a ton of coins, and everybody… Literally premined, he ran his CPU and then didn’t release the code until he had mine like ten thousand blocks or something like that. So he released that code, and almost immediately everyone in the community was like: “What the hell, man, this is completely unfair”. And if you look at Charlie’s github, there’s a repo called Fairbrix, and Fairbrix was basically… he took out the premined Tenebrix, and he’s like, I gotta launch Fairbrix! Of course that didn’t really go anywhere. But he realized almost right there: “Okay, this isn’t popular because I’m not marketing it properly”. So he changed the block time to 2.5 minutes from 5 minutes and he gave it a catchy name “Litecoin”, and he gave it a catchy slogan: “Silver to Bitcoin’s gold”. And to this day he credits having a catchy slogan and a good logo and a nice name as the reason why Litecoin was successful. That and being fair. He watched it and there were so many altcoins around that time, because they realized: “Well, I could make some money off of this thing”. And, you know, there was other stuff called like iXcoin and many other things. But in a sense Litecoin won because it was marketed properly, and this is the case for every altcoin and ICO. It’s all about marketing. It’s not about the actual technical or monetary properties, I mean, those are always arguments that are made, but it’s all about marketing and it always has been. For Bitcoin though, it almost had an immaculate birth. In the sense that it’s actually decentralized, whereas all of these things are not. So, in a sense Bitcoin maximalism is recognizing that reality that Bitcoin is very different than everything else and that it has a network effect, it has a Schelling point that everyone else is coming towards, and it has a purity, if you will, that the others don’t. So, I am being a Bitcoin maximalist, I think is the rational thing. But it isn’t about cheering for a political party, there’s “Ethereum!” – “Bitcoin!” – “Ethereum!” – “Bitcoin!” It’s not like that at all. It’s just Bitcoin… this is the mistake, by the way, that a lot of companies make, like they try to “stay neutral” and offer everything. That’s the wrong, I think, analogy there. They think they’re like sports broadcasters on a level playing field, and all these teams are like playing against each other or something. It’s not like that at all. It’s, you know, Bitcoin is the one that was there first, it’s something that should be there. All these pretenders to the throne are acting as if they’re on the same playing field, when they’re not. And that’s the reality that a Bitcoin maximalists or how Bitcoin maximalists see it. So, maximalism is more about rationality and logic, simple logic behind the project, not like, as you said, you’re cheering for your own team and trying to be enemy with anyone. Yeah, to be fair, that’s how all the other altcoiners see themselves. As “oh, you know, we’re gonna cheer for Dash, or we’re gonna cheer for Monero, we’re gonna cheer for…” god knows what, right, XRP? I don’t know, I don’t actually know anyone that cheers for XRP. I’m pretty sure there are bots on the internet. But anyway, regardless, it’s not about cheering for your team, people act like it’s a sports team or something like that, or a political party or something to that effect. It never was. It’s kind of like, the hardest money is just simply going to win, and Bitcoin is the hardest money. And that’s an economics thing that you have to recognize once you study money and economics and all those things. And that’s what Bitcoin maximalism is, it’s a set of corollaries from fundamental assumptions based on like studying economics and money. I mean, I’m totally open to being wrong about some of the assumptions that are made about economics, but that’s not the argument that a lot of these altcoins are making, almost always the argument is “we’re better because of this feature” or something like that, and that’s not what money is, it’s not a technology, it’s money and it’s better if it doesn’t change, it’s better if it’s stable, and there’s a fixed supply and everything else, and we’re seeing that. Actually, I was surprised… last year I was in Prague in Hackers Congress and you were giving a speech, and I was thinking: Jimmy, he’s a coder, programmer, most probably will be like tech speech, something like that. And then I came to your speech – honestly, during the last year it was the only presentation that I listened, and you were talking about some social, economical stuff, that actually Bitcoin can help fight poverty all over the world and it’s actually a shift of the wealth, a proper distribution of the wealth. Yeah. Can you say a bit more about these views, about social, economical things? Yeah. So, that speech in Hacker Congress, I think was “Bitcoin the ultimate social justice”, right? And I was trying to rile up people a little bit and reclaim the mantle of social justice, because right now around the world social justice means something completely different. It’s like “oh, you can’t say this” or “you can’t say that” or “you have to make sure that these people get this money” or whatever, and really, justice is about fairness, and Bitcoin is ultimately the fairest thing you can have. Because when you have somebody printing money, well, it’s completely unfair, and they get to enrich whoever’s around and their cronies and things like that. So, the social aspect is what really drives my desire to see Bitcoin adopted in the world, because it is fair, and this is something that I talked about yesterday in my speech. But essentially, Bitcoin is a lot better than the current system that we have today, and ultimately that boils down to: well, the people that print the money get to benefit themselves and their cronies. And this is why rich people stay rich, the poor people stay poor and so on. A lot of that is covered in our new book, just let me show this for a second, “The Little Bitcoin” book, and it’s essentially a book talking about Bitcoin from a social perspective. And, you know, we spend the whole first chapter talking about what the heck is wrong with money – there’s a lot of things wrong with money. And then we talk about Bitcoin, and how it fixes things, and why it has value, and what it matters for. Sort of taking power back from the people that wield the power of the printing press on money. It really has some profound implications, and we’re seeing that in the world right now. There’s about 10% of Venezuelan citizens that have escaped the Maduro regime, and before, when you had hyperinflation in an economy, most people wouldn’t leave, because despite the hyperinflation they would still have some wealth stored in their house or the car or goods. And the regimes that usually had that stuff, they make it very difficult for you to transfer that wealth out. If you convert it to dollars and go to the border, well, they’re just going to take the money. If you convert it to gold and go to the border, they’ll again take something. But the big thing that Bitcoin allows is it’s not physical, it’s not a physical commodity, it’s something that you can store even in your brain. So what a lot of Venezuelans have done is they’ve sold everything, converted it to Bitcoin, crossed the border into Colombia for the large part, and then they sell their Bitcoin to live and so on. And it’s interesting to note that there’s actually a discount in Colombia for Bitcoin right now. For that reason, because there’s just so many sellers. Argentina right now, there’s a lot of people that are using it as a way to store value, and… it’s interesting, because a lot of the power of a central bank needs to be supplemented with something like capital controls in order to keep pegged to a particular currency and so on. But that power is going away, the power of being able to restrict capital flows, makes it such that essentially central banks don’t have as many tools as they want to have, and that means power is being taken by the people instead. And that’s a wonderful thing, because central banks right now have way too much power, and the power of money being in the hands of the state is just absolutely horrible and has been for almost everyone. It’s crazy that hyperinflation is essentially like a 20th century phenomenon. Before that, it was just: okay, government went bankrupt, they have to charge more in taxes, in which case you’d have some sort of revolution usually, or they have to restrict their budget, or get out of wars that they’re in, or something like that. But because of the power of money printing all sorts of evil has been unleashed in the world, including two devastating world wars, that absolutely destroyed just so much value and so on. When you actually decided to educate people, coders about Bitcoin? So, that was back in mid-2017. I had some material from the previous two or three jobs, where people didn’t know that much about Bitcoin, and I knew how frustrating it was to try to learn about Bitcoin if you didn’t really know anything about it, so I started teaching people: here’s how elliptic curves work, and here’s everything else, because usually that’s the stuff that gets them stuck. And I had taught it like three times at Paxos, there were that many people that didn’t know about Bitcoin that needed to learn that, and they felt that it was just so useful. “Okay, we have to do this again”, every time there was a new group of engineers, it’s like: “Jimmy, just teach them”. So I’m like, all right. I had done that before so I had all the material, and I suspected that there would be other people that would want to learn. And at the time I was working at Paxos, took me about a month of, like, just getting up the gumption to quit and just try this. And I prepped by selling some of my bitcoins, so I had a long enough runway should this completely go south, like, I couldn’t find another job – my family is good for at least a year or something like that. So, that was the plan, and I was like: okay, well, let’s see if it works. In a way, I was also contributing to Core at the time. And I was thinking: well, you know, I got like 15 commits under my name, that’s pretty good. If I do that for a whole year, maybe I could do like a hundred commits, in a year or something like that if I worked really hard and tried to figure out all that. Or I could teach people how to do the same thing. You also recently made some investments in Bitcoin companies or in crypto companies. How do you choose companies that you’re willing to invest in, what’s the investment decision behind that? I mean, I just approach it based on the competency I have, which is looking at code and things like that. So, one of the first things I did when Rain approached me was: “Can I look at your code?” So they shared with me their github repository for a few days, I looked at it, I was like – that’s a pretty good code. I know Go lang, it looks pretty solid, it’s well commented, they knew what they were doing. I was like: okay, well. I know exchanges make money, and they had good code. So I was like, okay, let’s put in a little bit of money and see what happens. That’s what I did with them. The other company that I advise is LVL, and they have a completely different business model. I was like: okay, I want this to success, I really want this to exist. So, I’ve been advising them, Willy Woo is also advising them. Essentially their premise is: okay, instead of taking a cut of every transaction, essentially, on their platform, it’s just doing a fixed price and do as many as you want. And the model can definitely work, you can definitely make enough money, because they’re at least an order of magnitude simpler than something like Netflix, and Netflix charges like $9 a month or whatever, and they make plenty of money, you just need scale. So, for the next bull run my thesis on this one, at least, is that you’re gonna get a lot more people. And fixed fee is going to be much more attractive, especially for the sake of dollar cost averaging and things like that. And, you know, they have a great vision, they want to also allow something like checking account, so you can freely move money between dollars and Bitcoin and so on and back and forth. And they’ll have a debit card, so you can just go pay for stuff. So, right now for a lot of people there’s like two separate worlds that you have to bridge, where you have a bank account with all your fiat money, and then maybe an exchange account or your own wallet or something like that, where you keep everything else. And going back and forth is a lot of mental costs and stuff like that. If you can constantly balance stuff sort of on an automatic basis, I think that’s the new world that we’re going to be in, at least for a while and until fiat goes away. And it’s a lot fairer, because you can run automated and market making algorithms and stuff, you don’t have to be a whale to be a market maker and stuff like that. So, I think that’s the direction that I wanted to go in, because you’re taking the power away from the really rich who continue to make money because of market making opportunities and things of that nature, and put it into the hands of the people. Yeah, this is part of the Bitcoin ethic and I want this company to exist. I think it makes economic sense, I think it’s better for customers. So, for me this one was much more of a passion play. Like, I believe in the product, but I also believe in where they want to go and I really want to push them or help them out as much as I can to go in that direction. So yeah, that’s I guess my investment thesis and those are the kinds of companies that I want to invest in. And not… you know, I’ve been inundated over the years with people that want to pay me to be on their board for ICOs or something like that, I’ve been offered like millions of dollars to endorse something… I’m like: not interested, guys. It’s completely against my ethics. And I tell people, like, if you become more prominent in the space, there’s gonna be many temptations to sell your soul. You can’t sell that more than once, your reputation is completely ruined afterwards. So, first of all, don’t sell your soul, but if you are going to sell your soul, make sure you’re gonna make out like a bandit for the rest of your life. Because 30 years from now, it’s still gonna hang over your head. Yeah, about exchanges, if we touched that subject: many of them are doing KYC/AML, which is like completely separate thing and contrary to what Bitcoin is about. And many of them, of course, are not so good in terms of security, because they’re centrally storing all the funds, and the mantra “not your keys – not your bitcoin” doesn’t work in that sense. So, what’s your view on that as well? Yeah, so, depends on the segment. Like, if I give my mom a Trezor or something, I’m gonna have to give her like two days of lessons before she figures out how to do everything. It’s not for everyone, storing your own keys. I mean, many of us end up being banks for our families. I jokingly call it the “Bank of Song” or something, where I’m storing bitcoins for a lot of my relatives and stuff. But not everyone has that. So, storing it on an exchange sucks, but… I mean, there aren’t better solutions, and a lot of exchanges are a lot better at storing stuff. The only thing you have to be careful about is if they’re solvent or not. And there may be solutions forthcoming with respect to that, but it’s hard to know what their liabilities are and stuff like that, so you do have to be careful. But I think there is something to be said about the utility of exchanges. Now AML/KYC, I hate that. I hate that, and this is part of the government’s way of trying to take back some of the power through AML/KYC laws. I mean, it’s something that they grab by controlling the flow of money and saying certain transactions are not allowed and so on. But I think this is one of the things that you just kind of have to play by if you want to be legit… under the current system. Hopefully it goes away. I’m not sure how it goes away, but the tentacles that the government has, it’s just kind of ridiculous at this point. As Bitcoin becomes more prominent, hopefully they start realizing: okay, we can’t enforce this stuff and people are gonna screw our laws anyway, so maybe they step back and say: “Okay, you can do what you want to do”. It’s hard to say, I would love a decentralized version, maybe it comes, but as long as we have fiat it’s centralized anyway, so… you kind of have to play by those rules, just because it’s fiat money. You’re not going to be able to deposit with a stack of cash to an exchange anytime soon. So, on the Bitcoin side… you’re just gonna want to store coins anyway, but exchanges are for that transition between Bitcoin and fiat, so it’s centralized anyway, they already have your fiat information, so you kind of need to have that as part of it, at least while fiat is part of it. But once we break off that link, and Bitcoin becomes the prominent thing, then all those AML/KYC laws kind of go away on their own. Great. So, some final questions. That’s the question that I wanted to ask you since the beginning I saw you first time in real life. What about the cowboy hat? Alright, so I have three reasons for wearing this cowboy hat. So, first of all, I’m from Texas, I moved there seven years ago, but it’s definitely my adopted state and home for me. And once I got to Texas, I started wearing cowboy boots. The great thing about cowboy boots, especially for men, is that it goes with almost everything. Like, you can wear it with a suit, you can wear it with jeans like I am now, semi-formal, formal, whatever. You can wear cowboy boots to everything, and that’s awesome. As a guy you don’t want like 80 pairs of shoes like my wife has… she doesn’t have 80 pairs of shoes, but you know what I mean. You don’t want that many pairs of shoes, you want like a few. And to top it off, they’re really comfortable, I love boots! And they last forever. You know, a lot of people own cowboy boots for like 20 years or something like that. That’s impressive. Yeah. So, I love cowboy boots. And when I would go to conferences, Bitcoin conferences and stuff, they would ask me: “Hey, so where are you from?” And I’m like, “Texas! Texas!” And at one point I was like, you know, maybe if I did something a little more Texany, then I would get more recognized as being from Texas. So, let’s try this hat. It was about a couple years ago. I think the first time I wore this hat was to Consensus: Invest, and I didn’t even have a ticket. And there’s a video of me, Pete Rizzo was the editor-in-chief at CoinDesk interviewing me, and he’s just making fun of me about the hat over and over again throughout that all interview. I was like: I can handle this, I kind of like it and it’s fun. So, first reason is because of the whole Texas thing. And I’ve added the belt now, it’s got a little bit of an Asian flavor, it’s a dragon here. Got the hat, got the boots… part of it is because I’m from Texas. But more than that, I liken the entire cryptocurrency space to the Wild West. It’s got a lot of danger but also a lot of opportunity. And there’s been a lot of danger, like people getting scammed all over the place with altcoins and so on, or exchanges and everything else. But you know what you’re doing – you can make a lot of money. And that’s what the hat represents to me with regard to this space. But even more than that, the third reason is because I love the 19th century era, the era of the cowboy, and I almost feel like I was born in the wrong era. Like, that era to me was all about freedom, the government leaving you alone and everything else. And if you think about where the US was at the beginning of the century and where they ended up at the end of the century, it went from backwater British colony to a world superpower in a hundred years, and it did that largely on the backs of a lot of cowboys, the people that were going out west and that whole ethic. And I love that sort of ethic that they had, which was the saying back then: “Go west, young man”. Go west, young man. And that has a lot of significance to it, because back then the East Coast was where everybody was. And if you grew up on the East Coast and you became a baker, a cobbler, a lawyer, whatever, it would be kind of hard, starting out. You’re like 21 years old or whatever and you’re trying to start your own bakery. Well, you have to compete with the bakery down the street that’s been there for like 30 years. That’s hard. It’s hard to start something. And maybe you have some innovation and you’d be okay or whatever, but it was: “Go west, young man”. Why – because if you go out west, there aren’t that many bakers there, right? There aren’t that many lawyers there, there aren’t that many cobblers there? You don’t have to compete against all these established folks. There was opportunity on the frontier. And for me, what the cowboy hat represents is that push towards the frontier. That is where the opportunity is, that is where you can make something of yourself and create something. You know, there’s a US politician Henry Clay, who I think was out of Kentucky, and he first got into Congress at the age of 27. 27 – crazy, right? That’s what he was able to do because Kentucky was more or less a new state. And he stayed in Congress, I think, into his 60s and he ran for president a few times, and had it not been for a couple of states in the Union around 1860 or something like that, he would have been president instead of Abraham Lincoln. He was like this close to being President a few times. He’s a politician and I hate politicians, but he’s like kind of that vanguard, you know, he found an opportunity and he was able to blaze that trail. If you want to be a senator now, it’s very difficult and you’re not gonna go anywhere near there until you’re like 50 years old or something. Maybe you can get there in 40, but you’re gonna have to work for 20 years before you’ve paid your dues and you’re able to do that. He did it at the age of 27, which is crazy. But this is what opportunities are available on the frontier. It’s that when you’re blazing your own trail, when you’re making something new, you could do it at a fairly young age. If you’re following somebody else’s path or a path that’s set out for you, it’s gonna take you 30 years. I’d rather be on the frontier, with all the danger and everything else. I’d rather look for opportunities, and that’s what Bitcoin represents for me. It’s a new frontier. If you are an accountant right now, you’re not gonna compete against the 60-year-old accountant that’s been doing it for 40 years. If you do something with Bitcoin, well, 60-year-old ain’t gonna learn about Bitcoin. 20-year-old, you learn about Bitcoin. Now you have all these opportunities to serve all the people that are in Bitcoin, that need help with their taxes or something, and you can find an intersection between whatever it is that you do and Bitcoin and make money off of it, and and blaze your own path. And it’s the place I want to be because it’s where all the entrepreneurs are going, it’s where all the people that are making something of themselves are going. So that’s why I wear the cowboy hat. How do you think, who is Satoshi Nakamoto? Who is Satoshi Nakamoto. It could be a real person or just like imagination, what do you think? Okay, so here’s my theory. Here’s my theory. It’s kind of an out-there one, okay, it’s really out there, but I think Satoshi is a robot from the future who has very limited time-traveling capabilities. And I actually want to write a book about this someday. So because of some sort of quantum entanglement or something, the only communication that Satoshi the robot in the future or some computer in the future has with the past is flipping bits on some fiber optic line in Colorado or something like that. And the only thing that Satoshi can do essentially communicating from the future to the past is post on the Internet, as a result. And because of that Satoshi was able to be anonymous and release the code and everything else. And because of some weird supernova that interfered with the quantum entanglement it cut off in 2010 and we never hear from Satoshi again. But Satoshi the robot from the future was communicating with the past in order to save humanity from the evils of fiat money. That’s an impressive theory. And the final one. I usually ask also to predict the price of Bitcoin at any point in the future, and we usually make this prediction and put it on our prediction platform. Okay. It’s a common question. Sure. The only pricing model on a fundamental level that’s ever made any sense to me is a PlanB stock-flow model, I don’t know if you’ve seen that on Medium. Basically it’s taking the stock-flow concept from Saifedean book and applying it to Bitcoin. And based on that, it’s essentially figuring out how much new flow of Bitcoin is coming in vs how much stock it is. And based on that, there’s very little flow coming in based on stock, and that will decrease even more next year when the halving happens. And if you plot that on a logarithmic graph over Bitcoin’s history, based on like the first two years of data, you could have more or less predicted the last seven years, which is pretty impressive. That’s a very good correlation. So, the fair market value based on that evaluation is something like $50,000 to a $100,000 after the next halving. Now, whether it gets prerun, coincidental to that halving or backrun by about a year… at least the last two having’s it was backrun by about a year. You know, the last 2013 bubble and 2017 bubble happened about a year after the 2016 halving. So I’m gonna guess it’s going to be about a year after that. So, 2021, I’m going to guess $50,000 to a $100,000. $50,000 to a $100,000. Can we choose a precise date and the precise, like, above or beyond certain level? Above $50,000 on the precise date? Above $50,000, March of 2021. Cool, that sounds great. Thank you very much, it was a pleasure. Enjoy the rest of the conference. Thank you.