.... ​In other words we are witnessing the end of what some economists call a debt super cycle which is a multi-generational cycle in which a civilization increases its levels of public and private debt until they become unsustainable 
 
At that point the system of leverage quickly unwinds and debt is restructured but often not until the civilization undergoes an economic depression and shifts to a lower level of complexity. 
 
We are seeing the beginnings of this today, with the collapse of major cryptocurrency exchanges, like FTX and Voyager, and crypto hedge funds, like Alameda and Three Arrows Capital. 
 
Essentially these institutions placed massive market bets using leverage, or debt rather than assets they owned. 
 
They also lent money they didn't have to financial services providers in the crypto space to prop up yield products. In effect high rate crypto savings accounts, which became very popular with retail investors in an environment of low fed rates where most Bank savings accounts effectively yielded zero percent. 
 
Crypto exchanges and hedge funds also had venture arms that invested in hundreds of startups building across the crypto ecosystem. Because these companies were significant market makers, their collapse has triggered systemic shocks causing a cascade of insolvencies and bankruptcies. 
 
Millions of investors have lost significant amounts, if not all of their wealth. 
 
The criminality of what was underway is only now beginning to come to light. But the bad actors in a debt super cycle aren't just the companies making wild unkeepable promises or engaged in outright fraud. They take their cue from the sovereign, and in the case of the United States the Federal Reserve has doubled its balance sheet since the start of the coronavirus from four to eight trillion dollars. 
 
This is what both FTX and Terra Luna tried to do, to print their own private currencies, to prop up their asset books and valuations, but they were not sovereign. They could not force anyone to use their tokens under the threat of sovereign violence. But the state can and prop up the value of its currency for a time. But at some point, confidence in the sovereign also collapses. 
 
After all, debt is a game of confidence. It doesn't matter if you have lots of debt potentially for a long time until suddenly it does and that is the point of no return. Our national debt is currently over 31 trillion dollars and growing. Our debt to GDP ratio currently stands at 125 percent which means that our productive economy cannot generate enough value to repay our debts. 
 
And the world's biggest investors in U.S treasury bonds other sovereigns, other countries, have been systematically selling their holdings and buying less. Confidence is plummeting. It is this very environment that Bitcoin was built for environment that Bitcoin was built for.
 
History has shown again and again that during crises of confidence in governments people rely on stores of value that keep their value over long periods of time like gold, silver or land. 
 
One of the ways that archaeologists know a society was facing conflict and war at a certain period in time is the larger number of coin hordes buried in the ground during that period. 
 
Which brings us to the problems with physical commodities. They're very difficult to store because they are heavy they take up a lot of space and even more difficult to move especially across borders. 
 
If you're a politically persecuted minority for example and you bury your life's wealth in your backyard but then you have to flee the country to save your life, the chances you will ever see that wealth again are slim to none. 
 
But even if you somehow are able to retrieve some of it and take it with you it can easily be found and confiscated. Try crossing a border today with ten thousand dollars worth of gold and you will see what I mean. 
 
Physical Commodities are also hard to verify if someone hands you a gold coin and says it's 97 pure how do you verify that if you're not a jeweler with the right experience and equipment. Bitcoin was developed to solve these problems. Cost of verification is done by The Ledger which only admits transactions with real Bitcoin. If you're transacting on the Bitcoin Ledger you know that Bitcoin is real and not fake. 
 
it's also easy to move Bitcoin anywhere. Peer-to-peer either by sending it electronically by taking a tiny hard drive with you or by memorizing your seed phrase and regenerating it on a new hardware wallet when you are in a safe place. None of this requires any third parties any banks or financial institutions. 
 
The true promise of Bitcoin is therefore self-custody, that you store your Bitcoin yourself on special hardware and you transact with it yourself using that hardware. 
 
I'm well aware that this process is still a pain in the ass for most ordinary people but is it:

• more of a pain in the ass than having your accounts frozen or 
• having your money stolen by a corrupt counterparty? 
• Is it more of a pain in the ass than needing to verify your identity and tell the government exactly what you're going to do with even very small amounts of money whenever you want to send it or spend it? In America most people didn't think they would ever be the victims of this kind of exploitation and surveillance until now.

 
And so now is the perfect time to say Bitcoin is not crypto. 
 
Of course it uses advanced cryptography but it has nothing to do with what crypto has come to mean colloquially. 
 
The Ponzi schemes joke coins and unregistered securities that virtually all cryptos are. 
 
Bitcoin is not a company token or a scheme to create fake value for underwriting bad debt. Bitcoin is absolutely scarce, peer-to-peer, censorship resistant, digital currency designed to keep your wealth safe through any political and economic storm. 
 
Its price fluctuates in the short term but over the long term it's the best performing asset in human history so the only question is are you patient enough to secure your future and this brings me to the question of character. You know in 2017 shortly after we launched learning machine the world went through the ICO or initial coin offering craze this is one of the crypto bull runs. Many of our competitors were launching their own tokens and raising Millions even hundreds of millions of dollars off of the sale of these coins. We had to make a strategic corporate decision about whether or not to do that and we chose not to. There was simply no value that a token would add for our user base or for our product plus we knew that these coins passed the Howie test and therefore they were unregistered securities even if the SEC for some inexplicable reason wasn't going after the vast majority of them 
 
We stuck to building and selling a software product that delivered real value for real users. This was a slower path to growth but it was real. Today I continued to work in the real economy that productive part of human society that generates the value governments use to secure the debt they create but our government has chosen to try to have everything to fulfill everyone's spending priorities while creating unimaginable amounts of money out of thin air and then raising interest rates to fight the inflation that will inevitably occur when you double the supply of money in circulation. 
 
This is not a sustainable situation. In this context Texas has the opportunity to lead by demonstrating fiscal discipline and respect for property rights. 
 
In 2021 the Texas blockchain council worked with our Champions and colleagues in the Texas state legislature to pass HB 1576 which created the state work group on blockchain matters. A group of subject matter experts with a mandate to make policy recommendations about blockchain technology for the state of Texas. I was appointed to that group by Texas speaker Dave Phelan. That report was just published and my colleagues and I testified about it yesterday for the Texas Senate committee on business and commerce. Please find this report.
 
It's linked on my Twitter and Linkedin bios and read it. It showcases why Texas is leading in responsible, well-collateralized, financial services and it outlines the role Bitcoin should play in restoring confidence in both state and National governments. 
 
Finally the Texas Bitcoin Foundation announced this week that we have partnered with Texas State Technical College to launch the world's first professional certification programs in Bitcoin mining offered by any institution of higher education anywhere in the world. This will create a pool of talent for Bitcoin miners the backbone of the Bitcoin protocol right here in Texas. 
 
This project didn't require a 50 million dollar Grant from the FTX future fund. Just a couple of dedicated energy entrepreneurs, Felicia and Gideon Powell, to provide the seed funding so the project can start small demonstrate success, and grow based on the actual value it provides for the Texas economy.

Bitcoin Wallet FAQ
In recent weeks, Bitcoin has reached all new highs in terms of both popularity and price. And because of this, a number of people are eager to get in on the action—maybe you’re one of them. Maybe not. Before you can buy Bitcoin, understanding Bitcoin wallets is very important. And we aren’t talking the kind of leather wallet that you can buy at the mall. Below (FYI), I'm going to use the word Bitcoin and Bitcoins interchangeably. 
​
What Is A Bitcoin Wallet?
Bitcoin wallets come in different forms. If you want to get technical, no wallet actually contains any Bitcoin. Wallets of any kind productize access and security of the private key.

Remember: 

• The private key Is what gives a person access to the balance of Bitcoin that they have on the Bitcoin blockchain.
• The backup seed phrase gives a person access to a person's bitcoin regardless of the condition of the wallet.
• Guard and secure your private key and seed phrases like your life depends on it. Why? Because that is where you are holding (HODLing) your wealth and savings.

For the non-technical person, there are hardware and software wallets.

• A hardware wallet is a physical device which holds your Bitcoin just a physical wallet holds your cash. These often look like small USB flash drives. You access them by connecting them to your computer, and entering in a PIN number. You also need your private key and/or your Seed Phrase to access your Bitcoin (generally, you'll want to store your Seed Phrase physically far away from your hardware wallet and private key).
• A software wallet (this is not a common term... actually, it's not really a term at all) is a digital wallet which holds your Bitcoin either on an exchange or on a website, but either way it is somewhere in the digital realm and not something you physically store or carry around. Regardless, word of advice to you is don't store your Bitcoins on an exchange. Use exchanges to buy/sell/trade - then get the crypto asset (like Bitcoin) off the exchange and into your own wallet (where you have the private key).
• The golden mantra for Bitcoiners is "Not your keys, not your coins".

Which Is Better?
Well, the word better isn’t necessarily the best word in this case. The real question is, which is safer FOR YOU, specifically. And the answer depends on what you plan to do with your Bitcoin, as both wallets have real risks and benefits. The answer also depends on the kind of person you are and what you can take on in terms of responsibility. The answer depends on what's at stake.

Also, what matters is WHO or what entity has CONTROL or CUSTODY of your Bitcoin. If you use a service like a wallet or an exchange to hold your Bitcoin, that centralized entity has custody of your Bitcoin. NOTE: If you buy Bitcoin through entities like: PayPal, Robinhood ---> THEY have custody of your Bitcoin. You do NOT have the private keys to them (as of the publication of this blog post, neither service provider allows you to take the Bitcoin you purchase out of their wallet gardens). You CANNOT move your Bitcoins out of PayPal or Robinhood. I do NOT recommend PayPal/Robinhood for buying Bitcoin. (see previous article -- best places to buy Bitcoin as a beginner are Swan Bitcoin, CashApp, Coinbase (tho it has higher fees - usually I'll point folks to Coinbase PRO if you want to use Coinbase....). 

If you have Bitcoin in Coinbase, BlockFi, Bittrex, Binance, Celsius, Jaxx or any of these centralized applications and exchanges (aka software), THEY have custody/control over your Bitcoin. Again, you don't have the private keys to your Bitcoin, You CAN move your Bitcoins in/out of these applications as you choose, as long as there are no issues with your 1) identity, 2) relationship with the government, etc.... If anything happens to these companies, your Bitcoin is at risk. If these centralized companies are attacked, your Bitcoin is at risk. If you are in trouble with the government for any reason, your Bitcoin is at risk. So please act accordingly. 

What About Hardware Wallets?
Unlike "software wallets", hardware wallets are nearly unhackable. Unless someone has your Seed Phrase, they cannot get access to your wallet. Not only that, but if you physically lose your hardware wallet, you can buy another one, enter your Seed Phrase (which is like a 12-24 word password) and recover all of your Bitcoins.

Here’s the problem. If you lose that Seed Phrase, which is assigned for you by the device, you will not, ever, ever, get your Bitcoins back. They are gone forever. This is what people mean when they say they’ve lost access to their Bitcoins—they’ve locked themselves out of their hardware wallets forever. And if you haven’t seen the news lately, there are people all over the world ripping their hair out at the passwords they lost to Bitcoins that are now worth millions.

Hardware wallets are generally safer if you plan to hold Bitcoin for a long time (and you can write down/remember a 12-24-word password, aka the Seed Phrase, and not lose it). Where a hardware wallet is kept offline, it is also known as cold storage.

If you are going to go the hardware wallet route, I generally recommend Coinkite, Trezor or Ledger as they are generally easier to set up and use for hardware wallets. (Side note, Ledger has gotten hacked recently - so they leaked ALL of their customer data recently. Hopefully they've increased their security measures and fixed their vulnerabilities since then...). Don't buy them anywhere. If you buy them on Amazon, make sure you're buying from the specific company directly. Do not buy from a second hand or grey market. Trezor and Ledger are also the largest players in the space. Whatever you do, find a way to remember that passcode and keep it safe (and store it physically FAR AWAY from your hardware wallet)! VERY IMPORTANT.

What About "Software" Wallets?
There's no real such thing as "software wallets". The term that matters more is Cold wallet versus a Hot wallet:

• Hot wallets are connected to the internet.
• Cold wallets are NOT connected to the internet.

Generally, if you're not using a hardware wallet, it's all software (or seed phrases). Also, most of the applications in the space have very minimal customer support... so don't rely on being able to get good customer support in this space.

Generally, there's always a risk of an exchange or wallet provider getting hacked (you are responsible for double checking when you decide which exchange or wallet application to use), and this is still a risk you have to take when choosing a  wallet. The risk comes from "centralization" -- most exchanges and wallet providers are centralized private companies. This means they are literally a "honey pot" for the bad guys to attack (like we've seen time and time again in the centralized world: Target, Marriott, Facebook, Equifax, etc...)

What are the benefits of NOT using a hardware wallet? Well if you plan to trade cryptocurrency on a daily basis and often, it will get quite annoying to transfer it on and off the exchange to your hardware wallet constantly. Make sure you choose a reputable wallet provider, because they aren’t all the same. Then again, the annoyance might be a good thing for that extra level of security.

Which Wallets Are The Best?
Again, there is no "best wallet".  Again, the real question is, which is SAFE FOR YOU, specifically. And the answer depends on what YOU plan to do with your Bitcoin, as different wallets have different real risks and benefits. The answer also depends on the kind of person you are and what you can take on in terms of responsibility.

I have heard of people recommending the Coinbase wallet (Coinbase wallet was a spinoff by "Toshi" of the real Coinbase market/exchange.... so it's really confusing. Be careful), or Exodus, as these are supposedly fairly easy to use. I personally think their products are not easy to use. I'm not a user of either of them. There's a Bitcoin Wallet wizard you can try out: https://bitcoin.org/en/choose-your-wallet. 

Some quick recommendations:

• Bluewallet is the respected non-hardware wallet these days. It's open source. It's mentioned and endorsed a lot these days. You'll have to try it for yourself - download it and play with it. It's on iOS.
• What I do recommend for buying Bitcoin (see previous article) is: Swan Bitcoin (the one I recommend the MOST), Coinbase (though higher fees and terrible customer support), Coinbase PRO (better fees than the consumer Coinbase), CashApp, BlockFi....

You can trade your crypto assets on any exchange you are using to trade it. The decision is yours. Know that exchanges are more likely to be targets to hacks - so best practice is to NOT leave your crypto assets on an exchange in terms of storage. 

There are a number of combo wallets out there which employ a little bit of both technologies. These are also an option, but are generally more complicated than just picking one or the other.

So Where Should I Keep My Bitcoin?
Well, if reading this far hasn’t answered your question, this is entirely up to you and what you feel is a greater risk for yourself personally: is it losing your password or is it being the victim of a hack? Are you better at keeping your passwords secure and safe? Are you good and not losing your car keys? Only you know what's best for you. Again, do not store your Bitcoin on an exchange - it is generally NOT a best practice.

Objectively, there is no "best wallet". There is only "the best wallet for you", based on how you want to handle and store (or not store) your wealth, based on your personal needs. At this point in the Bitcoin infrastructure buildout, there is basically a solution to fit every person's individual needs. It's a big spectrum of needs and wants - and a person must go and get it to learn.
​
Generally, I would advise that you spend the time to DO YOUR OWN RESEARCH. Self education is very important in this space. Learn. Learn as much as you can. LEARN. Watch and listen to videos. Read. Don't do anything you are unfamiliar or uncomfortable with - feel free to reach out to others in the community to verify or ask questions. But ONLY YOU can make the ultimate decision as to where you would feel safest storing your Bitcoin. 

Hope that helps!

Hi, All:

Bitcoin's price has been going up a lot recently with new all time high's achieved so I prepared an FAQ: Where to Buy Bitcoin (Getting Started) for new folks coming into Bitcoin. Lots of folks have been reaching out to me (which is great), and I realized that there are quite a few frequently asked questions, so I thought I'd share here, too!​

Please let me know if you have any questions.

FAQ: Where to Buy Bitcoin (Getting Started)

1) Partial Bitcoin
You can buy less than 1 whole Bitcoin at a time. You can buy $1 worth, you can buy $10 worth, you can buy $500 worth - whatever you are comfortable with. You don't have to buy a whole Bitcoin. Start buying, and do dollar cost averaging ---->

2) Dollar Cost Averaging (DCA)
Before you start, I want to give you this piece of advice that is literally the best advice you can get for someone wanting to get into Bitcoin. Dollar Cost Average: Buy a small amount every week. Do not try to time the market, you'll be disappointed. One of the best tools I've discovered (easy to use, great resources, best low fees) is Swan Bitcoin. Use my link and get $10 Free in Bitcoin: https://www.swanbitcoin.com/windshieldtime/

3) Exchanges
You can buy Bitcoin via cryptocurrency exchanges like Bittrex, Coinme (which is done through their partnership with Coinstar/ATM, look for the green machines in grocery stores), Coinbase, CoinbasePro, FTX, etc.... Be careful. The apps are generally a bit tricky to use (**Coinbase is the most accessible and probably the easiest to use out of them). If you do small buys ($10-$1l), the fees are higher than I like, which is why I recommend Swan Bitcoin above (FYI: the fees are usually made in the "spread" of the Bitcoin you are buying). You can get free $10 in Bitcoin for using my link: https://www.coinbase.com/join/yu_1k

4) Consumer Trading Applications
There are consumer trading applications that you would use for buying stocks or for payments like Robinhood, CashApp, PayPal that now also allow you to buy/sell Bitcoin.

To be candid, be careful with this. The only one I will actually recommend is CashApp. CashApp. (Here's my signup link for CashApp if you want to use it - you get a free $5 for signing up too https://cash.app/app/XJCWNGQ). I really like their overall experience for consumers - there's a debit card with shopping boosts you can use while shopping for 3% back in Bitcoin, or 15% back at USPS or the grocery store. Robinhood/PayPal do not actually give you custody or access to the BTC you buy (they only give you the ability to buy/sell this Bitcoin). While this is "nice" in that you get to participate in some way, you don't actually get the full benefit of buying Bitcoin in the first place - so I don't recommend Robinhood/PayPal for buying Bitcoin/crypto.

5) Indirectly Buy Bitcoin 
An indirect way to get BTC is through something like $GBTC (Greyscale Bitcoin) in your stock brokerage/IRA/401k account (like Fidelity, eTrade, etc.). I personally have put a lot of my retirement into GBTC because I believe in this space overall. GBTC is a great buy for an investor who doesn't want to trade cryptocurrency on an exchange (but wants exposure to Bitcoin). At times, it can trade at a pretty high premium due to high demand and limited supply because of what I call the "convenience" GBTC provides for investors. Overall, have done really well with this strategy personally and so I recommend it. 

Side note: There are other cryptocurrencies out there, but NONE of them have as comprehensive and as complete command of the fundamentals of good money, good store of value, security of the network and everything that Bitcoin does. You may assume they are seemingly "cheaper" and assume that they are the same thing as Bitcoin (BTC), they are not (For example XRP, DOGE, etc.... -- they are NOT the same as Bitcoin.) Do your own research, feel free to ask questions. 

Hope that helps.

--Arry 

I just had an ad hoc Bitcoin debate. I'm finding, the more I put myself out there on the topic of Bitcoin, the more I learn about myself and my command of the knowledge I've been accumulating to date. I'm still learning - every single day, reading and listening and watching all of the content that keeps on growing. I stuck my typing fingers out and said something asking everyone on a particular call I was on if they'd been tracking Bitcoin. I heard rumblings, ah, yea, I'm still working on setting up my Coinbase account or, yea, I've gotta dollar average on in. Another person, let's call him Joe, went all in on the other side of the argument, Bitcoin is dead, it's not money, and the only currency that'll ever live is the U.S. Dollar. He said I should be worried about 51% attacks. I was told that I needed to study my history better and go look up the term, "Tulip Bubble", and then get back to him. 

Then I got the following screenshots shared with me:

Seemingly harsh, I thought. Study my history better? Tulip Bubble.... Why do people keep bringing up tulips when they are trying to argue against cryptocurrencies and Bitcoin? Tulips. ...  That always surprises me.

Actually, as my business partner says, "the “tulip bubble” as people refer to it is more of a confirmation of human behavior that, again, is a stupendous affirmation of why bitcoin is needed, is the answer."

I debated back and forth in my mind on whether to engage - or to just let this Tulip Joe go.....  and despite my tendencies, decided to go for it. Here's what I wrote in reply (for context, this is a group chat, so there are other folks viewing this discussion going back and forth). This is literally a "copy/paste" of my response:

• If you've truly read the whitepaper for Bitcoin, you know that Bitcoin was created to specifically address the problems of modern money - the U.S. Financial system and the U.S. Dollar (fiat money).
  

​
Macro-economic points: 

• Federal Reserve has cut interest rates to 0%. This is an issue.
• The world is addicted to Quantitative Easing like it's heroin. Trillions of USD printed out of thin air, even in this year alone. "QE4": This is another big issue.
• Nassim Nicholas Taleb (The Black Swan guy) wrote (in beginning of The Bitcoin Standard): "... we only discovered too late: one can macroBS longer than microBS, which is why we need to be careful of whom we endow with centralized macro decisions." ----> basically, those that have claimed to understand macro-economics and have been running the Fed, had no idea what they were doing.
• 1971 US officially went off the gold standard - became fiat money. There's history for you.
• oh yeah, and shortly after that, 1974 -- Nobel Prize winner, Hayek wrote about ("Pretense of Knowledge") how that was going to be a grave mistake, the U.S. dollar becoming a fiat currency, as the world's reserve currency.  And here we are.
• After WWII, 1944, Bretton-Woods Agreement, the U.S. Dollar became the world's reserve currency. Another bit of history. We had the most guns. But today, 2020 - we're at another "Bretton-Woods" cross roads. Did you see the IMF (international monetary fund) meetings that happened this week - the world is moving to digital currencies. China's already got a massive head start. The middle east is working on digitizing quickly. Once all of these digital currencies exist, what's the common digital currency across the globe? Bitcoin.

Supply side - Bitcoin has a limited supply 

• Again, only 21 million total Bitcoin ever available. Only 18.4 million currently in circulation. Math.
• Actually more than 60% of Bitcoin in circulation has not moved - people are using it as a store of value.

Demand side for Bitcoin (which has limited hard capped supply)

• Bitcoin is up more than 70% year to date, and is the best performing asset class in the decade (2010-2020).
• Corporations are now using Bitcoin as the reserve asset part of their treasury: Galaxy Digital, MicroStrategy, Square, etc. This is just the start. There is very few other assets out there that's not simply way over priced and/or not a great store of wealth when you look at the price in terms of gold prices. Demand will continue to go up.
• Actually, despite how "volatile" Bitcoin has been, it's been consistently trending upwards - it beats a lot of other national currencies out there, including the U.S. Dollar. Another example: Turkey. I wouldn't be surprised if nations opt into Bitcoin as a way to leap frog innovation/time to pull themselves out of the dark holes they are in today. Another example: Venezuela, Argentina, Columbia, etc. Again, more support for the Demand side.

As for 51% attack concerns, yes - and now we are much further along with the Bitcoin network. It would literally cost billions of dollars ($15 billion I read somewhere?) to make this happen, if one could find and secure all the hardware, and that alone is really difficult to do for even setting up a small mining operation. The chances are becoming more and more slim as the Bitcoin network has matured - case in point, we now have more and more public companies putting their cash reserves into Bitcoin. It's 2020 now, a lot has happened since 2015, 2016, 2017, 2018, and 2019. There is no other currency that is as sound, as secure, as borderless, deflationary, hardcapped, transparent, immutable, decentralized, nonsovereign (as Travis Kling says often), than Bitcoin. My bet is on the digital future, on technology, and on math.

More on the 51% attack concerns: Think about it in terms of the built-in game theory. In short, it's not in the best interests of the miners to try and spend a shit ton of money  to double-spend Bitcoin. They would have to spend a shit ton on equipment, electricity, space to even get a short at rewriting the blockchain. It's like trying to rob the bank for $10 million, after spending $10 million. Makes no sense. The numbers favor all of the people who have an incentive to keep the integrity of the Bitcoin global network is MUCH greater than the number of folks that want to attack it. We saw it - with Bitcoin Cash as the hard fork. That was a critical moment in history and the perfect moment for Bitcoin to have died. It didn't. Bitcoin has only gotten stronger since then. 

RE: Bitcoin and tulips. Yea, this is the knock that we hear often from the "peanut gallery, it's a lazy argument intellectually and very misleading" (as I think Pomp would say about the Tulip argument). I heard a lot about tulips in 2017 and especially in 2018. Those were truly hard times for me personally.

[AND THANK GOODNESS FOR HUMANITY that] Bitcoin didn't die in 2018, sorry. Nor in 2019, sorry, or in 2020. Sorry. You're talking about the ATH (all time high, that was just all kinds of crazy speculation thanks to the ICO's) in 2017, it went from $1k to $20k, and then back down to $3k. It's not a good factual representation for anyone that looks at the market holistically. [I've learned recently that] The Bitcoin average across many weeks, 200 weeks is the better metric - [and as we've seen] Bitcoin is a solid investment. Also look at the number of consecutive days that Bitcoin has been (really boring) and just hanging out over $10k in 2020. ----> really that'll show you that Bitcoin has stabilized a lot since the crazy hey day of 2017. [Technology is evolving FAST. 10 years ago, I had turn-by-turn map directions printed out on paper. Today I have Waze on my phone.] As investors, we should care more about the long term. Things go up and down, and in this case, Bitcoin has been trending up, even with its ups and downs. The technology is much more mature. The network is much bigger.

​And the timing is also, very right.

One more (the U.S. Dollar versus Bitcoin debate): 

I don't know how I did, if all of my facts are straight - they should be close (enough). 

Anyways, I'm a believer in Bitcoin, in bitcoin, and in blockchain. This is the future.

​--Arry 

Saw this talk by Jimmy Song (and Jimmy Song speak live) for the first time when in LA for Russell Okung's Bitcoin is_ conference. So many concepts and ideas that I hadn't thought about before were introduced - and so provocative. I found the talk, had it transcribed, and am sharing it with you, because it really is so good. A couple of my favorite points that really got me thinking:

• The Cantillon Effect: "Alright, so I don't know how many of you know what this is but these are glass beads and this was used in sub-Saharan Africa for money for a very long time. And in fact it makes sense to be money if you heard Saifedean Ammous's talk - it's about hard money versus easy money. Glass just isn't very abundant in some in Africa so it made sense to use this as money. European settlers came in and they recognized that oh they're using glass for money. We know how to make glass we have glass blowers and we have a plentiful supply. So what did they do? They went, made a whole ton of glass beads, and bought up everything. They bought up everything. They were able to print money essentially as a way to take the wealth of everybody that was depending on that as money. And this has an economic name and it's called the Cantillon effect. And the Cantillon effect is essentially this - the first printers are the money, the people that get to spend the money first, they get all of the benefits of the printing of the money. "
• Capitalism is about capital accumulation. It is about creating more so you can you can make even more money and continue to benefit society. In fact, production and entrepreneurship are exactly what happens in a in a hard money civilization because most people aren't going towards investment banking or the money production business. They start using their talents towards something else. They start giving people what they want.
  

Watch the video below from Bitcoin Is_ 's Jimmy Song's talk. So good.

--Arry 

Conference: "Bitcoin is ___"
Speaker: Jimmy Song
Title: Bitcoin is the Ultimate Social Justice
TRANSCRIPTION of above video below here.
 
Alright, how's everyone doing? I know it's like late afternoon right now. Maybe you're feeling a little bit sleepy, maybe you need to get a little coffee. I won't be offended if you fall asleep or something. I'm okay with that just you know I won't judge you too much. Alright, so my talk is called Bitcoin the ultimate social justice and I deliberately titled it that way as a way to provoke maybe a little bit of a reaction because we have a conception of social justice that I think is very flawed and we're going to talk about exactly in which… actually can you change that to the actual slide. Yeah thank you. Otherwise I'm going to get lost… as the ultimate social justice and this is something that I'm very passionate about and this is the way in which Bitcoin will impact society is absolutely huge. So, what I'm going to do is go through an argument essentially arguing that Bitcoin is going to be better for the cause of social justice than pretty much anything else and we're going to look at the current situation - what things are like right now, how fiat money changes a lot of the incentives, and exactly what incentives people have under a fiat money system. Then we're going to talk about Bitcoin now that changes you know the incentive system and how people behave under a Bitcoin system and then talk about the future and how things will change there.
 
So let's look at the cause of what's going on and let's sort of try to define at least what social justice is all about. Alright so we have a lot of problems in the world right? We have a lot of people that are poor, some that are rich, and so on. And we also have you know some people that have more opportunities than others we also have other people that have power over you some people that they can abuse and so on. There's a lot of different problems in the world today and the general way in which social justice sort of defines this or sort of attempts to remedy this is by treating essentially the symptom. And the symptom is kind of like the tip of the iceberg, alright? Like there's a lot more that goes into it than just some somebody is suffering. Generally, if you look at any charity or NGO or government program, they're looking to treat the symptom. This means making sure that the people that are going hungry have food or that the people that don't have housing have a place to stay and so on. But that's treating the symptom. The actual problem is underneath and that's what I want to talk about.
 
So this is the general way in which a lot of NGOs and you know charities and so on, this is how they generally approach the idea of helping people. And you know if you can't read it, it's give a man a fish you feed him for a day, teach a man to fish and you feed him for a lifetime, create a good tutorial and you can teach himself how to fish. This is sort of the way in which a lot of people that are in these spaces of charity and social justice, that's how they think about it. But I would submit to you that this is not the problem. It's not a problem of information. It is not a problem of information at all. It's not about somebody not knowing how to fish.

Fact the real problem is oppression - it is oppression. People have power over other people and that is the real problem here. And when you have oppression well you can do certain things. It's not that the person that's being oppressed doesn't know how to fish, it’s that he has to apply for a fishing license or has to you know get in with government crony in order to fish at scale. It's that they got taxed on the fish that they catch because that's the current law that happens to exist and that's the real problem. It's not that they don't know. Lots of people know. That is not the problem at all.
 
So what happens when there are enough people that are oppressed continually and there are more regulations and things like that that happen is that eventually you end up with revolution. This is the most recent thing that happened that's like that is the Arab Spring. I mean Muslim countries where you had Arab Spring, a lot of them were very oppressive. They had so many rules and it gets worse and worse and worse until basically the people explode. It’s gradually then suddenly and all of a sudden something happens. And so you might be wondering, "okay are we always doomed to this kind of cycle where you know you have a revolution and then you have more and more regulation and more and more oppression and then people get sick of it and then they revolt again"? Yes, but things have changed. Bitcoin is something that's new and different and we just heard from Alex who's talking about government surveillance and technology that's used to make people more and more oppressive, but there's also a technology that's taking the power of money printing away from the state. Financial oppression, believe it or not, is the biggest source of oppression that you can have. In many ways, that's what we're going to be talking about going forward. 
 
Alright, so we talked about the current problems and my argument in this section is that the real oppression is easy fiat money - is easy fiat money. Alright, so I don't know how many of you know what this is but these are glass beads and this was used in sub-Saharan Africa for money for a very long time. And in fact it makes sense to be money if you heard Saifedean Ammous's talk - it's about hard money versus easy money. Glass just isn't very abundant in some in Africa so it made sense to use this as money. European settlers came in and they recognized that oh they're using glass for money. We know how to make glass we have glass blowers and we have a plentiful supply. So what did they do? They went, made a whole ton of glass beads, and bought up everything. They bought up everything. They were able to print money essentially as a way to take the wealth of everybody that was depending on that as money. And this has an economic name and it's called the Cantillon effect. And the Cantillon effect is essentially this - the first printers are the money, the people that get to spend the money first, they get all of the benefits of the printing of the money. 
 
And it's something that Richard Cantillon noticed in the 1700s. He used to work as a banker and then you wrote you know some economic treatises, but that's essentially what happens. The thing about the Cantillon effect that's so seductive is that the population doesn't really notice right away. It's very slow. When you're inflating money, when you're adding new money to the population, you don't notice oh this is going to be worthless later. You know it's a very gradual thing and then very sudden. And this has some really pernicious effects including long term uncertainty. And among other things that it does is it increases consumption and rent-seeking. By consumption I mean just like sort of buying things for now alright? Like YOLO or FOMO or whatever. And rent-seeking in the sense that - and the way I define rent-seeking is taxing some transaction without any adding any value and there are plenty of people that do that. 
 
Here's a chart of the health care system in America today and you can notice that the number of physicians has not gone up very much, but the number of administrators has exploded. What is going on? Well there's a lot of money going into the healthcare system and as a result there's a lot more rent seekers - a lot of people that are taxing transactions that aren't really adding anything. Now I could show you a similar chart for education and government and many other organizations, but this is just what happens when you have a lot of money printing. There's no real… there's a lot of people that end up sitting in the middle of transactions making money essentially for doing nothing. 
 
And this has some consequences among others this is the question that gets asked. How do I get a job? And if you know anyone that's unemployed or in college right now, this is the question that they ask - how do I get a job? And if you think about it, this is the wrong question because in a sense it's asking where can I fit right; what rent seeking opportunity can I get? It's not about adding value at all. It's about finding a place in the world where you can survive right? It has a very static view of the world where there's only so much to go around and you need to get your piece - and that is the wrong attitude. 
 
And this has some serious consequences and real social ills that come out of it. Here's a cartoon. I don't know if you can read it but it's sort of from a perspective of a millennial. I don't want much in life, just sick clothes, a bunch of money, convenient restaurant options, free shipping is always nice, and like a sense of purpose I guess. I love this cartoon because it does sort of like capture that mentality, but think about it. If you are a rent seeker in in this economy, what are you going to be thinking about? You're not thinking about changing the world or providing value for the world. You're thinking about all this other stuff and why is that? Well it's because deep down inside you know you are a leech; that you are really stealing from everybody else. And I'm serious about this. There's a lot of people that are going through having to deal with the fact that they are not contributing at all to society. We have epidemic levels of depression. Where do you think that comes from? If deep down inside you know that you are not contributing anything to society well how should you feel? And think about it. There's a lot of other people that when they have that voice inside that's telling them okay you're not really doing anything useful, well they go around and drown that. We have epidemic levels of all kinds of addictions too – alcoholism, drugs, even like TV or getting obsessed with the latest Netflix series, or you know eating or whatever. There's a lot of different addictions that everyone can get into. That causes real social ills. And eventually you get to a situation where you have a lot of run seeking and eventually you collapse. 
 
These are the ruins of Rome right? The Roman civilization famously devalued their money. Diocletian went from 70% silver in a denarii down to like 5% and that caused a lot more rent-seeking that caused a lot more people that weren't doing anything and eventually the whole edifice just sort of crumbled under the weight of all the rent seekers that were out there. So Fiat leads to decay. It's a fundamental part of it. 
 
Alright so why is that? Why does Fiat cause all this? Well there are two ways essentially to make money in any system. The first is to create more of the monetary medium - more of the monetary medium. So with gold or something like that you have to do the hard work of actually mining it. With central bank, they can just print the money and this is actually more expensive than what they do which is update a database that says I have 200 million more dollars. So there's creating more of the monetary medium. 
 
In the second case the other way to make money is to provide goods and services and this is what actually builds civilization. If you're successful with creating a good or service, then you're going to be adding something beneficial to everybody else. It's what they want. 
 
The key thing to realize is that the former does not add anything to society. If you're creating more of the medium of monetary exchange you are not contributing anything. You're not making anything. You're essentially stealing from everyone else through inflation. The latter definitely adds to society because by definition you're doing something better than what's out in the market already. You're doing something faster, more conveniently, more you know securely, or something - you're doing something better than what other people in the market are doing because there's a market for your services. And as a result you're adding to the pie. You're growing the pie. You're making something better. And the key thing to realize is when there's easy money people go towards the former. When there's hard money people go towards the latter. 
 
So when you have easy money for example you want to go into the money production business because the cost of producing that money is very cheap relative to the value that you're going to get out, but when there's hard money only the specialists go in. So if you're… not many of you are probably gold mining right now and that's because you have to be an expert in gold mining in order to be a gold miner and this is actually one of the biggest mistakes that people make when they come into Bitcoin is they think oh I can go print my own money buying miners or something, but in fact it turns out that only the real specialists can make money off of mining. And this is really terrible because think about where people have been going… where the best, smartest, and most talented individuals have been going into for the last 50 years? They've been going into investment banking, right? And they go into it not because they happen to be talented in investment banking, they go into it because that's where the margins are. That's where they can make the most profit. It's much easier to be an investment banker and make 300 million dollars a year than to create a three-billion-dollar company and keep three hundred million dollars for yourself. That's the reality that we are living in is that because of easy money everyone is motivated to go towards that direction and that's a real tragedy. That's how civilization gets built and hopefully this picture comes up. 

Alright, so I was born in Seoul, Korea and I found this nice picture of the contrast between then and now. See, 1900 it was kind of a backwater Asian place and after you know a 120 years later you have this thriving city that you have now. That happens because you have a lot of entrepreneurs, because you have people building things, that are creating things for the benefit of others. In a way, they're creating goods and making the world better and they get to profit - that's the beauty of capitalism. 

So let's talk about the new system right? Because we're are under a fiat money system well how is that going to change? The revolution is Bitcoin and the revolution comes in from the fact that we have property rights. We have control over our own money right now. If you have money in a bank account the government can confiscate it from you. They can accuse you of being a drug dealer or using it for terrorism or something like that. Even if you have money under your mattress, they can just inflate it away. They can print another eight hundred billion dollars to different investment banks or something like that. We don't have property rights over our money, but with Bitcoin we do. We can take the power of money printing away from the state and as a result we have a lot more long-term certainty because we can save for the future. A lot of people think that capitalism is like materialism or something like that. It's this idea you know I got the sickest car or something like that. That is not it at all. Capitalism is about capital accumulation. It is about creating more so you can you can make even more money and continue to benefit society. In fact, production and entrepreneurship are exactly what happens in a in a hard money civilization because most people aren't going towards investment banking or the money production business. They start using their talents towards something else. They start giving people what they want. And this increases production, increases value for everybody. There's a really good illustration in Saifedean's book which I'll repeat here, but at one point in time people used to catch fish with their hands and it would take… maybe you can catch only like one or two fish a day by trying to catch with your hands. At some point somebody decided okay you know what I'll catch an extra fish and sort of half star for a day and I will make a fishing pole and using a fishing pole - that's capital accumulation - they can maybe catch four fish a day and then doing that for about a week, you can save up, take another week to make a boat. Now maybe you hire somebody to drive the boat while you go fish. You get better and better productivity out of people as you have more creativity and entrepreneurship to the point where we are today where we have a, you know, a fishing vessel takes like five years to build cost millions of dollars but you have eight people on that ship and they can catch hundreds of thousands of fish in a week. That's real productivity; that's real entrepreneurship; that's real value that the rest of civilization gets to have.
 
Anyway the pertinent question that people ask in this case is not how do I get a job; it's what do people want. And this is the right question it isn't about finding your place in a rent-seeking society. It is about what value can I bring to other people and this is absolutely critical for entrepreneurship. I'm speaking to you right now as a speaker, as an author and stuff like that, but for the first years of my life I was a coder. I was a programmer. Think anyone ever paid me to go speak in front of people or to write a book? Not a chance. Those are things that I had inside of me that I didn't realize I could use for that sort of stuff but being an entrepreneur, being a producer, I was able to see ok well that's something that I can do. In a Fiat money society, what you end up with are very specific roles right if a company hires you to be an accountant that's all you can really be. They don't hire you to also be a publicist or something like that not unless you're in a start-up. But it's much more fulfilling to be an entrepreneur in part because you get to use all of who you are instead of this narrow slice that's defined by the company. And that's something that hard money allows and Bitcoin is the path to get there because that takes the power of money printing from the state and that makes it very difficult to go into the money production business eliminating a lot of rent-seeking.
 
Anyway, let's examine what that actually means and what that actually looks like. So one of the things that's really scary about Bitcoin is that you know ownership is pretty scary. This is a cartoon you can probably look at it later. It's about somebody that newly bought a house and you know doesn't think that he's ready for a home ownership. Fact of the matter is were not used to the personal responsibility that Bitcoin requires. There's a lot of people that you know… like even Bitcoin core developers, if they have to move their Bitcoins, they get really nervous. Why? Because it's scary having to handle a lot of money right, where it might be permanently lost. Everything is centralized in a sense to take away that fear of having to move or be responsible for a lot of money and that's convenient right because you don't want to lose money to a bank robber or something like that where if you had like a gold bar in your house and it gets taken away from you all your savings disappear. That's kind of scary, but at the same time, we've lost something we've lost something as a civilization as a result of all that centralizing of responsibility and it's this idea of personal responsibility. See when you have personal responsibility, it helps because you start caring about the thing that you're responsible for you. You want to make it grow. And you know those of you that are parents, you kind of understand what that means. A lot of it is helping the thing that you're in charge of. And when you do that it leads to a lot of good things because when you have long term certainty, when you're when you're thinking about ownership and you you're used to the responsibility, now you can set goals and have a purpose, and that in turn leads to a lot of building. And instead of the sort of the rent seeking job that you might have where your soul is telling you, you are not doing anything good, when you are producing something for the rest of civilization that is beneficial, it's much easier to get up in the morning. It's much easier to live and know that you are contributing something. You don't have to drown yourself in alcohol or drugs or sugar or whatever it is that you might be addicted to. It becomes something different. And that is the future that we want to have with Bitcoin. 
 
And really the key here is that we have a path to a peaceful revolution. It used to be that history was you know just a regime that would get more and more authoritarian until there was a revolution. That's like one view, kind of cynical view of history, but now with Bitcoin we have the ability to decentralize the power. See a lot of the social justice advocates, what they think about is okay if only my guy were in charge, things would be different. If only my guy were there, then everything would be okay. That's the wrong problem. It's still centralized power. With Bitcoin, we can start taking some of that power back and give it to ourselves. And as a result, all of the rent seekers that are propped up, we walk off the platform that goes away naturally and that's a very good thing. We don't want waste in our society. I love this picture because it has the Statue of Liberty which stands for freedom in the foreground and you have all these buildings that are built by big banks in the background. 
 
The prosperity that the U.S. experienced in the 19th century versus the 20th century are profoundly different. 19th century we were under a hard money standard and a lot of stuff was built during that era. The 20th century, it was mostly because of the dollar hegemony. It was the result of the dollar being the world standard and being able to use that to gain a lot of wealth from other countries. And thinking about the 19th century, there is a really cool phrase that's part of why I wear the cowboy hat. 
 
The phrase is, “Go west young man. Go west young man.” Now they were saying this not just to people that wanted to you know pan for gold or something like that. They were saying this to nearly everybody because say you are like 22 years old, maybe you're a new baker or a barrister or you know cobbler, whatever. The thing is, if you stayed on the East Coast, you would have to compete against everybody else that was a cobbler or a baker or a barrister and it would be very difficult because they had like 20 - 30 years’ experience on you. How are you going to compete against those people? They already had the clientele and everything. Well if you went out West, what happened? There weren't that many bakers or cobblers or barristers and you could make a lot more of yourself very quickly that way. Bitcoin gives us a new frontier. Bitcoin gives us a new frontier and it makes all of this happen a lot faster. And ultimately, this is why I think that a lot of social justice people have the wrong conception of human value. It isn't that we're not feeding them or housing them or clothing them - that's not the tragedy. Yeah it is a tragedy that's people are starving or don't have homes or don't have clothes or don't have you know freedoms and so on. That isn't the real tragedy. The real tragedy is that these people aren't contributing to civilization. The real tragedy of the starving African child isn't that the child is starving - I mean that's a tragedy too - the real tragedy is that that child has no chance to express their creativity, entrepreneurship, and inventiveness by contributing to civilization and creating something that none of us have thought before by creating businesses, by making something better - that's the real tragedy of centralized power is that it oppresses so many people so that we don't get to benefit from the tremendous human capital that already exists out in the world. By bringing sound money back through Bitcoin, that is the ultimate social justice.

Hi, All:

I'm working on creating a holistic blockchain heuristics course and I keep going back to this talk by Jill Carlson that we saw when we were at the "Bitcoin is_" conference in 2019, hosted by Russell Okung (yes the NFL football player) because it really hits the nail on the head on the question of:
​

1. Why blockchain? 
2. What was the landscape and catalysts for the emergence and evolution of blockchain?

For almost everything, I'm a big believer that the context, the journey, the how we get to our destination matters just as much, if not more, than the end result. Integrity. Satoshi Nakamoto, whoever or whatever you are, thank you for your contribution to humanity.

Had my assistant help us transcribe Jill's talk, so for anyone that has any accessibility issues with hearing, hopefully that helps. The talk was so good. Actually, that whole conference was just amazing and well produced (Thanks to George M., and Russel O., - go #Seattle!). 

--Arry 

Conference: "Bitcoin is ___"
Speaker: Jennifer Carlson
Title: Who is Satoshi Nakamoto?
TRANSCRIPTION of above video below here.

I'm really, really excited to introduce you to our next presenter who is going to cover one of the most important topics of Bitcoin. In the eToro Lounge, you will see the white paper, the Satoshi white paper that is now a part of the legend of Satoshi. So, it's in there, you can read it if you haven't. I'd recommend reading it multiple times, but with that, I would like to introduce you to Jill Carlson to talk about the legend of Satoshi Nakamoto. 

Thanks. It's awesome to be here. So I'm going to be talking about one of my favorite topics within Bitcoin. And it's one of my favorite topics because it sounds like a book. It sounds like a movie. It sounds like something out of the Da Vinci Code to me. And the most important thing to understand about this is that it's real. Everything I'm about to tell you is true to life how this played out, what the origin story of Bitcoin was.

I'm going to talk about Satoshi Nakamoto and the origin story of Bitcoin. Now, as Alex Gladstein, Jimmy Song, and the guys who were last up mentioned a few times, Bitcoin has no controller. Bitcoin has no one who is a central authority who's making the decisions around how it should be developed, how it should proceed. It is fundamentally, truly decentralized and that dates back to the very beginning of it. And it's very important to understand how it came about, how this could possibly be. 

And so, in order to understand this, we need to go back in time to the Fall of 2008. October 31, 2008, it was Halloween, eleven years ago. Take yourself back there. Now, on October 31, 2008, there was a paper that got published that we've mentioned already - the Bitcoin white paper. And in that white paper, there was presented for the first time, a solution to a problem that had existed for a while. That problem was how might we create a peer-to-peer electronic cash system. 

Now, we might be sitting here and saying, "Well, okay. But I kind of already have electronic cash. I have my Bank of America app on my phone, I have Venmo, I have PayPal. Why is this different?" 

This is different because what we talk about when we talk about Venmo for example - there's nothing wrong with Venmo, I use Venmo everyday - but, with Venmo, I'm relying on a third party to make that payment which is very fundamentally different from cash. If I send you $20 on Venmo, that transaction has to be routed to Venmo, back to my bank, back to your bank. There are all of these different parties and players involved. Whereas if I pull $20 out of my pocket and hand it to you, who else is involved in that transaction? No one, right? And that becomes very important when we think about the distinction between cash and just money. 

And so, here for the first time, in this paper, we had electronic cash invented. Now this paper was published and it wasn't published by a research university, it wasn't published by a government agency, but rather, it was released to an email mailing list called the cypherpunk mailing list. And so here we actually have the original email that Satoshi sent presenting Bitcoin P2P e-cash in this paper or the Bitcoin white paper. And again, it's important to note here, the way that he chose to release it was to this pretty niche mailing list on a random corner of the Internet that had maybe gotten a lot of traction back in the 90s and we'll go over in a second sort of who the folks on this mailing list were and why he might have chosen to release it in this format to these people. 

But he did. That was an intentional choice that he made to release it on the cypherpunk mailing list. And so then, we move on and we ask okay, well so who is this 'he' that I keep talking about? Who is Satoshi Nakamoto? Who is this author of this white paper that solved the problem that, again, had been around for a long time, that many great mathematical minds, that many great cryptographers etc had set out to try to explore. 

And the answer to that question is where, again, I think this starts to sound like a mystery book because we don't know. To this day, we don't know who it was who managed to solve this problem. That is wild if you think about it because if you think about other folks who publish under pseudonyms, for example. Authors. Artists. Very often we have some idea of who they are or they were just using the pseudonym as just kind of this is my professional life and then I'm keeping my personal life separate. 

But with Satoshi, there is not a trace. There is his online persona, he published this paper, again, to this mailing list. No one on the mailing list had ever interacted with this Satoshi before, with Satoshi Nakamoto. And in fact, the first people who started responding to him didn't even think twice. They didn't question who you are or where you came from. It wasn't until weeks, even months down the line that he started fielding those questions and he was always sort of very cagey and shy and didn't reveal very much at all. And then only later did it come out that actually no one exists. Satoshi Nakamoto does not exist in the form, at least, that he was presenting to the world. 

And then finally - so he publishes this white paper to this mailing list and very quickly on the order of weeks and then months he followed it up with working code and he performed the first Bitcoin transaction. And there are a few things that are important to think about there because that tells us something actually, about who Satoshi was. He's someone who could program. He wasn't just sort of an armchair philosopher coming up with these ideas and presenting them out to the world. He was actually programming and creating the source code that would enable this vision that he had for the future to become possible. 

And so he performed the first Bitcoin transaction on January 3rd, 2009, a few months after he had first released the white paper. Pretty quick turnaround time, actually. He performed the first Bitcoin transaction and he timestamped that transaction by publishing within the transaction the headline of that day's London Times. And here you can see it over on the right - The Times 03/Jan/2009.

Now, let's take a step back and think for a moment here because what I've just presented to you is pretty wild. Again, it sounds like something that is borderline hard to believe that this is actually how it played out. That this isn't just some origin myth narrative that we've come up with to sort of kick up some interest in this product and in this space. It's all true, though, but what I would suggest, what I would propose here is that it actually was very intentionally done for a whole number of reasons. That none of this was an accident from the timing to the format in which he released it, to the distribution strategy around it, who he was, who he presented himself as, and then finally, the kind of branding that he created around this new currency, this new technology, this new product. 

And I wanna again, take a step back here and think about the fact that we spent so much time in the Bitcoin space thinking about the technology, the technology that goes into Bitcoin. As we should because there are major breakthroughs that have occurred based on what Satoshi was able to put together for the first time. Again, he solved this unsolved problem. 

But if we look at this timeline up here, we can see that actually, a lot of what went into Bitcoin, those components massively pre-dated Bitcoin going all the way back to the 1980s. There were all of these developments that happened along the way in terms of the technologies that were needed to be able to create Bitcoin. And really, what Satoshi did on the technology front, among other things of course, was he assembled these technologies for the first time in such a way that he created something new and he created this peer-to-peer digital cash. But should we spend so much time in this world, talking about, thinking about the technology aspect? But what I would propose is that we spend not nearly enough time talking about basically the marketing strategy, actually, that Satoshi created around it because Satoshi's brilliance was not just in creating the technology, but it was also in how he presented it to the world and how he sparked people's imagination with it. 

And so with that, I want to briefly dive into a few of these areas. So I mentioned he created it on October 31, 2008. That's not quite right, though, right? He didn't create it then. That was when he chose to release it to the world. He chose that date. Now why would he choose October 31, 2008? There was a lot going on in the world at that time. Philadelphia had just won the World Series, Barack Obama was on the verge of being elected President, but you may also recall we were in the midst of a global financial crisis. 

So who here remembers where they were in 2008 when Lehman filed for bankruptcy? Who feels like they were affected by it in some way? This affected everyone in the United States, everyone in the world. And suddenly, for the first time, people took a step back and started scratching their heads at the financial system. If big investment banks could go under - and here we have a picture. This is the Lehman Brothers sign being brought into auction at Christie's to be auctioned off in order to raise capital, actually for the bankruptcy filing of Lehman Brothers. 
If we can have banks going under, if we can have governments bailing out those banks and creating, really, a moral hazard around the bankers who made poor decisions around risk that set off this chain of events, this cascade that impacted every single one of us in this room, people were starting to ask these questions for the first time. And they were mad about it. 
Occupy Wall Street. I was actually working on Wall Street at the time the occupy movement started happening and I would walk past everyday the protests occurring because people were mad as hell that the banks were able to be so irresponsible and governments were able to come in and bail out those banks while Mom and Pop had to lose their jobs, lose their pension funds. 

And so what I would challenge you to think about here is October 31, 2008 Satoshi releases the Bitcoin white paper. Why? Not because that was the date where he finally felt like he cracked the code of the technology, but because he knew that the timing was finally right to release this to the world, that people were asking the right questions that would enable them to understand this. So there we have the timing, the question of timing. 

The next thing I wanna talk about here is the question of who he released it to, why, and in what format most particularly. So I mentioned this word, "white paper". Everyone in Bitcoin loves to talk about the Bitcoin white paper. The Bitcoin white paper this, the Bitcoin white paper that. I had never heard the word "white paper" before I got into the Bitcoin world. Not actually a normal thing to be talking about, it's not actually a normal tactic and marketing etc. Now why did he choose this format to release it in? Well, actually the origin of "white paper" actually dates back to the early 1900s in the UK (United Kingdom) when white papers were used as policy proposals and they sat in this kind of interesting middle ground where they were policy proposals. They were intended to be used as tools somewhat of democracy to solicit feedback from people on the policy proposed there. And so there was this very all encompassing, democratic, high value placed on an individual freedom's format to be able to have a discussion. 

Interestingly - of course, this format has been picked up by universities and academic research and some other technologies in the meantime, but nonetheless, I think that it's really worth thinking about why did he choose this format - the white paper - and does it have something to do with the fact that he was soliciting feedback. He wanted this to be an inclusive process, an inclusive conversation and I would say yes, that is probably exactly what he was thinking. 

And so, we have the Bitcoin white paper, but as I mentioned before, we also have code. Satoshi didn't just put the idea out there and say, "Alright. No you guys take this and run with it or go and try and solve it." He said, "Okay, I'm also going to sit down and implement this. I'm going to pull some other people in and we're gonna try and build this damn thing and do some transactions." 

And that's exactly what he did. And there, he's tapping into a slightly different ethos from what he did with the white paper. He's tapping into an ethos of create, ship the code. And I want to come back to the importance of that because we might think about oh you know well this just kind of make sense for him to put the idea out there and then tinker around and try and build it, but even the fact that there was lag time between when he released the white paper and when he build the first version of the code. That's important because that made it such that he could get feedback from the community that he was presenting it to before shipping and releasing the first version of it. 

And now we want to talk about, of course, who he released it too. And this is where I think it gets very interesting again because I mentioned already the cypherpunk's mailing list and I want to talk about who the cypherpunks were. They were an activism community that really gained traction in the 1990s, really focused on privacy, individual rights, individual rights online, freedoms, all of these themes that we see crop up in the Bitcoin white paper. And cypherpunks had actually been working on this problem of how to create digital cash for years and so, you can think about the different ways that Satoshi might have gone about trying to present to the world this new idea. He could have gone and filed a patent. He could have approached a government agency and said, "Hey, I think I'm really on to something here." But instead, he took it to this community that he trusted to be the stewards of this - the cypherpunks - whose values he had some degree of certainty around in terms of the privacy and the individual rights aspect. 

And then finally, the last thing that we need to talk about is of course, the branding around it and so we've covered the timing, the creator, his distribution strategy, the format that he released it in, but what I would say was actually the masterstroke of this whole thing was his ability to see how he could plant, basically, an Easter egg in the middle of this. So, I talked a little bit earlier about how he embedded in that first transaction that he did, a headline from the London Times from that day. He did that for two reasons. He did that to timestamp it, but also, what that headline was, was no accident. 

That headline read, "Chancellor on Brink of Second Bailout for Banks." And that was indeed the headline on January 3rd of 2009, but that was also a political message. That was a political message saying look at the money that you have today. Look at where it's got us. It's gotten us into crisis. It's gotten us into a situation where we have banks and institutions who can use that money in ways that hurt us. It's gotten us into a situation where governments can bail out banks and what if we imagined a world in which that were not possible? What if we imagined a different type of money? And that's what Satoshi was presenting to us. 

And so, I wanted to share this story with all of you today because I think that it's really important to consider not just the technology behind Bitcoin, not just to consider the technological breakthroughs that Satoshi made in order to make all of these possible, but to also think about all the other decisions that went into it - as he was releasing it, as he was developing it - that got us, really, the magic of Bitcoin that we have today. 
​
Thank you.

 Hi, All:

I was asked if I could make time to go to this webinar this morning (9-10am), and I could, so I did, and of course, I took notes. I always take notes. And I'm continuing to share them - so hopefully they are useful to someone out there. I have to say, I saw Danielle DiMartino Booth in an interview for the first time last week - and was superbly impressed. Today, she went from being a self-proclaimed "old timer" who hedges with GLD (Gold) - to someone who might finally understand the great big case for BTC (Bitcoin). WOW. And Jeff Booth did an amazing job building up the case and really pushing for logical thinking and thought experiments. Now, I am following @JeffBooth - as I am also a newly minted fan.

Here are their bios for reference (I don't think they are related.):

• Jeff Booth: https://www.jeffreybooth.com 
• Danielle DiMartino Booth: https://dimartinobooth.com/bio/

Feedback welcome on the notes. Too much? Too little? Different format? Let me know! And here's the link to the full interview: https://blockworksgroup.io/ia-inflation-vs-deflation?SQF_SOURCE=webinararchive 

​--Arry 

These are my personal notes from attending conferences/webinars/talks - and this one is from this past weekend in watching a couple sessions from the Trading Investment Summit: Investing Notes: Lyn Alden 9/26/2020. I recently started following Lyn on Twitter too - after discovering that some of my favorite investors also follow Lyn, so thought it'd be a good opportunity to catch an interview live to learn a little more about her perspectives. 

Here's a link to her BIO, with some additional resources she's created.

Hope this helps! (And feedback always welcome.)
​--Arry 

Lyn Alden Interview

Lyn founded LynAlden Investment Strategy. Free newsletter every 6 weeks. Engineering background. Started investing before studying as an electrical engineer. 

How has the banks/markets responded to Covid? What’s your view on this, esp regarding employment/supply chain? ——> April 2020 - looking forward square root sign curve regarding employment. Falls, small recovery, then will be a very slow recovery. So far, that’s what we will see. We have a credit cycle playing out - permanent job losses are happening. Going forward, this will be an issue. Fiscal policy is what to watch out for - will dictate how “K shaped” this will be. If you see more fiscal, you can see a narrowing of the K. 

How to get this trickle down effect of QE over these years. Helicopter money into people’s accounts has a good short term effect. ——> Central bank have been trying to address this problem of the global financial crisis - we have had low rates for so long, so it is miss pricing risk. Negative rates destroy the economy.  It’s an over reliance on monetary policy - it’s like the 30s-40s. We need more fiscal policy - in the 40s, that’s what happened after the war. Lot of the deficits is tied to structural, an aging demographic. Fiscal versus monetary policy. This recessions we got a lot of direct to consumer earlier. Now it comes down to what happens next. We’re in a normal recession right now.

Apple issuing debt even with their cash pile of billions. Is it sustainable for low rates? It’s good for real estate, taking out low 30 year fixed rates. It’s good for stocks. But what else? ——> Whole yield curve is so low. Looking at the long term debt cycle, in a typical biz cycle, you might get more leverage in the system, then you get an external catalyst, and then a small recession. Then monetary policy comes in and ends it. Over multiple short term multiple biz cycles, then you’ll get more debt in the systems, … then you get lower interest rates, then you hit zero. The last time we hit zero bound was 1930. This will be a big deleveraging event - but they play out differently. Very challenging time for markets. Not a lot of safe havens right now - because they are not good places for holding right now. No safe haven to put your money right now. 

The FED has announced a symmetrical period… how will this affect the dollar. Interest rates will not be volatile because central bank will hold. You’ll get more currency volatility. 1940s, when we were getting off of 0 bound, they said won’t let the 10 year yield go above 2.5%. Inflation reached double digits - it was inflationary and contained. In 2020, we’ll see a scenario like that. They will cap treasury yields - and let treasury underperform. We’ll come down to fiscal policy. Central bank will put the breaks on it - so it’s all about fiscal policy. 

How calculating inflation has changed so much. Inflation is basically which is reported is different. Central banks changed different from tightening to easing pretty quickly. The pain problem is the debt - everywhere, not just the US. So much debt - how will central banks get out of it? —> Long term debt cycle will be done by inflating a large chunk of the debt away. It’ll be like 1940 — they capped yield below inflation rate. You get all of your money bank nominally - but you lost 30% off your purchasing power. We’ll be in that period. We’ll get inflation. Real yields will be negative for awhile. Over the next many years, negative real yields. 40 year period from late 1930s to mid 1970s, you mostly failed to keep up with inflation. We’re in that situation. Yields are so low - only short term trades is where you might gain. 

Look at total debt to money supply — our debt is building up nominally, but it peaked in 2007 and has been in decline because of the money supply growth faster than debt. US came out of the 1940s as the only country as the global creditor nation with a large industrial nation. Now it is the largest debtor nation. This one is different. People point to “Japanification”. It’ll maybe stagnation? Japan is currently is the world’s largest creditor nation - they own more foreign assets than foreigners own their assets. That’s not our case. I’m in the dollar-bear camp. Over the next 10 years, the dollar will lose value against some major currencies. Japan also owns a lot of their own debt, btw.

Since we had massive QE, zero rates - have we seen inflation? QE and zero rates are more deflationary. Housing going up Disposable income has been getting reduced of the average person - because most people don’t have all these extra assets. Thoughts? ——> Some extent. View a similar outcome from a different lens. QE mostly props up asset prices. Fiscal policy working with banks - that’s more generally inflationary. Need to point more to fiscal policy. This happened in the 1930s, you didn’t see broad price inflation until 1940s where they saw the broad price inflation. Fiscal policy more than more central bank monetary policy.

1930s we had twin budget surpluses in the early 1930s, The starting point was positive. We have twin deficits right now going into this. ——> This is more of a inflationary variable. We have slower population growth. Rapid tech growth. Deflationary forces, that are offset by trade deficit, debtor nation, etc…. More vulnerable currency than back then. Over the next 10 years, we’ll see the dollar decline (maybe more 5 years). Depends on more fiscal policy. It might go down to the “70s”. It’ll depends on fiscal policy between all the countries. 

Fiscal policy that leads us to the most event of the year, the US elections. What is a risk-positive or risk-negative outcome? Trump with Senate Red, House Blue = lot of things can happen. Depends on the decisiveness of the election. You’ll get large deficits no matter what. Size of deficit is all about the gridlock. There will be a volatility period. 

What is the breaking point? The confidence level? Where’s the limit? ——> FED is trying to do tightening. Domestic balance sheets are tapped out, even with the deficit oof 5% of GDP. Now QE happening to buy treasuries. We’re getting into a fiscal issue. We can’t float the treasuries to the foreign sector. Much slower rate of purchase than before, so we are self-funding them. These deficits are not going away anytime soon. You’ll still get large deficits, the central bank buying a large amount of it. If you look into 2021-2023, that narrative will change with so much deficit.

One of the most popular asset classes, Gold, Silver views on the next 1-2 years? ——>. 1 year I’m neutral. Out 3 years, I’m bullish on it. I turned bullish on this back in 2018. It’s really correlated to real interest rates. Sentiment layer on top of it. Real rates are less negative than 1 month ago. How well gold does really depends on stimulus? Are we getting disinflation? Inflation? How big will the stimulus be? Especially for the middle class. The wealth concentration (like the 20s-30s), …. Part of the inflation debate will depend on middle class, this is key. History repeats itself. 

Dollar losing its reserve currency status. What’s your view? Will this happen? ——> Good question. Most people ask the wrong question? We are at the point where there is no one currency that can do this. This is a weird period in history. Previous periods didn’t have such a lock globally. The dollar since the 1940s have been in a super entrenched position. After WWII,US was 40% of global GDP, rise of emerging markets, …. The US is now 20% of global GDP. We’ve run many large trade deficits. We exported our industrial base and our currency to the world. US used to have 80% of the world’s global GOLD reserves. Going forward, the trick is not to look for which currency will replace the dollar. You could have regional trading currencies. Trade between Russia and China, used to be 80% of dollars, but now it’s got more Euro. But Russia/China are antagonist towards the US. A handful of currencies will be used to price commodities. Going forward, central banks buy less gold/treasuries. The dollar will be A reserve currency, not the ONLY currency to price commodities. Just a part of the system.

These are my personal notes from attending an interview with Danielle Booth today: Investing Notes: Danielle DiMartino Booth 9/25/2020. I think my fingers got a major workout for the 45 minutes she was being interviewed trying to type/write as much as I could from what she was saying. Super smart, savvy woman who obviously knows her stuff and does not apologize at all about her opinions. The "Speak Truth to Power" type of stuff - which I'm a personal big fan of. In a sea of men that were presenting today at this 3 day investor conference, it was so refreshing to see and hear her. 

Took a screenshot (sorry, not the most flattering I know if you see this Danielle) - see below. Here's a link to her bio too.

Anyways - hope these notes are helpful. Feedback welcome. Normally I wouldn't be sharing my notes with everyone so forgive me if they're a little rough. Trying something out (sharing).

​--Arry 

​Notes from the conference on this talk: Danielle DiMartino Booth will be interviewed live by our hosts, where she will give a brief overview of the recent global developments and their potential economic effects. She will undoubtedly discuss central bank action and the likely scenarios for equities, interest rates and various asset classes.

Her ability to create really useful analysis and her Markets Briefings was how she made her mark and gained the attention of the great investors (Warren Buffet and Charlie Munger for example). They saw some of her work and invited her to Omaha to meet with them personally (she couldn't because she had a 5 month old baby - and they said no problem, they would provide childcare so she took the whole family.) Worked in the Fed, Speaks truth AND she doesn’t do sensitivity training. :) LOL. In the Fall 2015, inside the Fed, she was given special instruction to pay attention to only Jay Powell. An outsider insider. Danielle was not liked at the Fed. 

Covid was a bump or the catalyst, from October 2018. She really understands the markets and the behaviors, the impact to the market. Jay Powell really understands the credit markets. What’s going to happen going forward does she think? A doomsday policy was in place after junk bond issuance freezing. May 2019, Neiman Marcus issued debt and the bond market froze. Jay Powell talked about easing so the markets over again. Again, there already was a doomsday policy. Morgan Stanley did the math. Jay Powell already knew TRIPLE B was an accident happening. Any downgraded debt was eligible for purchase by the Fed — so even if anything was junk, the investors had to treat it with respect.

The problem is that today, the market is losing confidence. Jay Powell cannot create cashflow. He hates Trump (even though he’s a Republican). He will not buy stocks 39 days before an election. Optimically and narratively it’s more damning. It’s ready to deploy - but he will likely do nothing. He will not do negative interest rates. Other countries can. Everything will break. Someone needs to have a reference free rate. 

Jay Powell spoke yesterday. Downside risk is out there without further federal aid. The Fed is begging congress to do something. The growth of fed balance sheet is correlated with the S&P. The Fed wants more stimulus. “I wouldn’t say we are out of ammo”. Did he say it? He kind of did. They need “product” = They need “paper”. 

Is the Fed influenced by the president? Danielle says no. Jay is afraid of the credit markets. He doesn’t care about supporting Trump. One thing to note, is that Munichen and Powell speak the same language. What the Fed is doing is doing now against the law. During WWII there was yield control and there was a cap. The Fed and the Government were severed in 1951 - Fed was separated from government. There was an accord. Now because of what's going on, future politicians will have to RE-separate the Fed to be nonpolitical. 

Rhethoric today for Powell, is one of his biggest tools. The briefcase indicator. Powell likes to “play” with investors. What happens if the investing public loses confidence in the Fed? You’re already seeing that. He blows it on Jackson Hole on August 27. The whole world freaked out as a regime change. F1c statement to 2023, with a target of 1.7%. Market took a step back. The Fed, before this rhetoric, the Fed had been buying up all kinds of stuff. The Fed is creating the narrative. 26 million people are collecting unemployment, when there’s deflation knocking on the door. Powell is trying to bring up inflation. Rent is coming down. Housing is the main # into every model. 

The Fed gauges inflation how? Fed has to hide behind inflation. Our health care inflation is not medicare/medicaid rates. They know that. They know we spend more on housing. They have to have this broken metric to support the Contant QE. They can’t change this. They are trapped. QE is important. They cannot turn the facilities, they cannot turn off the printing presses. If they decide to become the printing press for hire. We’re going to go from deflation too STAGflation. 

What is the breaking point that will push yields? Traders are all waiting for this. Dallas, Scottsdale - Jay Powell has created the housing boom. The Housing is the most leading of all sectors. He bought all mortgage back securities in 5 minutes. You have rates of 1.99%. Ed Pinto (Fannie’s former economist). IN 6 months, cash out refinancing is HOT. The appraisals are not even happening. Fed is creating the narrative that there is this hot market. Wealthy people are renting homes for $75k. People who have money? FHA lending is still 3.5% down — people who are not wealthy are hurting. If you see the riots now, it’s going to be worse in March. Once banks can start to foreclose - this is going to cause mayhem. This is all caused by the Fed. 

You’re bullish precious metals? Gold? What will drive prices higher. Right now investors are going after the traditional next. Miniature repeat of March/April 2020. People are calling bluff of Fed and selling Gold. Gold is still outperforming in both deflationary and inflationary markets, and with volatility. If you’re looking for protection - Buy the Move. 

How do you feel about cryptocurrencies? The trading community is favoring it as a hedge. It’s like TikTok instead of the walkman. People that want to make a name for themselves buy Bitcoin. The old people want Gold. If we go over the line into quantum and it becomes more economical to mine this stuff. People are disgusted with the fiat currency. Danielle owns gold.

Lot of people look at what the Fed is doing, expanding the balance sheet. $1.5Billion/hour worldwide is what is being printed. Will asset prices will go higher? Is this a V shaped recovery? No, it’s a VERY K SHAPED RECOVERY. Small businesses hire most of the Americans and have been left behind. Great innovations. Great new industries. Lots of people left behind. The K may not be permanent. Raymond James, law firms are laying off. Indeed.com — job postings for high income are down 24% year over year. If we have more white collar jobs lost, then we’re in trouble. The stimulus really helped - if you see white collar layoffs, they the K will not happen. It’ll be a W shape. 

What about Japan and the bank of Japan? The rates are at 0. US to Japan is apples and oranges, but is there anything to compare? Yes and no. The No is that the fact about 1/3 of treasuries are owned by foreigners. It’s owned by the post office. Banks own 40% of CLOs. Good luck Japan. We are not Japan in the sense that we don’t have a long runway to start the printing presses because we pushed it so far. We are not at the point to being a recovery. Starting points matter. It’d be more convenient if we were Japan. The whole world is in recession. Japan is going in and out of recession despite it all. Nothing cataclysmic has happened - they’re an innovative country that’s moved that innovation to China. @bondstrategist on Twitter — sent out a poll a few weeks ago. We believe we’re in the Great Financial Crisis 2.0 because of the Credit issue. 

Is there a way for the Fed to get out of the box? They keep buying ever increasing debt. She wrote a book “fed up” as she’s not a fan of the Fed. That’s the trillion dollar question? The answer is you have to look at 2019. Russell 2000 and the broader stock have not ever gotten back to ATH’s off 2018, when the Fed tried to get out of it. They think they can do this for 10 years. I don’t think the market will not allow it. Bondage vigilantes have been hibernating for a long time - they will come out. The Fed can continue this for much longer - what they want us to believe. As long as there’s deflation, they will continue.

If Biden wins? Remember, the debt ceiling was passed - it was because the Democrats asked for no debt ceiling until 2021. From now until June 2021, there’s no debt ceiling. The bond investors will hit their pain threshold soon. Who knows when or what will happen.

How to find Danielle? Come to Quillintelligence.com — we publish/write every day. Macro investing is hot again. Data means something now again. They put unvarnished best research. She says @dimartinobooth follow on Twitter. 

As an insider at the Fed, is the plunge protection thing real at the Treasury? It is. It’s not inside the Fed. It involves more than the Fed and Treasury. It’s like you need a Lehman Brothers. That’s because they already had the Doomsday plan ready to go. 

Hi, All:

These are my personal notes from a talk I attended from the Investment Institute: Investing Notes: Brady Dougan 9/24/2020. I decided to attend this one because SPACs (Special Purpose Acquisition Companies) are all the rage right now and VERY INTERESTING as a vehicle for cash preservation (with some upside), and also for fundraising (as a company who's ready to scale and interested in doing an IPO (Initial Public Offering - when a company goes from being private to public), with a lot more support). SPACs remind me of the ICO (Initial Coin Offering) world, from which I got my first taste of this. They are sometimes called "Blank Check Companies". Some people will criticize and ridicule it. I am a believer and think this is a trend that'll be sticking around. 

Hope these notes are helpful to someone out there. Feedback always welcome.

--Arry 

Here are the bios of the folks that were in the presentation:
​
Brady Dougan (Interviewee)
Brady Dougan is an American banker and CEO of Exos. From 2007 to 2015, he was the Chief Executive Officer of Credit Suisse. Before this, Dougan was CEO of Investment Banking and acting CEO of Credit Suisse Americas.   After starting his career in the derivatives group at Bankers Trust, Dougan was hired by Allen Wheat to join Credit Suisse Financial Products in 1990. In 1996 he was named Head of the Equities division, a position he held for five years before being appointed Global Head of the Securities division in 2001. From 2002 to July 2004, he was Co-President, Institutional Services at Credit Suisse First Boston, and from 2004 until the merger with Credit Suisse in May 2005, he was Chief Executive Officer of Credit Suisse First Boston. Dougan received a BA in Economics in 1981 from the University of Chicago and an MBA in Finance in 1982 from the University of Chicago Booth School of Business. 
 
Ted Seides (Interviewer)
Ted Seides, CFA is the Founder of Capital Allocators LLC, which he created in 2016 to explore best practices in the asset management industry from the perspective of asset owners, asset managers, and other relevant players. He hosts the Capital Allocators podcast and serves as an advisor to allocators and asset managers. Previously, Ted was a founder and served as President and Co-Chief Investment Officer of Protégé Partners, LLC, where he spent 14 years at a leading multi-billion-dollar alternative investment firm that invested in and seeded hedge funds. Ted began his career in 1992 under the tutelage of David Swensen at the Yale University Investments Office. During his five years at Yale, Ted focused on external public equity managers and internal fixed income portfolio management. Following business school, he spent two years investing directly at two of Yale’s managers.

Brady Dougan Talk notes:

What is the functionality of financial institutions? What are the aspects of a bank that you took to Exos? Answer: The basic function is to intermediate the financial flows, and to do so in a productive way. This can be done a lot more efficiently through modern technology:

• Can do it all faster and more efficiently.
• Can do new things too.
• Platform play was important. 
• Lots of experience on the structuring side.
• Example - construction finance is an area of focus, has technology to track payments/data and allows business at scale. 
• Has algorithmic training business too.

SPAC investing opportunity. How to approach framework for investment fund in SPACs.

Then he talks about a special fund that Exos and Morgan Creek are doing together. It's called the "SPAC Plus Fund":

• Focus on short term relatively liquid cash safe vehicle. 
• SPACs are very interesting. They’re listed equities and trade on exchanges. 
  • First part of their life is very much like a fixed income.
  • Do an IPO, take the money and put it into a trust
  • When then do the acquisition, then they announce the acquisition.
    • If fail to do an acquisition, then investors get money back.
    • Fixed income protection on the downside.
  • If successful acquisition, then sell the stock at a profit.
  • Downside is the treasury with upside.
• Monthly liquidity.
• Is it a vehicle/type of asset? 
  • Instrument that optimizes for all the players involved.
  • Good return for investors.
  • Great vehicle for sponsors (management team of SPACs) gives them capital to deploy.
  • Good for the acquired companies. 
  • Very efficient and positive way to take companies public, good way to deploy the cash, manage cash.
• The market has graduated
  • We have high flyer companies - Virgin Galactic, etc… are using it as a vehicle. 
  • There are not many big losers.
  • People who take the biggest risk are the management team that create the SPACs. They’re 100% at risk. They’re the most knowledgable, etc…
  • They get great returns when they are successful.
    • They pay all the fees to take the company public - underwriting for IPO, the legal fees, etc…. All the costs of pursuing the acquisition 12-24 months. Fees on SPACs are 2% typically.
  • Promote or 20% that the sponsors own in the continuing business after the acquisition. There’s substantial dilution still. There’s fees. 
  • Opportunity to be a part of the initial private equity pool into SPACs too.
• Diversification is important
• Is this a fad?
  • No - likely be very durable. Serves everyone well.
  • It is a very interesting category of assets to have some exposure to
• SPAC to buy Bitcoin???
  • It’s a definitely a newer market.
  • It’s one of the reasons as an asset category it’s really important. 
  • Professionally managed asset is a good way to do that.
  • Access to mining as well.
• What’s the catch to SPAC+?
  • There isn’t it….
  • It’s an area you have to entertain any possibility 

What about crypto/stablecoins/etc?

• Regulatory side will develop and is slowing things down a little.
• The regulatory world is getting a lot of it right.

How do you allocate your time across all these different things?

• As CEO of Credit Suisse, my calendar was set for the next 2 years.
• With Exos, that’s not the case. Allows me to be very nimble and flexible. I have to be very responsive and flexible with my time. How to build new businesses or expand businesses. Lot is working with the team here. 

What’s the biggest unexpected challenge of being a CEO of Exos versus Credit Suisse?

• Brady has been surprised at how slow moving large organizations are.