@ The Bitcoin Infinity Show

This is the first time we're releasing our episode transcripts on Nostr! Up until now, the transcripts have been available on our show website, but now we're going to add them here on Nostr, too! The transcripts aren't perfect - we've cleaned up obvious mistakes and repetitive chatter that nobody wants to read, but sometimes the transcript doesn't pick something up properly or doesn't understand somebody's name or a niche word. But hopefully the transcript is still useful, as is! **Check out Bitcoin: The Inverse of Clown World!** Out now at <https://bitcoininfinitystore.com/> # BIS124 - Peter Dunworth ## Welcoming Peter Dunworth Back **Luke:** Peter, welcome to the Bitcoin Infinity Show. **Knut:** It's a pleasure to be with you two. Likewise, how are you doing down in Australia? **Peter:** Life is beautiful down here. They've lifted the jail like restrictions, so we're free to move around. We can leave the country when we want to, which is nice, and I've got to say it's a cold time of year in the southern hemisphere. It's our winter time and it's been a wet and a cold one relative to what we normally have, but I'd like to say that life is beautiful. **Knut:** Good to hear. **Luke:** Can you quantify the cold? Because, we've got cold here. **Knut:** Yeah, we got proper cold. **Peter:** I'm talking about 13 degrees Celsius. **Knut:** yeah. **Luke:** Yeah, you might be warmer than me right now, in, the middle of July here in Finland, All good. **Peter:** move in, it's good. **Luke:** Hey, **Knut:** saw Dave Grohl on the Foo Fighters play in Bergen, Norway once, and the first thing he said was, this is summer to you? He couldn't believe it, that the people considered that weather to be summer. **Peter:** yeah, we need to work on that. **Knut:** Yeah. # Bitcoin and Incentive Structures **Knut:** What rabbit hole, what sub cavern of the rabbit hole are we exploring today? **Peter:** I was hoping you'd help me on this, but one thing that's been, running around my head, is thinking about why Bitcoin has the incentive structure that it does, and its ability, to unite, more of mankind than anything else. And there are a few things that sort of Running around my head in that we've got the tragedy of the commons, which is a major problem when there's a common good. No one looks after it. Yet, here we have Bitcoin, which is for 8 billion people. And it seems to be looked after pretty well by, all accounts. The other thing with that, and this is what I find really interesting about the incentive structures with Bitcoin, is that Bitcoin, for a lot of people, takes on a religious type quality. And where a lot of people become obsessed by and one of the things that's sort of been playing around in my head is why is that so? And I can't help but come back to the Maslow's needs hierarchy that it fulfills a whole host of those base layer needs. And once you've got those base layer needs felt, All looked after, then you can grow spiritually and mentally, to fulfill those other needs that are at a higher scale. And because so many people in the Bitcoin community are relying on that foundational principle of those base layers being built on Bitcoin, it really doesn't matter which side of the political aisle you come from or religious spectrum that you, you want to adopt. foundational base layer of being. You know, your money is basically Bitcoin, and that sorts out and lays the foundation for you to achieve greater things. Then, everything else is downstream of that. You know, Bitcoin fixes this again. **Knut:** Yeah, I think Maslov's, Ladder of Needs is now on a Bitcoin standard, it's Maslow's escalator. **Peter:** We talked about that last time. And this is where So, one of the conversations, listening back to our last conversation was, you know, you've got the easiest job in the world, I think you said, as a financial advisor or investment advisor, talking about Bitcoin. It's like, just buy Bitcoin and do nothing, and that ironically is the hard part though, the doing nothing. # Bitcoin Mining **Knut:** Yeah, some people have a hard time doing nothing, myself included. about the incentive structure, the only part of that, that I'm not fully, you know, the whole thesis of Bitcoin, when they're in your head, anyone, trying to steal them, if you simply just keep them in your head, they'll get nothing. So the incentive to attack someone goes down, right? The, peaceful revolution thing. However, for miners, still, or mining pool owners, let's say, or big mining farms still do have an incentive to attack one another. At least, if they grow large enough and you have structural, like, nation level big things. so, is there a problem there? And also with miner centralization and all of this, like, I'd love to hear your take on, these, spammy miners that, or the mining pools allowing for spam. so that the individual miners are merely hash salesmen and not really miners at all, since they don't know what block they're mining on. so is there a problem there and how big is that problem? Is it? **Peter:** Good question. Personally, I'd like to think that I'm a free market guy, so I'd like to see the market solve that problem. And I think in some way, shape, or form, we are seeing the market solve that. if we look at the cost of transacting around the halving. we were up over 1, 000 sat VBITE for those early blocks after block 840, 000. And now, we did some transactions this week that were sub 6 sat VBITE. So that is a 99 percent drop or 98 percent drop in fees. And that's all been sorted out by the market. We haven't had to coerce. Any of the minors, it's all been sorted out through natural market attrition. **Knut:** And this is where I think the spam problem, in a broader sense, it really gets solved by the market Yeah, that's the hopeful take. but if you go to mempool space and look at the latest block and how much of it is this data is quite a lot still. And all of that data is making the Initial cost of firing up a node more expensive for the node runner. and the downloading of the time chain. when you syn it now you go up to, 2022 and then it gets slow **Peter:** Yeah, really slow. And if anyone's out there watching mempool or like just pull it up and have a look, it's actually, it's mesmerizing to watch. And I sound like such a dork saying this, but I sincerely love watching. Cools, but like blocks being created and to conceptualize this without a mempool in front of us, what you're referring to there. Is what you see is these tiny little blocks, that typically have 0. 0001 of a bitcoin in it, but they take up an improportionate amount of the block space because there's so much data attached to it. And that's the spamming that you referred to. I think the Node Runners, the technology's getting better and the rest of it, and hey, you know, if you look at the nodes, the number of nodes that are on the network, they continually and steadily rise, so I think that's probably proportionate to an improvement in technology and, you know, maybe bandwidth is getting better, so that's going to be less of a problem, but the other question that you posed on the mining front, mining is the fiercest competition on earth. Open to anyone with electricity and miners to do it, or, you know, as you guys like to say, someone with a pen and pad who can add up quickly, that, to me, is the competition. I'm really fearful for a lot of Bitcoin miners because I think it's the most intense competition that we see. And if you look in the market, you have a host of the Bitcoin miners moving to AI. Why are they moving to AI? Because there's more predictable revenues and there's, Probably a more predictable future, and when it comes to the listed miners anyway, they want to see predictability in revenues, whereas when it comes to Bitcoin mining, it's a wild ride, and this is where I look at the cost structure, the OPEX and CAPEX structure of the Bitcoin mining network. It realistically will end up being a state owned enterprise, is what I think, like an infrastructure asset that every country will run for themselves, so that they're assured of getting their piece of the block or having their transactions loaded on the block. And this is where, from a free market perspective, I think governments around the world will start subsidizing that as a way to compete. And that competition gets fiercer. It doesn't get any easier. It gets much more intense, I think, when the nation states enter and they've got free energy. **Knut:** huh? Let's, let's think about that for a while because that's sort of allows for those, government miners to, To do all the ESG bullshit and accept payments, offline and all of the trash that the inscriptions and ordinance people are doing right now, like paying miners off band and, the mining pools not paying out the entire, fee to the miners, but keeping a lot for themselves and stuff like that. I think you get all these, external influences, when you have the state level mining. So, now in a high fee environment well, it's lower right now, but like rewind the clock six months, you have Bitcoin still functioning, but. Only every 100 block or something do you get your transaction through because it's all filled up with these, other transactions from players that have less of an incentive to have Bitcoin's longevity in the back of their minds. # Nation-State Game Theory **Knut:** Do you see a risk there with state owned mining? **Peter:** in the short term, yes. In the long term, no. Short term, those incentives can be corrupted, but long term, I think everyone will be incentivized to play by the rules and maximize the outcomes that they're looking to do, because at the end of the day, if the governments aren't going to make an investment in Bitcoin, that concern that you've got, is alleviated dramatically when you look at the fact that they could put Bitcoin on the balance sheet, because then they've got a counterweight to the investment that they're making in the mining network, in that they could just stop investing in the mining and actually buy the underlying and be far more profitable at it. So it's a counterweight to the concern that. It's going to be a runaway mess with a network full of spam because at the end of the day, I think the governments are going to have to maximize the outcomes that they want to do because there are going to be, rational players in the marketplace who, if the governments don't compete on a rational level, they're going to get outplayed and they're going to have less Bitcoin and they'll lose power. And I look at this and think, the obvious example that, you know, holds a light for Bitcoin at the moment is El Salvador and what Bukele's done with his Bitcoin mining and you look at his policy when it comes to, not only is he wanting to mine Bitcoin, but he's putting that on the balance sheet. So he needs to assess, is the mining going to be more beneficial or do we need to just buy more Bitcoin with it? Because there's a cost associated with both of those things. And from a government perspective, globally, I look at El Salvador and think, I would really like to see him in Australia, running Australia, and he seems like one of the most logical leaders that we've got globally, who understands the game theory of Bitcoin, and he's winning. And so, he doesn't really have any competition now, though, but when competition enters the market, then there's a decision to make. And then there's probably a constriction on his decisions as to, you know, what he has to maximize for. And then that's another decision making, and this is where the forcing function of good decision making is absolutely brutal in Bitcoin. And I dare say we've all suffered the fate of selling Bitcoin. And then looking at the cost of that and we still calculate how much the 5 bitcoin or 10 bitcoin we sold 10 years ago would be worth today. And the governments are no different. They just haven't been playing the game as long as we have. So everyone plays the game at some point in time and we'll learn those lessons.   **Knut:** Yeah. That's the game theory. how do El Salvador custody their Bitcoin? I can't remember. they do use a custodian, I believe. how will a government, take control of their keys? A government is just a group of people, right? those coins do not belong to the people of the country, they belong to an X amount of people. Keyholders and like, will they have multi sig solutions or will they just use a custodian? not your keys, not your coins, right? So some guy owns the Bitcoin and not the government of country X. And some guy can fuck off and go buy an island somewhere. I foresee a lot of chaos, when banks and governments and stuff try to, acquire Bitcoin, because they don't know how to do it properly. I mean, paper Bitcoin is paper Bitcoin, right? So that, so, how do you see that? **Peter:** I see it being chaotic, just like all of our experiences up until this date with our own experience with Bitcoin. And this is the problem with Bitcoin is that there is not only a proof of work required to prove and claim a block reward, but there is a proof of work required to be a responsible Bitcoiner and be capable of looking after your own Bitcoin And this is where, The institutions coming to Bitcoin, are going to have to learn very quickly or leverage off the experience of others in this space, and if they don't, they're going to learn, a very costly lesson that the kind of fuck around and find out is going to happen at a nation state level, it's going to happen at a corporate level, it will happen at a bank level, there are going to be these failures, and this is where, as Bitcoiners who have been in this space for a long time, I think we have a responsibility to talk about this because We've seen it all before and sadly our little goldfish memories that we're all operating on, you know, we don't really have a memory past four years, we kind of forget things. We laugh at goldfish having a five second memory, but, humans are operating with about a four year memory for pain, so, yeah, ironically four years is the same time it takes to, go through a full Bitcoin epoch, and the same mistakes are going to get basically rehashed over and over again, but probably on a much bigger scale because you've got much Bigger entrance to the market. So I hope that's not the case, but I just don't see how people are going to learn at those different levels unless these mistakes are made. **Knut:** No, I totally agree. It's going to be fun to see it play out. I might disagree with we having a responsibility to make governments, to help governments hold Bitcoin. I'm kind of looking forward to seeing governments finding out after fucking up. **Peter:** Oh no, I've got no responsibility to the government. I've got none whatsoever, but if anyone asks for my help, a fellow bitcoiner asks for my help, I feel a responsibility, a sense of duty, that if they've gotten this far and they've found me and say, hey, I want help, it's like, great, we definitely want to help. # Incentives and Investing **Peter:** there's another incentive structure at play here that is very beautiful. And that's like all the people potentially involved in making this decision that my government, our government or our corporation is going to adopt Bitcoin. They do all have an incentive to front run that, you know, and acquire Bitcoin as individuals themselves first. **Knut:** And probably more of it than what they are buying for the institution. so even if a president of country X decides that I'm gonna use this tax money to buy Bitcoin, to put Bitcoin on the balance sheet, he has probably Acquired some himself first and told all his friends and family first. and I think that's, that's just beautiful because like you can't get around that everyone's an individual and that Bitcoin's for enemies and all that. **Peter:** like that idea and one of my favorite sites is the Nancy Pelosi Tracker. And to digress for a minute, which is exactly that point, we've had clients invested in NVIDIA for a long time, to the point where they're sitting on a 4, 000 percent return. And NVIDIA terrifies me. So, although we've been very lucky or fortunate to, I've put client money to work in NVIDIA and seen outrageous returns, which is about the only thing that has outperformed Bitcoin in that period, but it has. I've been terrified that on a balance of probabilities, the chart looks outrageous and it kind of needs to come off. And I was talking to clients in the last two weeks and said, look, we need to take some money off the table here. they agreed, we all agreed, and then last week, or it might have been earlier this week, the Nancy Pelosi tracker said that Nancy has bought a lot of NVIDIA. And it's totally changed my thinking on NVIDIA. Now I'm like, Oh, dammit, what, what does she know? so I'm sitting here having conversations with clients over millions of dollars of decisions to be made about this one single stock and we've all agreed to get rid of it. And they said, is there any reason we wouldn't do this? And I'm like, well, there is one and she's proven to be the best fund manager on earth and her trades very rarely lose and she outperforms the market by, you know, she beats every hedge fund by a mile. maybe we should tone down the decision not to sell all of it. We'll just sell half of it. So, you know, I make light of it, but it was a serious conversation and consideration to the point that, you know, if we have the ability to see what, these decision makers are doing, and they will be doing it at scale with much larger sums that they're in charge of, boy oh boy, that's the game theory that they're going to help their friends and family and say, yeah, we're putting into work, You know, a trillion dollars tomorrow, you might want to buy some.   **Knut:** we have a German friend that, told me about his, career as an investor in various stocks. He was day trading for like 15 years. Every day, just looking at the charts and trying to play them as best as he could. And then, he calculated how much money he had made being honest to himself, like 15 years down the line and made a giant spreadsheet and included all the taxes and all the banking fees and whatnot. And he figured out that he made a hundred euros. **Peter:** Damn! **Knut:** so then he thought, why is that? Why is it damn near zero? And, yeah, his thesis is that You need, either you need, to know a regulator, like if you do this over a long time, it's just like, if you take the risks and the probability that it will play out that way is extremely high because the only thing that can, you basically need insider information to be able to win, over this casino that we call the markets over the long run, right? So you need either to, be an insider in the actual company that you're buying stocks from, or you need to be a regulator, or you need to be insanely lucky, and that's unfortunately how the game is rigged when we're, especially when we have a money printer, skewing all of this and creating all of this artificial monopolies and whatnot, the regulators having too much power. **Peter:** I agree with that, and particularly, if your friend was day trading, that's an impossibility. You're never beating the market in that, because you're dealing with flash trades, you're dealing with market insiders, and there's no edge in that time frame. **Knut:** no, but this was, quite a while ago. So I think that during maybe the last couple of years there, the algorithms started taking over and out competing the individual day traders. **Peter:** this is what I love about Bitcoin and one of my all time favorite books was a book on Jesse Livermore's life called Reminiscences of a Stock Operator and it was written over a hundred years ago. If you haven't read it and you're curious about the stock market, it's a fabulous book and it talks about the world's best short seller and the two pieces of information I gleaned out of that was outside of being it's extremely difficult to be successful at it, he said that the money wasn't in the buying or the selling, the money was made in the sitting. And I can't think of a more perfect analogy to what, you know, the money is made in the sitting when it comes to Bitcoin. It's not made in the trading, it's made in the sitting there for eight years and, you know, taking your punishment and dealing with the cortisol. Ups and downs of, you know, the most volatile asset ever invented and then waking up eight years later where it's gone 100x. That's where the money's made. And the other thing that came out of this book where I just kind of put the book down and thought, well, that ends all hopes and aspirations of being a trader and making a fortune out of it. So, Note to self, like, if the best can't make money out of it, like, **Knut:** well, that was Warren Buffett's key to success, right? Not selling for a couple of decades. **Peter:** he didn't. **Knut:** and no, that's fascinating, where was I? I had a thought here. # Stay Humble and Stack Sats **Luke:** I think this is an interesting one about the sort of stay humble and stack sats thing. I saw a critique today on on Twitter about the stay humble stack sats thing. **Knut:** That's it. **Luke:** The critique was basically that you need to sell your Bitcoin to do stuff with it at some point. Yeah, obviously. The point of stay humble, stack sats is not stay humble, stack sats, and never touch the sats ever. it's don't trade. that's basically what stay humble, stack sats is. It's don't trade, don't shitcoin, don't try and beat the market, but when you plan to save some money for the future, whether that's six months or eternity, just stay humble and stack sats. That's it. **Knut:** this is the same tweet I saw, and my reaction to it is exactly that, like, yeah, sure. Use your Bitcoin to create the life you want to lead, like, but the way to do that is to stay humble and sack sass for like 10 years and then do it. You don't do it right away. first you let the purchasing power go up and then you can use a minuscule amount of your net worth to live your dream life. and I think that's the way the best way to go about it. **Peter:** I couldn't agree more, and this is where Bitcoin, I think, offers the opportunity to do this better than any other asset I've seen, and I had this analogy the other day that Bitcoin is Analogous to, or creating wealth is analogous to being shot out of a cannon, and Bitcoin is the biggest cannon that you can find that will shoot you the furthest. And if you think about it, they've hodled Bitcoin for eight years. And now they're sitting on a ton of Bitcoin that they want to make lifestyle investment decisions with and they've elevated themselves to a new level of economic reality that they never would have been able to achieve without Bitcoin. And I think it's analogous to being shot out of a cannon and all of a sudden you go from being at sea level to a thousand feet in the air. And you're looking down thinking, oh my goodness, it's a long way down. I want to take some chips off the table to buy a house or pay off debt or make sure that, you know, I can basically not hurt myself when I fall. And this is where you, you know, if you want to go up, you want to concentrate your decision into the best asset that you can find. Personally, I think that's Bitcoin. But when you've reached a level that you don't want to fall from, then taking chips off the table to pay a home or, or do some of the lifestyle things that you talk about is akin to literally deploying a parachute when you've reached where you want to get to, to make sure that you can come down and land safely if something catastrophic were to happen. And this is where, for me, Bitcoin represents the opportunity to move up as, Maslow's Needs Hierarchy in the fastest way possible, and there's a common misconception here in the investment community that most investment advisors want to talk to you about a diversified portfolio, and I'm sitting there thinking, oh, why? If you want to ascend that wealth Ladder. The fastest way to do it is to find the best asset and put as much as you can stomach into it. Once you've gotten to the level that you want to, then you think about diversifying because no one has made money diversifying. Well, not no one has made money diversifying. A lot of people have gotten very comfortable diversifying and for the broader population that is the best thing to do from a long term basis. The extreme wealth is through concentrated bets. I look at all the wealthiest people on earth. They've all done it through their own endeavor. Jeff Bezos, Elon Musk, they're concentrated bets. **Knut:** Yeah, and the diversification is sort of a, it's for security, once you're there. So it's not the path, it's what you do when you reach the destination, sort of. **Peter:** Yep. And this is the thing with, say, Warren Buffett. Everyone always references Warren Buffett diversification. That's not what he does. He put, he took concentrated bets in the best companies he could find and he put all his money in there. And then sadly, he got so good at doing that, that when he put money to work in a company, it changed the market. And it totally redefined the dynamics of the investment decision that he was making. So now, all of a sudden, he becomes the market, and the only thing that he can do is invest in Apple. And ironically, in the 60 years investing career that he's had, 50 percent or more of his returns have come in the last six or seven years from investing in Apple. That's outrageous.     # Stock Market Speculation **Knut:** so how much of the problems with the stock market in general in the world, and these inflated, stocks that are worth way too much, probably because everyone's speculating on the same assets and so on. How much of that, to do with broken money? how much does broken money gets The blame for that and why **Peter:** I think the large majority of it is. In the Bitcoin community, it's well, well understood. It's a very clearly defined problem that there is an easy solution for, but in the broader, the broader consensus is very slow to understand that. And this is where the increased liquidity over the last 50 years, the moving off the gold standard, and then the ability to print ad infinitum is, is a huge concern because it dilutes everyone. And if we take it down to our most basic of needs. Let's just say we were all at a pub together, and it was, you know, we were having beers, having a drink, and the publican, when he was pouring beers, decided to top our beer up with 40 percent water and dilute our drink. We would be rioting in the streets. We would be so filthy that someone would try and rip us off of our hard earned money **Knut:** the analogy is flawed **Peter:** But with money, you don't feel better the day after. **Knut:** No, no, it's **Peter:** don't even know you're getting robbed. That's the problem. So, I look at this and think, if it was a broadly understood problem, then Bitcoin would, it wouldn't be at the levels that it is now. We would be, fighting for a Satoshi. That's the kind of level that Bitcoin would go to and I look at all of the functions of store of value at the moment are, properties, shares, the rest of it. There's no ability to save money anymore because there's a negative real return. # Medium of Exchange vs Store of Value vs Unit of Account **Knut:** We go into this in the book, like, what Bitcoiners understand, I think is that, gold was good at storing value and fiat is good as a medium of exchange. But Bitcoin does both better, but I think it goes even deeper than that because I think the very term store of value is very misguided. in research for the book, I looked up the Misesian definition of money and it's just the most common medium of exchange in society. And he pushes the medium of exchange narrative sort of, it's sort of implied that it needs to store value, but it still sees money. As a medium of exchange. So I was thinking about that and I realized that the term medium of exchange is enough. It's just medium of exchange over time and medium of exchange over space because it's not really a store of values and values subjective, but it is a medium of exchange over time. What you're doing when you're saving is that you're trading with your future self. So you're just using money, and you are making an exchange because that money, if it's proper money that holds its value, then it does provide you with some financial security during that time period. it's never idle, it always, Serves a function to you, the holder of the money. But I think this is, this also ties into this whole, you know, that tweet we talked about just five minutes ago with, how to, you should stay humble and stack sats is wrong. Well, it's not because. It's all a medium of exchange. It's just that you have to account for all four dimensions and you can't have the spatial dimensions without having the temporal dimension sorted first.   **Peter:** he would love it. You're speaking to the wrong Dudworth. On that, it's funny, the money with the sort of the three functions of money, and this is where I think there is a distortion to that. The three functions kind of does distort what this is, and the study that I've looked at and done on this, I look at, and maybe this is a, quite a conservative way to look at this. I think Bitcoin as a store of value and a unit of account, excluding the medium exchange, is, to me, the killer use case. And if I break it down from a market cap perspective, and total market share of store of value medium exchange unit of account. And when it comes to functions of money, the store of value has maybe a, maybe a 15 trillion market cap with gold, give or take. Now, the definition I'm using for store of value is gold. Medium exchange might be a 100 trillion market. And unit of account, to me, some people will say it's, you know, 800 trillion, but I think it's more like 2, 000 trillion. And I look at this and I think, if you capture the store of value and the unit of account markets, then by default you get the mean of exchange. And this is where you come in and talk about spatial and temporal. If you capture over time, store a value and unit of account, by definition, everyone will end up using Bitcoin as the medium exchange. So it's a fait accompli that we will get medium exchange if you have those two corner posts. And from an immediate perspective, and this bringing it down to the personal level, because I think all decisions resonate from the personal up, not from a top down decision. if you. Capture the store value market and the unit of account market. You've effectively captured 95 percent of the value accretion in the marketplace for money. And then that little bit in the middle, 100 trillion dollars, the 5 percent that's remaining is your medium of exchange. But this is where it gets very complicated when you look at the temporal and spatial effects on that interaction. **Knut:** How is unit of account a market though? How can it be like, because you're measuring from. The very thing you're trying to measure the value of, **Peter:** A circumstantial, **Knut:** Is that the market for the US dollar or because that's the most common unit of account? **Peter:** Well, yes, but I think it's everything. I think it's every, all value that needs to be captured, and I look at this on, a personal level, how I think about it, and this is a conversation that we had last time, was, we play the simplest game on earth, stack sats, all we have to do is have one more sat than this time last **Knut:** Yeah, yeah. let me guess how you think about this and the market for unit of account, everything divided by something, right? **Peter:** Ah, let me think, yeah, exactly. That's exactly what it is. this is where, to me, things get really interesting, because everything divided by 21 million, people think, if say there's, let's just agree that there's a thousand trillion dollars of value in the world that needs to be accounted for. We divide it by 21 million and we Get that. But what I think a lot of people miss in valuing Bitcoin, I personally think that it can be a lot more than a trillion dollars divided by 21 million because you need to value the future value of that Bitcoin. And this is where your point is outstanding in that it's not just everything now, it's everything in the future that will be. And if you look at that, there's a time preference and a monetary premium given to that future value. Now, when you have all of your base layers on that Maslow's Needs Hierarchy covered, you can think further into the future. It allows you to have a lot less and spend a lot less of your proportionate stack. And this is where that escalator, I think, is such a novel term in that Bitcoin can account for hundreds of quadrillions of dollars. **Knut:** the problem there is like now we're into scaling territory, but I have my most misinterpreted article ever was one about the scaling and how the real scaling solution is just that we will use money less and, I think most people misinterpreted that and saying that it was a bit too much on the Kumbaya side of things, but I think that's why we don't see retail adoption and stuff, galore everywhere because most people Don't want to spend their Bitcoin. And like most people want to do the stay humble stack sets and then maybe spend a little on top 10 years down the line. but there is a problem there because like, transaction fees will inevitably go up and it will highly, it's highly unlikely that it will ever be worth the time or the effort or the money to, to buy a cup of coffee on chain anymore. there is something to the scaling thing, but my thesis from that article was that when you have that, everything else becomes money first, you have some sort of Gresham's law thing going on, including your reputational capital, if you have 10 wealthy people, that go and eat together every night, then there's probably 10 transactions being made because someone picks up the bill every night, right? So there's 10 transactions. If you have 10 very poor people eating every night, then they probably sit at home and buy their own noodles. So there's a hundred transactions going on, like over 10 days. for the poor, there's probably a need for more transactions with functioning money, that's what the, MMT people, view as a successful economy when people spend, spend, spend, spend, spend. But I think that this, perfectly sound money and this absolutely finite supply makes it so that You will be really, really careful with what you use that for. And you will use it a few times and those times will be far apart. And that's a feature, not a bug, like, for instance, I view this as a trade we're in, we're in a trade right now, we're trading information with one another, and if you come over to Europe or if I come to Australia, then we'll probably buy each other dinners and stuff, you know, and that is, Because we know deep inside this thing about Bitcoin is being incentivized to help one another that there's no real need for greed or needs to, spend your stack when you can just spend your reputation and get a reputational gain by spending something else like your fiat or whatever. So there is a scenario where barter and stuff like this becomes More common, I think. It's kind of hard to articulate this thought, but I see the need for many transactions going down on a Bitcoin standard and not up. # Timelocking **Peter:** I agree with you. And this is where, I've had a conversation with my brother on this. And you know how he time locked the Bitcoin into the future? **Knut:** Yeah. Based. **Peter:** I think that's a wild idea and I'll talk more about that because it's resurfacing on a geopolitical level too. He talks about the fact that because he's given a contribution to humanity into the future, and that, will be worth an absolute, unseemly amount of money. He talks about the reputational capital that goes with having made that contribution into the future. It's like, oh my goodness, there's Michael Dunworth, who basically put a whole bitcoin into the future to solve a mining problem or whatever he perceived to be a problem, but he made a contribution to the network. We should either elevate his opinion or be grateful that he's contributed to humanity on some way, shape or form. And bitcoin's the most objective way to do that. And this is where, what's interesting with that whole time locking concept, it's starting to get a second run with, Trump talking about having a Bitcoin strategic reserve asset for the U. S. And I think, someone's floated the notion that they should buy a trillion dollars worth of Bitcoin, time lock it into the future, and that is a way of solving the U. S. national debt problem. And I look at this and think, well, that's really interesting because that's one way to ensure that they can't spend it. So, it's time locked for 30 years and who knows, maybe there's a chance that they can actually get out of the debt problem that they've got by actually buying Bitcoin and time locking it. It also sends a really clear message to the rest of the world that, hey, we're serious about Bitcoin and this is where, to one of the points you raised earlier, I think, in thinking about Bitcoin as a store of value we just don't have the ability to pay off the debts that we've got right now. And the only way I see us being able to get out of this hole, is to recapitalize the markets. And so how do you recapitalize the markets? At this point in time, you either have to pump money into different asset classes. If you pump money into commodities, that's going to be highly inflationary for every other sector because it's a base, base cost in the economy. If you pump money into the property sector, firstly you've got to pump a lot of money into the property sector and secondly it affects cost of housing, cost of living. So that's another area that you don't really want to pump money into. Then you've got the speculative degen stock market, which ironically is moving closer and closer to meme coin DGN trading than it is to a, you know, a responsible profession of investing. And if you pump money into the stock market, then you're going to incentivize all these DGNs to trade harder. I look at this across the board and think the only realistic outcome of pumping money into to recapitalize the market is to pump money into Bitcoin and have Bitcoin recapitalize the entire sector, because putting 1 into the Bitcoin market will give you a 10 or a 50 or a 100x return on that by way of market cap, whereas if you put 1 into the property market it might go up by Half a half, a half a percent. It's not a big return, but you get a hundred thousand or you get a 10000% return by putting a dollar into Bitcoin, you get maybe a 50% return by putting a dollar into the stock market. And I look at this and think a lot of people looking at this problem and thinking that we've got a debt problem. And yes, we do have a debt problem, but the other side of the coin of a debt problem is that we, we've got a collateral problem. So how do you solve that? You either fix one of the two things. You either fix the debt or you fix the collateral. And it's far easier to fix the collateral side of things with a globally ubiquitous asset in Bitcoin than it is to fix the debt. So I look at this as a way of sort of getting balance back into the broader economics of what we're dealing with. # Bitcoin vs Fiat **Knut:** Yeah. And it's so fascinating because all money, not only Bitcoin, The reason we value it, I mean, we still vote for the value of fiat currencies by choosing to buy or not buy different sorts of stuff, right? and goods and services. so it's all just, In the back of our heads, like it's all in our heads, all of it, all the trillions of dollars in debt that the world is in. At the end of the day, it's just like some sort of intersubjective valuation mechanism going on. And the fiat isn't working because it's the rules are broken, but Bitcoin is just rules that are working. And we're just facing out of this old flawed mental state into a mental state that actually works and that it's all happening in our heads. That's the most mind blowing part. I mean, yeah, I know how money is not a collective illusion and there's a Harari narrative and that's, it has to be attached to something, it's all in our heads and like, this is what I push all the time in terms of narratives is that, Bitcoin is you, like there's no difference and the ASIC is just a fancy abacus to help us calculate, to verify what's going on. so the energy expenditure is just like a side effect, but it's a side effect that makes this. A competition of minds possible, but still at the end of the day, all of the information, it's in our head. you can't get around that. And that's what I find so insanely mind blowing. **Peter:** I think it's a paradigm shift because for the first time in history we've got, we're not playing a zero sum game. this is back to that incentives conversation earlier, because it's the first thing that is not a zero sum game. This is the first game we can play where we have a collective benefit. **Knut:** That's a tweet. Bitcoin is an everything divided by 21 million some game. **Peter:** It's true though, like, it's the first time that, you know, we can all benefit. And this is where, you know, finance up until this point in time has been, you know, you either win or you lose. Someone's either winning or losing and you're on the wrong side of it and for the first time maybe this comes back to that incentives that we talked about at the start that to me the fact that we're not playing a zero sum game is How we can all align and get behind this thing. **Luke:** Of course, Knut is actually tweeting during a **Peter:** Yeah, nice. **Luke:** Yes, save me here, Luke, We've all agreed to that. Very this is awesome. I mean, Yeah. I love the optimism whenever we talk to you or whenever you go on other pods, it's always like, you are in competition for the most bullish person in the entire space. Basically, you and Luke Broyles together is, like trying to one up each other a little bit. Mch also does the same thing. There's something about the loop. Exactly. I've got you, Knut. Yeah, but I think we're a little more understated than those other guys. But anyway, not in a, not like that's a negative. It's just, you know, we're the philosophizers. Those guys are the, hype men. I think something like that. but yeah, **Knut:** equals 1BTC. **Luke:** exactly. **Peter:** So true. # Peter's Short-Term Outlook **Luke:** But, yeah, Peter, what's your thinking on, the short term here, because, the having happened and everything, kind of maybe was a little disappointing from the perspective of anyone who wanted to see everything go to the moon right away, are you at all worried or just waiting for the rip? what's going on? **Peter:** I'll probably say something which is probably not going to be so popular, but it's just where we're at at this point in time, given current market dynamics, but it would not surprise me to see this sideways action continue for the next three months. And I know that's not what people want. It's definitely not what I want. But I think about this, that a lot of. The previous cycles had, sort of three months after the halving was the bottom in, in past cycles. And that was typically caused because there was a lot of minor cell pressure, maybe people got overexcited, got, you know, ahead of themselves. And then there was that sort of realization that, oh, there's a lot more heavy lifting that needs to be done in order to get to where we need to go to. And if you buy into that minor capitulation theory, we could be waiting a lot longer for that to happen. And that's a lot more than what we've seen in the past, because if you remember back in February, basically since the beginning of the year, we had huge fees. March was a bumper month. You couldn't get a transaction on there because we had, you know, the network was just out of control from a fee perspective. And then it died down a little bit, then came into the halving, and then first, call it week after the halving, fees went down. Absolutely mental. Like, that first block mine, block 840, 000, I think, was the first block in the epoch. Like, there was 39 million in fees in that one single block, which was just outrageous. And I think about this, and I think the other thing that adds to this is that All of these miners have benefited from these additional fees prior to the halving, and we've also got all time highs before the halving. That never happened before as well. So these businesses are very well capitalized, and so they haven't had to puke up all their Bitcoin yet. So I look at this and think, oh, we could be extended here for another three months, and it wouldn't surprise me. Having said that, I'd love Trump to come out and just say, yeah, we're buying a trillion dollars of Bitcoin and we just send it to a million dollars overnight would be, you know, my preferred outcome. But do I think that happens? No. I'd prefer to prepare for the worst, hope for the best and be pleasantly surprised in between.   # Pro vs Anti-Bitcoin Politicians **Knut:** What would you prefer? A pro Bitcoin president or an anti Bitcoin president? **Peter:** Oh, great question. **Knut:** Because it's not an easy one, you know, because you want people to be proper Bitcoiners, run their nodes and, not because they have permission to do so, like it needs to be black market money, because that's what permissionless means, like, it needs to be uncensorable, it needs to be all of these things, otherwise the value proposition is gone. Like, it needs to be non controlled, not controlled by humans in any way, shape, or form. So this is, yeah, I struggle with this. It is game theory playing out, and Trump is starting to talk about it. It's exciting, of course, it means something,   **Peter:** here's a question to you on that note. What would you think of Xi adopting it? **Knut:** of who? **Peter:** President Xi from China. **Knut:** Ah, GEOP, yeah. **Peter:** about Trump adopting it. Okay, great for the US to adopt it, but like, think about, our enemy's money or whatever. Like, or Putin comes out tomorrow and says, hey, I'm doing Bitcoin. **Knut:** Well I think the chaos theory, we discussed before still plays out these people are going to fuck this up so bad and it's going to end up with some guy and I root for some guy, you know, but the thing is, it doesn't matter because like once they have the Bitcoin and once they have Bitcoin on the balance sheet or whatever you may call it, Then the only way for them to leverage that in any way, shape, or form is to spend the Bitcoin. You can't, you can't do anything else with it. And that's, that's the beautiful part. So, so in the end, it benefits individuals and that's great. And even if they hoard. all that happens if they hoard it and keep, and you know, put it away in a vault somewhere, however you may do that, is, is number go up. That's the, that's the outcome of that. So, no, I, I, I don't have a problem with, you know, buying Bitcoin. Not at all. **Peter:** I don't have a problem with it either. And in a twisted way, I think it would incentivize that other nations adopt it quicker, just in case it was the thing that was going to catch on. But to another point on that is, I think Bitcoin requires a learning process for every Bitcoiner to go through. And so, back to what we discussed earlier, it's almost like a hero's journey that every Bitcoiner has to go through. So everyone will go through their own learning, and to me, if it's someone I like, someone I don't like, hey, who cares? Everyone's going to have to go through this at some point in time, so if you know it's an inevitability, and this is probably one thing that gets overlooked, I think, Bitcoin, is an inevitability. But if you know it's an inevitability, then you should probably get on the train sooner rather than later. **Knut:** Yeah, absolutely. but at the end of the day, if you take the thought vector and you follow it to its inevitable end, the whole notion of a nation state is sort of gone. You know, all aggression is gone in the end, because a nation state is basically just a monopoly of violence in a geographical area. and you may think that's a good or a bad thing. You may think that if there wasn't a government, something worse would, but still, that's what it is. But if you can keep 99 percent of your wealth in your head, then you cannot extract that wealth, if you're an attacker, the best way to extract that wealth from someone else is to trade with them and exchange something of value back to them and not to threaten to kill them. Because if you kill them, the Bitcoin is gone. so like, this is the peaceful revolution, train of thought here. But at the end of the day, Bitcoin obsoletes the nation state. That's, it, it just does, there's no way around that. **Peter:** So we turned into 8 billion nations. **Knut:** Self sovereign, the sovereign individual, literally. I'm looking forward to it and I'm looking forward to trading with other nations, you know, trading, a couple of pints with another self sovereign nation next to me. # Number Salad **Peter:** I've got to say, I look forward to that day. In light of everything that's gone on here and what's, what's gone on throughout the world in the last few years, that degradation of trust, has been enormous. And this is one of the fundamental premises of why I'm so enamored with Bitcoin is that I think it has the ability for us to, to build that trust back within society that has been utterly lost. And I look at, say, if I just confine that lack of trust to the financial sphere where I spend most of my time. We've had the Central Bank, the Federal Reserve, the most esteemed prestigious institution on earth when it comes to finance. You've had insider trading allegations. You had the JPOW say that he didn't think that inflation was, Here to stay, it was transitory. And then he said, oh hang on, we've got a problem. And then he jacked rates from 0 percent to 5%. These banks in the US that had treasuries on their balance sheet, who just bought US treasuries, which are classified by the accounting standards as risk free, ended up blowing up the banks. All of those Silicon Valley banks that blew up last year were a direct result of holding the risk free treasuries. And then we're getting, gas lit into telling us that the economy is fantastic, GDP is good. They redefined the term recession to say that, oh no, recession isn't two negative GDP quarters. It's actually two negative GDP quarters and higher unemployment. And I'm like, in my nearly 50 years on earth, it's never been defined with the unemployment vector to it. It's always been, you know, GDP. Is it up or down? It's down for two quarters. So I'm just like, and then the revision of the unemployment numbers. Always after the fact, six months after the fact, they tell us, oh yeah, they're a lot worse than what they thought they were. Like, it's just, they're telling you a story and there's no objective way to tell, like, To figure out what they're doing. **Knut:** And the word, the word unemployment itself, let's start by GDP is a, a bullshit metric to begin with because what does it measure? You include like, sales of medicine to the population in GDP. what is that? That's not a sinus of success. the metrics are all wrong. even the notion of unemployment. It's fictitious, like the government came up with the word unemployment because on a totally free market without interventionism, there is no such thing as unemployment. It is not a condition, it's just someone choosing not to work, and there will always be someone willing to pay something for someone to work. It's just when you introduce these social security schemes and stuff, that unemployment is a thing. in a functioning market, it can't be. So, it's all false. **Peter:** Well, they put those sort of false dichotomies in place and, they sort of try and underpin the value of labor by putting in the minimum wages. And it's like, look, if someone's not worth 15, you shouldn't have to pay them 15. They should be willing to work for whatever you're prepared to pay them so that they can learn the skill to get on the ladder of being employable and up to that 15 mark. And then when they get to 15, move to 20, 30, 50, whatever. **Knut:** Yeah, and minimum wage is so easy to debunk, and you can even, like, I hate using empiricism in economics, but where the hell do you think the touchscreens at McDonald's come from? They come from minimum wage laws, because they can't afford staff to do that stuff for you. it's because of the minimum wage law, not because the robot is so great. It's just that it's cheaper. **Peter:** So, I mean, these are all the challenges that we face and I look at, you know, the one bright spot in the finance world that I look at is Bitcoin, but it's completely misunderstood by the broader, you know, broader community of finance acolytes and this is where the opportunity for the pleb to stack sats comes in because while it's misunderstood and we do our best to explain it, therein lies the opportunity. **Knut:** Exactly. They're just not aware of what we're transitioning into. **Peter:** Touche. # The Bitcoin Adviser   **Luke:** point here. Haha. Anyway, so hey, it's been a while since we last caught up. It was actually a while since we caught up generally, but since we've had you on the pod, and there's been a lot going on, we've had a couple of other people in the Bitcoin advisor sphere. And as everyone knows, we are Bitcoin advisors ourselves, If someone wanted to be advised by us, we would absolutely do it, but we've been, finishing our book and everything, but, we're ready and raring to go, from the horse's mouth itself, can we get the TLDR and everything you've been up to in the last year and, the Bitcoin advisor and everything, because you can explain it so much better than we can, I think. **Peter:** You know what, it's been an absolute blast. Boy, what's happened in the last 12 months, and I've got to say, I'm absolutely delighted you two are on the team. We literally have a team of rock stars. I think the best Bitcoin team in the world. And, you know, we've got a mission to get every Bitcoin off exchange, which I think is a very noble mission. the team's grown dramatically. You know, we started off, Andy and I, Circa 18 months ago and that's now a team of 40 globally and we basically get to help Bitcoiners all over the globe get their Bitcoin off exchange and I've got to say it is such a fun feeling watching the coins. Get ripped off the exchange into self custody. And for me, that I think is the highest purpose I can serve the Bitcoin community. And I'm thrilled that we've got, you know, nearly 40 advisors now globally who share that mission to help anyone who wants help getting coins off exchange where we're there to help. And, you know, we provide a stack of free resources. There's a whole host of IP, we share literally our entire IP catalogue, how you want to do it, how we do it, it's there for anyone to take and, you know, one thing that I've got to say I'm so happy to see is that there's a whole host of other services popping up that are adjacent to what we do or similar to what we do, I think, the Bitcoin Way and Tony and, you know, you've had him on and what a fabulous story that is. great service, Bitcoin Mentor with BTC Sessions. These services are really invaluable and I look at this and think, Some people look at this as competition, and I think, no, we're all on the same team, we're all trying to achieve the same outcome, it's just a different way of doing it, so, for me, I'm thrilled that I get to work in Bitcoin, I'm thrilled that I get to work with the best Bitcoiners in the world, and something that's, you know, an absolute privilege. Pleasure and a delight, and it really is a treasure for me, is that I get to talk about Bitcoin, all day. So, the novelty of working with your passion hasn't worn off yet. It's still a pleasure and an honor to be able to talk about Bitcoin all day, because I know there's a whole host of Bitcoiners out there who are living, basically, separate lives. they're living the day to day mundane going to work and doing what they do and then, you know, at any spare moment, they're sitting there listening to podcasts like this and trying to learn about Bitcoin and, want to go down that rabbit hole and get a really deep understanding this is where, I think, one of the things that's been really fun for me to watch as well is the advisors who come on the team and being able to grow with them as well Hearing their stories and success around talking to clients it's a lot of fun having an impact on someone's life and Relieving a real world problem for them that we've been able to solve It's a really satisfying level on a, like, a really heartwarming level, regardless of what financial outcomes are achieved, it's still a wonderful feeling to help another human being solve a big problem for them. So, for me, I think a lot of the teams starting to experience, The joy of being able to solve Bitcoiners problems and this is the fun part that I think as, as the price grows, the need for these type of services is going to continue to grow because the sudden realization of someone being responsible for millions or tens of millions of dollars of Bitcoin without any redundancies or fail safes in place, it's a very rare breed where people can deal with that, so I think the more services we have in this space, the better. This is where I'm thrilled that, you boys are on the team and gonna get to experience all of this in the very near future. **Knut:** No, I know the feeling. I still pinch myself that I'm able to do this. any Bitcoin stuff really. it's just the journey is also real. **Peter:** Yeah, I've gotta say it's fun and, you know, I think back to some of those early conversations, Knut, that you had with our clients probably a couple of years ago now. And I think, you know, in the early days of you transitioning to full time Bitcoin. To me, any Bitcoiner being able to do Bitcoin full time is Pretty much the end goal. And this is where say, from a, from a, interestingly, from an advice perspective and a business perspective, it's far easier for me to take a bitcoiner and turn them into an advisor than it is to take an advisor and turn them into a bitcoiner. **Knut:** Yeah, I mean, transitioning into a full time Bitcoiner, I'm thinking tender reveal, like you're changing your tender, right? That's, switch tenders. **Peter:** What you're tethered to, right? **Knut:** Yeah. **Peter:** Yeah, so it's a lot of fun and, we get to have a good laugh with the team and, catch up on everyone's news. one of the things that I think is really valuable is that we all get to learn together and it's a source of constant improvement. It's not like, okay, here's the best solution and we're just going to do this. It's like, no. we want to have continual improvement and, one thing when you're dealing with Bitcoin security and custody, it's eternal vigilance. Because you don't get a second chance at putting the genie back in the bottle. Once it's out, it's done. So, from a service level perspective, perfection when it comes to helping clients custody their Bitcoin. It's the bare minimum that we can deliver and I've been very fortunate that, you know, we haven't lost a single Satoshi, that collaborative security protocol is a really important way of being able to deliver that and, quite sadly, we've had a number of clients who have passed and they've been self casting their Bitcoin and we've still been able to recover that. That Bitcoin for the family. And this is where to anyone who's listening about that, that's a very serious thing that, you know, you need to consider. if you go home after listen to this and ask your wife, hey, or your partner, hey, can you move my Bitcoin? If you don't get a satisfactory answer, then you've got some work to do on making sure that you don't die with the music inside you. And that's, that's a really big deal to your point earlier, Knut, that this is the first asset that you can't extract. TrueForce. It sits in your head and if you don't have a map to that bitcoin, then it's lost forever. Or until someone breaks SHA 256 and we can access it. **Knut:** Yeah, I love all this, the way of framing it, because it's so hard to debunk those theories, and, what play, another way of looking at it is that Bitcoin was always there, and it's just that the hashing power was zero up until 2009, **Peter:** I love that thought. It's wild. **Knut:** but it's true, it's 100 percent true, **Peter:** Yeah. **Knut:** the numbers were there somewhere. So yeah, it's goes back to the, the thing only being information and like even deeper. It's just data ones and zeros and, data interpreted, can be called information. And yeah, that's what Bitcoin is. # The Inverse of Clown World **Peter:** Can I ask a question of you boys? I want you to show me your latest and greatest. This book that's coming out. Hit me. **Knut:** it's the best Bitcoin book I've ever read. No, like, so Bitcoin, the inverse of clown world, started as an idea and it started with a long, long period of writer's block for me. So I knew I wanted to write something and I knew I wanted to write another Bitcoin book, but I couldn't get started. And then sometime during last December, like early December last year, it just started pouring out of me and it's, inspired by the two years, almost two years of conversations we've had with excellent Bitcoiners now, all of those ideas, started pouring out. And then I wanted to look on board as some sort of editor or something. We hadn't really decided what your role was going to be. as we started looking at the text together, we realized that you're not the editor, you're the co author here, like we should write this as a team, which turned it into a bigger project. And we, I had written around 10 chapters, I think, but then we saw, we looked at the chapters at one point and realized that, it's sort of a hero's journey thing, I looked up the conceptual hero's journey and we realized that if we just order these chapters correctly, we can sort of have it in the back of our minds that they fit into this, Heroes Journey template, and then the reader is the hero, that removes Clown World by, focusing on Bitcoin. so that's what we did. The first part of the book describes, the reality we find ourselves in, and clown world, and what makes, why clown world exists, and why politicized money turns into completely arbitrary issues being focused on, and bullshit, being emphasized everywhere, Then, the midsection of the book is a journey of introspection and this whole concept of your satoshis and how much, the mind creates reality and how you remove that old world by, focusing on different things. and then the last part of a book is sort of hinting at what's on the other side there. The funniest book yet, I'd say, and a bit more thorough this time, or we have, since that's sort of what Luke added, is like, coherency to the thing and, and us reading, we did like three passes with the book, so we read it one time first, like my, my original outline, and then decided this goes here, that goes there, and then we read it when the last chapters were, Done. So we had another pass and then we had a third pass and we've had our editor Mel, who's fantastic, look through it too and, change a synonym here and there and a paragraph here and there, making it look nicer. it is what's on the other side of the, everything divided by 21 million equation. Everything divided by 21 million equals the inverse of clown world. it is the natural follow up to that book, and we're doing a pass with everything divided at the moment. a readability pass, I'd say. So we are doing a light edit to make the ultimate version of that book. And it's, the sentences are a bit less choppy. It was quite a choppy book, so we're making it a bit more readable. And it's good to look back on that because we see so much mirrored in the new book. It's just, the other side of the equation. So we're very proud of it and we're excited to release it. We can't wait. What's your take, Luke? **Luke:** Well, I was, I was going to let, Peter, I was gonna let you respond a little bit, but sure, I'll just, I'll add, I'll add one thing. it's definitely funnier and more toxic than the previous Knut books. And this was from, I hadn't realized this, actually, because it sort of felt like everything that we've been doing for the last two years, this crazy show, this, formerly Freedom Footprint show, now Bitcoin Infinity show. the Freedom Footprint years are the input to this book, but, we just have a blast, joking together and, talking together about anything and everything. what actually went into this book is, there's jokes everywhere and, the toxicity is turned up a level then it was, the process of going back and re reading everything divided. you weren't nearly as toxic or, even nearly as intentionally funny. There aren't as many jokes in Everything Divided and it's different. I'm proud of my contribution. I mean, I'm honored to be here, really. And, as with everything in Bitcoin, it's, the surreal doesn't end. It's less than two years since I first. Met any bitcoiners face to face. Riga, 2022 is my first time. and so Riga 2024 we're launching this book together. And, for me, it's just surreal. can you explain all of it? thanks Peter, for asking, and I think this is the first time we've really gone in depth about the book on this show, **Peter:** I'm so excited for you. I sincerely love you boys and think you are a great team. Quirky as hell. And I, I'm really looking forward to this book. Like, the second I saw it I was like, ah, I cannot wait. And then, to me, like, being a fan of your work, I'm like, yeah. Oh, you're going to release a box set? Sweet! Another thing to just put on the shelf! I can't wait. Literally, call me and let me know when I can buy it, because I would love to buy not only Clown World, I want to get the rehashed box set. And I think, like I shared with you, the reading everything divided by 21 million, the thoughts in that were so dense. It was like the gravity of the sun relative to other books because and I remember reading it and I sat down and I'd like a dedicated time, it was a book that I was really looking forward to reading and I'd set time aside to focus on this and I thought, oh, it's a little book, you know, I'll get through this in no time. And. We talked about this, that the density of thought in that little book had me reading like a paragraph at a time and then I'd just sit back and I'd be like, Damn, and I'd have to think about one little paragraph in there for moments, like minutes, maybe even 10 minutes and what ended up happening was it took me probably five times longer to read that book than I had anticipated. Because it was so thought provoking for me. I was like, man, like, the things you've thought about in here are so deep and profound. I wanted to, you know, ponder on what, what the significance of it was, a question I've got on the release of Clown World. one thing I love doing with everything divided by 21 million was going back and listening to it because then I couldn't stop and ponder because I had to keep the train of thought going. And I'm wondering, at the time of release of Clown World, Are you going to release an audio version of it as well? Like, can you get both at the same time? **Luke:** Same time, probably not. The manuscript is done now, but we're still waiting on our forward, hopefully by the time this is released, Giacomo has given us our forward, and so we need that for the audio version, but we'll get it to Guy right away once we have that done. This is like a little snapshot in time here when we've got the thing done, but it's not 100 percent done yet. So yeah, we'll have the audio book, but it might not be quite immediately at launch. Bitcoin Infinity Day is a pretty specific day on the calendar and we can't move the launch date. I hope you understand. **Peter:** Totally. **Knut:** you want a paragraph, Peter? **Peter:** Yeah, come on, hit me. **Knut:** This is from a chapter called Freedom Footprint. The fight for freedom is never ending. Every generation must participate or be forever shackled to its hamster's wheels. The siren's song of the government has led many adventurers to a state of perpetual Stockholm syndrome. Even though the beaches are littered with human skulls, her song seduces new sailors daily. Free healthcare, universal basic income, fixed weather, free lunches abound. The government's anaconda grip over your life tightens every time another freedom is sacrificed on the altar of perceived safety. She is a cunning snake that grows stronger whenever we forget to resist. The history of human civilization is one of repeating cycles over the centuries. Property rights lead to perspective. Prosperity. Prosperity leads to more government spending. More government spending leads to bigger government. Big government leads to dilutions of grandeur and totalitarianism. And totalitarianism leads to civil wars and revolutions. Are you prepared to take matters into your own hands? Probably not. You still live in the world you were born into and idealistic martyrdom is not on most people's bucket lists, but whatever small step you take to increase your personal freedom footprint increases the total level of freedom dioxide in the atmosphere. Freedom dioxide is essential to life. It prevents political climate change and global laming. # Authoritarian Australia **Peter:** I love it. I've got to say, that just resonates so deeply with me at the moment because in Australia we have A change in law coming into our tax code next year, 1st of July, for balances over a certain threshold in our pension system will now suffer the fate of unrealized capital gains tax. **Knut:** Oh, holy fuck. **Peter:** So, I cannot tell you the amount of stress and sleep that I have lost over this, but it affects a big part of my life. Maybe 70, 000 Australians presently, but if you've got a couple of Bitcoin in your super fund, it's going to affect every Australian who's got a couple of Bitcoin in their super fund before too long. And this to me is the encroachment that is just beyond the pale for me. That's like theft straight up. **Knut:** yeah, even if you don't believe tax is theft, which it is, or that inflation is theft, which it is, taking an unrealized gain from someone is definitely theft. Like, how is it not? **Peter:** it's insane. And to give you some examples of this, because I've done the numbers on it, I'm not allowed to touch my retirement money till, till I turn, 63, I think it is, or 62, but by the time I get there, it'll be 65 or 70. Let's assume it's 16 years before I can touch it. By my calculations, I will have 86 percent less Bitcoin on my retirement than I do now through this unrealized capital gains tax. **Knut:** We need to set up a voting accident for you, Peter. **Peter:** I don't think that's possible. I'm pretty good at custody. **Knut:** I like the way you're thinking, but it's, it really is perplexing to me. We've had this discussion before about, you know, completely clean government approved Bitcoin and, coin joined the sneaky shadow super recoder Bitcoin. And you've been a proponent of the former **Peter:** that's true. **Knut:** yeah, it's, I hate to tell you, but this is a case of fuck around and find out, I think, **Peter:** Yeah, I've got to say, it's particularly disturbing because it skews the incentives dramatically, and I had a conversation, about this, but what it does is it robs you of the ability to compound your return through time, and you end up poor. But the best thing, That can happen to you. And this is doing the numbers, and this is the crazy part. The best outcome that I can hope for, is to end up with 14% of the Bitcoin that I've got now that's the best outcome. **Knut:** but it is an argument for not doing KYC Bitcoin ever, like doing it all under the table, all black market. **Peter:** But if, if you want to catch a, that Bitcoin in your, in your superannuation or pension system in Australia, it, it is all documented. So, there's no getting out of it that I'm aware of. So, it's an encroachment I am, I am none too happy about. And I kind of feel like, in light of how orchestrated the governments across the globe have been, or Western democracies anyway, it feels like a trial balloon in Australia to see if they can get away with it and then they'll implement it in Australia. All of the other nations once they've got, got that tick off, tick of approval. **Knut:** So how do you get out of it? **Peter:** You **Knut:** off somewhere? **Peter:** No. I need a 30 percent unrealized gain per annum, so I'm just sitting there properly disturbed by the fact that our government thinks it's acceptable to take unrealized capital gains, and what I'm more concerned about is because of the volatility of Bitcoin, what will end up happening at some point in time is when you get a 10x return on your Bitcoin, It'll go from, say, a balance of 3 million to 30 million in a year. that represents a 9 million unrealized capital gains tax bill payable. After a 10x year in Bitcoin, you know what happens. You usually have an 80 percent drop. And so 30 million will drop to 6 million, but you'll have a 9 million outstanding tax bill payable and they'll take all of your super fund, all of your pension money because you've got 9 million outstanding for their tax bill and you only have 6 million to pay it. So, unless I can pick the top of every market between now and the next 20 years, which is an impossible feat. I'll probably have no pension money left by the time I get to retirement. So, I've got to say, to say I'm particularly upset about it would be an understatement. **Knut:** Sucks. **Peter:** So, if you find a solution over there, in Scandinavia, ship it in. **Luke:** I mean, we just have the capital gains, the regular kind, but, yeah, if there was talk of putting in unrealized capital gains, I think you'd see a lot of Bitcoiners leaving pretty quickly and, craziness, jurisdictions, doing things differently, doing things unintelligently will be, over the next 20, 30 years, I guess. Probably lots of differences between jurisdictions. # Conferences and Wrapping Up **Peter:** So, anyway, we've got all that to look forward to. On brighter note, I'm really looking forward to your new book. I can't wait to get it, can't wait to read it. Are you celebrating Bitcoin Infinity Day, hosting an event? Bitcoin Infinity Day **Knut:** Yeah. In Riga, at the basement bar, which is the first bar in Riga that accepts Bitcoin and Bitcoin only. So yeah, looking forward to that a lot. We have a lot to look forward to in Riga, there's the Nostriga conference, big Nostr event, there's Noob Day Wiz's thing there, where we're both speaking and we're both speaking at the regular conference as well and doing interviews and all this stuff, so really looking forward to it, we love Riga and the team over there, **Peter:** I'm hoping to make it to Rega next year. **Knut:** Yeah, I might make it to Sydney next year. **Peter:** Oh **Knut:** we'll see. I'd love to return. Like I think every two years is, I could live with that. **Peter:** You were, Very, very popular, I've got to say, and sort of speaking to, the crew at, the Sydney Bitcoin Meetup, I can tell you before you arrived, everyone was so excited to see you here. And we understand it's a really long way from the rest of the world and, the fact you guys, or, Knut, you made it out here, Luke, hopefully you can jump on the next time and come out as a two for one. any Bitcoin talent that comes out here, we're thrilled to see, but, to have you. Still one of my favorite memories in Bitcoin is your rendition of Fuck You Money with Daz. **Knut:** yeah, that was a great moment. **Peter:** Loved **Knut:** that's, it's great. And it's so fun to play. Music with, and yeah, no, just the community down there in general is great. And, I'd love to see it. I'd love to, love to come again. **Peter:** well, anytime, **Luke:** Fantastic. Peter, I think we're winding down here. I'm feeling the energy and, so anything else you had on your mind before we sign off for today? **Peter:** No, I just want to thank you guys for, you know, just being great citizens in the Bitcoin community and doing what you do. I have enjoyed immensely the work you guys put out. big fan of the show, big fan of your books. And I can't wait to see what the new iteration looks like with the new co authors. So, Luke, I can't wait to read it. **Knut:** We'll send you a copy as soon as we can. **Peter:** no, I'll pay. **Knut:** all right, Peter, thank you very much. **Peter:** Thank you, boys. **Luke:** Thanks, Peter. **Knut:** Use code freedom. **Luke:** This has been the Bitcoin Infinity Show. Thank you for listening.