Trading Strategies, Charging the Monetary Battery

Welcome everyone to POV Crypto, the only podcast that both big corners and a theory in system two. I'm David Hoffman, here with my buddy Christian. Christian, how you doing? Doing good man, missed you last week. Yeah, it took a little breather last week, but now we're back at it because now we got some spicy POV stuff to talk about. Yeah, and I mean in the hiatus

Bitcoin went from like 43k to 60k and then now back to 56k. I think ether what traversed like almost back down to a thousand and then I guess not that much like 1400. The low the low said got was 1297 and I know that number very specifically because I kept on saying to all my friends without completely knowing the truth. Obviously I don't know the future,

but I kept on saying like below 40 below 1300s like isn't doesn't exist. You can't actually go there. And so we went down to 1297 and then just yeeted right back out and I was like, wow, that was that was probably the biggest like claim about the future state of the markets. I've ever made it actually just been like fucking nailed it. It was pretty cool.

It's better to be lucky than good. I have no reason why I can't chalk that one up to luck. Yeah, no, I mean I have been lucky with calls and then I've been unlucky with calls and not talked about it. Yeah. That's what I've tried to do when I actually like want to position myself to be able to have bragging rights is like usually I'll make

calls and I'll just make them silently because I'm not a trader. I don't really care to like brag about my trades, but sometimes they're like when I when I went tits out leverage at fortitude 90 and while I did first I did that privately, then the next day I DMed Sazel about it. Anthony Susanna was like, yo, going tits out tits out leverage at 1490. And

the fact that like I did it, but then also set it to someone makes it like that much cooler because we're in the fucking green now. So if you know you get you both get like a you have more money and be you have bragging rights. Almost slightly in the green. Oh, I mean, I think it's for being leveraged. This is in the green. Yeah, no,

I mean, it's just we saw that volatility, man, you never know where it's going to go. Yeah, it's so funny. Every single time that like Bitcoin and ether and all and it takes a dump like 30% does one of his 30% dumps, which I guess it's only really done like two of these in the past like six months or so. But every single time people are

like, oh man, like it could be over like this could be it. It could turn around at any moment. And I'm like fuck that. Like if you think this is over, this fucking bullshit. We're going so it's absolutely not over. I was actually just talking to someone today. Um, our good friend, checkmate. And he was like, oh, the on chain indicators are looking a lot like

the end of 2017. I'm like, dude, come on. Come on. Come on. And really what I'm saying is just got to be careful with the leverage because, you know, this shit's volatile. I don't know when it's going to end, but I know it's volatile. And that's why personally, I just prefer to buy and hold spot. Not be greedy. I guess, okay. But I mean, you know,

maybe I'm just letting letting up on a valuable opportunity in front of me. I'm kind of I'm curious for you. Like, what's like your comfort level around like using leverage? Like how much do you think about the price when you do it? Like what what goes through your head? So the the process that I've done so far, this cycle, which I did not even have the

option to do last cycle because DeFi wasn't a thing last cycle is that like, and I see this in a lot of my friends who this is that their first cycle as well as like, they'll compare all like, oh, like, you know, do I want to be in this all versus that all? Oh, I'll trade. I'm going to trade some ether first and unity tokens or

you need tokens for MKR tokens. And then, and then like that changes your psychology because of what you had to denominator your purchase in, right? Did you sell it? Eath to get that or did you sell X to get that right? Like what set what asset did you sell to move into that trade? But if you just sell dollars to get into the trade, then you

don't care. And so leverage or not, I guess it's always leverage, but like just borrowing USDC from compound and AVE to take a position in a DeFi token or an altcoin or whatever. The ease of mind, even though it's leverage, which is not supposed, people don't usually associate like leverage with ease of mind, even though it's leverage the ease of mind from just being short the

dollar and long the token rather than like short Eath long the token because I sold Eath to go into the token. Yeah, okay, it's just a weight off my shoulders. Like I don't have to think in like, oh, I don't have to denominator anything other than the dollar. And the dollar is a great thing to denominator a short position on in relationship with all these tokens

that are going up into the right. Okay. I mean that I'm glad I asked the question because that makes a ton of sense, right? You want to express a short dollar position. You have all this collateral that you don't want to quote on, quote, sell when you sell Eath and you sell Bitcoin to buy something else, you, you know, you're trading that and anticipating for that

something else to outperform it. And so you can cut with leverage, you can have your cake and eat it to some degree. Obviously you add on the ball, like the risk that comes attached to volatility, but you can express your position more accurately, if you will. Right. So like I see so much in like these these group chats that I'm in with with old college buddies

about like, oh, like, you know, this token pumped 30% and I sold this token to get that token and they're just comparing tokens all the fucking time. And I'm like, I just doesn't, I don't really care about any of it because like all of my buys and sells are against the dollar, which, you know, in my, in my theory of the market. So long as you

hold on enough for enough time in a bull market, you're going to be okay. So long as you can weather the volatility, the time is on your side. So how do you moderate your leverage to kind of make sure that you don't get liquidated? That's a good question. Well, my personal plan is to be pretty fucking risk on until 4k ETH and then have zero leverage

around 4k ETH and then around six to 10k ETH is when I actually do start rotating out of leverage into dollars and start taking on a long dollar position. And so I'm pretty fucking like I'm pretty risky. I would say with my portfolio, but even before I got into crypto, I was the guy that went like went 2x long on AMD stock, like with one single

concentrated bet. So I'm pretty tolerant to risk. But I am aware that like, I am aware that the price targets that I keep on having to like, this is when I'm going to go into USD has gone up and up and up. And so I am cognizant of this. And then I've never actually like meaningfully unwound. So like when ether goes up in price and I

have more borrowing power, I generally have taken advantage of that. Now my my ratio has always gone in my favor. But still some some bad habits that I know can get catastrophic if I don't harness them and reverse them. But for where we are right now, I'm I feel pretty good. Sound a little bit like the Federal Reserve Congress always raising the debt ceiling. We're never

leaving. So one of the reasons why I've been a little bit scared of leverage slash also a little bit scared of ever exiting my Bitcoin position is like this looming fear of like when is the last cycle when is like or at least not even last cycle. Maybe there's a meaningful downturn. But like then like does the bottom cash a lot of sellers, right? Because like

maybe institutions take that opportunity to buy a big time. And we never see like that 80% and we don't see the 30% and then they get it rips back up. Like who knows? Like I'm scared that if I sell at any point that I might have less Bitcoin in the future. And part of that kind of has to do with this. Financialization of Bitcoin as an

asset financialization. Hopefully, you know, in your hope of ether as an asset and kind of tags into what we're thinking talking about later, which is Michael sailor and his analogy is Bitcoin as a battery. But before we get into that, right? Like what's your view about ether financialization Bitcoin financialization. And like how do you like think about that in terms of like, you know, selling per

se, right? Because like I do think that this time is meaningfully different. Like the NFT thing has way more mass appeal than the ICO thing. Right. And then we'll this market turnover and go from bolt to bear. And like so long as the federal reserve can keep on printing money, like we can keep on going. And that's the whole like rationale behind this whole NFT mania

like or not the whole rationale and if team team media is legit in its own respects. Legida, I guess that's a weird thing to say point is like the reason why it's a mania is because there's so much printing going on. Right. So so long as there's printing like there's no reason why these things can't keep on going up. And I totally agree with you. This

is this cycle has been called like crypto's most mainstream cycle ever, which I guess makes sense because you know, it has to always be the most mainstream cycle ever because it's always going to be more mainstream than the last one. But like at this point, you can only have one mainstream cycle because that's it. Like once you are mainstream your mainstream. There's no more after that

like you are just mainstream now. And COVID has accelerated the movement into a digital world. And I think the we're all getting we're all circling around the same subjects as is the world ready for crypto. And if the answer is yes, then I'm totally with you in the sense that like any prolonged any bear market will get bought up into just being a bear plateau instead

of a bear market or something. And so I am cognizant of that and I do I do feel fear that fear of saying like all right, you know, I'm calling the top cashing out and then I like drops 30% of that. And you're like, fuck yeah, I got it right. And then it climbs 30% and you're like, oh, like, did I actually sell the top or

not? And then you don't know what to do next. Yeah, no, I'm I'm very scared of that. And while that may sound like not practical, you know, it's not practical that Michael sailors doing what he's doing and buying the smidge Bitcoin like every two weeks, he's dollar cost averaging with Michael with micro strategies money and a lot of other companies are looking at him do it.

And like they bent his his seminar and they've done all these things and like what like two weeks ago coin desk talked about a company that allocated to both BTC and E then they actually allocated more into ether, which I found was was interesting. And I'm just trying to say like in terms of like ever rotating out of your crypto position into dollars, AK something that

is known to be easily manipulatable and principle like, why do you ever do that? I don't know. Like again, like I'm I'm just scared that there's never a right time to do it after this point. I don't know. On that note of the that company that wrote that put Ethan BTC on their balance sheet. It was a Japanese company, I think, I think I think that's

right. And the Anthony Sazono had a good take on this is like most when most people talk about like institutions putting Bitcoin on their balance sheet. They're usually talking about just like companies in the S&P 500, but they're forgetting about all other companies in the rest of the world. Like this is not just a S&P 500 race or tug of war musical chairs. This is a

game of chicken that's global right every single global company is in this is in this like game of chicken right not just the companies in the S&P 500. So that's way more capital out there. Yeah. No, I agree. There's the fat tail. And the long tail and honestly the long tail has a better chance of adopting first. Like I think micro strategies definitely a long tail

tech company, right? But a used Bitcoin and crypto to really escalate itself in the conversation a lot. Totally. And dude, Michael sailor like. Ethereum's will have opinions about him, but like for overall for this base, Michael sailor fucking Saint man Saint absolute Saint. I think that's a lot of things. Like like Ethereum is going to be like David, why the fuck are you promoting this Bitcoin

or Max and Bitcoin Maxi guy dude he's promoting everything that we need this industry to be promoted about like the guys are fucking hero. He's no he's de risking and legitimizing the entire space and everything benefits from those tail from those tailwinds. Okay. So Michael sailor had this analogy and I believe in those seminars and in other places about Bitcoin as a battery. Maybe you know,

I think that's a lot of things that I'm going to do. Maybe before we go into that conversation, can I ask you to try and like do your best to rehash whatever you remember about Michael sailor making these comments or to have you not consumed any of that content. I've consumed an okay amount of Michael sailor content. It's really like honestly, I think the best one

is what is money series and Michael sailor and Robert Bredlove do like seven parts and go down the street money and they don't even talk about Bitcoin and most of it. But highly recommended. But on many occasions, Michael sailor has said that Bitcoin is the network that is dematerializing and harnessing monetary energy. And there's been monetary energy like throughout the analog sphere. And there this it

like just like Google, you know, became a search engine network and a website network. And just like Apple created the the strongest mobile network and just like the Facebook dematerialized your social network and made it kind of exist and be documented on the internet. He sees Bitcoin as dematerializing the world's money and and and harnessing that monetary energy in a monetary network on the internet. Right.

So I have this vision. This is an image of who's the superhero evil guy with the glove that snaps his fingers and makes people like this is a super hero. And it just appears and dissolves it just into the nothingness. Whatever that metaphor is. And so it's it's from Marvel. Yeah. Kill me for. I don't I don't watch any of these movies. Anyways, there are no

tear nose or something. Yes. There are no. Okay. There is. There is the is the. Okay. So so what Michael sailor is saying and other and other digital things is like it's being dematerialized being deleted from the physical world and being recreated in the digital world through these digital containers, vehicles, or batteries for value, right. And so my my question to you is how do if

Bitcoin is a battery for money or battery of a storeholder wealth a battery of money, how does one charge the battery? What what is the thing? What is the thing that it's I have my answer. And so I can skip. I can skip. I can skip. I can. I can answer the question my own question because I have my own answer for it. But I want

to ask you, how do you charge the battery? Well, I don't know if I'm necessarily speaking for sailor at all here. Like I feel like the like Bitcoin is a battery as as a metaphor has been used to describe proof of work and mining and the ability to like plot like theoretically take stranded energy plug it into the internet. And Bitcoin mines and and kind of

on take that stranded energy turn it into mind Bitcoin export elsewhere. So I've heard of that analogy as to like why Bitcoin to a battery. And then okay, the energy of the universe that we can harness, you know, it would be, you know, and put into the network would be how you charge the battery. Part of it also is buying it right. So people buying the

back like buying UTXOs for other things and demanding it. Like you're kind of like what filling the UTXO with energy. The only thing the UTXO is a is a is a is a you know a mark on the Bitcoin ledger right. So it's just about society putting value in it and the network of value right that is that are the network of of data points or

stakeholders that are putting value in and kind of reinforcing that that you know value chain. So I mean I don't like I don't know if that makes sense at all. But that's what I'm saying. That's how I would answer that question. So yeah, your second part of that answer, it was synonymous completely synonymous with what my answer is the way that you charge a monetary unit

is by buying it right and when everyone buys the same monetary unit. All the sudden that monetary unit has a lot of power inside of it a lot of bad it's a battery is like there's there's one time one time I old soccer coach took took me and some friends to watch a football game and in order to like make a fool out of me he

paid me $20 to like sprint up and down the stairs just like in front of like thousands of people who were watching this football game and so I had to do like three laughs up and down the stairs as fast as like any pay me $20. I worked I released energy so that I can get $20 right or I go to work maybe this is better

metaphor I go and go to work and do work for money. And so that the battery is the money and it allows work to be expressed in the world. With the first part of your answer I think is the opposite of the answer. You don't charge the battery by spending energy that's you discharging the battery. Minors are actually discharging the Bitcoin battery because they expend energy

in proof of work and they have to sell Bitcoin to do that. And so if buying Bitcoin is charging the battery selling Bitcoin is discharging the battery because you are doing work you are doing proof of work. And so the whole the whole idea of you charging the battery by the way. By spending work makes no sense. You're double dipping on the different metaphor and you're

jumbling it up. I think the proof of work is actually the discharging of the monetary unit and the monetary unit is charged by the $21 million hard cap. What's your take about that. Well I mean I was just bringing it up as like from the battery metaphor perspective and like I guess the proof of work thing has to do with like it's like a digital battery

because. So if you didn't store you there's no way to physically store that energy so the best way to get some use out of it is to utilize it in store in UTXOs. So but I guess I understand what you're saying is like miners selling Bitcoin's. You know which is very effective at distributing the supply right that's one of the key features of proof of work

miners having real cost in which they have to actually sell coins for. But at the same time there's been already time. So I think we can talk about miners never selling at this point because now that Bitcoin's become financialized enough that they can they can always just use the Bitcoin as collateral and then and then pay their bills with with Fiat and Omnid bills and money

that they borrow just kind of like what you are doing with Ether and DeFi leverage which also only works if the asset keeps going up in price. Yeah well and then the assumption is that all Fiat and Omnid liabilities will lose value against the Bitcoin. So I mean if that's the case then miners kind of stop selling. I mean obviously you know it's difficult to say

you know maybe only institutionalized miners stop selling. It's kind of difficult to say like how that playing field kind of develops but we're already kind of getting to a point where miners mind a horde bitcoins and they do whatever they can finance. Riot blockchain you know they can do bond offerings anything that's available to public companies to buy. So I mean yeah yeah I feel like

I'm digressing a little bit. I guess what I'm saying is I do agree that selling is antithical to you know recharging battery energy in terms of like value inside the ledger. Okay so where this where this extends to is that does just generalize buying is that what monetizes the market. And this is a asset right and this is Nick Carter wrote this in one of his

pieces one time where you know anytime someone buys and holds something they are actively monetizing the asset right and this goes back to the the OG 2017 conversation that big corners would have where they say hotlers are users if you are holding you are using right by definition and so is it is the is as simple as like the asset that is bought the most the

most money. Or the asset that is bought the most and sold the least the most money this because that battery is maximally charged I think that's where that conversation naturally extends towards. I mean are you just trying to like have a logical justification proof of stake yeah I am that's that does that's where extends to after that. Yeah I mean like the thing is like I

just don't think that you can take it like it's just not one feature right. It's not like okay so you can have an illiquid asset that's not that's not that you know it's not sold at all and it's only bought by a select group of people that value it and you know maybe that asset will continue to appreciate maybe you know no one gets access to

it. But I think for something to have money it has to kind of have like this magical mix of distribution some sort of scarcity some sort of universal desire. Like it's not just one thing right and so if you have like this proof of stake system that effectively you know makes it so that every every ether that's used is being burnt maybe everyone that is running

a staking node never needs to actually exit their position or sell and keeps you know kind of lowering the supply and not distributing the supply like that doesn't help with the monetary network side of things as far as I'm concerned. So that's where I'm kind of quite like it could be an asset that goes up in value a lot but does that make that money? Does

that make that the way that people think about denominating everything in the world? I don't know maybe that's what they did on the NFTs in right now. But is that possible in the world where like you know either is not something that can be distributed well or is at least incentivized to be hoarded to some insane degree I don't know. I mean Bitcoin is hoarded in

a world of like but it's also not synthetically also going to like I don't know I mean maybe maybe financialization and minors never selling it does do. Right. Use that word synthetically where we are kind of implying that there's some of some sort of like optimization and tinkering tinkering to make to make this the case right. I would also say that the hard cap is also

the same thing. It's just very blunt and straightforward. It's also synthetic. And again citing the Carter when we had a lot on the podcast I talked to him I asked him a question about engineered versus unengineered money and he said well and I was saying that Bitcoin is unengineered money in the sense that it's bottom up adopted rather than rather than like socially engineered which is

what I would call fiat currencies. Bitcoin is unengineered because it's adopted from the bottom up right but he goes well no I think Bitcoin is extremely engineered it's engineered for perfect scarcity right. So there's a semantic difference two sides at the same point. But I would say like to say that if ether is synthetically deriving its scarcity I would also say Bitcoin has also done that

that's exactly what the hard cap is. Yeah well the hard cap is quote unquote synthetic scarcity but part of it has to do with like there is no correct inflation rate so let's just do no inflation rate. Like that I think was part of Satoshi's express thinking. So I mean I feel like ether is a little different and I mean part of it is under the

guise of security. Like okay you know we need to ensure the long term security of this network and so therefore we need to maintain the ability to print when we need to print right that's you know it sounds again it sounds a lot like the federal reserve to me but like that would be my personal quam with like and why I call it synthetic because now

it's like okay we need to change this monetary policy in order to achieve this sort of behavior and it doesn't have to do with like not having people tinker tinkering in order to get like a desired end result. So I mean like maybe synthetic is just like a way to say like it's manufactured scarcity. But then again like you could push back and say like okay

well Bitcoin is... But like the reason is better than gold is because it is synthetic right. Gold is organic scarcity right through natural things that happen in Bitcoin is like no 21 million that's it. So you said that Satoshi said that there is no correct inflation schedule and that like Ethereum will mint what it needs to to secure itself and how that's like the Fed. The

missing component here is that there's the there's one more side of the equation that we've never unlocked before and this also kind of reminds me of breed loves Bitcoin is zero where you know once you discover the number zero you also discovered negative numbers in the whole the whole rate and you also discover infinity like the whole range. Well with Ethereum like not only will it

inflate the supply in order to maintain security but it will also deflate the supply in order to maintain security and it will inflate when it needs to inflate and it will deflate when it also can deflate and if it can deflate it will deflate and so no and then that is also built into the programming of the Ethereum protocol which is very much not like the

Fed where they tend to only inflate because they are humans but Ethereum is a protocol and if it can capture access transaction fees and save those for a rainy day then it will and maybe it can keep on capturing transaction fees and not only save them for a rainy day because maybe that rainy day never comes because Ethereum is a global internet size economy with global

buying pressure upon ethy asset to achieve some end on Ethereum and so perhaps that rainy day never comes and it's only deflationary and all of a sudden we go from sound money to ultrasound money. I mean again like that's that's the story right I mean you could say the same thing about stocks and stock buybacks. Okay Apple is only deflationary because they're only borrowing fee and

buying back like that doesn't make it money. So I mean again ether is more like Bitcoin than it is like Apple but I don't know I just like you can you can keep spinning the story in nice ways but ultimately I will do people it's a group of people that are trying to organize to get some end you know and you can't do it. You can't

really compare that to like 21 million this is beyond any humans control this is beyond any even group of humans control in terms of changing 21 million or even changing parameters around consensus. So I mean like I just feel like it's a completely different ballgame and that doesn't mean that Ethereum won't find some sort of like massive appreciation plateau because of their ability to you know

engineer game theory that is really you know enables the system to keep creating value as well as destroy and burn tokens. But I mean again I don't think that that necessarily means it's going to out compete Bitcoin. I think the beauty of Bitcoin again is like there is no right amount there is no like let's pump the bags of holders like it's just like 21 million

straight and simple this is like let's repress the world based on like this this clean cut measuring system. I don't think that really that's a very gracious interpretation of what is going on with the Ethereum researchers right it's not like a bunch of people trying to pump the bags. I'm trying to pump the bags because I work in Ethereum's narrative layer. But the Ethereum researchers are

working to secure the Ethereum protocol. And I think it really we didn't really find this out as an ecosystem until very lately where the security of the Ethereum protocol and the soundness of ether the asset are actually the same thing. And this is this is very core to what makes a good crypto economic system a good crypto economic system is you have the engine and you

have the fuel and those are integrated systems and you can't optimize for just one you can't optimize for just good fuel you also have to optimize for a good engine. And by proxy of the interest in optimizing for Ethereum's security so it can be a good host of economic activity. By proxy you optimize for the soundness of of ether and therefore the value of ether. And

that as a shelling point I think can be extremely competitive. Okay. And that actually is incredibly elaborate. So, what you all wanted to show us now is what you already found in that, why are you wanting to outsource that data to, that is not like you all really like Internet edits. But what this just means is the category pred , what is it the size of

the Bottomearith S173? So, how does it look, if I am really having you you're surprised you learn Web wrap capability. So, I think that's the biggest increase price and they're going to do it. And I mean, I don't know if that's moral or un-moral or whatever. But to be honest, like, it's just not as good as 21 million no one controls it in terms of being

money. So, I mean, I don't know what to say. Like that that's that's my perspective, I don't think that ultrasound money, aka whatever some ledger that's designed to reduce units makes it better than a clean hard 21 million ledger. So, I mean, that's my ultimate objection to that in terms of like branding it ultrasound money, like, okay, good luck. So, what is it for the market

cap or is it not beneficial for the market cap? I think is the real question. I think that's what is having humans involved tinkering with the supply schedule good or bad for the market cap. That's just only what it takes to get the system up and running and then ossification can come later. You have to also integrate the possibility that L1's blockchains ossify over time. We

know this. This is how blockchains work. And Ethereum has the option to ossify when it needs to at the time it needs to be used to, which is not yet because we have not we have not implemented the ETH one chain into the East two chain and then implemented the IP one five five nine. Why would we why would we ossify before that? It's the right

order of operation. So, first we implement these two things and then we implement the office of ossification because the office ossification comes last also Etherage ultrasound money is the best meme in crypto. It's at least the top three memes in crypto if not number one. It's the best meme in crypto again because like so when the monetary supply when what the asset is is defined by

the narrative rather than it actually rubbing up against people and people figuring out what the narrative is then when you lose the narrative. All of a sudden you realize that your network is attackable. So I think this like when you you're losing soundness because like what you're calling Ethereum ultrasound money. Because okay, it's going to reduce supply right it's going to reduce units on the ledger.

But you're really missing out on like okay, what else makes it sound right is it the fact that there's this massive networks of nodes that ensure that the network can't be changed. Yes. Got it again like that doesn't exist yet. Okay. And how are you going to get? Well, what will ETH price be when we do get to Byzantine attack the the proof of work chain

in order to get there. You're missing the point here is that the network the the network that's holding the value isn't even the network that you're prophesizing about yet. Right. Yes. So like when I make content, I want it to be everlasting. Or or have no staying power whatsoever because you're talking about something that doesn't that doesn't exist yet. Sure. Okay. So if that's the main

criticism of this that's completely fine. I'm okay with that. No. Again, what I'm trying to say is that the the difference is that you're measuring soundness on one axiom when there's many axioms of soundness and one of those axioms of soundness is unfuckable withable. And you're saying we will be unfuckable withable at some point in the future. After we do these things that we want to

fuck with the system on. Yes. So that is that those are terrible assurances that take away from the soundness of your thing that is reducing units systematically eventually. But the solution for that is that it's not the right time. Right. And so if my version of the universe is correct in 2050, Bitcoin will have 10 more years worth of Lindy attached to it than each two

will maybe it'll be 12 or something. And that'll be a ratio of like Bitcoin will have 50 years of Lindy and Ethereum will have 38 years of Lindy like it's going to work. It's going to be okay. And how and how many years of unfuckable withability and like ossification of those consensus layers. And yeah. Yeah, yeah. And then the thing is that we're going to have

to wait for the same thing happen. We're going to have to wait for the same thing happen. And then we're going to have to wait. But the thing is like when we started this podcast proof of stake wasn't shipped in the IP1559 wasn't even thing proof of stake is live. People forget that. Well, proof of stake is a real thing. It's securing a real network. And

it's a different network than the network that is a type of the way. I mean, I, I'm very doubtful that, do you think Ethereum will lowering supply make something sound money? Do you think that Ethereum will ever get to charted proof of stake with with no proof of work issuance? I mean, I don't even understand why you want to get rid of proof of work. So

we can reduce issuance. I mean, again, like we're going to, it's just like this, this circular argument, like, hey, proof of work is not good enough because it's distributing too many coins. We need to reduce issuance. But also proof of work is bad for the environment. So that's also another reason why we need to do it. But also it's going to help us democratize access to

Ethereum. But also it's going to reduce the amount of coins that are in circulation. Hey, and guess what? It's going to also make our system better. If we burn coins when they're using these, because that is going to reduce issuance even more, like these are like these weird circular, they make complete sense trees. I mean, again, you're drinking the coolade really hard, but like, I don't

necessarily see how, I don't necessarily see how like all of these little tank coolade. I got a big coolade tub right here. I know, man. You're getting drunk off it. There's why they call you eath heads. Is that, you're like, you even even hopped up on the eath real hard. Again, it's just I don't, I don't believe in the group of people to to tinker with

the parameters of this thing to improve the tokenomics. So that way, it out competes Bitcoin with proof of work. It's like, I just don't think that that's going to happen. Like proof of work is something that I'm going to talk about. Uncensorability, no changing the consensus rules, and then like 21 million. Compound. That is a formula to winning. Compound. How's that compromised? Bitcoin security is compromised.

Bitcoin will last longer than 60 years. Explain. The proof of my checkpoint because Bitcoin's broken. Proof of work with zero issuance does not work. Proof of work is inherently expensive. And if you don't have any issuance to fund that transaction fees will never be enough because of how in expensive proof of work is proof of proof of work is a gas guzzler. And you're asking it

to guzzle the gas of something that you can't issue. Like Bitcoin has optimized for short term security and long term by that by that definition, long term unsustainability and unpredictability and security, whereas the theory is doing the opposite. I don't know what the fuck we're going to be at tomorrow, but I do know 50 years. I would argue with you. Very. So it's kind of funny

to me that security for you has to do with like we need to make the we need to mess with the numbers in order to make sure that everyone can keep kind of coordinating. Whereas the way that Bitcoin or like Bitcoiners think of security is like we need to keep all the variables is like consistent as possible. So everyone knows what the shelling point is. And

when it comes to like well Bitcoin survived the havings that kind of go all the way until 140. First and foremost, you have to recognize that proof of work and then the largest network that utilizes proof of work in particular unlocks energy or profit opportunities for energy producers that do not exist. So if you think about like what that means is that the earth itself is

literally funding Bitcoin mining, right? Because as long as there's trapped gas that is accessible the human infrastructure and Internet infrastructure. That gas can be monetized. So even if there's no block reward any sort of Bitcoin that enables the capture and monetization of that gas is going to be worth it, right? Because they're ready. It's it's taking a negative. Something that was not monetizable and making it

monetizable. So that's also the same with energy production facilities. So do you get do you deal with your energy bill in Seattle? Hunter pays it. But okay. Well, if you look at the energy bill, they try to encourage you to not use electricity during peak hours. Right. By increasing the amount that it costs during peak hours. And they say, hey, if you're going to run your

AC or run the heater, do it in the middle of the day during non peak hours because we have a lot of abundant electricity. We have a lot of abundant electricity. And that's why we are going to encourage you to spend during or run your electricity during that time. So again, the reason why they want you to do that is because they have to produce electricity

at peak the whole time. Right. So for those energy those energy producing facilities, they have all of this energy that they have to produce electricity. They produce all the time to meet peak hours in the morning and the day and they have nothing to do with it. Guess what they're going to do with electricity. They're going to make sound money with it. That is efficient. That

is turning a resource that was uncapturable, like literally physically uncapturable because you couldn't physically ship it and you know one physically needed it. So they're turning it into an asset. So I mean, if you look at the way that proof of work fits into how the world works. So I find it very, very hard to be like, okay, in a world where guess what Bitcoin hit

60k after the having and miners have never made more money ever. That oh, and guess what Bitcoin is not sustainable. It doesn't fit into any sort of long term infrastructure play. Like that narrative just doesn't stick to me. Like guess what? Every energy producing facility in the entire world is going to be a Bitcoin miner. Like Bitcoin mining is not only set up to thrive, but

it's it's set up to literally completely dominate kilowatts. Kill a watch will be priced in sets because every energy facility will need the will need the grid balancing that proof being able to turn on electricity consumption turn off electricity consumption that Bitcoin provides. So like when you under understand that, you know, how the how the infrastructure works, where proof of work fits into that. And then

I hear you who understands those things too say, oh, it's unsustainable because we need to be able to tinker with the monetary policy in order to maintain its sustainability. I just laugh. It's just laughable. It's like you are going to get completely blindsided. You sound exactly like the Fed. So I'm compelled by that energy argument. But if you don't think that that sounds exactly if not

10 times more than than whatever coolate I was just trying to spin up saying that like Bitcoin is going to fund itself out of the energies of the earth. That is that's the same thing. That's equally as cool a to be cool atable. So can you can you point to actual examples of Ethereum instrumentalizing ultrasound moneyness that are real today? What do you mean? Because I

can point to real areas where Bitcoin mining is unlocking profit opportunities for energy producers and stranded people who own stranded energy assets. Today, those are real things. So I mean, what's more cool. One is observing reality. One is saying in the future, when this thing exists, it's going to work like this because I am a communist computer scientist. Well, okay, you cut out at the end

there. But I think you're trying to ask me to draw the same comparisons to progress in the in the East world, right? Well, I mean, we have or something to specifically backup your economic theory around. Right. Proof of work, proof of stake, issuance. In inherent faults in proof of work, those kind of things. Right. So the whole ultrasound. Well, the whole thesis behind proof of wake

is that proof of work is inefficient is that there's perpetual buying pressure. To pay for the overhead of the cost of mining Bitcoin, right? And if you perpetual selling pressure, right? Prepetual selling pressure, right? And like if you also think of a of a world like that, where Bitcoin, where energy facilities can can just not have to sell any of their Bitcoin because they are producing

energy. Well, that's no worse than proof of stake because that's the same, that's the same complaint because the people then therefore don't have any cost. What you're saying is that the the energy operators or the Bitcoin minor operators don't have to sell any Bitcoin because they figured out they hacked the planet. They figured it out. Well, so I don't understand why they need to use financial

engineering. They need to put down their Bitcoin as collateral in order to not sell their Bitcoin. Right. And that's what you have to do with proof of stake. You literally put up your stake as collateral. And then and then you secure that. Yeah, but but yeah, but the collateral and like the active staking is what it create, you know, what allows appending to the blockchain, whereas

with proof of work is you have to earn electricity, right to append to the network to to the blockchain. So there's a key structural difference. I think it's all that different. Yeah, proof of work is just more useful to energy producers, whereas proof of stake is useless for them. Yes. Yes, it's useless for that party. Yes, it doesn't it doesn't work for that party. It's consensus

with less with less utility. Right. Yes. The other thing I would say, which is why proof of work is better. And again, is why it's even at the top of the stock market. As the subsidy decreases, subsidy decreased last April, but by there's again paid more normally in US dollar terms. You know, it's going to continue. We're in the first 12 years of Bitcoin's lifespan, when

it has that energy reserve the most, right? Like it still has plenty of Bitcoin to issue again in monetary terms, because it keeps on going up. But like, of course, of course it's going to work out in the first three have anings. I'm not talking about the first three have anings. I'm talking about the 10th have aning or the 15th have aning or something. So I

have a question. Do you know what percentage of the world's value Bitcoin network issue issues every single block? I don't know. Okay. Well, it's less than 0.01% of the world's value because currently less than 0.01% of the world's value stored in Bitcoin. Yes, this is the BTC is going to pump forever. Cool. Is that what the cool. No, but no, no, but that here like you're

saying that Bitcoin's block reward is going down, but I mean, if Bitcoin, if Bitcoin stores 5% of the world's value, and it's block reward, let's say, decreases for extra. It goes to zero. Isn't that isn't that mean that each block is actually minting a larger percentage of the world of the world's value? Yes. In the earliest in a time in the earliest part of its lifespan,

when it obviously would do that. I mean, Bitcoin's block awards decreases linearly, but it's price appreciation opportunity can increase exponentially. So I mean, I'm just trying to understand. I'm just trying to understand. It wasn't increasing exponentially. We wouldn't be talking about it. It wouldn't be Bitcoin. Totally. But like I just don't understand why you think that it's miners aren't going to get paid. Because like the

thing that they're getting like they're going extra long. Bitcoin all the time miners aren't going to get paid. And like if we start if we did dominate and this is why we have this we have this big commute miscommunication with Dan hell that we couldn't get around where I titled that POV that old POV crypto podcasts episode is Bitcoin safe from itself. But you and Dan

kept on saying that the block reward in real value terms keeps on going up. That's not the problem. It's the block rewards in relation to the size of the Bitcoin economy. That's the issue. It's not about Bitcoin versus the value of the rest of the world. It's about Bitcoin versus the size of its own weight. That's what you have to protect against. I just agree because

there's a clear separation between the value of the network and then the structure and work that's that's securing. And while they are correlated has the value goes as a network increases value. Hashrate comes on. Once that hashrate is on, it's like it's hard to take it off. And when that hashrate is used to being funded by a very very small block reward. And whatever the fee

structure is and it's getting its energy from almost zero. If not negative costs electricity. Then you know all of a sudden you you have a very very antithragical network that is less susceptible to whatever is staying on top of it. I think we might have to wrap this up because your internet really sucks. And I think we've exhausted it. It's just a bunch of Bitcoin and

Ethereum enthusiasts here talking about stuff they really don't understand. I think you need to listen to the Ultra Sound Money podcast that comes out a week from today on the Bangladesh podcast. I mean I listened to the one with maybe it was not Ultra Sound Money Bows with Justin Drake and this is the other half. So crypto economics that was crypto. This is economics. So there's

just a drag round two. Oh so okay. So more more just and drag more just and yeah I wasn't super impressed with his knowledge of Bitcoin. I'm that makes complete sense. All right. Well look forward to listening to it. What did you think of the Nizomi Hayes Bitcoin magazine podcast. Oh yeah she was great. There was a lot of parallels that I think that's what I'm

going to say. When she was talking about Bitcoin to what I talk about with NFTs about how NFTs are a tool for disintermediating the emotional relationships that people have with each other. And I think the big takeaway I got was that like between technology and money technology and money mediate everything about humans at all ever everything. The whole the whole relationship of the humanity is mediated

by technology and money. When you can revolutionize those things you really revolutionize the relationships that we have with each other. So between you can revolutionize culture. I think that's pretty cool. Yeah no absolutely. I mean culture is kind of like a way of instantiating experience which is kind of built on top of itself. And money is a form of communication for expressing that more clearly. So

IE Bitcoin better communication. I'm excited for the improve the improve communication of 21 million which I can't see how some undefined lowering ether supply cap is better than making it. I don't know if that necessarily makes what makes something sound though. You can be able to see that in real time. We're about to experience it. Alright well man Bitcoin slip in here. Yeah. We need to

get out of this because we're clearly dumping the price right now. Man I should have sucked later in the day. Yeah you guys can find me at ck underscore snarks as well as at big quarter. We're going magazine and on the Bitcoin magazine podcast David. You can find me at trustless date both on Twitter and on bank listings everyone who's. Will you. We never cry when

no time. We never cry when no time. What will we be Ga-Kos Strike the blue prowls Ga-Kos Gogo Strike the blue Cut the white thread Cut the white thread Cut the white thread Cut the white thread Cut the white thread