What is Sound Money - Fight Night

Welcome everyone to POV Crypto, the only podcast that both Bitcoiners and Ethereum's listen to. I'm David Hoffman, here with Mbidian Christian. Christian, how you doing? Doing good. Did you know that today is a Satoshi's 46th birthday? How do we know what is birthday is? He listed on Bitcoin.org a birthday and it was it wasn't the date of Act 6102 where gold was confiscated or had to

be turned in but it was it wasn't the exact same date of like the Act but it was 42 years ago on this day which is the day of the Act. Yes. Yeah happy 42nd birthday Satoshi and the 88th anniversary of the 6102 Act which banned people people from owning gold. Yeah it was it was you had to go turn in your gold and all gold

that was held in like private. Faulting was converted at a set rate. Yeah well dude Roosevelt right there. It's crazy who is celebrated in school you know but that's what stuff that he did. Right yeah and like he's still pretty he's very celebrated by the left right like a whole green new deal as a celebration of Roosevelt isn't it? Yep interesting interesting. Shows why big coiners

are nervous about the left. Yeah I yeah the makes sense everyone's everyone well everyone should be nervous about both sides like both the right and the left are just weird right now and not not on the money. Very not on the money. Big truth big truth. All right what are we going to talk about first. Well wait tell me about your bullish sentiment because it's always

good to talk bullishness and this was your post from bank list. Today is is Monday April 5th by the way you all be listening to this a couple of days later. Yeah so I wrote this piece to every Monday market Monday is the time to talk about the market in bank list so I wrote this piece title crypto is about to melt faces and I just

ran through the list of things that are bullish right so last week we had the visa announcement that is using a Theorem to settle U SEC golden in sacks is scrambling to enable Bitcoin offering so it's customers in attempt to like match Morgan Stanley's Bitcoin fund so now Goldman Sachs has got to do something. It's also a we have a historically high quarter for venture funding

into crypto the Kim Chi premium is back so on Bittum or Bitthama or whatever. The Bitcoin is valued 16% higher than the US dollar markets in two weeks coin coin bases token or not token equity will be listed on the NASDAQ. And let's see what's up Bitcoin ETF got to be soon got to be around the corner got to be a couple months. Yeah I mentioned

in a desperate move to to get the premium of GBTC back at least up to nav. Barry is now offering to move GBTC into an ETF as well as lower management fees so pretty much what's happening is now with all of this competition against GBTC's great scale trust. The great scale the great scale shares are trading under the value of the actual collateral that they represent.

And that is bad for a lot of the market. People like block by like big traders you know people that you know are in that trade people that are holding the shares and now they're down 16% on the underlying value so. Very is trying to fix that and he's now submitting what is like the sixth or seventh you know ETF proposal and this one is to

convert GBTC into GBTC as an ETF. Right which makes sense and we we had a. Becky Tessprey here is RPGE and I don't know why we haven't improved an ETF like we should have like now market's ready for it and so you know CC commission are saying that. Marquess ready for an ETF and there's plenty of viable ETFs like ready to be stamped and improved got

to be soon that's gonna pump the market the other remain the bullish things I had are our our the the. We have E. p. We have E. I. P. one five five nine in July and then we also have the the merge being proposed to come in 20 at the end of 2021 which there seems to be all the Ethereum quarter developers like yeah we could

do that that would be an okay thing to do which means that we can take in 2021. Okay so yeah walk me through this so in July E. I. P. one five five nine which changes the incentive structure and the fee structure of Ethereum happens there's scheduled to happen and then at the end of the year there's gonna be proof of stake takeover is that what

you're saying that's what's being that's what is being proposed and tossed around among the Ethereum core devs. All right how confident do you feel on both of those timelines I think that the lot when it's definitely aggressive. The ladder ones a little aggressive did you lie E. I. P. one five five nine hard fork is that you're going to be a little aggressive. The P. one

five five nine hard fork is happening that is happening in July. What are the chances of some big issue related to that. I'd not qualified to answer that question. I don't know. Okay. So yeah so that's happening in July and then if all the core devs approve the acceleration of the merge then in theory that could happen by the end of 2021. I don't know what

the dependency is. These are of the merge. I don't know if it's just like we'll just agree to do it and then we'll do it. I'm assuming it's more complicated than that. What's do it. Like you have to be a little bit more explicit here. There's some dumb you know big pointers listening to this. Right. So what this means is that the beacon chain which is

the proof of stake chain that's alive and it's got the heartbeat the skeleton of E. two of Ethereum to we will use that to secure Ethereum one and that what that means is Ethereum one is just being like can in the initialized into the beacon chain and so the beacon chains is now validating the transactions on Ethereum one instead of the proof of work system. And

so this is this is what we call the merge where we shed proof of work and replace the security with proof of stake. So what what's the deal with Ethereum issuance right now is it being issued on both chains simultaneously. And what happens when there's this this merge. The new issue is going to be a little bit more complicated. So this is a 100% like buy

by proof of work. We're turning this off by the end of the year potentially if potentially if this proposal goes through and then gets executed. Yes. No more work by the end of the year. So let's talk about let's talk about the currency. So right now you know what I'm going to do is we're going to do this. So the ether is is ethers being issued

on both the proof of works chain and the proof of stake chain and but that's not fungible right like those right there technically there's yeah they're in separate you can even you can even move the ether on the beacon chain. So it's really just beacon chain ether that just exists and it's waiting on the beacon chain waiting for the Ethereum one chain to get merged. And

then for stake to be unlocked. Do you know what the inflation rate is right now. The total inflation rate of both systems. Yeah. Yeah. Something. Yeah. It's something like 4.7%. Let me go to etubb. Is there so on etubb there's a metric that shows both combined or just shows both separate. There is there shows a projection of both combined during this one like time period. There's

a link into the chat. Let me find it. Yeah. When I find it the eth hub site is not necessarily easiest to navigate. Hey if it's a if it's a sad project it's going to be just like a bunch of links. Yeah. Well, no they did it. They did a pretty good job filling this out but they just never really took it to the finish line.

Okay, here it is. The bull market came too fast. Okay. Right. So there's this. There the the orange line is the issue interest rate and that's the jagged unpredictable line that big corners like to point out for the Ethereum monetary policy. Except they'll always forget that it goes down all the fucking time. And then there's this one little blip that goes up a tiny little tiny

little amount where we are issuing an extra little share of the percentage of total supply. And so right now we are at like three six like yeah like 4.7%. And then then it just drops off the cliff. And goes down to very very little. So when this ships and this is projecting it shipping in January. So this is assuming the that timeline. But when the ships

it will theoretically drop down to a very low amount. But I mean, is it more than that being issued by the beacon chain right now? No, I don't think so. I mean launch pad Ethereum.org. There is three three point seven million ETH with earning 8% and so 3.7 million times 0.08. How do I do math? Is it going to take me a second to do this?

0.08. So 300,000 ETH are is a year is being issued to secure the beacon chain. Which represents. So yeah, whatever. The interesting thing here though is like okay, yeah it's going down but it's pretty clearly not. It doesn't look like Bitcoin's. Bitcoin's is. Yes. It doesn't look like it's like a it's programat. It's a programmatic monetary policy. We're like this is. You can see the difficulty

bombs like. Yeah. These like readjustments all this like tinkering and it'll all be in the rear view mirror. I mean, we'll see. Part of this is like kind of something I want to talk about. I was like what are the properties of money right. Because, you know, you're pushing this ultrasound money meme. You're trying to get me immersed to me. And make ultrasound money swag. But

like what is like what are the properties of sound money right. I mean, I think at least the way that Bitcoiners define it, which is like slightly different. How I guess you're using the terminology is like. Predictability. So there isn't really like. You look at this chart right now on ETH hub. We should just like share it for the video listeners, but we're not. Okay. It's

pretty clearly, you know, not a very predictable chart. Yes. However, if you're if you're trading has traded is short term unpredictability for long term predictability. While Bitcoin has traded for short term predictability, but it doesn't have long term predictability. So that nice elegant curve of Bitcoin monetary policy, that's great until let's what's the what's the Turkey fallacy. This chart. That chart. Yeah. Oops. That's that's perhaps

the Bitcoin. Like monetary policy. Like where because you've traded away because you can predict it in a short term, you forgot about being able to predict it in the long term. So. How is the theory. How is the theory unpredictable in the long term. Because there's been very many cases where. Ethereum is continued to act unpredictable into the future. So where's any precedent. They are actually

predictable in the long term. Right. I really don't think that Turkey fallacy makes any sense for Bitcoin. Can you explain a scenario where the Turkey fallacy works? The Turkey fallacy like Turkey's getting fat. It's happy. All these things, but little doesn't know that in a Turkey factory is going to get shot. But Bitcoin's not in a Turkey factory. Bitcoin is taking over the world. Bitcoin is

the like turning into the ultimate asset. So like that's not quite the situation where like. It's it's hostage. It's blindfolded. It's like thinks it's happily moving along. Like Ethereum will talk about like the block the block reward. It is going to. You know, be Bitcoin's undoing. But there isn't really any precedent to show that. Right. Because there isn't any precedent because we've never seen Bitcoin tested

without block rewards because all the block rewards happen at the very start. Right. And so all Ethereum's like chaos with developers and tinkering and all of that stuff that that Bitcoiners are pointing at. We. We've. We took care of that in the early. We're going to have to deal with it later because of the nature of the unsustainability of security through fees. Like. How have you

asked that Ethereum has gone through Bitcoin is going to have to go through. At the end, after it's already become integrated into the world's financial system. I mean, I think that all like that is unsubstantiated claims about how Bitcoin is going to play out. I think that's the way it is. But beyond that, can you. Can you. About like what Bitcoin is secured by fees? If

it's never been secured by fees before, that is also unsubstantiated. I mean, the trend of fees is going exponentially up in terms of buying power as well as overall percentage of the block reward. Yeah. And it's it's again, it's not about buying power for non Bitcoin things. It's about it's the relationship with itself. Yeah, both both are going up. And that's a definitely. So I think

that's the definition that you defined in a theory and to find without any pointing to how there's any precedent for that being relevant. Okay. I we can't show we can't show you precedent because it's about the future. Oh, the same conversation. Yeah. So it's about a model that you made about these things being important because proof of stake makes it better. It's. It's all you said.

What Princeton put together about the. Okay. The possibility of a public blockchain with that is just secured by fees. And then we know what came out of that research paper. Yeah, IP 1559 is the what came out of that. So like, Hey, like here's a way to to get route around this problem. Use this mechanism instead. And a theorem is like, Oh, okay. That's good. We'll

do that. Okay. Then we can have sustainability. But Bitcoiners are just like, no, we'll just generate a narrative and the narrative will work. It's not. It's not generic and narrative. It's a little work extreme. No, proof of work is extremely useful. We know this. The a proof of work network that issues a money that is highly liquid is extremely useful. That's not narrative. That's reality. It's

not how extremely useful. No, it's going to continue to be. Show me something that shows that a proof of work network that enables energy producers to access energy demand from anywhere on earth is not extremely useful in the future. That's this is a you're already complete. We're completing subjects. That's a different issue. No, no, no, it's absolutely part of the conversation. Because you're asking, how is

how is Bitcoin sustainable? Bitcoin opens up profitability opportunities that were not available before it. And proof of stake is not even playing for that game. In terms of proof of work doesn't, isn't necessarily a net add to the system. In fact, I would say it's a net negative. Well, I would disagree. I think this is incredibly needed. The system needs an energy buyer of last resort.

I heard got this comment. The after Vitalik did his brain dump in the R Ethereum subreddit after our last podcast. There was a comment in there. That was something along the lines of like proof of work is like when Netflix was mailing out DVDs because internet banks and bandwidth wasn't good enough. So we had to do this like hybrid digital hybrid analog system where they just

mailed DVDs. That's what proof of work is to me. Like it's this hybrid like stepping stone from like the old world into the new world. But what about if we were just in the new world. And that's what proof of stake is is just digital only and proof of stake network can exist on the internet without any footprint in the real world at all, which in

my mind is extremely. No, that's completely incorrect. There's a huge footprint all of Ethereum to do anything. It takes computers that provide compute to the network. It is a physical network. Okay. But the computers already exist. We already have I already have my my staking computer is still at my log Mac laptop right here. Okay. No, you created the people create demand for the staking computers.

You know there's going to be specialized staking computers. Those staking computers are going to be in regions across the world that most likely have actually pretty high and expensive internet. Or high and expensive energy costs because maybe those energy costs are competing against a civilization. Maybe they're in an urban environment. So the physical network is the energy cost of running a computer. Look, look, these these

staking computers. Maybe some of them will be on laptops. A lot of them are going to be on specialty servers. Okay. And those specialty servers costs electricity. Those this step is not negligible for an internet. So you can see the entire global network that you're claiming to be decentralized. So the proof of staking network. So you can assume electricity. Zero electricity. Yeah. Basically, an undetectable amount

of electricity. No, that's completely false. How many computers do you come from? Yeah, where where does a computation come from? Yeah, it's only one computer at a time. That's the benefit of proof of sake is you have one computer during the computation and then you have like three more. Checking that one person's work rather than a bajillion computers all over the planet just running through Sudoku

puzzles. We're not talking about proof of stake versus proof of work. I'm talking about there are actual computers that are online all the time. They're connected to the internet connected to the grid. They're doing this one specific thing. You can't say that that doesn't take up resources. Have you taken into account how many resources those things take? How that compares? How about the regions where those

computers are? Located. See the reality is you haven't even thought about these things. You're just a proof of. I don't think there's no energy. It doesn't take up any energy. That's the whole point. No. That is a complete misnomer. You're saying that the consensus is secured not by electricity. The consensus is secured by stake is digital. But guess what? The network. There is a physical network

run by computers. That's the takes of energy. The internet. It takes up energy. Yes. Of course. It's marginal. It's undetectable. Bitcoin is useful too because people need. It's not energy. It's only useful because Bitcoin has value. When you say that Bitcoin's energy consumption is useful. It's because it's selling BTC. It's only useful in the sense that BTC has value. Guess what? Now people who had energy

that either was a negative as in they have to flare it out or something or they could actually leverage an asset because there was no economic way to do it. Have an economic way to do it by taking whatever Bitcoin will scrap at them. Whether it's a small fee or whether it's a massive block award like right now. It does is a byproduct of the Bitcoin

network. Not a future. No, that's a great it's a great byproduct. We can argue. We can argue very, very real. It's extremely real. So your models that project the Bitcoin is going to die. They're not taking it. I did not even read this Princeton paper. So I'd like to read it. But I've heard of many, many academic models that have made some very strange assumptions. Like

your friend Justin who I very clearly dismantled because even Vitalik has five X his projections on your show. He said five billion Vitalik is saying 25 billion. Justin has three X his projections because he actually talked to one minor here. He had three X his projections. So I mean, if that doesn't show that he doesn't know what the fuck he's talking about regarding. So he was

asked by three X that's not that. That's not an order of magic. He talked to one minor and then three X his projections. He did not even do even do research. No, he didn't even do research. Talk to one guy and he got that close and he was doing napkin math and he was that close. So he had to do his three X it. That's not

that's not far off at all. Okay, Vitalik or any five billion dollars to 15 billion dollars. Okay. So no, I'm saying that his admission after just a little bit of pushback from me shows how little he actually knew about it. All it took was a little bit of pushback from not a minor and he and he already was taking his position back. Okay, like let's take

some like critical thinking here. Okay, this guy's supposed to be designing your entire system. Come on. This is ridiculous. This is ridiculous. Okay, it's ridiculous because you have nothing better to say. Yeah. It's sad. We're just we're just going back to the same argument we had last time. It's about it's about the message. It's about the meaning behind how he was able to get to that

number so quickly and easily. And then all of it's on. He was only like three X away. And okay, like now now he's at 15 billion dollars. He's still only secured by 15 billion dollars. Why does that matter? Why does that matter at all? So no, no, what you're what you're you're taking it incorrect. Exactly. He didn't know research. I pushed on him. He did a

little bit more research, took a couple more things into account and three X to his number. Okay. What you're not. Why he's confident in his what he's saying without doing any research is because it's plain obvious what he's saying. He doesn't need to do research because it's fucking obvious. So it was kind of hilarious. You're back and forth with Alex Gladstein last week where he asked

you to show him an example of a proof of stake system that was actually equitable. Yeah, it's a theory of proof of stake. That's what it is. So it doesn't exist yet. Yes, you're correct. I mean, every time I ask you for evidence, you say it's this thing in our model for the future. Yes, because humans are good at making models about the future. We have

that. I'm pretty sure if you went back and you listened to the Fed records, which are public from back before and then after 2008, they talked about their models a lot. And then they talked about how the model is not correct. This is not the Fed. No, it's people making models. It's genius is making models. In fact, very highly accredited geniuses that went to Princeton and

Harvard. Okay, I guess all models are destroyed, I guess. And like we have no models to go off. All models are inherently wrong. All models are inherently wrong. At least they exist. So we can use them for predictive things. You use them to try to help understand reality. Sure. They're only useful for their ability to help you better understand reality. Sure. They're predictive because they can

help you understand reality. Therefore, hopefully help you predict. Right. And we've modeled that Bitcoin security is unsustainable. We predicted this. Yeah, people, people that predict this. Same people that predict the Fed. That would get the Fed. No, literally not the same people, different people, crypto economic researchers, who care about these things and are qualified to make such statements. At the end of Bitcoin's life cycle, Bitcoin

goes from producing like one block every 10 minutes to all of a sudden it's a it's a doggy dog world of miners who won't produce blocks unless there's minor extractable value in those blocks. So they're going to turn off their miners and wait for a valuable transaction to be broadcasted to the network. And then they're going to turn on their miners so they can race to

mind that transaction. And so Bitcoin blocks are going to go between one second and one month. That's what that is the long term model that is predicted for Bitcoin or maybe even longer than one month. There won't be any mind blocks being mined unless there is actual transaction fees to pay for the network. And it's not about transaction fees above zero is about transaction fees in

relation to the previous history of transactions. The volume weighted average of the last two weeks of transaction fees. And so it doesn't matter what the buying power is of BTC or whatever. It's about the recent history of minor revenue and what is theoretically coming down the pipeline for future minor revenue. And all of that throws Bitcoin into a complete state of chaos because the game theory.

Can I ask you a question? So you guys talk about game theory, but then you never describe the actual scenario. So in this scenario, what is Bitcoin's current state? What is the global financial system? I don't know, but it's been pumping probably. Okay, so if Bitcoin is really important in the current financial system, do you think that there's going to be no transactions on the Bitcoin

base layer? No, they're really. Okay, so this scenario is Bitcoin is expensive and important because people are storing their value in it. There are transactions. There are transactions on the base layer. Okay. Keep telling me more about the scenario where it's not about whether it's not about whether or not there are transactions. It's about the volatility in transactions. Okay. So do you study the Bitcoin mempool?

No. Do you know what the mempool is? Yes. Yeah, so it's the it's the backlog of pending transactions. So the mempool, I mean, it does clear, but it hasn't cleared really right now. So I mean, maybe that trend changes. But if you think about it, the mempool is kind of that that is your that is a signaling mechanism of future demand. Right. I'm not saying that

there's 1559. I mean, like, so like right now, I mean, at least there's a lot of signaling that there's consistent long term demand week week over week. The mempool really does not understand. Yeah, so your failure model is not based on how this thing actually works, right? Because like, I mean, I'm trying to understand like, so you're saying failure is going to be clear the whole

time, even though Bitcoin is. No, it's not about the presence of transaction fees or not. It's about the magnitude of volatility in transaction fees in relation to the issue in, which is stable, which is not. This speed of Bitcoin blocks are going to be a function of the magnitude of transaction fees. That's what I'm saying. Yeah. So what you're saying is like, there's good. Now, you're

going to wait for a big giant mempool to build up before anyone takes any before anyone minds a block. And miners are going to just hold the network hostage to that. But I mean, that means all the miners have to collude. Because all like the way the game theory works is that any miner can mine a block. Right. That's why blocks come in 10 minutes because

all the miners are competing to mind the blocks. Yes. So you're saying that things are changing now to a situation where miners are actually holding the network hostage and colluding to not mine blocks. So they have to collude because like, how do they, how do they, how do they communicate? What's an acceptable block for you? It's about the game theory is about how. Because miners always

will add more mining hash power up to the value of what they are receiving as revenue. There's always going to be ultimately at maturity. Unless Bitcoin just keeps on pumping. And even at that point, it doesn't really matter. There's always going to be a ultimately a balance between a surplus and a deficit of hash power. And so it's minor. So miners would treat it deficit. Because

I don't understand a scenario. Why are these miners coming offline? Like what's their benefit? They're not at the moment be viable. But a lot of these miners are placed in areas where they're already using fuel that is not being used anywhere else. Can we just do this with Justin Drake on? I mean, I'd be happy to have him on to, you know, dismantle his arguments with

my just silly questions. Here's the thing is, I'm not even an expert. And I can like, I can break down these these silly like models. I think I think you think that I don't bring them on. You are actually doing that. I don't think you're doing the thing that you are think you're doing. Okay. What else do we talk about? I'm going to talk about ultrasound

money because again, I really think that like the role of money is dependability, reliability, predictability. Why should I believe that Ethereum is going to have a predictable monetary policy? And like when, when, when do you think I should believe that? I think you would more believe that after. How long do you want to have a lindia effect behind Ethereum's monetary policy? I think you can answer

that question. But I can't believe it. If you wait 10 years, Ethereum price is going to be really high. Okay. But here's my pushback. You look at that chart. It's not like from it sound money perspective. It's about, like, it truly is about like dependability of the monetary policy. Like you need to depend on it. Like that chart, although it is down, it is like it

shows tinkering, right? So right now that definition is not really met. So at what, like when do you think the definition is going to be met? And then at what point do you think like it has like, okay, this is like a proof, like I can trust this because like you're saying trust it before it happened. It's going to be fine. Like I'm saying, I can't

trust it before it happens. I'm just saying that that's the alpha is that ether is ultrasound money. And if you want to buy it before the rest of the world realizes it's ultrasound money, you can buy it today. That's the narrative. It's already checked the box on a call. It's a culture astound money culture with which Bitcoiners checked that box in 2017 with the defeat of

Bitcoin cash in my mind. Ethereum people checked that box. I think in 2020 when we started to really just hit the hammer on the the value of ether being a sound money. And so the the theory is not the same thing. Yes, it is. Yes, it is. It's not the same thing. Bitcoin cash versus the like some people rallying around the narrative is not the same

thing. Bitcoin cash is a real. It was a real standup against. That we're trying to change the network. Continuing on, there are the sound money culture of Bitcoin won out in 2017 because of the small small blocks emphasize the store value. Ethereum and mainly the people like me are a Connor Anthony D C anti pro Ryan. We've been hitting hitting the ether is sound is a

money drum all throughout the bear market into 2020. At some point I would say sometime in 2020 that started to really just catch on probably with the ethos money mean. And then that embedded a culture of sound money into the social contract around Ethereum. Where we've checked that box. And now the Ethereum core devs mainly just and Drake and now Vitalik are saying that the community

wants ether to be money. Therefore it will be money. And that is the first the first box that you need to check as a money is that the people believe it to be so. Now the way that it becomes money into ultrasound money is with EIP 1559 and proof is take. And at that point so each ether becomes ultrasound money perhaps at the end of this

year. And then after that it's just Lindy. So hop on. Find the right path in Ethereum timeline where you want to hop on board and pick your pick your point but the longer you wait the more likely the more on the higher ether price is going to be. So 2021 maybe 2020. And then just number go up straight up from there. Yeah. That's the plan. That's

the plan. That's the plan. Man. I wonder what happens to plans when they meet reality. I think we will find out. Have you never executed on a plan before? I mean I have. Right. So there's always a lot of curve balls. Sure. And they can be dealt with. Like these miners who thought that they could get in the way of the transition to proof of stake

and then folded because they realize they had no power. That was a curve ball and ended up going away. And that sounds like. We're like, what are we doing in this process? We're just going to have to be a bit more of a different curve balls than Bitcoin's curve balls. Just like Ethereum is such a different threat model. And it's not even comparable. That's why when

you say Ethereum is ultrasound money. It's like hilarious. It's like do you even know what makes Bitcoin sound? Yeah. You're talking about the lack of tinkering. Is that where you're referencing? This quote is the truth versus we are going to implement our control over the network because we are the community. The UASF was a lot of Bitcoin full node operators. We decide. But ultimately, you could

have not gone along with them and still been part of the network. So been part of consensus. There's a lot of companies that just said, we're just going to run with the old Bitcoin for a long time. I think blockchain.com put in segway like last week. Almost for almost four and a half years later. So that's the difference in my mind. Yeah. And this is to

me, this is the only miners. As to whether or not these systems are protected by people or are they protected by math? And as always, the debate we've had, I think these systems are protected by people. Yeah. Well, I mean, I think that there's a little physical network. Sure. That exists by people. Yeah. Well, individual actors are contributing to the network. It's like, where do you

want to zoom in? Do you want to do you want to see the whole picture? Do you want to be just like a small guy picking around? Like picking at like, oh, it's a person who's managing this node is a part of the network. Like we get to argue about that. Yeah. I mean, what's the there to argue about? No, I'm just there's a decentralized network

like that that is in consensus. It is hard to coordinate those people. Right. That's all I'm saying. The the the emergent coordination of a mutually beneficial outcome is still possible in a decentralized fashion. And that's what big pointers don't see about Ethereum. They they don't see emergent coordination. They see top down centralized decision making. And they they don't wait any of the community guidance or community

demand for the direction of the protocol. And that's their folly. That's their mistake. I mean, it's I think it's just about framing like really what's happening is there is a power mechanism that people that you either deem is true or not true. Rally behind and you know, I spoke. And they exercise that power mechanism in a way that no one complains about. So that's that's what

you're saying like big pointers can frame that as like. It's centralized. There's clearly a area for the protocol to be changed and like coordinated around. And then what you what you would argue is like, no, this is consensus of urging, right. So it's really all about framing, right. And what you're anticipation about the morality and future, you know, attacks and areas of the network are going

to be. Yeah, sure. There's a centralization point where people can be that what people that that where there's clear control of what defines the the area and the definition of the theory I'm has shown to change whether people complain about it or not. As so as soon as the Ethereum community gets what it wants, it's going to centralization aspect of Ethereum is going to be slowly

eliminated from then on out because it's got what it wants. The Ethereum community allows for there to be centralization as a tool to achieve its desired goals, which is ultra sound money. Which is something that was decided upon last summer. Yeah. Well, no, it was named last summer. It was decided upon earlier than that. It just didn't have a name. Okay. And so I saw you

put out tweet about why Ethereum is ultra sound money because it's depreciate. It's, you know, it's the declining supply as well as ultra secure as well as it's actually it creates cash flow, right. I sure. I think do you know what we are referring to your BTC is and not. Oh, yeah. Yeah. That was actually that was actually I straight straight up stole that tweet from

Lucas who works at Bancliffe as a joke. But yeah, I do stand by that tweet. Yes. Break it down because I didn't do it justice clearly. Okay. I said, hold on. BTC is a fixed supply, non-productive store of value. ETH is a deflationary productive store of value. One is sound money. The other is ultra sound money. So what does it being a productive asset make it

money? Like, why is that? I don't know. I just again, I just stole it from Lucas. It was mostly a joke. I wouldn't necessarily say the productive aspect of Ethereum is necessarily the part that makes it sound. It does make it extra scarce as capital and as collateral and defy. Well, the idea there is that there's a there's like a risk free rate associated with Ethereum

because of seeking. And that is a baseline of demand. Yeah. I wouldn't I wouldn't actually I wouldn't imagine Bitcoin anyways. I wouldn't necessarily make that a part of the ultra sound money. The ultra sound money thesis is the deflation. It's a reduction of supply. So it's strictly deflation. It has nothing else to do with like the aspect of the properties of Ethereum. The triple point asset.

Yeah. No, that's that's all the triple point asset. The ultra sound money is I believe I would I need to think about that a little bit more, but I'm pretty sure it's just a deflation. I mean, I would just push back and say that when Bitcoiners say sound money, they don't mean the same thing that you're saying when you say that. Yeah. He's talking about a

there are a conditions where it doesn't right there are conditions where it can be inflationary, right? Right. Yeah, because the priority is to secure Ethereum not to produce sound money. Based on what I would say is the fallacy that Bitcoin is not secure. Sure. The work is not secure. Sure. The fallacy of the fallacy. The second fallacy is here, baby. Spellacy is all the way down.

So the Gresham's law is that people that people flee from bad money into good money or they they flee from money that is depreciating versus another money. Right. So specifically, Gresham's law is in the face of legal tender laws. So I mean, it's questionable whether Gresham actually was referring to generally speaking in the way that they are. So market or okay. So people flee from money

that is losing value into monies that are gaining in value, just in relative to each other. And so if Bitcoin is holding flat, yet Ether is depreciating, the flow will go from Bitcoin to ether over the long term. But we can make it a valuable store value. Not necessarily. You're right. But I mean, we'll do that anyway. It's for other reasons. I mean, so you're saying

holistically with the deflation, but just because it's deflating doesn't. So can you can you tell me more? Why? So deflation plus other things make it a store value because I'm still trying like I, I, from my understanding, I just cannot agree with ether is even more sound money than Bitcoin, right? So it's me of that, please. All of these fees that people are like disgruntlingly paying

goes into the value of ether holders who aren't paying those fees. Right. And so the, how many, how many millions of dollars is being paid for ether fees as of this moment. Let me find out crypto fees. Info. Thanks David. Me how 2018 million dollars today is is is paid in ether fees and under EIP one five five nine that 18 million dollars. It's deleted from

the supply, which means that that gets in the same in the same way that Bitcoiners are like, well, when we issue coin, we're actually just borrowing money from the rest of the supply. This is doing the same thing in reverse. It's literally all the opposite of issuance. Instead of inflation, it's deflation. And so the value of all these fees that are generated going. It's can some

metaphor. It's consuming the ether when you transact on chain. Yes. And so what what if people stopped transaction on chain? What if yeah, that would that would make ether inflation. Like that happens with the. That's what I said. The Bitcoin blockchain will have transactions being paid to it throughout its life span all the time. That's not the failure mode. It's just numbers that are going to

be wrong number. It's going to be unstable. Okay, wait, we're talking about Ethereum. So explain to me how it's some money. Yeah. So you're saying that the fees are going to burn. It's going to deflate the supply. Right. But I would argue that a big part of something being money. Money is liquidity through distribution. Sure. And it's got that too. Yeah, but this not only this.

This destroys distribution. Because it sucks up. It sucks up fee. It sucks up supply. It's a destroyed distribution. It doesn't change it at all. I mean proof of stake itself ends kind of like enter distribution mechanism that proof of work is. Now yeah, that is it does not. It's not a distribution mechanism. That's right. But it stops like how many billions of dollars. It stops what

Bitcoin seven day average of five billion five million dollars. Excuse me. A fees. It stops that sell pressure on the secondary market. And so it just delete that sell pressure. And so no, it's not a distribution mechanism. It's a security mechanism. And that security mechanism makes east go up in value. And then people buy it because they really want to. And then it gets distributed because

people bought it because it's all for some money. Yeah. I mean, maybe ether is distributed enough. I don't know. I mean, it's like all of these things exist in the wake of Bitcoin. So you're saying that, okay, the ether supply going down is going to be enough to take over Bitcoin's liquidity advantage because that's part of the formula of something like taking the place of like,

the global reserve currency. Maybe there could be other things that could compete as like, let's just call it a sound money. But ultimately your eye is on like ether is going to be the denominator, right? Ether is going to be the best money of the world. And everyone is going to is going to flock to it eventually because it has the best properties, right? So I

mean, at what like, can you talk to me about like at what point does ether actually overtake Bitcoin's kind of like global liquidity. Because I think that one of the big bottlenecks to that is the fact that, you know, you like, ether's advantage is on its own chain, right? So like, ether's chain itself actually has to scale. Whereas like Bitcoin, it only has to scale to

on chain transactions. And as long as it can continue to multiply and decentralized further. And ensure that the ledger is sound. Like, that's all the scaling that actually needs to happen on the Bitcoin network. So it's, it's slightly, slightly different by orders of magnitudes, you know, network scaling kind of challenge. Well, any vehicle that Bitcoin has to scale Ethereum also has that same exact vehicle. But

that's not where Ethereum's advantages, Ethereum's advantages strictly on chain. Yeah. But like, but just because Bitcoin has has decentralized institution scale model doesn't mean that Ethereum. It doesn't also have that. Yeah. But Bitcoin is already dominant there. Why would someone use Ethereum if they're not going to tap into Ethereum's benefits? Because Ethereum does have the benefits regardless of whether you transact on chain or not. I

mean, you in terms of the decreasing supply. So that's the one. But it's other benefits are tapping into this permissionless marketplace, right? Yeah, to some degree. Yeah. And that's where like the role of the role of roll ups comes in where like, all of the, the very strong demand to transact on L1 where the fees are super high. Can that, that can just be made by

different roll up providers doing the whole like shipping container analogy. Like ultimately at the end of the day in 30, 50, 100 years, Ethereum, the L1, no one might touch that directly. The only people that might touch it are roll up providers who are transacting on L1 on behalf of their users. So what if that, what if that creates inflation? No, why would it create inflation?

Because there's no fee, there's no fee pressure. No, no, people, well, if there are, if there are cheap, they use the main chain. Why? If all the infrastructure is upchain, right? Like you're talking about, like you're talking about these disaster scenarios for Bitcoin, but like don't these disaster scenarios kind of exist on Ethereum? No, because of VIP 1559 is the mitigator of Bitcoin's disaster scenarios and

privacy and common issuance. Kind of. So it doesn't guarantee that there's going to be low inflation or no deflation or deflation. It doesn't guarantee that. It just all does is that it's a mechanism based on what's happening. Yes. And that mechanism has the optionality of going inflationary. Yes. If there is, if there's no demand for Ethereum, then yes, Ether inflates. Just like if there's no demand

for any economy, the currency inflates. Well, issuance creates influence, issuance creates never mind, never mind. I feel like we're going back and forth here. I mean, we should wrap it up. I got it. I got it somewhere somewhere to go. Yeah. Yeah. All right. Say hi to the person for me. Yeah, what do people find you? You all can follow me at Wow, I just said

y'all trustless state, both on Twitter and on bankless Christian. Y'all's great. You guys don't need that CK underscore snarks and at Bitcoin magazine and at the Bitcoin 2021 conference with pretty much everyone else in the crypto and Bitcoin community. So my me June 3rd, 4th and 5th go to B dot TCE for slash conference. Get your ticket. ESAP and maybe maybe David and Ryan will be

there. But at least I'm going to be there. I will not be there. I might be there. You should go. Tell Ryan that he shouldn't be scared. Ryan doesn't even go to the room conferences. He's not going to a Bitcoin conference. All right. All right. Well, I take back the invite. Ryan, peace. Yeah. this. Will you disoted he zoo. Will you disate. Will you disate. Will

you disate. Will you disate. We never call in order. We never call in order. So you are the reason that. So you are the reason that. So you are the reason that.