#8 Vijay Boyapati | The Bullish Case for Bitcoin

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Welcome to the monk of the hedonist tonight. We have a really special guest. His name is Vijay boy potty. He is a renowned in the Bitcoin space for his ability to provide very clear and simple explanations on what Bitcoin is how it works. And some of the key points around its economics and us as being a health and wellness show. You know, we also understand that Financial Health is really important so we're really excited to have Vijay on our show.

So before we dive into it, I'm just going to do a quick toast DP. I'm having a just a standard cranberry and vodka using Belvedere. Vodka, what are you drinking over there in

Chicago? I'm doing my standard. Ginger green tea, being the monk

Vijay. What are you drinking?

I think I'm about halfway between you guys. I'm drinking a Negroni which is pretty healthy, right? You guys are the doctors you can tell. Oh yeah, that's great to hear.

Cheers. I'm looking to learn how to make the perfect Negroni so maybe that can be another future podcast episode Vijay. So we've been really looking forward to this podcast and it's a little different from our usual and Bobby has infected me with excitement about Bitcoin. So I'd like to start by you telling us a little bit more about your background and what led you down the rabbit hole of cryptocurrency and specifically Bitcoin.

Okay, so firstly, you'll notice from my accent that I'm Australian, you may notice that I grew up in Australia, I was born and raised there, I studied their study computer science. Actually, I should also mention, I was in medical school for two weeks before I dropped out. When they brought the cadavers out and I realized that was not for me. Then I went back home and studied Computer Science and Mathematics. I came to the u.s. to do a PhD in computer science. But

But much to my parents should renate. I dropped out of that as well. And I decided to take a job. I ended up at Google. I spent several years there before Google, I poed and became this big thing and I was really exciting to be part of that. And then after that, after Google I/O, I left and I spent about a year campaign doing some political campaigning in the 2008 election. But really, I'm a, I'm a computer scientist and a software engineer. So I really

Building things. And so I spent a lot of time at startups since then, I came across Bitcoin in 2011, when I had a bet with a friend of mine, he's probably the most brilliant investor that I know and it was a bit about Federal Reserve policy. The Federal Reserve was having a meeting and we bet on whether they were going to increase interest rates or keep them steady and the BET was for one silver coin, 1 ounce silver coin, which at the time was worth about

$50 and I ended up winning the BET and my friend said, hey look, don't take the silver coin. There's this other thing that I've just recently come across called Bitcoin, take Bitcoin in payment instead of the silver coin. I said, okay, you know, you're a smart guy. Whatever. I'll take it had no idea what he was talking about and he said, you have to download this software and I said okay so I went and did that and then the software started downloading the blockchain Bitcoin blockchain, they took hours and hours. So what

Hell is this? And then the in the end he said, look, I sent you 5 Bitcoins and he showed me a primitive block Explorer where you can sort of explore Bitcoin addresses and how much each address has, how many Bitcoins each address had and it just, it looked like gobbledygook to me. I couldn't tell what any of it was very confusing, but I believed him, I said, okay, great. So that's how I came across Bitcoin and to end that story, that laptop with 5 Bitcoins was lost.

It my ex-girlfriend took took it when it wasn't worth very much. So it wasn't like she was stealing anything. I just gave it to her and I contacted her many years later and when the laptop was worth $100,000 and she said it had been stolen in a hotel. So so those Bitcoins have never moved. You can still see them on the blockchain, they'd essentially destroyed because the private Keys. Controlling those Bitcoins are dead. Now,

So yeah, that's the story. That's fantastic.

So so we Jamie you. So you've been in the Bitcoin World pretty much since 2011. Am I right when you say, right? So you've seen tremendous volatility with Bitcoin and you know as of today we're kind of hovering close to 60,000 we cross that and we kind of came back below it. So how you know, what kind of advice do you give to someone who just kind of entering the space?

And worried about these huge movements and

Yeah, so just from an investment point of view, I always tell folks. It doesn't matter how volatile and asset is to whether or not you should have it in your portfolio. If something is really volatile and that scares you, you can calibrate that with position sizing. So if you can't handle having 10 or 20 percent of your portfolio in Bitcoin, that's totally fine. Maybe you can only handle one percent of your portfolio in Bitcoin and actually in 2012 to

And 15. I used to tell people that you should consider putting one percent of your portfolio and Bitcoin because most people's portfolios move by 1% every day. Just from the, you know, volatility of the stock market bonds. So, be most people don't notice that, then even care, they don't, they're not paying attention. So if you had one percent of your assets in Bitcoin, and Bitcoin went to 0, then you probably not going to notice. You might be a little bit sad like that, that didn't pay off fine, but I didn't really care.

That's what I used to tell people. I think Bitcoin is far less risky than it was back when I used to say that some of the biggest risks about Bitcoin and now essentially resolved. So you know, if you feel like Bitcoins to volatile, just just change the size in your portfolio to a point where you're comfortable with it. I would say, the only mistake is to have zero, you shouldn't have zero percent in of Bitcoin, in your portfolio, because it's really great as an encore.

Related asset, and the only free lunch that you we ever get. As investors is having assets that are not correlated. So when one of your assets is going down the other one's going up and it kind of protects you from the downside and there's been a lot of research in portfolio theory that shows that portfolios that have uncorrelated assets do better than portfolios which just have all the assets. Essentially, the same. So just from a, the perspective of

Following a theory and designing a good portfolio, you should have some Bitcoin, choose the amount. That's right for you, you know whether that's 1% 5% 10% and I generally find that people go see, I've come to understand Bitcoin more and why it's important, they start feeling more comfortable, increasing that percentage, they may start out at 1% and eventually get to two or three or five, or whatever it is VG, can we just backtrack a little bit? And because there's people that are listening that are probably even wondering

And what exactly is Bitcoin. So can you just give us simplified version to someone who, you know, knows the word but doesn't actually know what it means. Yeah, absolutely. That's a great question to start with. So the way I described Bitcoin is that it's a new form of money and it's money that lives on the Internet. It's native to the internet. And another way I think about it is that maybe people haven't looked into the history of money, but gold used to be money. It used to

Money all around the world and up until only a century ago. And in the 19th century, gold was basically used as money everywhere entire across the entire globe. And the way I describe Bitcoin is its digital gold, it has a lot of the properties that made gold really good as money throughout history and we've understood these properties or attributes for a long time since all the way back to Aristotle, fungibility that is one

One one piece of the thing is equivalent to another piece so gold is better than diamonds for instance because diamonds are irregular in shape and quality so when you're when you're trading with diamonds the person has to look at it and check whether it's you know as good quality as the other one, where is gold? If you have a piece of gold it's equivalent to the other piece of gold. So fungibility portability is one so should be easy to transfer because you want to use money to carry value with you.

Your ability. So it should last. It shouldn't be something that is easily destroyed. So wheat is not good money because it's easily destroyed. And probably the most important one is the one that you know people probably think about with money is scarcity. If a money is really very abundant than it doesn't make good money. So the thing that made gold really demanded and good for money is that there was a very limited supply of gold. If you look at how much the supply of gold

Grows per year. It's very small. It's like one or two percent so Bitcoin has that attribute but even more so than gold that the display of Bitcoin is strictly limited to 21 million. Bitcoins will never be more than 21 million Bitcoins but Bitcoin has this one extra magical property that gold doesn't. It's like gold that can be teleported across the world as a very powerful thing to be able to send value to someone across the world as easily.

You sending an email. And in fact, this has never been possible before in the history of the world to be able to send value to a distant person without anyone in between without any intermediary, such as a bank or a nation state or government, helping you out to facilitate that transaction. So this was a this is a gigantic breakthrough breakthrough in computer science that Satoshi Nakamoto who was the person who invented Bitcoin basically solved

If it was an open problem in computer science, they've been open for 30 or 40 years called the Byzantine generals problem and he figured out a solution and he created this new money on top of his solution. So that's that's kind of the way I described Bitcoin its digital gold with this extra magical property that you can teleport it and can you go into a little bit more detail of someone's wondering? Exactly how do you teleport it, how am I going to exchange that with someone else halfway across the world?

Yeah, yeah, yeah, that's a great question. So you own Bitcoin and what do you own it? You own essentially, a private key which is a piece of information that gives you the capacity to send those Bitcoins. Only the person with the private key can send the Bitcoins, and what you do is, if you have Bitcoins, you sign a message and you submit it to the Bitcoin Network saying, I have 10 Bitcoins, and I want to send three of them to this other address. And

You submitted to the network, the network of computers will look at the transaction and see if it's valid. If it's valid then they'll add it to the blockchain. And the blockchain is this fancy term but it just means a history of the transactions that have ever happened on the Bitcoin Network and then it'll be recorded that that transaction happened and the person with that address will have those Bitcoins that you sent. So that's the kind of mechanism that's happening underneath when you're sending Bitcoins from your address too,

someone else's address and that address can be created on any computer device on a phone on a computer. So someone on the other side of the world can pick up their smartphone and create an address, and then you can send to that address just as if it was an email address and you wanted to send an email to

PJ you talked about scarcity being one of the properties of Bitcoin and with gold we have gold my errors, digging up, more gold to kind of increase that Supply. So how does that work with Bitcoin? Because there's apparently mining would Bitcoin as well but you're saying that there is a cap at 21 million. So my question is how many Bitcoin are left yet to be mind. And how does that impact kind of the pricing?

Seeing and what we're seeing with the Bitcoin

price. Yeah. So I mean, it's kind of an involved topic, but I'll try and give like a high-level view of it. So on the Bitcoin Network, there are these things called minors and they're just computers on the network and the job of - is to validate transactions. So deep Dee wants to send you some Bitcoins. She submits a transaction saying I have 10 Bitcoins, I'm sending Bobby three of them and then the miners on the network. See all the

Actions that have been posted and they validate them and they group them together into something called a block. And the thing that's kind of cool about Bitcoin is that the miners have to expend energy as a part of securing the network to make sure these transactions of secure and everyone agrees that they're valid. So the miners on the network actually expand quite a lot of energy in this process to make the network really secure so that that's kind of

The function of the miners and and every 10 minutes, a new block is created and added to the blockchain. And a block is just a list of transactions that have been submitted to the network in the last 10 minutes, approximately 10 minutes. So every 10 minutes, a new block is added to the Bitcoin blockchain. And if you want, anyone can download the Bitcoin software, which is free onto your computer and you can start running it and the thing it will do is it will start downloading the blockchain.

It'll download the entire history of transactions to have ever happened on the Bitcoin Network and then you can use your computer to verify whether someone else submitting a transaction to the network whether they're submitting a valid transaction or not. And so Bitcoins been running for about 11 years now is that right? 12 years now and miners have been adding blocks to the blockchain for that entire period of time. And one of the things that they do

Ooh, when they create a block is the minor is given a reward for mining. They're expending energy. They're using electricity to mine. These blocks and they're given a reward and that reward shrinks over time. So in the beginning each time a block was created, the reward was 50 Bitcoins per block that was mind. And after four years, every four years as an event called the having with a reward that you get from mining a block gets havd. So the

Just four years, every time you mind the block, you get 50 Bitcoins the next four years, you get 25 the next four years after that you got 12.5 and now the block reward is 6.25 Bitcoins per block. So because it keeps having it means eventually the total number of Bitcoins is going to converge to the number 21 million. And so far, I think it's about 18.6 of the 21 million have been mined so already you know the majority.

Garrity of Bitcoins something like I guess, 80, or 90 percent have been mined. So, there aren't that many new Bitcoins to be mined. And that's actually one of the things that's attractive to investors is that they know that when they buy Bitcoin, the supply is not going to be diluted by a lot more Bitcoins coming onto the market later on. They know that they have a fixed chunk of the total supply for the rest of History. That's a very attractive thing as a store of value. You want to know that the thing you hold isn't

Debased or someone's going to create more of them. You hold a fixed chunk of the

pie. Thank you. That was a great explanation so someone who's new to the space you know they're coming in and they're seeing thousands of different coins out there, you know Dodge Coin and a theory mm and for Donnell and and it's just overwhelming. There's so much noise in the space. So how would you address that with someone who was just wanting to enter the space and they're new to all of

this? Yeah. So,

Go on a bit of a tangent. When I first came to the US, I worked for Google and when I, when I first joined Google, it was still a fairly small company but it was already doing very well. And there are a lot of other competitors, a lot of other search products that were, you know, in the same space that was Dogpile and was Altavista and meta search and just a ton of them. You guys probably remember some of them, but Google ultimately triumphed, and

Products like Google and Facebook have something that's very important, which is called a network effect. When a product has a network effect, it's the most important attribute of that product that gives it value. So, an example is Microsoft Windows in the late 90s. A lot of people recognize that it wasn't a very good operating system. And they said, why is it the biggest operating system? Well, had the network effect, it had the most users. So, the companies that will develop

And software wanted to go, whether the most users. So they developed for Microsoft Windows and users wanted to go with those the most software. And so is this feedback loop where you want to go, where everyone else is going because that's where you get the most value just from the almost, like the community of other people being there. Now money is an economic good, which has this same attribute but even more powerful. You want to keep your savings in the thing that everyone else thinks is valuable

Because that's the thing that is going to keep its value over time. So yes, there are a lot of competitors, but none of them have the network effect. None of them have the scale of Bitcoin. None of them have the security. None of them have the expertise in the development team. All the world's best computer scientists and cryptographers are working on bitcoin, not working on these side projects. And, you know, I've worked in the space and I'll tell you one thing, most of these coins are just outright scams because

Now people have realized well Satoshi Nakamoto came figured out this great breakthrough in computer science and now I can just copy it. I'm just going to create this copycat and they do it because they just want to make money quickly. They're like, I've created this competitor and it's really cool because I added an extra, Bella whistle, but really the bells and whistles aren't the important thing. Is the network effect. That's important. So you, for instance, Bobby could create Bobby book and say that this is better than Facebook and I've created these extra cool features.

Matter. You don't have the network effect. You're not going to get anyone but your you know Mom and Dad on their same thing with money. You want to be where everyone else is and Bitcoin has that head and Tails above all the competitors. Makes total sense. So Vijay, you also mentioned that Bitcoin you think of it as, you know, a digital gold. So why buy the digital gold versus actually buying physical gold? Which, you know, historically has a great track record

Right. Well, you know, us sub Continentals. We love our gold. I own gold. How about you know I've got gold at my mother's giving to me and I actually own gold bullying as well so you know I think gold has its place but you know we're talking about Network effects. Golf has a big Network effect is has. It also has his long history where people have trusted it. It's something that holds its value over a long period of time and Indians certainly have a very long history of value in gold. And

It's part of sort of the culture as part of the religion, it's part of marriage. It really has this deep meaning and value in Indian Society, right? I would say something can only overcome a network effect of another product. If it's 10x better, it has to be massively better, conscious be a little bit better, and the benefit that you have of Bitcoin. Is that it's digital, and it's transmissible. That's very, very powerful benefit and

And I'll give you one use case. It's not the only one, but one use case is that imagine your, you know, sort of wealthy person is built up some savings over time and suddenly, your government isn't so friendly to you and your family. And you want to leave leaving with gold is very difficult, gold is bulky and cumbersome and it's easy to detect. And you know, you go through customs, they're going to catch you with the gold in your pants Bitcoin. On the other hand, you can store a hundred million dollars worth of bitcoin in your head.

And you can cross the border and no one will ever know. And once you've felt that, once you've felt the power of being completely Sovereign over your own savings, having complete control of your own savings and being able to go anywhere you want. Without anyone being able to stop you, it's a very, very powerful liberating feeling. So that is one of the reasons be coin, is it on that? Attribute Bitcoin is a thousand X better than gold? Because, you know, I can send

Bitcoin almost instantly to anyone on Earth whereas if I wanted to send you some gold and Chicago, well you know I can't do it now I have to get what go to the Post Office. I've doing sure it it's going to take like a few days. Maybe someone steals it along the way. Those are all big problems for people who want to transmit their wealth or carry their wealth or for even for a financial system that wants to move money between financial institutions. Those are, those are big problems that need to be solved. What

did you talk about?

One of the advantages for Bitcoin as being able, to transfer your wealth, or move around with your wealth, you know, carry it with you, the portability of it, one of the criticisms I hear often is, is the difficulty of buying Bitcoin and then storing the coins. They can be lost, they can be hacked or stolen, how would you address those concerns,

the completely legitimate concerns and suddenly, those much more complexity in the early days you'd have to figure out

Out how to like one of the first Bitcoin exchanges, the exchanges are like foreign currency exchanges. You send your money there and you get the other currency so you send dollars to a Bitcoin exchange and you get Bitcoin back. One of the first exchanges was called Mount gox and it was in Japan and to buy a Bitcoin. You'd have to go through this very long complicated process, where you go to CVS and you give them cash and they'd give you this printout, which would deposit it at some American Service and then they would send it to toe.

Yo and it was incredibly complex and then storing the Bitcoins was really hard to because you'd have to actually run the software. Download the blockchain figure out how to manage private keys and most people aren't sophisticated enough to do that kind of thing. But really another way of thinking about it is that those initial barriers gave a greater opportunity to the people who are willing to jump over those berries or climb those barriers. And certainly the returns for the people who were able to

To to figure those things out early on. Have been tremendous but really with any technology that it improves over time and the user interface improves over time and the services improve over time. So now you can go and buy Bitcoin at various places, which make it very easy to buy Bitcoin. I would say now it says, essentially as easy to buy Bitcoin, as it is to buy a stock, if you can buy a stock, you can buy Bitcoin. You sign up to one of these services like Square.

Sure Kraken or coinbase and you deposit some money, you connect your bank account just like you do with a brokerage and then you just click buy and that's it and if you don't feel comfortable, you know, holding the Bitcoin yourself, that's totally fine. You can leave it with that service. But if you do want to feel that power of holding the Bitcoin yourself, and being able to take your savings with you, wherever you go, then you can explore things like Hardware wallets where you can store the private keys and those have improved.

Quickly over the last few years where they're very easy to use, it's much simpler to withdraw your Bitcoins from an exchange and keep them on your Hardware wallet, which is just a USB stick, essentially, and that, and they give you, they walk you through all the steps to make sure that if you lose the device, you can still get the Bitcoins Bitcoins back. So I think over time the user interface is going to get easier and easier, but if you're the one of the ones who's willing to sort of Brave, you know,

Difficulty of getting into Bitcoin now. But I still think there's a huge opportunity for folks because there is still that fear that this is complicated and quite get it. What is this crazy thing? How do I get my money in there? So, it's a legitimate concern, but it's certainly improving a lot since when I first got into the space, when I, you know, I told you that story about my friend, sending your Bitcoins. I didn't I didn't understand any of it. And I'm a computer scientist,

just a follow-up question.

To that DJ. It seems like there is more and more platforms. Now that are actually encouraging you to keep the coins with them and they'll even pay you interest. So do you think that it's it's safe then to keep it on these platforms or do you would you recommend always taking them out and putting them into hard and Hardware storage?

Well, I think it's a spectrum, I mean, if you keep your Bitcoins with one of these Services, the risk is that the service itself gets hacked or the, you know, there,

They're criminals and they steal your Bitcoin. And certainly there's been a history of exchanges being hacked. The security procedures that have been used by these exchanges of much, much better than they were a few years ago. So, the level of trust you can having them is higher. There are also regulated. So, you know, if they do anything funny, they're going to go to jail so you could certainly have more trust. I personally don't keep my Bitcoins on these exchanges because that means I don't get the full benefit and full power of what Bitcoin is.

Is which is to keep my savings and have control over it but there's a spectrum, right? When you first come to bitcoin, I think it's perfectly, okay, if you're just starting to learn about it to keep your Bitcoins on one of these services. And as you learn more and you become more sophisticated, you might become interested in holding your own Bitcoins. And I find that most people who buy Bitcoin, start getting interested in it because it's a fantastic assets. Very interesting as performing really well, and I believe it's going to continue.

You to perform extremely well. And as it becomes a greater part of your portfolio, a lot of people start paying attention like whoa, I bought, you know, two or three percent of Bitcoin as two or three percent of my portfolio. And now it's 20% or 30%. I should think about this a bit more information experience a lot of people, whether they're doctors or computer, scientists or or whatever their profession, they get interested in going down and what?

It's called the Bitcoin rabbit hole which is like trying to figure out everything they can about Bitcoin and getting interested and getting involved in the community the Bitcoin community. So yeah, I would say it's fine use the services once, you know, if you're very new to the space, that's totally fine. But as you become more interested, if you become more sophisticated about understanding how to hold it yourself, then then go and do that too.

Vijay. What platforms would you recommend to get started with aha? Good question. I, you know, I try not to give recommendations like that because I never know which of these are going to succeed and which, which you're going to fail and the industry is so new. I think it's really important for people to do their own research on this, kind of stuff and, and to take take ownership and take responsibility like,

This is a new thing. Let me dig into it. Let me read the stuff that I need to read and figure it out. I think any one of the big ones is going to be pretty good and you'll be fine. And the ones that are big and regulated in the u.s. haven't really had any problems. So yeah, and I encourage people to look into it because I think that's helpful for their own education as well,

right? Yes, we say we've had several death even kind of

There's some questions to ask you. Another question that came up was, you know, for potential investors what if governments put on, you know, severe regulations on to bitcoin or even been Bitcoin like India just recently did, what do you see happening at that

point. So this is another very legitimate concern and just to clarify, India hasn't banned Bitcoin. It's talking about whether it should regulate and potentially band. So it is it is a risk.

The way I think about it is the risk to bitcoin being banned is really strongly related to whether Bitcoin gets enough political capture. And what do I mean by that? I like to give the example of the company, Uber the ride-sharing company and the way booby it was business model worked was that they would go into these cities and they would just start their business, they would hire a bunch of drivers that start their service without asking permission at all, and the taxi company,

The taxi companies and the taxi Lobby were really hostile to Uber. And they would, they had very strong connections to a lot of local governments. And they would petition their local governments and say, hey, we need to ban this thing. This is really hurting us and they're not regulated. And you know, we need to kick them out of the city. But, no, Uber will just go in. And, and it was really popular was a great service that did what it needed to do really well. And as soon as these government sort of caught wind that they needed to do,

Do something and try to regulate boober. There was enough of a Lobby and natural Lobby in the city to prevent it from happening. People saying, no, my I have a job with this company or I love this company. I don't want to go on a taxi. I want to go on a uber because the driver is much better than a taxi driver. And I think the same thing is true of Bitcoin. When you have enough of a population which holds Savings in Bitcoin, it will be much more difficult to regulate and you're already seeing this. There are you know a few members of Congress who are very

Appropriate coin and several more who are sympathetic to bitcoin and I think in the next four years there's going to be a landslide because I think the number of Americans that own some Bitcoin in their portfolio is going to Skyrocket. I think it's going to be the majority of investors will have some of their Assets in Bitcoin and then it's a question of like can you ban for it one Kaze no you can't paint 401K is because you're going to really hurt people. If you do that and there they have a vested.

MC interest. So it's a great question and it's an open question with the question is, do the entrenched interests that are hostile to bitcoin such as Banks and financial industry? Which Bitcoin is disrupting and the Federal Reserve which, you know, runs monetary policy in the US and would probably feel threatened if Bitcoin became really big. Do these entrenched interest. Try to attack Bitcoin because before Bitcoin becomes so entrenched that it can't be killed like like the internet is another example.

You could never kill the internet in America

with what you said them because, you know, you said, government intervention is a legitimate risk. There is also the risk of potentially losing your coins and some way or fashion, but even with those risks, I just want to go back to what you said earlier in the conversation. That it's actually the riskiest not to own any Bitcoin right at end. And I really want to kind of emphasize that to our audience so that they understand.

And that it may be financially unhealthy, not to own any Bitcoin. Can you speak on that a little bit as to why even with these risks that it's really important to own some

Bitcoin. Yeah, so the way I think of Bitcoin is it's an asymmetric bet. I think Bitcoin is the best form of money that's ever been invented and I think the Breakthrough in computer science that Satoshi Nakamoto came up with is is

A once in a thousand year break through that really is probably the most important innovation to Money In A Thousand Years. The ability to send money without a trusted intermediary to anyone on earth. Almost instantly has never been possible. So this is historically unprecedented. So I think Bitcoin is the best money that's ever been invented and I think it's going to become the global Reserve currency that is that's my view. I think it's going to overtake the US dollar in the next 20 to 50 years.

If it does, it's very, very cheap right now and everything will be. Everyone's mind is going to be rewired to think in terms of Bitcoin not in terms of dollars. So you're going to go to the grocery store. You're not going to think how many dollars is that look for bread. You can think how many Bitcoins is that. And if that happens is going to be a lot of savings that flow into Bitcoin and it's better to be early. When something is becoming a global Reserve currency, you benefit more by being early. Of course, you will,

Benefit if you're late, you just won't benefit as much your the amount of value that you get on owning money, that's become money. Is that holding it, you get the productivity of the economy, so your money increases in value by few percent every year. So I think it's an asymmetric bet. If you buy some Bitcoin, the downside is you lose the value of that Bitcoin. So you say you put in $5,000 into Bitcoin or a thousand or whatever you want to put in. The downside is that amount

Goes to 0 the upside I think is still a hundred or a thousand X. And so as an investor you really want to find those Investments where have that asymmetry where you can say okay I'll just put some of my portfolio folio in it just a small amount and if this does well then it's going to be meaningful to my life. It's going to really change my the savings that I have in the way the lifestyle that I can leave. And people in Silicon Valley are very used to this thinking because they invest in

Small companies, they make angel Investments where it's exact same idea. You put in a small amount of money in a small early company and if it fails it fails that's fine. A lot of them fail but if it succeeds and it becomes something like Google and you make, you know, 10,000 Exxon on the investment. That's going to really change your life. I view Bitcoin the same way because I think it's the most important innovation to money in a thousand years. So Vijay along those lines. You know, I was

was going to ask you if Bitcoin is what are your thoughts? If it's going to stand the test of time, but it sounds like you truly believe it will. So I guess I'll reframe that question. What is the future of Bitcoin in your opinion? Well, I'm very, very bullish on bitcoin. So I'm the author of the article. The bullish case of it going to you. You know, I take that with a little grain of salt. But, you know, there are various ball cases for Bitcoin and one of them is that it becomes the

I will Reserve currency it replaces the dollar and if it does get there, then I think you could put a price Target on bitcoin of, you know, 10 million or more per Bitcoin. But there's also a, you know, another case which I think is much less far-fetched to the average person and that's the Bitcoin does what gold does but is better than gold and it's a better store of value, because it's more scarce than gold gold. Gold Supply continually increases

Bitcoin suppliers are strictly capped and Bitcoins more transmissible than gold as we talked about. So it makes sense to me that Bitcoin should at least have the same market capitalization of gold. If not, you know, two or three times bigger than gold, and if that were the case, then you could put a price Target on bitcoin of 500,000 to about a million. And that to me is that's what I consider a more conservative bullish case for Bitcoin. Just recognizing that this is better than going.

Old maybe it doesn't replace the dollar as the world's Reserve currency, but I really feel like it's going to replace gold for that store of value. Use case, where people think, you know, I want to put some of my savings into gold because I believe it's a good store of value. I think in 10 years time, got most of that use case for goals, is going to basically be gone and it's going to alter that all those savings are going to drain into Bitcoin.

If it ever were to take over as currency, then would they produce more Bitcoin? Would that ever be a possibility then? No, well, that's the thing. Bitcoin cannot be created. It's designed in such a way that it's impossible to create more Bitcoin. And that's one reason why some governments may be a little bit hostile because then they lose control of monetary policy. They but but really that's it's not that crazy the world.

Use the gold standard for many, many centuries. And the 19th century was actually the century. When the, the standard of living for the average person grew the most, in the history of the world from people living in abject, poverty, to being, you know, middle class and having a decent lifestyle. So that was under a gold standard and I really believe having a sound money that can't be tampered with is really a good basis for a new Financial system. Because, you know,

it's talked about how they need to manage the money supply and what a good job they do. But really, if you look at history, the history of monies that have been managed by governments is a very bad history who usually it usually ends very poorly because there's always this political pressure to create more. We need to give money to special interest groups, or it's politically difficult to let them Nation go through recession. So why not just print more money and that's in a way, it's kind of like giving a heroin addict. Just another dose, just another

It's just another dose because it's painful to let someone go through remission and that's what the Federal Reserve does. Every time the economy is about to go into a recession and recessions actually healthy because they clear away all of the malinvestment, all of the investment in the things that the economy shouldn't have been doing should be cleared away. So that we can do the things that are productive and healthy building factories and, you know, investing in the future instead of like building houses and Lane Granite like that. You

The financial crisis, in 2008, we need those things to be cleared away but the Federal Reserve doesn't want to do that because it's so politically painful. You know, soon as you have a deep recession, the governor's like what do we do? What do we do? What do we do? And that's so bad for the money, the underlying money. So, historically, money, controlled by governments has always been destroyed because governments can't, they can't avoid that Temptation. Let's just create a bit more money. It will be easier for us if we do that, what did The Economist?