Scarce Assets E014: Matthew Pines – Technological Evolution & State Power

Let's be clear, Bitcoin is an international asset. We are spending like drunken sailors. Bitcoin is the only economic entity. Where? The supply is unaffected by the demand. If you want to preserve. Your wealth, you have to convert that. Currency into an asset that's scarce, desirable, portable, durable, and maintainable. Hello, my name is Andy Eckstrom and I'm happy to welcome you to the 14th episode of Scarce Assets, a show that examines scarcity, the most fundamental driver of economics and markets and the scarcest asset of all, which is Bitcoin. Delighted to be here with my Co host Jesse Myers and our guest Matt Pines. I am especially pleased to be talking with Matt because he's a true expert on geopolitics. And frankly, much of geopolitics is about how nations position themselves to control scarce assets. So Matt is Director of Security Advisory at Sentinel One, which is a leading cybersecurity firm. He's a fellow at the Bitcoin Policy Institute, and he's published a number of papers on Bitcoin and national security and related topics. I especially recommend the one entitled Bitcoin and US National Security, in which he did the important work of articulating how Bitcoin enhances US National Security while also acknowledging its risks. And Matt also holds a master's of philosophy and public policy from LSE. And he holds a bachelor's in physics from John from Johns Hopkins. And he's also a novelist. His novel Expectation Value was published last year. I just ordered my copy and I'm looking forward to reading it. So Matt, thank you for coming on scarce assets. How are you I'm. Doing well you know, just enjoying the long holiday week. Happy to chat. Yeah, well, thank you for sitting down with us. I'm really looking forward to this chat. I actually want to start this conversation with a short story. It was April in 20/22. It was a Saturday night and I went to a party which was graciously hosted by Peter McCormick and it was at this amazing opulent mansion, OnStar Island, which is this man made island next to Miami Beach. And there was a huge outdoor open bar and a DJ and a dance floor and it was on the waterfront and the weather was beautiful. Has perfect conditions for a party with one exception. There must have been 1000 people at this party. And this party had one extremely scarce asset which was a single bathroom facility. It was one of these mobile bathroom trailer things, and I think there might have been 2:00 rooms in it. And the line to use it was breathtakingly long. And moreover, there were security staff crawling all over this place, so they were actively preventing people from relieving themselves elsewhere, either on or near the property. So I had received Nature's call and was stuck waiting in line, and I'm not exaggerating for over an hour, but guess who was in line next to me? Matt Pines. So I got to meet Matt and I got to pick his brain for over an hour and I'm so glad I get to do get to do it today. So how do you remember that night, Matt? I remember you and me were maybe in worse shape than me. See, I timed it so that 'cause I, I saw the how long the line was. So I was sort of like, I need to position myself for when the for when I would get to the front. And so, yeah, I think we were able to have, you know, a conversation in moments of varying exigency. But yeah, that was a good, that was a good intro. Yeah. Well, fortunately, you had a lot of great and interesting things to say. So you know, the time for me passed quickly, notwithstanding the urgency of my situation. But but we'll, we'll leave that one. We'll leave that one there for now. I love the different approach to to that situation. Yeah, once in time delivery inventory management from Andy and then Matt with the T + 45 sort of approach. You know, I'm, I'm always about assessing risk in any environment. And that, that, that that was a, that was an acute risk I had to mitigate. Yeah, I should have known he was. He was thinking strategically from from the beginning. At On Ramp, we believe that Bitcoin is the most important asset of the 21st century. The hard part is securing it right There are shortcomings with keeping your coins on an exchange, but also with setting up your own self custody arrangement. On Ramp solves for these concerns. Our multi institution custody solution maximizes security and minimizes counterparty risk, ensuring that your Bitcoin remains securely in your possession and provides built in inheritance planning to ensure your family is protected as well. On Ramp provides Peace of Mind for your Bitcoin journey, whether for your whole stack or for part of it, as a complement to your existing self custody setup. For more information, check us out at on rampbitcoin.com. Well, this, you know, the show is called Scarce Assets and I wonder if you'd be willing to zoom out to the big picture and maybe frame up the last, I don't know, couple centuries or whatever time period you feel is useful. And and you know, maybe it's a much shorter time period, but can you take us to the current global competition for scarce assets, you know, maybe including particular resources, including and especially computing resources? Yes, I think fundamentally the monetary orders downstream of the geopolitical order and the geopolitical order is a function of state power and state power is a function of, you know, technology capabilities marshalled and services strategic objectives. And so this is fundamentally science and technology set the framework for what states can or can't do technologically in projecting power, defense or defense against each other's power. And so the predicate of state relations is often what is the prevailing technical and scientific paradigm until we've seen that unlock new capabilities, whether it's when the agricultural revolution generating large standing armies that can go out with Spears and just hack each other to death all the way through industrial revolutions where now you can create steamships. Now you can create large, large standing armies with more advanced armaments and you can serve, you know, do industrial scale warfare. And so like, you know, this is not a, a novel observation, but that's kind of the basic like foundational predicate for everything else we talked about. And in the 20th century, I think we've seen kind of the relationship between geopolitics and the money system become much more acute. You know, in, in times past, kind of the systems of global relations had an inherent relationship between money kings and kind of the, the relationship between sort of the capital provision in the merchant class and different political orders. And those were sort of stretched out in time. So those, those dynamics did change, but from the perspective of, of history, it took a lot longer. The 20th century took that same sort of pattern and it accelerated it. I think we're in an additional period of acceleration. I think the 20th century was a period of particular acceleration and that has had cascading effects. We're still living within and the formation of a different type of state system that really was forced by competitive pressures in World War Two to sort of create vertically integrated state, your bureaucratic structures to control and Marshall, you know, continental scale resources and populations to fight and win X central wars. And then also to leverage ground breaking understanding of the natural sciences to deploy novel weapons and technologies in those state conflicts. And so that birthed kind of the modern security environment we exist in today. So out of World War Two, we got of course nuclear weapons, but we also got radar. We got kind of the basics of of of computing and and computational systems. We got, you know, a whole raft of sort of electrical innovations, proximity fuses. We got a whole bunch of stuff, but those came out of state directed innovation pipelines and that really birth the kind of bureaucratic system that kind of was in its renaissance, essentially in the post war era, especially the American version of that. But it forced the kind of, you know, competition around the world for OK, now we need to create state institutional bureaucracies to sort of fight these these resource wars and and and and and wars of geopolitical influence. World War Two was a Crucible for state institutional creation that we sort of live within today. Kind of creation of the modern security state. The Defense Department, sort of the apparatus of government that was sort of formed first out of the sort of the impulse of the of the New Deal and then sort of became sort of regularized. And then of course, forged in the Crucible of World War Two is sort of what we live within today. And that really, you know, was kind of the high watermark of kind of this institutional power that was state directed, that was an alignment of military, defense, scientific, technological power. And that was sort of the high watermark of American institutional and global global power. And like all institutions, sort of Francis Fukuyama has this sort of characteristic analysis of how institutions are born with the sort of energy of creation, reach a certain maturity, usually within the first or second generation as they kind of adapt to the, you know, to to the environment and grow. And they have a sense of, of, of purpose and the sort of a novelty and the sort of energy of the, of the first kind of forebears. And the then the second generation, they sort of hand that baton to. And then there's sort of like a characteristic sort of peak and then slow decay as the second and third generations kind of take over that existing system which has been around for a while. And now kind of what they grew up within. It's kind of their basic predicate. And then the third and 4th generation is kind of like the Neil Howe sort of 4th turning idea, you know, tend to sort of forget how to maintain the systems that they were that they have inherited and tend to also approach it more like a 0 sum competitive dynamic to extract personal benefits out of this legacy system. Which once it starts, you know, getting into this reflexive feedback loop of decay, the sense of of of I need to just get what I can out of it before it totally fails, starts to dominate kind of the more collective orientation of the initial phase where it's all about contributing to a higher goal. And I think, unfortunately, I think that's a version of a story you could tell for the American institutional system over the past 80 or 90 years. And it has a dimension that is a stretch across not just our geopolitical sort of story, but about in our political system, but about like a monetary system too, right. So they, there are, you know, basic predicates of what sorts of systems you need to support a certain power structure. And the monetary system is a critical component of that. And and if you look at, you know, history, you know, decisions about changing the monetary, you know, regime are fundamentally geopolitical and political decisions. They're not made by the bureaucrats within the Federal Reserve. The Federal Reserve or the equivalents in other countries are meant to sort of maintain an existing system. They're meant to operate within very, you know, well established norms and sort of institutional frameworks. Any changes usually to the systems don't come from within, they come from without. And usually they resist those changes until the exogenous pressure sort of reach a tipping point and then they change pretty dramatically. And so, of course, you had FDR kind of, you know, go through this in the 30s where he was willing executive power and sort of fixed the gold price and then Nixon shock in the 70s. And then you could argue that, you know, there were various attempts between the Plaza Accord and the Louvre Accord to one, weaken the dollar and then strengthen the dollar, respectively, that were made essentially by executive mandate. Essentially the hierarchy of decisions was the White House to the Treasury Department to the Fed, in that order. And I think we're reaching a point in the global system where I think the, you know, combination of stresses, institutional decay of legacy systems is going to lead to a similar sort of of of, of threshold decision point. And I would expect this sort of historical template to be to be mirrored and how we how, how you would expect the system to adjust going forward. So that's like the US centric version. I think the geopolitical order is sort of a main driver of that. So there's like in my mind, there's like, you know, the basic dynamic of the global system is essentially that in the post war era has been especially post 70s has been the West, specifically the US as sort of the global military hegemon is the financial sort of provider of capital and and final end user sort of consumer demand for global goods that are the result of production in Southeast Asia, specifically China that is matched up with sort of raw commodities coming out of OPEC plus. So since you have this three legged stool that's like, you know, financial capital and sort of matrix of sort of military power and and territorial exit, territorial imposition of our, of our legal codes, you know, through sanctions and O FAC sort of regulations on the dollar system. That's like the one keynote is the US power. Now the keynote is sort of OPEC plus. It's kind of this loose affiliation of, of countries that dominate commodity market, specifically oil and then China, which has been essentially the the main power horse for global manufacturing. And as long as those like 3 system through three points of the global system, we're in kind of like a frenemy mode. You kind of got globalization, you got, you know, what we see is like the last 30 or 40 years of sort of economic global, global order. And I think that system is now in a process of like slow decomposition. And so you can see different examples of like the relations between that on that triangle is like Russia's sanctions is like taking a major whack between like the US dominated finance capital node and and a version and a subset of the OPEC node. You see the technology containment strategy between US and China as A and sort of this idea of decoupling or de risking as like a taking an axe and stressing the link between finance capital in the US and it's it's key trading partner in manufacturing supplier in in China. On the other hand, you're seeing kind of growing relationship sort of an an improvement of the bond between OPEC plus and China manufacturing centers through things like alternative currency sort of arrangements innovations with sort of cross bridge CBD, CS and sort of an increasing security alignment around things like SCO and the bricks. So that's like, you know, if I zoom out like there was a global order, it was sort of stable under a certain regime. And now it's getting perturbed pretty strongly. And we don't exactly know how it will continue to evolve, but you should expect potential significant change. So I'll stop there. That was a bit of a of a of a rant, but that's kind of my zoomed out view of where we are on a certain perspective. Yeah, that, that was awesome. That was a fantastic summary of, of where we're at and so thought provoking. I, I can't help but find it so interesting that the same problems that, you know, the classic archetype of like a family making a fortune and then trying to propagate that through generations and having that just natural inevitable decay of the meaning and skill set necessary to maintain that position is what happens to a country to, you know, you get to that position of power and then you just inevitably enjoy that position and lose this, the, the, the qualities that were necessary to establish that position in the 1st place. I want to ask, though, about. So the changing World Order by Ray Dalia was for me a very helpful entry point into questioning the future trajectory of the, you know, the global world order, globalism in general. And and you know, that the sort of stuff you learn about in Business School, they sort of projected a mentality like the world is going to become more and more unified. And then the changing world order was kind of the first, you know, really polished and well respected finance name that I was aware of really challenging and questioning that. But it felt like in, in Ray Dalio's thesis, the sort of implied take away was that the US is going through this natural decay. As you know, you're only you're, you're the dominant reserve currency for 100 years. And then inevitably a rising power takes your place. And the implied take away for me at least, was that China was the ascendant world power going forward. But it, it felt wrong. It still feels wrong to me because it feels to me with the Bitcoin lens like the Internet is that rising power that can be, you know, the, the, the new place that people turn to for trust in the currency. What are what are your thoughts on the on the changing world order thesis ideas? What does Ray Dalio get right or wrong? Very curious. Yeah, I, I, I certainly respected and have gained a lot from reading his analysis. And I think, you know, he's does a good historical review and I think he's making a conservative projection essentially just to saying, you know, holding all those equal, this is the past pattern. We should see indicators of that past pattern repeating itself. And so I'm just going to sort of follow the trends lines that history tells me are are it should be expected. I think, you know, there's like quote UN quote, like this time isn't different, but this time is different. Like fundamentally, technology has changed civilization and we are becoming a digital civilization and increasingly state power is mediated through digital systems. In fact, you could argue most of the state competition we see is happening sort of through over and aunt and and against essentially each other is digital networks, right. So whether it's subsea cables, you know, space transmission, you know, downlinks to the Arctic, whether it's digital currencies, whether it's AI computing, you know, clusters, this is sort of the the frontier of of state competition. And like power in a digital society is essentially network power. And network power has two different kinds. You have choke point and and surveillance power. So like the equivalent in and financial networks is, you know, choke point is like OFAC, you get the block and sort of excise, you know, participants out of the network. And that gives you a lot of power If you are the dominant, if you control most of the nodes in that network and if you control most of those in the network where you have, you can influence most of the nodes in the network to follow your rules. That gives you a lot of surveillance power. So you can get bank secrecy, Bank Secrecy Act reports out of every institution in the world. You can impose your extraterritorial sanctions, you know, through those, through those relationships, through through the dollar clearing system. And so you get immense amount of power. So US still has an immense amount of power that comes from just having legacy dominance of these existing networks. And China is trying to construct, they're trying to do 2 things. One is they're trying to mitigate how much exposure they have, you know, immediately to being coerced by the legacy system because they don't have an equivalent global hierarchical, you know, correspondence banking system that the United States has sort of organically supported the development over the past 80 years. And so they're trying to essentially block how much they can be coerced while trying to basically create their alternative sort of rails as like a failover backup. But that's in the financial space where like EU s s legacy's still dominant and China essentially is a is trying to sort of carve out some autonomy while putting in back up plate plans in trade and sort of manufacturing. China's already dominant. So China's by far the largest trading partner for most countries in the world. They're climbing the value chain pretty aggressively and it's triggering kind of panic in the West, whether it's E VS photovoltaics, 5G, etcetera. And I see my analysis of kind of the overall dynamic here is sort of a network competition playing out over all these different types of networks that are all that are all sort of interrelated. And there's like a value system piece of it that's built in in the sense that China's value proposition and their version of kind of digital technological governance is, you know, we need your resources, you know, you need our capital and our technology. And this is the deal. We'll give you essentially Huawei 5G, we'll give you CTE surveillance, we'll give you all of our state owned enterprise and, you know, construction capacity. And we'll sort of help you develop your economies, you know, become more digitally native. But it'll be on sort of our platform, right? And that will sort of help keep your regime in power and will help ensure that those resource deals and those geopolitical deals are secured. So I think that is with the dynamic playing out is like a competition over global influence that's over and through these digital networks. And I think it's not necessarily the same old story of, you know, systems just inevitably collapsed because of some historical projection. You know, his main focus is on debt. And so just to like zoom in on that is like, OK, some folks look at you as debt load as essentially an existential burden for the United States. And I think it is a critical burden, but, you know, there are sort of levers that the hegemon still has. And so you would expect that not to just go down quietly, right? And an important lever is that in in a world that's increasingly geopolitically risky, where conflict, especially great power conflict, looks like it's, you know, creeping up in terms of the probabilities. Then a whole host of states that are in the periphery of you might call like the Dollar Imperium have an have a their demand for security protection goes up, right? And the United States as the, you know, potential provider of that security protection, you know, can, can do a deal, which is we will provide more security protection, but you have to pay, right? It's a traditional kind of, you know, old style sort of racketeering, right? And whether it's, you know, Trump going over the NATO and, you know, bullying them into paying up more or whether it's doing these deals with Japan and the Philippines, South Korea, etcetera. There's you could imagine an arrangement which is the world divides into sort of clubs and fences. And the United States sort of in it's, you know, while it still has some legacy power in the global system, you know, uses those those reserves of power to essentially enforce a security zone, gates the security zone with tariffs and then forces members of that security zone to essentially pay up. And how could they pay up? Well, if you look at historical practice, whether it's FDR or or Nixon, you know, usually do that via some form of financial repression, right? And it's never quite the same, but it's usually the same in effect and the same effect, you know, go back to FDR essentially is we're effectively going to either seize or devalue your, your, your, your, your gold hold, like your gold holdings, your gold reserves, which we were doing then consistently essentially post war until it became untenable. And then Nixon essentially said, OK, we're just going to flip the switch and we're going to now go to floating exchange rates. So that was effectively a devaluation, right? It was a financial oppression, especially of kind of our, you know, our friends and allies and, you know, critically, but they couldn't really do a whole lot because, you know, it was this Cold War block based, you know, division of security zones and they were in our zone and so they could protest etcetera. But at the end of the day, we have the nukes, we have the aircraft carriers, etcetera. So that's how we were able to enforce that essentially reset of the of sort of the, the fiscal position of, of the US government as the sort of core of this dollar imperial system. So the equivalent today would not be like you can imagine varieties of it. You can imagine instead of, you know, devaluing the gold content of people's reserves, it's like increasing the duration content of their, of their FX reserves. So force them to just buy longer, longer dated treasuries. Everyone is basically now funding very short term, whether it's repos or FX swap markets or the foreign repo pool, very short term funding bills, markets, etcetera. And that's not exactly expressing a whole lot of confidence in the long term fiscal and militaries reaching Hegemi, United States. So you could say we're going to force you to provide a vote of confidence, which is you're going to swap those for century bonds or longer dated treasuries and we'll let you swap them at the FX at, at the, at, at, at the sort of the FIMA sort of repo facility at the Fed, you know, at par, just like the, the BTFB kind of facility. So in, in extremists, if you need an access to dollar liquidity, you can take the century bonds, you can pledge them at the Fed and get dollar liquidity. And that just sort of reinforces sort of the, the network power of the, of the, of the Fed and the dollar system. And it further sort of subjugates essentially monetarily sort of the, the, the periphery. So This is why I think the story that you tell of like simple curves of like, you know, the dollar, the dollar debt loads are unsustainable. And then there'll be a bond revolt and that the US government will just be like, oh, there's a bomb revolt. I guess we're not the hegemon anymore. It's like, that's not that's not the story that I would expect as a baseline. There is going to be like a whole bunch of Alamos, right, that are going to be said, this is the last line. And they'll be extreme sort of choices, you know, imposed on our friends and allies that we will, you know, essentially look to financially repress and geopolitically coerce to keep the system going. And, you know, so that is that's my baseline, right? That doesn't mean that we everything just the wheels fall off, but it means that it as we were essentially fighting, but we are fighting a major competition with China, at least from the perspective of DC policy elites. That there's a certain narrative that has taken hold and it's got elements of truth to it, which is like all the bad things that have happened in the past 30 years, whether it's a deindustrialization, you know, the sort of atrophy of our defense industrial base, the fentanyl ravaging of the working class, deaths of despair, the political polarization. All of this sort of has been A cause of neoliberal elites selling out the country to China, essentially adopting this, you know, Gordon Gekko greed and globalization is good two point O type idea and kind of got, you know, rich off of this recycling system, taking dollar surpluses from China and OPEC and then putting into fancy assets and Manhattan real estate and they're getting rich and then the middle working class gets gets hosed something. There's there's some truth to that. But at the same time, it's sort of it's it's like, well, this is kind of the like, you know, just flip a switch and change the basic structure of the global global economic system. Like China actually has built an industrial base that's extremely effective and the United States is working from a position of relative weakness when it comes to that industrial capacity. And instead we're sort of, I think living in a bit of a a fantasy world where we think building some more chip fabrications in Ohio is going to somehow magically solve this problem. It's great for for politicians, everyone gets to say, oh, we're building these in a fancy data centers. It's tech jobs. But again, it's not that many jobs. And once the facility's built, it's like a few, a few high, high skilled workers that are going to be replaced by robots in a few years anyways. So it's like, if for me, it's a version of magical thinking, it's like the biggest threat to the West, and this is, I'll wrap this part up. The biggest threat to the West isn't our debt load. It is our magical thinking. It's, it's, it's the fact that we, we don't really think certain things are problems. And I think, you know, it's a bit political and I've, you know, I've, I try to be completely agnostic. I'm just trying to be an analytic observer. But like the whole issue with Biden's performance at the debate was a version of this magical thinking coming to coming to roost. Even close folks very close to the president who are like staunch allies of him, had a bit of like cognitive shock at the fact that, you know, they had been laboring under an illusion of of the apparent competence and coherence of national strategic policy making in the executive office. And it was a bit of like a, Oh, well, like this isn't just like a right wing Republican talking point, right? It's just like a statement of fact. And it's kind of hard to kind of come to grips with that, right? It's like the world is a certain way and you telling a certain narrative. And we're so good at fighting information wars with each other. We think everything is an information war when there are actual material constraints and facts in the world that you have to eventually confront. And the unfortunate problem I think we we have in the West is we're really skilled at telling narratives and we're like really good expert PR, you know, narrative shaping or like narrative shapers. And we have a lot of endogenous power. You can kind of coast on that and you can sort of just invest a lot of your elite cognitive capacity in constructing really sophisticated narratives. But when the sort of base of actual hard institutional legitimacy and material power starts to erode and all you're good at is essentially, you know, spinning tales and stories for each other, then you have this sort of Roadrunner moment when all of a sudden you realize, uh oh, this actually isn't, isn't, isn't a stable foundation. And that's unfortunately the biggest risk I see is not that. And this could have cascading impacts to the debt markets is like, if folks feel that, you know, the basic structure of American power is effectively hollow, then there could be, you know, instability. But yeah, that that that to me is the biggest risk isn't like the debt load per SE, but is like the narrative frame that we've constructed for ourselves as as like is now lagging the, like material reality. And you need to always be in alignment with reality, whether it's good or bad. You just need to like like accept it and then come up with a plan. Yeah, it it does. It does strikes me in the little analysis I've done on this of like there are levers that could be pulled, austerity and and the like, but we have just no political will, no desire as an electorate to face that reality. And instead we come up with magical thinking to just kick the can. And then the national debt becomes a real problem if you're just not going to address it with, with, you know, reality. Well, let's talk about the let's talk about the reality. I want to get back to your concept of, you know, military power in the US, power umbrella over Europe, obviously, but other segments of the world. And I know this is you're due to your professional experience. Let's talk about cybernetics and let's talk about command and control and let's talk about, you know, let's talk about nodes and networks. When you look at the US military budget and you look at, you know, let's say big ships, big ships and aircraft and, you know, physical things that can deliver mayhem. How do how do you think about how that budget is allocated as compared to cybersecurity in general or as compared to elements of information technology anywhere, anywhere you want to go with that? I mean, this is, I think the fundamental shift in how American policy makers think about security. I mean, we, we're continental island and that has shaped a lot of our, sort of our, our, our mental models of security and defense. Also our sense of national identity and security that, you know, we have relatively friendly neighbors ever since, you know, a few 18th century or 19th century wars with Mexico and, and, and, you know, kind of just sort of clear the, the, the, the, the table. But once we established kind of, you know, the continental sort of hegemonic framework for our security model, then we were kind of, we're riding high. And we had, you know, then a sense of how we could essentially leverage the fact that we're both the Pacific and Atlantic power to project naval power globally, dominate maritime and commercial trade networks. And that was sort of the we're both like, yeah, we, that was the story of the 20th century. We kind of just took over the world basically. And that gave us a sense of like, domestic in invulnerability. No one could plausibly invade the United States, you know, you know, no one was ever going to take over or invade us, unlike other countries which have to worry about, you know, armored divisions on their on their on their border. And that like it's a Nikkeep threat that has to frame their whole approach to security. And this is not a novel observation. But you know, of course, cybersecurity, the fact we became digitally connected civilization, our society then was exposed to threats from, you know, other actors globally distributed in a way that cyber that, that those physical borders really were, were rendered moot. And that has taken a while to sort of shift the overall strategic mindset in the United States. And it has come in like 2 different directions. Like one is ransomware has really dramatically shifted the threat landscape for private companies and started to come to become a point where private companies are essentially kind of like, you know, normally you exist within a territory of a sovereign, you know, state and they provide, you know, certain common goods. And one of those is like collective security that we don't just, you know, let anyone just come in and rob you, you know, blind. We don't just like we enforce some basic rules of law and, and a security order around the private sector so they can do business, right. You're sort of saying like in cyberspace, there's a version of piracy emerge that's extremely lucrative and that it's sort of becoming like strategically important, especially in certain targets like say Colonial Pipeline or change healthcare, where now I realize there's certain private entities that are critical infrastructure for society and it doesn't require China or Russia hacking them. It can just be a bunch of 18 year old kids in Belarus that, you know, pick the right target at the right time and take down a provider that's critically comport important to an entire sector of the economy. And then everyone loses their minds. You know, it seems like every week now there's a version of this, whether it's in the energy sector, in the health sector, pharmaceuticals and even even car dealerships were like in chaos a few weeks ago because a critical company that provides all the software to all these car dealerships, you know, got got got ransomware. So we're sort of waking up to the fact that there's a the basic shift in the security paradigm for, for private, for private enterprises that are essentially just bundles of SAS applications in the cloud. And they're they're, you know, the security provider for their business is no longer the state. It's essentially that cloud provider, whether it's Microsoft or Google, whoever, or a bunch of other third parties. And so now they really rely more on the security practices and obligations or responsibilities of these private sort of tech conglomerates, which are not great, right? Microsoft essentially sells security as an up, as an upsell. So you know, you're kind of like you're kind of on your own, especially if you're a small company or even a medium sized business. But the US government is it's has faced a similar version of its own problem, but against larger scale actors, right? So it's it's, you know, ransomware has hit some federal agencies, but really the the major threat that keeps the government up up at night. And this is your point question about the balance of like how much we spend on like hard physical assets like aircraft carriers, which are $13 billion a pop or multi billion dollar spy satellites. Is that the cost differential for strategic, you know, platforms has dramatically changed, right? And so this this is manifested both in like the hard physical domain, like drones, for example, where the Houthis can build a fifteen $20,000 drone and can block a major global choke point for maritime trade and essentially force for months. The rerouting of massive trade volumes, you know, around the, around the, around the Horn of Africa doesn't require, you know, anything more than a bit of support from Iran in terms of manufacturing and then using Chinese components, which can give you really effective since you precision guided missiles. And that, that is not something that like we baked into our calculations. We were building these fleets of destroyers and, and carriers, you know, 20-30 years ago. And in cyber, it's the same thing where it's, you know, there's, there's been, this has been reported now as a, as a group that's affiliated with the People's Liberation Army. There is a theater command called Volt Typhoon, which is embedded itself in American critical infrastructure networks both overseas in Guam and Hawaii, but also in, in the continental United States. And they're looking in, you know, they're, they're already embedded in critical infrastructure networks, so telecommunications, ports, certain energy transmission systems, as well as, as well as water systems. And so we now wake up to this moment of like, OK, our the systems upon which we rely on to ensure civil order, economic functioning, even our military mobilization and readiness are can be sort of held at risk at a distance from an adversary purely essentially using very clever tricks to get in. And, and it's not like an easy solution to get them out. And that is, that is a different form of security environment than you had in the, in the, throughout the Cold War where it was basically like the missile, you know, the missile counterforce balance and, you know, hard power, like, OK, how much air defense do they have? Can we knock it out? Could we, you know, go in there and take that territory? Now it's a much more dynamic regime of, of coercion in advance of conflict. Cause the whole premise of these actions by, for example, this group, well, Typhoon isn't really to win a war if when we're fighting it, it's to deter us from escalating our involvement in a conflict, say in Taiwan, because our domestic political decisions, we'll focus on keeping order here. And it will change the calculation of leadership when everyone is, you know, freaking out about water and power, etcetera, in various urban environments and not, you know, stuff half around the world in Taiwan. And so that is a dramatic shift seeing this in space as well, right? I mentioned like the multi billion dollar super spy satellites. Well, you can get some of the capabilities for much cheaper now and they're not as vulnerable targets like a multi billion dollar platform we put into orbit. You know it's vulnerable up there, right? And so if instead you can put many different low cost, highly effective capabilities are much more what they call attributable or sorry attributable, then that's a big shift the United government is trying to move to. But I agree, it's to back to where my magical thinking, the Defense Department has put about a billion dollars towards something called the Replicator initiative. And this has been like much ballyhooed big strategic pivot and how we think about fighting wars about much more about mass quantities of low cost, you know relatively effective autonomous systems and how we just churn these out swarms, right undersea smart minds, you know swarm based drone systems for ISR as well as precision strike satellite based swarm self fueling mesh communications networks etcetera, etcetera. Again looks really good on a PowerPoint slide, right. But when we actually turn to our defense industrial base. And we say, oh, can you build 100,000 of these things? They laugh in your face and they say, OK, like you need to pony up up upfront capital cost of X amount. And then maybe I can turn this out. And by the way, I can't guarantee you that I can source all those electronic, you know, chips and critical just sort of, you know, basic components from anywhere that is in China. What I can do is really good. Like, you know, he's really good at at creating exquisite top of the end, you know, super spooky capabilities that no one else on the planet knows about. But again, how many do we have? And are those going to be things that are going to be winning, you know, a fight that's could be like, you know, a matter of political will and industrial capacity, Whereas China is that's all that they're doing focused on is just how to churn out hundreds of thousands of these units. And they have a whole industrial ecosystem to turn to, to, to do that. And that again, magical thinking is like, oh, we'll, we'll write a check, we'll create a big program and we'll just rely on the competence of these industrial players and the bureaucracies in the Pentagon to kind of like make it happen. And but like the, the foundation of how much that worked is like, that doesn't exist anymore. Like we had the Ford and GM, we had the industrial capacity before World War Two that we could convert into making tanks and planes. We don't have that like, latent capacity to convert now. It's just a lot of talk. There's a lot of like, yeah, we should do this. And there's some, you know, promising initial attempts. But is it sufficient to like to meet this to, to, to, to, to cash the check that we're writing? I, I don't know. I think I need to see you more than I've seen today. Does your Bitcoin custody set up keep you up at night? Maybe you still have coins sitting on an exchange. Worried about hackers? 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And so no wonder it's a wonderful business, right? No wonder it's one of the most profitable businesses in history. Now, of course, it's new, you know, the the cloud dynamic is it's a little bit of a different business that changes the model. But one of the things I always loved about Bitcoin was that it actually privatized the cost of insecurity, right? For the first time ever. For the first time ever, companies that were running insecure software actually had a price potentially associated with it. Now, I don't know where that ends up from a policy perspective. I sometimes imagine that the only real solution is that most are all critical. Infrastructure, at least on the private side, needs to run on open source software just because it'll maybe actually be secure. That might be ambitious or unrealistic. Do you have any thoughts in in that regard? Yeah. I mean, there's a lot there and certainly this is close to what I do day-to-day is, you know, when you think about what a private company is as like, like the basic systems that run a company, it has finally changed last 15 or 20 years. It used to be, you would have, you know, servers in house run quote on Prem maintained by your own in house IT department and responsible for securing to do that like intranet. And it was like kind of a walled garden. And it was really focused on, you know, security in that model was about ensuring that like, you know, you could kind of monitor the the boundary of that of the enterprise network. And it was firewalls and it was authentication systems and encryption, etcetera. What has dramatically shifted in the last 10 or 20 years, really in the last 10 years has been the shift to the cloud, right, where and increasingly what the company is, you know, in terms of the data, the systems, the process, the tools, the, you know, but the administrative, you know, functions are essentially provided by third parties, you know, SAS applications, whether it's Slack or your major, you know, enterprise, you know, sort of hosting provider, mostly Microsoft or Google Cloud or AWS, etcetera. And so a company is just kind of a bundle of SAS applications with, you know, a certain tax registration and, you know, globally distributed employees that can log in to perform their different functions. And so security, you think about securing that sort of thing, the security model for that sort of company is very complicated now because there's been a proliferation of more complex technical stacks. Kind of the legacy stack is still sometimes mixed in with kind of this cloud stack. We haven't shifted like a new model, but you can imagine like, you know, like imagine that essentially if the trend continues, you can see most companies could look like essentially, you know, they're kind of like surfs in like a digital sort of feudal system, right? Like their whole data were just exists and all the services exist hosted on say, you know, a single provider, say Google cloud or, or Microsoft Azure and or now, you know, could be like hedge between multiple, like sort of multiple clouds, but usually it's like a handful of them. And so your security model is essentially their security model, right? They have all your data. Your operational systems are dependent on their functioning cloud infrastructure. Your customer's data is hosted on their servers. And so the security model for a private company now is essentially contingent on the security practices of these big tech conglomerates. And so, you know, there's certain things individual companies still responsible for, like provisioning access to their employees, ensuring they have multi factor authentication. They often develop a whole bunch of their own business applications. They're going to make sure that those applications are secure, the whole sort of dev SEC OPS stuff. And of course AI is changing that as well. So it's not like it's still a very mixed bag. But I would say to your point, like private companies do not work like an economic super efficient machine, right? Sort of like sort of the Cosian analysis of like there's a price signal from ransomware and therefore that price signal will translate into, you know, certain security response. I think you're seeing that, but it's not necessarily sufficient, right? So like the threat of ransomware has forced companies to raise the profile of security considerations, you know, up. And so budgets have also gone up to a certain extent. But but it's also kind of like human beings are very much especially corporate CE, OS and senior, you know, sort of chief financial officers. You know, security is a cost center, right? The rest of the company provides revenue and so if you ever hit a speed bump, you're coming up on quarter end and you're looking ways to save money. Cost centers always take the hit first. And so you see security kind of come in, the security spend. It kind of comes in these pieces and troughs and it's very sector specific or like if there's a very high profile event that hits a certain sector and it looks like maybe the feds are going to start to regulate it. Like, for example, in healthcare, you know, there's a whole push now after the change healthcare stuff to potentially pass like mandatory security requirements. And of course the health sector is very resistant to that because it wood forest them to spend more than they want to spend, often at their own collective expense. So this is the problem of like human beings is like, you know, we tend to unless we have a, is it like a principal agent problem here? This is like the corporate CE OS get judged on fiscal perform, on financial performance in, in, in sort of equity returns and their stock and their pay packages are directly related to that. And so there's like this Turkey problem of like, yeah, they could be hit by ransomware, But if they do, if they just do enough to look like they did the right things and they still get hit, you know, they kind of cover their, they kind of cover their ass, right. So there's a big problem of how to trans as a. You know, a lot of conversations I have is like how to translate not just cyber risk, but geopolitical risk, which are to a certain extent like unquantifiable. You know, there's been some attempts to sort of quantify cyber risk, but my, my perspective, they're just, you know, they're only usually applicable in like very narrow domains. And even then they're not that great. Like cyber insurance is like not a very ineffective market at the moment. And that's just like a proof of kind of this. They haven't been able to price that risk effectively, right. Usually if you can price the risk, you should be able to buy an insurance product to mitigate it. And there there's not great. The cyber insurance market is just not not very effective at the moment. So yeah, that was just a yeah. So we're kind of in not a great spot when it comes to cybersecurity and the modern enterprise. And it's it's compounded by the fact that you're seeing the financial incentives, you know, as Bitcoin goes up, right, the financial incentives for for ransom actors goes up as well. And you're increasingly seeing some sophisticated threat actors, like a nation state level kind of masquerade as ransomware crews. It's a very clobber. In fact, we, we just put our report on this of a Chinese group that was sort of, you know, making themselves look like in conducting ransomware attacks 'cause we just want to steal some stuff. Yeah. It used to be that. It used to be the government hackers were a cost Center for governments. But now that they now they can get paid, they can make Bitcoin, right? Well, I mean ransomware. I mean, North Korea's lies Worth group, which is essentially their they're the cyber cyber element of their military intelligence wing. But the party is, you know, full time cyber criminals. And yeah, they're very effective at, you know, not just hacking and stealing, you know, weakly coded D5 protocols and cross bridge protocols, but actually infiltrating employees into these protocols, you know, as programmers, as as developers. And then once they get to a certain size, you know, they get access to to the keys and they're just poof, they're ours now. Or they just building vulnerabilities that some other unit exploits. So we're seeing it's kind of this, you know, you know, Cryptonomicon, you know, kind of kind of kind of system. Yeah. I don't see it reaching like a healthy equilibrium at any, at any point soon. It's, you know, kind of an, an arms race between offense and defense. And I think at the end of the day, you're going to see something like, you know, if the security provider, if the monopoly security provider can't effectively defend private companies, private companies are going to eventually kind of defend themselves. And, you know, this idea of like, you know, private companies hacking back is technically against the law. But at a certain point, I could imagine the norm shift enough that that's what happens. Or, you know, certain certain U.S. policy makers make a decision that we're going to impose cost on certain groups that cross cross a red line. And, you know, we've drone strike terrorists. We haven't drone strike any, you know, ransomware crews. But I don't know, I, I'm not advocating as a policy, but I could see that like you, you could see us on a trajectory where where that gets considered. So yeah, this is a new dynamic and the the boundary lines between the public and private sector are dramatically shifting. And one of the keys to put on Microsoft back to like the point of like digital sovereignty and and, you know, the changing nature of of warfare. So in the early weeks of the Ukraine conflict when Russia came in, is, you know, Ukraine government was worried about their basic government services and data which was locally hosted. And so Microsoft offered and did essentially redeploy all of those services to their Azure infrastructure in the UK, You know, free charge. It's like a few $100 million worth of, you know, digital services equivalent. And so that's like a digital government exile, right? It's a concept we didn't really have before where like all the government records and, you know, services, whether it's tax records, draft records, government services of all kinds were essentially being hosted, you know, out of the country by a private company. And this idea of like, you know, national sovereignty, you know, starts to become more, more more sort of complicated, right? It's like, OK, a a sovereign government is relying on essentially the goodwill of a private company to protect its basic, you know, functioning as a state. And that didn't, you know, that's not a constant that existed 30 years ago. And so I think you're seeing that power dynamic play out. And Microsoft is a key example of this, where you're doing these arrangements around the world. You can sort of model Microsoft as like a quasi sovereign entity that has its own strategic objectives, which is build more data centers, more places to suck in more data, to like just digitally colonize as much of like the digital territory as possible. Like that's its objective. Its objective isn't to like do good things for America or do good things for China or do good things for the Emirates. It's to like grow more data centers, get suck in more data and like colonize more of the digital territory and have more companies and governments essentially pay rent on its digital land, right, If that's the metaphor. And so then it has this incentive to go in all these places and do deals that like G42 and the Emirates and now doing this sort of data center build out in Kenya that from one perspective look like, Oh, this is great. This is now an American tech company, you know, colonizing this digital, you know, land and and not a Chinese company. It's not Alibaba cloud, etcetera, or or, you know, there's there's no hallway, you know, towers there. It's all going to be, you know, Microsoft and open AI data centers and AI. But the other said perspective, it's like, well, Microsoft is a fair weather company. Like they they are responsible for their shareholders. And at the end of the day, you know, we don't have a whole lot of coercive influence over Microsoft. In fact, a government like a new government board called the Cyber Safety Review Board totally ripped into Microsoft like a month or two ago because it was their basic security failures that led to the pretty deep compromise of U.S. government, you know, agencies. And, you know, it was like China and Russia kind of leveraging Microsoft's poor security practices. And because, you know, they didn't have the incentive to prioritize that and it created a big PR thing. But at the end of the day, like the US government, you know, can sort of use the bully pulpit and maybe can find them. But we're in this new world where these private big tech companies do have essentially almost quasi sovereign power. And see if your point about Bitcoin, I think that's where it's it's really fascinating because there's, you know, not too many like novel institutions that are globally, you know, distributed that have a sort of a self-sustaining endogenous stability to them. But they're not, you know, like these existing systems of kind of neo feudal digital capitalism. They're kind of a much more different form of system. And I think the implications of that, you know, should be modeled into how you think about, you know, the development of these digital societies and whether you're going to swing towards this techno authoritarian, you know, neo digital feudal model or where they're going to have a more decentralized liberal traditional, you know, sort of small D democratic, sort of political and economic system that's now digitally mediated. And that's, that's doesn't be the battle lines for, you know, the next decade or two. Wow, so much embedded in there. I always, you know, in that vein as it relates to corporate sovereignty, Matt, I sometimes think about the AI boom and I think about owning equity in, I don't know, in via Google or Microsoft or whoever one of these AI places. And I think to myself, what does that mean exactly? Like, how do I feel about my status as a minority shareholder in an entity that may already, or at least in the near future, you know, possess so much power that it may somewhat exist outside the classical boundaries of property rights that investors, you know, have come to depend on, at least in the United States over the last over the last few centuries. You know, like what? What does that look like? Do you have any thoughts? Do you have any thoughts on that? I mean, the lesson in history is that the plebs always get hosed, right? You know? The masses are always just the exploited, you know, physical labor or grunts for the for the for the meat machine on the front. It's like lesson history is that most most systems of power don't care what you think, Andy, Most systems of power run over you like a bug underneath the tire, right? It's like only in like a sort of a relatively recent window of human history have there been systems of government where the systems of power have to essentially be accountable and checked by, you know, the median voter. And I think the conditions that enabled such political conditions to obtain were were coincidence that kind of was kind of lucky, right? It was kind of, you know, coincidence of the fact that it was it was a relatively liberal English, you know, parliamentary system that discovered coal and became like an industrial powerhouse for global trade and then impose their common law norms and English language around the world and colonized America. What had this massive abundance, kind of a one shot massive, you know, natural resource, kind of like, you know, treasure house that could, you know, import that system of democratic rule and common law adapted for the frontier, you know, democratic ethos and created modern, you know, created America. Like those were like contingent historical kind of like lucky strikes. And you know, I think, you know, I'm not like I'm not a pessimist, I'm an optimist. I'm sort of just like there's historical deterministic, like determinating conditions about like what political conditions are possible under certain economic and technological conditions. And unfortunately, I think we could be heading to an environment where, you know, the like this. I don't believe this fully, but you can tell a good argument that, for example, like the Goss plan of the Soviets, you know, was practically infeasible from the, you know, same sort of, you know, like hayeacking a knowledge argument that you just can't centrally plan a complex economy. There's a certain strain of technocratic belief. That actually with AI you can do two things. One, you know, you can, you can do more complex, you know, real time analysis of the economy. In fact, the Bank of National Settlements, it's like one of their main policy sort of tool programs is to like how to do like now casting with AI to actually try to see the the economy in real time and try to do these fine-tuned adjustments to steer and manage the economy. That's how I did do it. But the other hand, there's other subset of stakeholders that don't say this publicly, but they also believe AI is really good. You know, OK, there's too many preferences, there's too many diverse sets of beliefs and attitudes in society. We seem to like manage that diversity down to controllable system. And so you can use AI not just to calculate preferences and, and, and wages and, you know, do the sort of Goss plan like version, but you can like take the extraneous variables that otherwise would be too complex for the AI to manage. You can just use AI to like steer them away, to suppress them away. And when everyone's beliefs and attitudes are technologically mediated and and therefore manipulatable, you could see yourself drifting into sort of a techno authoritarian AI Goss plan. And there's a lot of folks that think in that elite system that believe that's like a desirable course of action. And that would, you know, potentially lead to more safe, more more, you know, more stable economic systems, but would eventually be, you know, an erosion of what we think of as like individual liberty and, you know, democratic legitimacy. So that is like a big fear that I have sort of in this slow motion, you know, path of least resistance just to give more control up to these systems, even if they're not that good. But they form like a they form a, a shelling point, right, For sort of elite governance that OK, we all disagree. This is the system we're going to we're going to follow because it makes everything easier for us to manage. I don't think it's actually going to work, but I think they could try. And so, yeah, this is where Bitcoin is potentially very important politically in that it provides essentially a refuge, right? Because I think Europe, you know, certainly is going along this, this path where they're under so much stress of fragmentation, geopolitical economic stress that the need to try to like contain things is going to, you know, has incentives to centralized and therefore, you know, suppress diversity of thought, diversity of, of economic decision making. And usually when you're in a crisis, you know, in whether it's war or something approaching war, you tend to see things like capital controls, credit rationing, financial oppression, censorship, etcetera. And so if the, if the world power structure thinks that it's in a crisis, which it, which it is, you would expect that to be the, the, the, the trend line. That's just what history tells me, Heavy. No, of course, the, you know, the the technocratic central planning bordering on communists, you know, top down directive control. It does feel like it it will be tried because, you know, has been the dream in many circles for the last century. So in all this, Matt, you've brought so much nuance and like considered thought to both the trajectory of the future trajectory of of national security and cybersecurity. And then I'm very curious to to tease out like how do you think about Bitcoin and its role in the trajectory into the future is specifically how you think differently from the rest of us Bitcoiners who haven't layered in all these considered nuances about, you know, the complexity of how all these different levers that that the US will pull with regard to the national debt and so on. So I think for one, nothing is like historically inevitable. And if I look at history, I see a lot of like contingent decisions made by like certain individuals, like presidents actually matter, right? So like, who makes it? Just like, you know, Nixon with like, I think Kissinger wasn't there, but it was his Treasury Secretary. It was Paul Volcker, like one other guy, like Camp David in like 3 days. And they kind of just decided they were going to do, you know, the Nixon shock, right, That there was probably like there was a build up to that. There was like, I think they were triangulating around a big change. There was like a few guys went to a place, had some decisions and it was like, boom, we're going to announce it and then everyone's going to like be in a different world. And so I sort of think about Bitcoin in that way, which is, you know, it's naturally evolving, but the legacy system is still subject to like a handful of individual decision makers, whether it's the White House decision makers, ECB, you know, President Xi, etcetera. And so I think sometimes Bitcoiners, you know, think too much about sort of inevitable, just sort of trend line, you know, having cycle driven peaks and valleys and the price action as just, OK, it is the IT is the, you know, unstoppable force. And it will sort of, you know, sort of sweep away the the legacy system. It's almost like this, you know, it's kind of like a religious fervor, right? And so, you know, you need that to like have the movement spark itself. And there's a sense of like hyper optimism that you have to have right to a certain extent as being a part of any sort of political movement. I think Bitcoin sub subsets of Bitcoin are like a political movement in that respect. But I think, you know, as a pure realist, it's like there's legacy institutions and some parts of legacy institutions are going to react very hostilely or very, you know, pragmatically to to this emerging trend. And I think it's very hard to predict. But like, for example, just to make this very practical, like Trump hosting whatever it was, the 10 or 15 Bitcoin mining CE OS and a few other folks. David Bailey, kind of, you know, the ringleader of that posse down to Mar a Lago. So like, you know, big monetary shifts happen in, you know, usually like retreats or like palaces, you know, the Versailles or the Louvre or, you know, even Bretton Woods, you know. Yeah, Circle Island, you know, they're on a yacht, you know, So it's just like you, you know, a small bunch of rich people or elites or something you put them into like a fancy building and they come up with like a summit or an accord or whatever, right. And they then they change. And at least what I heard from that meeting is that there's some wild conversations happening about the potential for Bitcoin and Trump administration. No, I think some of that is just like, you know, throw it against the wall, see what sticks, right? Or just know you have an opportunity to shift the Overton window so dramatically. So you just want to blow the Overton window as far out as possible. And then knowing that it's eventually going to snap back, but it's going to snap back to a place. It's like finally shifted from where it is today. So it's probably some tactical considerations about, you know, some of those ideas. But I think not if thought goes into the, it's sort of like there's a risk of Bitcoiners like being like the dog that caught the car, right? Which is like we were so much always like thinking, oh, nation state adoption is almost here. Nation state adoption is almost here. Central banks are gonna buy it. Middle East is gonna buy it. China's gonna buy it is gonna be this geopolitical arms race. And then like, our bags are gonna be just like, you know, AD zeros. And I think not much thought is going to like what actually what actually happens when that happens, right? There's just because I think it's been painted for so many years is like this somewhat far off, but not too far off kind of somewhat utopian vision of like Bitcoin making it right and coming out of the wilderness of being somewhat of a fringe taboo, somewhat derided subclass. And there's a resentment built up and it's like there's a desire to like have that one big aha, told you so I was right, you're wrong, bend the knee, yadda, yadda, yadda. And that's all fine. That's but that's a psychological, it's not an analytical reaction. An analytical. Reaction Never felt this way. Mad Nobody listening to this, to this show has ever had these, has ever had these thoughts. I mean, it's, it's really natural and, and, and fair to a certain to a certain extent, but I think it matters exactly how that happens. Like there's a path dependency. That's why I've argued for a while now that the United States should have a Bitcoin strategy, right? It doesn't mean we, you know, have. It doesn't mean I've determined what that strategy should be. It just means we should have one. It's like someone there should be a considered national effort broad that, you know, spanning both the Treasury Department and traditional kind of economic policy, but as well as national security decision makers and policy, sort of analysts from the defense and intelligence communities as well. To say, OK, let's paint a scenario where Bitcoin and say it does monetize to the level of gold, which maybe not my baseline scenario, but it's certainly a reasonable scenario for the for the say this decade. I don't know what percentage, you know, whatever percentage you ascribe to that is probably what price you think, you know, your your break even should be. You know, you want to you want to be buying up to that point and but I see zero national policy decision making or strategy planning for that type of scenario. But that would be very disruptive monetary shake up, geopolitical shake up. And it would mean that likely Bitcoin has been, you know, incorporated into the sovereign reserves of many different countries, if not the United States, potentially many different Gulf powers, maybe maybe South Asian countries, maybe, you know, maybe Singapore, maybe China, etcetera. So how that happens, whether it's the United States that leads that sort of does it in a, you know, in a deliberative fashion. I think it's a very positive end result for both US National Security Bitcoiners as well as the sort of the fiscal position. United States. If we're going to be going to, you know, a more unstable kind of monetary environment, if it ends up being the Saudis and the Emiratis and the Chinese, then it's probably not great for the United States, right? And so I have to be like an analyst to be like, well, you know, the Bitcoin could be at the same price, but the geopolitical implications, the national implications could be very different depending on how that happens. And I think Bitcoin is just so much it just like, let's get to that level. Let's just have it happen that. And I think about, OK, what's the best possible path to get to that level, right? And not just be like, well, our only objective is to get to that level And therefore whatever is the quickest path to get there is what we should choose. So I think there's different people can have different views of that. My view is sometimes it's better to maybe take a slightly slower path that's deliberative and plan to maximize, I think the the advantages of the West then necessarily the quickest path that might also, you know, make you rich, but also could accrue power and influence to say dictators in the Middle East that I would prefer not to be relatively empowered or to China, for example. And so that's just that's like a philosophical political attitude. So people can disagree with that, certainly, But I think that's that's a conversation isn't isn't happening. It's just, you know, OK, whatever gets us there, right? And, and there's also a sense of, you know, I think some folks have this view of, well, how you get there is by having this kind of arms race. So how you get here is by essentially, you know, meaning it into existence. Like having Trump go on some speeches and talk about Bitcoin very, very positively and then whisper that actually he's going to he's going to accumulate Bitcoin and national reserves. He's going to order the Fed to buy it. He's going to do a bunch of stuff that's would be from our perspective now look, you know, like, wow, like that's like a step change in terms of national policy. But if he says that, well, then that has to send different signals that aren't being sent or hadn't been sent before to the Chinese authorities to the Gulf. And that could, you know, essentially meme this kind of geopolitical arms race to buy Bitcoin into existence, which, you know, could could be successful. But it's like, OK, if your plan is just to like spark that fire, that's great. But then the global system is extremely complicated and there's a lot of like, you know, existing systems we rely on our day to life like payment and clearing systems, you know, like we don't want things just to break overnight. And there's a risk that if you if you do it in a very disorderly fashion and there's a crisis, that the political snapback could be very counterproductive. Like Trump for all, you know, people, you know, lauding him for being pro Bitcoin. Fundamentally, he's not like a Bitcoiner, right? He's just, he's a politician. He's like, this is where I get votes. This is where I get energy, I get I get money, boom. This is my support base there. Now I'm going to do things that make them happy. But if all of a sudden this blows up in his face and it makes him look bad, it makes him look stupid or rash or it embarrasses him, he'd be the first person to do a completely 180 and turn on it and turn on turn on the community in a second, right? So I think if you, if you don't plan for that scenario, then you're not really being, you're not doing a prudent strategic, Yeah, making prudent strategic plan, right, 'cause it could be it's a very, you know, tightrope to to walk there. So that's my. Take I think it also, you know, calls to mind some of the centralization points and you know, still I don't, I don't know it's called weaknesses or risks inherent in Bitcoin. You know, perhaps centralization of the mining pools is, is one major topic lately, right? You know, who who has a Direct Line into control of those, you know, mining pools at the moment? Well, probably the CCP does. And you know, if Bitcoin were to develop very rapidly as a result of some political move like you just described, you know what, what does that do to the incentive structure for China or the CCP as it relates to, you know, Bitcoin's long term success? These are yeah. These are questions people should ask ask themselves. Yeah, and I think there has been conversation about, you know, state influence over mining pools for centership, you know, purposes, whether it's O FAC or whether it's sort of, you know, the implicit threat of, you know, empty blocks or whatever come from some other, you know, not financially motivated actor. I think the lesson, you know, Bitcoin community is always, you know, there's a lot of energy behind lots of things. I think relatively more energy should go into things that decentralized block production. So stratum V2 and it was kind of mixed opinions, but I think maybe more in that direction that helps ensure that the block production is as decentralized as possible. And, you know, there's just overall thinking about, you know, Bitcoins are adversarial thinkers, but it's like, OK, like if you are the dog that catches the car and Bitcoin is at the level of gold, Well, like there's going to be a whole new raft of threats in terms of not to the protocol itself, but to the say the developers, right? There's like 40-50 core developers. You know, I'm aware they have like in a meeting every every year, they sort of pick a city, they go there, they just have a conversation. It's just like a technical kind of like vibe session. And these are just like programming. They're very in the weeds where this Pip, you know, BIP BIP X versus BIP Y sorts of stuff. What's the vibe? Very personality driven sort of discussion, rough consensus. You know, at a certain point there's half of those are going to be Chinese spies, right? I mean, I, you've seen this in open source software already. In fact, there was a story just few weeks ago, I forget exactly what about for several years a maintainer who's actually using a Chinese name. But I people think it was probably the SVR, the Russian intelligence service basically could have worked on an open source library for Linux. It was a very kind of very kind of off in the weeds, very small sort of library. It was called Xe Eutels. And you know, over there was like it was maintained by 1 maintainer who had like 50 different libraries. They were maintaining, you know, it was kind of getting, you know, over overworked and want to maintain his like pretty boring set of tools. And so this guy kind of kept offering to help, you know, submitted small little, you know, change requests and, and or, or, or sorry, pull requests and kind of, you know, kind of insinuated himself. It got to the point. And then there was a whole other host of, of, of anonymous contributors that were like gradually pressuring the lead maintainer to like to incorporate these changes from this other guy and be like, why aren't you listening? Like this is a simple change. You should do it. So they created a bunch of social pressure and I feel like it two years the guy made the the Anon SVR officer, the like a Co maintainer where now he could just push updates. And they got this back door built in to like foundational Linux sort of software updates. And it was like this one random, you know, autistic Microsoft engineer who noticed like a slight latency to like his normal compiling. He's like, why is this taking a little bit too long that it used to take? And just like dug in for hours and realized there was this like weird, weird change to the code and then kind of this, it all blew up. And so that tells me, OK, so Bitcoin is resistant to, is more resistant to that sort of attack than than than than Linux is. But it's, it's not entirely impervious to sort of gradual systematic, you know, manipulation of the conversation around, say certain types of dips and maybe creation of social pressure, you know, which essentially is OK, should we should we signal for taproot type type of thing, right? So that we should be more conscious of those sorts of attacks, like social layer attacks on the technical development ecosystem, you know, in general, I think that should all things considered, raise the bar for any, for any soft work, right? Because you always don't have to factor in the possibility that the, the public pressure for a certain soft work, whatever it is, just like completely abstract, could also be manipulated by some unknown purpose, right? And and that this pressure to like make a simple change could introduce us a flaw that not everyone had figured out. Of course, the whole thing with ordinals was like, you know, some people feel it was attacked, some people thought it was just basic change and whatever is the protocol is protocol. But that lesson should you should, you should draw a conclusion about that lesson that in the future that type of thing could happen again. But like not by accident, right? So like in general, I think that should change like the the default posture to to to updates. Now again, that might make me, you know, that might impose some costs, right? There might be some like simple changes that like time locks, etcetera. That would be good to have that you know that that wouldn't say that it's like inevitable and wouldn't say we say no changes. It's just whatever your current posture is to changes, it should just be slightly more resistant. Well that's great food for thought and makes me appreciate especially your style and your contributions to the space mat as someone who, as you said, assesses risk for a living. Right. This is literally your job. You do this all day every day when you're not, by the way, also writing policy papers about Bitcoin, which by the way, I highly recommend people read those papers if you want to support Matt on the Bitcoin Policy Institute website. If you really want to support Matt, by the way, buy his book, Buy Expectation value. I've ordered my copy. I look forward to to reading it soon. I want to give Jesse maybe the almost last word here and I want to be respectful of your time. This has been awesome, Matt, really appreciate you. Really appreciate you coming on scarce assets. But, but Jesse, did you have any, do you have anything you want to say before we give Matt the closing thoughts in order to reach him? Not in particular incredible contribution here, Matt to you know, I love your, your, your disparate, you know, points of view that you're bringing in from our typical Bitcoin community. Talking points are are so narrow in scope usually. And, and you break that mold, which is fantastic and and necessary and great. And, and I also, I agree with you on the sort of ossification point. I think we had VJ on the on the podcast and he made a impassioned case for the the bias towards ossification. I and I think that's an important distinction to to not be completely closed off to, to that possibility of changes in the future. But the bar certainly should be, in my opinion, higher than it has been and and currently is with regard to making changes. So I agree with you on that. But thanks so much for coming on the show. This is extremely thought provoking for for me and I think probably everyone listening. Absolutely what? Any final thoughts or information you want to leave people with? Final thoughts. Well, I'll, I'll leave without like the final kind of like mega, mega, you know, macro takes this. Yeah, I think so. Like, it's an interesting convergence this decade. A lot's gonna happen this decade. I think this is gonna be very, you know, the terrible 20s or disruptive 20s, whatever I think this is, it's true. We're kind of in the middle of it. And, you know, the the Daily News cycle, you know, depending on what's blowing up that day kind of focuses on different aspects of this sort of creeping crisis or or acceleration of instabilities. And then Bitcoin is sort of going to become one dynamic in this larger complicated unfolding of call it chaos, you call it creative destruction. You could call it, you know, whatever you want to call it. But I think it's going to be a lot of convergence, right? So and, you know, Bitcoin I think can play a potential stabilizing role throughout that sort of crisis environment. I think that's where focus should be on like, OK, a lot of a lot of the anchor points of global civilization and society are going to be sort of freed up, right? And usually when that happens, like lots of things can change and, you know, the purpose of the state and the existing social orders to kind of anchor things down and like, you know, try to keep things relatively contained. But when things start to like pop off the ground and the tent starts flying and everyone runs around like with their heads cut off, I think it's important for Bitcoiners to like, try to keep themselves grounded, try to get themselves anchored, you know, and, you know, it probably will not be the full solution to, you know, it doesn't like Bitcoin solves everything. But I think the the more that Bitcoin can play that role of a stabilizing anchor point as other things potentially get freed loose and have to reconfigure themselves for a while, you know, the better. And yeah, so I think it'll be a disruptive decade in many respects. I think we're going to end up in 20 thirties in a vastly different world. Bitcoin still be around, but I think the world around Bitcoin will be very, very different. And so, yeah, just keep it up in mind. A lot of things are going to change. So yeah, that's that's all I got. That's good. That's sage advice. Be cool, big corners, try to try to stay cool. And as this wild drama unfolds, Matt will be will be keeping you updated live on Twitter, I'm sure at Matthew under score Pines. Matt, thank you so much again, phenomenal conversation. I hope to do it again sometime before too long. And I really appreciate you. And this has been scarce assets. Thanks. Thanks for listening to this week's episode of the show. 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