Scarce Assets E017: Avik Roy – Then They Fight You

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 Edstrom, and I'm happy to welcome you to the 18th episode of Scarce Assets, a show that examined scarcity, the most fundamental driver of economics and markets, and the scarcest asset of all, which is Bitcoin. It's great to be here with my Co host Jesse Myers and our guest, Ovic Roy. One of the reasons I'm fascinated to talk with Ovic is that he's already on his fourth career. He trained as a scientist and as a doctor at MIT and Yale. Then he worked in the investment business for Bain Capital. He started publishing on healthcare policy, first on his own blog and then in the Wall Street Journal, the New York Times, the Washington Post, and a number of other great publications. And he actually became policy editor at Forbes as well. So meanwhile, he became a policy advisor to governors and senators and multiple presidential candidates, and he's now president of Free OP, the foundation for research on Equal Opportunity. Now he's also a senior advisor at the Bitcoin Policy Institute. And I first encountered OBEX work in 2021 when he published an article in National Affairs magazine entitled Bitcoin in the US Fiscal Reckoning. This article was so good that I printed it out and I gave it to my wife and a bunch of other people, and I told them they had to read it. I think it's a brilliant framing of how Bitcoin can be helpful to the United States and U.S. citizens. But I also think it's just one facet among many of Ovic's much broader work on providing Americans with opportunities to lift themselves up. So I'm very happy to talk with him today about that. Ovic, how are you? Thanks, Andy. I'm doing all right. How are you doing? Doing well, Doing very well. Thinking about that article three years ago and some of the seeds that I think it planted for recent policy proposals within Bitcoin. But I want to table that conversation for the moment. And I'd love for you to hit some of the highlights of your background and career and maybe weave that into how those events and activities and milestones brought you to to founding Free OP. Well, you, you had on a, you had on a bunch of it, I think. I think what's interesting for me, you know, in terms of like, how did I get into Bitcoin? I've been been fortunate to have friends who are in the kind of Austrian econ world very early on. So I mean, I heard about Bitcoin from the beginning, but was just too intimidated by all the technical elements to get involved myself in those early days. And I had a pretty intense and busy career as a biotech investor, which took up all my time, didn't have bandwidth to pick up new hobbies. And, but as time went on, you know, I felt like it was important to start building that uncorrelated asset or at least then uncorrelated asset into My Portfolio and, and did so at a, at a scale that has worked out for me and, but still kind of kept that to myself. And, and, and just kind of what I, what I found is that as Bitcoin became a more significant part of my own portfolio, I had to pay more attention to it. And, and as the regulatory radar, as, as Bitcoin kind of hit the radar of Washington more, I felt like a lot of the skills and, and, and professional background that I had was maybe became more useful to the Bitcoin community. And I wanted to try to be useful to the Bitcoin community by bringing that, you know, Washington experience into the Bitcoin community and vice versa, to help Washington people, policy makers and the like, and the think tank world, sort of under the conventional think tank world, understand why Bitcoin was not a passing fad while I was, why it was going to be important and more relevant as time went on. And that's what motivated me to write that piece, Bitcoin, US Fiscal Reckoning to help Bitcoiners understand why Washington was important for them to take into account back, you know, 10 years ago, seven years ago. You know, 2017 was really when the SEC first started to crack down on crypto more broadly. But at that time, Bitcoiners had this kind of like, hey, you know, we're not crypto, we're fine. You know, the Bitcoin network will will keep going regardless of what governments think, which is technically true. But I think my view was that it it gave short shrift to the degree to which governments can make it hard for Bitcoin to be as maximally useful as possible. Take something as simple as in the US, technically speaking, if you want to pay for coffee with your Bitcoin, you have to file a capital gains transaction, you know, every time you do that. And that's because of U.S. tax policy, right? That has nothing to do with the functioning of the Bitcoin network. That's a very simple example. I could give you 20 more examples of how laws and regulations in the United States make Bitcoin less useful than it could be. And similarly for Washington, I think that they've generally seen Bitcoin the standard view in Washington as Bitcoin is just something that money launderers and tax evaders use and criminals use. It's not something that anyone who has a sincere interest in in money would would care about. And, and I, I did my best in that article to explain to them why actually Bitcoin is an exit strategy for those who worry about the debt and the money printing that goes on to basically support the, the rising and growing federal debt. And so, you know, it's always, it's, you never know how anything is going to get taken. You know, how people are going to take something when you, when you put it out there. But I was certainly very amazed by and grateful for the reaction from, from guys like you and so many others in the Bitcoin community and in the Washington community. So it was, it was worth the effort to put that piece together and, and I've been working on it. What you might call a sequel to that piece. I'm on the, as you mentioned, I'm on the board of the well, I, you mentioned that I'm a senior advisor of Bitcoin Policy Institute. I'm also on the board of the Texas Bitcoin Foundation and the Texas Bitcoin Foundation, which is led by Natalie Smolensky is in in, in is about to publish a, a book called the Satoshi Papers. And I have a chapter in that book called Then they fight you perfect chapter, which we can talk about today is basically about what you might call the sequel to this. So this original article of the Bitcoin, the US fiscal reckoning, which is OK, let's say this fiscal reckoning actually happens. Let's say the US does go broke. There is a fiscal and monetary crisis. Will the US go the path of Latin America and say, OK, we're just going to crack down and establish capital controls and basically prevent, even more so than they do today, people using Bitcoin and converting the US dollar to Bitcoin and vice versa? Or will the US try to adapt to a world in which Bitcoin is is a stronger and more widely used monetary mechanism than it is today? Will US try to adapt to that much? As some Latin American countries have said, OK, we're going to dollarize and we're going to use the dollar as our official currency to kind of prevent our own central bank from from making the mistakes that they are inclined to make. Might we just kind of take that out of our hands? So there's precedent for both, right? There's precedent for countries going to sort of Venezuela approach or the Argentina approach, pre Malay Argentina approach. And then there's the president for countries taking the opposite approach like say Panama, where they pegged their currency to the US dollar and kind of have outsourced or El Salvador pre Bitcoin, right? The old El Salvador in 2000 converted, got rid of their own currency, the Cologne, and converted to the US dollar. And that worked for them reasonably well from 22,000 to say, what was it 2021 when, when, when they adopted the Bitcoin standard. So I would say that there are these questions, what is the US going to do when they're when people are increasingly fleeing to Bitcoin, assuming that does happen, and this article explores some of the possibilities thereof. At Onramp, 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. Onramp 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. Onramp provides Peace of Mind for your Bitcoin journey, whether for your whole stack or for part of it as a compliment to your existing self custody setup. For more information, check us out at onrampbitcoin.com. Please, please. So if I'm not mistaken, Satoshi papers.org, you can find more information. But yeah, hit us with the hit us with the preview with the sneak peek on, then they fight you. So the basic, the basic thing I try to do in this paper is explore three different scenarios, what what I call the, the restrictive scenario, the palsied scenario and the munificence scenario. So you can kind of grade them sort of negative, very negative to somewhat negative to positive. There's not really a neutral scenario. It's more like a somewhat negative scenario. So the, the very negative scenario is a bit what I was describing just a minute ago. Let's say there's a crisis and the US says, you know what, we're going to respond to that crisis by completely cracking down on Bitcoin because we see people fleeing the US dollar for Bitcoin. And we're going to prevent that. Kind of like Roosevelt did in 34 with the executive order on gold Or, you know, China and other countries do today where they say, look, we're not. We're going to basically shut down the exchange of U.S. dollars for Bitcoin, which they can do. They can shut down, they can say to Coinbase and Kraken and all the big exchange, you're not allowed to convert U.S. dollars to Bitcoin and vice versa. They could for example say all if you want to own own Bitcoin, you have to do it through ETFs which we can regulate. You can't own the Bitcoin directly in cold storage. Of course people might not comply with that, but they could. They could. They could say that it's illegal to to have self custody Bitcoin. For example. They could say they could crack down on the exchange of U.S. dollars for Bitcoin. They could force everyone to convert their Bitcoin into these ETF type products. They could do a bunch of things like that to basically make it very hard for people to own Bitcoin and and for and and also maybe to convert U.S. dollars to other foreign currencies, not just Bitcoin as a way of saying forcing people to own and save in the US dollar even though the dollar is losing its value. That's again exactly what we did in 34. Effectively, that's what we did in 71 when we broke the finally broke the connection between the US dollar and the value of gold under Nixon. So we could have that kind of approach, we could do a bunch of things like that. And look, that's, that's hardly a, that would be hardly shocking at this point. When we look at what happened during the pandemic, what happened during the financial crisis, We have so many examples in U.S. history, let alone in the history of other nations where the emergency of an economic crisis. So again, let's go back to this emergency point because I think Bitcoin as Bitcoin Bitcoiners tend to understand that an emergency, a future emergency or future crisis is possible. But for those who may think that's like unlikely or like, look, the US has run these debt, you know, built this debt for a long time. Nothing bad seems to really happen. Is that is there really going to be a crisis? One thing I do in in the paper is walk through my argument that we basically have about 20 years plus or minus before the math gets out of control with the size of the debt relative to our tax revenue. Because we're already seeing the interest costs relative to our revenue and spending reach escape velocity. We for the first year in 2024, how much we spend on interest on the federal debt has exceeded what we spend on National Defense, which to me is a real threshold number. And again, if there's any crisis in the future, let's say China invades Taiwan or something else happens in the world, another pandemic or financial crisis, things get really bad really quickly. So if you think about interest cost is something that can kind of run away from you, we're getting close to that threshold. So basically, I have, I have young children by the time they're in their 20s, we're, we're going to be, we're going to be in a really tough spot where the debt to GDP ratio could be 400%. Right now it's about 100%. The, the, the, the official government projections as to what the debt to GDP ratio will be in 20 years are very optimistic. They're based on rapid economic growth, steady population growth, interest rates remaining moderate to low. And if any of those things go wrong, especially the GDP growth, we're, we're going to get crushed. And I think it's likely the GDP growth, economic growth is slower over time than it has been historically, let alone at an above average clip, which is what the G what the CBO projects. CBO projects 3.6% economic growth forever, which would be like Reagan, Clinton era economic growth. I just don't see it under an environment where we have this massive debt and the increasing regulatory burden and other problems that we have in this country. So the first part of the article really goes through the fact that the debt to GP is ratio is going to get far worse than the what could the Congressional Budget Office projects because of these factors where their their projections are optimistic. And that's why we have about 20 years before things get really bad in my view. Look, I hope I'm wrong, but but this is what I see. And then if so, if you project that and then then basically article goes on to say, OK, in 2044, what are the scenarios? And let's say scenario number one is this massive crackdown that I talked about the restrictive scenario where we're restricting people's economic freedom in order to protect the US dollar. Very easy thing to imagine given again, all the aggressive restrictions that we've endured in just the last 15 years of our lives between the financial crisis and and the, and the pandemic. So if that happens now, the problem is if that happens, it's a short term solution, right? You're, you're only going to encourage people to leave the US dollar if you're cracking down in that way. If the US decides that, well, we've got to prevent people from fleeing to gold or Bitcoin, then people are going to flee to gold, Bitcoin, they're not going to, they're not going to stick around because they, they understand that if you, if you, as the government are worried about them fleeing to Bitcoin because then then people are going to, the market's going to look at that as you basically admitting that gold and Bitcoin and particularly Bitcoin are superior stores of value. So it will, it will not solve the problem and lead to massive economic stagnation of crisis and possibly even more dangerous outcomes. I mean, you one could imagine the weakness of the United States at that time, leading to a lot more war, a lot more violence around the world, very unpredictable. We've, we've taken for granted US leadership around the world for, for the last 100 years or more if you count World War One. So it's a pretty dangerous environment when there's a sudden shock and a sudden collapse. Let's hope that that isn't the outcome. So that's scenario number one. I can stop there if you want. We can talk about that before we get into the other scenarios. Yeah, no, I think, you know, the terms I always think of are in the interest of national security of the United States. You know, dot dot dot all the things you just explained, right? It's a bitcoiners frequently underplay the possibility of this scenario and you know, granted things could get worse. Generally in order for that to happen, I always think of executive order 61 O 2 and that, you know, it took a depression right for that to to get implemented. So that's. No different, yeah. Yeah, exactly. This would be no different. It absolutely could happen. Yeah, so and and look, I think I think yeah. So anyway, so that's center number one and we'll get to like how do I, how should we respond to that in a minute? Let's go through the three scenarios and we'll talk about the real take away the article. So the second scenario is what I call the palsied scenario, meaning a kind of paralysis with various like, you know, you know, as a medical term, palsy means it's kind of paralysis with various kind of jerky movements here and there. And, and that's kind of like what the scenario would be. So imagine a world in which, you know, you don't have the first scenario like the aggressive government restrictions, but rather because of the polarized and distributed nature of power in the United States, you're not able to actually do a lot of the most aggressive restrictive things because maybe the courts strike it down, or maybe Congress is controlled by one party in the White House by another. And so they, they kind of argue with each other and the most, you know, aggressive restrictions don't get enacted. But at the same time, for the same reason, because of the polarization and the distributed nature of power in the US, neither do you solve the problem. You don't reform entitlements. You don't get the deficit under control. You don't do the things that we would need to do to actually fundamentally solve the problem. So you neither solve the problem nor do you enact the most restrictive policies to, to try to stem the tide of outflows from the US dollar. So what happens in that case? Well, the outcome is still fairly negative, right? You still have capital outflows. You still have a lot of people leaving the US system, which would weaken the US and and weaken the currency for those who are left holding the bag so to speak. But you would have the ability to flee the US with your capital under at least more of an ability to do so relative to the the the first scenario, the more restrictive scenario. So still bad, still bad for America, but maybe a little bit better for people who are already in Bitcoin in that they can they can have that escape hatch relative to the first scenario. And then the third scenario, what I call the munificent scenario is one in which there's a kind of Malay type figure in the US who's who's charismatic and maybe wins the presidential election of 2044 and says, hey, we have this crisis. We've got to do extraordinary things to get out of it. We're all going to have to accept some sacrifices, but we've got to do it to get the US out of this ditch. And we're going to do it. And he gets elected on that premise and is able through his mandate, his electoral mandate, to pass the kinds of reforms that would get us out of the out of the ditch. And the way I describe the munificent scenario is much like a bankruptcy, bankruptcy of a large company. It's not a, it's not like the old Paul Ryan type scenarios from 12 years ago where, you know, you, you shave a little bit off Social Security here and you shave a little bit off Medicare there. And gradually everything over time gets back into balance. By 2044, we won't have the luxury of those more gradualist approaches. You're going to have to do some major surgery and that will involve, in my view, a partial default on Treasury securities in exchange for entitlement reform. So you basically say to bondholders, you're going to get maybe $0.50 on the dollar, but you're we're gonna do the things to Medicare and Social secure and everything else to ensure that this never happens again. We're going to put, you know, kind of like if you think about the auto bailouts from the financial crisis, right? So GM and Chrysler went bankrupt. The the owners of the equity and the debt got took a bath, but they were able to use bankruptcy to rework a lot of their, their contracts with the labor unions and, you know, get back on their feet afterwards, right? That's kind of how a bankruptcy works. So similarly, one can imagine a bankruptcy of the United States in which there's this that you take a haircut if you're an investor in these bonds, which will lead a lot of banks to go under if they're too heavily exposed to, to Treasury securities. But by then a lot of a lot of banks may not be heavily exposed to Treasury securities for the reasons we've just described. And, and, and we fixed the problem so that we take this one time haircut and we come out of it the other, other side, which again is countries have done this. Countries have emerged from defaults in a stronger position with, with real reforms. So that's not, it sounds crazy, but it's not actually that crazy if you look at fiscal and monetary history and in other countries. But I would have to say of those 3 scenarios, the first one is the most probable because that's the one that you see most countries undertaking when when they are in a fiscal and monetary crisis. So while we hope for the best, we've got a plan for the worst. Yeah, it does kind of seem like the third scenario. Well, I think it's probably the most prudent in terms of actually solving problems. It seems like the only example I can think of is is Argentina, after decades of suffering, like to get the political will for the people to, you know, accept tough talk as the the prudent path forward rather than, you know, buying into delusion of invincibility that some politician is promising. It feels like you have to go through an awful lot of pain before you can get there. Do you think it's possible for the US to for the electorate to see that reason before, you know, in advance of a lot of pain? It's possible, but there are it's going to the road ahead is not there. There's a lot of there's a lot of risk and a lot of challenges that those of us who believe in Bitcoin face to get to that positive outcome. And I talk about some of these in the article. One of them is the fact that today, if you actually look at the distribution of Bitcoin wealth, it's very, very skewed to the top, right? If you were an OG, you were a miner, you have a lot of Bitcoin. And if you're a humble SAT stacker who's putting 50 bucks a month away, that's great. You should be doing that, but the amount of Bitcoin you hold relative to people who got in very early, obviously very different. I actually in the article I compare the distribution of wealth in U.S. dollars relative to the distribution of wealth in Bitcoin. And the distribution of wealth in Bitcoin is much more skewed to the top relative to the distribution of wealth in dollars. Now it's, it's a little tricky to measure these things because some of the large wallets, maybe exchanges and lots of people who have a lot of Bitcoin actually split it among much smaller wallets, especially because most of the, the cold walls today encourage that kind of that kind of storage, right? So, so you know, you, there's some, there's some asterisks and people can quibble about the exact way you calculate this stuff. But I would say given the latter factor, which is to say a lot of people own a lot of Bitcoin, actually split it up on into smaller units, a smaller holdings at different addresses. You know, it's, it's, it possibly is more concentrated actually than we know based on wallet distribution today. All that to say that if there is a crisis in 2044, it's going to be very easy for a populist politician to say, attack Bitcoiners and say these Bitcoiners want to hoard their wealth. And they're, you know, they're the ones who are selling out your U.S. dollars and they're selling out America to, to hold Bitcoin and we got to stop them. You could imagine a, a populist politician saying something like that and, you know, people really going after and targeting Bitcoin holders in that way. So one of the things that it's very important for Bitcoiners to do is to expand the the number and volume of stakeholders who actually have a stake in Bitcoin success. Not merely by owning Bitcoin, that's also important, but it could also be through Bitcoin based businesses like Onramp or many others where you know, you may not have a lot of Bitcoin, but if you build a great business that's part of the Bitcoin ecosystem, then you may also have a great stake in Bitcoin success, even if your wealth is in in a kind of Fiat denominated format such as equity, an equity stake in a Bitcoin based business, right. So the, the, it's really important for us to do everything we can today to encourage as many people to hold Bitcoin so that if the government cracks down on Bitcoin later, you as a citizen have a stake in his Bitcoin success. That's that's one of the most important things that that we have to do. And I talk about a number of others in the article. Yeah. Well, that perspective, I wonder, I'm a little more optimistic myself about the concentration issue, partly because I sometimes think in terms of adjusting for the size of the asset. In other words, I don't know, I think about NVIDIA stock or something like how concentrated was NVIDIA ownership when NVIDIA was at a trillion dollar market cap, which is roughly where we are on, you know, a network value for for Bitcoin. And I like to think that actually your average trillion dollar asset is still kind of concentrated in terms of its holder base, but I could be wrong about that. Do you do you have a? Do you have a finer view on that? You know, that's also a tricky one, right? Because you know, if you look at a 13F filing of you know, say NVIDIA and the top shareholders are basically ETFs and things like that, that are indexed to the NASDAQ 100 or the S&P or what have you, which obviously most people have in their 401 KS and their portfolios and things like that. So it's, it's somewhat tricky actually to assess the distribution of ownership of of those highly valued companies. And so again, I think that's more true of large blue chip companies than it is a Bitcoin because you know, we're on ETF's are in the in at least in the US context of pretty new development. So we'll see. But it's going to be important, right? It's going to be important to, to, to, to expand. It's, it's important for all of us to make it easier for people to buy and hold Bitcoin and to use it to pass it on to their relatives and not worry about losing passport pass passwords or, you know, private keys, things like that. And obviously there are people working on that. So that's great. Another thing that that I would mention is it's really important to make the conversion of Fiat currency to and from Bitcoin as resilient to government censorship as possible. So today the conversion of Fiat to Bitcoin is basically on centralized exchanges, right? But there are people working on using technologies Light Lightning and Noster and and others. Is it possible to create peer-to-peer decentralized exchanges of Fiat and Bitcoin? To me, that's a really that's the arguably, from a technological or technical standpoint, the most important thing we can do to make Bitcoin resilient to this restrictive scenario in the future. Because basically the real Wick weak point of Bitcoin today is the fact that if you want to buy more Bitcoin with your Fiat, you're dependent on government permission to do so. So if we can make the conversion of Fiat to Bitcoin permission list, then we're really off to the races. But we're we're not there yet. But I think that's something that I would love for the listeners of your show to invest their energy into. Yes, absolutely agree with that. And and I guess I have hope that you know, we are it is early days and the tinkering that's possible will eventually cumulatively add up to some breakthroughs in in that Holy Grail really. And and also going back to the the distribution question, this is I think you're right. That is probably the greatest risk for persecution for Bitcoiners. I do have hope, though, the the historical analog that I found very helpful and I wrote an article about this was the California Ranchos. So the California Rancho system was how Mexico parceled up Southern California to friendly land, land owners, you know, 10,000 acres at a time. And that's how all of Southern California was divided up 150 years ago. And now there's basically none of those anymore because they've all been parceled up and distributed by generations of the descendants who were looking to cash in some of the appreciation in the value of that those land holdings. And so in that way, we have this nice historical analog of real estate on the frontier does distribute over time after its price appreciation, you know, is is is due to be captured and you know, you diversify into other assets. So that gives me hope in the long term. But I think in that 20 year timeline that you're specifying, it is a little dicey. That's, that's yeah, that's right. I think, I think it's, it's a very interesting analogy. But we don't have 150 years under my thesis, right? We have 20 years. And you know those, those are the people who didn't get the land in in New Spain 150 years ago. They didn't get to vote, right? That was a, a monarchy, an empire. So the in our system, people who don't own Bitcoin get a vote and and rightly so, but, but, but that's, that makes it more urgent to expand the stakeholder community. And again, it doesn't have to just be by owning Bitcoin and you don't look, you don't have to own a lot of Bitcoin to care about it. I think one of the insights of tax cutters in the 80s, for example, So when, when Ronald Reagan and Democrats cut taxes in the 80s, which was one of the first major tax reforms of, of the late 20th century, the, you know, there were a lot of people said, oh, this is never, you know, this is not going to succeed politically because the beneficiaries of the tax cuts are going to be rich people. And so Democrats who oppose Reagan said this is tax cuts for the rich. It's really terrible. But what Republicans did and, and the Democrats who worked with Republicans on these tax reform, because they were bipartisan, what what they did is they cut taxes for everybody. And so if you were a middle class person making thirty $40,000 a year and you got a tax cut too, you didn't care that the millionaires got tax cuts because you got one too. So you're like, hey, everybody gets a tax cut. I get one too. And yes, the dollar value of my tax cut might be smaller than the millionaires, but for me that's real money. And so I'm fine. Similarly with Bitcoin, like you can, if, if you have, if you have a significant amount of your net worth of Bitcoin, but your net worth is, you know, $30,000, then it's still meaningful to you and you have a stake in Bitcoin success. So you don't have to, I'm not saying like you have to have this kind of Marxist distribution of an equal amount of Bitcoin for every person in the country. But what you, what you have to do is you have to get people off 0. So you don't have to get them to OG level Bitcoin. You just have to get them off 0. You have to get them at a point where it's a meaningful investment for them. It's a meaningful mechanism for them to save money. And so that if if the government is basically saying their hard earned savings are going to be wiped out, then they're going to care. Yeah, I think it's a really good point in pursuit of keeping America safe for both Bitcoin and Bitcoiners. Speaking of getting of. Right, Like part part of the thing too is like, it's not just about you making Bitcoin, making, you know, America safe for Bitcoin. It's about helping America benefit from Bitcoin, right? Which is another part of this whole thing is can we actually get to a point where through this munificent scenario, maybe part of it is not just that we have this, you know, structured bankruptcy with the entitlement reform, but you also promised to back the US dollar with Bitcoin going forward so that investors in Treasury securities in the dollar have that security in the future. Yeah. So I'm glad you raised that proposal. You proposed it in your Article 3 years ago. I think what you proposed was rotating some of the government's gold holdings into Bitcoin, a portion of percentage, I want to say it was like 10%. Three years later, multiple presidential candidates have talked about something along these lines publicly and one US Senator I think is introduced to build of this effect. Can you put a finer point on the idea, how you think it would be optimally implemented? You know, in the face of some passage of time and and some greater discussion on it? Yeah, sure. So in that article, as you mentioned, we proposed that much like our our analogy was simple. You know, we have this massive gold reserve in Fort Knox and other places in the Federal Reserve Bank of New York and elsewhere. We store the US gold reserves. Why not say that 1010% of the gold that we own we convert to Bitcoin. That was the idea that we put out there three years ago. And you look, there's different variations on the idea. You could say, well, we don't have to sell the gold we have. You could just take, you could just say analogous to the gold, we just add in some Bitcoin. That's one way to do it. Another idea is, well, we actually the US government, the federal government is already one of the largest holders of Bitcoin in the world because of all the Bitcoin it's confiscated from criminals. So just don't sell it. We tend to auction off the Bitcoin that we seize, for example, from the Silk Road seizure and things like that. You don't have to, you don't have to auction it. You can just hold it. And that's another idea out there, right? So there's a number of different variations now that since that original concept was thrown out there that people have have iterated on. And I think these are all interesting and useful ideas. I think, yeah, if you just say let's not sell the Bitcoin, we, we, we get through these kind of criminal proceedings, but we also try to strategically build a reserve with with that goal in mind. I think that's all very useful. I think there have been some overly optimistic claims about how a Bitcoin reserve could solve the, the, the, the debt crisis. Unless Bitcoin goes to like a billion dollars a coin, you're not going to be able to solve the debt crisis by simply holding Bitcoin. You still have to reform the fact you have to reform the, the fiscal structure, the US where we spend more than we take in every year. So even if you somehow wiped out the debt, you know, a 35 trillion a debt, we're going to accumulate another several $100 trillion of debt in the next 20 years. So 35 trillion isn't going to be enough. So to those people who who who've argued that we can just wipe out the federal debt with a strategic Bitcoin reserve, I would say the math doesn't doesn't get us there unfortunately, but. I'm shocked you're saying there are bitcoiners out there who are overly optimistic about the power of Bitcoin to solve all their problems. You look, I mean, I, I appreciate the enthusiasm for sure, but but for those of us who are trying to think hard headedly about this dangerous scenario in the future, we've got to be sober about and we've got to realize that it's not going to solve all our problems and have a Bitcoin reserve. And, and to the we want to persuade skeptics to, to, to take on this idea, then we got to not oversell it, right? We got to, we got to be realistic about it. And, and what's the realistic benefit of having a strategic Bitcoin reserve is that it strengthens the US balance sheet. It makes us a little bit more resilient to problems. If there is a crisis in the future, we have a little bit more leeway in, in how we deal with it. Maybe a little bit more runway, maybe we don't have to, you know, crush. You don't have to have a severe and austerity plan and things like that. The austerity plan will still have to be there, but it may be less severe if we if we have a Bitcoin reserve. So it's the more, the more we do it, the better it is. But we're, you know, if we, if we don't fix the, the, the runaway cost, Medicare and Social Security Bitcoin Reserve at the scale we're talking about is not going to not going to solve the problem again, unless Bitcoin really explodes in a way that I think even the most optimistic Bitcoiners at this point are not anticipating. Does your Bitcoin custody set up keep you up at night? Maybe you still have coins sitting on an exchange. Worried about hackers? Or maybe you've set up your own self custody but don't feel safe with your Bitcoin savings stashed on a little plastic device in your desk drawer? Gain Peace of Mind with Onramp and our multi institution custody solution. Here's how it works. Onramp creates a dedicated multi sig vault just for you. 3 separate institutions each hold a key, Onramp bit go and coin cover, but none can move funds unilaterally. 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It's literally a billion dollars if you, if you add 220 trillion in unfunded liabilities and 35 trillion in, in hard debt, that and, and the US ends up with 1% of of the Bitcoin, that'd be a billion dollars per Bitcoin, right? So that's not going to happen. Yeah, I mean, look again, we can you know, in a, in a sense, we, we, those of us who hold Bitcoin, you, we, you could think, oh, that's great. Bitcoin is a, is a billion dollars a coin. I'm rich, but if Bitcoin's a billion dollars a coin, that means civilization has collapsed, which is not good. So in a sense we, we, you know, we should be, we should be be careful what you wish for effectively with that scenario. Yes, indeed. I wonder, have you thought about, you know, a timeline for adoption? One of the things I think about, well, first of all, 20 years, I hope we had that long in terms of the reckoning. We may not. We may not. Yeah, I've sort of thought in terms of 10 years, but I hope you're right. I guess with respect to government policy in Bitcoin, should there be sort of a, a timeline, a multi year evolution, you know, either with respect to the the reserve or other policy. I mean is that is that is time on our side with respect to not making big jerky, you know, palsy like movements. So that one of the things I, I, I think I put this in the article and if I didn't, we can talk about it here, which is that that 20 year time horizon is assuming no other dramatic crises. It assumes less robust economic growth, slightly higher interest rates, optimistic population growth. So pretty, you know, it, it involves slightly less optimistic projection, the CBO, but not like super negative projections. Yeah, but imagine there's another pandemic or financial crisis or war which requires us to spend a lot of money that we don't have above and beyond current law that then accelerates a crisis. I think the COBIT really did that for us. I mean, Co bid pushed the timeline much closer to us in terms of a fiscal class because we spent six trillion, we didn't have that monetary inflation was massive during that period, another 6 trillion and monetary inflation or more. And so Co bid that this Co bid period really did a lot of damage in terms of pushing all these timelines upward. And there is absolutely no guarantee that we won't have further crises in the future in which we say, well, this time is different. We got to throw money at the problem, what we'll deal with the consequences later. And we just never do. We just never do. Yeah, as as like the BTFPA year ago or two years ago would suggest. Yeah. And you know, look, I mean, I think it's, it's, it's hard. It's, it's hard always to, to project these things, right. I don't think anyone could have predicted the exact trajectory of the way Bitcoin has has turned out the last couple years. I know there are people who think they've got a magic formula that predicts exactly what how the price cycles of Bitcoin work. But empirically, there's a lot of reason to to argue that those, those relatively simplistic formulas are not, are not actually what we're observing. And the ETFs, I think are real game changer in that regard because the ETFs lead to a very different market behavior for Bitcoin than what we had before ETFs. Just because of the mechanics of how you maintain the ETF peg and the hedging strategies people use in the arbitragers who try to basically make sure that ETFs are hewing to the actual Bitcoin price. There's a lot of stuff in the guts of the financial system with that that really starts to transform the way Bitcoin is bought and sold. Yep, all makes sense. All makes sense. Well, let's I think maybe pivot the conversation a little bit here, Ovic, I want to talk about free up. I want to talk. You know, if you could give us a little bit of history as to how you focused on freedom of opportunity. You mentioned the influence of friends who were big on Austrian economics. Perhaps that played a role there, but can you tell us about how you're thinking evolved and then tell us about the organization's focus and activities today? Sure. So it's it's it's related to the conversation we've been having, which is if you if you understand that we have a debt crisis, it's getting worse every year. How do we solve it? Well, you're not going to solve it through a kind of Iron Rand approach where you say you poor people have to take your alarm, said we're going to cut off your Social Security and Medicare. That's not going to fly. People aren't going to vote for that. Politicians who depend on voters support are not going to vote for that. So you you can't, you can't have that kind of approach if you want to solve these problems. And for too long the narrative and the conventional wisdom has been you have to you have to aggressively harm vulnerable populations in order to solve the federal debt. To take one example of many issues. And my view, having been in the wars on, on, on on healthcare reform and fiscal policy, is that unless you can reform entitlements in a way that protects and advances the economic interests of lower and middle income Americans, you're never going to have the votes for meaningful reform. And you may, you know, you, you can like that or not like that, but that's just a reality. The reality is it's just never going to happen. You're never going to get 60 votes in the Senate so long as we still have a filibuster. You're never going to get 60 votes in the Senate, let alone 50 for a policy that the majority of Americans feel is not in their interest, where you're, where you're perceived fairly or unfairly to be throwing granny over a Cliff. So you've really got to solve for that. It's an engineering problem You've got to solve for how do I reform these entitlements in a way that protects the economic security as much as possible of lower and middle income Americans? And that's not just true of entitlement reform and fiscal policy. It's true of almost every issue. If we want a freer economy in which people can build great businesses and, and have better job opportunities and wage growth and better educational opportunities, all these things can be advanced through more economic and individual freedom. But too often people in politics and also in the Bitcoin community have this kind of attitude of just leave me alone and let me keep my stuff and, and you take care of your own problems. Don't bother me with your problems. And that I understand that as a, as a point of view, but from a political standpoint, it just doesn't work right. The, the people who's, who have the problems, they're not going to buy that. They're not going to buy that. If that, if you want to be left alone, that that's OK with them. They know they don't want, they don't want to be left alone. They want someone to help them out. And so you've got to come up with a strategy for dealing with that. And so the idea behind Freak was there's so many issues where the pro freedom solution is the one that actually disproportionately advances the interests of of people on the bottom half of the ladder. Economic and individual freedom have been the greatest engines of economic equality that the world has ever seen. That's why America is the richest country in the world where people with humble origins can have incredible success. These stories continue to emerge every single year. There are new stories of people with humble origins who do incredibly well here. And that's not true in systems where you can't get your business off the ground or you can't get your career off the ground because of restrictions and cronyism and bureaucracy. So we have to those of us who believe in economic freedom, if we don't lead with how that economic freedom is going to help people on the bottom half of the ladder, we're not going to have the public support for the kinds of reforms that can unlock the economic and financial growth that we all want to see. So the basic idea behind Free OP is the most progressive social and economic and political outcomes are the ones that rely on individual and economic freedom and Marshall them in the service of people on the bottom half of the ladder. So Free Up, the Foundation for Research on Equal Opportunity, was founded with that spirit where every every issue we work on, every issue we do research on, every issue we publish a white paper on. We center our arguments around how economic and individual freedom, technological innovation and pluralism can advance the interests of Americans whose incomes or wealth are below the US median. If it doesn't meet those two tests, we won't work on it. And in that way, we really try to identify things like, how do you deal with the rising cost of housing? Well, let's start by, you know, making it easier to build more housing. Let's let's challenge the Federal Reserve, which by keeping interest rates at 0 drives massive asset bubbles, including real estate bubbles. So more economic freedom through sound money and deregulation can lead to more affordable housing. Same with same is true with energy. Same is true with healthcare. Same is true with all sorts of things that right now, through barriers to entry, through regulation, through subsidies that are unwisely designed, we make these things more expensive than they need to be. Yeah, I really appreciate your pragmatism with respect to you got to get it, get things past the voters. I shouldn't say get you got to get support of the voters is really what? I should say you got to respect that they're, they're making rational decisions. If you're telling them that in order for financial markets to work, I've got to screw you, they're going to be like, well, I don't care about financial markets. I care about, am I going to have health insurance? Am I going to, are you going to take my Social Security away? The thing I rely on, I'm retired. You know, people are going to be very concerned about that. So you've got to address those needs. And look, it's not that, you know, people haven't been trying, but I think our argument is that you can't trying is not enough. You've got to, you've got to lead with that. You've got to, you've got to make that your North Star with everything you do. And is there an area, particular area, I mean you mentioned a few, you mentioned housing in particular. Is there an area that's most actionable, either most actionable in the near term or has such a huge magnitude potential of impact, you know that you're that you're really focused and interested on that area in particular? We have issue areas that that address each of the meeting, each of those questions or each of those buckets, you know, to take the last one first. I think healthcare and entitlement reform is the one where the scale of the problem is so large because it's the biggest driver of our deficit and debt, other than rising interest costs that any modest success, any modest reforms in healthcare have just because of the law of large numbers. We spend four or five trillion a year in healthcare. And you know, if you, if you just fix it a little bit and you save a couple $100 billion, that's real money. So, so Healthcare is 1 where the scale, the problem is such that even modest improvements can make a big difference. And so we do a lot of work in healthcare. An example of an issue that where we think we're making real progress is housing, where actually on the, there's a progressive movement towards deregulation of housing construction called the YIMBY movement. That's very aligned with everything that that we've been talking about since we started Free Op in 2016. An issue that's kind of in between where the scale is very large and we feel like we're making a lot of progress in terms of implementing reforms, but we're not, we're not, we're not there yet, but we're, we're very close. I think is higher education reform where, you know, Biden's approach is let's deal with the high cost of higher education and the student debt problem by just bailing the students out and forgiving the debt and putting it on the taxpayer. Well, that's a terrible idea because first of all, it's profoundly unfair because it's the top third of the income distribution that goes to college and goes to grad school, and the bottom 2/3 don't. So it's highly regressive policy. But more importantly, if you bail out these loans, then colleges and universities say, this is great, I can double my tuition and it doesn't matter if people can't pay me back because the taxpayer will be on the hook for the remainder that you're incentivizing higher prices by bailing out the universities. So what we really need to do is completely reverse the incentive structure. Or we say to universities, if the return on investment for that degree is negative, meaning what you pay upfront in tuition and room and board is more expensive than what you're going to get back in terms of increased salary for getting the degree. That we shouldn't be subsidizing that through subsidized student loans and and other forms. We should be telling that university or college or institution of higher education, we're not going to subsidize, subsidized that. If a student wants to do that on their own accord, that's fine. But taxpayers shouldn't be expected to be on the hook for $150,000 master's in film studies at Columbia, where the graduates are working at Walmart afterwards and making minimum wage. So there are politics. So we've actually pioneered something where we actually have a searchable database at our website where you can literally look up for every degree program in the United States, whatever major it is, whatever kind of degree it is. It could be a vocational degree, it could be medical school, it could be college, Whatever it is, you can look up the institution and the course of study and find out if that degree has a positive or negative ROI. And our hope is not just that it's a tool for students and parents can use that as a tool to say, you know what, we're going to stop forcing taxpayers to bail out colleges that want to charge overcharge for a degree that doesn't give you the economic return. Well, I love that That's a that's. A very handy tool. I mean, how many young Americans? First of all, they're so early in their lives, they're making this giant financial decision that they're I'll equipped to make. How many would benefit from that ROI return on investment analysis to make a more informed decision about what's arguably, for many people, either the most important or maybe the second most important financial decision that they're ever gonna make in their lives and what what happens sometimes. The real tragedy is there are a lot of cases where somebody goes to college or trade school or what have you and, and, and they don't complete it because of the financial pressures that they're under. Maybe, maybe you're a single mom and you're balancing having your kids with trying to get your degree done and you can't get it done for one reason or another. Or you have some economic set back in life and you drop out And so you spent all this money on a degree you don't have. So you, you, you, you've taken on the debt, but you don't have the the professional advantage that comes from having that credential. And there's a lot of people who fall into that bucket. That's the worst possible outcome. And, you know, you'll hear these university administrators say, well, you can't put a price on the education that we're offering, which is wonderful sounding, you know, rhetoric, But they actually do put a price on it. They charge you. So if they they are very capable of putting a price on it, they just don't want to be held accountable for the returns on it. And that's something that's got to change. And it's starting to change because we are at a point now where people who are graduating from high school are looking at the cost of going to these schools and saying, I'm not going to do it. And I think we're going to see, you know, we're starting to see college enrollment is declining. It's peaked and it's declining for that reason. There's schools that are closing and, and, and so and, and more, perhaps more need to if they can't get their costs under control. But our, our hope is that what colleges and universities start to do is say, you know what? We've been living, you know, high on the hog with these inflated tuition payments. We don't actually need that in theory, the cost of education should be crashing because of technology. You think about YouTube, you think about Khan Academy, you think about all these tools, Coursera that people have to learn things that they couldn't learn before. It should be much less expensive to get a college level education than it is today. And we we just through government policy made it more expensive. That's so there's a lot of areas of public policy like that. Think about nuclear energy. We could basically massively slash our carbon emissions for those for whom that's a big concern. This is relevant to the Bitcoin thing, right? So to the degree that people talk about, oh, Bitcoin is this energy hog, that only matters if you believe that consumption of energy is inherently a carbon intensive process. But it doesn't have to be. If we build nuclear power plants all across the country, we can generate more energy than we need with 0 carbon emissions. We just have chosen not to do that. So this whole idea that somehow bitcoins energy consumption is a threat to the planet, it's only a threat to the planet because we've refused to build a high high density, low carbon electricity grid grid using nuclear power. We could have done that 50 years ago. We can still do that in a lot of our work and energy policy is showing that. If you look at France, you look at Ontario, you look at places where they get a high percentage of their electricity generation from nuclear, they, they are 0 carbon, you know, the carbon neutral today are close to it because of their reliance on nuclear energy. And in America, what we're doing is we're doing the opposite. We're closing nuclear plants. We close nuclear plants in New York and their end result is more use of coal, which is just colossally dumb. Same with Germany, they're doing the same thing, right? So nuclear energy as a result, because we regulate it basically out of existence or certainly new nuclear generation capacity, we've made it incredibly expensive to build new nuclear plants. It doesn't have to be expensive. It's only expensive because we've chosen to make it expensive because of the regulatory hurdles that we force nuclear generators to go through. So there's so many examples of, of what we can do to make America less expensive and more abundant and more competitive. And, and the good thing, the encouraging thing is that some of these ideas are taken up by Democrats and others by Republicans. So this is not a partisan issue. We think, you know, some people have a pet perception that economic freedom is inherently a Republican issue. I don't think that's, that's really true today. I think there's parts of economic freedom that are embraced more by Republicans and parts that are more embraced by Democrats. And, and we, we take all comers, we engage everyone whose interest in our ideas. Well, that's the right spirit. Make America's economy free again. I know you've got, in addition to the tools you mentioned, I think you have a conference as well. Maybe maybe as we close here, is there anything else you'd like to talk about either with respect to the conference or or other activities that you've got going or in ways that people can support the effort and get involved? I appreciate you mentioning the. Conference so. We're recording this in the summer of 2024. Every fall in November, Free Op has a an annual conference in Washington DC at the Park Hyatt called the Freedom and Progress Conference. This year it'll be held from November 17th to 19th at the Park Hyatt in Washington, and we cover a lot of these topics of how to how to solve a lot of these seemingly intractable problems using economic and individual freedom and technology, including how how to use Bitcoin for that purpose. You can learn more about the conference at our website at freeop.org/events slash freedom Dash Progress Dash 2024. And it's, you know, it's, it's an energy, it's an energizing conference every year that you know, you know, it's, it's so easy to get pessimistic and hopeless about all the big problems that we have. And we've talked about some of those big problems today. But you go to this conference and you realize there are talented people working on real solutions that can attract bipartisan support and get us out of some of these challenges that we have. And it's it's, it's always an incredibly rewarding event with a lot of really incredible people who come. So if people are interested in coming, they're welcome to. And if you're interested in supporting our work, we certainly welcome that as well. We are A5O1C3 nonprofit. We are supported entirely by donations. Another thing I'll mention that could be interesting to your audience is that we're producing a documentary that's kind of the, the movie version of Bitcoin in the US fiscal reckoning, where we, we, we try to engage the, you know, the popular audience, particularly young people, and helping them understand that these, these problems of the debt and deficit are the, the, the great social challenge of their time. Much like An Inconvenient Truth convinced people that climate was the thing they had to worry about 25 years ago when Al Gore made that movie. Our ideas, let's do something like that for the federal debt where we show people why actually it's the federal debt in the fiscal crisis that should animate their their political activism going forward. So that the working title for the movie is The Buck Stops. And we're also taking donations to support the production of that. Wow. Well, that's incredible. I'd love to see see what's going on with the buck stops. I'm wondering what are you going to use for polar bears? You need a, you need a polar bear like polar bear on the sun. That's. You know, that's a great. Yeah, that's it's. You know, it is really. Important, I think with this stuff to not just get to not just have inundate people with charts, but to give them the emotional power of what a debt crisis really looks like. And we are very actively that that's a that's a real point of emphasis for us. We want there to be emotional power of this film. We want people to really come out of that, that, that, that screening feeling like, OK, I, I know why this is the most important thing I have to do with my life. To the degree that I'm engaged in politics and advocacy. Well, Vic. It's been a tremendous conversation. Thank you for your time. We're going to leave it there. I look forward to learning more about the film, checking out the conference, and I encourage our listeners to do the same. So thank you so much for coming on Scarce Assets. Thanks a lot guys. Thanks for. Listening to this week's. Episode of the show. If you found the information valuable, please share the episode with a friend or leave a rating on your favorite podcast app. All the links we discussed in today's show will. Be in. The show notes inside your podcast app. Before we finish, a quick reminder that on Rat Media. Is for informational and entertainment purposes only and nothing should be construed as investment or legal advice. Regardless of where you are on your Bitcoin journey, we'd love to hear from you. Visit onrampbitcoin.com contact to schedule a consultation with one of our. Private. Client advisors.