The Last Trade E007: Cathedral Building in Bitcoin with Alex Leishman

What you're telling me is that music is about the stock, and we're going to be left holding the biggest bag of odorous extras ever assembled in the history of darkness. 1974198792972 thousand, whatever we want to call this, it's all just the same thing over and over. We can't help ourselves. I say when we. Sell, hey, I say when we sell. You heard it from Logan. We are rolling. Welcome back to the last trade, Episode 7. Happy 4th of July week, gentlemen. Happy 4th of July week. So we're we well having it on the weekend and then if it's on Tuesday, it's like nobody. There was no like a shelling point on when it was celebrated. I don't know if it's a good thing or a bad thing, how having 4th of July on a Tuesday sort of extends the weekend to a six day weekend. Kind of nice. I threw. I threw a party it. Was fun. I'm tired. Marty's referring to, if you like, the sauce that he's been drinking for six days straight, and so he's trying to figure out if that's an actual problem or or not. Yes, as you can tell I'm I've recorded from down here last week, so I've been down the shore. I got down last Wednesday night, so last week when I recorded was the first day I've been here. And we're in a multi generation home right now. My wife's parents, her sister, my brother-in-law, their kids, and we have all of our kids in one room and since everybody's on vacation at the same time, they just haven't slept in like 7 days. So that's what I was referencing, Not the sauce. OK, Michael? Hey, I'll throw myself under the bus. It's Episode 7 and the lighting still hasn't been figured out. The the microphone needs to be done, so we gotta get it. Got some work to do on my end. Yeah. But if your freaks weren't aware, we are joined by Alex Leishman. Hey, hey, great to. Be here Andrew River, my favorite Bitcoin exchange out there. It's great to have you here particularly on this week because we've talked about this on TFTC multiple times in the past and I think since it's 4th of July week here in the United States tying Bitcoin what it represents to. The founding fathers of this country and what they fought for, How in line is the Bitcoin protocol with the ideals that the founding fathers tried to set forth in this country? Yeah, you know, we've we've chatted before. And you know, I think what attracted to me, what attracted me to Bitcoin, was how deeply American it is, the the fact that it's money that nobody can tell you what to do with. You can do whatever you want. It's fully self sovereign. And I think that was that that core is what deeply attracted me to to work on this years ago. And and I consider myself and my family are very American at our core. And yeah, it's just like 2 pieces of pod in my opinion. Bodies. Everything. Free speech. Property rights. Freedom of association, sound money. Too many people forget. That's like the crazy thing about the time we live in again. Fish swimming in water is the most famous analogy that people use when explaining this. And even though we we discussed it last week. Like, when you're pitching Bitcoin, you probably shouldn't have asked somebody like, what is money? You don't even know what money is. But you do live in this day and age where people really don't understand what money is, nor realize that the founding fathers, like, had a language about sound money. In the documents that they they created and signed. Yeah, absolutely. And you know, the last, you know, since the since the 70s, you know, the American economy has done pretty well. And I think it's distracted people that from the fact that, you know this, this sort of encroaching monstrosity was that has taken more and more control and Bitcoin showed up almost. I mean it's it's almost. Almost too, too coincidental, you know, that showed up at the time it did. There's something about that that I it almost seems like a prophecy was fulfilled. There's something sort of like it feels deeper, deeper to it. But I think it showed up at the perfect time. And I I don't know, it might it might be what saves our Republic. Yeah, we talked, discussed this last week too, but I I do think. Again, people have been thrust into the framework. It is worth reiterating. I don't think you can reiterate this too much, but people have been thrust into the argumentation argument framework of red versus blue, left versus right, and both sides are feeling the pain and they are led to believe that it's the other side causing that pain and leading to the troubles that they they experience in their daytoday lives while never addressing. What is actually causing the pain, which is the fact that we messed up the money, and that has led to a ripple effect of compounding bad decisions. That has got us to a point where the quality of life, despite all the technological advances that we've made over the last many decades, is depreciating in many ways. If you look at obesity, the overall stable health life expectancy in the US is crashing. Drug overdoses, That's the despair. There's no matter what the government wants to what picture they want to paint with the economic data that they put out and make it look rosy. There, I think there's a deep, unspoken understanding that something has gone terribly awry. It's not red side or blue side. It's it's the money. Yeah, there's a beauty in the there's a beauty in independence and sovereignty, sovereignty that I think Bitcoin embodies that people come to America for independence and we found Bitcoin through the sovereignty of, you know, it's the from the native text and like the come and take it, you know, you have this, this asset that cannot be seized, cannot be censored. And at the same time gives you the independence to live your life because that's the universal truth, right? Everybody just wants to be left alone and just do the things that they want to do. And the reality is, if the money is corrupted you, you have that infringed on. And to Alex's point, there's something very interesting about, you know, when free will is taken, how something ends up stepping in, in general over the course of generations. And you have this 08 crisis that was like had been built for probably over 100 years feeding into that and that 08. Bitcoin comes out of it and we've seen the past thirteen years just this kind of like growth in the market and mindshare and so we're very amazing time. I think everybody here, while the world's a little bleak, everybody here and and folks that listen to the pod are extremely excited about the world where Bitcoin is part of it and helps you know. Humanity flourish moving forward. Jessie. You're on mute, Sir. It snuck on. Again, I was reflecting on the 4th about about how it's kind of surprising to me that that there isn't more explicit language about sound money. I guess there's allusions to it, but you know, it's not in, it's not in the Bill of Rights, for example, in our, in our founding documents. And I think it would have been if Fiat money had been a part of the world back then, but it wasn't like the the, the specter. That they were concerned about that Jefferson and Adams were concerned about was nationalized banking and you know we were on a gold standard. It wasn't conceivable really that we would be using monopoly money as currency and and allowing you know the issuance to be controlled by the state. And it's kind of a shame that that it there wasn't an opportunity to put that in the founding documents at the time. But here comes the free market, so many years later, creating that solution and imposing through, you know, capitalistic incentives, free market realities that here's, here's a better currency to store your value and propagate it through time. And you can choose to adopt it or not. And that's the individual choice that everybody is facing. And you know that through that sly roundabout way. Reimposes the the the mandate of having fiscal responsibility and and not being able to print money eventually, like that's where we're headed. And you know I was thinking about how how do we get out of the the quagmire that we've normalized in the US where, you know, we haven't balanced the budget in 22 years. We're on course for a $2.2 trillion deficit. You know, and that's excluding interest expense. It's creeping in here on $32 trillion of national debt at at now like 5% interest. And you know, there's no political will to restore fiscal responsibility and balance budgets into the future. And so long as you can print debt, print dollars or issue debt. And and control the printer that you know makes it possible to to satisfy those obligations in time. So long as you have that ability, you you can't. You won't. There's no political will to ever restore fiscal responsibility and balance the budget. But when there's sound money, when there's money you can't print, you are forced eventually. To balance a budget because you can't print any more of it in order to to spend beyond your means. And so I think, to Alex's point, that Bitcoin might be coming along at just the right time to save the Republic, because it will eventually impose fiscal responsibility in an era where we've forgotten the importance of it. Yeah, that's another interesting point too. Again, like fish and water if people forget. Often forget. I think in recent years people began to remember that this is a Republic of autonomous states in a union that can make their own decisions. And as it pertains to Bitcoin, I think that's one of the most exciting trends and themes that have begun to pick up over the last three years. Specifically, is states asserting their autonomy and coming out and defending Bitcoin or just signaling like, hey, we're open for business? Anybody wants to work with Bitcoin and obviously they did it with COVID lockdowns in mandates and some other things as well. And that's something that's really important to highlight as well. States beginning to remember that we live in a Republic and really reminding people that hey, we can make our own decisions. Federal government you you've got a bit crazy. We're going to protect our citizens. Within our borders, with laws that that we deem to be reliable and sensible, and Bitcoin as a tool for these autonomous states, fighting back against what we believe is a bloated and increasingly Orwellian federal government like Bitcoin gives them a superpower. It's an incredible tool to have in your belt as an autonomous state looking to sort of tell the federal government they back off a little bit. Yeah. You've talked about the Permanent Fund and that what you just said made me think, is it we talk a lot about a nation state adoption. Do we see states start holding back one on their balance sheet ahead of nation states from that perspective on when it comes to federal taxes and being able to subsidize what's needed? Because that's always a thought, right? Is that there's a check and balance because. Individual states need the government subsidies, but a world where they have and they allocate to BTC based on, you know, whether it's Wyoming and their energy extraction or other states, is that something do you think we see or is it still we're still too far out for something like that? No, Texas got the got their own gold vault. Their own gold treasury. Wouldn't be surprising to see that. Jump into it first and have the the infrastructure set up, I believe from like a legal perspective to do that. But no, yeah, I mean the Permanent Fund makes a lot of sense to me. I don't know how it would work exactly, but I've always had this idea using the Alaska Oil Permanent Fund as an example, where they're able to pay Alaskan citizens dividends every year from the profits they make from the oil industry via this permanent Fund. And it's always. We don't know how it would work exactly from like a funding perspective. But I do think there's an opportunity for a state government or a local municipality to issue a bond, to raise cash to buy a six and then partner with a private minor to build on infrastructure, plug the a six and maintain the operation, pay back the bondholders plus the interest. Then once those bonds are paid off, just roll those revenues into a permanent fund that builds up overtime. Who's gonna be the first to do it? I don't know. I think Wyoming. Texas would make a lot of sense, but. I think we know who would be the last two states, the New York and California, will both fight. To. Hey, Alex is in. Alex is in New York. Now let's take it easy. Yeah, that was my subtle, my subtle dig. Because we're gonna, we're gonna do it here in Texas and then we can have Alex come. Sure. Park Park would love the world. The red carpet get a river HQ down in Austin and and I think that the world would be ready to heal. Yeah, you know, I like being around. I like being surrounded by people. I need to convince so. It's. Actually, it's fun having you, Alex, in New York, because there's very few of our friends that are still there. So we get to see your tweets in real time about some of the craziness that happens on a daily occurrence that we don't get to the insight anymore because generally everybody else is oblivious to it. Yeah, you know, I'm like, you know, surfacing it all and bringing it to the and I'm I'm sacrificing, you know, to bring you guys like a good taste, like on the inside. The latest was was the whole situation. The latest was the whole situation in the Northeast with the smoke or whatever was happening. I was actually up near Canada and upstate New York and I was like having my wife and and son inside. I was like, I just don't know what's happening, but doesn't make sense. Everybody else stayed outside. I was like, am I crazy? Are they crazy? And then I was scrolling and saw your tweet about people running and like, it seems a little strange. It's like, OK, we're all right. It's gonna be all right. Yeah yeah so. But hey, there's a good bit devs community here though it. Really is. There's one thing I missed about New York is the bit devs started going in 2015 and I think I've missed like four or five over the many years that it was there. It's shout out to Jay. Max at New York at this for put on a great show, but Alex, really excited to have you on the show this week. Especially considering everything that's been going on in the space with Prime Trust and the fallout from Nat debacle and subsequent transition to Fortress Trust, which is founded by Scott Purcell who founded Prime Trust, which seems to be. Or seems to have been embroiled with some fraud and the way you built River has been intentionally done in a way to eliminate single points of failure or third party dependencies like Prime trust. So I think let's just assume that anybody listening to this podcast is ignorant to what you've built at River, what River is. Explain what River is and why you guys have built your company. And your technical architecture and infrastructure the way you did using Bitcoin's native properties. Yeah, I do believe in this Bitcoin mantra of not your keys, not your coins. And I also think that applies to companies and especially if you're selling Bitcoin or doing Bitcoin custody for people. And so at River, what we do is we offer Bitcoin brokerage custody. Wallet and hosted mining services for both consumers businesses in the United States and then we also have an international payments infrastructure business. So we and and that's mostly focused on the Lightning Network and we make it really easy for for exchanges apps while it's globally to plug into the Lightning Network. And we have some prequel customers, the government of El Salvador is one of our customers for that product. It powers the Chivo Wallet. And then we also have an international, we also serve higher end international customers for our brokerage services. So like high net worth individuals and and businesses who are looking to buy Bitcoin for their treasury. And and you know the way we built the company was sort of a slow kind of do the hard work upfront to save headaches later. So we started the company by you know building our own custody system. And you know, building our own full stack and the software was part of that. But actually like a lot of the work was regulatory. We had in order to be a company that touches people's money and facilitates the movement of that money, we we have to be registered in or we have to be licensed in a lot of different states as a money transmitter and that's an expensive and cumbersome process. It's a lot of work, but it's the only way for us to operate and have you know, control of of our systems and our keys and our infrastructure. The alternative would have been to, you know, outsource all of that to something like a I mean there weren't many places you could do that and the the most popular one was Prime Trust where basically they're the financial institution, they have all the licenses and you're building like a wrapper on top of. Their systems. But you can't touch the money and if you can't touch the money, it means you can't know that the money's there and you can't have any sort of you don't get as much insight into, you know, how how the custody is being handled and how the how the operations are. So yeah, so so that's that that that's how we approach our business is kind of doing it the the hard way, the Bitcoin way proof of work. And it's turned out to be the right decision because these third parties that a lot of people are outsourcing to turned out to be. Frankly, clown shows. And you know, it was pretty obvious in my opinion, but everyone learned the hard way I guess. Why? Why do you say you think it was obvious? Well, look, I don't want to. I don't want to, like, throw. I don't want to sling too much, you know, Shit, I guess. But look, I've interfaced with, you know, a lot of these. Firms who, you know claim to be qualified custodians and you know, like, you know, I want to be sure okay like Okay. If your qualified custodian is based in like Las Vegas and doesn't have anyone who's ever built key management systems or like worked on like crypto custody systems, like, you kind of have to wonder like. Is that a place that I really wanna be storing assets? Right. That's all I'll say. And yeah, I think people really over indexed on just like they basically outsourced their due diligence to regulators who also don't know what the hell is going on, right, and really. And really the question should have been like, well, how are they doing custody, right? Does anyone on this team know how to build high quality custody systems? Because if you don't have that, it doesn't matter how many licenses you have or how you know how many regulatory check boxes you check. And so you know that's there was a six. There's a very sort of, you know, massive gap in people's due diligence in my opinion. Yeah, just to add a few few things there. One really commend you Alex for what you built. It's increasingly as Marty said, I think it's the most frictionless entry point for somebody trying to get access to Bitcoin for larger like you mentioned institutions or nation states looking to leverage some of your products. You know have been building a alongside in the Bitcoin only ecosystem, you know at Unchained with river now on ramp. And I've always respected because of what Alex just references. It takes a lot of work and foresight to understand that you want to own the infrastructure from custody, Mt L's compliance and everything in between. And I actually fully also understand where somebody would use an intermediary because you can help jumpstart that liquidity process of being able to offer certain services. Where I think and I'd be curious like Alex and everybody else's thoughts is you want to if you if that's your. Route, that's Okay. But the problem is to not be complacent on that because there's a lot of counterparty risk for you as an individual business owner, but then also for your clients. You're the individuals that are relying on you as a trusted party to get access to these financial products. And so you're basically kind of kneecapping your own potential business by leveraging these intermediaries, whether it's the custody of U.S. dollars, custody of the BTC and everything in between. Because again when we talk about these intermediaries Nevada state charter, it's questionable what the rest of the state charters look at from a trust entity. So South Dakota, Wyoming, it's my understanding that Nevada is like its own little kind of bubble on like the requirements and that's always been known. The Nevada state charter was questionable to be offering these services in the way that they leverage them for all 50 states or however many they they let the Mt L's. But then the the other part is really. The the status of hiding or or leveraging behind the qualified custodian status because as we've discussed here and it's been shown point blank, it's like qualified custodian segregated all the buzzwords you can throw from a legal perspective. Yes, you might need it from an RIA or to offer services in the United States and that's perfectly fine. But from a pure game theoretical understanding Bitcoin and the architecture and just. What can happen to the asset if it's not custody? So you can have the qualified custodian and still have completely unqualified custody if it's not secured properly. And that's effectively what just happened the past, you know, 6 to 12 months, but the past month what we saw with Prime Trust and so again just to to tie it all back in, it's very important from the business owner to understand the layers of counterparty risk as you as you build a business because you have to think about the different ways a flow of funds can potentially be. Lost or just not structured in the right way, but then also from a client perspective, understanding where you're depositing dollars, where the BTC sits, where you're taking possession and everything in between because those are all points. We're dealing with a different world here versus like traditional securities. And so there's a bunch of points where you can ultimately get rugged and we just continue to see this and this is the course of bitcoins. We'll be over the course of, you know, the past 10 years, probably the next 10 years until the market gets educated and we've talked to blank. Previously with the ETF and so there's just different financial products that will be structured and they ultimately won't adhere to Bitcoin's native properties. And over time those generally have shown to not end up faring well for the company and the end user. Which is the saddest because that person stored their hard earned capital in in that company and in the unit and they thought they were OK and it end up being you know a trending or it went to 0. Yeah, exactly. And. You know, if you look at and and The thing is, if you really need a qualified custodian, you typically know that, right? Like you're an RIA, you're starting an ETF, you are a big pension fund, you're a public company and there's already products for those people like go to Coinbase custody, go to Nitig, right? Those are New York trust companies. If you're looking for like if you really want to make sure all the legal stuff is going to be exactly like you expect. The New York Trust Company is the gold standard, but you have to pay for that, right. You're going to have to pay a UM fees on for that qualified custody because those qualified custodians in New York have to lock up that capital with regulators. So the cost structures are built for like financial and financial products that have a UM revenue models like funds like investment management and and the like. So you know this sort of like outsourced like. Compliant custodian as a service it tends to basically attract like I mean if you look at prime trust customer roster like it was Celsius finance us Abra which turns out seems which they're saying wasn't solvent on top of prime trust insolvency. I mean, it's not exactly like, you know, a great roster of companies using these kinds of services. So. And there's a reason and there's a reason for that. So, so yeah. Yeah, that's my, I think one also thing to point out is it is not required for an entity to hold Bitcoin in a qualified custodian. It is required for registered investment advisors to hold securities. On behalf of clients and a qualified custodian. Ra's do it because it's a form of CYA, hey? But it is nowhere written that you can. You need to hold a commodity with a qualified custodian. They decide to do that because they are not IS again. Information asymmetry, they just want to check the box and be fine with it. But it is not required and it's being rumored or discussed that there's this discussion on the federal and state levels on what qualified custodians will be required to hold. And they're trying to encroach on other assets, alternative assets, commodities, real estate, and also what states are recognized i.e. federal versus like honoring the South Dakota charter as it is today. But that is all speculative and it's still years more than likely. Because that would require changes across the United States. So it's just there's a lot of discussion out that happens about this. And and again, I didn't know about any of this stuff, right. It's like you go into this world, you have to understand it. And when you go and look and educate is the reality is very different than what people will propagate out in the market. And it's important to know because at the margins, if you choose a qualified custodian that ends up in Nevada, you may lose all your Bitcoin. Yeah, and you know, an interesting data point here is the only. As as far as I know in in recent history, the only American custodian that went bust due to something other than financial leverage was Prime Trust, which was a qualified custodian. I mean, I can't think of any other examples like all the other ones that went bust like Celsius block by it was all yield and leverage, it was all financialization risk. The one custodian that screwed up key management was a qualified custodian, and I think there's a correlation there. People running qualified custodians tend to be traditional financial people who know absolutely nothing about key management. Yeah, absolutely. And so there's this world where you can combine the two. You need the Bitcoin custody skill set. To marry with the qualified custodian procedures and policies and practices. And through that fusion you can create something better that you might not get by just handing over your keys to a quote UN quote qualified custodian. Yeah. And I mean, so like what is a qualified custodian? Why do they exist, ideally by the litter of the law to protect consumers. By ensuring that their assets are custody by somebody qualified to actually control and secure those assets. But again like Michael mentioned, Bitcoin's completely different. Like the way to consumer protection on a grand scale in the era of Bitcoin is to have like a distribution of private keys amongst many businesses. Like that would be the worst case scenarios if this qualified custodian. Encroachment into alternative assets turns out to be true, and you force a bunch of Bitcoin into very few players hands. That's overall bad for the vast majority of consumers because that's concentrated third party risk in the hands of a select few, which is not what you want. You want a million flowers to bloom? Distribute the private keys amongst many different businesses, many different individuals. And yes, some may fail, but that failure will be isolated to a relatively small group of people compared to the potential failure of a massive qualified custodian. Yeah, exactly. And you know, also sort of like part of the purpose of the qualified custodian thing was, you know, you have these financial institutions, they're like moving all sorts of assets around doing like trading over here, doing all sorts of stuff over here. Like you want to make sure that if you say you have a. Clients, assets, they're like, there's no funny business happening with them. They're all right there. If you're just running a simple Bitcoin brokerage, you know where you're holding. Someone buys Bitcoin, you put it in your cold storage. When they would draw it, it leaves your cold storage. It's not like there's this, all this other stuff going on, right. It's not like customers, assets might be over here, might be over here. It's a very like. Simple business and we're already legally required to not use our clients assets for anything else. We make those representations to regulators and our auditors check that. So it's you know like it's it's not really designed for this, it's like it was designed for a very different sort of financial institution. Right. And because there's because fundamentally there's never been an asset like this where you can. You can point to the Ledger real time and say here's the proof it's sitting right here. There's nowhere else it could possibly be right now. It's not like these books are out of date. It is there that this is you know my real time Bitcoin audit in action, you know, and of course the auditors have their other policies that they're checking boxes on. But that gets you a a great deal of the way to the assurances that are that you're seeking with any kind of. Audit trail and and custody in general. You want to know that the assets are there, that control is maintained by the entity that is supposed to be controlling it and nobody else. And that's what Bitcoin provides. Exactly. It's a brave new world. And that's, I mean as a Bitcoin or as an investor in the space, if somebody wants to see freedom. Went out in the long run. That's like the biggest threat right now is like the regulators in the United States just really dropping the ball by infringing on the market for figuring things out and putting some overburdensome regulations on smaller companies. And then creating risk for individual consumers at the end of the day by applying this anachronistic view of securities custody onto Bitcoin. Yeah, I think, I think that's the thing that we like. It's been talked about. I was actually initially concerned you did what you just referenced Marty of like the centralization qualified custodian federal. But the reality is like bitcoins such a tiny asset compared to other things that would be fall under this. Like gold's a good example of this. So you require all these different entities to figure out if they need to move the gold or go get this charter like that would cause an uproar across other industries, let alone Bitcoin. Like I don't see this happening. You know in that like in that scheme of having to like move assets or not recognizing state charters where the dynamic would change for custodians to move forward with how they custody all these assets because again think about trillions and assets being held in these different custom arrangements. I think before we jumped on we talked or maybe it was on the we talked about the Texas. Bullion depository like I think this would effectively have them have to move the assets out of that or get some kind of state charter to to custody those assets because they're holding it. I think still for the largest endowment in the country which is UTEMCO, the University of Texas and A and M Endowment and I think it's over a billion dollars held at the Texas Bullion Depository. I don't believe they're a qualified custodian and because they're not those assets. We potentially have to move and actually probably should check that. But yeah, and I think there's like we talked about this I think in the last episode and I think my thoughts have crystallized a little bit more on what I see is a likely outcome over the next 10 years is some Wall Street firm, a lot of Wall Street firms are going to get exposed to Bitcoin and and and launch Bitcoin products like the BlackRock product. The ones that are very successful can accumulate large amounts of Bitcoin. Meanwhile, I think the price of Bitcoin runs such that these funds become very large. And you know, a bedrock normal practice for Wall Street is to rehypothecate assets and funds to lend them out to get additional yield. And you know, thinking about it more, I think that there is, I'm going to go out on a limb here and say. That some very large Wall Street firms that have been around for a century are going to die in the next 10 years because they rehypothecate Bitcoin and the tide goes out and they're the hole on their balance sheet is larger than their enterprise value. And I think that's going to be that's the better scenario because the world Wall Street, everyone touching the hot stove and burning themselves. Is better than the alternative which was would be the over regulation and of of how Bitcoin custody is done forcing all of the Bitcoin out there into a small number of custodian honey pots that can then be more easily confiscated or controlled or have stipulations applied to them about. You know, OFAC compliance or KYCAML or ESG compliance or whatever the flavor of the month is at that point. So you know, I think, I think we're going to see Bitcoin custody be a extremely big topic in the world of finance over the coming decade. And people don't know it yet. And I think it's going to be the reason that some venerable old Wall Street established names die in this in this decade. Yeah, Sue text bowling depository not qualified custodian. And Alex, I don't know if we we've chatted or we haven't chatted about this, but part of what Jesse said was Q3Q4 of last year before really the end like fallout of FTX, we started having conversations with folks that were sitting close or at. Citadel, BlackRock and hearing about all these plans, EDX, not really the ETF, but recognizing at the time the, the, and I think this was even in writing that the EDX, Schwab, Citadel and Fidelity, we're going to use Paxos as their back end. I think it just came out today or yesterday. Now they're potentially using Anchorage custody, but just seeing what we witnessed with Block 5, right. You know before that in this state the status of the market was like, Oh my God, we're going to see orders of magnitude. Like what we just saw, what we just witnessed three to five years from now at that scale with Wall Street, it's like there has to be people that step in and at the time like looking at the market and I'd be curious like your thoughts like building the space, you kind of thought a lot of the market players have been built. You know, you looked at grayscale, you looked at Block Fi and while we knew that they were kind of on shaky grounds, like maybe they get themselves out of it, but it's like the whole. Landscape got like the table got knocked upside down is like the opportunity is still there and now you have the benefit of hindsight of like how not to do things, the risk not to take. So to Jesse's point, it's like this is a big reason by like where on ramp exists is really thinking through like how do enterprises, institutions actually get to a way where or how do we build the right structure. So we don't see what happened just recently with FTX Block 5 and the like happened five years from now, but orders of magnitude larger. Yeah, it's a I mean it's been, it's honestly like I, you know it's it's been really sad to see how many people lose money and get hurt by this. But selfishly it's been great for our business and I and I've said this on other podcasts, but you know during the bull market, you know I never understood how the lending worked. If I'm being honest like I'm I I never understood it. I never really understood where the yield was coming from and how they did all this stuff and there was a point in time where I was almost kind of wondering if I'm just dumb like am I just retarded that like I don't get this and and block five was soaring and all these guys were soaring and I was like I don't I don't know how this is working like this is just doesn't make me feel comfortable. We're just not going to do it but we're also going to be missing out on a lot of growth and and revenue and and it turns out like those instincts were just right. And and so you know since then our growth has been great because you know, now everyone's learned well, well yield isn't actually a great thing for Bitcoin. So now I'm going to go to the company that doesn't offer any yield because that's much safer. But and and so like that's a lesson that you know, I think that the industry learned what I what I don't know is, you know Wall Street was built on all of this stuff like all these finance people, all these firms. They all made all their money. Not all of it, but a lot of it, just doing all these funny games. And when they get into Bitcoin, like like Jesse said, like, is this actually going to help Bitcoin or is this Bitcoin just just going to kill all these guys because they can't do the same game and it's like, what's the point of them getting into it, right, so. Yeah. Yeah, I I think there's there's so much hubris right now because that that's Wall Street. They think they know money. They they've got the playbook from 150 years of doing this, that, and now the big boys are here to show us how it's done. But The thing is, is that Bitcoin is uncompromising and Bitcoin humbles everyone because it is uncompromising and you have to play Bitcoin's game on its terms. You can't dictate the terms of the game to Bitcoin. And so there's this, like this juggernaut of hubris coming up against this completely inflexible Bitcoin. And we're going to see fireworks from some, you know, disastrous outcome of Wall Street playing the games that it is accustomed to getting away with in the Fiat world. Yeah, you know and sorry, you. Got. Well, and I was just going to say like I think what you know, my realization has been, you know, like Bitcoin is like kind of the great definancialization. We our company, like our company name officially legally is River Financial. We just did a brand refresh. We now just say River because what I've, you know, what I wanted to sort of internalize in the company is we're not a finance company. The innovation here is, is, is software, it's user experience, it's brand, it's service. We're not going to be building new you know finance things. We're not going to be offering new sorts of ways to you know like do leverage or lend or anything like this because that stuff will just kill you. You know everything we're going to be building at River is like is like software basis. How do we help people secure, move and buy Bitcoin, better people in institutions and. That's our focus. There's no source like there's nothing on our roadmap that leads to like I just can't sleep at night offering any financial products that involve risk beyond software risk and and so yeah, so that's why we're just river now because I'm like you don't want to be doing finance with Bitcoin. It's really funny to hear you say that, Alex, cuz me and Marty talk a lot about just the status of the market. And it's like if you look hard and long, it's like the only way you get to what you just said is looking long enough at this problem that you're like, it's like the killer app is just buying and holding at least for another like 10 to 100 X. And so I've been coming to this realization too. And I look at the status of just venture in itself. It's like how much a lot of these firms that are Bitcoin only don't actually monetize because there's only so many people willing to spend the asset. If you think about like lightning and liquidity, like the orders of magnitude is on chain versus through it. And to your point, I think like there will be a financialization of it just by definition of it being money in the same way that there will be very incredible businesses built in top line, But the core from an order of operations and where the money will accrue and the value added services right now is literally to get exposure and to hold it safely and securely. And then everything else is downstream of that and they'll be test and innovation just similar to early Internet days. But right now in my mind it's still like similar to like web van where you're gonna like see the inkling if you squint. But we're still probably years out from all the different crazy stuff because the perimeters haven't been built that like mimic what the software layer will allow. And the example I always think of is. Like we tried a lot of stuff in the early 90s and early 2000s, but it really was the mobile phone that allowed for the real applications to be delivered. Because you had GPS, you had Geo location, you had the phone that set your thing and then you got the Ubers and Airbnb's of the world. And so to your point, I think, yeah, like the killer app is not the lend against it or get yield or you know these other like even merchant services like it makes sense that any of you worked on, but we're still so far from people using Bitcoin as money that it's just something I've been thinking about. So to hear you saying out loud it, it really is kind of like crystallizing my mind the past few months. Well. Go ahead, Marty. Well, I was gonna like in harkening back to your comment Alex about. Sitting there watching a lot of these Defy Yield products blow or like have temporary great success, like I have that same that same feeling too. Like am I wrong like already, like I had that same intuition like I don't think this is right but they're making so much money that maybe I am wrong if I have to check my priors. Like remember 3 Hours Capital Suzu and Kyle Davies were vaunted as these Wonderkins FTX SDF. Was a Wonderkin. Like, yeah, they were all the smartest guys in the room. They could influence people on Twitter, They can go on podcasts and sound extremely smart. But they were doing some of the dumbest stuff they could ever do with Bitcoin, which was borrow it from a company like block fire Celsius and then go leverage trade it with shit coins. And that's what's going to be interesting, tying this back like Wall Street getting in. And something we probably have to mentally prepare for is a a temporary period of time where it seems like they're having massive success doing their financial gains with Bitcoin, their their marketing like massive returns and showing all these profits. But like Jesse said, the tide will eventually recede and that will get all laid to bear. And like like Michael said, it's gonna be pretty epic. But that's like. Psychologically, the point I'm trying to make here is having been in the space for 10 years, I've had these self doubt questioning moments many times throughout the many bull and bear cycles that I've been a part of over the last decade. And it's something as I get older, as I get more experienced than beginning to internalize much better is like, hey, it's all noise, come back to the fundamentals, we have some money, you cannot print more of this. So taking obscene risk with it does not make any sense. Especially if you're a business acting on behalf of clients. Absolutely. And for me, you know, like the last year really hammered home this idea that it I'd always kind of intuitively unknown, which is like sounding smart and being smart or two very different things and you know, if you add unnecessary. Risk and complexity to things and you create this, you you create this sort of like complex world of of complexity and little things that you need to know and understand. And you create all these words like rehypothecation and and swaps and perpetuals and you know and you create that. You can sound very smart, right? And somebody like who who, who's like, you know what? I just don't. I just think all that stuff introduces unnecessary risk. They're not. They're not going to bother understanding all of those. All that complexity just created. So they're not going to sound as learned and intelligent as the person who is into it, right? They just intuitively know to stay away from it. The smarter person actually intuitively knows to stay away from complexity, But because of that, they sound Dumber, right? Because there's there's fewer words, they know, there's fewer concepts for them to explain to you, and it's that you're constantly on the defensive like. You know you don't want to spend all your time. Now you have to go research what a perp swap is so that you can explain to somebody why it's a bad idea, right? It's an endless sort of like struggle to constantly try and debunk new crap that gets invented for you to lose your Bitcoin. So I think that's what ends up getting people is like that sort of dynamic. Yeah, we talked about this a bit with with Parker, Lewis and and Michael and Parker had a. They rift on how Bitcoin is a common sense test. And you know, it boils down to like, if you just have internalized the common sense mantra at some point. The money doesn't grow on trees, There's no such thing as a free lunch. You're going to avoid the the fancy talk that is designed to be the siren call that lures you into risk. And if you just stay the course and and and know that you've got sound money. You've got the best savings technology ever that appreciates in value over time because of its increasing scarcity, and that's good enough for you. You're gonna come out on top. What's interesting though is there's almost like if you were like that from a previous generation, you avoid Bitcoin. And that's the irony of that, right? Because like you hear about a blockchain and a you know you learned your lessons the hard way in like the pre Bitcoin world and you hear these guys going on about all this stuff. You're like I learned to stay away from the complicated stuff. So there's. Yeah, absolutely. You throw out the baby with the bathwater because you're like, there's no way that any of this blockchain mumbo jumbo is worth my time when it turns out that. We've reinvented sound money. It's. A fascinating 90. 5%, right? 99% of the blockchain mumbo isn't worth your time, but 1% is. That's a really important 1% and not this. Well that reminds me of the Bitcoins is a get rich slow scheme disguised as a get rich quick scheme. So if you will look at it, they think of it as a Ponzi. Marty, your comment really like made a lot of sense about you know the pattern recognition and I think this happened in 17 with the alt coins and everybody thinking they're crazy about not getting the Icos. And it's like there's something to the like downstream effect of who gets in the early adopter and similar with like this ETF and all this all this like financialization with the different fund structures and who custody's you're going to start seeing the downstream ruggings happen. At a certain point cuz some ETF is gonna do, maybe it isn't BlackRock, but it's another one that does decide to lend out. The volatility happens. They're not used to seeing it go from 300 to 150 over whatever the numbers are and it's just gonna be like it's just we're just gonna see it happen again. There was like, I could have never figured this out. I don't understand. And then five years from there we'll see the nation state do the same thing. It's just like all the way ruggings until until the end. Rugging is until people relearn the lessons of a free market economy with sound money like there's there are no bailouts in Bitcoin and we have to relearn that hard lesson the only way that hard lessons are ever learned, which is through disaster. Yeah. And that's like actually since you brought up the BlackRock ETF, like I was observing a thread that a bunch of the ETF into it, people. Were engaged in earlier today and it's really funny to see how they view Bitcoin and particularly black rocks entrance into the space. I'm gonna put a tweet in here look and pull it up. We talked about a rabbit hole recap too but I think it's important to discuss it here on the last trade as well because especially for our audience because I do think. Wall Street views the BlackRock ETF in a particular way that is going to get them burned or severely limits their understanding what Bitcoin can do. And so this is Eric Val Kunis, who I believe is Bloomberg's ETF expert. The big irony in all of this is most crypto people see the ETF is boomer mainstream trad 5 when in fact the ETF is the real disruptor and disintermediator mediator. This was the point we made. After the dumb Matt Damon commercial and he references an article with the title of Spot Bitcoin ETF could make this the last crypto Super Bowl commercial. And essentially his argument is since people will be able to access Bitcoin via the ETF and only pay 10 bips and fees like that is the distance mediator in the space so far as like cheaper access to Bitcoin failing to acknowledge that that Bitcoin will just sit in a coin based wallet. That individuals won't have access to and therefore won't be able to the reap the benefits of the digital bearer assets and the many things that you could do with that. So I need artwork in this cave I have at the house or whatever and I think that needs to be framed like is there more perfect Wall Street like just version of understanding what's happening here? It's like I think where I saw that was your comment about 12 words or the he responded or you responded about 12 words being a lot easier than understanding this. And it's just like all personal responsibility esolving of all risks. It's just like here, ETF 10 Bips handle this. It's incredible because the 10 bips actually isn't 10 bips. It's a 0. Ultimately, what's on the table is if you lose all your funds because they decided to do something. Yeah, the point Michael's making here is for anyone out there who is less versed in what exactly BlackRock has created here is. They're going to try to have very low fees and that sticker price will look great in terms of you know here's your your AUM fees or your trading fees too. But they're going to get, they could get their yield, additional yield by rehypothecating that Bitcoin. That's the standard practice and then that's the scenario where you could end up with the zero, so. Buyer beware. You know when Wall Street is saying we've got this figured out and it's going to be really, really, really cheap? So cheap you can't believe it. It's for a reason and there's hidden risk. Is there any indication that BlackRock is in the current filing is allowed to do any rehab, any rehab application? That's what I was just going to say. I don't think there is like, I don't think like I talked with Townsend Lansing from Coin Shares who's created a lot of these exchange traded products in Europe around Bitcoin and other crypto currencies. I mean he helped spun out the GLD and the Palladium and Platinum Grantor Trust, which is the model obviously the black rocks using for the Bitcoin ETF and he's seemingly like now there's no way that they can rehypothecate it. I think, I think that the question is like the grantor trust has a direct unit exposure and then what they're supposed to do. I think we're it gets mucky as between the authorized participants, the redemption creation and what all the things that happened in in between on having the actual Bitcoin versus what the claims on it from like shareholders are an issue. Yeah, I think. I think people should more worry about like Coinbase, Like if they ever get in a sticky situation, like they're the ones custody. Yeah, in in my view, there's. So I I spent a weekend really diving deep into the S1 and there's a lot of little mucky details that you know about like standard practices that Wall Street's bringing that add a little little bits of risk here and there and and you could have a disaster at any one of these. Points of of small risk, Coinbase being one of the the additional, you know single points of failure effectively that is in place in this model. There's nothing in the S1 that prohibits them from rehypothecating and there's and I've I've heard both sides from from folks about whether or not they would they would dare to rehypothecate to lend out the Bitcoin in the fund. But there's nothing explicitly that that says they can't. And and that is a standard practice with ETF. So they could tiny risk. But it's there among many other little mucky points that that are, you know Wall Street trying to force their structure of how they do things to to make Bitcoin fit in it. Interesting. And even if they're not now. There's nothing, you know, things change down the road, yeah. Right and and for for example for that like you know the in kind redemptions are allowed for the for the Ap's, the authorized participants that means broker dealer firms and it it specifically says that they have those broker dealer firms have to enter into a separate contract with with BlackRock and basically be in the good graces of BlackRock so. That's the that's the limited list of who can do in kind redemptions. And at any point in time, BlackRock could revoke those permissions for for some or all of them, depending on it. And there's a little angle, a little point of risk where it it could be you know it starts to become a a bit of a honey pot where if the government wanted to 6102 the, let's say it ends up being a million Bitcoin in this vastly successful BlackRock. Fund. Very, very, very doable. That's actually my biggest concern and like let's put the 6102 off the table, just the honey pot. If it gets a million Bitcoin, it really means Coinbase. And by the way, BlackRock probably has four or five million Bitcoin because of what they already hold. Cuz like if they're probably if they get a million Bitcoin, that means the price is whatever. And at the same time that means Coinbase is holding more GBTC if they're so custody with Coinbase. And you get to 3 to 4,000,000 bitcoins sitting on Coinbase. I'm curious, Alex, have you thought about that? Is that like concerning you cuz that's like my like my that was the first thing that's been I thought about. I mean, it's a real concern. I mean, the good news is BlackRock could diversify their custody if they wanted to, but. It's weird because like with custody, you almost want to go with the big one because they have the most to lose and probably have the most resources to secure it. But it's a constant concern. But I don't think it's really avoidable because wealth distribution in terms of just like, you know, where it will land, like the institutional stuff will just be the like vastly, you know, outweigh any sort of individual holders who are selfcustoding and so. You're just going to end up with a dynamic like this, whether it's Coinbase or somebody else. So I don't really know if it's avoidable, just given how institutions, given how just human civilization works, frankly. And so because of that, yeah, better hope Coinbase doesn't mess up, Yeah. But I think it's like a civilizational sort of like reality. I don't know that it's actually ever avoided like. Any like the wealthiest civilizations or like the wealthiest countries will have the highest institutional trust, right? And we'll like trend towards like wanting to outsource this core competency. Like BlackRock knows that Coinbase can custody their Bitcoin lots more than BlackRock can. Like. Like the alternative is BlackRock custodying it themselves And like, well, what's what's safer, Coinbase doing or BlackRock doing it? I mean, probably Coinbase doing it almost certainly right and so. Yeah, I don't know. These are sort of just like foundational issues, and I don't know that there's a good answer. I think the one, the counter that is like that, this is the first asset. They can have multiple people participate in the custody model, right? Like you can't split the Bitcoin or the, I mean the gold or the silver or the dollars, but the asset can have multiple. Jurisdictions, multiple entities and I think that's, I think that I mean that's where we're taking our bet is like that's how this all ends up playing out is the keys end up further out versus like Coinbase holding it all. That's. A great point and that is the one of the pieces of learning that is outside of the paradigm of Wall Street of corporate America, frankly, like Alex nailed it, you tend to trust the expert firm and because there's one. Person that one firm to hold accountable and and put all your eggs in one basket. That's how the world has worked. But this crazy asset has this property that can mitigate your risk by distributing across multiple entities. There's a game theoretical aspect too about just like being able to move the assets if you're coerced like in the sense and I always thought this was interesting, like Unchained costs of holding one key in a world where worst case scenario happens, server sees government, whatever it is, they can't move the funds and that always kind of keeps a check and balance on what can happen. And I think in a world that we are concerned about a 6102, the best position for a large entity holding the asset is actually not able to give up the Bitcoin or be course because they don't have unilateral control. I think we're a long way from that, but I think that's ultimately if Bitcoin becomes money, it will face that in whether it's the US or another jurisdiction that will be a problem where it could just be a government that wants the Bitcoin for themselves and not even outlawing it. Yeah. And that's the other thing too, like when it comes to like 6102, like. Bitcoin is a push system, it's not a pull system. So like if the government wanted to confiscate Bitcoin whether it be from individuals, coin bases or a multi sig, multi institution setup like somebody has to sign the transactions. At the end of the day when they did the 6102 gold confiscation it really showed up. We just took the gold, especially if you have like a multi institution, multi sig or even just a geographically dispersed. Multi CIG as an individual company it's much harder to do that like in person coercion if you have the right processes and policies in place and let's hope to God it never gets to that point or government never gets so despotic and overrun with power. They tried to do this but that's the beauty of bitcoins native multi cig properties it is it is sort of a hedge to that like hey you can't move that imagine that the government went and tried to get like. 3 institutions to collaborate, to move user funds and instead of moving them, they came out publicly and be like, hey, the government's trying to take your Bitcoin. We don't want to let that happen. You get like a social movement behind that. It's true. But I think at the end of the day, like, you know, if you want to, if the US government is going, is willing to go after your money, I mean like you kind of have two options, right? Keep your keys in. Jurisdictions like yourself, right, Like keep using jurisdictions that the US government has no influence over, which are typically very low trust jurisdictions, right? And maybe there's like a few, there's maybe like Dubai or something, but or keeper keys in high trust jurisdictions. But the US just like they did to Switzerland at some point gets the power to just be like, no, you're going to do this because. You will, right. Like, I don't know. I don't know how that stuff plays out. Yeah, I think Marty to your point like the counter is just as easy. It is to take the person's goal to take the person or the entity that can sign, you can force them to sign. So I think to Alex's point, it's like this hybrid of jurisdictions along with the US and it's not necessarily that, it's more of to make the. It's the asymmetry of violence, basically. It's like the reason about like, you know, firearms in the US. It's like it's just the thought that you have to go door to door that makes it untenable or like very hard. That's like the game. So we're all trying to play. It's not like you're gonna, you know, completely solve it because reality is you can put pressure on anybody or one entity. It's just about leveraging the. Tools as they are, Yeah. Yeah. Again, it's brave new world exploring the unknown here. That's sort of known. We know what the government is willing to do. What? Are you guys bets? Does the BlackRock ETF even get approved this year? Let's say this year. Does it get approved this year? I think right after Labor Day, Labor Day, right after Labor Day, yeah. Yeah, I'm kind of 5050 on it actually, though I'm sort of bracing for it does happen, which is good and and bad at the same time. It's a better question is what gets approved first to our core BlackRock. Because that's been in the headlines this week is that ARC Invest, headed by Kathy Woods, is technically frontline and has refiled to be very similar to BlackRock. Yeah, you know, maybe maybe ARC gets approved 1st and then BlackRock a few weeks later and BlackRock Day 2 has surpassed ARC and AUM. Yeah, obviously a better distribution. I don't know. I'm going to be controlling here. I don't think it's approved. Everybody, everybody again, pattern recognition and Bitcoin, everybody thought the ETF was going to get approved in 2020. What do you think the. Motive is for that, Marty. Like, do you think the SEC is trying to stop it for a particular reason or do you think that they have like legitimate justification for wanting a better version of an ETF? I mean, the way Townsend from Coin Shares explained it to me and it used to be like a securities lawyer here in the US was that you're really worried about price manipulation and not particularly at Coinbase, but like other offshore exchanges manipulating the price, which I think we do have some examples of that in recent history like FTX, you could argue that they actually manipulated the price lower than otherwise would have gone because they were just dumping. People's bitcoins on the market and I don't think the way towns and I'm not a securities lawyer, I don't know, frankly don't care whether it does or doesn't like. The signal in and of itself is big enough for my opinion. The signal is that black rocks customers have been demanding Bitcoin so much that they were forced to bend the knee and file for the CTF. I don't think they came to the decision to file a Bitcoin ETF by themselves. I think their hands were forced. My clients were saying give this to us, you're going to take our business somewhere else. But going back to the price manipulation, like even if Coinbase does really good custody, they run a good shop that doesn't manipulate price, which looking like the history, like B cash and like coin and stuff like that. Like who knows if you can actually say that with any degree of certainty. Even if they had that surveillance sharing agreement with NASDAQ the way Townsend framed it to me, I believe I was understanding them correctly is they don't have any assurances with offshore shops manipulating the price. And even if you have your buttons buttoned up between Queen Base and NASDAQ doesn't doesn't matter to them. Marty, what happened? You're Marty Jones. You're you're thinking in the lens of the world being logical. Like Townsend came at it from a logical fair playing game. Like this is BlackRock, this is the US government. Like, they're gonna just slap there's they're they're gonna slap everybody around. They're gonna slap Kathy Wood and arc and say, hey, yeah, you were first. Whatever. You play by the rules. This is our ETF. Like there. It's a it's a humiliation ritual. Like they're gonna, they're gonna get it. It's gonna go to BlackRock. What he referenced it's like. It doesn't even actually make sense because it's even inconsistent like they did the futures ETF already and it's a global like traded asset. The it's already trading like the price manipulation has always been just their version of. Hiding behind getting the ETF actually launched it wasn't actually real like we know that it's a free trade asset. They're gonna do like you know the USD, USD to BTC pair with like Coinbase. They're gonna have an isolated so they can show it and they're gonna make up all these reasons when reality they could have done it three years ago like I get what towns it was coming from and in a free like fair you know whatever world that that all makes sense but that's not what we're living in and so. Yeah, they're just gonna, I agree, just gonna. I was trying to play the contrarian on the panel, but I agree. I mean black rocks gonna get the red carpet rolled out. Probably the question, the better question, I'm curious is what is going on, like what is going on with them launching it, Larry Fink coming about about it, playing in gold, that's like what I'm curious about. Well, that's that's a good segue into the newsletter you wrote over the weekend, Jesse. Like we had pretty big spasms in bond markets today. Like maybe it's a signal that they're like a. Things are not all well in the markets that we've been playing. In yeah, it's funny timing that today the UK gilt market had a steep bond sell off and this last weekend and I put together a piece the the bondholders burning platform and and tried to lay out in simple terms why the math is really not on the side of. Bond holders over the coming decades, and it's a pretty simple argument. Ultimately, it's that you know the amount of debt in the system at the sovereign level at every level necessitates that we're going to print a lot of money in order to inflate away the debt. Because you you, you know if you 2X the money supply, you let inflation run hot such that. The dollar today is worth half as much in the future. Suddenly your your nominal national debt burden is 2 times easier to pay off because GDP adjusts upwards and and becomes easier service at that. But the bondholders are left with the bill and so it's it's a way to to get out from under the debt burdens that the US and every. G7 Nation has at this point, you have to print a bunch of money and then confiscate wealth from the bondholders in doing so. Like, that's that's the math. That's the path forward is to cause the $32 trillion of U.S. National debt that is held by individuals and institutions and you know whether or not you even know it because. People have in their pensions or in their four O1 KS. You know the standard 4O1K is the 6040 portfolio. 40% of that is bonds. A lot of that is U.S. Treasuries, and the math says that that has to be devalued. You have to to earn a negative real return on that portion of your portfolio in order for the US to to get out from under its national debt burden. Without defaulting. Without hard defaulting. So at this point, we've kind of crossed the Rubicon and we have to default in one way. There's soft default. Print a bunch of money. There's hard default. Just say you're not going to pay people back. And we have a printing press. So of course we're going to soft default and print as much money as we need to nominally service our debts. That's the that's the circumstances, that's what we're looking at. And that means that over the next decade or two. Bonds will deliver negative real returns for their holders and then you know today we have a massive sell off of of UK sovereign debt, meaning that people who are holding these bonds are realizing I don't want to be holding this because I'm going to end up getting a negative real return. So get this out of My Portfolio. Let's sell it and and reallocate to a different asset, of course. My view is that people will learn over each successive having Bitcoin. Having that Bitcoin fulfills the function that bonds are supposed to provide to your portfolio at this point in time going forward, that reliable return over time, in Bitcoin's case, delivered by increasing scarcity with the havings causing value appreciation over time. Rather than the nominal promises of yield that bonds offer, but then can't deliver in real terms given the amount of national debt that that we all that we face and every G7 country faces at this point. The counter that just to play the devil's advocate, it's like, hasn't it been the past 5-10 years like bonds have had negative real returns? Like the common thought is like, yeah, So what, What is that? Like, how is that? Is it at the margins that we're going to get the like grandma and the family offices to start or like how does that work? Because I think that's what everybody's waiting for, right, The like. Yeah, well, it's already, it's already in process like it the the platform is burning a little bit right now and it's up to bondholders to realize that the the platform they've placed their value on is is on fire and it's made of wood. Since micro Strategy has Michael Saylor has been keeping track of this and and proudly proclaiming how micro strategy adopting the Bitcoin standard has has done very well for them in comparison to the risk free asset of U.S. Treasuries. So since Micro strategy adopted that in gosh was that was 2020. The bonds are down 19%. So you if you were to store your value since 2020 in bonds you lost 19% of your purchasing power, whereas Bitcoin is is up like 160% or whatever and more I'm not actually sure. So there's there's your it's already in process and we we talked with dines about 25% down since 2021. I'm not sure exactly which. Point in time or what type of bonds he was referring to. But this wealth destruction, this wealth confiscation is already happening It what's what's wild about it is that for this to work, policymakers have to convince the bond market that high inflation will not continue because they need somebody holding the bonds to confiscate wealth from. So you know you really can't trust. What you're being told by the Fed when it comes to to inflation because they need somebody to get stuck with the bill. You hear that, Alex, You're 30% personal account allocation to bonds is is on fire, is that what you're well? No, I think this is actually, I mean, Jesse and Michael, obviously you guys are talking to a lot of people. We're curious about Bitcoin, but Alex, I know that's a point that you make at River too, if they actually speak with your customers, really new customers. Like are you seeing any growing trends and common themes that is turning people on to Bitcoin? Yeah, I mean, so we're seeing record transacting users month over month for a while now. You know, I think it's really mixed I think. I I think all these factors are basically pushing the crowds slow like more quickly and quickly into Bitcoin. But the way that like everyone perceives it is maybe from a different perspective every every individual in that crowd as as to the why they're doing what they're doing. For some of it's it's inflation. For some of it they've gone down the rabbit hole and they they they've like really sort of understood the theory. A lot of people frankly, their friends like you know, I actually think like the the majority of people are convinced by a minority of people, right. Guys like you guys, you know you're you're spreading the message or getting the word out there. People listen to your show and and those people then tell their friends and it gets people going further and further down the rabbit hole. So I think it and then I think lastly I think. It's a it's it's the decline of institutional trust in the United States. You know, before, if you trusted the US government, you trusted the US dollar. Fewer and fewer people trust the government. And I think that's also at a like unlocked a lot of people's minds and given them permission to actually look at this thing. Yeah, it's a very. A very good point. It seems very obvious, but something I never connected like the collapsing confidence in the US government particularly should lead to a collapsing confidence in the dollar. Yeah, I mean, if it's because like, you know, you know, I mean, when I was in, when I was in undergrad in college, I was really into this monetary stuff. I graduated undergrad in 2012 and you know, I was talking to my parents and like, I would talk to other people about central banking and. You know why it's bad. And you know, most people just kind of like thought it was kooky, right? Like and but now when you talk to people about it, you get it's different. Like you're allowed to talk about that stuff now without looking like a nutty professor. Like Ron Paul was right about a lot of things he said. But like the mainstream saw him as like sort of this kooky quirky like Professor Guy and now. If you ask a lot of people now, you know, like do they have the opinions he had? They're they're kind of, yeah, you know, we shouldn't have been in Iraq, right? We should be watching out for central banking. Like that's a these are mainstream conversations to have now, not just sort of fringe or libertarian weirdos. So I think that's all a result of people realizing the US government is an absolute mess. Our institutions have been coopted by people who don't share our American values and. It's leading people down this path. Yeah, the I think it incredible anecdote I came across recently was that we had this debt ceiling fight a month ago and it was, you know, they both sides pretended to fight over whether or not we would allow more debt and of course ended up rubber stamping it. And and that was one month ago we went, we raised the debt ceiling from 31.4 trillion a month ago. And we have now added almost a trillion dollars of national debt in one month and that is the same amount roughly as all of the fighting about bank bailouts in in 2008. That was the scale of of what those bailouts were and we've just added that to the national debt in one month and and nobody made a peep. That's how much things have progressed since 2008 in terms of the the erosion of. Of fiscal responsibility and and trust comes from that. Yeah, Marty, your tweet, your tweet from the weekend, so I just thought I was talking to Jesse about it. I think today or yesterday is like 150 billion I think has been funneled to Ukraine from the government the past two years and they're like the 4.5 billion. I think that was paying off some of their debt that's owned by BlackRock. Like it's it's literally insane if you just look at it, it's just it's all out there. Yeah, it's lazing. Corrupt. It's oh nice. It really is brazing corruption. That's like. But that's power, right? So that, like, that's true power, right? You know, the people in charge have true power that they can just do this in front of you and nothing happens to them, so. Yeah, Hunter Body can do cocaine on the White House balcony on the 4th of July. Found any clear retribution because they have true power. Yeah. It's so I'm, I'm short. I'm, I'm, I'm long American values. I'm short United States federal government institutions. Same, yeah. And that's and bringing like tying it back. I think that's one thing we have to recognize too. We touched on it earlier, but like the. Beauty of When Satoshi launched Bitcoin, obviously in the wake of the great financial crisis, you had Ron Paul really drumming up some support, but not quite enough in during that election. And then at the same time you have like the bubbling and the emergence of the social media wave which has played a big part in propagating Ron Paul's message and message to Bitcoin on top of that. So you have like all these factors, Toshi. The great financial crisis, Ron Paul exceeding some ideas and the people in our generation. I was 17 at the time and really connected with me. And then we have social media. We go on, we mean into those ideas, discover Bitcoin, like, hey, this is a perfect implementation of these ideas that they can't corrupt and we don't have to ask permission. Then we're able to go on social media, begin propagating the message. It really is like a crazy serendipitous coalition of events that happen. When I when I was first raising investment money for forever, people would ask me who's your biggest competitor? And I would tongue in cheek but also like kind of half meaning it, say the Federal Reserve and and you know, as this goes on, like it's almost like like meming this is getting us closer to the reality of it. I feel like this is going to be one of those like Trump moments where like it's a meme. That he's going to be president. It's like a it's like this like kind of meme. We joke about like bitcoin's going to like take out the Federal Reserve and we it's still kind of a meme. Like we still kind of are meming it, but also like someday it happens and we're like, holy shit, I can't believe that it's happened. Yeah, yeah. I do think it's incredible that for most people they will experience Bitcoin. As something that that that was just a joke that turned out to be real. Like like a joke that everybody decided was real, that it was always a joke and just became real. You know, like for most people they will not put two and two together, that Bitcoin was real the whole time and not a joke the whole time. But we'll, you know, we're living in this weird breakdown of reality where Elon is meming all sorts of stuff. And you know, the Internet is crazy and meme stocks take off and we're going to end up with meme money and people. And most people will just be like, I guess this is what's happening. But if you, if you actually look at the evidence and dig into it, now you can frontrun those people because you understand it's not a joke, it's it's real. Yeah, and I mean, well, that's the thing too. Memes aren't jokes. They're they're truths that are distilled into. Very like like a JPEG, like a like a digestible form of information. Logan, pull up, don't play the video but just pull up the YouTube. So anybody watching this and link to this in the show, that's after. I think honestly this is one of the most important speeches ever giving at a Bitcoin conference. It's Michael Goldstein's The Art of Bitcoin Rhetoric, how to mean Bitcoin to the moon and it is so incredibly well done. Start a lot of controversy when when he when he first when it first got released in 2019. But if you dig into it like the memes around Bitcoin number go up. That three three word meme basically highlights the bitcoins extremely scarce. More people are going to want it. So number's going to go up. Like fix the money, Fix the world is another one. Stay humble. Stack sets like the memes are are riddled with truth at the end of the truth embedded in and once. They're common sense, yes. Yeah, they they become the the way that you can most effectively transmit common sense wisdom to the maximum number of people. Stay humble. Stack Sats is is penny saved, Penny earned for a new generation, a new, a new digital landscape. And we're part of creating that new. Pantheon of common sense witticisms. It's so much less absurd than, you know, this concept of a dollar is a dollar that the government owes you. Like, yeah. The Mental gymnastics of What Do You? Mean you don't understand it like well you need. To go. Get a degree to understand this. It's this is the way money should be. It's like. What do you mean my money's not in the bank? Ohh, you don't know. You don't know that we lend it out great new units we only actually have. We're required to have 0% of the money that we are taking in and reserves at any given point in time. Yeah, let's see like we've harped on this on this show, many other shows, but again, cannot be overstated like the simplicity of Bitcoin from a network perspective, from an asset perspective. It is incredibly beautiful because we will be able to build a complex world just by anchoring into the simplicity of the network. Like having that stability of its simplicity, its transparency, its tangibility in the sense that you can see what's going on at any given point in time, you can verify what's going on at a given point in time, is extremely powerful, That simple anchoring function that Bitcoin will play in society. Yeah, I mean, Alex touched on it earlier. You know, bitcoin's a great defund financialization. It's like the fact that your money just does what it's supposed to. Then you don't have to do all the other things that everybody's been on this hamster wheel and you get to do what God gave you, like as a, you know, individual on this earth to, like, go and flourish and innovate. And we've been stuck in this kind of like perpetual just, you know, tinkering and all the best people focus on these apps and all this weird crap when there's so many other things that we can be doing and, you know, basically innovating as a society. And so I think that there's like, you know, I think personally, but I think probably every this group is like part of the goal or attainment of what we're working towards. It's like that end version at Bailey. David Bailey says really well, like the party starts when the dollar ends. It's like when we're all like have that unit, that's when the fun actually begins. And until then everybody's just trying to figure out get mean and psyop to to figure it out. You mean you guys don't want a world where your grandma has to own? You know, dozens of different companies securitized and also all of their debt securitized so that she can feed herself when she's older. CEO's, Cdo's, Derivatives leverage. The way it should work, Grandma, Grandma needs to throw her no. When it comes to the financialization of the world, just suck it up. Talk to her financial advisor. Get a. Get a nice allocation trying to eat and. You'll be able to eat when you're old. Then give some more of your money to the government, and then they'll give that money to Larry Fink too. That's great. I was just thinking like Jesse just pulled, this was just pulled up. Think about all the financial advisors and wealth managers that could build that cathedral physically if we just got, if there was just Bitcoin, you don't need one percent, 2% paying somebody every year to look at your money. Yeah I I saw this come. I saw this at Logan. If you put up I I saw this come up yesterday of like it's a beautiful quote that it was not in Bitcoin world. But it came across as modern man is is in a terrible predicament. He is helplessly enamored with the beauty of what the old world built yet despises the beliefs that inspired them to build it. And I think it's such a it's so close to what I would say is you know the sound money and the. Deflationary engine of craftsmanship is what built so much of the stuff in the world that we, you know, hold on a pedestal and Bitcoin returns those mechanics to the world and is how we're going to build a better world going forward. People know deep down inside what's real and what's true and they've been. You have to be taught to not listen to that and. I think we're seeing a trend. More and more people are listening to what like what's there, but we have a long way to go. Yes. And that's actually a good segue until the last question I want to ask you, Alex, before you wrap up here. Somebody's building a company in the space and touching the Bitcoin technological stack at the protocol level at Lightning in the mining industry. Like what are you most excited? To build on the horizon or what's what's what's exciting you in the Bitcoin space right now that you can apply to River? So the two things technologically that are most exciting me are Lightning. I really think sort of we're getting to an inflection point and the and the the tech is getting there where Lightning truly is going to unlock a whole another order of magnitude of international value transfer. Because we've removed the delays for payments and the UX, it's a 10X UX experience for transferring value with Bitcoin now and we're working on a lot of stuff there and the infrastructure has matured to the point where we're starting to be able to get real money, real flows happening with this. I'm also very excited about cryptographic advancements. There's a lot of investment left. I'm thinking about what we might be investing in at River, but deep crypto, deep deep crypto investments. And by crypto, I mean cryptography. I think there's a big opportunity with Frost and in in creating Schnorr specific multiparty computation, which I think can be a lot more elegant than some of the stuff we've seen with ECDSA because of how messy ECDSA is. And I think we can. I think there's a world where sort of, yeah, I kind of see MPC as as maybe sort of multisig 2.0. It's going to be a little bit more complex. There's still going to be reasons to use multisig, but this concept of like having a single singular wallet, root wallet key split up into shares that can be refreshed, rotated, signers moved in and out, I think it's really interesting and I want to see Bitcoin specific. Versions of this for Schnorr, the mature implementations built out, and I have a lot of interesting product ideas and thoughts and what kind of things that can unlock. So those are two things I'm really excited about. Jesse and Michael, anything you wanna add before we head into the weekend here? You know what, as as Alex was talking there, I was, I was thinking about how it really is a testament to the choices you made early on and sticking with them that you had the foresight to like own your infrastructure and and not, you know, get into any situations where you were, you were trusting A custodian that wasn't quite up for, you know, the the job. And I think that what you're talking about right now and the excitement to build out the feature set is such a perfect microcosm of how Bitcoin wins. It's through these, through, you know, the cumulative efforts of adding valuable features and doing it in a, you know, you're building a cathedral, and Bitcoin is about building a cathedral and doing it the right way. And and yeah, I admire it. Thank you. I'm really excited about what you guys are doing. Thank you. Us too. Yeah, removing central points of trust. The more we do that, the better. Yeah. And I think just to echo Jesse's sentiment, really appreciate you joining Alex. Really admire what you guys have built. And I think the one thing we didn't focus on, but it's a big part of what you guys do in every like business that will truly be successful over the next decade is on the education and providing you know people are coming to financial. You know service, I know you're not calling river financial service business, but a partner, a trusted brand, they're looking for guidance in this new world. And so part of that is like it's the responsibility of that individual and that firm to provide their clients with the right guidance because that's going to translate to them telling their family and friends and that's how these businesses are built by propagating that. And so you guys have done a great job of that and and that's a big part of all this because of what we talked about early in the podcast that. If you you can win early, but you can't win long if you don't actually send the right message on education and educating the end client. So that's a big part of like you can have the right product and you also need to have the right education and like motion to to go to market and you guys have done both. So it's been cool to see. Thank you. Yeah, we're investing heavily in that. We're we're trying to put out some really indepth research reports. We just put out A1A few a few few weeks ago on a 60 page research report on Bitcoin and international payments. So check that out if you want to go deep. Yep, Marty has a pod on it. If you, if you if you're not a reader. I I thought there was, there was some very interesting data points discussed in that pod. They're really interesting. You know, with the research analysts at River Sam Booters, you dove into it on TFTC. So if you guys want to go over to that podcast and check it out, it's great conversation. I mean, you've got some killers on your team, Sam being one of them. Oh yeah, he's awesome. And and my old my old classmate from Stanford, Julia. Shout out Julia. Yeah, Julia's a pillar of river by my right hand. Woman COO. She she she has been an instrumental in river success. So you have good friends, Jesse. Julia's very talent. All right, gentlemen, that was an incredible conversation. Alex, thank you again for joining us. We will have to link up in person. Since I'm on the East Coast right now. At some point in the next few weeks, I'll make sure to make that happen. We should. Everybody going, everybody go, enjoy your weekend. Things are heavy out there. People are losing faith in institutions, but we have Bitcoin. We have this this giant thing that we can anchor into. We hope that conversations like this. Give you some more clarity around this credible rounding force that we have at Bitcoin. So that is all for this week, episode 7. We'll see you guys next week for episode eight Faces.