INTERMEDIATE: 17 questions I took to Satoshi Roundtable in Dubai in 2023

00:01 Hey everyone. Back in 2023, it was 00:04 either January or February of 2023, I 00:07 attended the Satoshi Roundt Conference 00:09 in Dubai. Um I've been twice. I think I 00:12 went once in 2023 and once in 2024. Uh 00:15 but back in 2023 when I attended um I 00:18 started before the conference, I made a 00:21 list of 17 things that I did not yet 00:24 understand about Bitcoin that I was 00:26 going to try to get an answer about at 00:28 the conference. And I got an answer to 00:30 most of the items, although some of them 00:32 are, you know, harder to answer. But I 00:34 figured I would go through those 17 00:35 because it would give you a sort of a 00:37 peak into what my mind was uh what was 00:39 going through my mind back in 2017. 00:42 Sorry, not 2017. These are 17 questions 00:44 back in 2023. 2023 uh the 17 questions 00:48 from 2023 that I had about Bitcoin. And 00:51 I thought you might have some of the 00:52 same questions and it might be 00:54 interesting to uh go through them one by 00:55 one. So, I'm going to start and just 00:58 just go through them. And so, question 00:60 zero, I made a question zero because I 01:02 thought of this question and I wanted to 01:03 stick it at the top and I didn't want to 01:04 re number them all. So, I guess it's 01:05 technically 18 questions, but I'll I'll 01:07 number them uh 0 through 17. Okay, 01:10 number zero. Uh now, at the time of the 01:13 conference, the um the price of Bitcoin 01:16 was between uh 01:18 22,500 and probably 23,500. 01:22 So all of these realize are from a a 01:24 perspective of that you know the price 01:26 of Bitcoin has roughly tripled sorry not 01:30 tripled quadrupled it's roughly 01:31 quadruple from when I was asking these 01:33 questions and when I attended this 01:35 conference okay so again the Bitcoin 01:37 price was between about 22,000 and 01:39 23,000 at the time I had these questions 01:41 and attended the conference. So question 01:43 zero, will broad will a broad stock 01:46 market crash drag Bitcoin down to the 01:48 bottom with it? And has that happened or 01:50 will it happen? And how does that 01:52 compare to March of 2020? So the general 01:55 verdict from that is sure when 01:57 everybody's selling everything because 01:58 everybody's panicking, it drags the 02:00 price of Bitcoin and other assets down 02:02 with it, but it's temporary and as soon 02:04 as everybody comes to their senses, 02:05 Bitcoin bounces back faster than 02:07 everything else. uh because unlike a lot 02:09 of the stock market uh bitcoin is not 02:12 massively overvalued right now whereas 02:15 most of the stocks and bonds real estate 02:16 and everything else has uh essentially 02:19 the prices are stratospheric and at some 02:21 point if we get a major worldwide 02:23 recession all of those prices are going 02:25 to return to something more normal 02:27 whereas I would argue and so would those 02:28 at Satoshi round table that bitcoin is 02:31 significantly undervalued 02:33 um and therefore um you know it's going 02:36 to bounce back quickly and the adoption 02:37 will continue, which is what happened in 02:38 March of 2020. It dipped sharply uh in 02:42 the middle of March of 2020, but 02:43 ultimately Bitcoin bounced back much 02:45 faster than everything else and 02:47 ultimately went on a wild tear from what 02:50 was it in the dip of 2020. I think 02:53 Bitcoin got as low as like $4,000. So, 02:56 it's up like 20x. So, that's a lot of 02:59 percentage points. 2,000% 20 times your 03:02 money from that dip in 2020. So, that 03:04 was question zero. All right. Number 03:06 one. Number one, is Nick Sabo the real 03:09 Satoshi? Uh, the verdict is no. Um, if 03:12 you ever go on a who is Satoshi Nakamoto 03:15 quest, you will eventually come to the 03:17 conclusion that it's probably Nick Sabo. 03:19 And then the more you research, the more 03:20 you'll realize it's not him and that you 03:23 have no idea who it is. So anyway, uh 03:25 there's a recent book called uh 03:26 Unmasking. I think it's unmasking Mr. 03:29 Nakamoto or something like that. Anyway, 03:31 I did a Facebook post about it. It's a 03:33 super comprehensive, insane 15-year 03:35 journey of somebody doing the most 03:37 in-depth uh writing and reporting that 03:40 has ever been done to try to figure out 03:42 who Satoshi Nakamoto is. They ultimately 03:44 concluded is not Nick Sabo and that they 03:47 don't know and that nobody knows and 03:49 that may be the case forever. So, I came 03:51 to the same conclusion as soon when I 03:53 talked to at the conference. I talked to 03:55 uh Adam back. I talked to um oh the guy 03:59 from uh the guy that invented Litecoin 04:01 was there at the conference. Anyway, a 04:03 lot of the sort of Bitcoin OGs were 04:04 there and I I talked to each of them 04:07 about all these questions and got the 04:09 you know same conclusion from all of 04:11 them which is you know it's not Nick 04:13 Sabo it's not Adam Bach. It's not any of 04:15 these people. None of these people 04:16 invented Bitcoin. We just don't know who 04:17 invented Bitcoin. Um, so question number 04:21 two, why 21 million Bitcoin versus 42 04:24 million or some other even number? And 04:26 the answer is Satoshi Nakamoto, the 04:28 inventor of Bitcoin, just picked it. And 04:30 he picked it based on toting up the 04:33 total amount of monetary uh supply in 04:36 the United States and tried to set the 04:38 price of a Satoshi, the smallest unit of 04:40 Bitcoin, 1/100 millionth of a Bitcoin at 04:42 a US cent. Um, now the money supply is 04:46 much larger now than it was way back 04:47 then. Um so the price of Bitcoin um even 04:51 if it gets to uh parody the smallest 04:53 unit is the same as a cent will still be 04:56 uh $1 million Bitcoin. Um but it's uh 05:00 it's ultimately uh destined I believe to 05:02 go far higher than that because that is 05:04 only the US monetary supply not uh other 05:07 countries monetary supply anyway. But uh 05:09 the other thing is there's a floating 05:11 point um there there's some specific 05:14 amount that if you go above it the math 05:17 gets much harder to do uh due to 05:20 floatingoint math in JavaScript and 05:22 things like that. And so Satoshi both 05:25 wanted to pick a unit which is 21 05:27 million subdivisible into 100 million 05:29 parts each that uh that would roughly be 05:32 equivalent to all of the uh the sort of 05:34 the monetary system he was trying to 05:36 replace. uh but also he was trying to 05:38 stay below that floating point math uh 05:41 difficulty that kicked in if you get got 05:44 above a very specific number which is 05:46 slightly above 21 million. So it looks 05:48 like he picked 21 million bitcoin for a 05:50 combination of that was about the supply 05:53 that he wanted to pick based on uh his 05:55 goal to replace the entire financial 05:57 system and all of the currencies in it. 06:00 uh combined with the need to make the 06:02 software easy to develop for people in 06:04 the future without introducing 06:06 complexity with regard to floating point 06:08 math. So that's why we have 21 million 06:11 bitcoin. Uh all right. So why eight 06:13 decimal places versus nine? So each 06:14 bitcoin is divisible into 100 million 06:18 units. But that makes it awkward for 06:20 decimal points because mostly you do 06:22 decimal points every three numbers 06:24 instead of every uh two numbers. And 06:27 there are two reasons for that. One, 06:29 people hypothesize that he was sort of 06:31 trying to do it like dollars and cents 06:33 where this, you know, you basically 06:35 divide US dollars into thousands, 06:37 millions, billions, trillions, but 06:39 ultimately the smallest unit on the end 06:41 is only two decimal points instead of 06:44 three, which is there's not 1,000 06:46 pennies in a dollar. There's only a 06:47 hundred. So, some people hypothesized 06:49 that the goal was to replicate that 06:51 where Bitcoin was divisible into 100 06:53 million. So each bitcoin would be um you 06:56 know divisible into uh a million units 06:59 and then further subdivisible into 07:02 hundreds like the penny. Uh so some 07:04 people hypothesize that is the reason 07:06 for that. Uh and then the other is again 07:08 it goes back to floatingoint math is had 07:11 there been an extra decimal so that each 07:14 for example each bitcoin was 07:15 subdivisible into um instead of 100 07:18 million a billion for example suddenly 07:20 that creates complexity with regard to 07:22 floatingoint math in certain computer 07:25 programming languages that have a hard 07:27 time holding numbers that have a more 07:30 than a certain number of decimals. and 07:32 he did not want to make he did not want 07:34 to introduce the possibility that sloppy 07:36 computer programming in the future would 07:38 create issues with floatingoint math 07:40 with JavaScript and things like that. So 07:42 whichever of those reasons was the case, 07:45 it resulted in 21 million bitcoins 07:47 subdivisible into eight decimal places, 07:50 not nine decimal places. Um, and I think 07:53 the entire we talk about in terms of 07:55 Bitcoin right now, I think at some point 07:57 when each Bitcoin is worth a million 07:59 dollars per coin, probably everybody 08:00 will start talking about it in Satoshi's 08:02 because at that point at a million 08:04 dollars per coin, one Satoshi will be 08:06 equal to one u uh one US penny. And so 08:10 it'll be a lot easier to sort of talk 08:12 about prices as in, you know, something 08:14 that costs $8 is 8,000 Satoshi's. Uh but 08:17 anyway, that probably is not going to 08:18 happen until Bitcoin uh approaches and 08:20 subsequently crosses uh $1 million per 08:23 coin. Okay. Uh number four, again, it 08:26 started at zero. So technically, this is 08:28 the fifth question, but the number four 08:30 um why having a having instead of 08:32 gradual? So you, Bitcoin could have been 08:34 set up where instead of the uh supply 08:37 issuance dropping by 50% every four 08:39 years, it could have been set up where 08:41 basically every time a a block is mined 08:43 every 10 minutes, it microscopically 08:46 reduces 08:48 uh the total amount of new Bitcoin. So 08:50 it's like okay for for example right now 08:52 every time you mine a block whoever 08:54 mines the block gets 3.125 Bitcoin and 08:56 then you could have set it up that the 08:58 next block is 3.124 Bitcoin and then 08:60 it's 3.123 Bitcoin and instead of it 09:03 dropping in half every four years um 09:06 that it's instead it um it just 09:09 gradually tapers uh which would have 09:11 been smoother than just sort of an every 09:13 four year more of a sort of significant 09:16 drop. Okay. So people have different 09:17 opinions on this uh that of of why it 09:20 was set up this way. The most logical 09:22 one which is sort of the uh you know 09:24 what people talk about with uh you know 09:26 if you hear hoof beatats uh think horses 09:28 not zebras like what is just the most 09:30 obvious reason um is the fact that the 09:33 the uh the computer programming is super 09:36 simple to do that way. It's like five 09:37 lines of code. So to set it up with 09:39 havingss, it's literally five. The 09:41 entire monetary sort of issuance and 09:44 monetary policy of Bitcoin is literally 09:47 five lines of code. It's super simple. 09:49 It gets a lot more complicated if you 09:51 set it up where the block reward, which 09:53 is the amount of Bitcoin that each minor 09:55 gets every 10 minutes. If it if it 09:58 gradually tapers off a tiny tiny tiny 09:60 tiny tiny amount every 10 minutes, that 10:02 is a lot more complicated to program 10:04 from a computer science perspective. 10:06 Other people hypothesized that it was 10:08 not just due to the simplicity and 10:10 elegance, but that Satoshi was trying to 10:13 take a take advantage of what's called 10:15 the Gartner hype cycle for technology 10:17 adoption, which is that it is helpful if 10:21 periodically to trigger a new wave of 10:24 adoption on, you know, when you're 10:26 starting from zero, you have a supply 10:28 shock, which means you have something 10:29 that triggers there being a lot less of 10:31 whatever it is, thereby triggering a 10:34 price increase. And the when you add 10:36 that together uh it triggers adoption 10:39 obviously because the you know everybody 10:40 notices the price go is going up. So 10:42 people are not certain you know was 10:44 Satoshi Nakamoto trying to leverage the 10:47 Gartner hype cycle of technology 10:50 adoption by setting up the havings the 10:52 way they are which would basically 10:53 trigger a new wave of adoption every 10:56 four years based on a supply shock or 10:58 was he just trying to make the computer 11:01 science code nice and super simple and 11:03 elegant? I think it's probably just the 11:05 computer science code, but it did have 11:06 the very helpful effect of making it uh 11:10 adoption sort of naturally kick off a 11:12 new cycle. Now, in the current stage of 11:14 Bitcoin adoption, you don't need that 11:15 because it's already one of the 10 11:18 largest assets in the entire world and 11:20 it's getting adopted organically. But in 11:22 the early days when nobody knew what 11:24 Bitcoin was and it was tiny and nobody 11:26 was sure if it would catch on, it 11:27 definitely was helpful to have this 11:29 every four-year supply shock that would 11:31 basically, you know, force the price to 11:33 rise based on the decrease in supply and 11:36 therefore, you know, suddenly everybody 11:37 would start paying attention to Bitcoin 11:39 again. Uh, but it was probably just 11:41 simplicity of computer science code. 11:43 Okay. 11:45 Um, oh, and I I talked to a guy that 11:48 worked for Bitcoin magazine and I asked 11:49 him all these questions and I said, "If 11:51 you could change anything about Bitcoin 11:53 today, would you change anything?" And 11:54 he said, "No." This was back in again 11:56 2023. And I came to the same conclusion 11:59 after asking all of these questions and 12:01 originally thinking surely there's a way 12:03 to improve Bitcoin somehow. Um, I 12:06 ultimately came to the conclusion that 12:07 there is not. And if somebody handed me 12:08 a magic wand literally today and said, 12:12 "You can go back to the very beginning 12:13 and change one thing about Bitcoin," I 12:16 would literally change absolutely 12:18 nothing about Bitcoin. There is nothing 12:20 you can possibly change about Bitcoin 12:22 that does not make some other aspect of 12:24 Bitcoin worse. Um, and so it's basically 12:27 perfect in its original design. And all 12:30 of my research had led has led me to 12:32 believe that any change to Bitcoin would 12:34 make it worse, not better. and therefore 12:36 it's as perfect as it could be from the 12:38 start which is pretty incredible. So 12:39 anyway, uh is the heart hype cycle 12:42 accurate? Uh the answer is yes, but 12:44 eventually uh it will not be relevant 12:46 anymore. If you want to understand the 12:48 Gartner hype cycle of technology 12:49 adoption, read VJ Buaat's book, The 12:53 Bullish Case for Bitcoin. That book 12:55 again is the bullish b L I case for 12:60 Bitcoin. Fantastic book. it uh it 13:02 explains how technologies are adopted, 13:05 why Bitcoin's price does what it does, 13:06 and once you understand why the B price 13:10 of Bitcoin behaves the way it does, 13:11 it'll make you much more comfortable 13:12 with it as an asset class. Um but 13:14 anyway, but over time, the Bitcoin 13:16 havingss have less and less effect with 13:19 each uh having that doesn't mean there 13:21 will not be hype cycles. It just means 13:23 less and less they will be triggered by 13:26 Bitcoin havingss. Okay. So, 13:29 um what explains the ups and downs of 13:32 the price of Bitcoin? Uh the short take 13:34 is in the near term, it's uh uh it's 13:37 basically the same thing. It's supply 13:38 and demand that affect every other 13:40 asset, which is people one day they 13:42 think Bitcoin's taking over the world 13:43 tomorrow. The next day they think it's 13:45 never going to happen. Everybody's 13:46 speculating all the time. Everybody's 13:48 guessing what everybody else is going to 13:49 do all the time. And everybody is, you 13:52 know, buying or selling Bitcoin based on 13:53 every random bit of news. and it just 13:55 results in a you know short term a lot 13:57 of volatility long-term all of that 13:59 volatility goes away uh as the asset 14:02 gets bigger and bigger and bigger and uh 14:04 but anyway so in the long terms it's uh 14:07 it's driven by the Gartner hype cycle 14:09 although again that is diminishing with 14:10 time in the short term it's just supply 14:12 and demand doing its thing which is just 14:15 that's what happens with any asset um 14:17 you know it's the same reason major 14:19 stocks uh the you know magnificent seven 14:21 stocks go up and down on a daily basis 14:23 even when there's literally nothing in 14:25 the news about them. I mean, it's just 14:27 they're just going up and down because 14:29 everybody's speculating on what might 14:30 happen in the future and all this stuff. 14:32 Um, okay. Next up, we got 14:35 um what about Fed Federal Reserve 14:38 monetary policy? Yes. So, the biggest 14:40 correlary in Bitcoin uh what Bitcoin 14:44 correlates to more than any other thing 14:47 is the Federal Reserve monetary policy. 14:50 How loose or tight is the Federal 14:52 Reserve? basically where are they on the 14:54 spectrum between printing insane amounts 14:57 of money to just printing a little 14:59 amount of money and that goes up and 15:00 down as they're trying to contain 15:02 inflation which is entirely caused by 15:04 the Federal Reserve printing money. So 15:06 they print money, it creates inflation, 15:08 then they try to rein it in by easing 15:11 off of that. And so uh Bitcoin is 15:13 correlated to global liquidity, meaning 15:17 how much money the central banks are 15:18 printing out of thin air more so than 15:20 anything else. And uh right now the 15:23 central banks are just ending a 15:25 tightening cycle where they are they are 15:27 trying to suck money out of the economy 15:29 by offering people uh high interest 15:31 rates which is one of the ways they do 15:33 it. They offer very high interest rates 15:34 which encourages people to put money in 15:37 certificates of deposit or store it at a 15:38 bank account where they can get uh 15:40 interest and then eventually uh stuff 15:43 starts crashing because everything in 15:45 our economy is built on debt and as 15:48 everything starts crashing they have to 15:50 uh print a bunch more money to keep 15:51 everything from crashing. So um uh Lynn 15:54 Alden and who was it? It was Lynn Alden 15:57 and Natalie Brunell's husband uh Sam 15:59 Callahan. So I think Lynn Alden and Sam 16:02 Callahan did a comprehensive report on 16:04 how correlated uh Bitcoin's price is to 16:08 global liquidity and found that 16:10 basically it's one of the highest 16:11 correlations that Bitcoin has to 16:13 anything is global liquidity. Um so as a 16:17 result of that obviously um you know 16:20 it's worth paying attention to that and 16:22 right now we're just getting to the 16:23 point in uh the cycle and of things 16:26 where the Federal Reserve and national 16:30 uh you know uh central banks around the 16:32 world are starting to crank out huge 16:34 amounts of free money out of thin air. 16:37 Um which should correlate again to a 16:39 significant price rise uh with Bitcoin. 16:41 Okay, let's see next up here. What about 16:45 inflation and being ahead hedge against 16:46 inflation? So Parker Lewis does a really 16:49 good job of explaining there's a number 16:50 of talks he's given where he says look 16:53 um Bitcoin is not a hedge against 16:54 inflation. Bitcoin is a solution to 16:57 inflation. And he explains what that 16:58 means. I'm not going to go through all 16:59 of it other than to say 17:02 um sorry other than to say the um the 17:07 price of Bitcoin is much more correlated 17:09 to global liquidity than it is to 17:11 inflation. Inflation is a lagging 17:14 indicator. When the central banks of the 17:16 world, including the Federal Reserve, 17:18 print a ton of money, that later shows 17:20 up in this form of inflation. So, but 17:23 the price of Bitcoin rises as a result 17:26 of printing a huge amount of money. And 17:27 then when the Federal Reserve and other 17:29 central banks clamp down on the printing 17:31 of money, Bitcoin's price tends to fall. 17:34 But it tends to fall right at the time 17:36 that the inflation that is caused by all 17:38 that money printing is showing up. So 17:41 often times people are like, "But wait, 17:43 we're getting record high inflation in 17:44 2022 and the price of Bitcoin is 17:46 falling. How can Bitcoin be a hedge 17:48 against inflation if the price of 17:50 Bitcoin is falling? Uh, you know, the 17:52 price of Bitcoin is falling even though 17:54 inflation is rising." And the answer is 17:55 because Bitcoin's price was rising when 17:58 the Fed was printing tons of money. And 18:00 then it starts falling when the central 18:02 banks are trying to suck money out of 18:04 the economy, which again sucks money out 18:06 of everything, including Bitcoin, 18:07 because they start offering ridiculously 18:09 high interest rates in order for people 18:11 to take their money out of the economy 18:13 and put it in uh certificates of deposit 18:15 or for the uh uh banks to store their 18:18 money at the central bank and they get 18:20 paid interest to do that. Um so but if 18:23 again if you want more detail uh read 18:25 Parker Lewis's work on why uh Bitcoin is 18:28 a solution to inflation not a hedge 18:31 against inflation and he explains what 18:33 he means by that uh and all of that 18:35 which again is probably warrants its own 18:36 video but I don't have time to do that 18:38 right now. 18:39 Okay. Um why is Bitcoin so correlated 18:43 with the NASDAQ and not the NASDAQ stock 18:46 and other tech stock markets? Uh the 18:48 answer is because in the short term 18:50 people think of Bitcoin like a 18:52 technology stock rather than a new form 18:54 of money. At least some of them do. And 18:57 so speculators and tourists who own 19:01 Bitcoin and don't understand what they 19:02 own and they're not sure basically they 19:04 trade it like a stock even though it 19:05 makes no sense to do that. But that does 19:07 make the price go up and down. Over 19:09 time, Bitcoin has gotten significantly 19:11 less correlated to the NASDAQ and it's 19:14 much less correlated now than back when 19:16 I uh wrote this question down. And so 19:19 you right now it it's you know less 19:22 correlated and in the in the future it 19:24 will probably be inversely correlated 19:26 meaning um when everybody is scared they 19:29 will run to Bitcoin and when they want 19:31 to speculate on crazy stuff they will go 19:33 from Bitcoin into the crazy world of 19:35 speculating on whatever and then as soon 19:37 as they freak out again they'll run back 19:39 to Bitcoin. But right now the reverse is 19:41 happening where people are still acting 19:43 like Bitcoin is some sort of a 19:44 technology stock and they're you know 19:46 buying and selling it accordingly at 19:48 least to some degree. Okay, next 19:51 question. What is the upper one 19:54 second? What is the upper price limit 19:56 base money or beyond? Okay, so there's 19:58 this con uh there's concept of base 20:00 money which is tracked by uh porkopoulos 20:03 which is a Twitter handle. I forget the 20:06 guy's name. It's Matthew something, but 20:07 anyway, it's porkopoulos. But anyway, he 20:09 tracks worldwide base money and the base 20:12 money, the last I can remember, is 25 or 20:14 $30 trillion. And then there the M2 20:17 money supply is like $120 trillion. Um, 20:20 so since that question, Michael Sailor 20:23 and a lot of people have done a bunch of 20:24 research that basically says, look, the 20:26 market for Bitcoin is not the world's 20:30 money supply because people don't use 20:32 the the money in the world the way they 20:34 should. They basically only use money 20:36 for short-term stuff because central 20:39 banks are constantly printing more of 20:40 it. So they store their wealth in things 20:42 like real estate or the S&P 500, the 20:45 stock market, NASDAQ, all that. Um so 20:47 but ultimately uh since then the the the 20:51 better estimates are uh for example the 20:53 research Michael Sailor's done which he 20:55 uh I forget the website he publishes it 20:57 all on but it estimates sort of a base 20:59 case of Bitcoin at $3 million per coin 21:01 and a more aggressive case at $13 21:04 million per coin and he's got all of the 21:06 reasons behind that. Uh the easiest case 21:09 to make is Bitcoin as digital gold. 21:11 Gold, all of the gold in the world right 21:12 now is worth about $20 trillion. And all 21:16 of the Bitcoin in the world is only 21:17 worth $1.6 trillion. So whatever that 21:20 is, 13 14x whatever a million divided by 21:24 or 20 billion, you know, 20 trillion 21:26 divided by 1.6 trillion. Anyway, 21:28 whatever that number is, that is uh 21:30 there's a bunch of, you know, multiples 21:32 of significantly above 10x, something 21:34 like, you know, whatever 13 14x just for 21:37 Bitcoin to get to the size of the gold 21:39 market. And most people believe that's 21:42 sort of the starting point. So, let's 21:44 call it $1 million per coin is sort of 21:46 the base case where Bitcoin has reached 21:48 parody with gold. And at that point, 21:50 it's a discussion of how much better is 21:52 Bitcoin than gold. I would argue 21:53 Bitcoin's a lot better than gold. Uh but 21:56 how much better, you know, people 21:57 debate. Okay, next 21:59 up, why 22:02 is the depth chart so symmetrical? I'm 22:05 not going to go into that one cuz it's 22:07 complicated. But if you uh turn on in 22:09 Coinbase Advanced, the depth chart, um 22:12 the sell side and the buy side tend to 22:15 be relatively symmetrical. Meaning the 22:17 number of people that want to sell at 22:19 $1,000 above its current price tends to 22:22 look similar to the number of people 22:23 that want to buy $1,000 below its 22:25 current price. And it just did not seem 22:28 logical to me that that would be very 22:29 symmetrical, but oftentimes it is 22:30 symmetrical. Um I don't have a good 22:32 answer to that other than um the 22:35 behavior patterns of humans tends to be 22:37 similar whether they're buying or 22:38 selling and therefore the people who are 22:40 willing to buy or sell at a given price 22:43 uh above or below the current price of 22:44 an asset tends to look relatively simple 22:48 or similar when you graph it out which 22:50 is what a depth chart does. 22:53 Okay. 22:55 Um, okay. So, at the time, um, I had 22:59 about 60%, this is, uh, again, this is 23:02 January or February of 2023. So, about 2 23:05 years ago since it's well, a little more 23:07 than 2 years ago. I think it was 23:08 February. So, this was uh, yeah, it was 23:10 definitely February. from February of 23:12 2023 to March of 2025, two years, a 23:16 little over two years, uh, Bitcoin has 23:17 gone from either 22,000 or 23,000 uh, at 23:21 the time of this conference up to 23:24 $82,000. So 22,000 to 82,000. Big big 23:28 jump. Um, and my question was at the 23:30 time I had about 60% 60% of my liquid 23:34 net worth in Bitcoin. And my question is 23:36 when should I put the other 40% in? And 23:38 basically everybody was like, well now, 23:40 of course, like why are you even 23:41 thinking about it? But again, you know, 23:43 I was newer to Bitcoin two years ago 23:45 than I am now. And it's still I was 23:48 still figuring it all out and everything 23:49 like that. So ultimately between that 23:52 conference in February of 2023, uh after 23:55 uh Silicon Valley Bank and uh Silvergate 23:58 and whichever the third one was, the 24:00 three banks that got took over, two of 24:03 them got assassinated. One of them 24:04 actually uh went bankrupt. So, three big 24:07 banks went bankrupt or sorry, one of 24:09 them went bankrupt in March of 2023. The 24:11 other two were assassinated by the 24:13 government in 2023 and ultimately it it 24:16 turned out that they were solvent and 24:17 the government never should have taken 24:18 them over but the government took them 24:20 over anyway because they were banking 24:21 the cryptocurrency industry. And so the 24:24 government at the time, the Biden 24:26 administration did not like the 24:27 cryptocurrency industry. And so because 24:29 those banks were banking crypto 24:31 companies, they assassinated them bas 24:34 basically they p pulled the plug on them 24:35 and forced them into bankruptcy even 24:37 though they had money and were solvent. 24:39 U but anyway after that happened I 24:41 ratcheted up from 60% to 80% because um 24:45 nobody blamed that on Bitcoin. Obviously 24:47 it had nothing to do with Bitcoin but I 24:49 was concerned people would try to pin it 24:50 on Bitcoin anyway. But that did not 24:52 happen which gave me a lot of confidence 24:54 and Bitcoin went up rather than down 24:57 after those three banks uh were either 25:00 bankrupted or forced into bankruptcy and 25:03 that gave me a lot of confidence that 25:05 you know when the financial system 25:06 became unstable people would run to 25:09 Bitcoin not away from it because that's 25:10 what happened. So I ratcheted up my 25:12 Bitcoin from 60% to 80% uh as a result 25:16 of attending the Satoshi roundt in 25:19 February of 2023 and then subsequently 25:22 watching things unfold with regard to uh 25:24 the banks that uh blew up or were taken 25:27 over in March of 2023. I ratcheted it 25:30 from 60% to 80% and then ultimately 25:33 later I think in you know April or May I 25:35 ratcheted it to like 87% and then I 25:39 ratcheted you know over the next year or 25:41 so up to 97% which I stayed at a while 25:44 and then earlier this year uh in the 25:47 last month or two I ratcheted up to 99% 25:50 of my liquid net worth. So right now I 25:52 have 99% of all of the liquid assets 25:55 that I own or control are invested in 25:58 Bitcoin and the other less than 1% is 26:01 mostly in Tesla uh to give me some 26:03 diversification. If you consider more 26:06 than 99% Bitcoin and less than 1% Tesla 26:08 to be diversification. Um I just want 26:11 something that I'm not going to have 26:12 heartburn if I have to sell it. And even 26:14 though I love Tesla, uh it does not give 26:16 me the same heartburn to sell Tesla 26:18 stock that it would to sell Bitcoin. So 26:20 by having a emergency reserve fund in 26:23 Tesla, even though Tesla is even more 26:25 Tesla has in my opinion higher risk and 26:28 lower upside than Bitcoin, it still does 26:30 not give me the same heartburn to sell 26:32 it uh in an emergency as Bitcoin. 26:35 Although at some point I might just dump 26:36 the Tesla stock and go 100% Bitcoin, but 26:39 right now I'm above 99% Bitcoin. But at 26:41 the time I was at 60% and I was asking 26:44 that question and the best thing I could 26:45 have done is buy as much Bitcoin as I 26:48 possibly could right then. But like 26:50 everyone, I wanted to get comfortable. I 26:51 wanted to give it time. I wanted to do 26:53 more research. And so, um, while I did 26:55 buy a substantial amount of Bitcoin, I 26:57 think the Bitcoin when I went from 60% 26:59 to 80% of my liquid net worth in 27:01 Bitcoin, it was in the mid to high 27:03 20,000s. So, it was a a couple months 27:05 after Satoshi round table, so the price 27:07 had risen from 22 or 23,000 up to like 27:11 26 to 28,000. uh when I dumped in 27:15 another 20% of my liquid net worth. And 27:17 then again, I did the same thing in the 27:20 40,000s, 50,000, 60,000, 70,000s, and 27:23 I've even bought Bitcoin above 100,000. 27:26 So, never a bad time to buy Bitcoin. All 27:28 right, so um next up, question 13. It's 27:32 really 14, but I started at question 27:33 zero, so number 13. Uh what is your seed 27:37 phrase storage advice? split the seed 27:39 phrase or what is the best approach if 27:42 you have multiple hardware wallets etc 27:44 etc uh this was before the invention of 27:46 bit key uh bit key bit ke.world world uh 27:50 solved all of the problems related to 27:52 seed phrases. So the questions that I 27:54 was asking related to Bitcoin storage 27:56 and best practices on seed phrase 27:58 storage and all of that all of the 27:60 questions I was asking related to that 28:02 became obsolete as soon as the Bitkey 28:05 amazing Bitcoin storage device was 28:07 released which solved all of those 28:08 problems without you the user having to 28:11 mess with seed phrases which is a 28:13 miracle and the way they did it is truly 28:15 incredible. So um that that question 28:18 became obsolete. Okay. Question 14. Uh 28:21 at the time the uh the the main storage 28:24 or sorry the the the same the main 28:27 services out there because Bitkey did 28:28 not exist were Casa CSA Unchained 28:32 Capital and Zapo Bank. Uh and I was 28:35 asking questions about those three. 28:36 Ultimately Zapo Bank does not allow or 28:39 did not at the time allow US citizens to 28:40 have an account. So I could not use that 28:42 anyway. And the verdict from everybody 28:44 was Unchained capital is the a good 28:48 solution for cheap, but Casa is the gold 28:50 standard and more expensive. Um, so 28:53 anyway, so that was the what I took away 28:56 from that was for people with lots of 28:57 Bitcoin that need a sophisticated setup, 29:00 a three of five multi- signature setup, 29:03 uh, the best place to get that was Casa 29:05 Cassa. But again, Bit Key uh, solved 29:09 that problem. Okay. 29:12 Uh question let's 29:15 see 15. Okay 15. What happens when two 29:19 valid transactions both hit the minimool 29:20 at the same time? Uh the answer is every 29:23 Bitcoin node is going to share every 29:24 valid transaction it hears about with 29:26 every other uh Bitcoin node it's aware 29:28 of and then the Bitcoin miners are going 29:31 to start mining on whichever block they 29:33 hear about first. So if two valid 29:35 transactions that uh you know that uh 29:39 spend the same bitcoin which is called a 29:41 double spend uh for example I if I um if 29:46 I tried to spend the same bitcoin let's 29:49 say I'm sitting in Thailand and I also 29:52 am spending the same bitcoin in the 29:53 United States. question is what happens 29:55 because the memp pools on the Bitcoin 29:58 nodes in Asia are going to see one 29:60 transaction and the the memp pools on 30:02 the Bitcoin nodes in the United States 30:04 are going to see a different transaction 30:05 and each of those transactions are going 30:07 to try to spend the same bitcoin. The 30:09 answer is only one of those transactions 30:11 is going to get confirmed on the 30:12 blockchain. So every 10 minutes a 30:14 bitcoin block is mined and that is how 30:16 you know the official record of truth in 30:18 the bitcoin network. So if somebody 30:20 tries to uh do a double spend like that 30:24 uh it will get rejected because uh the 30:26 next Bitcoin block to get mined uh will 30:30 only have one of those two transactions 30:31 in it because the the rules of the 30:33 Bitcoin network state obviously that you 30:35 can't spend the same Bitcoin on two two 30:38 different things simultaneously. So 30:39 that's why um anytime you spend a lot of 30:41 bitcoin on something, it's good to wait 30:43 until after it is confirmed in a bitcoin 30:46 block and things like the bitcoin 30:48 lightning network which was much more 30:50 used for spending of like buying a cup 30:52 of coffee. Uh they work in a different 30:54 way that does not require that. But the 30:55 short take is every mempool is going to 30:58 uh take whichever transaction it hears 30:60 about first. There's something called 31:01 RBF replaced by fee. And so if a uh you 31:05 can escalate if you want a Bitcoin 31:07 transaction, you can uh push through a 31:09 higher fee of a Bitcoin transaction to 31:11 speed it up. Uh but again, none of that 31:13 is really relevant nowadays. Um because 31:16 you know, everybody uses the lightning 31:17 network to pay for stuff, not Bitcoin 31:19 onchain. So super technical. If you want 31:21 more details, let me know. But it's not 31:23 really relevant, but it was just a wonky 31:25 techy question I had. All right, number 31:28 16. What does the Bitcoin lightning 31:30 network or other payment methods allow? 31:32 Do they allow contactless payments like 31:34 I can do already with my Apple Watch 31:35 with the Coinbased debit card? Uh the 31:37 answer is all of those technologies are 31:39 compatible with contactless payments, 31:41 meaning one day you will be able to pay 31:43 with the lightning network or anything 31:46 else using your contactless payments. 31:49 You know, tapping your phone, tapping 31:50 your watch, whatever. But um a lot of 31:53 that payment technology and the payment 31:55 terminals that would support it are not 31:57 uh there yet. Uh so in the in the mean 32:00 or in the near term I buy everything 32:02 with a Coinbase debit card which uses 32:04 the Visa network. In the future the 32:06 payment terminals and everything will be 32:07 updated to support the Bitcoin lightning 32:09 network and you'll be able to natively 32:12 uh transact with Bitcoin. Um and you 32:14 won't have to use the Visa network. But 32:17 uh all of that technology can be used 32:18 with contactless payments. uh it for the 32:21 most part is not yet because it just has 32:23 not been implemented by Google and Apple 32:26 into their contactless payment which 32:27 uses NFC near field communication NFC 32:30 technology. Okay, next up uh question 32:34 is last one here. Question 17. How does 32:39 difficulty being 40 trillion transa how 32:42 does a difficulty adjustment of 40 32:43 trillion translate into a much higher 32:45 hash rate than that on the Bitcoin 32:48 network? Okay, this is a complicated 32:50 one. So, not sure you want the answer to 32:53 this, but so when Bitcoin was set up 32:56 originally, Satoshi Nakamoto chose a 32:59 difficulty adjustment of one. One means 33:03 that a Bitcoin miner will find a valid 33:05 block every uh 4.3 billion tries. Uh so, 33:10 a difficulty adjustment of one means 33:12 every 4.3 billion tries, which is uh two 33:15 to the something power. I guess it's I 33:18 forget what it is. 2 to the 32nd power, 33:20 maybe something like that. Anyway, it 33:22 it's it's the same with the uh it's the 33:24 same number of bits as the um the check 33:28 sum. Basically, if you mistype a Bitcoin 33:30 address, there is a 1 in4.3 billion 33:33 chance that it's valid, but you typed it 33:36 wrong, but it's still valid. It's uh the 33:38 check sum checks for that. But anyway, 33:39 uh so the same number of bits is the 33:41 same uh for the difficulty adjustment. 33:43 Again, it means you're going to find a 33:45 Bitcoin block out of one one of out of 33:47 every 4.3 billion tries. So, um, in the 33:51 early days, he determined that with the 33:52 number of people on the Bitcoin network, 33:54 that would be about every 10 minutes. 33:55 And he needed a difficulty adjustment. 33:57 So, the hash rate is, uh, the hash rate 34:01 is how much total computational power is 34:04 being applied to the Bitcoin network. Um 34:06 there is some complicated mathematical 34:08 correlation between the two because when 34:11 you increase the difficulty adjustment 34:13 uh it you obviously have to the hash 34:16 rate let me put it this way the hash 34:18 rate is going to determine the 34:19 difficulty adjustment. So the difficulty 34:20 adjustment goes up and down depending on 34:22 how much hash rate is on the Bitcoin 34:25 network. So the last time I checked uh 34:27 the difficulty adjustment was 112 34:29 trillion. Uh now to again by to to to 34:33 run the math out there uh a difficulty 34:35 adjustment of one means one every 4.3 34:37 billion. So a difficulty adjustment of 34:40 112 trillion means the number of 34:42 computations you have to try before 34:44 mining a block is 112 trillion times 4.3 34:49 billion because each increment of the 34:51 difficulty adjustment represents an 34:53 increase of 4.3 billion additional 34:55 tries. So um at the time I was uh doing 34:59 this or asking this question two years 35:01 ago uh the difficulty adjustment was at 35:04 40 trillion. Now it is more than 2 and 35:07 1/2 times as difficult to mine a Bitcoin 35:09 block as it was 2 years ago because back 35:12 when I wrote this the difficulty 35:14 adjustment of 40 trillion meant you had 35:16 to try 40 trillion times 4.3 billion. 35:19 Now you have to try 112 trillion * 4.3 35:23 billion. So, the difficulty adjustment 35:25 has increased from 40 trillion to 112 35:28 trillion. Uh, that's what it was 2 weeks 35:30 ago. I didn't I haven't looked. It's up 35:32 or down a little from there, but it's 35:33 probably in the ballpark of 112 35:35 trillion. But the short take is if you 35:37 want to know how the difficulty 35:39 adjustment translates into the number of 35:42 hashes required to mine a block, it is 35:45 again, I think it's 2 to the 32nd. 35:48 whichever one lands you close to 4.3 35:50 billion. I think it's two to the to the 35:52 two, excuse me, two to the 32nd power. 35:55 But anyway, um so you can look up the 35:58 difficulty adjustment and if it's 112 35:59 trillion, then you know that it is 112 36:02 trillion times harder to mine a Bitcoin 36:04 block than it was when the Bitcoin 36:06 network launched. Um, it also means 36:09 that, you know, on average they're going 36:11 to have to guess 112 trillion times, 4.3 36:15 billion times before they mine a block, 36:17 which happens about every 10 minutes. 36:19 And uh, anyway, again, there is a 36:21 mathematical, you know, formula between 36:23 the two because the the uh, difficulty 36:25 adjustment is set based on hash rate. 36:28 It's set based on how uh every 20 2 36:32 sorry every 20 2016 blocks which is 36:36 every two weeks uh 216 * 10 minutes is 2 36:40 weeks. So every 2016 blocks uh the 36:43 Bitcoin network determines how fast or 36:45 slow the Bitcoin miners are mining 36:47 blocks and it adjusts the difficulty 36:49 adjustment to true it up to an average 36:52 of 10 minutes. So obviously that 36:54 difficulty adjustment has adjusted a 36:56 gazillion times in the last 16 years and 36:59 has gone from a difficulty adjustment of 37:01 one literally one to 112 trillion. Um so 37:06 but again there there's a direct 37:07 mathematical correlation between those 37:09 but I don't know what that math formula 37:10 is because it's not it's sort of an 37:13 indirect mathematical uh relationship. 37:17 All right so that is the last question 37:19 on my list. Um, so what does all this 37:22 mean? Well, what it means is I did an 37:24 insane amount of research, came up with 37:26 every conceivable question I could to 37:28 try to understand how Bitcoin works and 37:30 whether it was a safe place to 37:32 ultimately store 99% of my liquid net 37:35 worth. The only thing else I own is less 37:37 than 1% which is mostly Tesla and the 37:41 remainder is illquid assets meaning not 37:44 liquid assets like my stock in Prosper. 37:47 Uh, but obviously that's not liquid. I 37:49 can't buy groceries with illlquid stock 37:51 and that will only become liquid, for 37:53 example, if Prosper goes public on the 37:56 stock market. So, um, what benefit is 37:58 all this to you? I guess it's that I've 38:00 done an absolutely insane amount of due 38:03 diligence to make sure every conceivable 38:06 aspect of Bitcoin is rock solid, 38:08 bulletproof, and the technical 38:11 fundamentals are amazing. And the way 38:13 Bitcoin works is, I mean, just an 38:15 incredible breakthrough for humanity. 38:17 And anyway, I'm just super impressed 38:19 with everything about Bitcoin. So, uh, 38:21 hopefully my due diligence helps you 38:24 have confidence in Bitcoin, even if you 38:25 don't have time to do the same level of 38:28 due diligence yourself. And I understand 38:30 most people don't have many thousands of 38:33 hours to study this sort of thing uh, 38:36 the way I do because I love this stuff 38:38 and I basically listen to audio content 38:41 constantly. Um, so anytime I'm not with 38:45 my family or at church or working on 38:47 Prosper, I've got headphones in and I am 38:50 listening to podcasts, listening to 38:51 books, uh, or using a texttospech app 38:54 that, uh, reads me news articles, uh, 38:58 PowerPoint presentations, PDFs, you name 39:01 it. Any sort of written content that I 39:03 find can be turned into audio content 39:05 and can be piped into my ears to feed my 39:08 brain. And so hopefully you can benefit 39:11 from all of that. So uh those are my 18 39:15 most burning questions that I had 39:16 walking into Satoshi round table in 39:19 February of 2023 about 2 years ago with 39:22 the price of Bitcoin between 22,000 and 39:24 20 $23,000 per coin. And those were the 39:28 burning questions I had and I came away 39:30 satisfied with the answers and 39:32 ultimately ramped up the amount of 39:35 Bitcoin I uh my net worth in Bitcoin 39:37 from 60% to 80% and since then have 39:40 ramped it up to above 99%. I hope all 39:43 this is helpful. Have a great night 39:45 everyone. Thanks.