Is It Rational to Hold Bitcoin? With Parker Lewis

Parker Lewis is the author of Gradually, Then Suddenly, A framework for understanding Bitcoin as money. Parker previously worked in finance in the heart of wall street before discovering Bitcoin in 2016. He is now the Head of Business Development at Zaprite, helping businesses migrate to a Bitcoin standard.

Parker on X - https://x.com/parkeralewis

Gradually, Then Suddenly: Essays on Bitcoin Monetization - https://graduallythensuddenly.xyz/

Zaprite - https://zaprite.com/

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Episode Transcript

(00:00):
It's just you can't store the same unit of value in in two
different currencies at the sametime.
And the second that you put Fiatcurrency on top of Bitcoin, it's
a different currency. You're holding a liability in a
different unit. And you can say, oh, well, it's
back. But it's like, yeah, but if you
could just hold the thing, the Bitcoin.
Hello, I am Cody Allingham, and this is the Transformation of

(00:22):
Value, a place for asking questions about freedom, money,
and creativity. My guest today is Parker Lewis.
Parker is the author of Gradually then Suddenly,
Framework for understanding Bitcoin as money.
Parker previously worked in finance in the heart of Wall
Street before discovering Bitcoin in 2016.

(00:43):
He is now the head of business development at Zaprite, helping
businesses migrate to a Bitcoin standard.
Parker, welcome to the show. Cody, thanks for having me on.
Oh yeah, thank you. Now in your excellent book,
gradually then suddenly you identify 3 principles which
through which we can consider money.

(01:05):
Firstly, understand understanding that money is a
basic necessity. Secondly, money is not a
collective hallucination. And finally that economic
systems converge on a single form of money.
Now in particular with this lastpoint you describe how with the
credibility of bitcoins monetaryproperties, of course all people

(01:26):
will eventually use it. Therefore that coin becomes the
global standard. What I propose is that we start
off by critically exploring thisidea of individual human
rationality, though people oftendon't do what's best for them.
So taking the counterpoint for amoment, Parker, what are the
different ways that you see human or the ways you've

(01:49):
observed it when it comes to money?
Yeah, that's good. That's a good way to start.
Well, one, I think there's a recognition that people can be
rational and wrong and then and then people can be irrational at
the same time, right. So an example of that might be

(02:10):
that China went on the silver standard when the entire world
went on the gold standard. And it was it was a bad
decision. There was a reason for doing it.
They weren't they weren't irrational.
There's a lot of irrational things that people could do.
Like in today's world, it's likepeople are rational in deciding

(02:33):
to own gold because the logic says that, well, they're
printing money and the world's going to have to go back to gold
because they don't yet understand Bitcoin.
So it's not that they're being irrational.
They're, they're, they're actingupon some rational thought, but
they, they happen to be in, in my view.

(02:57):
And in that case, they happen tobe wrong because they're missing
some fundamental truth or they're, they're, they're not
realizing something, some other alternative that exists that
would change this, the very samelogic that they're using to
arrive at the conclusion. So, so as it relates to those
kind of sequences of logic that,you know, money is a basic

(03:22):
necessity. What I mean by that is that if
you don't have money, there's not food at the grocery store.
The concept of a grocery store can't exist at the at the very
best, there's some very rudimentary trading post, but
very rudimentary and that would involve barter.

(03:44):
The other the other side of it is like, is there a scenario
where there's many monies? Like could there be, could there
be many? And it's like there are many,
but it but it the logic that explains why money converges to
1 common medium is that both people must accept one form of

(04:05):
money and will in order to to trade.
And then part of that evaluationof what money is to to form a
consensus between any two peoplenecessary necessarily relies on
what the person who's receiving it thinks in terms of whether
other people are willing to accept it.
And it just compounds out and out and out.
And so I think to to test the logic it is, you know, could an

(04:28):
economic system work with a goodthat wasn't money, that that
wasn't particularly useful and unique and capable of
facilitating exchange. And then secondarily, is there a
reason why money would not converge to 1 common medium and
and are the underlying assumptions about trade and

(04:49):
needing one money to to facilitate trade between any two
people, does that not elevate tothe end consequence of everyone
operating on under one money? And then there's things that you
have to evaluate like, well, whydoes everybody use one form of
money in a local economy today? Because there might be hundreds
of currencies, Fiat currencies, but in your local economy,

(05:13):
everyone's trading in one currency.
Is that by coincidence, you know, are humans just
hallucinating into that to that scenario or are they doing it
for some reason? And, and if you can come up with
a good reason, which I believe the explanation that many two
people must agree on on a form of money in order to trade

(05:34):
between them to that that it extends out to the third person,
the 4th, 5th to an entire local economy.
In the case of Bitcoin, because it's permissionless and can be
accessed in any country, money always tended to common mediums.
And in this case it will tend toone.
That's kind of how I think. Yeah.

(05:54):
Well, that, that's interesting because I guess for me, those
three points don't, that's not really an issue as such.
It's more, you know, playing devil's advocate here though,
with that final point as how we,how we frame it and what is it
that makes economic systems converge on a single form of
money. And I guess another way of
looking at this for a rational person, you know, their sense of

(06:15):
personal agency is perhaps within themselves and it's kind
of a personality trait. They, they feel like they can
understand something and they will choose the thing that's
best for them. But the reality is a lot of
people don't live their lives like that.
And they delegate that sense of control.
And so often that means trustingsomeone else or trusting the
state as their default mode. And I guess I'm looking to see

(06:39):
how we can sharpen our Bitcoin argument when we, we understand
that there's a lot, a lot of people in the world who for them
the single convergence is because it's the money that the
state provides. And that's kind of the logic as
opposed to superior monetary properties if that sort of.
Yeah, I mean, I think that I think there it's that I, I mean,
what I would go to is that people are being rational at the

(07:03):
same time that they're they're wrong and that there are
consequences to being wrong. And then that causes people to
change their their logic or applied logic, the the same
logic with access to more information.
And so, you know, like the example being that where I would

(07:27):
challenge, and I know that you're playing devil's advocate,
but where I would poke a hole insomeone who says, well, it
can't, you know, something can'tbe money unless the state says
it's money. They don't actually believe that
they are they are they are doingwhat they believe is in their

(07:47):
best interest. They they believe it is money
and they believe everyone will always accept this as such.
So they think that their decision is the rational one.
But the very moment where something changes in their mind
and they realize, oh shit, I waswrong, they will they will adopt
the better form of money becausethey actually need it to

(08:08):
survive. But it doesn't mean that the way
that everyone gets to that conclusion is the same.
Somebody might get to the conclusion by reading a book,
reasoning through it, and adopting Bitcoin.
Someone else might adopt Bitcoinwhen they're literally forced
to, you know, but when, when, when it's the only form of money

(08:28):
that's working. Someone's not going to be
sitting there saying that, you know, if somebody lived in a, in
a, in a country where there was hyperinflation, they wouldn't
say, well, shoot, that's not money.
It's not granted by the state. And then, you know, they're
sitting there with a pile of Venezuelan boulevards that
aren't worth anything. You know, so it's not that.

(08:48):
It's like basically where I would, where I would push back
on, on the, the devil's advocacyis saying they don't actually
believe the thing that they're saying.
They're doing the rational thingbecause they think it's in their
best interest, and only they will only change their mind to
do a different rational thing when it becomes clear that they

(09:10):
need to, because it's in their interest that they don't realize
that it's in their interest. Yeah.
So there's potentially paying thresholds that are required or
there are paying thresholds to overcome this stickiness,
perhaps because I think maybe arguably the, the, the, the 1 to
3% sort of band of inflation or anything under 10% even, it sort

(09:32):
of maybe is within that stickiness where someone's like,
well, it's, it's too much effortto change.
And I often wonder whether something like changing your
bank, which is actually, you know, can be quite good for
someone. Most people never change their
bank in their entire lives. They, they use the one they were
set up with when they were, you know, they were children just

(09:52):
because of the, the stickiness and the friction there.
And so have you given any thought to what those thresholds
are? You know what one thought that I
had where 'cause like it, it's fairly easy to buy, you know,
$100 worth of Bitcoin or $1000 worth of Bitcoin that it's one.

(10:12):
There's just a recognition that Bitcoin's difficult to see.
Like it's a deep rabbit hole andit's just difficult to see.
And there's no avoiding that foranybody.
The more people that adopt it, the easier it becomes to see.
But then the second thing is that a friend of mine was
showing me different adoption curves and asked what, what do
you think Bitcoin will look like?

(10:33):
There were a number of differentadoption curves and one of them
was airlines. And it showed this very flat
adoption curve and then a hockeystick.
And when you think about it, it's like, well, if you get on
an airplane and the thing doesn't work, you're, you're
done. It's, it's 101, you're the, the

(10:55):
consequence of being wrong. And so it was very slow adoption
because people didn't understandit.
It was dangerous or it likely was dangerous very early.
And they were putting a lot of risk.
And I think that's how people think about their life savings
because it's literally their time and their time is finite.
And somebody that is an adept financial investor that

(11:21):
understands odds and probabilities, taking various
different investment risk, but risk with opportunity of gain.
They think about, you know, potentially losing 1 or 2% of
their wealth differently becausethey're planning, maybe I'll
lose some money here, I'll, I'llmake money there.
And I'm, you know, I'm confidentin my acumen to, to build my

(11:46):
wealth for, for, for a large number of the population, the
idea of putting even 1 to 2% of your, your wealth and risk and
losing it is, is very difficult to do.
And so I think I, I raised that because I think that a lot of
the hesitancy is because of what's at stake in terms of

(12:06):
people's savings and how sensitive that is.
And if, if you pair that with the idea that Bitcoin is
genuinely difficult to see, money is very difficult to
understand, It is, it is esoteric.
It feels like a, a turtles all the way down problem or maybe
describe another way, a collective hallucination.

(12:26):
And then combine that with and I'm, I'm putting some of my
finitely scarce time, my savingsat risk.
Like, no, not for me. And so I think that if if
everyone accepts that, then the reality becomes that there are

(12:50):
objective realities in the world, there is truth, there is
falsity, and people figure this out in a progressive way, you
know, as a combination of listening to podcasts like this,
reading books, and then experiencing things in the real
world. And that's where force comes in,
not being forced to do something, but the force in the
sense that it becomes apparent to certain people that they were

(13:12):
either wrong or that they're forced into no other options.
This is I I thought this other thing was an option, but that
clearly no longer is. Maybe that just changed my
perspective of what Bitcoin actually is.
Yeah, that's fascinating. And in the sort of last two
chapters of your book, you do talk about Bitcoin as common
sense. It's one for all.

(13:34):
And and you quote Thomas Paine on how time makes more converts
than than reason. And I do wonder whether it is
possible that people start usingBitcoin not through a conscious
choice, but more passively. Somehow the machinations of the
legacy financial system kind of give them Bitcoin exposure via

(13:56):
ETFs or other legacy products that kind of start getting them
used to the idea that this thingactually is out there without
them consciously opting into it.What are your thoughts on that?
I think that that will that willoccur.
I still believe that that won't equate or like people today

(14:17):
still consciously have to adopt Bitcoin as money like any like
and realistically even when it becomes apparent to somebody
that there's no other choices, they still have to consciously
adopt Bitcoin as money. So what I would say is that it's
going to find their ways into their portfolios.

(14:37):
If they are holding companies and the company is holding
Bitcoin, it's going to it's going to find its way into their
consciousness, even if they haven't decided to consciously
use it as as money or adopt as money or think of it as money.
An example of that is that, yeah, my view is that I think to
this point, 99 point, some odd percent of people that have come

(15:00):
to understand Bitcoin have done it by reading a book, listening
to a podcast, pairing that primary knowledge, that primary
education with something that happens in the real world that
allows them to see Bitcoin. But 90% of the world will come
to understand Bitcoin as they start to see it being used as
money. That there's a certain there's

(15:20):
just a there's just AI would sayit's difficult for the vast
majority of people to accept based on this, you know, these
ideas or principles or theories,whatever you want to call it
that because of XY will happen because of the fixed supply and
because it's permissionless and censorship resistant that
everyone will adopt this thing as money.
And you're like, there's no way this thing's money what are you

(15:44):
talking about You're being ridiculous.
But then when they see that foodis sold for it that some
merchant was willing to accept it, that will unlock for them
that it is money and that that that would be part of the
education. And so I think I think more so
that that there's a reality thatas more people adopt Bitcoin, as

(16:04):
two people in the network went to 1000, went to 100,000, went
to a million, went to 10 million, that it's always easier
for the next doubling to to to occur.
Because say, when you get to a world of 100 million or a
billion people who have consciously accepted Bitcoin as
money, that those are people that are in your orbit, that you

(16:25):
know are rational, that that have made the choice before you.
As more people stack up and having made that choice as
Bitcoins a greater utility, the choice and the conscious
decision becomes functionally easier because it looks and
quacks more like a duck. It looks and feels more like
money and more people have arrived at it.
So I I do agree with you that itwill find its way in.

(16:49):
But part of that seeping into the consciousness is because
more and more people have deliberately chosen Bitcoin, and
that has an influence on the next wave of people, always.
Yeah, that's fascinating. And I guess are there adoption
metrics or, or things that you've been looking at
practically that have you know over the last few years since

(17:09):
the book came out even that you've been following as kind of
indicators for you of this, of this trend?
Well, one of them is price that if, if there is truth and
objectivity in the world and youknow, because you could, you
know, somebody could look at Bitcoin and say this has this
fixed supply, it's money, it's perfect money, but it's an money

(17:33):
is an inter subjective problem. And if nobody else agrees with
you, then it's not if someone's not willing, you know, if more
people aren't coming to the sameconclusion, then you are wrong.
You know. And so I think that when you
think about the, the consequenceof the fact that Bitcoin and

(17:58):
this, this shift to that world of the future where everyone's
transacting it and, and it's perfectly stable and
everything's priced in Bitcoin, like that's just that not
everyone can get there by just seeing the principles of it.
I guess I would say. And that the metrics that I look
at predominantly is like, hey, are more people adopting this or

(18:21):
not? Are more people coming to the
conclusion that I've come to in the past or not?
This, the single aggregator of that is price.
If more people were not coming to the conclusion, then the
price would not continue to go up over time.
Secondarily, I look at things like, you know, the amount of
say accounts that exchanges or Bitcoin addresses that have more

(18:41):
than .1 Bitcoin or .01 Bitcoin. As it, you know, there's an
interesting trend that as Bitcoin increases in value, the
amount of Bitcoin held in large amounts goes down and the, the
amount held in smaller units goes up, which which is very
logical to increasing adoption. And then, you know, I just, I

(19:03):
see it in, you know, people creating content and books and
you know, you, you might see 100books about Bitcoin.
You might see one about Ethereum.
If that, you know, like 'cause that's education, that's people
committing their time and, and resources to some endeavor
around Bitcoin. And then Bitcoin payments.

(19:25):
You know, where I'm working currently on Bitcoin payments
and seeing real people with realbusinesses want this, you know,
and then exposing it to their customer and having that seep
into the culture. And then things like, you know,
certain headlines, like, you know, different events that
happen where Square, which is a payment processor in the USI

(19:47):
don't they might be in Japan. I'm not, I'm not sure, but they
decided in or not maybe decided,but it was announced in May that
they would be bringing Bitcoin payments to their terminals and
all four million of their merchants in the US.
It's like, OK, that doesn't happen.

(20:08):
If, you know, if adoption is notincreasing that that itself is a
form of adoption and it will also drive even more adoption.
You know, and that's, you know, that's looking at at single
events and saying, is that a bellwether event?
Is that an aggregation of many other data points?

(20:28):
Materializing something significant that moves the
needle. So price is is the singular
greatest thing to say or more people adopt, you know, price
over time. I would say not price day-to-day
volatility, but that trend is, is the singular probably most
clear aggregation of all other noise.
And then everything else is, youknow, things like the number of

(20:49):
Bitcoin addresses, the number ofaccounts that exchanges, the
number of people starting to accept Bitcoin payments, the the
payment volume, the use of lightning, things like that.
So I'm happy to go in any more of that, but those are those are
just painting a range of things that I look at.
Yeah, no, that's a fascinating. And I mean, obviously price from
Austria and perspective is, is apure condensation of of

(21:12):
information communicates a lot of things, right.
I think this this theme of convergence is, is also very
interesting. You know, the way things come
about. It's, you know, not I think from
an engineering perspective, often things can be thought
about kind of lint in a linear fashion or kind of logical
steps, but often it's a lot moredynamic.
And with something like this, it's kind of like we know

(21:34):
there's going to be a traffic jam, but we don't know where
these things kind of come out. And and, you know, you pass
through where the traffic jam isand there was not even any
reason. But, you know, there's sort of
this dynamic when you're talkingabout networks, which is
actually like really hard to to think about.
And it can be a whole lot of little things that happen and
then something big happens. And, you know, here we are today

(21:54):
with, I think just like all timehigh price this morning.
I don't know. Yeah, you've been following
that. But I guess I do want to come
back, Parker, to your time in the system, if that's OK.
You worked at Deutsche Bank in the heart of Wall Street during
the Great Financial Crisis, but you discovered Bitcoin in 2016.
So could you tell me a little bit about your perspectives on

(22:16):
Bitcoin and money from those years in between, please?
Were you, were you working by the time the Great Finish crisis
happened? I was in school.
You were, I remember. I mean, I was, yeah.
It didn't affect New Zealand maybe as much as the US, but
certainly it was something I sawbut I wasn't super sort of
following. OK.
And that's like university or? I was in high school.

(22:39):
OK, OK, well, no. And I ask because I do and there
are shades of of grey, but that having, you know, and I was just
in the working world, but I was on Wall Street and it would have
been my second and third year out of out of college that I

(23:06):
think that just people that wereactually working at that point
and like living it, it, it was formative in a way that can't be
if you weren't. And that, that every, you know,
it's like when you know, something like that can happen,
you're always checking your six and you and, and you just

(23:31):
approach things differently. And so I think that people and
it, you know, it might, might not be true for people that were
30 years older than me that werethinking, Ah, well, there was a
crash in 1987. This is just the same like in my
mind when that happened. And I, and I saw it from, you
know, a lot of my peers and, youknow, not just them, but people

(23:54):
that I continued to be friends with to this day, that it was
clear that something was broken.And it was also clear that we
had no idea what like couldn't possibly know.
And, and there were there were there are people that knew, you
know, there, there have been people that have been signalling
the alarm bells about the amountof leverage in the financial

(24:19):
system, that it was unsustainable that would cause a
currency collapse. Like those people were out
there. My view of it is that that they
never had an actual solution to the problem.
And that the consequence of thatwas that fewer people or, or the

(24:40):
number of people that came to the same conclusions as to what
the solution would be was very small.
And so that having lived throughthat crisis and, and realized
that, you know, again, not knowing at the time, but
knowing, knowing something that was broken, but not knowing what
to today is realizing that, OK, Bitcoins allowed me to

(25:04):
understand what was broken. That it was the money that that
was, that was the root cause of the system being able to be
constructed the way it was with such a high degree of leverage.
But also it's the solution. Like if you, if you realize that
the the problem, but you didn't actually have the solution, it
would be very easy to be pessimistic, maybe dystopian,

(25:26):
black pilled, whatever the term you wanted to use.
And that Bitcoin allowed me in. I think, you know, for a lot of
people that were in the early parts of their career at that
time and, and the crisis being so formative that it makes
Bitcoin easier to see and it allows people to understand what

(25:46):
the what the problem was, but then also being a part and
parcel to what what the solutionis.
So I do think it, you know, it was, it was formative in a way
that, you know, I think ultimately will be for when
everything crashes that like everyone's going to get to
experience it basically. And for people that were working

(26:06):
at that time or in the early part of their career will be the
the second coming. Yeah, interesting.
I it's interesting how you mentioned how Bitcoin gave you
this new perspective looking back.
But I mean, if you do cast your mind back to that time, would
you say that it was a sense of unknowing or confusion about
what had happened that was sort of like in your day-to-day life

(26:26):
for those years in between before you?
Yeah. Yeah, for sure.
Yeah. I mean, yeah, I'm trying to find
a good way to describe it, whichwas like, hey, you kind of just
moved on, right? Because like the Fed came in,
they printed a bunch of money, things calmed down the the sense
of eeriness, like the all the people being fired, the Lehman

(26:50):
Brothers failing or Bear Stearnsfailing.
First, Lehman Brothers failing. Second, the bailouts.
Like I remember working on Wall Street and a bunch of senior
bankers being in the corner office at 9:00 PM and you're
like, those people are not supposed to be here at that
time. And what are they talking about?
Like all the most senior bankersin the M and a group of the of

(27:10):
Deutsche Bank, literally not on the eve of Lehman Brothers
failure. And so, yeah, I like, it's like
things got back to normal quicker.
But the, the, the memory or the knowing of something was broken
never left, you know, So it wasn't like it wasn't something
that had this like long last thing, like immediately, like,

(27:33):
holy shit. But I was like, hey, something's
broken. No idea.
I know that was chaos, but I don't know why.
And then it kind of got normal again.
And then it kind of started to fade, you know, and then at
least in my world, incomes Bitcoin and, and then the other
side of it was that the Fed was starting to talk about unwinding
what they had done. And that that led me down the

(27:56):
path to try to go back in time to, to understand it.
But it was kind of like an, an eeriness that just quickly
faded. I also worked in restructuring
and it was like every business was going to need to be
restructured and thing, you know, the, the people that work
in restructuring were gearing upto have, you know, endless

(28:16):
amount of work. And then kind of, you know, I
don't say evaporated, but it waslike the, the, the, the tide
went out and it's like, well, why did that happen?
Oh, well, that's what happens when you digitally create, at
least in the US, $3.6 trillion, you know, and, and what they
functionally did now looking back, was they massed over a
problem. They didn't.

(28:37):
They didn't fix the problem. They they realistically made it
worse. This masking is is quite
interesting. I mean, I reflect actually on
the forward to your book by Marty Bent and he talks about I
think he was in high school at the time and has economics
teacher was talking about this. And I actually have very similar
memories. My in my final year of school
the my economics teacher, you know, briefly touching on it,

(28:58):
but again, you know, I was a kid.
I wasn't paying attention. I didn't really want to know.
There was many years later that I started looking back and
indeed, you know, me leaving NewZealand, I said it maybe didn't
have as much of an effect on theGFC, didn't have as much of an
effect on New Zealand as maybe the US.
But certainly I felt like there was no opportunities in New
Zealand at that time. And I got out and sort of came

(29:20):
came on this course to coming toJapan.
But I'm really interested that this, this broader project of I
guess the simple way of framing it would be the neoliberal
project. But certainly the market
manipulation, the the systematicprivatization, all of these
things that happened sort of since the, the the late 80s,

(29:40):
early 90s through to arguably 2008.
There was this kind of golden period, which again, I was a
kid, I wasn't really following. I can only read the history
books. But I wonder whether you have
any thoughts more broadly on sort of what is to come.
You know, it seems like the world is moving towards this
kind of competitive authoritarianism.
We've got a move back from that globalization that had taken

(30:02):
place in the 90s and early 2000s.
How does Bitcoin fit into that in your world view, Parker?
Oh, that's, that's probably a question above my pay grade.
You know, I it's difficult to know what happens when there's a
massive sea change in the immediate aftermath.

(30:23):
You know, like I, it's difficultto to know what occurs
geopolitically because of volatility, right?
Like what would I expect to occur is that G3G5 currencies
are all going to hyperinflate and that Bitcoin will be rapidly

(30:47):
adopted as a reserve currency. It will become virtually
overnight, the primary trading currency of the world.
But to know how those balance ofpowers shift or what conflicts
arise or don't it, it's just very difficult.

(31:08):
And you know what I, what I do though expect though, is that
the, you know, the legacy system, even if it sounds like a
bad word, has been weaponized. It's been weaponized in the
sense of, you know, censorship on an individual level, But it's
also been weaponized in the sense of if you can cut off

(31:31):
Russia from SWIFT and functionally take treasuries,
you know, or you know, other financial assets, that itself is
a, it's a, it's a tool that can be used, but it's still a tool
that can be used. It's a, it's a source of
conflict. It's a lever.
And when you take away that lever, then you, you will

(31:53):
inevitably, and it doesn't mean as the next step, but it does
mean inevitably you will arrive at a place of greater peace and
stability because of trade. And because the, the neutrality
is introduced into the currency system that hasn't existed

(32:14):
before that, you know, genuinely, like, there's a
reason why you, if you have a trading partner that you don't
want to destabilize the trade, right?
And if you're all operating withthe same currency and it's
neutral and that currency can't be used as a source of conflict

(32:34):
or a a lever, then it will, it will create a world of greater
sanity and greater balance wheretrade is prioritized over
conflict. But that's not to say that, you
know, given the volatility that the, I mean, certainly in the
interim period, there's going tobe economic instability that

(32:54):
arises from large currencies hyperinflating.
It's just, there's also no way of avoiding it.
You know, it's the hardest thingto predict.
It's like this is the way that it's going and that after the
the trials and tribulations and the volatility, it the economic
world will be far more stable. But like what geopolitical

(33:15):
alliances look like and what, you know, prior conflict zones
look like or maps look like, I don't know.
And it's just I live in Texas. I know that that in that world,
Texas is a good place to be. And that's, you know, everyone's
got a kind of have to evaluate that, you know, for for

(33:39):
themselves just in terms of there's a lot of uncertainty
that comes with the currency of the world changing and it is
changing for the better. But that doesn't mean that
there's not an instability in between, and people have to be
prepared for that. You know, it's interesting.
My my understanding is that during the GFC actually a lot of

(34:00):
countries were piling in to the US dollar as the safest place to
be. The, you know, the idea that the
US would hyperinflate is is veryinteresting, but do you think
that's a possibility given its current status?
Yeah, I think it's an inevitability.

(34:20):
You know, you there have been different iterations of the
Argentine peso, right? There's an Argentine peso that
failed, the re backed it with money, there's a new new peg and
then it failed again. You know, so there might be
future iterations of the dollar and it might be backed with a
Bitcoin, but that the current version of the dollar will

(34:43):
hyperinflate that you can't cannot produce trillions of
something at 0 cost and expectable to value like it.
That is actually what causes theeconomic system to deteriorate,
the fact that that phenomena exists in the 1st place and
everybody has an interest, whether they realize it
rationally or not. To go back to our the beginning

(35:05):
of the discussion that they do, they have an expressed interest
in preventing anybody else from printing money and they have an
expressed interest in holding a foreign money that can't be
printed. And so I, you know, the, the
same that's true of the Venezuelan Blvd. is true of the
US dollar, is true of the euro, is true of the yen, that all of

(35:25):
those are currencies that can becreated out of thin air and are,
and if there's an alternative that people can adopt that that
is not true, which there isn't aBitcoin, they will do that.
And that what I would look at interms of the financial crisis of
what you are seeing is that the,the thing that guarantees that
there are going to be more dollars printed, there's also

(35:47):
the thing that creates relative scarcity in in the dollar today.
And that is the massive amount of leverage that exists in
dollars. So when the financial crisis
happened, everyone was demandingdollars, not because the dollar
was a secure thing. It was because they had dollar
debts. And it doesn't mean that every
last person was in debt, but thesystem in total was.

(36:09):
And so gold was sold for dollarsany, anything that you've looked
at. And the explanation for that was
not that the dollar was the mostsecure thing.
It was that the dollar was the, the funding currency of the
world and it was highly leveraged and everyone had debts
that were coming due and they were cascading.
One default was leading to the next because of the way that the

(36:31):
the financial system was constructed.
Well, that very same thing as what dictated that they were
going to print dollars, you know, and like what actually
happened was you the the Fed wasgiving swaps to places like the
Bank of Japan who needed dollarsbut didn't have them.
You know, that's what that's all.
That's what all the the calls toaudit the Federer about.

(36:51):
It's like there's a lot of things that they don't want to
know. Like if you knew that the Fed
was having to lend dollars to the Bank of Japan, basically
giving them an unlimited amount of dollars to swage a crunch on
dollars of people needing dollars and and fleeing Japan,
then it would precipitate the crash.
So I think it was more of a function of leverage unwinding

(37:15):
than it was fleeing to security.And the same thing exists today.
It's just there's about 7 times more dollars that exist now than
then. And the next time there's a run
on dollars because of the massive leverage that's that

(37:35):
continues to exist in the system, they will have to print
trillions more and more people will figure out that it's not in
their interests. So the answer is yeah, the the
in my view, the dollar is hyperinflating because there's
no, there's no way around it. That's fascinating.
And so this this current instantiation of the dollar
hyperinflation, though you mentioned something there,

(37:57):
dollars backed by Bitcoin. And I wonder, I mean, again,
even since the book came out, how have you come to understand
that? What?
What? What do you see within that idea
of a of a dollar backed by Bitcoin?
So it becomes a rational thing to try, but it also, in my view,

(38:21):
remains maybe illogical because if anyone was presented with the
world of, oh, you can have Bitcoin or you can have a dollar
that's backed by Bitcoin. Well, the only reason that you
wouldn't choose the Bitcoin is if by some force to say, the US
government says, well, you can'thave Bitcoin, but you can have

(38:42):
the dollar that's backed by Bitcoin.
But even in that world, you'd rather have Bitcoin if you
could. And there's enough regulatory
arbitrage and competition that different jurisdictions are
going to treat it different ways.
And that's going to be the forcing function that that keeps
everybody safe in the sense of giving them access to actual
Bitcoin rather than Fiat currencies backed by Bitcoin.

(39:05):
That being said, people are going to try it.
They're going to try to say, Oh,well, you know, my Fiat currency
is backed by Bitcoin and it gives you these benefits, but
I'd still be better off holding the Bitcoin.
And so, you know, it's like you could try to back a Fiat
currency in a, in a way that it's fixed and there's a, a peg

(39:30):
for the currency, but currency pegs always fail because, and
you could, you could also take aFiat currency and back and buy
Bitcoin and say, I'm never goingto print the Fiat currency
again. And it would still be based on
trust and they would still printthe money and people would still
have the ability to, to hold Bitcoin directly.
And that is the incentive. And so it is a logical thing for

(39:55):
a Fiat issuer, Fiat currency to try, but at the end of the day
for the economic system. My, my personal view of it is it
only represents an unnecessary friction that, you know, and
again, in like that, in an Austrian sense, it only starts
to introduce distortion where distortion literally doesn't

(40:18):
need to exist because the systemitself could operate on Bitcoin,
that Bitcoin can be used to facilitate transactions.
And you know that, that that doesn't mean that everyone has
to be holding it non custodially.
It just means that all the liabilities can just be dollar
denominated or, you know, deposits that a custodian could
be, sorry, not dog denominated Bitcoin denominated.
Or if there's bailment agreements that they would be

(40:40):
Bitcoin denominated rather than,you know, converted in, you
know, deposited and getting a contract out that says, Hey, you
now have X units of a Fiat currency, that having something
denominated in some other unit that's not Bitcoin becomes the
irrational, illogical thing to do.
So I think it's logical for people to try because they're
trying to preserve the Fiat currency.

(41:01):
It's just you can't store the same unit of value in in two
different currencies at the sametime.
And the second that you put a Fiat currency on top of Bitcoin,
it's a different currency. You're holding a liability in a
different unit. And you can say, Oh, well, it's
backed by this, but it's like, yeah, but if you could just hold
the thing, the Bitcoin or, and I'm saying even if you held it
at a custodian and you say, yeah, don't give me a contract

(41:23):
for X number of dollars, just give me a contract for X number
of Bitcoin. Those are two fundamentally
different things. And so it will be tried.
It will be logical to try it, but it will just, it will not
be, you know, it will also at the same time be illogical.
And the economic incentives willdictate that people that try
that will ultimately fail. Interesting.

(41:44):
The government's going to need Bitcoin too.
You know, like I'm unrealistic, like they're going to tax in
Bitcoin, they're going to use Bitcoin, they're going to fund
the operation of the government and Bitcoin.
They're going to, they're going to accept Bitcoin too.
They, they just will have an interest to continue on their,
their Fiat currency. But once they figure out that
that's no longer possible, they will adopt and use Bitcoin just

(42:07):
as it works. That's interesting.
I mean, again, devil's advocate with two points on that.
Firstly, you know, I'm here in Japan and you know, just
yesterday talking with someone looking out the window and
thinking about looking out the window at the, the Mitsubishi
Bank headquarters, this huge building and all of the payment
operations and the, the point ofsale units and the, the millions

(42:31):
of people using yen every day. And the kind of the
infrastructure that's been builtout for the Fiat system.
It's, I mean, it's pretty good. You know, you can tap to pay,
you can do all of this stuff. There's a whole lot of incumbent
legacy stuff there, which is really interesting.
And, you know, I wonder how thatplays into it.
And then the second point is there's always a talk to the
gold standard, the classical gold standard and, and even

(42:53):
earlier. Yet what's often not talked
about is that in the vast majority of cases, the gold
needed to be stamped by the sovereign and to be minted to be
currency. And, you know, you couldn't
necessarily use gold as, you know, just Nuggets of gold to
pay for things. You, you needed to have the, the
specie that it had the, the, themark of the king or whatever on

(43:14):
it. And that was a process that made
it into legal tender for paying taxes and things.
So with those two points, I mean, how does that relate to
what you what you just said? OK.
So on the first one, it's fairlyeasy, which is that there's a
lot of legacy technology that will incorporate Bitcoin, that

(43:37):
Bitcoin will be incorporated in the same point of sale systems,
just like Square is incorporating like the point of
sale isn't changing. They're building new software
into it. Bitcoin can be is already today,
but it will become more prevalent.
You can use a, a card to tap to pay for the Bitcoin that that
there is a lot of good technology and a lot of that

(43:58):
technology will continue to exist and be leveraged and
Bitcoin will be built into that.So there's nothing that prevents
that from happening. So that's how I would respond to
to that one that things like credit cards and tap to pay and
Venmo, they're not specific to, they're not, there's not

(44:22):
something that says, oh, that the Fiat currency that's running
over that rail, it can't also beleveraged to use Bitcoin.
In fact, it can be and it will be even better.
And there will be things that Bitcoins capable of doing that
Fiat currencies can't because ofthe way the Bitcoin works, but
not vice versa. That Bitcoin could work

(44:43):
identically to the way the Fiat system works if people wanted to
use it that way. And, and in many cases it will.
Second thing on the, the gold being coined and stamped and
that that was kind of what, whatmade it legal tender.
Part of that is, is for the reason that if you're just

(45:07):
thinking from a practical perspective, not even a legal
perspective that there needed tobe some issuer to make gold
functional and a utility is money that you needed some way
to create a standard unit. You needed a way to to validate
that the standard unit actually was the unit.
You need somebody to attest to that to effectively increase the

(45:30):
efficiency of like you're viewing trust.
It's like, OK, well, it has the stamp of the crown.
And it's like, if someone is so dumb to put the stamp of the
crown on their own coin and theydidn't create it, then, you
know, if they're found, if they're caught, they're going to
be killed. So there's a lot of risk.
And then if someone's to counterfeit it, same thing.

(45:51):
And so realistically to to, you know, again, setting aside like
legal authority, like legal decree, this is legal tender.
There there was a necessary function to an issuer of
currency sitting on top of money, setting the standard

(46:13):
weight and measure, ensuring that the goal was gold and
enforcing against counterfeit and functionally validating that
that actually made that the physical element gold.
It converted it into something that was a utility.
But Bitcoin doesn't need that because it has a standard
measure baked in standard unit measure.

(46:38):
The the network issues the currency.
So there need, there need be no third party issuer, central
issuer. The network validates what is
currency and what is not, what'svalid and what is counterfeit or
what is invalid. And so all of the things that
are that you know, in the case of gold or realistically any

(46:59):
form of commodity money that came before it there that the
reasons that issuers were needed, which were many or
multiple, Bitcoin doesn't need because of how Bitcoin works and
the nature of the system that the network itself fulfills the
role of what a currency issuer would have done to augment the

(47:20):
commodity money to turn it into a a functional trading currency
and money. So those those things were real
and they existed, but they just don't exist in Bitcoin because
Bitcoin issues invalidates currency and is able to transmit
currency and do all that withouta central third party or a

(47:42):
central issuer. Yeah, no, that's great.
And I am interested, you know, that there is this simplicity
that, you know, just what you'vedescribed, you know, sort of
like, wow, you know, if, you know, you know, even somewhere
like this busy Tokyo station area where I was yesterday, you
know, these skyscrapers and all these people, if the need came
and there was this kind of greatrealization, you know, how

(48:04):
quickly would would that happen and people move over?
It actually maybe wouldn't take as much time as one might think,
especially where we are at today, where it's sort of, it
does seem like it's a little bitslow, like maybe we're still a
little bit early. But certainly work could be done
if, if, if people needed to and they were pushed into one of
these pain points, right, these thresholds, whereas, oh, we've

(48:27):
got to change this thing out. And the, the simplicity is quite
beautiful. And I wonder just sort of if you
could contrast that with your, your time again at Deutsche
Bank, because I mean, the legacyfinancial system is complex.
I don't understand it. I don't know if anyone fully
understands it. And so it's almost like kind of
shocking that we would propose that something so simple like

(48:47):
Bitcoin could actually fix all of this.
What are your thoughts on that? Yeah.
I think that is, I guess what I'd say is that a lot of people
has, there's an acceptance that Bitcoin is complicated and it's
difficult to see and it is both of those things because money is

(49:08):
difficult as a concept. But beyond that, it is very
simple like in terms of its application and the reason, any
incentives and how the how, how beautiful it is that this idea
of just of currency that can't be printed aligns all of these

(49:28):
otherwise adversarial interests that everyone just accepts.
OK, well, we can't do this one thing, you know, and none of us
have this interest to undermine it, even if we're adversarial to
each other. That people who think that
Bitcoin is too complicated to understand or for the for the
entire world to adopt it as money.
You know, one thing I would say is that, and I'll, I'll get to

(49:51):
the relation to Deutsche Bank, but the financial crisis was
like the phone is complicated. The phone is used everyday by
people who don't understand how the technology works.
I work at a telecom company. I to this day still don't, can't
get my head wrapped around the idea of people, you know, us
talking right now, like how thathow that is actually like I, I

(50:15):
understand the technology that it's running on.
I still like there's a, there's a glitch in my brain when it's
like, and how is how are you sitting across the world and
we're talking in real time like that.
That's magic. Then Bitcoin's the same.
It's like it is, is very technical under the hood and
people will be able to conceptually understand why it

(50:36):
works and how it works without understanding technically, like
actually how everything's put together.
And then, but then for those people who say, oh, Bitcoin's
too complicated for people to get their heads around, it's
like, no, the financial system, the legacy financial system
truly is way more complicated. It's way more complicated at so
many different levels. It's more complicated in terms

(50:58):
of the the politics in terms of how money is issued.
It's more complicated in terms of the the relationship between
different central banks. You know that compound the
complexity of the politics of how money is issued because
there's consequences between trading partners that come from
it. It's complicated in, in terms of

(51:18):
individual counterparties and credit risk and how, how
collateral is held against moneyand the contracts that, you
know, might need to be enforced or then taken to court.
And all those things about like court and legal exists, you
know, can exist in Bitcoin, but but they're actually separate

(51:39):
from the operation of the network itself.
And, and, and then, you know, just the, the, the dynamics that
come from effectively orders of magnitude of leverage sitting on
top of the base money. Yeah.
So and no one really understandsit.

(52:01):
There's, you know, like I have AI have a concept of, you know,
how individual things work, but and, and the guiding the, the,
the things that forced the Fed to print money or not print
money. But in terms of when you light
the match on fire, like how manydominoes really fall and how you
how what it takes to stop it. It's like, it's such a black

(52:22):
box. And so, yeah, we can rid
ourselves. And then and, you know, it's
like so much of the world today sits on pins and needles and
waits to see what Jerome Powell says, you know, or the PBOC or
BOJ or ECB. And so much of the economic

(52:49):
decision making is resting on these these decisions that if
they could just be taken away and no longer exists, then it
frees up so many resources to focus on other things.
So, yeah, it is the the financial system, the legacy
system. What the, you know, financial
crisis demonstrated was there's this great degree of complexity

(53:09):
that no one really understands. the Fed itself doesn't really
even understand it. And they admit that if you go
back and read Fed transcripts, they admit that they did not
understand what was happening and they did not understand the
cause and effect. But they needed to attempt to do
something, so they printed a bunch of money, again, not
knowing the consequences, so that that system is being
replaced with this. Very easy.

(53:31):
There's this for money. No one can print it.
You can access it with a node. And yeah, this concept of mining
is a little bit esoteric, but runs energy to help enforce the
fixed supply and validate currency.
And so long as you can have money in your bank account and
it holds its purchasing power against real goods and services
and you're able to trade it the other people for real goods and

(53:52):
services, that's it working. And so much of life will become
more simple. Again, it's not utopian because
there's there's going to be volatility when the sea change
really occurs. Yeah, yeah, it's fascinating.
And you mentioned the word beauty before, which is
interesting because, I mean, honestly, I don't rate myself as
a rational person that much. I am an artist at my core and

(54:17):
for me, what really stood out going into Bitcoin was that the
kind of beauty of it feels right.
It feels simple and and it just it's very.
Right about it. Yeah.
It just it feels good. And I guess the, the other side
of that though, is if I was morerational, I would have brought
more micro strategy. And I want to just sort of

(54:39):
linger on that because for me, Ido feel a lot, you know,
simplistically, I do feel a lot better having sets and cold
storage. Yet we have seen this emergence
of these Bitcoin treasury companies.
And I just think sort of wrapping up a little bit,
Parker, do you have any systemiccritiques or understandings of
what this Bitcoin treasury company phenomena means?

(55:00):
I, you know, I think that one I want to, I want to touch on the,
you know, if, if you were rational that you would have,
you know, held more micro strategy that you can be
rational and do that, but then you can also be rational and not
do that. And that I saw somebody and then
this is how I think. But it's like saving Bitcoin and

(55:22):
focus on your craft, right? And that's what sound money
really allows you to do. And that saving in Bitcoin is
enough because it's allowing youto increase, you know, hold your
purchasing power, benefit from being early to Bitcoin.
And if you think that it's rational to, and I'm not saying
that you think this, but I'm, I'm pulling on this one.

(55:45):
If you think that it's rational to spend more of your time and
energy getting more money if youalready have enough, and that
the time that you spend thinkingabout getting more money rather
than creating something, producing something that
somebody else can consume and deliver value to them and have

(56:05):
that be the way that you get more money.
Then if you look at it through that way, then it becomes
irrational. You're like, no, I've got
enough. The purpose of this is not to is
literally not to make money. It's to produce value, to trade
to, to be compensated, to live in a, you know, some sort of
greater harmony. And that's how I think.
That's how I think about it in my own life is like, I'm able to

(56:26):
do the things that I want in my day-to-day life because my
money's all its purchasing power.
Now, if I was optimizing for themost amount of money, maybe
there's a way to do that, but that's not what I'm optimizing
for. And then the other side of that
is I have to be optimizing. And Michael Saylor will say this
himself. He's like, you're taking my
counterparty risk, you know, andlike, you should own Bitcoin,

(56:47):
but you have to know that if you're owning Microstrategies,
it's something fundamentally different.
I don't have to worry about that.
None of my time and energy worries about that.
And I, it's basically like, it'salmost like being too cute in my
mind. It's like you, if you've figured
out the answer and then you, youget a little greedy, you know,

(57:07):
where, where does that stop? Even if you're like, Oh, I'm
just going to be a little greedy.
So I think that it is very rational to, to pass on that.
I also don't think it's a bad thing.
I think that, you know, it's like what they're doing is
rational. At the same time.
I, I, if it was me personally, I'd be like, hey, bro, like
investments in Bitcoin companies, like build, build the

(57:28):
future you want to see, don't financial engineer.
But I can accept that it's not abad thing at the same time as
helping, you know, arbitrage theFiat system and expose a
weakness in the Fiat system. And that that is functionally
what they're doing. They're they're arbitraging Fiat
capital markets. They're borrowing from people
that are willing to take a much smaller amount of Bitcoins

(57:50):
upside because of some realistically, in my view,
misaligned incentive. And you know, and when I say
that they're, they're, they're allocating someone else's money.
And but it's a benefit because it's, it's exploiting and
showing the weakness of the Fiatsystem.
If, if the weakness didn't exist, then it wouldn't be

(58:13):
happening. And it is, you know, showing the
fiat's support. It is.
So I think it's, I don't think it's, I mean, I don't think it's
a bad thing. I personally don't want to spend
my time thinking about, you know, I'd rather be out in the
real world, not just optimizing for amount of money.
But I think it's great what they're doing at the same time.

(58:34):
But I also think that not everyone is going to be as good
at that game as the author of it, as Michael Saylor is.
So I would be cautious. I'd be cautious of everything.
I would just own Bitcoin stacks that stay humble, put it in cold
storage and go work on your craft.
That's my advice to people. But if you're going to do it,
I'd probably trust Michael Saylor to do it than anybody

(58:54):
else. Yeah.
And Speaking of that, just sort of wrapping up then talking
about craft, I mean, what's nextfor you?
What what's in the pipeline for 2025?
What are you working on? So heads down working on Zapray
Bitcoin payments, the just delivering product that people

(59:15):
want to use and need and to support real businesses and to
help people that have figured. And really what we're targeting
at Zaprite is people that have already figured out Bitcoin.
We're delivering solutions that that people who understand
Bitcoin that are at the point tosay now pay me in Bitcoin that
those people need and want. So what's on the horizon is

(59:39):
Zaprite. We've just released a new ticket
solution for you know, we were we were already supporting
people with an imperfect solution doing a lot of events
using Zaprite payment links. And so we realized that we were
having success there. So we built a more native
solution that's live, but but still behind a feature flag.
So we're in the process of onboarding early users.

(01:00:00):
Anybody that was interested in that, we'd be, you know, I think
we, we have the guys at, at the Tokyo Bitcoin Conference, they,
they use our payment links and they're onboarding to our
tickets. So that's one thing we're going
to be working on an application for individuals to help send
Bitcoin between each other. That's a little bit, you know,

(01:00:20):
I, I. It's already July, so if we, you
know, hopefully there's something released, you know, in
this fourth quarter, but that'llbe the next big thing.
And then it's just improving everything that we have
currently on our API and improving connectivity.
You know, we, we support the mining industry from the payment
side, so finding more ways to dothat.

(01:00:41):
But with our current products and just continuing to build
out, you know, our thesis is that every business is going to
need Bitcoin payments in the future and that we are building
products for the most logical places where there's overlap of
willing buyers and sellers in Bitcoin.
Where there is that most logicaloverlap is closest to the center

(01:01:02):
where it's people going to Bitcoin events, it's people
working with Bitcoin financial services companies or places
like Bitcoin Mentor that are doing Bitcoin education or the
Bitcoin way that's doing Bitcoineducation is Bitcoin miners.
It's like all the concentric circles around the Bitcoin
service industry because their customers, they have Bitcoin,

(01:01:24):
they're willing to pay in Bitcoin, but then they're the
most logical next wave of peoplethat have businesses that say,
well, I want to be paid in Bitcoin too.
So it's a way that we distributeour brand and distribute our
products. We kind of stay small and
focused and and narrow because we can't be everything to all
people, but we know the end state is that everybody's going
to need this product and we, we just focus our time and energy

(01:01:47):
on Bitcoin payments in the most logical areas to build 1st And
yeah, just going to continue to knock down doors and one
business at a time, because I do, I do genuinely think that
more, you know, the I enjoyed writing the book.
I, I, I enjoy sitting down and and not just talking to podcasts
like this, but orange feeling people like I, I genuinely enjoy

(01:02:11):
helping them see Bitcoin. There's another reality that the
vast majority of all the people in the world are going to like
when you're when you're able to explain all the things that are
fundamental about Bitcoin and fundamentally true, and then
you're able to say and that grocery store accepts Bitcoin is
payment, you can get food for Bitcoin.
It's going to make it so much easier for everyone to
understand. So we're doing it for the

(01:02:33):
businesses that we support, but it also is a form of education
in itself. Like you should.
You should use Zaprite if you'renot already.
Yeah, yeah. We have invoices, you can bill
your your sponsors and they can pay you an either Fiat or
Bitcoin. That's the beauty of it.
Yeah, no, I'll definitely check it out.
And again, thank you, Parker forjoining me talking about your

(01:02:56):
book gradually then Suddenly andtouching on Bitcoin money and
your work with Zaprite. So, yeah, thank you very much.
Hey, appreciate you having me on.
I am Cody Allingham, and that was the transformation of value.
If you would like to support this show, please consider
making a donation either throughmy website or by directly

(01:03:16):
tipping to the show's Bitcoin wallet.
Or just pass this episode on to a friend who you think may enjoy
it. And you can always e-mail me at
[e-mail].