 So, yeah. Thank you very much for having me. So, I'm Michelle and today I'd like to talk about the hierarchy of money. So, the fact that there is an inherent hierarchy to every monetary system. So, I'm going to introduce a simple model and then apply that to digital assets and Bitcoin more specifically. So, let's get started. I think that it's really important to understand that money is not just one particular thing, but it can actually take various forms and shape even within the same monetary system. So, if you ask people in the street who creates money, most would probably say the central bank and that's entirely correct. So, you have the central bank that creates what we call central bank money. So, physical cash, coins, notes and so on that are available to everyone, but also electronic bank reserves which are only available to, let's say, a select club of privileged commercial banks. And so, all of that money is the liability of the central bank and that's what we call the base money or the base money supply. Now, commercial banks also create money or credit in the forms of bank deposits. So, unlike central bank money, these are actually liabilities of the commercial banks that issue them and they are effectively promises to pay currency or central bank money. And so, that's generally what most people use when they settle their obligations and do payments. And so, those two types of instruments taken together is what we call the narrow money supply. But since the 1970s, actually, what we've seen is a massive surge increase in what we call market-based money or credit creation by the financial sector and that is creation of credit in the form of securities. So, securities being promises to pay money or currency over some time horizon in the future, if you will. So, examples of that are money market fund shares, commercial paper and so on, but we do more generally or broadly pretty much any type of debt security. And so, these are liabilities of the financial sector or what we commonly call also the shadow banking system. And so, all of these taken together is what we call the broad money supply. So, that's the total money supply essentially of an economy. And so, as you can see, the money supply is based on a variety of different financial instruments and effectively credit. So, we can also visually represent this. So, here, just as a quick note, this is just for illustrative purposes. So, the bubble sizes do not reflect at all the actual sizes. So, otherwise, security would probably take over the whole screen here. So, in some cases, in some monetary systems, you also have something that's called a reserve asset that's generally commodity money. So, money that's nobody's liability. So, most commonly that has been gold historically. Now, as you can see, there is already a sort of natural hierarchy that emerges. So, you can imagine there's a sort of like a pyramid, if you will. And this natural hierarchy of all these different forms of or essentially different financial instruments that all to some extent pretend to be money exists, but it's mostly hidden in our everyday lives. And the reason that it's mostly hidden and only becomes really apparent in times of, let's say, financial distress is because there's an elaborate system of security dealers and market makers that operate in between of all of these layers and manage different prices of money. So, first we have the central bank that manages the exchange rate. So, the price of central bank money in terms of the reserve assets or otherwise another, let's say, international or national currency. Then we have the banking sector that manages the price of bank deposits in terms of central bank money. And so, that price should ideally always be the same. So, what we call being on par. And finally, we have the securities dealers that manage the interest rate. So, the price of securities or promises to pay in the future in terms of commercial bank money or currency. And already here you can also see that there's a natural hierarchy between these actors because these agents cannot create forms of money that are above or at a higher layer than themselves in the hierarchy. So, for example, the banking sector can't create central bank money and securities dealers, they cannot create bank deposits. So, let's turn this around. So, this is going to be our main model, this pyramid. Relatively simple. So, in reality, it's a bit more complex. There's more fine-grained layers in between. But I think for our purposes, this simple model serves us very well. So, I guess the key question now becomes really in this system, what is money and what is credit? So, let's first define those two terms. So, money, in my view, is the ultimate means of setting an obligation or promise to pay, whereas credit is precisely that promise to pay or an obligation essentially to pay something in the future. And now, at first it might seem actually pretty obvious of what is money and what is credit in the system. But actually, in reality and in practice, the lines are really blurry. So, it's not very clear cut. And the main reason for that is that what counts as money at one layer of the hierarchy really is considered credit by the layer above. So, essentially what counts as money depends primarily on your position in that very hierarchy. So, to give you an example, we generally pay and as most businesses do with commercial bank money to sell out all our obligations, so bank deposits. So, to us, bank deposits are money because we can sell out those obligations in it. Now, to the banks that actually handle those payments, bank deposits are promises to pay and they only sell obligations between themselves in the base money with central bank reserves. So, to them, central bank reserves or base money is the actual money, whereas bank deposits are credit. So, in order to illustrate this point, let's add two more access to this particular model. So, we have the y-axis that highlights essentially the degree of moneyness, if you will. So, the quality of all these different financial instruments in terms of how much is a qualify as being money. And then the x-axis, which is effectively the money supply. So, the quantity of money or credit that exists in a system. And so, the fact that there is credit that is really inherent in every monetary system is actually a very useful function because it provides us with elasticity. And elasticity is the ability of the money supply to actually dynamically adjust to increased demand for money, which generally happens in times of booms. So, what happens is that actually the money supply expands through the creation of new credit. And so, what's also interesting in these boom phases where there's lots of new credit that's being created is that the qualitative differences between these instruments generally tends to be, let's say, neglected to some extent. So, people in businesses, they don't really see much differences between these actually different forms of money. And that stops or becomes actually quite the opposite in times of financial distress and crisis. So, when confidence levels and trust actually plummets, and so effectively credit is being destroyed, which then actually also reduces the actual money supply. And that is precisely in those times of financial crisis where you start really seeing the qualitative differences between all these financial instruments. And so, you can then also see a rush to essentially the highest quality forms of money, which are generally high up in the hierarchy. So, I would say that this is actually a key feature of any monetary system that you can dynamically expand and contract the supply of money. And this is not only based on the fear currency system, but also as we're going to see with Bitcoin, this is pretty much every monetary system that has this inherent ability, which generally also is not something that's prescribed top down, but rather emerges, let's say, organically and naturally over time from the bottom up. And maybe before I forget, so the element of discipline, so let me actually go back so you can see the base money here. There's actually two elements of discipline, so that puts a sort of, let's say, constrained to the creation of credit. So, the first one is, as we've seen before, that agents cannot create forms of money that are above them, so higher layers at the hierarchy. And then second is the actual base money itself. So, in the gold standard, there used to be the quantity of golds available in a certain country. Now, with fear currencies, it's actually the quantity and supply of central bank reserves that puts a limit to some extent, at least, to the creation of credit at the lower layers. So, let's move to digital assets now. So, first, I would like to talk about digital assets, let's say, as it relates to the traditional monetary system, and we're going to take a US perspective here. So, let's use the same model that hopefully you guys are a bit more familiar with by now. So, in the system here, base money is effectively exactly the same as central bank reserves. It's just we call that today central bank digital currency, or CBDC, and that is effectively just a digital version of base money. Now, today, as far as I'm aware in the US, there is no CBDC yet. But there is actually a project that comes pretty close to it. It's called Finality. And so, they are tokenizing central bank reserves. So, I would say they fit somewhere in between there. The equivalent of bank deposits in terms of digital assets is what I would call bank-based stablecoins, like JPM coin, like signature banks, signal platform, or the Silvergate exchange network. And as you can see, I'll put stablecoins in quotation marks, because in my opinion, those are not actually real tokens or coins. They're effectively just digital bank deposits that exist in an internal closed system and enable you to actually quickly move money around, but only within that closed system. Next, we have fiat-backed stablecoins that are issued by non-banks. And as you can see, we've already left the banking sector, and we're right down in the securities sector here. And again, security is not necessarily the legal sense of the term, but more in practical terms. So, these are effectively stablecoins that are collateralized, either by bank deposits or other short-term money instruments. And effectively, what they are, they are by use of promises to redeem or be redeemable against commercial bank money or bank deposits. And so, as you can see, there might be some qualitative differences between these instruments as well. So, for example, I would think that some people would consider Tether to be less credit worthy than, let's say, a regulated stablecoin like USDC, although I guess it depends on how you look at it. But then, adding another layer of abstraction here, we have crypto-collateralized stablecoins like DAI, for example, or is it called Sino? I can't remember actually. But so, here the idea is that it is not even collateralized by fiat currencies or fiat instruments, but actually by other crypto assets. And yet, another layer of abstraction would be worth mixed stablecoins, which are actually not backed by anything like, let's say, new bids and steam dollar. And again, there are also qualitative differences between all of these. So, I think what's also important here to understand is that actually, this doesn't even include tokenized, let's say, bank deposits or any other kind of securities like digital securities, security tokens, and so on, of more traditional instruments. And so, in my opinion, this is fundamentally going to change really over the next, let's say, five to 10 years, actually. But let's move to crypto currency, which actually, in my opinion, the most, let's say, interesting aspect of all of this. So, I'd like to set them apart because in my view, crypto currencies are effectively monetary systems on their own. They have also their own unit of accounts. And so, to illustrate the point, I'm going to use Bitcoin here as a case study for, well, I guess, obvious reasons. So, let's use the same model again. So, what is the equivalent of base money in the Bitcoin monetary system? Well, that's on-chain BTCs. So, the UTxOs that are recorded and stored in the Bitcoin blockchain. And I would consider those to be synthetic commodity money. So, thin out a synthetic that it's essentially not tangible. And commodity money because it is no one's liability. And what's interesting about Bitcoin is that it has this property of provable scarcity, which is enforced by the protocol rules. So, it already adds a massive element of discipline in the whole monetary system because you can't just create new on-chain BTC out of thin air. The equivalent of bank deposits in the Bitcoin monetary system is what I would call representative BTC balances. So, these are effectively IOUs, so promises to redeem against on-chain BTC. Now, the Lightning network is quite an, let's say, odd edge case because it's not really on-chain BTC. It's not either really an IOU in the traditional sense of the term. So, it puts the Lightning network somewhere in between there. But I guess this will be probably worth just to talk on its own. So, I'll just leave it there for now. But so, moving back to the representative BTC balances. So, first, we have Bitcoin or BTC on other blockchains. So, that would be something like, let's say, T BTC, where the PAC is at least claimed to be trust minimized. Next, here in the hierarchy, I would say you have something like liquid BTC or L BTC, where the PAC would be maintained or is maintained by, let's say, a federation of different entities. And then further down, you would have something like RAP BTC, where the PAC is maintained by just a single custodian. And so, that is just exactly the same thing as custodian service providers, where you have Bitcoin balances, essentially in their internal systems. And that is the same as just holding a digital deposit certificate, if you like. And so, securities in the Bitcoin monetary system are essentially all Bitcoin-based financial instruments. So, promises we need to pay BTC in the future. And so, that can range from lending to investment trusts, to trackers, to derivatives, and so on. And I think this is really an emerging and fast-developing market segment that I'm actually not too familiar with. So, I'd definitely love to do more analysis on this. But just taking a step back here, I think, again, it's interesting to see that, again, this notion of credit being really inherent to any monetary system, including something like Bitcoin. And I would actually say that this is a good thing in itself, as long as, of course, users are aware of the differences between these instruments, and they can actually freely move and use, or essentially freely move between these instruments. So, just before I finish, so, lots of people, especially Bitcoiners, like to talk about what's called the Bitcoin standards. So, essentially, Bitcoin, a new international monetary order that's based on Bitcoin as a reserve asset or reserve currency. So, I think, like gold, and pretty much any other commodity money, the property of essentially being politically neutral, so being nobody's liability, is very useful for international holds, etc. And similarly, the fact that it's provably scarce, so that it has that natural element of discipline, is also a very important characteristic in that context. But the main problem that I see with that is that politically neutral assets generally work mostly or mainly, let's say, in a multipolar world. So, a situation, a world order that's characterized by multiple powers that have a certain balance between themselves, don't trust themselves, and don't want to use each other's currency. And so that's really the environment, so that multipolarity, or multipolar order, where these politically neutral assets thrive. And now, despite what you hear about China, and although lots of people probably won't like this, but I still think that we live in a unipolar world, that it's completely dominated by the United States. So, just for example, the dollar, so the USD underpins pretty much all of global trade. And it is really the key asset that underpins also international finance. And if that's not enough, well, then the US still has, by far, the strongest military on the planet, by really a wide, wide margin. And frankly, I do not really see any serious contender there, at least in the short or medium term. And so, in my opinion, at least, unless the world becomes more multipolar, I don't really see a chance where Bitcoin or something like gold, for example, same counts for gold as well, will really become a de facto reserve currency that underpins a new monetary order. But that actually doesn't mean that Bitcoin won't have its world to play. So, I definitely think that it's going to continue to develop and grow its own monetary system, so the one that we've just seen. Also, what I think we can increasingly see in the near to medium term future is that more and more countries will actually consider Bitcoin as one of several components of their foreign exchange reserves, so just alongside gold. Although for that, the volatility would probably need to decrease quite a bit, though. And then finally, as well, and that it will be increasingly used as a high-powered and also auditable collateral in traditional finance. But again, for that, the volatility still would need to decrease quite substantially. And I frankly think that this is not too bad for an asset that has barely existed for 10 years, and so I think the future sounds really exciting for Bitcoin.