 There's no design space left to disrupt Bitcoin. It's the perfect, the most perfect money we've ever had. The higher a command comes, if it comes higher up the chain of command, the symbolism of Christ purely means truthfulness and individual sovereignty. Bitcoin maximizes both of those things. I think the last time I heard Bitcoin and Jesus in the same sentence was when someone was referencing Roger Bayer. Oh yeah, forget that guy. Hi guys, it's Joker. What's up, YouTube? Welcome to the show. My name is Jackson and today I have the pleasure of speaking to Robert Breedlove, who is the founder and CEO of Crypto Asset Hedge Fund, Parallax. How are you doing today, Robert? I'm doing well, Jackson. Thanks for having me. Yeah, it's a great opportunity to speak to you. So I guess I kind of like to start with the basics and then we can ease our way into the real meaty stuff. So how did you first come about Bitcoin and how did your background help you understand the potential of Bitcoin? Sure, so I've always been a curious person, curious kid. I've been reading a lot my entire life. And there came a point where I stumbled across the book, The Creature from Jekyll Island. And I think this was in like my late teens, early 20s. And I had this dawning realization that central banking was at the root of many problems in the world. So at that time I went and there was one Christmas, this was a few years later in my early 20s, I bought an abridged version of The Creature from Jekyll Island, which is a book about the inception of the Federal Reserve. And this abridged version is called Dishonest Money. And I bought several copies of this. I got up for some friends and family for Christmas. And my general position was like, here's some information about what's wrong with the world. Central banking is at the root of many of the problems, including warfare, wealth disparity, all these other things. So I gave this book out, a few of my family's friends read it and they got back to me with, thanks, that's interesting. I appreciate the knowledge, but what can we do about it? And again, this is like 2005, 2006. So this is pre-Bitcoin. And I'll never forget just that feeling of kind of being dumbfounded a little bit, sort of helpless. You know what, I thought that just sort of arming ourselves with knowledge would help bring this thing down, but there really was no good pragmatic answer, no practical tactical response to central banking at the time. So that stuck with me. And fast forward to 2014. By this time, I'd already earned my undergraduate master's degree in accounting and finance. I was a CFO for a technology company at the time. I'm on vacation in Costa Rica, having an argument with a banker. And his position is that digital currencies, this is 2014, will absolutely never work. 100% will never work. Banks will run the monetary system until the end of time. And my position was the precise opposite, that digital currencies were inevitable. Like it was a 100% chance that banks would be disrupted. However, and I always kicked myself for this, at the time I was operating under the fallacy that Bitcoin was version one of what would later become version 50, that would be the thing that kicks central banking's ass. I hadn't gone down the proverbial rabbit hole. I hadn't studied it deeply enough. So I'd, although I had speculated on it slightly, I hadn't really gotten serious about it. So fast forward again to 2000, this is late 16. I'm studying actually Ethereum. And when I stumbled across the concept of smart contracts, specifically Zabo's work that he actually wrote about smart contracts in the late 90s. And I had this epiphany that the entire finance industry, which is just an intermediary function, just connecting buyers and sellers, is basically disruptible by a smart contract. It is today a dry code function that has human beings on top of it. So it's just a totally inefficient layer basically that I think software will replace in the long run. So at that point, I realized the wave of innovation sparked by Bitcoin was gonna be a really big deal, like as big as the internet. So I started making heavy investments into the space, late 16, early 17, 2017 was Berserk as we all know, market was up 1,800% in a year. During that process, I had left my CFO role. I was starting my own company, doing some consulting work in the finance and tech space. And everyone in my personal and professional spheres knew I was investing in crypto. So when 17 was booming, everyone was reaching out to me, like how do I get exposure to this, what's going on? And then just sort of organically, we launched Parallax Digital and we operate some multi-strategy crypto asset funds and a Bitcoin slash digital security consulting practice. That was incredibly comprehensive. Thank you for that. It's always interesting to hear how people come into the space. And I may be getting ahead of myself a little bit, but I'm curious to hear you talk more about, you said that you realized, you thought there'd be more Bitcoins that Bitcoin would improve itself, but I think your position has changed from what I've read of your writing that Bitcoin is irreplaceable and it's a singular entity that can never be repeated. Could you just explain more of how your position shifted there? Yeah, I tried to write about this in depth in my zero piece, but I say that Bitcoin, it is an invention clearly. It's a man-made tool. However, it's an invention that led to a discovery that I argue is as big of a deal as the invention of the number zero or the discovery of the heliocentric model of the universe. Like it's something that really changes our worldview and disrupts legacy institutions in a very big way. And the discovery that Bitcoin represents is absolute scarcity for money. We've never had anything much less of money that could be absolutely scarce. And just to give you like a high level point about what that means is like, so gold historically was money because it best fulfilled the five treats of money, which are durability, divisibility, portability, recognizability and scarcity. So metals best fulfilled those functions of the monetary metals, gold was the most scarce. However, if we could flip a switch right now and make everyone in the world's sole occupation gold mining, the supply of gold would soon soar. Like we could get things above ground much more quickly. So really the supply of gold is just a function of the amount of time allocated towards its production. So gold is the most relatively scarce monetary metal that we have, whereas Bitcoin is the first thing we have, first money that we have or anything that is absolutely scarce. Now, but how much time you allocate towards its production, it basically via the difficulty adjustment just becomes more difficult to procure. So it's like an ever-receding horizon. The harder we chase it, the faster it runs away. And that makes it basically the ultimate shelling point for money. Like it scarcity historically is the best strategy in money. You obtain and hold the most value by holding the most scarce money. That's what gold is. And now Bitcoin in a way is sort of optimized that once and for all, it is perfected scarcity, if you will, by delivering it in an absolute form. And that's a lot to understand. So from the surface, especially people living in a world that's dominated by hundreds of national fiat currencies, it's very easy to fall prey to the argument that Bitcoin's just one of thousands of crypto assets and could be disrupted by any of them. But again, as I argue in my piece, the number zero on Bitcoin, it's path dependent emergence in that it was released into the world at a time where nothing else like it existed with a perfect scarcity profile basically makes it beyond disruption in a lot of ways. Because money is valued based on its liquidity, network effects and chain security, anything that tries to compete with Bitcoin as money is necessarily behind the curve on those three functions. So yeah, once you see Bitcoin as more of an unstoppable idea and less as a technological revolution, I think that's how people see the light. So you don't think that like a faster, better, more scalable version of Bitcoin that also has absolute scarcity that will never replace it because Bitcoin is incumbent and has that priority. Here's a couple of things about that. So anything that becomes market proven via an alternative crypto asset or any free market experimentation because Bitcoin is open source, it can absorb those features, right? Like we've already seen that with Segwit, we're seeing it now with Schnorr signatures, things like this. So anything, so I kind of look at in that sense, alternative crypto assets are market proving grounds for future feature set for Bitcoin. And that's again, it's very hard to disrupt that because it is open source. So you can, the rules that matter, right? It can't be inflated, confiscated or stopped. Those don't change, those are unchangeable but everything else can be, it's adaptive. So it can absorb features from other competitors. And then two, again, because it's money, money's valued based on those five traits, Bitcoin being pure information optimizes those five traits. So in terms of divisibility, it can be infinitely subdivided and recombined at virtually zero cost at multiple scales. Information, if it's maintained in a distributed form is basically infinitely durable, it doesn't decompose. There's no physical decomposition. Information is clearly highly portable, right? Due to telecommunications, we can beam it around the world at the speed of light. And information is also basically the most recognizable substance in the universe. If you just think about the written word or mathematics, like this, the recognizability of information, that's what its purpose is. And then again, because Bitcoin has absolute scarcity, it's like what zero is to mathematics, Bitcoin is to money. It's kind of like the capstone of the entire system. So I just don't, I cannot formulate a way that it could be disrupted. And then that thesis is basically reinforced by the real world market failure we saw of Bitcoin Cash. Bitcoin Cash forked Bitcoin to ostensibly increase its payments throughput by increasing block size, but it fell. Its value collapsed back into Bitcoin. And you could take that a step further and say even if Bitcoin Cash forked off, developed something super unique that was a genuine competitive threat to Bitcoin, your default strategy as a Bitcoiner is still just a hold because you get allocated Bitcoin Cash in that fork. So you can literally just keep holding Bitcoin in all of its forks and you're protected from any disruptive threat. So it's just like, it's so insulated by network effects and path dependent emergence that I can't really see a case that it's disrupted. That's a pretty compelling argument. And it's kind of funny. It reminds me of that scenario you were talking about with the banker a little bit, where it's like the banker is like, oh, it'll never change. And then imagine if someone came to you and it's like, there's gonna be a better, a bigger, better, faster, Bitcoin's gonna take over everything. Just imagining that reversal scenario right now. Well, that was where I was too. It's like the MySpace Facebook fallacy. Basically, when you look at Bitcoin as a consumer app, it's very easy to see or believe that it could be readily disrupted. And so another good analogy there is this. There's like Facebook or social media is a one-sided marketplace, meaning they have one type of customer. So when Facebook introduced a superior value proposition to this one set of customers, it was able to disrupt MySpace, right? So that's a one-sided market, so one-sided network effect. If you look at something like Craigslist, which has buyers and sellers, it's able to, it has much less technological innovation because it has a two-sided marketplace and a first mover advantage. So if you look at Craigslist, like the site looks like garbage, right? It's not very advanced. It's not super cool looking. However, its first mover advantage is insulated because you have to introduce a superior value proposition for buyers and sellers simultaneously to disrupt that marketplace. So for every side you add to the network effect, the more undisruptible the marketplace becomes. So now when you look at Bitcoin, you have a four-sided market, four-sided network effect. You have merchants accepting Bitcoin, you have holders holding Bitcoin, you have miners and you have developer mind share. So you would have to introduce just another way of thinking about it, a superior value proposition across all domains simultaneously and campaign to get everyone to move to this new money. And in a form that was not a fork of the money because if it was a fork, they would just hold Bitcoin anyways. So it's like there's no design space left to disrupt Bitcoin. It's the perfect, the most perfect money we've ever had. You spoke a little bit earlier about, you know, feeling helpless a bit in the face of the power of central banks. What inspires you to support and promote Bitcoin through your writing primarily? My writing, again, I've always been a very curious person and just read, like reading is my thing. Any chance I get, I've got a book open. And I've just always been that way since I was a kid. And writing is a bit newer to me. And it was actually the impetus for it was Bitcoin. So as I got deeper into the space, people became more challenging to my perspectives. You know, they introduced good questions like the one we just touched on. What makes Bitcoin any different from the thousands of other crypto assets? And that forces me or encourages me to go deeper into the topic to try and develop really good answers. So through writing, I've just found it to be the ultimate tool to sharpen your own understanding. Writing, and there is also for me, there's a moral imperative here because I feel that central banking is the largest apparatus of theft mankind has ever known. It's the greatest con in human history. And this all sounds hyperbolic until you really peel back the layers and see it for what it is. Like every dollar printed is time stolen from productive people. So we have nonproductive people leading the world, leading from behind the curtain. And I think in this digital age, we finally have the tools and means to sort of to give people the power to own their own time and efforts without being robbed by an invisible intermediary. So that it's a really big change, once in a 500 year type change. And I think those of us that see the light, we have a moral imperative to share what we see. So that's what drives my writing. Yeah, and one thing I like about your writing is that it's really dense. It can pack a lot of information into just a few sentences, which I think is really great. And there is some of these concepts can get really complex. So it's great to see that kind of conciseness there. So do you think that, I'm just gonna throw this question out there. Do you think that Bitcoin is like the perfect expression of capitalism? So I, you know, I was hesitant to use the word perfect earlier because perfection is very much an ideal. Doesn't really exist, I think anywhere. However, there's this concept in economics called perfect information, which essentially means that all market participants have absolute access to symmetric information at all times, such that they can make the best decisions in their own interests. And perfect information is a precursor to perfect competition. Perfect competition being this ideal state of the free market that's like totally unhampered by regulation or impediment or violent coercion. And in that sense, I think Bitcoin is the closest thing we've ever had to perfect information, right? It's open source code. It's fully inspectable by anyone, anytime, anywhere. It's monetary policy, which I actually don't like the word monetary policy because that insinuates that it's a law or a rule that's subject to change. It's protocol. It's a protocol. Yeah, I think shelling points are really good word for it but it's really just, so for instance, gold, the supply of gold was not on monetary policy. It was a product of natural law, right? Everyone's competing to produce as much as they can or mine as much gold as they can. Bitcoin's sort of the same. Like one guy decided he picked an arbitrary number but it could have been 21 million, 84 million, 100 million, it doesn't matter. What matters is that it's unchangeable. So I tweeted this the other day, is that Bitcoin is changing the world tremendously by being unchangeable. Like that's the big deal, right? That's the thing here. So in that sense that it's perfectly known, it's a perfectly transparent rule set that everyone can sit down, formulate a strategy and play based on those rules. Like one of my mentors told me a long time ago, he said that once smart people know the rules, they'll sit down to play the game. But when things are shifting around like tax law, monetary policy, physical policy and it's uncertain, people don't play, right? They don't trade, they don't compete. They go on to preservation mode. They become more nationalistic and protective. And all of those things are damaging to economic activity. When we inhibit trade, it reduces wealth for everyone. So another way to think about it is like, it's an immutable rule set. So if you're playing poker and you sit down at a table in Las Vegas and you see that all of a sudden the hand rankings are changing every few hands. One hand, a flush beats a straight, the next hand a straight beats a flush. You can't even formulate a coherent strategy to play the game. So you like, clearly you're gonna exit the game. That's what fiat currency is. It's this constant shuffling of the rules like the such that we are living in perpetual confusion. And Bitcoin is just like this immutable stone that shatters these veils of illusion. And all of a sudden you just have this clear, transparent, immutable rule set by which to plan your economic strategy. So I will say that it's perfect expression of capitalism, but Bitcoin is monetary capitalism, out-competing monetary socialism, which is central banking. Bitcoin is providing so much economic thought around it. And I'm curious because, you know, a lot of people have called Bitcoin, you know, just hot air, right? It doesn't really represent anything. So do you think that Bitcoin, but I mean, on the other side of it, there's also this like, you know, Bitcoin's value is determined by the energy needed to mint new Bitcoins through mining and all that. Do you think that Bitcoin has an intrinsic value like gold does? So I like to stop this argument out very clearly. Intrinsic value is bullshit, first of all. All value is subjective. And I, you know, Ray Dalio, this is where I've written the letter to Ray Dalio clearly, but he stops, he's evaluating the history of money. He stops at gold saying it had value because it had intrinsic value. This is a logical fallacy. Anyone you ever hear using the term intrinsic value beyond referring to a human being, which I would argue is the only thing that has intrinsic value. Any object with intrinsic value that they're wrong, all value is subjective. So every one of us in the world, we have wants, desires, aims, goals, objectives. We seek to satisfy them using whatever means we deem useful based on our own limited perspective, circumstances, and knowledge. So in our very striving to accomplish these aims, which are inherently subjective, we're going to value things that help us get there differently. All right, so value is purely subjective. It is not an objective feature at all. So another way to think about it, like gold, for instance, gold today has value because it has a utility to satisfy, help us execute trade more effectively. But if all of a sudden you're on a deserted island, that gold's value basically goes to zero because you have no one to trade with, right? You're going to value things like the coconuts and the shovels and the survival tools over the gold because it only helps you satisfy a trading function. So given that all value is subjective, our best approximation of value is the market price. So what the market price is effectively, each of us is looking at the world through a very limited bandwidth. And this has been quantified. I think man has about four bits per second of information he can take in through his sensory capacity, mostly which is visual. If you take that across the entire world, right, that data load is much higher. We now have four bits per second times 7 billion people. Each one of those people taking action based on their own perceptions is what compresses all these subjective realities or subjective perspectives into the closest thing we can get to truth, which is the market price. So this is everyone's buying and selling decisions compressed into a single numeric actionable variable which is the market price. So you can think of, in that sense, free markets are like distributed computing systems in that they're compressing all of these demands of people against the available supplies of capital and they're assimilating all these intersubjective perspectives into one objective truth, which is the price. And so in that context for money, like historically what gives money value are those five treats. There's no intrinsic value, but people do tend to value money based on how divisible it is, how durable it is, how recognizable it is, how portable it is and how scarce it is. And in that context, verifiable scarcity is like the best proxy for the truthfulness of money and which is assurance that it's not going to be debased over time. And that's the most important thing because we spend our time, we sacrifice our time to earn money. We expect to be able to sacrifice that money in turn to claim commensurate sacrifices from others. That is the trust fabric. That is the mechanism that it provides. When that trust function is violated, the value of money collapses. And that's what fiat currency is. It's like a communication protocol with a technology backdoor that the issuers get to perpetually siphon value out of to benefit the few at the expense of the many. That's a really interesting perspective. And I'd been reading a bit of your writing and I think that last explanation of your perspective on time and money and the relationship between the two kind of pulled things together for me. But that leads right into my next question. I mean, Anthony Pompliano's podcast, you called fiat currency a pyramid scheme. And I think we've touched upon it already, but I mean, could you explain the pyramid that you see? Absolutely. So again, as we've already laid out, and historically gold became the free market selected monetary technology that was dominant in the world because it best fulfilled those five treats, right? And for a little context there, so historically gold and silver kind of worked side by side and the reason is because gold has such high value to weight, it was not practical to use for day-to-day transactions. So buying a cup of coffee with gold coins was difficult, for instance, whereas silver with a sort of similar qualities as gold, except that it was less scarce and had a lower value to weight, it was used as more of a transactional medium. So it was used for day-to-day purchases where gold became more and more used for settling large transactions. So they had kind of this, they functioned side by side for much of history until we started abstracting gold and silver into paper notes and later into electronic entries on the database, right? When we started that abstracting of gold, all of a sudden the divisibility and value-to-weight shortcomings of gold were abstracted away, effectively. If I have paper or electronic entries that I know are gold-backed, they're very divisible and can be used for day-to-day transactions or large transactions, it doesn't matter, right? So as soon as gold became abstracted into the electronic form and the world became interconnected by telecommunications, silver was demonetized. So because basically it's competitive traits, lost relevance. So the world settled on a gold standard after we became connected via telecommunications and we had paper-backed, we had gold-backed paper transacting throughout the world. And initially those claims were one-to-one, right? One paper dollar redeemable for one ounce of gold, for instance. Over time, that peg was compromised. And I'm gonna gloss over a lot of history, but essentially it went from one-to-one to one-to-half-of-one to one-to-zero today, but in 1971. Nixon. First of all, yeah, the gold's shocked. So a little history there. And after World War II, the United States basically entered World War II late. We kicked our war-warried opponents' asses to sort of finish them off. We had already been taking in gold from Europe because European countries, seeing that every time Germany invaded a country, they went straight for their central bank and hoarded their gold reserves. European nations started to wise up to this and began shipping their gold to the United States and North America as a geographic safe haven from this gold plundering. After enough of that gold arrived here, again, gold's like the means and ends to all warfare, the United States said, well, okay, we're gonna go in, finish off our opponents and then rewrite the rules because now we hold the gold, we're the boss, essentially. So we held the Bretton Woods Conference, which designated the United States effectively as the world's central bank to where all international currencies would be pegged at the dollar. The dollar would in turn be pegged at gold. Over time, this gave us the proverbial, exorbitant privilege to sort of externalize our inflation, run perpetual deficits, allow us to run an unfavorable balance of payments, but externalize the cost of that under the world. So we could ship the world dollars and they would ship us stuff, right? And that's worked for a long time to our favor. So this, in a nutshell, that's what central banking is, is that it is a pyramid scheme constructed on top of the freely selected money of the world, gold. And a pyramid scheme is essentially one in which those at higher tiers in the scheme extract wealth or at the expense of those lower down the pyramid. So today, central banks loan governments money. So our money is not even printed actually, it's loaned. It's borne out of debt. The Federal Reserve is a privately held institution. It pays a 6% annual dividend to undisclosed shareholders. It is not a government organization. It is not publicly held. It has never been audited. It's a private group of individuals that they loan that money to the government. The government disperses that money as it sees fit into the banking system and whatnot. Banking tier one banks loaned to tier two banks so on and so forth. At the very bottom of that pyramid are consumers who actually get who suffer the consequences of inflation. The more you have to live and denominate your daily life in dollars, the more vulnerable you are to this system. Whereas the wealthier you are, the more hard assets you own which benefit from the inflation. So it is a system that confiscates wealth from the bottom and reallocates it to the top via the printing of money. And this is essentially what every monetary system has ended up as throughout history. It started out as coin clipping when princes would clip coins, keeping the residual for themselves, pushing the bad money back out into society. And today we've just, again, we have this con artistry at scale where people think it's normal to expand the money supply and manipulate it in these ways. But, and this is where the promise of Bitcoin is so important is that we have a money supply that has been permanently placed beyond mankind's machinations once and for all. There's no individual group, nation state, no one can change the supply of Bitcoin to manipulate anyone else. It's just not possible. So I tweeted this the other day, it's kind of like people have always said we have two things in life, death and taxes. Well, we now have a third one and it's 21 million Bitcoin. Yeah, there are only a few absolutes, right? That's right. I'm kind of curious, because you said that there's not really a way for people to manipulate Bitcoin. But how do you feel about Bitcoin whales? I mean, it's commonly thought that there's like, these large consolidations of Bitcoin that are being held by one person or one group of people and movements of Bitcoin in and out of those people can dramatically affect prices. How do you assess that in terms of market manipulation? When I say Bitcoin cannot be manipulated, I am referring specifically to its money supply. So I'm saying the 21 million Bitcoin is incorruptible, cannot be changed. As far as concentration of wealth goes, like any market, it can be, it is vulnerable to those moves, right? If I hold a million Bitcoin, I'll hold a lot of sway over its day-to-day price moves. The only solace there is that as Bitcoin continues to out-compete and absorb more market cap from other store values, each one of those whales, that Bitcoin tends to become more widely held, more widely distributed. So it reduces the efficacy of the individual wells in manipulating market price. But you're absolutely right. The concentration of wealth in Bitcoin is high and that is at an early stage that makes it a super volatile market that's a dangerous place to trade. And I kind of like to go back to what you were talking about earlier. You kind of described how the US acquired its global hegemony with the dollar. Do you see Bitcoin at a certain point displacing the dollar or even replacing it at some point? Again, back in to the context we described this as, at the base of all fiat currency pyramid schemes is gold. If all of the sudden, and they still, central banks still settle with one another with finality in gold, right? Like when push comes to shove, central bank A will tell central bank B to send me physically ship me gold. I don't want you to pay for promises, send me the gold, right? Kind of like the rappers say, you pay me, right? It happens at the central bank level too. And that, I mean, that's a testament to what gold is. Like gold is money. Everything else is just a promise to gold. And what paper is really worth, right? Exactly, right. Yeah, the marginal cost of paper collapses to its marginal cost of production, which is why fiat currencies all go to zero. But so if you look at it in that perspective, gold is still prime money in the world. Like we don't have money in our pocket. Like the government paper I have in my pocket is currency. It's a, it's tokenized government debt. It's not money, right? Money would be something that's freely selected in the marketplace. Something that is a final extinguisher of debt. Something that's 100% asset and 0% liability as gold is or as Bitcoin is. Something that you can transfer to someone and just by holding it, it's a bearer asset. They know it's unencumbered. They know there's zero counterparty risk that its value is completely freely determined on the market, basically. So Bitcoin is disruptive to gold. Bitcoin is superior to gold across all five of those monetary treats as we laid out. So in this sort of interesting twist of fate where governments over time have pulled the rug out from under us by giving us paper backed by gold to resolve some of its convenience issues and then remove redeemability for gold over time. And an interesting twist of fate, they're kind of having the rug pulled out from under them because now Bitcoin is disruptive to gold, which is the foundation of all fiat currency pyramid schemes. So yes, I see in the long run, markets zeroing in on truth. The truth being Bitcoin is superior across divisibility, durability, portability, recognizability and scarcity to gold. And as that transition plays out and more capital flows into Bitcoin, nation states lose control. They're already crazily overly indebted, but when they lose control of money, they can no longer generate revenue as effectively through inflation or taxation and they just start to bankrupt. These are the most inefficient organizations on the planet. They only are able to survive, basically due to money supply manipulation, which is sort of their express, not express, it's their implicit aim and purpose. And now that we have a money that can't be manipulated, it really is an existential threat to central banking and in our concept of the nation state, frankly. And what happens if central banks realize that Bitcoin is undermining gold, as you say, and they start acquiring Bitcoin? I mean, you know, the day that we see central banks stockpiling Bitcoin, I mean, what happens then, right? I think the real light bulb moment for me with Bitcoin is when you come to see its game theoretic aspects and that they govern at every scale, at both an individual level all the way up to the nation state level. And so if I'm a central bank, and I determine with even a 0.1% probability that Bitcoin may disrupt my business model, that Bitcoin could represent an extinction level event for central banking, my prudent maneuver game theoretically is to hold 0.1% of my assets in Bitcoin, right? As a perfect hedge against its success because should Bitcoin succeed, and the value of my central banking model collapsed to zero, it would in theory be offset largely or mostly by an appreciation of Bitcoin, right? So that sort of kernel has been thrown into the geopolitical considerations between nation states. And now if you further consider that the central bank that adopts it first will benefit disproportionately because they're gonna acquire more of the network at a lower price. They're gonna take more territory on the absolute scarce monetary network that is Bitcoin at a lower price in advance and in anticipation of other central banks being forced into this prisoner's dilemma situation. Like they're gonna be forced to play at some point. So you take those two factors together, there's a huge impetus for central banks to take some position in Bitcoin as an insurance policy against its success. And there's also a huge incentive to move first. So when that happens, I mean the game theory is taken hold at a nation state level. And we already see this today, like Iran has announced a sub 10 million dollar Bitcoin mining project expressly to circumvent US sanctions, right? So there's a demand internationally to get off the dollar to have a neutral settlement layer such that you cannot be under the thumb of the US government. No one likes that. And I think in Ukraine too, they're exploring Bitcoin mining. So you see it starting to happen. But the other thing to remember is that central banks also have an incentive to do any acquisition of Bitcoin surreptitiously because if they announce, then all of a sudden they've sparked the game theory everywhere, the price is running, they've reduced their ability to acquire it at a low cost. So I think the game will play out secretively over time, but it will reach a breaking point. And the interesting thing there is, you know, money shapes reality for people and institutions. So the table that I'm using right now to support my laptop is an accessory to me based on my motivational significance, which is to record this episode with you. If all of a sudden I give someone $100 to jump over this table, the table instantly becomes an obstacle to them based on their motivational significance. So as you get skin in the game, so to speak, as institutions or central banks start to hold Bitcoin, their incentives are changed, they shift alignment, right? They go from being arrayed against it to all of a sudden wanting to see it succeed at least marginally. And as Bitcoin just becomes more and more scarce and more and more hard to obtain and imposes its ruleset harder and harder on the established economic order, the more we accelerate towards a Bitcoin-denominated future. Yeah, and I mean, from the way you talk about it, it kind of sounds like it's inevitable that Bitcoin is going to have this impact. Do you think that the US has the power to suppress Bitcoin so that it never reaches this kind of potential? So I'm hesitant to use the word inevitable, although clearly I'm very bullish, but black swans by definition are unknown unknowns, right? The future is unknowable. And so we have to be sort of reverent to that opacity of the future. There's a complete possibility that some black swan could take out Bitcoin. So I don't want anyone believing 100% that this seems to surefire conclusion. However, absent any unforeseen catastrophic event to Bitcoin, it does seem that game theoretically to be an extremely high probability that it will outcompete gold as we've described. As far as government's ability to suppress its success, the governments are very effective at targeting centralized entities and regulating them. So they can go to a CEO, they can subpoena him or lock him up, or they can turn off bank accounts, or they can come to an office and turn off servers, things like that. But they've proved to be impotent at dealing with distributed computing platforms. So a good example there is like BitTorrent, which back in, I think this is the early 2000s, BitTorrent was essentially where governments had come in and shut down things like Napster, which were more centralized. BitTorrent was open source distributed software that allowed people to share media files. So you could slice and dice songs and movies into a bunch of little bits and basically just beam them anywhere in the world and anyone could download them. And it was anonymized and distributed. And every time the government would try to clamp down on it, which was largely driven by media companies. Media companies were, BitTorrent was eating their lunch, so they would lobby the government to go and attack BitTorrent. Every time they would try to shut down BitTorrent in different ways, it would just, it's like a virus. So it would just mutate and end up other places. And because it was open source, you could just be kind of copied and pasted and spun up again very quickly. So it was very much like whack-a-mole, right? You knock down one and 10 more pop up or a Hydra. So in that sense, distributed software is anti-fragile. And the more government tries to intervene, typically the more dispersed it becomes. And it's kind of hardened by hostility in a sense. So the Bitcoin network itself, I think is more or less immune to government regulation. And one more wrinkle to that is that we do have this case precedent with the PGP case, where essentially the government was trying to classify PGP, which was also open source software as munitions and regulate its trade internationally. However, the case took a turn, I think it went all the way to the Supreme Court. The case took a turn when one of the programmers printed out all of PGP's source code and set it on the table and said, this is PGP. So in that moment, open source software was basically declared protected under freedom of speech rights. At least you see on the US way of the First Amendment, I know it's not everywhere. But anywhere that freedom of speech is protected, we have case precedent that open source software falls under those protections. So that's another thing that makes it very difficult for the US to come out and declare Bitcoin illegal, they would have to somehow amend the First Amendment, which is the cornerstone of Western civilization, frankly. So there's a very big, very tight stronghold there that would seem to be uncompromisable, but who knows. Where they can do a lot of damage and where they do do a lot of damage are regulating the endpoints. Again, those centralized entities, largely exchanges, OTC desk, custodians, they can regulate them very tightly. And that can be an inhibition to Bitcoin adoption. So they do hold some sway over it. But again, for the reasons I've laid out earlier, I think Bitcoin, I kind of see it as this liquid that gets into all the nooks and crannies of even political interests and incentives that slowly, what do they say? Speculators become holders, holders become revolutionaries kind of thing. It really changes your incentives as you interact with Bitcoin. And I think that operates, I think it's scale agnostic. I think it operates as much at the individual level as it does at the institutional and nation-state level. Great, thanks for that. And we've mentioned it a few times throughout this video, your open letter to Ray Dalio. So I'm curious, did he ever respond? I got no direct response from Ray. I did speak to him. So I published the letter the day before an event here in LA called Summit, which is, they call it an ideas festival, but it's basically a convention for entrepreneurs and high net worth individuals, things like that. So Ray was speaking at the event and I got there early, got in the front row, waited right beside the microphone for his Q and A after the event, and I was fortunate enough to ask him the first question. And in a very long-winded form, I basically said, in a world where central banks have totally compromised the scarcity function of money, how do you see the absolute scarcity of Bitcoin playing into that? And Ray gave this very intelligent and eloquent response about the macroeconomic situation and how we got to where we are today with central banking, but then he gave this very ill-informed response to Bitcoin, basically saying it was too volatile to be a medium of exchanges to our value, which is like an argument from 2013 that's been refuted a million times. So I think with Ray, he just hasn't gone to first principles on money and that's why he doesn't understand Bitcoin. But although I haven't received a direct response from him besides that event, I have spoken with a few people at Bridgewater about it and word on the street is he's looking at it very closely. He's not maybe explicitly a Bitcoin investor yet, but I think there's a very high likelihood he holds a position. I mean, he's a billionaire too, right? He has to see it as an insurance policy just like every other economic actor we've discussed today. Yeah, and given the recent Paul Tudor Jones news that everyone is talking about, the waterfall so to speak may be on its way already. So my next question's a little bit off the topic of crypto and it's about a tweet that you recently posted where you said that on a global level, you're a free market capitalist, on a national level, a libertarian, on a local level, a Democrat, and with your friends and family, a socialist. So I think a lot of people would look at that and see more than a couple of competing labels going on there. And you called this flexing your individual sovereignty. So could you explain a bit further this position that you have? Yeah, first off, I can't take credit for this. So I got the scale variant side of what I think not seem to love is one of my favorite authors. He described it as political views being scale variant where he said like basically socialist at family and friends level and a pure capitalist at the international level. I tweaked it a little bit to refer to sovereignty instead. And sovereignty, it's got sort of an amorphous definition but to me it really means just the authority to act as you see fit basically. And in that sense, as group abstraction goes to higher and higher levels, as I go from being Robert, dad at home, the face and guy you interact with every day to Robert Breedlove, a row on a spreadsheet at the IRS or whatever, you necessarily become depersonalized or dehumanized. So we go from being viewed as an individual to literally that just kind of a row on a spreadsheet. And so I think in that perception, it becomes more incumbent upon us to be intolerant about the impositions placed upon us from higher up. So if someone at a nation state level is gonna tell you like pass a law that dictates something in your life, like you have to be questioning of that at all times where it's like maybe if you're a wife or someone's giving you close feedback, like, hey, I think you should change this about yourself, whatever, whatever, like there's a more personal connection there and you should be more open-minded to feedback and considerate to change. Whereas laws coming from on high that are intended to satisfy the ends of someone who's written the law, you have to be very suspect of, right? So you have to be, and the way I consider that is you just have to be more, you have to better embody your sense of individual sovereignty the higher a command comes. If it comes higher up the chain of command, the more you have to consider your individual sovereignty, right, if that makes sense. So it's kind of like, it's sort of like Occam's razor where the simplest solution tends to be the best solution, which said in another way for government is like, the government, I forget who said it, but the government that governs best governs least, right? So many laws today, like pick one, like accredited investors. Like it's a bullshit law designed by people that have and control capital to have privileged deal access so they can maintain their privileged position in capital markets. Like those are laws, like I'm not advocating to go out and violate laws necessarily, but you as an individual have to question these things. Like always ask why. So yeah, I think it's just, it's a problem solving principle and things could tend, the best solutions tend to be generated at the localized level. That's what a free market is, right? We figure out things by tinkering and trying new things and anything that inhibits that adventurous spirit tends to be bad for business and bad for life in general. And so you see Bitcoin as a way to hold on to your individual sovereignty. Absolutely. So this gets interestingly into kind of the Judeo-Christian tradition. And I'm not advocating for any specific religion, but it's just one I'm familiar with. It's like, if we had to, regardless of if you're a believer or a non-believer, Christ is symbolic of two main things. So you could argue more of it. It's to speak the truth and to honor the sovereignty of the individual. That's what, those are like his two core teachings. And I mean that for believers and non-believers in that Christ is symbolic of that teaching in the same way a ghost emoji is symbolic of a paranormal apparition. Even if you don't believe in ghost, we all still know that what the ghost emoji signifies, right? That's what Christ signifies. So I'm saying this in a totally, a lot of people on Bitcoin, especially get very dodgy on religion because they're like, oh, we're already separated church and state. Let's not reintroduce it. But it's like the symbolism of Christ purely means truthfulness and individual sovereignty. Bitcoin maximizes both of those things. It is the most honest monetary system we've ever had. And by holding your own keys, you are maximally sovereign. There is no government decision in the world that can shake out your hand or change the value of your holdings or siphon wealth from you or steal your time. In that sense, I think that this is kind of like grand arc of history. The whole arc of history has been a decentralization of sovereignty over time. We moved from say like ancient Egypt where you had the pharaohs that were absolutely sovereign. Everyone else was a slave basically to monarchies where you had monarchs that were mostly sovereign with an aristocracy that was semi sovereign with a bunch of serfs to democracy, right? Where we have a representational body that's mostly sovereign and then a lot of disenfranchised people beneath them. And now we're moving to the next stage where I think, and this is where I encourage people to read the book, The Sovereign Individual, which is just super prescient. We're moving to a state of the world where individuals are maximally sovereign as enabled by cryptographic and digital tools that sort of allow us to perform the functions of governance and self-government at an individual level. So it's just another extension of the Andreessen axiom that softwares eating the world. Like through the technology that Bitcoin represents, we now have a wave of innovation that is functional enough to eat many of the functions of government basically. And I think money is clearly one of the biggest functions that's being devoured first by Bitcoin. And I think it's technology will also be used to eat other functions like property rights, voting, identity, things like this. So yeah, it's an amazing time to be alive because the possibilities are seemingly infinite and the way we look at the world is changing dramatically and it's changing really fast. So it's like you're intelligent to be woke to this. Yeah, I mean, when you put it like that, it makes it seem like we're at a really, a very special time in history. And I also really enjoyed that analogy you made between Bitcoin and religion. I think the last time I heard Bitcoin and Jesus in the same sentence was when someone was referencing Roger Bayer. Oh yeah, forget that guy, that guy's a joker. So I think this is actually a really good note to end on. I think you've done an awesome job of taking these really broad historical concepts and bringing them down onto a personal level. Oftentimes I feel like a lot of people have trouble with this aspect, you know, putting together the big picture with the small picture. So I really appreciate you taking the time to explain all this to me today. And I really look forward to speaking with you again in the future. Yeah, Jackson, that was great. Thanks man. Thank you everyone for watching. That was Robert Breedlove who is the CEO and founder of Crypto Asset Hedge Fund Parallax Digital. My name is Jackson and if you enjoyed the show, please hit that like button and subscribe to our YouTube channel.