WBD407 Audio Transcription

WBD: Live in Nashville with Preston Pysh & Marty Bent

Interview date: Friday 8th October

Note: the following is a transcription of my interview with Preston Pysh & Marty Bent. I have reviewed the transcription but if you find any mistakes, please feel free to email me. You can listen to the original recording here.

In this live interview, I talk to Preston Pysh, the host of The Investor Podcast, and Marty Bent from Tales From the Crypt and Great American Mining. We discuss rising inflation, why bitcoin mining is good for global energy use, and why bitcoin is this answer to many problems.

“The price appreciation on bitcoin is not coming from an ETF, the price appreciation that’s going to make bitcoin scream over $1 million a coin, is going to be when the fixed income market comes to the realization that the 5% inflation is not going away.”

— Preston Pysh

Interview Transcription

Peter McCormack: I've got some questions for these guys, but I think I'm also going to open it up to the floor, because I'm sure you're all a bunch of smart people, you've probably got some questions as well.  But yeah, just a big thanks to Marty and Preston for doing this, and thank you to all of you for coming.

So, I'm going to start with you, Marty, and I think you're going to throw in some stuff here as well, Preston.  Shall we talk about inflation?

Marty Bent: What's that?!

Peter McCormack: Well, listen, we're seeing it everywhere.  There's a lot of problems in the UK at the moment.  I was about to say, we had a problem with truck drivers!  We had a fuel crisis in the UK.  Speaking to some friends and family, they couldn't fill up their cars.  There's been a 250% increase in wholesale gas prices, we've got energy companies going to the wall.  There are problems everywhere.  I've been sending you pictures of stuff I've been seeing here.

Marty Bent: I mean, frankly, it's scary, to a certain extent.  I just drove down from Jersey, 13-hour car ride, and I was just telling Peter before I came up here, I was trying to kill time calling people.  I called one of my buddies who runs a logistics company out of Chicago, and he was explaining, I was like, "Dude, how bad is it?" and he was, "It is really bad".  So, they have problems getting truckers.

He was explaining to me, their revenue per load has gone up 50% year on year this time from last year which is like, "Oh, you guys are making more money?"  He's like, "No, it costs people that much more to shift things across the country.  We usually take five to six years to see a 50% increase in revenue over a period of time, and we've seen that in one year". 

Then, the pictures you sent me, we've been talking about this a lot; empty shelves, that's a sign.  Inflation's not only a price, it's in the accessibility of goods as well.  There's some places in the country and throughout the world where you cannot get what you want to get.  In the UK, petrol right now.  You're seeing the natural gas crisis in the UK right now, the energy prices are going up.  So, it's happening with everything: food, energy.  It seems like it's coalescing into a major shitstorm.

Peter McCormack: Is it transitory?

Marty Bent: No.  You can tell Jerome Powell is starting to regret ever calling it transitory.  He's legitimately scared.  That's the thing.  I don't know if it's malice or incompetence, and we go back and forth of it being either/or, and you can tell the Fed targets inflation; that's essentially what they do with their monetary policy.  Last year, they started trying to overshoot their 2% historical target, and now they're way over it, and they're trying to downplay how bad it is.

First, they called it transitory, and then you had Biden's head economic counsel come out a few weeks ago and say, "If you take poultry, beef and chicken out of your food prices, there's really no inflation".  That's pretty much the core staple foods here in the United States.  So, they're posturing like everything's okay, but there's little creaks in their posturing and it's basically showing, "Oh, shit, there's something terribly wrong".

I don't want to keep rambling here, but this is predictable.  If you shut down an economy, you print a bunch of money and you don't have goods being produced on the back end, this is the natural order of things.  People have been calling this out since the economy started locking down last April.

Peter McCormack: Preston, the quoted inflation rate is 5.4%.  Do we agree with that?

Preston Pysh: I can come up with any inflation number you want.  You want 5% inflation; you want 2% inflation; you want 50% inflation; you want -5% inflation?  I can create a basket of goods, services, whatever and construct whatever inflation number you want me to construct.  It's a matter of whether you continue to use that as your basket as time progresses, right.

So, as an example, since I've held Bitcoin in 2015, my inflation rate against the dollar is about 100% annually, so we could use that as what I'm measuring against.  So, if you're talking about hyperinflation, that's typically something above 50%.  So, in my opinion, Bitcoin is hyperinflation against the dollar, or the dollar's hyperinflating against Bitcoin, I mean.

Why is that important?  So, when you think about why is this inflation number that you got CPI that the Fed is printing, they're changing it.  Why are they changing it?  Because they want to construct it in a way that allows them to do what they need to do with interest rates, and that's what it's all about.  So, when you think about how everything, literally everything on the entire planet, is constructed in its value, whether it's a bond, whether it's a stock, whether it's real estate, anything, it starts with your understanding of inflation.

So, if the money supply is inflating, and let's just use simple numbers, is inflating at 2%, which is their target, right, if those units, those digital units of the dollar, the yen, the euro, all of them are combined and it's only inflating and expanding at 2%, everything is then constructed in valuation terms on top of that, a premium above that 2%.  So, let's just say they're inflating the currency by 2%, fixed income should maybe be 2% above that, your equities should be maybe another 2% on top of the fixed income premiums; that should be priced at maybe 5%.  And this is just a generic model.  So what it really comes down to is, what is inflation? 

For me, when I'm thinking about how I would personally define inflation, if I was going to try and make it in a way that you could then do the mathematics on value of everything on top of that, I would say, and Lyn and Michael Saylor and others talk about this quite a bit, they're using the M2 money supply, because that's what's actually expanding the units that everybody's using.  They're not using Bitcoin, 99.9% of people are not using Bitcoin as a unit of account, so they're using these fiat units.

When you look at that M2 money supply growth just over the last decade, the compound annual growth rate of that is anywhere from 10% to 15%, depending on which currency you're actually talking about.  So, if that's the actual inflation rate, that M2 money supply growth, the units that are being put into the system, how they're nesting themselves, those units are nesting themselves into real estate or stocks or corn or whatever, you name it, it's nesting itself into those different things in various ways and at various growth rates to represent those units that are expanding by double digits.

That's the thing that I think so many miss and it's such an important question.  In my opinion, it's the most fundamental piece of all of this, is understanding what is inflation?  I used to tweet about it all the time, and I'd put #howdoyoumeasure -- everyone laughs at how I say that word -- #howdoyoumeasureinflation, like what is inflation?  Some of my ideas on it.

Peter McCormack: Well, it feels to me like every administration is kicking the can down the road.  There is almost a blinking contest between China and the US, but at some point a massive correction will have to happen somehow.

Marty Bent: I think it's going to come from energy markets.  I read a great blog post.  He's go by Kuppy, he's a hedge fund manager, I forget the name of his blog, but he wrote a great piece yesterday, which I think I'm actually going to write about tonight.  It's, "The energy crisis that's looming could be the next Lehman moment", where you have, again, I think all this stems from whether it be the inflation, the monetary units or the energy crisis that we're beginning to experience and will encounter more aggressively as we move forward through time, has just top-down control over these markets, whether they be monetary good markets, which are completely centralised and have been since the 1970s, or energy markets, which are becoming more and more top-down control by the government deciding what energy sources we are allowed to use.

So, in the UK, a lot of Europe has decommissioned very reliable nuclear power plants, natural gas power plants.  Here in the US, the Biden Administration came in and banned new mineral rights leases on federal land, and there is a lot of politics around fracking for natural gas, and there's a transition to renewables that are pretty unreliable.  And these top-down diktats of how you're supposed to run these, what are supposed to be free markets, are creating unnatural supply shortages, which naturally leads to inflation in the price as demand stays steady or rises, because humans, there's 8 billion and there's going to be more every day, competing for scarcer and scarcer energy resources.

So, energy is the base of the economy.  If you have runaway inflation energy markets, the Fed just can't print money and throw it at energy producers and say, "Give us…"  It's not like a bank, you can give them collateral and say, "Here's your collateral.  You're better capitalised, you can lend out money".  You can't just throw money at an energy producer and say, "Give me gas now".  It's like, "Well, this is a process, I need to drill a well, I need to build a pipeline, I need to get it to market, and there's a significant lag in that.

Preston Pysh: And energy is something that everybody understands, and it makes up a substantial portion of their expenses in a month.  So, if you're watching the energy prices just rip, everyone's just scratching their head and saying, "Why are they printing these inflation numbers of whatever when the price of this is going up and homebuilders -- I had somebody start building me a house", this isn't me, I'm just saying it.  Somebody would be like, "I've just had them start building me a house and it's twice as expensive as what I was originally quoted".

So, people are looking at the CPI prints and they're saying, "That doesn't make any sense".  It's crazy.  Then the supply chain stuff is going to continue to wreak havoc on this reality of price of your commodity prices ripping to the upside.  And then, on the backdrop of that, they're actually printing CPI at 5.2%.  So, that's here, but your ten-year treasuries are 1.3%.  So, there's a -4% real yield that you're guaranteed to lose money on based on that spread.  So, who the hell wants to own that bond, right?  You want to guarantee to lose money?  Well, sign up and buy some bonds then.  That's the situation today.

Peter McCormack: But where else will you put your money?

Preston Pysh: Good question.  I know where I've got mine, right?

Marty Bent: I have all my liquid assets in Bitcoin; I can tell you that right now.

Peter McCormack: Well, yeah, I think we all know what we're meant to do with our money.  But the energy thing's really interesting, Marty, because if you're talking about the inflation being driven through the energy markets, I think that makes me understand better why you're so concerned about the ESG narrative, which you've been pretty firmly against.  You had a great debate with Michael Saylor.

Marty Bent: I'm just paranoid.  No, people think I'm just some oil-guzzling, environment-hating capitalist, and it's like, "No, I like to clean my beaches".  From moving to Austin, I've lived on a barrier island for the last two years and I go there every summer for my whole life.  I truly care about the environment, but I also care about, and it's not mutually exclusive, but I care about environment and humanity.  Energy is the base of human flourishing in the modern age, and if you fuck up energy markets, you fuck up the economy. 

Any energy transition throughout history, when we moved from wood to kerosene to more advanced hydrocarbons, like gasoline and eventually natural gas and stuff like that, and hopefully nuclear; nuclear's been lambasted as some dirty energy when it's the cleanest energy on the planet.  But each energy transition has been deflationary in the sense that it drives prices lower and it makes it more energy dense.  And the energy transition that the ESG movement and the powers that be are trying to force on the markets does that exact opposite.  It's less energy dense and it's more expensive.

We've seen it play out.  Germany's a perfect case study.  They've made this transition over the last 20 years, decommissioned a number of nuclear power plants, a number of natural gas power plants, and now they have the highest residential electricity rate in the world, which is like 36 cents/kWh, which is absurd.  And, they're trying to bring that over here, and that's not good for humanity.  Humanity uplifts itself from poverty.  If the Third World countries want to join the developed world, they need cheap energy-dense power, and the way the ESG movement is moving, they're like, "No, you can't have that, you need this unreliable, less dense, more expensive energy source".

Preston Pysh: How many people saw the Gary Gensler video today on ESG?

Marty Bent: What did he say?  I've been in the car all day; what did he say?

Preston Pysh: So, there's this video from when he was teaching at MIT, where one of the students asked him his thoughts on the energy consumption of Bitcoin.  And, he very thoughtfully responded, which is the exact same way that I see this, in that, "What is your opportunity cost?  What are you comparing it to?" just like the inflation number.  So, when you're talking about the energy consumption of Bitcoin, compared to the existing fiat system, how much energy does it take in order to manage the existing system versus this alternate system that we're all big fans of?

So, how did he go about answering this?  Well he said, "Everybody who's swiping a card, if you're ever there and you swipe your card, this business here is incurring a fee of anywhere from 2% to 2.9% for that swipe.  How about your Fedwire, if you're buying a house today, what's the cost to make sure you have immediate settlement -- not immediate, but a one-day settlement using Fedwire?  $45, $25, depending on what your bank charges". 

So, let's look at those fees and let's assume that most people that are conducting a transaction, I don't know what the percent would be on a global scale, but it would be massive; let's just say 80% of all the transactions on the planet today come through some type of swiping for the clearance to cost 2% to 3% of that transaction that you did.  So, when you add that up on a global scale, what does that cost? 

Now, compare that to the clearance of mining a few coins today, and pretty much no fees on the Lightning Network and the continued no fees on the Lightning Network, when you think about the breadth of what that would look like at full scale.  Now, let's compare those two and let's compare the cost and the ESG that's associated with those two alternative systems.  It completely falls apart, it's completely laughable, when you look at it in comparison.  I don't think anybody's talking about it, I don't think anybody's writing about it, except for a few people, NYDIG, Lyn Alden had an amazing piece that she wrote about it, and I think more people need to start writing about it and looking at it in those terms.

I just find the whole thing to be really ironic that the guy who's the SEC Chairman right now basically laid it out in that exact way, when he was at MIT teaching the course on Bitcoin.

Peter McCormack: I think he's a bitcoiner; I said that --

Preston Pysh: I think he's a hardcore bitcoiner.

Peter McCormack: Yeah.  He hates shitcoins.

Preston Pysh: His bags are packed!

Marty Bent: Well, I've beaten this dead horse, but people honestly don't understand how energy markets work, how you extract natural resources and turn them into electricity and deliver that to the market.  They just see energy consumption and assume it's bad, and as I'm sure most of you know, the natural incentives of the Bitcoin mining industry are to go find the cheapest energy source possible.

Preston Pysh: Amen.

Peter McCormack: It just happens to be wasted energy; it's energy that people are literally willing to set on fire, natural gas, where we do great American mining.  We go, "Hey, don't waste that natural gas.  We'll run it through a generator and mine Bitcoin with it".  People go into hydroelectric dams saying, "Hey, you have excess capacity?  Let's give you some revenue and we'll get some economic value out of that electricity".

Preston Pysh: Gravity, stop.  Stop the gravity so that the water doesn't go over the side of it.  We're wasting energy.

Marty Bent: It's FUD that stems from just plain ignorance, frankly.

Peter McCormack: Well, we'll come back to mining, because I know that's a subject you lot will.  Preston, Greg Foss has been talking about the risks within the system right now.  He's talking about potential sovereign defaults, the contagion from what might be happening in China.  What are the key things that you're looking at; what are you worried about?

Preston Pysh: When I'm looking at the Evergrande situation over in China, there's so much that China can do from just a policy standpoint, and they're so secretive, and they have all these methods to hide what they're doing within that country.  So, it's really hard to really understand the extent of how bad that potentially is.

I just know from a competition standpoint, here in the United States, insurance is very competitive.  What you find is that they get so competitive that they're maybe implementing policies that turn into systematic-type risk.  I'm not saying that that's here in the US, I'm just using that as an example.  So, when I look at Evergrande and you look at it from a property development standpoint in China, you look at it culturally in China, most people in China, 70% of their net worth is stored in real estate.  For whatever reason, that's how they culturally respond to investing there, probably because the price of real estate keeps going up, interest rates keep going down, price of everything keeps going up.

Peter McCormack: Well, what happened last time with that?

Preston Pysh: Well, so here we are, and you've got to look at the timeframe.  This has been going on for decades, they keep compressing that.  They keep shoving more and more of whatever disposable income they have into real estate; developers are highly incentivised to just keep building as much as they possibly can; and at a certain point, you start outstripping the number of people that have remaining disposable income to buy a full property.  Then, the developers are leaning forward and they've got all these skyscrapers that are half-built, and there's no buyers.

What happens to the prices?  Well, the prices start going down, people start getting scared.  They're saying, "Well, it was 100,000 last month and now it's 70,000.  I'd better sell this".  Then the contagion steps in, then it gets mathematical because they're levered, and all of those things start playing out.  And that's what happening in real time right now in China with the Evergrande situation; $300 billion worth of liabilities on the balance sheet of Evergrande alone.  But you have two other competitors in that space, that I suspect China's going to force those half-constructed properties that make up $200 billion of the $300 billion of liabilities on their balance sheet, they're going to try to start pushing those into those two other companies.  Country Garden is one.

Marty Bent: Sunac?

Preston Pysh: Yes.  So, these two other companies that are equal in liability size, they're going to try and force that over there.  The problem is, when you've been that competitive in that space for that many years, a decade plus, they're going to receive that, because the government's going to tell them to receive it.  But then, they're receiving stuff that's -- can you imagine, as a contractor, receiving somebody else's half-arse-built project and saying, "Hey, you're going to put that on your balance sheet.  Now you're going to figure it out".

It takes time for that to work itself out.  And although the government's going to be trying to pull the strings, I think where you're going to see the weakness start to percolate up is in all the foreign banks, all the foreign lenders, that their capital was brought into the country; you're going to see them get totally taken for a ride, and then that could potentially spill into contagion into the rest of the market.  You're seeing the equity markets respond to that, you're seeing a little bit of the fixed income space respond to it; but it's really hard to know, is this another Lehman event or not?  I think it has the potential to be one, but I'm not at the point where I would say, "Yeah, that's what this is"; I don't know that.

Peter McCormack: Do we know how much exposure US banks maybe have?

Marty Bent: You won't find out until you know, until stuff gets washed out with the --

Preston Pysh: Because, they might have promises from other banks.  I mean, it's credit, it's all promises.  You don't know if it's constructed to some bank in Europe, that then it was sold to another bank in Denmark, to then the US, yeah, to Marty's point.

Marty Bent: I mean, it's predictable.  You've just been following the Chinese ghost city market, because I think it's been going on for like a decade now.  That's the other thing about the opaque nature of China; it's the one I guess some could see as a benefit of the Chinese Communist party, they can just paper over this stuff and try to Band-Aid over it for longer than probably other countries that are more transparent can.  But it doesn't seem like a good situation.  And China's having energy problems now too.  They're asking provinces to shut down factories and stuff to lessen the load on the grid.

Peter McCormack: It's quite a surreal situation, going into places like Starbucks, and they haven't got any sandwiches, they can't produce them; queues at gas stations in the UK, like Venezuelan gas stations.

Preston Pysh: And it's not going away any time soon.  This situation is not changing.

Peter McCormack: It just feels like there's so much weird stuff happening at the moment.  Most of my life has been fairly stable and easy, and I feel like we're heading into quite concerning times.

Marty Bent: I'm moving to Texas for a reason.

Peter McCormack: I'm moving to Nashville.  I kind of have to now, don't I?!

Preston Pysh: Any realtors out here?

Peter McCormack: So, I do want to open up the questions to the floor at some point, but I do want to talk to you a little bit about mining, because it's your big subject.  So, following the banning of mining in China, how has the market reset itself?

Marty Bent: Well, it's in the process of resetting.  So, it seems like the most recent news from earlier this week, or last week, it seems like a good ban to the point where Bitmain's come out and said, "Yes, we had to move our operations".  So, two big players in the ASIC manufacturing realm: Bitmain obviously, the MicroBT.  Bitmain makes the Antminers, MicroBT makes the WhatsMiners.  So, the way it works, Bitmain has their chip foundry in Taiwan that used TSMC, MicroBT uses Samsung in South Korea.  But Bitmain manufactures and assembles their ASIC in China.

So right now, from what I've heard, Kevin Jung from Foundry, who's usually a good source, has said that they're working to reallocate their assembly factories into Malaysia and Thailand.  That's going to take time and that's a process that throws a wrench.  And actually, that's why the S17s, those ASICs were sort of shitty, because when Micree and Jihan had their split, Micree had the manufacturing and it wasn't what it was in China, so that they had poor ASIC quality in that run until they got back into China after they figured that out.

Bitmain specifically, as they're trying to reshuffle that supply chain into other countries, you can see a backup in orders getting shipped and potentially lower quality.  That's yet to be seen, but there will be some disruption there.  MicroBT, I'm pretty sure they've had their assembly in Malaysia already, so they're pretty much inoculated from this most recent ban.  But yeah, I think it's going to be hard to get ASICs.  Matt Odell's been saying on Rabbit Hole Recap for the last three weeks, "The only thing that's going to be more scarce than Bitcoin next year is ASICs to actually produce the Bitcoin"!

Peter McCormack: Are they selling at a huge premium right now?

Marty Bent: Right now, I believe S19s are around $15,000, I haven't checked the price; but I think we'll see -- Adam from Upstream, he's confident that we're going to see $25,000 ASICs at some point next year, and it makes sense.  It's not only a product of them getting kicked out of China, it's the whole semi-conductor industry outside of Bitcoin at large for car manufacturers, or anything, is pretty borked right now. 

Bitcoin miners are pretty low end of the totem pole when it comes to foundry space.  The Apples and the Toyotas and the Hondas of the world are going to be able to get space on the floors to actually make the chips necessary before Bitcoin miners.

Peter McCormack: Wow.  Preston, do you mine?

Preston Pysh: No.  I have a node!

Peter McCormack: Okay.  What do you make of the mining industry, Preston?  There seems to have been a lot of movement in here in the US.  I've been down to a couple of the events in Houston, there's a lot of oil and gas people interested, a lot of growth?

Preston Pysh: The way I try to think of it from an economics standpoint is I just think goldminers.  I try to construct my view of it like that, but with a twist.  The twist is, every four years, the crust of the earth changes its composition of how much gold is there; there's half as much.  That's one piece of it.  Then the other piece of it, every two weeks, it doesn't matter how many more people you show up to your goldmine, the difficulty of that tries to polarise itself to a certain difficulty level, right.

So, if you look at it from that framework, I think you're able to see why these jumps occur.  So, when I think about gold and I think about how it has this homeostasis on the price, based on the demand that's there, but more importantly the amount of people that are trying to pull it and extract it out of the ground, it brings it to that stock-to-flow valuation.  And I know there's a lot of emotion over stock-to-flow.

I think it's a model that, if you're saying it's going to peg itself at $100,000 because of this model with this map, I don't look at it that way.  I look at it more as a model that demonstrates production cost to extract this thing out of the ground, or out of these rigs, or out of thin air, or whatever you want to use.

Marty Bent: Out of the digital ether, yeah.

Preston Pysh: Digital ether, it keeps getting more scarce.  And because it keeps getting more scarce and as long as the demand is there to keep clawing them out of the ether, which to me is represented by a continued growth in the hash rate, that's the demonstration that the demand is constantly there.  And since it's only issued at a ten-minute time period, statistically on average, that demand has a constant dropping into the market.

Now, the demand for using it as a store of value is completely different and separate from that, which is what I think allows it to blow out the price, has this ability to blow out way beyond what a stock-to-flow, or what I would refer to as a production cost floor level, because of guys like Marty, who understand what they think the value of it is, or what his cost is to extract it out of the ground.

If the price goes below that threshold and now it's cheaper for him to go borrow a bunch of money at 0% interest rate and just buy Bitcoin with it, he's going to do that instead of mining it at a higher cost.  So, they kind of become these buyers that they know, and I'm talking from a net level globally, they're looking at it from that lens.  So, when I think stock-to-flow, I think production costs, and I think of this thing that just keeps ratcheting itself up every four years, because of this thing that's happening in the ether that's not possible in the physical realm. 

So, that's how I think about mining and the role that it plays in price, because everybody likes to talk about price.  And then, there's all these other just amazing incentives that are built inside of that, as far as security, the ten-minute blocks, the block size is part of that security.  I mean, the amount of things that are going on in what appears to be such a simple little thing is just divine; it's totally crazy.

Marty Bent: Well, it's crazy on multiple levels, because you're explaining the technical aspects of it, how it actually happens, the difficulty adjustment, hash rate, miners' reflexivity to the price.  But then there's the meatspace impact that mining has, which is obviously, I think, the Bitcoin mining industry is going to incentivise us to usher in a new energy renaissance.  We're going to be the most energy efficient as we've ever been as a species, because Bitcoin mining literally forces it. 

The energy incentivises us to consume it, right, because it's cheap; semantics argument.  But not only that, what we see in the field, I'm convinced.  So, we mine Bitcoin on well pads and one of the biggest factors of us being able to do that successfully, with optimal uptime, is having generators that are up and running as consistently and as long as possible.  So, you have these second- and third-order effects that mining's going to have on the meatspace we're on, where I think it's going to drive innovations, not only in the consumption of energy, but in the areas around that: generation, electricity generation.  I think mining's going to make generation equipment extremely more efficient, and it's going to give it more longevity.

Then, on top of that, just to put a cherry on top of all this, within the global landscape of mining right now, there's a golden opportunity, like who's going to take the crown?  With China banning everything, they had the lion's share of hash rate for the first 12 years of Bitcoin's existence; and now, we're at this point, it's like, "All right, who's going to take all the ASICs?  Who's going to take the opportunity?" and it's very interesting, particularly as an American, as you see DC and all the politicians posture, "Do we like Bitcoin; do we not?" and then you see the energy guys starting to get in there, "No, we're going to go for this".

That's what I'm looking at the next two to three years; can the energy industry get mining integrated into their business operations faster than the politicians can fuck it up, and I'm confident that that's going to happen.

Peter McCormack: Well, it's quite interesting in Texas, that both Governor Abbott and Senator Cruz seem to be becoming bitcoiners, and I don't know if that's just to be popular and get votes, or if they actually believe in it.  But having spent a lot of time there, I understand why you're moving there.  Bitcoin feels a very American idea; Bitcoin mining feels a very American idea; and it feels a very Texan idea.  So, I would expect, with a huge amount of investment going into mining within Texas, that will lead to political capital, which will become a defence of Bitcoin.

Marty Bent: Well, it's not even Texas; even Pennsylvania, which teeters from blue and red, depending on what election year it is.  But you have that gucci gas and the Marcellus shale up in Pennsylvania, West Virginia, New York; they're going to participate as well.  That's the thing.  Again, the incentives are so strong.  A lot of these producers are either wasting their gas, or they're not getting a profit margin on it at market that they're happy with, so they can use Bitcoin to eliminate waste and turn that into a positive revenue stream, or they can use it as a competitor to the utility companies they're selling their energy to, to basically help them get more profitability out of their molecules.

So, just from a pure business perspective for these energy producers, whether it be natural gas, nuclear, hydroelectric, Bitcoin is another buyer, another market for them to sell their energy to.  And, if you're a savvy businessman, or if you care about profitability and getting the most efficiency out of the energy you're pulling out of the ground or producing, you have to implement Bitcoin.  It's the only mechanism to make these molecules profitable basically in these locations where electricity cannot be consumed, but with other processes.

Peter McCormack: I'm going to do one more big question over to you first, Preston, and then I'll open up to the floor.  So, we had a country make Bitcoin legal tender this year, which was quite a significant moment.  I don't think many of us saw that coming at the start of the year.  Outside of the politics, because let's separate Bukele and who he is from the actual decision, within three months of making the announcement, you could go to any coffee shop, any Starbucks, and you could buy a cup of coffee with Bitcoin; you could go to any McDonald's and buy a cheeseburger with Bitcoin; you can now go to any Walmart.  They've managed to integrate and roll out Bitcoin across the whole country in three months, which is kind of mind-blowing.

It's obviously an important story, it's obviously important in terms of Bitcoin, but what are the things you're watching; because, one of the things that Bukele said, he said, "This has to work.  I'm popular now, but if this doesn't work, that will quickly change; this has to work!"  I think we all want it to work.  What are the kind of things you're watching there, in terms of El Salvador?

Preston Pysh: I heard there was a podcaster that went down there and even interviewed him!  The thing for me that I just find fascinating about all of this, and I don't think it's being covered in a way it should be, this is Lightning, right; this is Layer 2 Bitcoin.

I just remember coming into the space, and the big narrative when I first came in was, "Bitcoin can't scale.  It can't do enough transactions.  Nobody's going to buy a cup of coffee and stand there for 30 minutes hoping they get into the next block, to know whether they're cleared or not".  I mean, you had Mike Hearn, you had these people that were leaving, "This is a dead-end product; this thing's dead".

2017 comes along and they're like, "Okay, we solved it with SegWit", and I think everybody was like, "Okay, I guess I'll keep holding", why did I say "holding"?  Keep hodling!  And there was this promise, or this far-fetched idea that no one even knew if it would work.  Here we are, not far from that just being implemented at Core, and you've got a country that is using it full-scale in every single business. 

More importantly, the thing that blew my mind with this, the journalist, I don't know the guy's name, maybe you guys know who he is, he goes to test this out and he goes to the McDonald's --

Peter McCormack: Aaron van Wirdum.

Preston Pysh: Yeah.  He goes to the McDonald's, he pulls up the QR code to pay with Bitcoin.  Instead of paying, he takes a picture of it.  He posts the picture on Twitter and he says, "Hey, can somebody buy me a hamburger?"  Because of the way Twitter is, somebody's sitting there right next to their full node opening channels and they're like, "Well, I'll buy him a hamburger" and they just pay him, boom!  Payment goes through in El Salvador.  He has no idea who even paid it, but he got his hamburger.

This is what's happening right now, and the thing that's just so crazy to me, I don't think CNBC, these people just don't even understand what the hell is happening, right?

Peter McCormack: Do you know what's also interesting about the McDonald's thing is, when I went to do it, I expected to be given a phone to scan and pay like I was in Starbucks.  You go McDonald's, they've got it in the screens.  You know the screens where you go and order your food?  It comes up with a QR code on that screen within the McDonald's interface.  And the question I haven't had answered that I'd like to find out is, can they hack it themselves?  Do they have to go to the McDonald's in the US?  How does this work?  How did they get to the point where the software integrates Bitcoin?  Because, this is advertising to McDonald's globally and what they are also going to realise is that they're not paying any transaction fees.

Preston Pysh: None.  And, you might have saw me just having fun on Twitter yesterday.  People were there wining about, "I don't have the Twitter integration for people to tip me", and I was like, "No, we can do that right now.  And they're, "What are you talking about?  I'm in New York and Strike isn't enabled here".  I'm like, "Dude, just go and download a BlueWallet, create an invoice for $1 and take a screenshot and post it in this thread on Twitter; post it here, I'll pay it".  So, the person posted the QR code right there on Twitter and I said, "It looks like Bitcoin works in the state of New York".  And I said, "Show the receipt that you got paid", and we did it over Twitter, right now!

I didn't have to ask for permission from anybody.  I ran it from my node to his BlueWallet, which he probably didn't have custody of it, but he could; that's the thing that's important.  He could.  Everybody has the option to do that from anywhere on the planet, encrypt a channel.  Your internet service provider doesn't even know that it happened.  There's just a packet flow through their processing.  How the hell do you stop that?  

Marty Bent: You can't!

Preston Pysh: You don't, you don't stop it, right?

Peter McCormack: You embrace it.

Preston Pysh: So, I think this is the untold story of El Salvador, because the question I kept asking myself with Lightning, especially when it first stood up in 2017 was, "What's the incentive for people to start opening channels; what does that incentive look like?" and I think we're seeing it real time, in such an unprecedented way, by a country saying, "We're open for business with Lightning Network today, now".  It's crazy!  So, that's my takeaway from El Salvador.

Marty Bent: And there's multiple layers: there's the technical aspect, Lightning being integrated and them adopting that, I have some thoughts on that; but also the cultural.  It's the first nation state domino to fall, and that is a huge first step.

Peter McCormack: Who's next?

Marty Bent: Panama maybe, I don't know.  But obviously, I'm one of the most optimistic people in Bitcoin in the world, but I think you mentioned SegWit earlier.  Why did SegWit eventually merge the software?  Because there was a forcing function of a high-fee market.  It's like, all right, fees are high, people are not happy setting fees on chain, we need SegWit to help reduce the fee pressure.  So, that was that forcing function.  It wasn't fun; Bcash came out, "We can do it better", and there was a lot of confusion, there was a lot of friction, just because of the nature of the protocol at that time.

SegWit enabled the Lightning Network and we had that, and El Salvador's adopting it, but I do want to caution.  As we're using Bitcoin, we're basically exploring in unknown territory where we have our hands out, we're walking into an abyss, we're trying to figure out where the walls are.  So, I think we'll have similar experiences with Lightning.  The point I'm trying to make is there could be instances where Lightning comes up short, but it will just highlight a pain point that needs to be fixed moving forward, and that's the beauty of it.  We need the El Salvadors of the world to begin adopting this and putting pressure on the network so we know what needs to be fixed, and that's another aspect of this where we're going to find out what needs to be better, and bitcoiners will identify that and then build and make it even stronger from there.

So, there's the cultural aspect and then them adopting it, helping the rest of the world figure out the limits of the stack as it grows.

Peter McCormack: All right, I'm going to open it up for some questions now.  I've got more if -- that's quick!

Q1: So, if the US Federal Government voluntarily moves to a Bitcoin standard, do you think that they keep a branded US dollar, and does that happen as a sidechain, or something else?

Peter McCormack: That's a big question.

Marty Bent: I don't think they'd ever overtly adopt a Bitcoin standard, just because obviously a lot of the debts in the United States and our global debt is denominated in dollars.  I think you could make the argument that they're doing it right now, they're just slowly but surely having these debates in DC, "Are we going to regulate it or we not going to regulate it?" but while that's happening, like I said, the energy industry's getting in, more everyday Americans are adopting Bitcoin.  

The state of the federal government, the Federal Reserve and the US dollar is that they decided to default on the US dollar; they're already defaulting on it, they're just not doing it overtly where they're saying, "We're not going to pay back our debt".  They're doing it by saying, "We're going to print trillions of dollars and print our way into bankruptcy".  They're already doing that, they'll never come out and say, because it's politically untenable, but you just look at their actions and that's exactly what they're doing.  Governments have done it many times throughout history.

So, I think there's just certain individuals in the halls of the federal government, the Federal Reserve, Gary Gensler might be one of them, that are just, "All right, let's just get Bitcoin into as many hands as possible, we'll let it flourish and let our citizens adopt it while we hyperinflate the US dollar away".  Bitcoin is that safe boat and I think letting Americans adopt it and use it in a self-sovereign fashion may be a light endorsement of, "All right, we fucked up, keep buying this stuff".

Preston Pysh: I would just say that your elected officials want to keep calm and they don't want social unrest first and foremost.  So, taking an action like that would probably create a frenzy of activity.  I mean, let's just take an example.  If Janet Yellen sets down some type of testimony and she's like, "You know, I really think we should adopt Bitcoin and put it on our balance sheet here in this country", what would happen in the next 12 hours if that statement was made?  It would wreak havoc on the global economy. 

So, I think the reason they will never, ever go down that path, until it just takes over, and even then I doubt that they would be talking about it openly, because it would just maybe cause even more disruption to the events that would be unfolding, so I don't see that happening.  Maybe on the other side of this, you see countries try to have a currency that is backed by Bitcoin, maybe.

Marty Bent: Then we go back to the free-banking systems that existed in Scotland and Canada in the early 19th Century, late 19th Century.

Preston Pysh: The hard sell on that is, the whole reason a currency exists is because when you looked at the divisibility of gold, it doesn't work.  So, you have to have some type of paper on top of that in order to allow it to service the entire global economy.  When you look at Bitcoin, it's divisible, so that whole requirement for paper really goes away.  So, it's an exciting time to be a human being; first time the planet's ever seen anything like that.

Marty Bent: The federal government at least will never come out and endorse Bitcoin as the reserve currency of the country because, like Preston said, there would be global chaos.

Preston Pysh: Calamity!

Peter McCormack: We'd be rich though!

Marty Bent: Yeah, we'd be rich and people would be trying to rip our arms off!

Peter McCormack: Yeah.  You had a question over there; do you want to come and say it on the mic?

Q2: It almost feels like the United States then is at a huge disadvantage to every other country in the world, because we are the global reserve currency, right?  I mean, are we that much less flexible, because everything else depends on it being stable?

Peter McCormack: It feels like that status is being slowly lost.

Marty Bent: Yeah, I mean you certainly have countries like China and Russia --

Preston Pysh: The dig from the UK!

Marty Bent: Well, you have countries like China and Russia, other countries dumping their treasuries, buying more gold.  But yes, it's a disadvantage; the US Federal Government, the Federal Reserve is at a huge disadvantage compared to their counterparts around the world.  US citizens though, us as individuals, we can take advantage of this right now.  And again, like I said, I bet there's people in high places who make decisions who will never say this overtly, but they sort of have a panicked worry like, "I hope enough people and enough businesses in enough states adopt Bitcoin that there can be somewhat less of a calamity".

Preston Pysh: To your question, the countries based in a fiat world, the fiat that has the biggest network effect, which is the dollar, I think is going to have the biggest challenge to retain the power and the influence that comes with having that status, because it comes with the luxury of having a status.  So, when you transition to something that is a global settlement layer that everybody is using on the planet, there's an uphill battle for the participants that had that luxury to transition to something new, collectively speaking.  Individually, I mean I'm with Marty all day long; everyone in this room's going to be fine!

Q3 - Marty Bent: Just to repeat the question, where do I see Bitcoin in 2050, and am I worried about the centralisation of hash rate? 

I see the energy industry, energy producers being the largest miners in the world.  It's going to happen, because the natural incentives they have access to, they're literally at the base of the energy industry and that is the base of the mining industry; they're going to merge.  So, by 2050, the Bitcoin mining industry and the energy industry will be synonymous, they'll be the same thing.

Am I worried about centralisation?  No, because I think we're on a trend to the commodification of ASICs, where we're hitting a stasis in the step function improvement in the efficiency of the machines.  Once Bitcoin monetises and the demand for ASICs increases, the supply of ASICs will increase naturally as well and it will be easier to mine from home.  That's the beauty of energy being the base of the mining industry, is that energy is pervasive. 

If you go down to Texas, you have everybody from your mom and pop, they have a well in their backyard that they can tap a mining rig into; of course, you'll have the Exxons, large producers as well, but you also have the mom and pops, like Marshall Holbrook, who's been on TFTC before, he's been mining off these stranded gas wells in Kentucky that are just producing 50 mcfd, which is a very small amount of gas compared to what they're pulling out at some wells in the Bakken and in the Permian.

So again, energy is pervasive, it's global.  There's individuals in Latin America, Africa.  Bitcoin 2021, I talked to five people from Nigeria looking seriously to transition their flare gas into a Bitcoin mining operation; I talked to people from Saudi Arabia.  It's going to get more global than it already is, and the combination of energy being pervasive and the commodification of ASICs as they reach their plateau of efficiency is going to drive prices down for them and make it easier for more individuals around the world to get into the mining game.

Peter McCormack: Will that mean more state-controlled mining operations, because there are obviously a number of countries that the state controls their energy centre?

Marty Bent: Potentially yes, yeah.  I mean, Venezuela's already doing it.  They've confiscated mining hardware and they're mining on behalf of the state there, so there already are states mining it.  You've got to hope that there's enough -- I think Bitcoin's incentives are perfect, but yes, you'll have states doing it, but you'll also have your mom and pop natural gas producer doing it as well.

Preston Pysh: And what's great is, we already know that if a country had at least 50% of the hash rate and the government forced them to shut it down, the Bitcoin still wins.  We've already experienced that, so block checked!

Marty Bent: That's another underscore theme of this year, the Blocksize War of 2017 was a huge stress test, and this hash rate migration was another one, and Bitcoin passed with flying colours.

Preston Pysh: Six weeks, it hashed it all out!

Marty Bent: Pun!

Peter McCormack: Do you want to…?

Q4: Thanks for coming out, guys.  So, one of the beautiful things about the Bitcoin rabbit hole is it just goes deeper and deeper as you go.  I'd love to hear what gave you guys your first foothold into really understanding why Bitcoin was important and why it works?

Marty Bent: I was interning at a managed futures fund when I was 20, and I was sitting in on meetings where people were talking about currency markets trading off of the colour of Janet Yellen's blazer that day.  I was like, "This doesn't seem right", and I was probably a stoned college student sitting on my couch later that night feeling, "This Bitcoin thing may make sense".  And then obviously, you get in for the gains, and then you realise you get in for the gains of the asset and then you realise the power of the network, the distributed network, and it's like, "Holy shit".

I got in it for the gains.  I got in it because I thought the way fiat currencies were being handled, and the way traders were trading them specifically of the colour of a Fed official's jacket didn't really seem like a good way to be trading currency markets.  Right now, I don't care about the money.  I would advocate Bitcoin if I had zero Bitcoin, because I think it's imperative for the future of freedom in the digital age.  As somebody, I have a 19-month-old son, I do not want him to grow up in a world where Bitcoin doesn't exist.  It's literally about preserving freedom.

Preston Pysh: Yeah, amen to that last point.  Why do I think it works?  It really goes to answering your question in reverse.  Why do I think it works really goes to a lot of the points that I was talking about earlier with El Salvador.  And, now that we have instant settlement from anywhere, it just works.  It's very clear to me now, just probably in the last six months to a year, that you have so much channel capacity, the incentives are all there, nobody can shut it down, finality of payment; all of those things are just so elegantly there, so that is pretty much…

I think it's a closed book at this point, to be quite honest with you.  You still have idiots our there, Elon Musk and Mark Cuban, that are literally, these people have a massive platform that are talking about literally ClownCoin.  It's just amazing to me that you have people that can impact the world in such a meaningful way, not seeing it or just lying, one or the two.

The first question, so I was affected by the 2008/09 crisis.  I was a captain in Afghanistan during that period of time and had money in the markets, and just remember what that felt like, watching that happen.  I started studying Warren Buffet and all of that kind of stuff, and really tried to understand how financial markets work at a very deep level.

So, come 2014/15, to me it was just very obvious that this system is broken, it's irreparable, and it's mostly because of the debt market and the bond market that that's the case.  The equity market just goes along for the ride, especially when you're talking about market cap size.  So, when I was looking at that, I was thinking, "What is the solution?  How does this insanity end?  Are they going to try to take rates negative?"  If everybody's doing it and every single currency's getting debased into negative interest rates, because they're being manipulated, because it's not a free and open market, how does that end?  It's not like everybody's just going to agree to go back on a gold standard; they're not incentivised to do that, especially the ones that have a large network effect with their currencies.

When I saw Bitcoin, I saw that it had a peg, it had a fixed number of units and that it was being designed at the time so no one could shut it down, I said, "Holy Moly!  This thing right here could literally change everything", and then I just kept digging deeper and deeper.  I was very concerned about the instant settlement piece and whether that would actually get resolved at a future date.  We've learned that it has, so…

Peter McCormack: I always think there's never usually just one moment, there are lots of moments.  There's little moments and big moments that reinforce your belief and orange pill you further.  So, I'll just explain the El Salvador moment that clicked for me.

So, the first time I went was 20 months ago, and Michael Peterson invited me and showed me his project, and he was paying these kids in Bitcoin and they could go up to the store, which was also a pupuseria, and paying in Bitcoin.  And I went up and I paid and I bought some pupusas and I was like, "Oh, this is cute", and then just left and thought it was cool what he was doing, but didn't think of it more than just a little project.

Fast-forward two years, and I go back to El Zonte, and every single place accepts Bitcoin.  Then, fast-forward when the Bitcoin law passes, I didn't have to have cash on me, I didn't have any dollars on me, and I can show you all the transactions on my wallet; I just paid with Bitcoin over and over again.  What I realised was, it wasn't a novelty anymore; I think I put this in a tweet.  I put, "It actually became a convenience".

What happened was, then when I came to the US, there were certain times I was like, "This moment here would be much easier if they had the Lightning Network.  A really great example, one of my hotels that I was staying at recently, my vending machine, I wanted a bottle of water and it was cash only and it would take notes.  I went down to the ATM and the ATM distributes the notes in $20s, but the maximum note the machine would take is $5.  So, I've got money and there's a product and I can't buy it.

You just think, if there's a Lightning wallet, scanned, done, you'd get your bottle of water.  And, there's just so many times like that, now I've had the lens in El Salvador, that there's so many times I'm like, "If I just had Lightning now, it would be a lot easier.  So, I think that's just an interesting story, and I got into Bitcoin because I was buying drugs online; sorry, but it's true!

My friend called me up one day and he said, "Hey, Pete, have you heard about this website, The Silk Road?"  I was like, "No", he's like, "Yeah, it's like Amazon for drugs".  I was like, "What?!"  He was like, "Yeah, you can buy any drugs you want".  I was like, "What?!"  So anyway, he came over and showed me Bitcoin and my first Bitcoin cost $80, and I didn't hold any, I just -- actually Tim, what's his name?  He bought all the Silk Road Bitcoin. 

Marty Bent: Draper.

Peter McCormack: Tim Draper's got 3.5 of my Bitcoin, motherfucker!  I've actually asked for them back and he won't give them to me.

Marty Bent: That's steal.  What did he get, 30,000 and $300 or something?

Peter McCormack: Oh, man, I've never seen him out.  Carliño, come over.  So, Carliño's a really interesting guy.  When I was in El Salvador, he comes over one day in his car and drove me to Guatemala and we went and got drunk for about eight days!

Q5: So, I appreciate the attention to the El Salvador story.  Personally, I think that the bigger story of the past six months is actually Afghanistan.  If the fiat US dollar is backed by the United States military and yet they just abandoned Afghanistan after 20 years of wasting all the money that could have been used to pay for old folks retiring in the United States and all the debt, does that send a message that actually, the US military is no longer backing the US dollar?

Marty Bent: Preston, I'll let you answer this one, since you served?

Preston Pysh: I mean, at the end of the day, you're looking at a legacy system that served its purpose that worked for the time being, and I would describe it as working, because you didn't have social unrest.  You had an environment; all of us grew up in an environment that was safe.  That doesn't mean that was the same environment that everybody around the world grew up in.  But the system that we inherited that we grew up in is now transitioning.  If you want to say that that was the moment that the transition happened, feel free to do so.  Other people might say that that moment might be somewhat off into the future, with maybe some other event. 

I'm really hesitant to ever say something as binary one way or the other, or that this event was the thing that made everything different.  I just think it's a mark in time for a system that has run its course, it's transitioning to something that is going to be beneficial for humanity as a whole, because at the end of the day, your labour and your work, the energy that you personally expend to perform labour, is now frozen and preserved in a way that you can then re-spend that for the value that was captured by you at whatever point previously in your life; it's not being clawed away from you.  It's something that has never existed before in humanity, because the technology wasn't there to supply it. 

It's not that I'm trying to pivot from your question, but I just look at what's happening right now as being such an exciting time in history and such a positive situation for people that are open to the idea to harness it, and to embrace what's being presented right at their footstep; and I don't feel like I answered your question real well.

Peter McCormack: It is interesting to watch the complete collapse of the banking system in Afghanistan at this moment in time, and there is an argument there for -- actually, there's multiple currencies we're seeing collapse in real time: Lebanon; we're seeing Turkey.

Preston Pysh: All over the world.

Peter McCormack: All over the world.  And everyone now has a -- I wanted to avoid the politics and the war argument, but I think it's a very interesting time.  I was talking to Steve yesterday.  We were talking about, whilst America's spent two decades fighting wars in the Middle East, China has been building infrastructure projects around the world, indebting countries, with the Belt and Road Initiative, whatever you think of that; but their influence, their form of imperialism has been a lot softer and probably a lot more effective than the US.  Don't even know where I'm going with this.

Marty Bent: Well, me personally, as an American, I was 10 when 9/11 happened, a very impressionable time in my life, and you had patriots like Preston go over and fight on our behalf, thinking they're fighting to preserve the freedom.  Just for me personally, I know this must be very personal for you, Preston, but just seeing the way the Afghanistan situation was handled in the end was embarrassing. 

I think, while I was embarrassed, other people around the world probably looked and they were, "Woah", maybe like you said, they were not as strong or organised, I want to say strong; not as organised or put together as possible, and sent a strong signal.  But like Preston said, it's not one binary thing, it's just another snowflake of compounding incompetence.  Again, it comes back to, you can't have top-down control of these complex systems.  It just highlights that for me specifically, and it highlights the need to get away from this top-down control of things that should be grassroots and emergent.

Preston Pysh: I like to play the role of, what if I was in the seat of Person Whoever?  So, I'm guilty of this, I bash on central bankers all the time; just look at my Twitter feed at any point in time and you'll see it.  But I have to ask myself, what if I was Janet Yellen; what if I was, you name it, central banker?  What policy or what actions would I be personally taking right now? 

I have to tell you, I probably would be taking the exact same actions they're taking, because they're actions -- they have to take them.  They have to supply more liquidity into a system that is literally sucking every dollar they print, or every euro they print, that they're putting into the system, it's going straight into the market capitalisation of the equity or the fixed income bond prices that are out there.  And it's going to happen whether they do it via quantitative easing into the bond market, or if they send you a UBI cheque, and you'll immediately go to Walmart and you'll stuff that buying power into that conglomerate and it boosts their net income, and then the entire marketplace goes and bids the price of the equity even higher.  The P/E's now 40 or 45 or 50.

So, they have to keep supplying that liquidity into the system, and they're going to keep doing that until some alternate system can decentralise that process and take it away, but it's needed.

Marty Bent: It's a very good point too.  They know the gravity of the situation.  Hank Paulson went into the government in 2008 and said, "We do not bail these banks out; there's not going to be money in the ATMs by Wednesday".  They know how bad a situation their monetary policy over the last five decades has put these central bankers in.  And like you said, I think they've known how bad it is, and they've been planning to push this to a central bank currency, like something more Chinese social credit score, but I think they thought that was the only alternative.  That would obviously be terrible, the banality of evil, "Oh, we need to fix this, let's cattle-herd these people to this dystopian future".

Luckily, we have Bitcoin.  And I think while we do, I shit on the central bankers and the politicians too.

Peter McCormack: It's so easy to do!

Marty Bent: But I think we should turn the other cheek and understand, like Preston said, where they literally -- like, Jerome Powell, you can see it on his face.  He does not like being the Fed Chairman and having to say that inflation is transitory.  That's the way the markets work now in this fiat system; it's all posturing.  Again, the people who are trading currency markets on Janet Yellen's colour of her jacket, it's not based on any reality.  Everybody at that level knows it.  They cannot admit it, because once they do, like we said earlier, there'll be pandemonium.

Preston Pysh: Imagine you're in an aircraft, the oil in the engine, maybe you had a bullet hole, or there's a hole in it, or whatever, and it's leaking oil out of it.  The airfield that you're trying to fly to is way far away, right.  But you have this reserve of oil in a pump that can continue to supply into the leaky engine.  Do you do that, or do you just let the engine seize up and wish yourself luck?

The central bankers are deciding to turn on the pump of the liquidity into the engine so that it can continue to fly, in the hopes of finding an airfield that many of them, I think, don't really understand exists, which there is one.  But as long as they keep supplying that liquidity, the aircraft is going to naturally land itself, but they have to keep the liquidity flowing.

That's the situation that they're in today, and I think it goes back to your original question.  Everybody's got incentives to do what they think is right, based on the opportunity cost of their other choices.  And unfortunately, for a person who's a central banker today, all their choices are bad choices; they don't have a good choice; they have ones that are just slightly better.

Peter McCormack: Well, they do; they can buy Bitcoin.

Marty Bent: They probably are personally!

Preston Pysh: Personally, yeah.  But it goes back, they can't make that announcement, Peter.  They cannot make that announcement publicly, because they would rip the Band-Aid off so quickly that the transition wouldn't be this gradual transition.

Marty Bent: The central bankers don't want to be the last ones holding.  There also is hubris in it, where they're academics, they worked their whole careers; they don't want to be the fucking Fed Governor, the Fed Chairwoman, Chairman, that was left holding the bag that's the reason everything fell out.  But that is why I think a very strong silver lining of the last two years with everything that's going on is this reassertion of the states' rights; and I do think that the states can get it together, the states can get it on their balance sheets, they can implement mining infrastructure, roll some of those excess mining profits into permanent funds that allow them to keep taxes low and go to the federal government and the Fed like, "Hey, we don't need your money, we're fine".  I want to see that.

I'm trying to meme Bitcoin mining permanent funds into existence, because I actually do think they're important in creating a smooth transition.

Preston Pysh: You heard it here; memes are important!

Q6: Okay, so one thing that you guys didn't really hit on ahead of time is, the three of you, while also being some of the smartest people in the space, also have some of the biggest platforms in the space.  Each of you has one of the biggest podcasts here and you've had a lot of guests.  So, a fun question would be, who's the smartest person you've talked to in Bitcoin and why?  And, give all the caveats you need to give it ahead of time!

Marty Bent: Damn, that's hard.

Preston Pysh: Mine are very financial; I have a financial bias.  So, Lyn Alden I think is brilliant and I personally get along with Jeff Booth really well.  Jeff really helped me see how technology growth was this exponential thing, very similar to the way that Moore's Law is, and I think that really helped me construct just a little bit of a different picture than I had before, reading his book and really getting to know him a lot better.

But here's the caveat: there are so many smart people in this room!  I'll tell you, just standing over here talking to everyone here, we are not the smartest people in this space, I promise you that.  We have a platform that has a network effect based on search algorithms, and I'm just trying to be as forthright as possible.  This space, you go to any conference and you just talk to whoever, wow!

Marty Bent: That's a hard question, dude; so many.  Disclaimer, sponsor of the pod, I think Dhruv Bansal is really smart, underrated in the space.  He likes to keep things close to the chest.  I think what they're building at Unchained is an incredible product; disclaimer, sponsor of the pod.  I mean, Mike Rollo, John Newbery, James O'Brien, all the Core devs, Xander Zhou.  The young talent in Bitcoin's insane, Ben Kaufman, Ben Carman.

Preston Pysh: How about the people that have literally written the lines of code, the Adam Backs, those type of people.  They're very technical, they're engineers.  They might not come on and give an interview that you're just like, "Yes!" because they're really getting down into the nuances of how this entire thing works.  And, I would like to also caveat, just because a person might not come on and have this charisma about themselves, they're probably -- Pieter Wuille's another example of somebody, I don't understand half the stuff that he posts.  But just think about his contributions to the space; it's mind-blowing.

Marty Bent: Incalculable.

Preston Pysh: Yes.

Peter McCormack: I'm going to throw out one I think you'll appreciate, just because it's very easy to -- they've already listed some of the smartest people.  But somebody I've interviewed twice recently who fascinates me, and I just think more people should listen to him and be aware of him is, I know you like him, is Harry Sudock, I know you do as well.

Preston Pysh: Yeah, love him, yes.

Peter McCormack: What's quite interesting, these guys will know, there's certain interviews you do you know you're going to get your big download numbers, and there's certain people that you get on and nobody knows them.  The Harry shows, the two I've done with him, they're more towards the lower end, because people just don't know who he is.  But I think if they listened to it, they would listen to every show he does.  He's really smart; he's got the whole mining thing covered, like Marty.  So, if you've never listened to Harry Sudock, I mean…

Preston Pysh: Have you had him?

Marty Bent: Yeah, I've had him on.

Peter McCormack: You've had him, Preston's had him.

Preston Pysh: Some of us do shows where I bring on Marty and Harry; there's podcasters that have done that episode!

Marty Bent: I've known Harry for almost five years now.  I was working at Barstool and he was working at a hedge fund, and we met at the Ace Hotel in Flatiron.  I'll never forget the first time I met him, and we were just two bitcoiners who weren't really in the Bitcoin space yet, talking about how we can get in it.  And, Harry started from the data side; I believe he was providing on-chain data to crypto hedge funds, and he didn't really want to go that route.  Just me personally being a friend of Harry's, seeing how far he's come, from us meeting in the Ace Hotel in the winter of 2017 to where he is today, and how much he's completely consumed the mining industry and owned it.

Peter McCormack: He could have a second career doing movie trailers as well, doing the voices.

Marty Bent: He's got a voice!

Preston Pysh: Yeah, that is true.

Q7: Thank you again for coming, I'm Zacharia.  I'm actually a banker who has Bitcoin.  I'm at First Horizon in Green Hills, on Abbott Martin Road, so when you all need a banker, come pay me a visit!  But bouncing off of something you all were saying earlier, what would you say to the traditional financial institutions, such as the banks, such as central banking and the credit unions, to say, "Hey, we need to get on this Bitcoin thing, because this is a road to hell right now"; what would you guys say if you were at the negotiating table for that?

Marty Bent: Number one, there's going to be demand for services.  One thing we should be leading into is, yes, Bitcoin is a little rough around the edges right now, but Bitcoin's UX is only going to improve going forward and traditional banking systems' UXs are only going to decrease over time, just because of the regulations and the increased regulations and the limits on who can send how much money to who, and who's even able to hold money in a bank account.  So, the UX is only going to improve; it's open-source software, it can only improve from here.

You need better collateral, you need faster settlement times, you need better money.  You can run down the list, but I really do think pitching this to newcoiners, precoiners, whatever we want to call them is, "Hey, just think about it.  Has your banking experience gotten better over time?  Do you expect it to get better over time?  Yes, Bitcoin's rough around the edges, but would you concede that it can get better over time with more software and more UX?"

Preston Pysh: Are you talking in terms of adding it on to the balance sheet, or as an investment vehicle; is that what you're…? 

Q7 (continued): A little bit of both, just having it accepted in the industry.

Preston Pysh: I mean, for me, the thing that's super obvious, and I know this is past performance, which is an indication of what the future holds, but if you had a stock that had a compound annual growth rate of 100% annually for a decade straight, had the best Sharpe ratio of any security on the entire stock market, and you didn't actively try to explain why it wasn't part of your portfolio, I mean I would call that, in a military term, a dereliction of duty for a person who has a responsibility to put their customers' interests before anything that they're trying to sell, a product that they're trying to sell.

So, I mean those are the simple things.  Everybody who's an investment person, they want to say, "Okay, what was your Sharpe ratio over the last year for performance, so that I can look at what your return was, comparative to the volatility that you assumed for that investment?"  When you do that with Bitcoin, it's a little hard to ignore it.

Now, let's talk about the future, which we already did.  So you say, "Okay, so this thing is making a run at $1 trillion and has upside in excess of $30 trillion, and I'll tell you it's more than that, and we can go into all the reasons why".  So, okay, the upside's there, it's more technically sound; the fundamentals, you've got countries literally adopting it as legal tender, people can't stop the payments, nobody can shut it down.  At some point, that industry's going to have to look themselves in the mirror and ask themselves, "How have I continued to be the patsy at the table for an entire decade?" because from my point of view, they have been.

Marty Bent: It's going to be easier to build stuff on Bitcoin compared to the traditional banking system as well.

Peter McCormack: One of the important things I've found is just thinking about the idea of final settlement, and I'd much rather have my money in a multisig wallet than in a bank.  I have free access to it, I can spend my Bitcoin as I choose, I don't get my accounts closed down, I don't get mass surveillance across my Bitcoin account, I can travel to anywhere in the world and get liquidity.  I think it's obvious that this is a big problem for the banks, and that's why especially someone like the UK, it's very difficult to buy Bitcoin.  The banks are essentially scared of it.

But I think the banking system is ripe for disruption and I think it will be a combination of Bitcoin wallets and neobanks.  And I think eventually, if the banks themselves do decide that they want to accept Bitcoin, there's going to be some consolidation with the Bitcoin companies.

Preston Pysh: I've got one more comment on the investing side.  So, one of the replies you'll hear from the banking sector is, "Well, this thing's got 60%, 65% annual volatility.  I can't put that in a 60-year-old's portfolio".  That's total crap, and here's why it's total crap.  You can take Bitcoin and put it as a 1% position on that portfolio, take 99%, stuff it into cash, and compare that to somebody who's in a 100% S&P 500 fund, or take their whole portfolio, put it in the S&P 500; you name it, whatever.  Find something, a portfolio mix that you really like.

That 1% Bitcoin position is matching the return of the S&P 500, but it's doing it with less volatility.  So, your Sharpe ratio, comparing the 1% allocation to whatever portfolio mix you want to bring to the table, because 98% of fund managers can't outperform the S&P 500, so come to the table with the best portfolio mix you've got and I'm probably going to be in a better shape than them having 100% of the S&P 500.  And, you're going to outperform it and you're going to have less volatility.  So, I can't understand it.  Dereliction of duty.

Q8: So, rumour has it that the SEC may approve a Bitcoin futures ETF next month.  If approved, what do you think will happen with adoption for that, and do you think they're choosing the futures over spot, because they think they may be able to control it, like some may say they've done with gold?

Preston Pysh: Did you see my eye roll when you said it? 

Marty Bent: I've said this many times, BTC is the ETF, they will approve an ETF.  Can you -- maybe they'll try to, but I don't know.

Preston Pysh: The whole futures market being used as the vehicle so it's cash settled is the biggest eye-roll, zero-credibility joke.  Think about it.  What you're getting at is, "Hey, they can control the gold market, because it doesn't immediately settle".  You've got to wait for the gold to be pulled out of the vault, you've got to line up your transportation and logistics, you've got to get it to the next vault, wherever it's going.  It's gold; it's old.

Bitcoin's not like that.  It immediately settles; ten minutes if you're doing it on chain, whatever.  It doesn't cost any type of storage cost to put this thing in a warehouse somewhere.  So, sure, they can stand up an ETF, they can use the futures market, they can make it cash-settled, but it's not going to stop this thing and it's not going to stop the underlying price. 

Every kid 30 years and younger, they're pulling out their smartphone, they're watching their friend who has some type of app open, that they're buying Bitcoin, "Oh, I've got Strike here.  I just immediately converted dollars into Bitcoin.  I just blasted it off to my own self-custody wallet with zero transaction fees".  Who the hell thinks they can step in front of that with some cash-settled -- the thing's a freaking joke; it's a joke; it's laughable, for anybody that actually understands how settlement works and this game of trying to manipulate a market with a cash-settled futures.

Marty Bent: This is investment advice: just don't buy the ETF, just buy Bitcoin.

Preston Pysh: What are the fees going to be on that debacle?  It's a total joke.

Marty Bent: Maybe they can manipulate the price temporarily, but that would only be temporary.  Bitcoin, I don't want to say it's inevitable, I don't want to be that hubristic, but it's too big at this point.  One cash-settled ETF in the US, Bitcoin's global, you're going to have people in El Salvador and Africa, Middle East, all across the world using it.

Preston Pysh: The price appreciation on Bitcoin is not coming from an ETF.  The price appreciation that's going to make Bitcoin scream over $1 million a coin is going to be when the fixed income market comes to the realisation that the 5% inflation is not going away, right, as they manipulate the bond market via QE to rates even lower than 1%.  Eventually, there's going to be a realisation, when people are managing a $3 billion bond tranche and they're saying, "You know what, I need to have some of this buying power allocated into that".  When that contagion starts to set in, you're going to watch Bitcoin just go like this, and it's not going to come back.

Peter McCormack: Do we have anyone here who doesn't own Bitcoin yet?  You can admit it, you won't get in trouble. 

Marty Bent: Sidewalk?

Peter McCormack: The boomer?  Let's bring him in!

Preston Pysh: He's a precoiner!

Peter McCormack: So, everybody here -- it's okay to admit it.

Marty Bent: I actually lost all my Bitcoin on the drive down here today; it flew out the window!

Peter McCormack: I'm losing mine on Saturday, I think.

Marty Bent: Back to the ETF, somebody who's been around the block, the ETF has been coming next month many times in the past, so don't hold your breath for that either.

Q9: So, Preston, you've thrown out a number of $30 trillion for a market cap, just as a guess.  So, I wanted to get some more clarity on that.  Are you seeing that in addition to maybe a store of value component, in addition to global payment layer, or in addition to kind of a plague on the fixed income, fixed debt market?

Peter McCormack: Can we show some appreciation for an American turning up in an Aston Villa football shirt, by the way, which is the oddest team for someone in America to support?!  I don't know what the equivalent is for --

Marty Bent: Miami Dolphins?

Peter McCormack: Yeah, I don't know.  It's a very strange -- I mean, it's the middle of nowhere and they've always been pretty shit!

Marty Bent: The Buffalo Bills; it's the Bills!

Preston Pysh: I would answer your question you gave me, choice A, B, C and D.  I would say it was choice E: all of the above, of everything you mentioned.  I actually find the whole gold narrative to actually be hilarious that, "This is replacing gold and that's the end state".  That's the tip of the iceberg, as far as I'm concerned.

Marty Bent: This thing about what Lightning's doing.  Lightning is the payments layer of the internet.  Bitcoin unlocks utility that has never been possible before in the digital realm.  We don't even know the total addressable market of that stuff.  And Balaji Srinivasan, I don't know if many of you remember, but he had 21.co and he had his Bitcoin, his 21 Bitcoin mining computer, which was the worst fucking miner in the world; it produced a very small amount of hashes.  But the idea around that 21 computer was something he deemed "the machine-payable web", and it was an incredible idea; it was just too early for its time.

Now, that is possible with the Lightning Network.  So, you think about what we can do now.  You can go to my website, you can buy shoutouts, you can use the Dime Bag to buy a final thought, people are starting to integrate the Lightning Network into BitTorrent, they're going to integrate it into streaming services, and that's just humans interacting with the internet.  If AI and machines talking to machines become a thing, that's a whole other market that nobody's even thought about yet, and we can't even fathom how many trillions, hundreds of trillions -- I think it's going to be hundreds of trillions.

Preston Pysh: Yeah, I agree with that.  I mean, I'm just really having fun with my node these days in opening all these channels, maybe you've seen it on Twitter.  But I'm thinking about this and I'm taking Bitcoin, writing a contract on Layer 1 that's an indefinite contract that either person can basically close out.  But I have an incentive to keep that contract open and just rebalance the funds.  So, those funds are locked into this Layer 2, right?

So then I'm thinking, how many transactions are happening on Visa, Mastercard and all those?  Well, it's like $370 billion on an annualised basis that are flowing through these pipes, so that's like $1 billion a day for the pipe size.  That's just Visa and Mastercard, that's not a pipe that's laid to Amazon, or all these other connections that are going to naturally occur on this network.  So, what does that look like?  How many of those coins are going to be locked up for the transactions that are taking place?  Those aren't going to come back onto the market for resale and for trading purposes.

It's mind-boggling to me what that turns into, because you're talking about something that world has never, ever seen before.

Marty Bent: It's fucking sending transactions to space.

Peter McCormack: So, do you remember the Lightning Torch?

Marty Bent: Yeah.

Peter McCormack: So, I sent mine from one plane to a guy on another plane.  We went plane-to-plane using the plane Wi-Fi.  It was fucking brilliant!

Marty Bent: 40,000 feet?

Peter McCormack: But you can do that, 40,000 feet in the air, you're sending money from one person, part of the world flying 500 miles an hour in a chair to somebody else doing exactly the same, and it worked; it was amazing.

Preston Pysh: Fully encrypted from your node to his node and then to his phone.

Marty Bent: I think we'll be able to tell, or guess at a market cap.  But when it comes to the Lightning Network, the ability to create private channels, you're not even going to be able to know how much activity's going on.  Right now, there's probably an insane amount of transaction volume going on on the Lightning Network that nobody will ever know about, because it's private channels; other than the two entities in the channel.  It's alien technology that we discovered 12 years ago and we have no idea of the potential that it's going to unlock.  We're very lucky to be alive right now; stack as many sats as you can, God damn it!

Q10: Hey, guys, thanks for coming out.  My question was kind of centred around a states' race for Bitcoin mining, and then what that would possibly play out and look like; and then, the states that maybe aren't as energy independent, countries even, how would you see the shift?  So, say if Texas becomes a centre hub of mining Bitcoin and you have these energy-stranded states, countries, how can they get scanning in the game and exposure directly; and how do you guys see that playing out?

Peter McCormack: That's for you, Marty.

Marty Bent: They'll have to provide other services that people are willing to pay Bitcoin for.  That's the other thing.  I don't think people realise how pervasive energy is.  Like solar; I shit on solar and wind a lot, but it exists, and you can harness solar.  My beef with solar and wind is that they're unreliable and I don't think they should be baseload energy for large swathes of people for large grids.  However, they could be good for personal mining operations.

But there are very oil-rich and -- actually, no.  These states will just buy nuclear reactors.  Bitcoin mining incentivises the proliferation of nuclear energy; it's going to happen, so they'll just buy nuclear reactors and mine with that.  They're all going to get in the game.

Preston Pysh: I think the intention of your question was oriented more towards, how are the coins going to be evenly distributed throughout not just states, but kind of more on a global scale between nation states.  I would tell you that I think a lot of the Bitcoin's going to get redistributed in a major way once you actually get fair, free and open markets and the cost of capital reprices equity across the globe.

So, today, I'm not willing to give up any of my Bitcoin for equity, because of how mispriced it is.  As you actually get real interest rates that get constructed through a free and open market of Bitcoin lending, what you're going to find is your interest rates are going to go up, they're going to be way higher than where they're at right now.  So, all the equity is priced today based on interest rates, ten-year treasury at 1.3%, or whatever it is, and so that's why your P/Es are 30 or 40.

But if interest rates were at 10%, I'm just going to use this as a round number, let's say that that's the free and open interest rate that comes out of a Bitcoin standard, when that 10% comes up, the price of all that equity now gets compressed.  The prices of that equity get compressed down to some form of return that gives you something better than a 10% return.  So, that means that the capitalisation rates of that equity are going to, if we're talking about a P/E of 30 to a P/E of 10, to come to parity with an interest rate of 10%, you have now lost 66% of the buying power in the market capitalisation of equity.

Now, all of a sudden, I start to become a buyer of equity for a person who holds a significant portion of the coins.  They're now looking at that and saying, "If I buy this for this price, based on the free cashflows of a company that has a competitor advantage, has a moat around the business, as far as their competition in the space, and they're kicking off free cashflows, I'm now going to give up my Bitcoin to that equity holder and I'm now going to buy it".

But the problem today is, all that equity is compressed into the hands of 1%, 2% of the population when you're looking at it.  They think that those prices are warranted based on the interest rates that they're seeing.  But I think what they're missing is, when this keeps moving in the direction that it's moving, it's going to reprice everything.  Then those coins are going to get out into these nation states, especially nation states where those equity prices are penalised the most, because you're going to have investors, like myself or others, that are saying, "That equity is grossly mispriced, it's way, way below; or, the yield is way, way higher than that 10% rate", whatever that rate ends up being, and you're going to have investors that step into that market and those coins are then going to get redistributed all over the planet.

Marty Bent: I think we're already seeing that Bitcoin's utility is just driving adoption in developing countries; like Africa, in terms of actual transaction usage, I believe Nigeria, Ghana, Latin America are top of the list.  Yes, they may not have all the coins, but they're adopting Bitcoin and actually using it a lot earlier than a lot of people in Western countries.  So, I think there is that utility that Bitcoin provides and the demand for that utility in emerging economies, it's a natural adoption in those places, because they literally need it.

Peter McCormack: Right, we're coming to a close.  I'm going to do one more question, but before I do that final question, do people want to just go somewhere and have a drink afterwards, because this place is going to close at 9.00pm?  So, if everyone wants to go and have a drink, we should probably just agree a place.  We could either go down to Broadway; that could turn into carnage, but I'm not against it.

Preston Pysh: Sounds like we're going to Broadway!

Peter McCormack: Okay.

Marty Bent: I want to go listen to some live music, I know that.

Peter McCormack: Okay, so we're going to go to Broadway.  It's just a bit small though and we're taking probably 50 people down.

Marty Bent: You've got two final questions here.

Q11: Hey, thanks for all you guys do.  So, yeah, it seems like a pretty young crowd here.  I'd just be curious on what you guys think on some of the Bitcoin IRA-type stuff?  I think we're all optimistic on what Bitcoin can do long term, but for those of us with kids and looking down the road, do you see any advantage to using IRAs, or just buying Bitcoin spot price and just holding; even if you could hold your own keys in that IRA, do you see any differentiation, or could you speak on that a little bit?

Preston Pysh: Peter Thiel's kind of messed this one up for everybody.

Marty Bent: Yeah, what did he do?  He rolled his --

Preston Pysh: "I've got a $6 billion IRA"!

Marty Bent: He rolled his PayPal seed shares onto that, didn't he? 

Preston Pysh: So now, they're trying to put a limit and a cap on how much is…

Marty Bent: Yeah, I'm bad with the tax preferable --

Preston Pysh: I think it makes total sense to do it, especially if you're holding your own keys.  I think the big mistake that a lot of people are going to make is that they're going to be buying an ETF that is based on top of a futures price, there's going to be massive disconnect, especially if you get into this hyperbitcoinisation kind of scenario.  I think you're going to watch those types of vehicles just be disgustingly bad at tracking the underlying price.

More importantly, if you've got your own Bitcoin and you hold the keys, I think the real big play on the other side of this is, it's going to start in the fixed income space.  And the only way you're going to be able to lend anything is if you actually have your keys.  And, I'm not encouraging people to be in that space right now.  I find that space very interesting right now, because you're seeing a major disconnect between what risk-free rates are in traditional finance and the rates you're seeing in the Bitcoin space; that's why I find it fascinating.

But I have a lot of concerns with rehypothecation in that space today.  I specifically have a lot of concerns about how the companies that are providing this have basically two different books.  They've got retail books and then they've got institution books, and those institution books, where a lion's share of that lending is occurring, is happening in a rehypothecated, fractional -- they're under-collateralised in that space.  And if you don't think that that could spill into the retail side that is over-collateralised in an instant way, which I think is very promising, you're totally kidding yourself.

That's why I'm hesitant to suggest anybody do that.  But I think when that matures at a certain point, that's going to be an extremely exciting space for people to benefit from, and I think the interest is going to be pretty exciting.

Marty Bent: But I worry about Janet Yellen trying to come after unrealised gains.  Maybe those IRAs can be a target.  I'm going to channel my inner-Odell here.

Preston Pysh: It shows you how desperate they are right now.

Marty Bent: That's what I worry about, is those IRAs becoming targets for wealth confiscation, which is something you should consider.

Peter McCormack: We have a different setup in the UK.  I don't actually have a pension, another thing I was talking to Steve about yesterday.  I explained to him that essentially, my Bitcoin wallet is my pension and 200% annual gains, hopefully by the time I retire, that will become my bank account I'll be dipping into and I probably won't be in the UK and I'll be somewhere where hopefully I won't be taxed and not giving a shit.

Well, listen, we were at our limit two minutes ago.  Can we have a round of applause for Marty and Preston.

Preston Pysh: Thank you for bringing us together, this was awesome.

Peter McCormack: Thank you everyone for coming; the whole thing worked out.  I was really nervous no one was going to turn up.  When I announced the Miami one that was free, it sold out in about 30 minutes.  When I announced this, for half an hour, there were no tickets sold.  I was like, "Fuck, this is going to be so embarrassing; three people will turn up!"  But no, so I appreciate everyone coming.  All the money went towards the equipment, food, drink.  We don't make any money on this, hopefully we would in the future, but we don't, so appreciate you all coming down.  Probably go down to this Honky Tonk Central; it's a bit rough.  There'll be a lot of bachelorettes there for any single lads here!

Q12: Are you doing it here next year here?

Peter McCormack: Maybe sooner.

Preston Pysh: Why next year; why not once a quarter?

Peter McCormack: Yeah, why not. 

Preston Pysh: Hey, I'll come here as much as you guys want.

Peter McCormack: Well, I'm moving here.  Thank you.  Appreciate everyone coming, have a great night, be careful, don't get too drunk; love you all.