WBD696 Audio Transcription
Will Blackrock Be Bitcoin's Suddenly Moment? With Parker Lewis
Release date: Monday 14th August
Note: the following is a transcription of my interview with Parker Lewis. 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 interview with Parker Lewis, we discuss the book he is currently writing, the Bitcoin scenes in Austin and Nashville, the triggers for a significant shift in Bitcoin adoption, the potential effects of hyperinflation, and how governments may seek to regulate and tax Bitcoin.
“The endgame of all these currencies is hyperinflation, the Dollar, the Euro, the Yen… the Yuan, the Ruble, all of them; but I think when one of those currencies that’s run by more of a developed nation…that’s when everyone is forced to adopt bitcoin because it’s the only thing that works.”
— Parker Lewis
Interview Transcription
Peter McCormack: 9th tier now, we started in the 10th. You getting interested in football now are you, Parker?
Parker Lewis: Yeah. I grew up playing football.
Peter McCormack: Yeah, 9th tier, man. And our ladies just had their first pre-season friendly. We've taken over the ladies. They've become Real Bedford Ladies. They finished bottom of the league last year. I think they won like two.
Parker Lewis: 11th division? What division?
Peter McCormack: They're in the 5th tier, the ladies. There's not as many teams. And they won like two or three games. The only reason they didn't get relegated is another team folded. They've just had their first pre-season friendly and won 7-0! We've signed a bunch of new players and the first half was all the old players and they were 1-0 up; brought all the new players on, they won the second half 6-0, 7-0. I mean we would have put ten past them in the first game, so I'm very confident both the ladies and the men's will both win their league this year, which will be incredible.
Parker Lewis: Nice.
Peter McCormack: Anyway good to see you, man.
Parker Lewis: Good to see you.
Peter McCormack: Been a short while?
Parker Lewis: I don't know when the last time you've seen us was.
Peter McCormack: We were in Austin. It was when we played Chenecks.
Danny Knowles: Yeah, that's right, we watched it at the Commons.
Peter McCormack: Yeah.
Parker Lewis: When was that?
Danny Knowles: Six months ago, something like that.
Peter McCormack: Yeah, start of the year. Been going to Nashville a little bit more recently. Nashville, where Bitcoin Collective's doing a good job over there.
Parker Lewis: They are.
Peter McCormack: Complementing Austin well. They think they're winning!
Parker Lewis: Chirping.
Peter McCormack: Chirping! Have you been?
Parker Lewis: Yeah, it's good. It's a nice place to visit for a couple days.
Peter McCormack: We went for how many days?
Danny Knowles: I don't know, six, seven?
Peter McCormack: Yeah, how many days were we in Austin?
Danny Knowles: Two. Did you see the chart that Rob Hamilton made?
Parker Lewis: The one that compared Real Bedford --
Danny Knowles: The Commons and the Park.
Parker Lewis: Yeah.
Danny Knowles: What do you think of that?
Parker Lewis: I got mad Yeti Cold vibes. Do you know what that is? Remember where Yeti Cold ranked themselves against all their competition; and they brought in people to participate, and then they kind of cooked the system to have Yeti Cold be the best cold storage, even though nobody uses it? That was kind of how I got.
Peter McCormack: Who's Yeti?
Peter McCormack: Oh, fuck that guy.
Parker Lewis: You remember this? He really put people's faces on their website, saying that it was like Gary had done it, like people devoted their time; that's kind of what I got the vibe here. This had like a very Yeti Cold, rating-themselves vibe.
Peter McCormack: It reminded me of what --
Parker Lewis: We were just back -- either people in Austin were at Nashville shipping or people were working in Austin shipping while that was all going on.
Peter McCormack: So, it reminded me of what Roger Ver used to do with Bitcoin versus Bitcoin cash; he used to do a similar chart.
Parker Lewis: Yeah. But what's the Shakespeare, "The lady doth protest too much?"
Peter McCormack: I mean I think it's a fair -- I mean can you not open carry at Bitcoin Commons?
Parker Lewis: If somebody had a gun in their bag, I wouldn't have an issue with it.
Peter McCormack: Is that open carry though?
Parker Lewis: That's not open carry.
Peter McCormack: Oh, fair.
Parker Lewis: I mean the building is a privately-owned building. So, no, I one time had an issue because somebody on Marty's podcast brandished a weapon, just to kind of flex. It's like, "Hey, carrying a gun on you, it's fine". But you know, we do not have open carry. There is constitutional carry in Texas.
Peter McCormack: We don't want people flashing their butter knives at Real Bedford.
Parker Lewis: There are not dogs allowed. The drinks are free, so whiskey, beer, we take care of our patrons --
Peter McCormack: So that really needs a "Free drink" row.
Parker Lewis: -- at the Commons. National Bitcoin Capital, that's false. That's the Yeti Cold vibe.
Peter McCormack: Well, I can only speak for Real Bedford. We are the National Bitcoin capital. And you can pay for your drinks with Bitcoin, you're allowed your dogs.
Parker Lewis: But you don't host BitDevs.
Peter McCormack: Well, no, so I challenged him on that because the best place for BitDevs is in London, but I sponsor it, so I pay their costs. So, I said I deserve the credit.
Parker Lewis: That's like a half, that should be like a yellow.
Peter McCormack: A yellow.
Parker Lewis: A yellow with a knife, I guess.
Peter McCormack: A yellow, yeah. And I don't think you can wander around brandishing a butter knife! I think if someone did, I'd probably ask them to leave. I'd be like, "What the fuck are you doing? This is a football club". But we are the National Bitcoin capital.
Parker Lewis: Yeah, okay. I agree with that.
Peter McCormack: Is this war?!
Parker Lewis: No. It's like, we're supporters of our friends in Nashville, but again, Nashville is a great place to go visit for a couple of days. Austin's the Bitcoin capital. Texas is the centre of hash. You know, it's like if you started adding up Tennessee's hashrate, the whole thing is just actually in the water here. It's not people shitposting on Twitter, rating themselves like Yeti Cold; it's not a coincidence that the Square hardware wallet is being built here; it's not a coincidence that the Samsung Fab is an hour away from here. This is a tech centre. It's the one tech centre in a low-tax, business-friendly state. People love Austin. It's the city with the single greatest inflows in the country.
We've got our own issues. But the reason why people are moving to Austin, Texas is not just specific to Bitcoin, but there's kind of a diaspora going on. And so it's kind of like when you get in a little echo chamber and you start rating yourself on Twitter, you can start to make people feel like you're bigger than you are. But at the commons, we're just focused on shipping and working and Bitcoin. So yeah, we make our way up to a couple hour flight every once in a while, but then we come back and live in Austin.
Peter McCormack: It's a firm defence.
Danny Knowles: This is like a Cold War.
Peter McCormack: You get on a plane, dude.
Parker Lewis: I mean, when you put the confluence of things going together with Bitcoin, the tech centre in Austin, I mean, all the mining that's happening here, just from the energy standpoint that creates an anchor to Bitcoin here, it's just that alone will make it hard to displant Austin as the primary place in the United States where Bitcoin kind of brings people together.
Peter McCormack: So, a week Friday, I've got a meeting with the Mayor of Bedford's Head of Economic Growth for the Bedford Council.
Parker Lewis: Yeah?
Peter McCormack: Yeah. I'm going to be telling them I'm going to be making Bedford the Bitcoin capital of Europe, not asking permission, but trying to explain to them that this is a gift they're getting that a little, shitty town like Bedford doesn't normally get and they need to take advantage of it. We have this problem though. We don't really have that kind of incentives you can offer people, because we have these flat, UK-wide taxes. I think they can do things on business rates, can't they?
Danny Knowles: I don't even know. Yeah, business rates maybe.
Parker Lewis: I mean, the thing is, you don't need anybody to advantage it, you just need them to not fuck it up.
Peter McCormack: Well, that's the first point. Don't fuck this up, but if you want to support it, you can. The only one good thing, we've got this big solar plant in Bedford.
Parker Lewis: Well, see, this is the thing that you have to watch out for, is that if you start building up Bitcoin in Bedford, then the crypto snake oil people will come in.
Peter McCormack: Yeah, that's true.
Parker Lewis: And people in city councils are particularly susceptible. So, in that meeting, that might be where I'd focus my energy, just, "Hey, when the snake oil salesmen come out to try to leverage this, remember that this was about Bitcoin".
Peter McCormack: Yeah, this is Bitcoin country.
Parker Lewis: Yeah, "We'll do all the work on our own, just don't sell yourself out to snake oil salesmen".
Peter McCormack: Well, we're going to do it anyway. Anyway, we've a topic to -- how's the book going?
Parker Lewis: It's going well. I was telling Danny that I got a little bit, not sidetracked, but delayed for about four to six weeks. I had to change my process, bring in some new editors. I was working with a company that helps self-help publishers through the editing and production process, that ran into some financial struggles. So, rather than wait on them to figure their shit out, I just set up a new team to help carry it forward. That delayed me about a month of June, but now full steam ahead and hoping to have an e-book out by BitBlockBoom! and then hopefully the print version by October.
Peter McCormack: Wow, so August, end of August.
Parker Lewis: Yeah.
Peter McCormack: All right, well this might pre-empt it a little bit and we're probably going to want to talk to you again when the book is out. I'm really looking forward to the book. So, the thing we want to talk to you about and get your very rational view on, because you're pretty good on this stuff, is you've done your series, Gradually, Then Suddenly, which by the way, I didn't actually know until recently was an Ernest Hemingway thing about going broke. And so in my head, I was like --
Parker Lewis: You didn't read the first Gradually, Then Suddenly then!
Peter McCormack: Well, sorry, I hadn't consistently associated with it. In my head, Gradually, Then Suddenly, it was like just constantly thinking about Bitcoin, it happens gradually, then suddenly, Bitcoin will take over. But then we're me and Danny were talking it through, the Ernest Hemingway thing, it was like, "Or is this the Gradually, Then Suddenly death of the dollar?" and we're like, "Or is it both?"
Parker Lewis: Yeah, so I think you have to go back and read the --
Peter McCormack: I read it a long time ago!
Parker Lewis: -- introduction to Gradually, Then Suddenly! But I think so. One, the actual text in The Sun Also Rises, I believe is, "First slowly, then all at once", and that described the process of going bankrupt. And then that was kind of culturally adapted to, "Gradually, then suddenly". So, I think most people probably think that Gradually, Then Suddenly is what was actually in the book, but it was slightly different, but the same idea. So, in the introduction to Gradually, Then Suddenly, I talk about how it was how Hemingway described the process of going bankrupt. It's also how countries' currencies hyperinflate, as well as how people come to understand Bitcoin; and that functionally, at a country level is bankrupt, or at least they were bankrupt a long time ago, but when their currency hyperinflates, that's when it becomes apparent that at the country level, they're insolvent and that nobody wants the counterparty risk of their money.
It is how people happen to understand Bitcoin. I feel like people search for it, or I like to say it's difficult to see, but people focus in on it and they're hearing things from bitcoiners, listening to your podcast, but it doesn't necessarily click for them, the puzzle pieces don't come together. And then something happens, either they consume one piece of information, one thing happens in the world where they connect a bunch of ideas together, and it's like a flash in the brain that says, "Maybe these people aren't all crazy", and not just in a low probability way, but in a way that you could suddenly, even if it was a fleeting moment, could describe to yourself why Bitcoin could be money. And then the trick or the challenge is being able to consistently get back to that same point, that it kind of happens in this flash where, again, consuming a video, a podcast, reading something, or Russia gets cut off from SWIFT, Canadian truckers get frozen from their bank accounts, Silicon Valley Bank fails, is my money actually in the bank? So it's oftentimes a lived experience.
In that moment, the pieces come together, but then you've got a lot more work yet to do to be able to reliably get back to the point of yes, Bitcoin is money.
Peter McCormack: Do you remember what yours was?
Parker Lewis: Yeah, I do. It's actually hard to describe. But I was up in Wyoming with Will Cole. We had been listening to podcasts, talking about Bitcoin for quite some time. I had started to get there. But we were having some -- I was hung up on the idea that Bitcoin was too expensive. That like, how's everybody going to be able to get Bitcoin if, like at the time it was like $2,000 or something, or like $3,000. Yeah, I think it was the end of 2016.
Peter McCormack: It was at $3,000.
Parker Lewis: It was $3,000, it was somewhere around there. And I was thinking, "But how are a billion people going to get this if there's…", you know. And today, it's difficult to go back and be like, "Oh, that was so illogical", but that was the thing that was tripping me up. And Will made this comment. We were literally coming off, leaving the ski slopes and he's like, "You know, realistically Bitcoin needs to be worth about $10,000 in order for it to even be relevant", and he might have said it'd be relevant to like large institutional people or banks, something like that, and for some reason the way he said that, I connected, that Bitcoin actually gets more valuable the more "expensive" it is and therefore it's never too expensive.
But for whatever reason, I had been coming around to the idea of Bitcoin possibly being viable, but it didn't make sense. And that comment about Bitcoin, I was struggling with it being too expensive and Will made a comment that it needs to be worth at least $10,000 for it to be relevant globally. And part of that that I heard or connected was that as Bitcoin becomes more valuable, you can send more value for a lower nominal unit of the currency, such that as it becomes more valuable, it becoming more valuable is more realistically an output of more people valuing it. And as its value increases, thinking about it as, if I could send $1,000 for 0.1 Bitcoin versus 1 Bitcoin, more people can send 0.1 Bitcoin around. Well, it doesn't just happen by magic, it happens because more and more people in the world adopt Bitcoin as value and are willing to transfer and transact their actual real-world value for a form of money that can't be printed, albeit that it's digital and it's hard to understand.
So yeah, for me, that was the one. It was like, it all fit into place, that thing. I still had some work to do from there, but for whatever reason, that was a particular comment that made the puzzle pieces come together.
Peter McCormack: Do you remember yours?
Danny Knowles: So, it's the idea that the more expensive it is, the less risky it is?
Parker Lewis: No, it's that the more "expensive" it is, the more valuable each unit of the currency is.
Danny Knowles: Oh, I see.
Parker Lewis: One way that I would equate it is, and I might get my maths wrong, but at $1,000, you would need 10 Bitcoin to send $10,000 across the world over a communication channel. If there are 21 million Bitcoin, that equates to a certain maximum number of people that could send the equivalent of $10,000. But if Bitcoin were worth $10,000, then 10 times the number of people could send that same amount of money. And so, if you think about how it actually happens, the more people value this as a currency, the 1 Bitcoin becomes the equivalent of 0.1, becomes the equivalent of 0.01. And what that actually means is that the network is capable of facilitating more and more trade.
Peter McCormack: Oh, yeah, I get it, because you're just using much smaller units.
Parker Lewis: Yeah, more people are adopting, more people have come to see, "Oh, this is actually valuable, this form of money is more valuable than my other form of money", and as that happens, on average people have less and less Bitcoin, but the marginal unit, nominal unit, is worth more and more.
Peter McCormack: It's kind of the opposite of what you were thinking.
Parker Lewis: Yes.
Peter McCormack: Yeah.
Parker Lewis: Yeah. I was hung up with the opposite. Like, "Not enough people are going to be able to get this because it's too expensive". And I was like, "Oh no, as more people adopt it, it becomes more expensive, but it becomes a greater utility because more people are adopting the foreign money which equates to more and more trading partners", and that's what money is there to do, to facilitate trade and exchange.
Peter McCormack: I had a similar one recently, and I'm still not sure if I've actually clocked onto something here, but I was saying to Danny the other morning that, say if Bitcoin suddenly goes up to $200,000 and I was to sell 10 of my Bitcoin, $2 million say, and that would be a significant part of my Bitcoin, but I would be highly incentivised to do it, even though I know it could go much higher in price. Because at that point, the amount of things I could do in my local town, businesses I could build or properties I could buy, or investments I could do, I could have a meaningful impact. I don't need infinite amounts of money. And I kind of had this moment where I realised that someone would be willing to buy the Bitcoin at that price and I'm willing to sell it.
Whereas in fiat, with this continual inflation, we've been borrowing from the future, I'm kind of flipping it, in that I am now selling from the past to enable other people to try and put themselves in the same situation in the future. I can get off the train a little bit. I can take one step down now and do the things I want to do and in doing so, somebody else is joining the network with that Bitcoin to try and do the same in the future. And it was kind of that reverse, or whatever, like it kind of really hit me at that moment.
Danny Knowles: You're investing in the present rather taking from the future.
Peter McCormack: Yeah.
Parker Lewis: Yeah, and basically someone in theory, somebody who doesn't have Bitcoin, is entering the economy at the same time you're taking your Bitcoin to produce something in the present to ultimately make the Bitcoin more valuable too.
Peter McCormack: Yeah, it's like handing the time preference baton over.
Parker Lewis: Right, I mean because when you think about it, sometimes not spending money is high time preference. I think too many people, not too many people, I think I'll describe myself. When learning these concepts, one of the things that was intuitive was that a lower time preference was associated with saving money. And I think that's part of it, but the other part of it is not spending money can also be high time preference. Where it's like, imagine if you had nothing but only saved money and you were just sitting there appreciating your stack of Bitcoin, but you didn't have a home that you could call home. Or imagine something's broken on your car and you didn't fix it today, and then it broke down in the future and you had to spend 10X; not spending today would be...
So in your case, it's like, you've saved for a long time and now you can sell a percentage of your money, of your savings, in order to invest in something real. What you probably wouldn't do is take the 10 Bitcoin and just sell them for pounds and be like, "Oh, now I've got £2 million, I'm just going to watch them wither away", it would be to consume something in the present. And that's really what money is there for, to bridge the present to the future, intermediating a series of transactions, and it is always between money and real goods. And there's some people that have very little money and a ton of debt or a ton of assets, but no good money, and they're going to have to allocate out of that and actually get money.
But every bitcoiner that's sitting there is doing the exact same thing. It's just that we've been saving for years, tolerating the volatility. As more people come into the economy, we will, on average, have to part with Bitcoin. People will basically bid it out of the current holder's hands. But it's also rational to say, "If I'm converting that into something that I'm going to consume in the present", like we all have a positive time preference, that was one of the concepts that I got from the Bitcoin Standard; people have high time preference, low time preference, but everyone's positive because our lives are finite. And consuming in the present is not a bad thing. It's just, make sure that you're also planning for the future, and that's what you would be doing if you converted some of your Bitcoin. You're consuming in the present for the future.
Peter McCormack: We're also creating new allocators of capital with a different set of principles. That money's been hard to earn.
Parker Lewis: You've paid for it, it's not borrowing from the future, it's something tangible, physical that you've saved. You're parting with it in an honest exchange to consume in the present. You're paying for what you're consuming in the present versus borrowing from the future.
Peter McCormack: Yeah, and you're paying with past time, the time you sat on that.
Parker Lewis: Yeah, and didn't consume.
Peter McCormack: And didn't consume, yeah. And so you come up with a different set of principles for how you allocate that capital. It's an interesting thing. Do you remember any of the things that flipped you?
Danny Knowles: I remember only one thing, but I had like zero knowledge of economics when I came into Bitcoin. And I do remember one kind of lightbulb was thinking about fiat as like a changing measurement for investment. And so, if you're constantly changing the ruler that you're measuring things with, how would you ever get some things solid; and the Bitcoin was like a fixed ruler?
Peter McCormack: It's like Steven Lubka, isn't it?
Danny Knowles: I can't remember the first time I heard it. I've probably explained that badly.
Parker Lewis: I mean, when I tried to explain what I hung up on -- I tried to write about this once and I couldn't get it onto paper well, because the things that kind of confuse us or hang us up, I think, are all similar but unique. And then the thing that allows us to unlock, you might have heard something and ten other people might have been struggling with something similar, heard the same thing and not had it unlocked, so I think that being able to explain something that otherwise in hindsight appears less clear, it doesn't matter what unlocks the mental block to see Bitcoin. But I think that that's fairly standard.
Peter McCormack: So, I had one moment in 2018. So, 2017 I was first getting in and I was trading a lot of shitcoins. I bought everything, whatever you can think of, Dash and XRP and everything, and I used to keep this spreadsheet of what I bought, the price I bought, the price it is now, the value; and I used to track the value in dollars and Bitcoin, but every day I'd focus on the dollar price. And there was a time when my portfolio was going up in dollars but down in Bitcoin, and I thought I was cool, I thought this was good. So increasing in dollars, increasing in dollars, and then the market crashed.
At my peak, I always remember the numbers, at my peak, well, very close to the numbers, at my peak Bitcoin, this is quite depressing, the total value of my shitcoin portfolio went up to 186 Bitcoin. By the bottom of the bear market, I had 18 Bitcoin. And that to me was a real trigger, that was a real lesson. I was like, "Shit, the game was to accumulate Bitcoin; the game wasn't to accumulate fiat", which I had thought it was. And that was a gradually, then suddenly moment where I eviscerated all this Bitcoin. I was like, "Huh!" And so ever since that moment, the game has constantly been to accumulate Bitcoin and kind of ignore the dollar price. Yeah, obviously when it goes with $70,000 you're thinking of things I can do with that money, but generally speaking… And I haven't and I don't think I'll ever get back to that Bitcoin number, which is frustrating, but it was a real lesson in the value of Bitcoin. Stop thinking of it in the moment and consider it in the long term. And so, that was a real changing moment for me. Painful!
But it all leads to what we want to talk to you about, is you've talked about Gradually, Then Suddenly, and I'm starting to think a lot more about what "Then Suddenly" means. We had Tuur Demeester in yesterday, and one of the questions I put to him is, "I don't personally know what 'Then Suddenly' means. I keep thinking of the current world, but we have Bitcoin rather than pounds and dollars, but it's possibly a very different world". And I don't know what that world is, so I wanted to get into that a bit more with you, but also talk about the Then Suddenly trigger, what makes that happen. And we've been talking a lot about BlackRock on this trip. And the reason we've been talking about BlackRock is not that we think an ETF is a good idea, we've seen the issues with the Grayscale Trust, and I know they're slightly different, but at the same time, locking up those pools of Bitcoin rather than people holding self-custody is worse.
But at the same time, the number one asset manager in the world flipping to being a bitcoiner, calling Bitcoin hope, saying it's money, saying it's the best money because it's global money, that is a signal to the world and signal to asset managers and to investors, but there could also be a signal there, because whatever you think about ESG, if BlackRock are going to want to promote the ETF, there's every chance they say that Bitcoin is positive on their ESG scales, which might flip further narratives in media. So, it feels like it could potentially be a trigger that sends us towards the Then Suddenly moment, but I'd love to know what you think.
Parker Lewis: So, I think probably most fundamentally, it's weird because I'm not rooting for this, but I think when developed country currencies hyperinflate is the other side of when there's a rapid, like the last cycle of Bitcoin adoption; that people en masse will turn to it when they have to, not when they want to. And thinking about when currencies fail, and there's currencies failing all over the world today; the Venezuelan bolivar has obviously failed, the Argentine peso has functionally failed, the Lebanese pound is failing, the Turkish lira is on the way, that those aren't the dollar, euro, or yen. And when those currencies are failing, everyone's first rational instinct is to adopt the form of money that's next best, which if you go to any of those economies, they're largely run on dollars, right? Anybody would love to get dollars or potentially even euros, if they could get a hand of euro, right?
Peter McCormack: Well, I'm off to Argentina tonight for a week and I'm taking dollar cash and Tether, because I've been told ahead of time, that is what you need. And when I was in Venezuela, I had dollars. And when I was in Cambodia, it was dollars.
Parker Lewis: Yeah, so I think the same will occur with Bitcoin. At the same time people are --because it is rational. If your currency is losing 10% a week, adopting a foreign money that's losing 10% a year is a better trade, especially if you need food tomorrow and power, right? But the end game of all of these currencies is hyperinflation, the dollar, the euro, the yen, the yuan, the ruble, all of them. But I think that when one of those currencies that's run by more of a developed nation or more of a developed nation currency, that that's when everyone is forced to adopt Bitcoin because it's the only thing that works.
Peter McCormack: The TL;DR was, as currencies hyperinflate, where we've seen in Venezuela and Argentina and Lebanon and now Turkey, they go to the next best currency, which is often the dollar. But it's when the dollar fails --
Danny Knowles: There's no other option.
Peter McCormack: Yeah, because some people are going to Bitcoin rather than the dollar, we know, we see that, I mean we see the charts, but they're not going en masse; they are going to the dollar.
Parker Lewis: Yeah, and realistically, I'd say the currency failures, they do cause Bitcoin adoption. But when we're talking about Bitcoin adoption at the level of facilitating day-to-day trade, and 90% of it, that's not the type of adoption that Bitcoin is seeing. It's more rational at this point. It's people sitting around this table thinking long and hard about the question of like, "Is Bitcoin money?" consciously considering the question versus instinctively adopting a form of money in order to facilitate your needs tomorrow, a week from now, a month from now. So, I think that that's the point where, and realistically I say this where, like when the dollar hyperinflates or the euro hyperinflates, it's not going to be a good day. I think that the further down the road that could happen, such that the infrastructure's in place, the more people that could have Bitcoin when that happens, but it is a related equation.
When people are choosing to save in Bitcoin, they are impairing the demand for local currencies. And if you're saving in one form of money, you're marginally opting out of another. And obviously, we're not doing that all at once, right? But we are doing it on the margin. And as more people do that, the value of those currencies further deteriorates. And so, it's kind of the reverse side of the same coin, but ultimately, think about somebody who has a lot of Bitcoin today. They've got to eat, they've got to get gas, they've got to pay for power. So, the other side of that is that that event will probably be the greatest distribution event of Bitcoin ever, because people who don't have Bitcoin but have oil and gas assets or power assets or things that people need to consume that are of value, people that have Bitcoin are going to have to pay for it. That will be, in my view…
I also recognise that, I don't want to say peaceful, there's no transition away from a world of excess that's been built on fake money, where in the US alone, there's $93 trillion in debt-denominated liabilities. The US federal government has $32 trillion of debt. Somebody owns those assets. A lot of foreign countries own those assets, a lot of pensions own those assets. Somebody's on the other side of that, and when it becomes clear that, say, $5 million in US Treasuries don't purchase you anything, that's a bad day for whoever was holding that bond or that currency.
So, there's no such thing as a debt jubilee. Look at every country that's experienced hyperinflation and ask, "Did somebody get a debt jubilee there?" But the hyperinflation of the dollar will be the forced rapid monetisation, because there will be a good form of money that's out there and available to people, they just have to be able to figure out how to get their hands on it and use it and trade it, and the vast majority of everyone in the world will do that very quickly when they have to.
Peter McCormack: So what do you mean by that there isn't a debt jubilee, because there have historically been debt jubilees?
Parker Lewis: There's no such thing as a debt jubilee.
Peter McCormack: Okay, why?
Parker Lewis: Just like there's no such thing as a free lunch. It's like, I can give you a handout, but if you're way worse off, did you actually give me a handout?
Peter McCormack: There's a consequence.
Parker Lewis: What I would say is, imagine somebody lives in Venezuela and imagine they had a 50,000 bolivar loan, and imagine that they could go pick up a pile of bolivars and repay the 50,000 bolivar loan, but they didn't have access to clean water or healthcare or food any more, are they out of debt? Because the reality is that the people that are in debt, this is the thing, the people that are in debt, they actually get squeezed of everything. So, imagine you have a $20,000 credit card bill and if you have a credit card bill balance and it's charging you 18%, that means that you've consumed more than you've produced. And then something happens, you lose your job. So, you already had a job and you were already in credit card debt, now you lose your job at the same time that inflation is increasing. You basically get suffocated of everything, and then the currency isn't worth anything.
The point is that the idea that you can print your way to a debt jubilee, it's that society, the economy as a whole, pays the price of a currency collapsing. And even people that hold Bitcoin can't. Nobody's going to be able to avoid the cost. And there's this idea, I think, if people drew a chart of progress historically, they would draw it as a meandering path up and to the right. But the reality is that wealth can be created and destroyed and everything is always at risk. So, if a good currency allows wealth to be accumulated, and that wealth is in the form of higher quality of life, better things, less disease, better healthcare, whatever it might be that the money is coordinating the trade, then on the reverse side of that happening, wealth is actually impaired or destroyed, that every instance of hyperinflation that's ever existed, things got worse, right? Things went from good to bad, and that's the cost that everybody has to pay.
So, when the United States is in massive amounts of debt and they're printing the currency to be able to get out of it, well, the cost, the debt that everyone's going to pay in the future is the fact that the money that they were relying on that got them all these things that they came to appreciate and take for granted are no longer there.
Peter McCormack: But when this happened in Germany, the Weimar Republic, those people living in the border countries to Germany would be going into Germany and buying the assets or buying cheap bread and cheap goods and services. Is the equivalent of that almost like the bitcoiners? Will there be a redistribution of assets and wealth from the fiat economy into the bitcoiners' hands? Will companies become available -- say I, as a bitcoiner, there's a company near me that during a hyperinflationary event cannot afford to continue, and there's an opportunity to buy their assets or company, is that what we're talking about?
Parker Lewis: Yeah, you would give them Bitcoin and they would benefit because now they have a form of money that works. You give them a percentage of your Bitcoin, now you have a business to run. Maybe you even need the person to run the business, so they keep a job. But I think it will be in certain ways like this. In other ways, it will be like bitcoiners are going to need to survive, not in like the Mad Max survival, but in terms of bitcoiners are going to need to pay for things like gas and power, and so if those things are becoming more expensive and more scarce because there's not as much of it being delivered in the economy, then you're going to part with more of your Bitcoin just to sustain yourself.
So, it's not necessarily just going to be, in my view, just like taking other people's businesses, but in a large part, it will be. Or one way that I would frame it is, it would be Bitcoin repricing the world. I think, I haven't read the article yet, but I want to. Allen Farrington wrote an article recently, in the last couple of days, called something about pricing capital in the 21st century, where basically Bitcoin is going to restructure, people who have Bitcoin are going to restructure the world saying, "That's of value, that's not. And they won't be the sole arbiters, because that group of people will be dynamic.
But when you think about, I've got X amount of Bitcoin, and say there's five businesses that are failing, and you're like, "I'm going to invest in that one". That is setting a price. And what you invest in might also not be valuable. You might lose all your Bitcoin, right? But there's a lot of things that have price tags on them today based on a manipulated form of money, like the prices of homes in Austin, Texas. They're out of control, people can't actually afford them. But it's based on the money being printed. But at some point, when Bitcoin appreciates, a bunch of bitcoiners in the city are going to say, "Yeah, I'll take that house, but not that one".
So in a way, it is kind of repricing the world, but it's also the other side of it being that as the world moves to a Bitcoin standard, because everyone who's selling a home or a business for Bitcoin is saying, "Yeah, I'm willing to accept that as a form of money going forward".
Peter McCormack: So, there's almost like two redistributions that are going to happen, in that as the dollar hyperinflates there will be a redistribution of assets and businesses based on how Bitcoin has allocated capital; and because of that, there will be a redistribution of the Bitcoin from the people who have Bitcoin to the people who don't.
Parker Lewis: Yeah, and what's actually valuable, right, which you can look at that as being a one-way function of what people who have Bitcoin say. But on the other side, it's just something fundamental to an economic system. So as an example, if you start thinking about the world around you and being like, "What would be the one, two, and three things I would cut out of my life if I had to?", versus, "What are the one, two, or three things that I can't cut out of my life or I'd be in a very bad situation?"
So, I started thinking about things like hard assets of like a natural gas pipeline. That is of immense value, you know, power to not only power the Bitcoin network but to power homes' AC, heat. So, who's in a stronger position, right? So, a bitcoiner might be like, "I might want that business", but the guy who's holding that very valuable asset, basically there's probably a lot of things in the world that we will find out would not be sustained if not for the manipulated money, and there's other things that are probably undervalued relative to those things for the same reasons, and that people will have to spend money on because they are the most basic necessities.
Peter McCormack: Capital will be very expensive at a time like that, there won't be cheap capital available. So, something like Twitter might completely die, because it has $44 billion of debt, it can't cover its costs.
Parker Lewis: Yeah. And somebody might say, "Hey, is Twitter valuable?" because maybe it's valuable at a price of $1 billion or the Bitcoin equivalent of $1 billion, and saying like, "Okay, we'll right-size this". But other things like Facebook might be like, "Hey, no one's willing to pay for that". Gone.
Peter McCormack: Yeah. So there's two levels of redistribution, there's a massive repricing, most likely very turbulent times.
Parker Lewis: I think any time a currency destabilises, which we're in the process of it, I don't really like to talk about or say the word "hyperinflation", because it has this like dystopian and doomsdayer kind of perspective; whereas, the other side of it being Bitcoin adoption is like, "It doesn't matter if it's a turbulent time, I'm willing to accept that if you've got $93 trillion as a system in the United States of debt that you can't pay for, and that the way that they are actively attempting to pay for it is hyperinflating the currency, that the inevitable consequence of that is the currency fails". So, accepting that that is just the logical end is not dystopian, it's just I've got to deal with the reality in front of me.
But I brought this up because when Jack Dorsey, I think it was in the fall of 2021, he just tweeted out, "Hyperinflation". You know, it's something that's not actually fun to talk about, it's not fun to predict. One of the experiences I had before I got into Bitcoin, I was working for a hedge fund in Dallas and I was looking at an investment in GM, General Motors. But I had this interesting experience where I was just reading a 10-Q, which is a quarterly filing for a public company, and I think this was in 2014, it talked about how GM had basically, they wrote off, I think, 90% of their bolivars, I think they had like 500 million bolivars, and they took a $450 million hit and they pulled out all of their supply chain from Venezuela. They basically used to manufacture cars in Venezuela, relying on parts from outside of Venezuela, but they would have manufacturing facilities.
I bring it up because that was 2014. The bolivar wasn't officially hyperinflating until 2018. And I gave a presentation at BitBlockBoom!, I believe in 2020, where I was talking about, if you're learning about your currency hyperinflating on the TV screen, you've waited too late. When it's become obvious and it's on the TV, you're done. But also connecting that when GM is no longer manufacturing cars in Venezuela, that's not a good thing for Venezuelans. But they wrote off their currency 90% in 2014, but it wasn't officially hyperinflating in 2018. When Jack Dorsey tweets out hyperinflation in 2021, and everyone is seeing shit around them, like the Fed is increasing interest rates, yes, they can control things that are heavily dependent on debt on a short-term basis, but food's not getting any cheaper, energy's not getting any cheaper, power's not getting any cheaper. The things that marginally have to be produced on a daily basis and fulfilled do not get cheaper in these instances.
So, I think it's like when I talk about the idea of hyperinflation, I look at the end game and say, "There's no way out". If you print money for free, and they do it all the time, they do it a lot, people have to stop valuing that. But more realistically, it's like we're in that process today. You go to the grocery store here in Austin, Texas and you want to buy enough steak for two, it costs £50, and salad things, whatever, and you're like, "What? That's fucked up". But people can kind of tolerate it for a period of time at the same time that in its totality, we're at some point on this accelerating curve of prices changing so quickly that we can observe them not on looking back, "Oh, a beer used to cost $1 ten years ago", it's like, "Yeah, actually, six weeks ago the beer was $6, now it's $7", those types of things. Those are the types of things that are happening now, and when we look back on it, we're like, "Oh, yeah, we were in that early phase of hyperinflation and it would have been more ridiculous not to see it than to see it".
Peter McCormack: And one thing you can hope is that there's as much of a smooth transition as possible. So you said, "Let's hope that the hyperinflation event for the dollar is as far out as possible". During that period, we've already had people recognise Bitcoin, they're still recognising Bitcoin that is growing. And during this period, whatever it is, a decade, two decades, those transfer of assets may happen. I bought a bar recently that became available in the UK. I know why they were selling it, I could afford to buy it, I could afford to buy it because of Bitcoin, let's just be completely honest, it's because of my Bitcoin journey that gave me the capital to buy that. So, I'm doing that pre- hyperinflation. There might be other asset opportunities that come along the road. There might be more people who transition to back Bitcoin over the next five years, who start to see this new capital they have. So, that transition might not be just like a very tight event over this period; it's already started.
Parker Lewis: It's already starting. It will be accelerated in the form of, you asked about the "suddenly" part, when people have to adopt it, right? Every person today, and I don't want to say every, because somebody is dealing with hyperinflation today, and somebody is opting into Bitcoin on a marginal basis because they have a more pressing, "I need this today". When that same dynamic happens to a large swath of the population that both has access and is looking at it like, "I have to", it's like, "My currency is going down 10%, what do I do?" and it's an instinctual like, "I don't need to go through this rigour of thought of why Bitcoin is holding its value, or if it's money. It's holding its value more than everything else, and my currency is rapidly devaluing to the point that it's not buying anything", at that point is when 90% of the world is going to rush into Bitcoin, and not in like a going and buying it on an exchange basis, going to figure out how they sell their goods and services for it.
At that point is when we see this kind of hyper-monetisation, hyper-repricing of things, where what you just did is happening on an everyday basis; but more realistically, the other side of it is people figuring out, "Okay, how do I get a Bitcoin wallet? How do I go work for a company that will sell me Bitcoin?"
Peter McCormack: When I think about Larry Fink again, I'm rethinking this and thinking there is a scenario where BlackRock have lots of their customers and clients say, "Hey, look, we're interested in Bitcoin, can you create a product for us?" it's like, "Yeah, we'll create an ETF, that's a good opportunity". Or alternatively, they're the largest asset manager in the world, $9 trillion under assets, they're seeing the US government printing $1 trillion over the last month, or whatever it was, Luke Gromen quoting $2.4 trillion by the end of the year. They're essentially printing their tax receipts in this entire year, something like $6.3 trillion is being printed, magnitudes higher than the bailout from 2008. They've seen massive inflation, high interest rates. The high interest rates kind of have to stop at some point, which will lead to more money printing and more inflation. Is there a world where Larry Fink is thinking, "Holy fuck, the situation is real, it's happening, it's coming. I actually recognise Bitcoin's an answer for me and my customers and my fund", like he's rationally made the decision?
Parker Lewis: Yeah, I mean something seems to have changed, right? And it's hard to peg it, whether it's purely profit-motivating and saying, "Well, enough people are asking for this and I'm a profit-seeking company and this makes a lot of sense". I think that part of me thinks this is a PSYOP, where I don't exactly know what that is, but at the same time the SEC decides to come down on Coinbase, and kind of set Binance aside because Binance has their own issues, but they went after Coinbase saying, "You're an unregulated securities exchange for practically everything other than Bitcoin"; that in the same week of that, BlackRock announces that they're doing an ETF and who are they choosing to be their party? Coinbase. Something about the timing of those two things, and that the SEC actions didn't dissuade BlackRock to go to a different party, there's just something off about the sequence of those.
At the end of the day, it's a good thing. I'm somewhere between, Larry Fink is just following the signal that enough people are asking for this, and I'm in the business of providing this exact type of service, as from the way he talks about it, it's like he doesn't get Bitcoin, but something might have triggered a thought to say there's something here worth investing around. In either scenario, anybody owning Bitcoin through an ETF definitionally has less information about Bitcoin than somebody that actually groks it, because If Blackrock is using coinbase to custody, then think about this; it's the same thing as GBTC, different structure, but functionally the same thing.
Coinbase is custodying it, then you've got the fund, call it, "I shares Bitcoin", whatever BlackRock will call it. That's another layer of counterparty risk. Then you have BlackRock's counterparty risk. And then, if you're holding the ETF, you're holding it typically through a broker, so you have that broker's counterparty risk. That's four levels of counterparty risk. If you wanted Coinbase's counterparty risk, you could just go straight to Coinbase. Now, the reality is that there might be a scenario where BlackRock's influence over Coinbase might be greater than yours was as an individual, so there might be certain scenarios where if you wanted to take Coinbase's counterparty risk, having BlackRock on your side might benefit you. But if you're one small guy in BlackRock's pond, do they give a shit about you?
My only point is that it's definitionally worse from a counterparty risk standpoint. If you're already going to take Coinbase, you can go straight to Coinbase; now you've just added on an additional three layers of counterparty risk. So, anybody that bought GBTC definitionally had less understanding of Bitcoin; anybody who buys the ETF does as well. The good thing of it is that somewhere along the line, Larry Fink got the signal that there's enough people asking for this, there's an ability to profit, or maybe at a best scenario, "Maybe there's something real here that I want to have a part in", and it will provide some regulatory cover. If BlackRock's getting involved in this, then it can't be the thing that's for criminals, right? So, I do think that that is a net benefit.
I think that the best thing that's come out of this, as you mentioned ESG earlier, if you look this up, two weeks after he announced that they were filing for a Bitcoin ETF, he said, and he didn't connect the two, he said, "We're stopping using the term, ESG". He said, "It's become weaponised". And I think that was more driven by the states like Florida, Texas had threatened it, but people started pulling their funds, like billions of dollars, that hurts, right? And so right after they launch the Bitcoin ETF, they say, "We're going to stop using the term, ESG". What are you going to see? And the good thing is, the bitcoiners have been out there being like, "ESG is a fraud. It's just about people who want to make money". But now that Larry Fink has introduced a Bitcoin ETF, "Oh, we're pulling back from the term, ESG". In six months, you won't hear the term, ESG.
Some other people might cook up a different variant of some virtue-signalling bullshit to try to get your money, but that's one sign too that those two things aren't a coincidence: BlackRock stopping using the term ESG, and Bitcoin ETF. Did you guys see this?
Danny Knowles: Yeah I saw that.
Peter McCormack: I didn't see that.
Parker Lewis: Yeah. Can you pull that up?
Danny Knowles: Yeah. The one thing that I would be concerned about though is, you say that BlackRock getting into a Bitcoin ETF means they're not going to say, "Bitcoin's for criminals". I don't know if that's necessarily true. I think they might say, "Our Bitcoin's not used by criminals", and try and blacklist self-custody Bitcoin, or however they delineate it. I think there's a risk that something happens there.
Parker Lewis: I think we can project any number of potential risks. I would say that it would be similar to the 51% attack where, "Somebody's going to get more than 50% of the hash power and then they could create orphan blocks", and I'm not going to go into detail of what all that means, because at the end of the day it's like, in theory, that's possible, in practice, it's not.
Danny Knowles: But they don't have to force it to do that.
Parker Lewis: So, my view of it would be that if they accumulate a lot of Bitcoin, and then they're like, "These are our rules, our Bitcoin is the valuable one", the market when there was the SegWit2x, where the miners were colluding with the big companies, it's like the market decided which Bitcoin was worth and everybody else had to follow. So, if Larry BlackRock over here thinks that he's the new sheriff in town, and he accumulates 400,000 Bitcoin, and imagine what that does to the price of Bitcoin to the remaining 19 million that are held by the market, and says, "My Bitcoin's the Bitcoin, and it's the only one accepted at XYZ", the market's going to say, "Actually, no, we'll take the other one". Because if he did something that somehow forked the network, then the market has access to two different things and one immediately gets sold.
Peter McCormack: It's like the futures pricing during the Blocksize Wars.
Parker Lewis: No, it's like the Bcash split, 1 August 2017, where there were actually two different coins in the market and one got sold. The market said, "We value this version of Bitcoin that hasn't changed, you can take your 4 cents on the dollar".
Danny Knowles: But that's not really -- the concern I would have isn't that they would try and fork it and make that rule, it's that they would try and regulate the idea of self-custody. They could regulate out self-custody, say that's the Bitcoin that's used by criminals and make that illegal, or it has to be through a qualified custodian, whatever it is and --
Parker Lewis: But wouldn't that be similar to China banning Bitcoin mining?
Danny Knowles: Yeah, and I think anyone that tries to make a big change of Bitcoin quickly gets humbled, but it doesn't mean I don't think they'll try.
Parker Lewis: So, I think that there is a scenario where they try to influence politicians. I think more realistically that it is probably along the lines of things that will benefit a Bitcoin ETF, right, because if you think about saying you have to do this or that, that part of that, it's like, they wouldn't say you have to own Bitcoin in an ETF, they might try to say you have to own Bitcoin in a full custodian, but it's like, we have people in Congress right now, like Brad Sherman, saying we need to ban Bitcoin. So it's like, where does that stack up on the spectrum? And if somebody did, there is a tangible -- it's called the Nakamoto Paradox, which is a Keynesian theory about Bitcoin that everything is good for Bitcoin. The Keynesians are still trying to figure out exactly why the Nakamoto paradox holds.
Peter McCormack: Is that where Harry got it from?
Danny Knowles: Probably.
Parker Lewis: I believe we all attribute it to Gideon Powell originally.
Peter McCormack: Love Gideon.
Parker Lewis: So, the idea is that if suddenly someone actually put into a piece of legislation in Congress that said you cannot self-custody Bitcoin, and more realistically they would do it in a more nuanced way to try to attack that same vector, all of a sudden this thing of Bitcoin self-custody comes to the forefront. And a bunch of rabid people start peppering the phone lines of their congressmen, senators, and even if they did it, they're like, "Shit, I sold my Bitcoin, I lost it in a boating accident", or, "I'm going to go to a different country that respects my rights", because when people are like, "Well, shit, I'd never leave", it's like, look at America. People do that every single day. They leave one place with nothing and go to another place, or they leave everything behind, basically, they leave one place where they have something, and they leave it with nothing to come to America. In this world of Bitcoin, you can literally leave but take virtually everything you have with you.
So, I just don't worry about those types of attack vectors, because Bitcoin changes people more than they change Bitcoin. That might be what the person thinks today, but he gets four years down the Bitcoin rabbit hole and he's going to be like, "Shit, yeah, this is probably the most American thing that's ever existed. I'm not going to destroy my own interests to advance some crooked politicians".
Peter McCormack: What about, before we get into this, the scenario where you've talked about the dollar hyperinflating, that being the other side of Then Suddenly, and people need Bitcoin and have to have Bitcoin, and you start to see the cracks then in the government because they don't have the money to fund what they need to do, and there are these large pools of Bitcoin which exist in a BlackRock ETF and a Coinbase custody. Do you see an equivalent potential 6102 for Bitcoin, where they just go and rug that Bitcoin from these custodians?
Parker Lewis: I think that there's a real scenario where that could happen, right? It doesn't kill Bitcoin. I think it only happens at the point where it's like the dollar's last gasp, where it's like clear that it's failing and like, "Oh, we've got to ban private ownership". It won't work.
Peter McCormack: Well, I don't say ban private ownership.
Parker Lewis: Because that's what 6102 was.
Peter McCormack: Yeah, but I'm not sure they banned private ownership because they still had the dollar and gold at that point, right?
Parker Lewis: Right, but my understanding is you had to take your gold and turn it over to a bank and get dollars.
Peter McCormack: Yeah, but the Bitcoin, if they steal the Bitcoin but they also ban private ownership, there will be no use for that Bitcoin or rapidly devalue that Bitcoin. But could it be a scenario where --
Parker Lewis: Think about it like this. So, China banned Bitcoin mining. If you look at that chart, Bitcoin mining has increased 2.5 times from that point. I guarantee you people still mine Bitcoin in China and people still have Bitcoin in China. If, in the United States, they tried to ban booze, prohibition, and people found a way to get booze, it's like, just use it as a microcosm. Here's this thing booze that is relatively destructive but has survived the test of time so there must be some value in it.
Peter McCormack: Hell, yeah!
Parker Lewis: And people found a way to get it, even though it was illegal. And it was easier to stop, because you want to get booze somewhere, you've got to go on a road, right? So, you're going to take something, booze, that's a thousand less valuable than Bitcoin, and probably a hundred times harder to stop, and you couldn't stop that. So, the idea that they would make its use illegal, and then it would suddenly become less valuable...
When the US Government did Executive Action 6102 to ban private ownership of gold at the time, I believe the dollar-to-gold conversion ratio was, "Bring me one ounce of gold, I'll give you $20". A year after that, in 1934, it was, "Bring me an ounce of gold, and I'll give you $35". So, they devalued the dollar. Gold didn't lose its value, the dollar lost its value. So, I think that that's the scenario, that same scenario; always look at history to what happens. But the more likely thing is that they come to all the people that have Bitcoin and they say, "Hey, we're going to tax that". And just like the time when you sold it, you were going to have to pay capital gains on it, or whatever, we're going to have a one-time tax, which is effectively stealing your Bitcoin. But give us 30% of your Bitcoin, and thereafter, Bitcoin is legal tender. And every time you spend it, what it would be the equivalent of is like in a more literal sense is theft, but it would be taxing unrealised capital gains, which they have done in other scenarios.
Peter McCormack: They've threatened to do recently.
Parker Lewis: Yeah. So, it's basically like, "We're going to pull forward, we're going to act as if you sold it all today. Give us 30%. If you don't, you're a criminal and then thereafter, when you go to the grocery store and spend Bitcoin, it's not a taxable event, it's just money".
Peter McCormack: And that's an easy tax to put on custodians.
Parker Lewis: Yeah, and if you hold your own keys, you get to decide. You get to be like, "Hey, do I want to go to El Salvador, or do I want to --" My view, that's probably the most likely scenario, because the governments are going to need Bitcoin too. They're also, I mean, like the US Government has 60,000 Bitcoin, I believe, or maybe it's --
Peter McCormack: But they keep selling it off.
Parker Lewis: They do, but at this moment they haven't sold it all off, right? And so either way, assume they sold it all off. We don't want government selling Bitcoin, but assume they had zero today. If a government's going to fund this operation, and if we accept it, because I am someone that believes that rule of law doesn't just magically appear, you need a group of people to agree on a consensus of rules and then have a structure to enforce them, governments are going to need Bitcoin, too. So, in this world where a currency is no longer working, it's also no longer working for governments, and they are going to have an aligned incentive to, when they have to, adopt a form of money that's holding its value.
Peter McCormack: And do you see it's a scenario where Bitcoin is the currency, or they will try to maintain a peg to the dollar and try and keep the dollar alive?
Parker Lewis: I mean, I think that they will try to keep the dollar alive by any means necessary. Which, I mean, like someone's instinct is to be like, "Hey, why don't we get a pool of Bitcoin? And we'll say each Bitcoin is the equivalent of, $100,000, and give us your Bitcoin and that makes sense". I bet somebody tries that, some country tries that. But the reality is, if you can have the Bitcoin and you can send the Bitcoin directly, the dollar originated because, I don't want to say it's as simple as this, but one of the primary reasons was, it was functionally harder to carve up a bar of gold than to have a print of paper that was hard to produce, that if you made one and you weren't an authorised party, you were guilty of a crime and could be put in jail and people still tried it, right, counterfeiting. In that world, the dollar wasn't, in certain ways, technological, whether it was an augmentation, it was basically saying, "These are easier to transact, move. Turn in your gold, I'll secure it, here are these dollars, you can go spend it".
Bitcoin combines those two things, so it obsoletes the need for this other representation. You could argue the dollar was necessary in certain ways to improve on some limitations of gold, in a complementary or augmenting way, whereas you can't make the same argument for Bitcoin because it's like, "Hey, I can secure this tangibly finite, scarce asset, and I can also directly use that scarce asset to facilitate commerce". So, that all said, someone's going to try it, right? Someone's going to try to say, "Hey, give me your Bitcoin, I'll give you this fractional note for something else".
Peter McCormack: It depends where that peg is set as well. It's like, going out to Argentina now, I've already been warned, do not withdraw the local currency from cash machines because the official rate and the black market rate are very different.
Parker Lewis: Yeah, how long are you going?
Peter McCormack: A week.
Parker Lewis: Okay, so what you should do, get a steak the night that you get there, and then get a steak the night that you leave and see what the difference in the currency is.
Peter McCormack: That will be interesting but also, it's whether they want dollars or pesos. Because when I was in --
Parker Lewis: Maybe you should ask them both, "What if I pay you in dollars?" and then ask them the next time, go to the same place.
Peter McCormack: Yeah, I might even say, "Look, do you want dollars, Bitcoin or pesos?" It'd be interesting. But when I was in Venezuela, certainly when you're in East Caracas, the menu was priced in bolivar and every single time they said, "Can you pay in dollars?" They just wanted it, nobody wanted the bolivar. And so I'm expecting a similar scenario.
Parker Lewis: Yeah, because if you think about those countries, the increase in the dollar supply is something physical, right? Like, somebody has to physically fly, like you're causing dollar inflation. When you print off dollars here and take them there, you're physically transporting dollars.
Peter McCormack: I apologise!
Parker Lewis: But I'm just saying, that is a much greater restraint on currency inflation than the central bank clicking a button and producing a trillion more.
Peter McCormack: Well, so I'm not going to be getting any pesos from the cash machine. There's money markets where you can get it at a much better rate, but apparently that is how the government rips off tourists. It's like 40% or something.
Parker Lewis: Well, but they're also trying to maintain that their currency isn't collapsing, and the market is the black --
Peter McCormack: The real market.
Parker Lewis: Yeah, because the government has the incentive, not just financially, to get more dollars for units of currency, but also to maintain the confidence game.
Peter McCormack: And it's a tax.
Parker Lewis: Yeah, it is, but it's also like, "Our currency isn't deteriorating as rapidly as they're saying it is". It's like, "No, it actually is".
Peter McCormack: Yeah, it actually is. Okay let's go back to this, "Reuters: BlackRock's Fink says he's stopped using weaponised term, ESG". Do you want to scroll down, Danny? "BlackRock boss, Larry Fink, at the forefront of the business world's adoption of environmental, social and corporate governance (ESG) standards, has stopped using the term, saying it has become too politicised. But the world's largest asset manager hasn't changed his stance on ESG issues. ESG, a catch-all term that encompasses a range of ethically responsible business practices, from curbing carbon emissions to cracking down on discrimination in the workplace, has become politically polarising in parts of the Western world, especially in the United States", etc, "'I don't use the word ESG any more, because it's been entirely weaponised … by the far left and weaponised by the far right'. But he said dropping references to ESG would not change their stance". So, yeah, it will be interesting.
Parker Lewis: So, my point is the most relevant piece of this is that he's dropping the term, ESG. And that came from somewhere. It came from influence from states like Florida and Texas. But it's also timed right after the launch of the Bitcoin ETF. And while I would say that there's no better use for energy than securing the money system and ultimately Bitcoin, those two things are inevitably related to each other. And my stance on ESG is that it was always a fraud. It was always a fraud by people like BlackRock that ultimately wanted to get people's money. BlackRock being the largest asset manager in the world, they were competing with other asset managers, right? And they would say, "We're the one who cares about the environment, the social whatever, and the governance", etc.
Do you think Larry Fink gives a shit about the fishery in Wyoming, or the diversity score of… No. He created a massively profitable business and he used everybody as pawns to say, while he was massively enriching himself, that he had these environmentalists cheering him on. Think about how crazy that is. The environmentalists were cheering on the likes of BlackRock. Like, what a PSYOP. So, the fact that he's now bending the knee to a whole host of interests that are saying, "No, you were always a fraud", he wants to exit stage left and be forgiven for basically profiteering and using a bunch of other people, using pawns, people who thought that this whole ESG thing was actually about the environment and social good and diversity, when in reality it was all along of origin from asset managers trying to make money.
Peter McCormack: So, layer that same thesis onto Bitcoin and his interest in Bitcoin right now.
Parker Lewis: He has a profit interest.
Peter McCormack: He has, but I still think, like does he have a Michael Burry in there who's gone, "Larry, I see the numbers".
Parker Lewis: I think that's possible, but it's more like -- the difference in it is, it's like where Bitcoin's a currency for enemies, this is one system that's positive sum, you can't manipulate it, if you want to participate, you have to follow the rules. Even if you think that you might come in and be able to change the rules, you're going to be humbled and have to follow the rules. In the other world, where you can manipulate people to have financial gain, it's negative sum.
Peter McCormack: Get up that long-term price chart, because I think there's another highly suspicious thing going on right now with this whole BlackRock situation. Get it as far out as you can. Here we go. Look at the price chart right now. Look at it right now. For the last month, it's one of the flattest, most tightly ranged months ever. There always seems to be an uptrend or a downtrend or spikes. I mean, even look at the bottom, right, where we were near $15,000. We had those dips down and we had the spike up. At a time where we've got one of the biggest announcements ever, BlackRock interested --
Parker Lewis: Do you think that he's buying it personally and then he's going to...
Peter McCormack: I don't know what's happening, all I'm saying is every time it gets near $31,000 it dumps back to $30,100. Every time it gets down to $30,100 it goes up to $30,300 and sits around and just for a whole month, it stayed in that exact range and it won't move out of it.
Parker Lewis: Yeah, I mean look, I think it's ultimately fooled by randomness. There's probably some market-making Bitcoin whales that have a lot of Bitcoin that are range trading it. I think also if you go back, there's always recency bias. There have been other times that I recall, I can point you out on a chart where I'm like, "Bitcoin has been remarkably not volatile for this past month". If you pull it back up, if you look at this last, basically it's been 25 days of this tight range. If you look to see how small of a period that is on the chart, there are other moments like that. There were periods when Bitcoin was trading at $6,000 and it was like $6,000 to $6,300, which may be greater on percentage terms than $30,000 to $31,000.
Peter McCormack: I mean on glance, that looks like the tightest --
Danny Knowles: Look here before it dropped.
Parker Lewis: Yeah, look back there at the end of 2018. It was in the $6,000 range.
Danny Knowles: Yeah.
Parker Lewis: It was anchored to it for a couple months.
Peter McCormack: Yeah.
Parker Lewis: And then you can see another one kind of like 2020.
Peter McCormack: Yeah. Well, still, great signal!
Parker Lewis: Yeah.
Peter McCormack: Great signal. I think we've covered everything.
Danny Knowles: I think so.
Peter McCormack: Yeah, anything else you want to cover? What's on your mind?
Parker Lewis: I mean, maybe we could wrap up with the book stuff.
Peter McCormack: So it's a collection of essays, but have you expanded beyond that?
Parker Lewis: Refined, improved, knitted together better, kind of adapted to be more of a book format. Excited to have something, a physical representation, to be able to actually give to people. There's certain people that will consume content that's not on a blog. So, ultimately just looking forward to getting it in more people's hands. I wrote, and what I tried to preserve in the series is that each essay is a standalone, and I think that there's a particular value of being able to hand something to somebody where they can read 15 or 20 pages and come away with an answer to a key question.
I like to think about, in a comprehensive format, the series is taking you from zero to one for someone that really wants to go down the Bitcoin rabbit hole. It's not for someone that's trying to gain a basic understanding, because I don't really think you can have a basic understanding, but somebody who might have been staring at Bitcoin, but not making sense, that wants to go in with rigour, that they can have the totality of it, but they can start with someone being like, "Here's this book, read this individual essay"; less so being like, "Here's this book, read 350 pages and then come talk to me". It's daunting all the same, but it's easier to kind of peel back layers of the onions when it's presented that way. So, I tried to preserve it in that form for a reason.
Peter McCormack: Two big books coming out.
Danny Knowles: Yeah, there is.
Peter McCormack: Yeah. Lyn Alden's book is coming out, which is going to be very cool.
Parker Lewis: Jimmy's working on a new book too.
Peter McCormack: Is he?
Parker Lewis: Yeah.
Peter McCormack: His are usually dev books though.
Parker Lewis: No, this is about fiat.
Peter McCormack: I was only thinking recently, I've not heard much from Jimmy.
Parker Lewis: He toured the world for nine months with his family, back in Austin now, the Bitcoin capital of the world.
Peter McCormack: Bitcoin capital of America? Bedford will fight you for that!
Parker Lewis: World, but America.
Peter McCormack: There is a world outside of America!
Parker Lewis: Centre of hash! It's the Bitcoin capital of Texas.
Danny Knowles: Are you going to be doing the distribution yourself?
Parker Lewis: Yeah.
Danny Knowles: Yeah, okay.
Parker Lewis: I'm going to talk to Pete about advertising on his podcast.
Peter McCormack: You get a free advert, man.
Parker Lewis: We'll see.
Peter McCormack: Yeah, we'll give you whatever you need, we'll help promote you. I want to read it ahead of time. If we can make a release show, I know that'll be two in quick succession, but we should definitely do that. So, just get me a copy so I can read it ahead of time. And yeah, we'll shill the fucking shit out of it, as we will do for Lyn. Our friends who write books, we want to promote the hell out of it. We'll probably give some copies away as well.
Parker Lewis: Yeah, I appreciate that.
Peter McCormack: Exciting times. So end of August?
Parker Lewis: End of August, e-book. Printed version, I'm getting a painting done for the cover art, so we'll be coming behind the e-book with the print version that'll have a dedicated piece of original art for the for the book.
Peter McCormack: Is there some Bitcoin hidden in the art?
Parker Lewis: There's a Bitcoin allegory that ties back to the Gradually, Then Suddenly theme.
Peter McCormack: And do you know the pricing of either?
Parker Lewis: No.
Peter McCormack: But can you pre-order the book and get the e-book for free?
Parker Lewis: I'm going to launch the Kickstarter at BitBlockBoom!. And, yes, so there'll be a free way to access it online, and then there will also be ways to order advanced copies.
Peter McCormack: Yeah, well we will order. You should do packs. We'll order a pack and give some away as well.
Parker Lewis: Awesome.
Peter McCormack: All right, well good luck with that. Cannot wait, and good to see you again. It's good to come to the second Bitcoin capital of America!
Parker Lewis: Hey, every city's going to be a Bitcoin city, we're just the best.
Peter McCormack: And every company's going to be a Bitcoin company, and every podcast will be a Bitcoin podcast, and every football team will be a Bitcoin football team.
Parker Lewis: Absolutely.
Peter McCormack: Just be first, man. All right, good luck. See you soon.
