Our Money System's Fatal Flaw Nobody's Talking About (Got Bitcoin?)

The entire global credit system was built on the assumption of infinite growth. But what happens when AI makes the real economy collapse into a deflationary spiral that nobody is pricing in? Michael Tanguma, CEO of On-Ramp, is back on Bitcoin for millennials. We're going to talk about the loss of monetary soundness in our financial markets, why the smartest actors on Earth are all moving into the same tree assets, and we'll look at the cracks already forming in the old dying thread system. And stick around because Michael is going to reveal why he thinks a fivep person team is going to outbuild JP Morgan and other TRA 5 firms in the next five years. If you were enjoying my content, it would mean a lot to me if you could subscribe to the channel and like this video to support my journey. Thanks a lot. Now, let's dive in to this episode. Michael Tanguma, welcome back to Bitcoin for Millennials. I'm glad to be back. I'm a little disappointed because we just had the real podcast conversation the last 10 minutes and uh you refused to hit record because Braum didn't want to lose any followers and I get it. So well this is this was just a warm-up. Now you're warmed up to really uh bring the heat. >> We'll see. We'll see. >> Okay. Well, we talked yesterday and the day before, right? So we we always have something to um to talk about. But um yeah, I I just you know what I think it would be nice to just kind of go uh I wanted to say like go around the field and kind of see kind of discuss what what you're seeing and and get your insights and you send me some topics beforehand which uh I think I'm I'm also looking at so I think we'll have a nice conversation and I I just wanted to start with the whole AI you know productivity boom deflation um development right so I I think you on your podcast and and and I have also talked about this a lot, right? Like uh uh increased AI productivity brings a lot of uh deflation which uh obviously bumps heads with the uh in inflationary fiat money which you would use to um value the productivity gains um gained by AI. And I heard you talk you you mentioned a credit air pocket which I thought was really interesting and and you say like that's something that no one is pricing in and this question around what happens to the the credit if there's like a real deflationary force through you know rapid acceleration of of AI. Maybe that's a nice point to to start there with your thoughts on that. Yeah, I think um I can't help but come to the full like circle of we live in the most exciting and also like uh treacherous time to to exist when you think about inflation, the money changing, AI hitting us, uh layoffs, and ultimately it kind of goes back to a lot of the things you talk about and we discuss um once you learn about Bitcoin and and also just the status of the environment, they're so farfetched posts like everyone talks there was a good tweet the other day about pre20 and post and how we're in different worlds and I think that when you look at like I've always thought about when Bitcoin was going to do its real thing and go to you know 500k to a million or million plus it would be natural it would make sense the world to look fundamentally different or at least very chaotic because that's just the world pricing in this other asset that's never existed but then what else around it is requiring it that capital to move into it and so I'm bringing that up because ties into what you're discussing with air pockets and that independent of AI, there was fundamental air pockets. They've existed for a long time because of the amount of leverage in the system and that it continues to to delever.08 was our first big one. We've had like 14 2020 seems like we're on the precipice of another one. And then you add the AI narrative and it's not even necessarily fully AI. It's the fact that AI is skewing a lot of the multiples and values on these firms. think about the stock market and SAS companies that now individuals are like there's no margin for risk there because it's like well what if they take even 10% of your clients you really look shaky and then you have the private credit seizing and so you tie all that together and then there is real deflationary components of people can just start competitive businesses and undercut the market and that's real deflation. So you add all that together and it just gets really crazy. And there was a tweet we talked about yesterday which was anthropic getting to $30 billion with 2500 employees which is just an insane 35 $30 billion in ARR. And the comp that was the most the closest was um it took Facebook 14 years and 85,000 employees to get to that similar uh reoccurring revenue. And so we're just in the early stages of this. And I think what gets exciting if you're a Bitcoin investor and you think about building is we are it feels far away but this is the first time you can kind of squint and see within the next 12 to 24 months how the narrative around AI and Bitcoin from payments in tooling will start to really take off because it's just simply better tech for that. And then the other side of it is the savvy entrepreneurs. As inflation's ripping and as the credit market is starting to teeter and people are printing capital, you're going to start to see real companies stack Bitcoin on their balance sheet in the same way companies are stacking AI on their balance sheet from a workload perspective and they're out competing others. And that's when this whole thing gets really interesting because it gets less about ideology or less about even somebody having to understand there's 21 million. It's just like, "Oh crap, this is uh, you know, I call like a nuclear reactor for my money, and it's just the best thing that's ever existed." >> Yeah. I think there's two things that I noticed. One is that the, you know, conceptually, I think we've talked a lot and just in general, people have talked a lot since like 2008 about how fragile the fiat money system is, that 2008 would was never really sold, right? I actually just uh solved um I actually just saw a tweet that the Treasury bought back 15 billion in treasuries like the largest buyback uh ever. And it's just stuff like that that I think we talked about conceptually before and and was part for a lot of people in their like Bitcoin thesis, you know, like you should have you should own something that's outside of this fragile fundamentally flawed and now fragile system. But actually today like we're kind of like seeing these cracks like you you mentioned private credit right like um I don't know the exact I don't remember the exact headline but was like you know uh they said like you can only take out 20% for the next 5 years or something right like it's such a crazy bad signal and there's still no panic which um I think just also shows that we are very far ahead I also saw yesterday a video by Ree Witherspoon on on it went viral on ax where she was talking about like holy shit, this AI thing, you know, is so, you know, there's something really going on. There was like all these normies like replying. So, I kind of feel that uh and American Hodddle said this to me once, right? Like Bitcoin is very eight years ahead of people like it's actually true, right? So, we acted upon it upon a conceptual understanding. We acted on and and created a thesis, but now it's actually happening. And so, there's people that don't think in that way that are actually seeing just with their eyes, right? What is what is actually happening? And so at first I thought like Bitcoin and and AI is like a parallel thing but it's it's going to converge like you're saying in your example right it is how do I protect the capital of my company one right if all these classic types of ways actually don't protect me from the loss of my purchasing power and then you know the thing that's converging is okay how do I optimize my productivity by using AI which essentially means I need less I need less people right and these things convert urging I think will kind of like amplify these underlying cracks that are kind of already there and uh that that people are slowly starting to see now and I also just wanted to ask you like what what do you think we should look out for like we've been talking about the thesis of Bitcoin and fiat money debasement for such a long time like for you what what would be like the real signal where you would say like okay now it's actually happening or there's like a next phase Right. I I don't believe in the suddenly like we wake up one morning and there's ultimate chaos, but like what are the things that that you were looking out for? >> Yeah, it's a great question. I think um don't let me lose the track cuz I'll come back exactly to it. I but I think the answer that comes straight to my head is settlement uh for commodities in Bitcoin from sovereigns um that this thing's real and working. One thing I was going to bring up yesterday, and I know you've had him on, um, did Parker, when he came on, talk about kind of his genesis story and going down the rabbit hole of the Fed having to unwind its balance sheet >> probably, but I can't I can't remember. >> Well, there there's really two great I'll share them with you cuz I meant to and then maybe you can put them in the show notes cuz they're old. They were from 2019 and 2020. And it's important because part of Parker's story and I've always held that Parker understands what's happening probably better than most on the planet Earth here because he understood Parker Parker for the listeners. Yeah. >> Cuz he understood the money system but then he understood Bitcoin and then he ultimately came to the conclusion that Bitcoin was the solution to the problem with the money system. and he was tasked with having to understand to your point you brought up 08 what would happen if the when the Fed has to unwind its balance sheet because it ultimately injected all this liquidity and as he was going down that journey he understood that it was ultimately impossible and so he's done some presentations but why I'm bringing them up is because we usually think of '08 but if you go back from 70 and specifically like 1990 2008 even though in relative terms you see all this money printing and the chart goes up and to the right past 08 and then 2020 but you can see that leverage average coming into the system from 71 and really the '90s. And so it was always understood that the market has to delever because the credit coming into the system is fundamentally unsound. And then when it delevers, you have to inject more. If your Bitcoin double tomorrow, would you feel good about how it's secured right now? Most people haven't really pressure tested that. And I get it. Some people are comfortable taking full control of their own keys, but others want security without having to manage it all themselves. That's why I partnered with On-Ramp, multi-institution custody where your keys are held across independent institutions in multiple jurisdictions. No single company can access, move, or lose your Bitcoin. Lloyds of London insured, inheritance planning builtin, and a team that walks you through the entire setup. They serve clients globally, whether you're in the US, Europe, or anywhere else. Book a free consultation at onbitcoin.com/bram to learn more. That's onrimebitcoin.com/bram. Most people stop too early with Bitcoin. They buy it, maybe move it to a wallet, and think they are done, but they're not. 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If you're lending out credit to a restaurant or whatever it is, an individual and you have interest rates that were at 0 or 2% and the interest rate got jacked up to 5%, naturally, you're going to start to see cracks. So, we kind of understood this was going to happen. Um because it's not only the interest rate on the individual that's having to pay. It's that as interest rates go up, the cost of capital, the uh layoffs happen because it costs more to run a business and so there's less consumer demand for products and so this was always kind of like baked in. We're just finally starting to see that and then I think the Iran stuff um is going to accelerate it. Now what you said about like what what would be the moment I think we're on the precipice you know there's obviously a lot of conversations Larry Leard good friend the big print that we're on the precipice of that because we've known that things start are already cracking and they have to inject liquidity there's a lot of stuff in the states going on with like tariffs and um giving out like different stipens but where I think this really hits a a velocity of like okay the cat's out of the bag it might have already happened and it's the Iran uh oil stuff because I think that was underappreciated in the sense that we talked about a lot uh yesterday, but if sovereigns need oil, if they don't naturally um uh create it in their local uh geography, and if they don't get the oil, their constituents and citizens revolt, well, and you're you're basically taken out of that system via Swift or whatever the mechanics are. Well, you're going to need a form of trustless money to coordinate economic activity to bring that in. And as you see more of that, what that's telling the market is there's something else out there that people value and has value enough to settle to bring oil trade in. And then everything else ends up downstream of that. And so I think as we start to see more of that pick up, bricks countries and others start to rely on that um you naturally will see this a play. The only thing I'll say is like this is already kind of happening with gold and the hold you on and like net settling in oil. The fact that people are saying the dollar's cooked and they're not holding treasuries is the canary. It's just when does Bitcoin price that in. >> I agree. And I also think um we kind of touched upon that. I don't know if we when we talked before or yesterday. Um I definitely talked about this with um Peter Dunworth. This unwinding of the balance sheet, right? like how how can you inflate the debt away without actually blowing up the blowing up the world or your own country, right? Because slowly but surely, right, in some weird way it takes, you know, what is it a trillion every two months or whatever for people to notice that there is, you know, the the the promise of paying back the debt is uh far far gone, right? um more and more people um or less and less people are buying American debt, less and less countries are buying American debt, right? So this kind of uh lingering inevitable issue of the loss of trust in what has been the global reserve currency, you know, is just getting more and more to the the surf the the surface. And this idea of inflating the debt away in a in a neutral asset that, you know, a few million crazy people hold instead of, you know, into, you know, the the American housing market that would, you know, um, hit everyone. I I think is a big but not so far-fetched idea, right? Like ba ba basically Bitcoin is kind of like a blessing in disguise. Um and I and I just wonder what you think like because you you as the global reserve currency that uh you know is is is being unmasked as you know the emperor has has no clothes basically which is clear I would say but not to the entire world they know that point is coming right so there has to be some sort of action before um so it doesn't look like a defeat I I just wonder what you what you think because I know you have thoughts uh you know it in inflating it away into Bitcoin for example. >> I think there's two big components here that have independent of nothing to do with what we're building or who we are. It's maybe why we're building the business that we're building, but like that I think get widely underappreciated. And the only reason I can say a why I have this thesis is because I've just been doing this for a long time, whether it was at Unchained or here at OnRamp. And also just having so many conversations in pattern recognition. And the two are one is less controversial, just doesn't get talked about is we conflate investing and then savings, right? Because the notion of saving is you already invested your time and risk your time and capital, your human capital to go out into the market. You could get hit by a bus, you could lose the money, whatever it is. So then the savings are really meant to preserve and then provide that optionality into the future that is already just inherently limits the ability for people to gro Bitcoin or gold because that just hasn't been told for the past hundred years. So I think that ties into a lot of this of the market recognition. The beauty of Bitcoin is it's in its monetization phase. So that's what's beautiful. You can get you can reduce all the counterparty risk. You can strip all of that out. You can hold a form of money that gives you optionality and then you still get the upside of venture growth. Like that's where its value is. But the other thing is that we really underappreciate I fully believe the reason why when anybody listening and you as an individual tell friends and family that are out not you know thinking maybe you're a little crazy is they believe Bitcoin is a Ponzi or speculative because the subconscious in their brain all they see across social media and across um time and Bloomberg is the asset keeps getting lost. So you take this idea that there's never been a new form of money. So you introduce that and then it's ephemeral. You can't touch it. And then everything on the backdrop, the mosaic, the whole thing is that it's keeps getting lost. It keeps blowing up whether the counterparty. So the point is that you can give them the answer that Bitcoin is the solution to everything you asked and described, but you're almost giving them a problem, not a solution, because you're saying if you look and see the right thing, now you have to figure out how to actually hold it and not lose it. It reminds me of like uh telling somebody there's a better country, right? There's all this like crazy stuff happening across the world and we understand the bull bull market for statism and everything, but people can't you can tell them where to go, but you're not giving them the real solution because their families there. Everything all the inertia is tied to that. And so it takes a lot of courage and agency to go and say, "Look, I got to just help my existing, you know, family, whatever the the the metaphor analogy of making is." But similarly with Bitcoin, you have to do a an insane amount of work to figure out if I'm going to actually put a material allocation that this is going to save me and my life, I got to go deep down a rabbit hole and understand how to back up 12 words, hardware device, all of that. And most people aren't willing to do. So I think like we'll have the market forces, but the thing that won't really fix this is really until solutions and products exist that give people real exposure and that don't keep them off sides. Because if that keeps happening and blowups keep happening, you're going to continue to have effectively this like barrier in people's mind to believe that this thing is insane and it's speculative because it keeps getting lost or the it's highly volatile because somebody just goes and loses 500,000 or whatever FTX number of coins were. >> Uhhuh. Yeah. I I think there's also a huge uh psychological part there just the uh kind of like a red red pill of holy shit, I need to take real responsibility, right? like the whole uh abstracted and and outsourced um responsibility in the fiat money system is obviously why the majority of people still uh participate in the fiat money system because they think you know uh I can I can trust this this is proper blah blah blah. Um even even funny like today uh you know yesterday we saw this professor Jiang right like say like where are the Bitcoin servers and I had this tweet I asked Grock like hey Grock where are the Bitcoin servers right and then replied and this went semi semiviral so I have like a lot of people replying and one person said like um yeah why would you invest like tens of thousands of dollars in in just ones and zeros and computer code and then I said you know dude h how does how how do the Spotify songs reach your phone, right? Or like how do the Netflix series reach your reach your phone? Or where does the number in your banking app come from, right? And then he called me a retard or whatever. But the point the point is more that you know it it it's just a difficult subject. And so I do think that once you get there to a certain degree, then the second part is realizing that you have to take um more responsibility than before. And a lot of people just do not want to do that, right? And um this is also kind of why I think it is slow this adoption or people have like the wrong idea of what Bitcoin is like you just said like some people think it's an it's an investment right or a gamble. I mean you are in the room with a lot of Trafi people. This is something I wanted to ask you, right? Like they buy the ETF, some people buy like uh spot bitcoin, but do you think they get the soundness part or is it just like another kind of like high beta investment or gamble or is the debasement trade an actual thing? Like what are what are you hearing? >> Yeah, it's a great question. I think like this ties into the sentiment for the past 6 to 12 months. It's the first time I've seen the fundamentals get so dislocated from the price and part of the fundamentals can be the underlying network second third scaling uh really when you look at cash app and square turning on that many merchants like all these spark what they're doing but then on the other side of that I think equally or not even more more impactful is the amount of liquidity pools coming in I think it came out today that Charles Schwab started to roll off um their uh trading ing for spot bitcoin buying and I think they're managing anywhere between 10 to 20 trillion in capital. Um but then to your point I think it goes across the spectrum. It's really like barbell where there's institutions adopting this because they can get some fees and uh it's the thing coming. They know tokenization and all the stuff associated with crypto is coming and in the future they can make money. And then there's another cycle and we talked about it yesterday like the Morgan Stanley's and Fidelity. I think they deeply understand that this asset solves a real pain in the market like a gold 2.0 and has better properties even just from an allocation perspective. It's easier to buy slivers of it. And they're not just building ETFs. They're building real market structure around custody. How do they vertically integrate the solution? We saw the mortgage product that Coinbase did. I think that'll be natural evolution for banks and other institutions to offer because the game is really how do you get your financial service arms around as much Bitcoin because as the price appreciates you can monetize that. I don't think that's widely held. I would say that is out of the norm. Um, but it does exist. And the thing that I found in the past, call it 48 to 72 hours, that's probably the most bullish out of all of this is that this, and we talked a little bit about it, but this is really a retail driven phenomenon for better or worse. Like, it's retail even on the stretch stuff. That's why you target to retail. It's like retail is interested in this. And retail uh, and retail means anything under the sun that's not institutional, that doesn't require a board to make an allocation. and even family office can fall in that camp if it's limited governance is you can ape into a position if you're uh a private wealth client at Goldman or whatever you call up your banker you say look I need you to move this over and the point is that this is why these banks are adopting this and why black rockck launched it because they understood that's where all that pent-up demand and flow came in got us to 120 wasn't necessarily new interests coming into Coinbase it was a lot of people that just wanted to buy Bitcoin through their brokerage and why that's bullish is because if this is a retail driven and it has been the first 17 years it was individuals figuring it out taking it offline in cold storage then it will continue to be retail driven from the demand of better products and that's bullish from an entrepreneurial perspective because if you build the products if you're native to the space and understand who you are and your peers are and what they will demand especially living in the future being a visionary in this space has nothing to do with like the Elon Musk seeing the future it's just you've already allocated the majority of your wealth so you have to live through those pain points of all the things with people getting kidnapped math, cancer is dying, needing a loan, needing financial services, then you build the things you need because you're already living there. And if we believe Bitcoin grows in portfolio and market share, then more people are going to need those solutions. And Trady can't think like that because all other assets have been top down driven, not bottoms up. And so anybody listening to this I it's a an ad for I would highly encourage if you find a niche you should really figure it out especially if the timing because I think everyone or at least me and bro here next 12 to 24 months are probably going to be positive for the price and with that things start breaking because the existing market structure looks like the same it's existed for the past 15 years outside of the ETFs. I I wonder why and I always wondered this, you know, all these developers went to like crypto, it's so cool and fast and blah blah, but if you're building on sound money, that's that's arguably way more interesting. And so I just wonder and and I also wonder what you think like why are we seeing that, right? Like why why is it so hard? Why is like the whole speculation and annihilism or like the you know prediction markets and whatever like all this fast stuff is way more interesting apparently to technical people um or builders or entrepreneurs than than building on uh on Bitcoin. >> Yeah. I mean, I think it all just goes back to um the true clowness or clown uh peak clown world that we live in that what's up is down and down is up and everything is noisy. We talked about it where Alberts, you know, did whatever gap up by launching an AI company from a shoe company. >> Um and I think that it's really easy when you pinpoint the incentives. So like one step back I don't know what the realiz or the the conclusion is for the word but I think the natural like same stigma that Bitcoin exists uh when you say the word and people are just like I think sound money and hard money have that stigma of the prepper and the gold bug and so I like the version I'm not saying we use it but like rationalist right I just want I just want a rationalist I want rational money that uh doesn't inflate away that can't be debased that's sovereign neutral and to your point this is really where I've had a lot of respect for the individuals built in the space that have trade state principled. Uh the one I call out is my previous firm on chain because they initially were supporting ETH. They they moved away from that. But there was a lot of um venture uh backing that wanted if they were going to raise more capital to support other cryptocurrencies, rehypothecate collateral. We know how that goes in the credit market with Bitcoin. And it's because if you're going to get funding, if you're having Wall Street, because Wall Street understands velocity, they understand management fees, they understand diversification, it's insanely hard for somebody to wrap their head around why this is the asset versus everything else. And then also to deeply understand it and see where you can find value. Because if you go back a 100 years, what was banking? Banking was in the truest sense, how do I custody and preserve the asset and maybe layer on some financial services, but it was very conservative. And if you live in this world where you increasingly financialize it, you increasingly bring complexity and there's no real complexity in buy Bitcoin, store it. And River is a great example of doing things the right way as well. And so, um, the opposite is the momentum and incentives for venture capitalists, LPs, and everything that goes downstream of that to fund things that, uh, pattern recognize to what does TRDI look like? And so that's the thing. And then to to the credit or you know uh no fault it's the world we live in as entrepreneurs have to pick do I want to raise the money stay principled build slower um and these were all real like impact impactful things as I saw from I was at I carry this as a badge of honor even though it shouldn't be I really do is like I was at Google that's whatever but I was at weiwork and I was living you know sitting working with Adam Newman while the whole world was saying that we were the hottest thing and I understood it and I think part of understanding that it was all upon Ponzi was because I was reading the Bitcoin standard. So, this was 17 and the joke is I was lighting money on fire while I was learning about money. And so, that helped me see all that liquidity just kind of drowned out the soundness. It made everyone think they're smart until they're not. And then I came into the Bitcoin space and I saw a similar thing with all this money that comes in. It kind of clouds a lot of the judgment in crypto and sometimes in Bitcoin building. Um, so I think those are the far those are the components. It's just market forces that keep everyone going. Uh, and I always like the quote of like what's obvious is obviously wrong, >> right? >> Because it's it's similar with Bitcoin, but it's similar with being like principled and conservative. Right now, we live in this world where it's uh somewhat controversial to say that Bitcoin and gold are money, everything else is credit. And the reality is you should stack stats and stay humble and park it in a place that's safe and then just go back to producing value. and that you shouldn't go and speculate on these Bitcoin derivatives or the stock market and all these things that have counterparty risk. Um, and then maybe the last thing I'll say, and this is kind of a funny thing that came to mind, is I heard once, I don't know, it was before he kind of went crazy was Jordan Peterson made this comment of it was when he was going down this bent of like um, immigration and the notion of you want to insert any kind of variance at a very limited rate because you add too much and you increase like real chaos and that we take for granted that when we go to bed at night, most people listening, definitely me and you, we sleep easy. Nobody breaks in our house, no bear rips us apart, no bad actor comes in. And in that similar vein, like we take for granted that in a similar thing with like the grocery store, it's like a modern marvel that all these things show up that we take for granted because we've been lulled asleep in western markets that the banks will always work, the capital will always be there, there will be no air pockets. And in postco, we've seen that is the exact opposite. And so it's just a different paradigm and you have to underwrite risk in a fundamentally different way. And even if you theoretically can make a little bit more money, should you is the question because the downside is not worth the upside risk. For my European friends that want to buy Bitcoin with ease, check out Relay. I've been a longtime fan and happy to partner up with what I think is the best Bitcoin only platform for Europeans. They offer a super simple, beginner-friendly app with no distractions and no shitcoins. You can do a quick one-time smash buy or set up automatic purchases when you're stacking regularly. And here's the thing that matters most. Relay is 100% self-custody. Every set you hold is yours. Your keys, your coins. If you want to get started, download the app via my link below or in the description and use code Braum. That's B R A M at checkout to get 10% off your fees. A huge shout out to Relay for sponsoring the show. Now, let's continue. Yeah, I it's it's funny because I I have uh well no now now less but I I really felt like this action bias right like oh I also you know I have Bitcoin for my savings I also need to invest and do some stuff like um that is now way less and I have to say it is way more chill right like you sleep you sleep um um better and the funny thing is I don't know if it's Warren Buffett or uh truck miller. I don't know. It's just like, you know, if you if you find the one thing, just go all in on the one thing like for a long for a long >> time in one basket and watch it closely. I'll share an anecdote I think you'll appreciate is um all these things everyone's had to go through and I was there. I was in in the space. I worked at the block crypto in 2019. So, I was in the middle of it. I was still Bitcoin only, but I sat all around it. And so, when you get around it, you start to learn about all the things like Salana is a great example. And you could see like as a in like just a technologist, you're like, "Oh, well, this has the momentum. It has devs. It has marketing. This thing's going to take off." So, I had this opportunity, right, to buy it at 10 cents and a dollar and blah blah blah. And when I was at Unchained, this was in 2020, I had I was just doing this real soularching like, do you kind of make some money from this? And this was over a dinner with Cam and Parker and I think I forget who else but point being is it was the discussion it was Parker's guidance around like look you could make some money but there's two aspects that are like really zero sum and negative is one crypto investing is zero sum right so somebody's going to get on the other side of that bag and lose their wealth but the other one that was honestly more profound it's what you just hit on is you lose the mental clarity of doing what you're supposed to be doing dayto-day because now you're trading it in explicitly or implicitly. Now, you're sitting there, you're waiting for when do you time it, when do you pay your taxes, when do you get out of the position versus again, maybe you can theoretically make a little bit more marginal capital or Bitcoin, but is it worth the time and attention versus focusing on your craft? And I think that's a big like pervasive dark matter component of this whole world we live in is that when everyone turns into a speculator and trying to create all these products to make money, they're actually not focusing on the thing that they were meant to do. And that's how you end up in a world where we're still like trying to figure out how to fly cars. >> Fully agree. I mean, also crypto is is just fiat on steroids, right? >> It was a test net. It was the test net. It was the the way the trial before the real the real >> Yeah. Well, and and then pumpf fun came along and just killed it all, right? Because anyone could build um um a cryp a cryptocoin. And I agree. I mean, I've also stayed up until 3:00 a.m. to buy some board ape land or whatever. just fucking stupid. So stupid. Um, >> what was the ROI on that? >> Maybe a lot. Maybe you learned >> I I I did make money with NFTTS, but way less than I could have made it. Like I was so blinded by the fucking greed at that at that point. Uh, I probably made like 10 10 I I could have made like I want to be honest six 7x more or something. um which I could have easily done if I just wasn't blinded by the greed. So, you know, and it's funny because I um now I never really think about it. It's just, you know, now it comes up, but I I I did think about it before, you know, and it's or like had had um uh I don't want to say resentments too much, but like you know, just felt like oh fuck, I should have done this and this and that, but it's just it's just it's a trap, right? And it's way nicer to just sleep like you said, you know, I'm living in this parallel money system. Um, and um I'm just trying to become a better person. That's basically it. Like I I don't want to mess with all this um other stuff. And uh it's it's funny because it's like you said, you use the word conservative. I don't know if that's if it's conservative because a lot of people still think, you know, if you're 90 plus% in Bitcoin, you're you're insane. So, you know, it's just a perception of the person saying the word conservative, right? But but for me, ending up with Bitcoin is just the most logical, rational conclusion that I could have come to. And so that is actually a pretty good feeling because I've never felt like that in crypto or you know in stocks and uh even not in the beginning of when I found Bitcoin like in 2014 14 I was day trading for a few months with my friends and you know there was then Litecoin and all this crazy stuff and uh at after three or four months I remember just laying in bed almost like seeing all the charts and then just realizing like okay the trading is not for me like I am not a trader guy Right. Um, but it took me a very long time, I think, to get to the point that we're talking about to to just be uh, yeah, just try to create value, earn money, save in Bitcoin, man. It's very simple. And I love that the memes were already there for a very long time, right? >> Yeah. >> Stay humble stacks, you know, hone, hone your craft, and that's just it. >> We don't have to go deep here, but tying into what you said around it is like um, it's very underappreciated. And it sounds like cope of the clarity you get if you like you want to go to the meta level of um when you understand Bitcoin you just understand from first principles what where value derives from right and so I was talking with a client and they were you know it was just a little little funky because the price and the FUD and all this stuff and when you're newer and you just get moved a little bit harder especially with everything working in our favor in 25 and the price doing what it did and the point being is it just hit me as I was talking cuz I could sense it and I was saying you can't put a price on the clarity that you understand the market because you understand the stock market for what it is. you understand all the things that exist and I think that's just an important function of once you get how the money works everything else is downstream of that and you can't really put a price even if the volatility is not working in your favor currently that clarity is the thing that will uh protect you into the future and it just doesn't get talked about because it's not monetarily like directly correlated but I think on the other side of it those people will make a lot more money in the future as well. >> Yeah. Yeah. I I agree. So you are obviously building in this space. We've been working together and uh you just launched a new I want to say not even part of the business is an extension right and uh it's called on-ramp finance and I I thought it was interesting you have custody into dollars and allocated gold alongside Bitcoin and we saw Tedar do the same river launching a banking product. So what what is the Bitcoin gold dollar endg game? Like why why do you end up there? I mean we had some uh quarrels around gold, right? >> I love it. So we don't want to make this a shilly podcast and you set this up perfectly because everything that we stand for was embedded in the first 30 minutes of this pod. Like independent of what onramp is doing. It's how we look at the world in me personally. And when I think about just so you know cuz I don't necessarily know if you know this that building this space for the past called six seven years I've always had this vision and wanted dollars next to Bitcoin right like from a just unified experience we live in a dollar denominated world we hold vast majority of our wealth in Bitcoin it's the rational thing to do to have one login to see your dollars be able to to manage them lend against it so the post uh new administration ingenious act really opened up the aperture for effectively anyone to build on banking rails. And so that was really the kind of like moment where we went and signed this deal with Stripe and were able to get a partnership there. But then to your question, what what is Honor Finance? Who is it for? And why do we including gold is a there's reality of like our existing clients get all this value and then net new clients that have been wanting to like sign up and get better custody and all the things we're doing get that. But the big unlock and this is the one that I think you'll find interesting. Just curious your thoughts or push back is when you get punched in the face and that's make no mistake that's what we do all day long talking to the Morgan Stanley Fidelities that everyone thinks oh you're cute Bitcoin only company custody blah blah blah is that 99.9% of the people are not where we are at in the listeners are at meaning they may have some exposure to Bitcoin they may not even be into Bitcoin yet but the whole market is pushing speculation poly market derivatives perpetuals and they're looking for something that has trust is found and from the Bitcoin side, there's a lot of firms that do different things really well, but nobody's really tied in and unified that experience. And so what Honorant Finances is independent of ever needing custody. You can buy Bitcoin through it, take it as self custody. You get up to 5% cash uh earning on your cash, 1.5% on cash back on a card, so you can live on it. You can lend against the asset IRA, but then to your point, you can actually get real gold allocations through our interface. It can sit in the Royal Canadian Mint. then you can take delivery if you want. And the core idea is that independent of how much gold or any one that Bitcoiners have, there is a rational uh reality that gold is $34 trillion today. Bitcoin sits at 1.7 that it was really naive for us and I'll say me to believe we were going to have people bypass and go directly from dollars and just to Bitcoin. there is going to be a a a maze in a in ways that people go from dollars to Bitcoin to gold and in between back and forth. No matter if they have to live on it, they need to start with gold and understand Bitcoin has better properties or we see this a lot where people have thousands of BTC and it runs up and they move 10 20% into gold for a number of reasons. And so, um, the only other thing I'll add is you're going to see more and more of this because if you want to stay alive in the world, you have to provide value to your end client. And Tradfi is coming and they're they're maybe not adopting the best Bitcoin native products, but they're are adopting products. Morgan Stanley is a great example. And the rational thought for those 99.9% of people that are going to try to buy Bitcoin is why would you leave Bank of America if spot bitcoin buys are right next to it and your mortgage is there and your car loans there. And so if you're going to build a digital native firm, you got to you have to start to embed some of those valuable products, my bet is on the digital native firms because it's a new design service just from money movement as an example. Like they're still thinking in legacy wires and those rails. And so kudos again to Alex because this past week he came out with uh banking on Bitcoin and they're doing um some cash back as well as you know they have the worldass exchange and then Tether who TBD on their long-term intentions but I still think they're one of the most sophisticated actors and how they carry their balance sheet being long gold bitcoin and real estate and they announced a wallet that embedded dollars uh via tether uh tokenized gold I don't know if you could take delivery of it and um BTC now I think this is more for emerging markets individuals because I think that's world class. If you're in a country, you can't get a bank account. Ours is more of like it's global, but it's more of like western centric because it's individuals looking for dollars but cash on their dollars being able to buy Bitcoin at the lowest rates and they get all of that value uh in a financial service platform that has that conservative view we just talked about of like look, you get best-in-class experience. You stack dollars, Bitcoin, gold if you need it and then over time if you want to, you know, migrate over to multi-institution custody, you can do that as well. >> Yeah. Yeah. What I find interesting is that um I worked in Thr for I want to say four years, almost four years with two huge banks um in like the innovation department, right? And it was funny because there were like these these banks that I worked at but also their uh competitors they had like different ideas around what is the actual value that we are providing right? So there you have banks that say like well we are a we are basically a a fintech right and like savings and um um how do you say like like debit and savings accounts right those those are free those are basically um our acquisition channel that is you know the best product that there is you know eventually it's quite quite basic and then based on that when we acquire these people we're going to build services uh for them but there's also other banks that do the aim in the first part, but the second part is just like what what can we spam them with basically, right? Like what can what can we sell to them versus what went can we build to them uh for them? And I think that what they never realized was that they were already kind of like disrupted by I don't know there's like 20 or 30,000 fintexs in in the world, right? That all take a little piece of this huge um banking institution and just do that better. But with Bitcoin, I think we aren't only talking about better integrated products and flows, etc., etc. We're actually talking about this new money part, which is Bitcoin. And I fully agree with you that that being a digital native, right, without the having the burden of of of needing to shed basically the entire fiat money history attached to to a Trafy incumbent. I I think is probably a bigger um competitive possible competitive advantage over you know just starting a fintech company that takes a certain part from a business line of of a of of a bank right and so it's a it's a different type of way to just approach business and the service and and all these things when you are coming from this digital hard money type uh perspective and I'm just very interested to see like how is that going to play out, right? Like are people eventually if they get in touch with Bitcoin through their Treadfi bank and start paying more attention to Bitcoin, is there a way to create a competitive edge that will help people to actually move towards something that is way more digitally and and Bitcoin native? I think without question like the best analogy and I'd love the push back here is um this is a little bit hyperbolic but they're done. They're toast. >> Yeah, I mean I I agree. Well, yeah, I forgot to add that but the fun thing was they never realized that they were already disrupted by all these fintexs because there's just too much money to be made in classic >> Exactly. >> classic fiat Ponzi basically. That's exactly right. And that's what credit to Fidelity for knowing this and we'll see how it plays out long term, but they adopted Bitcoin because they understood that this had a potential to disrupt them. Without being long-winded, the analogy I always use is really Blockbuster and Netflix because Netflix knew Blockbuster was dead 10 years before they did. They were just waiting for the rails to catch up because Netflix knew in '96 when they launched they were going to go to a different level which was streaming but the bandwidth had wasn't there yet. So they were shipping using online. It wasn't until Blockbuster in 2001 started even just shipping online the DVDs and by uh I think it was 03 04 it might have been 05 but point being is once streaming happened it was game over and they knew that before then. So to your example there's really two sides of this barbell where they're toast. One of them is the 6040 fundamentally doesn't work anymore mathematically. So that's where all their capital is. That's where all the fees are. So if they're going to push people into a real um uh bucket into h a sound asset like Bitcoin or gold breaks their models breaks their financial service firm. So that's one side of just being able to provide more economically rational uh assets to the user and because economic forces will dictate if you're losing money year-over-year, you're going to move to those products because gold, it's crazy with the run it did. It's a $30 trillion asset and most people don't know how to buy it. And that's because of it's the same thing about like why are people focused on crypto? This is embedded in the psyche when you hear gold bugs. It's the same thing about Bitcoiners and the notion of like rationalists. It's a pjorative because it's a um it combats the way the existing system is set up. But the other side of it which is probably more interesting to you from being an entrepreneur and enjoying technology is this is just better plumbing. Like when you think about how you can move digital dollars, lightning, uh the notion of multi-institution custody, when you think about lending, net settling, escrow, mortgages, all the things you need for long tail risk and duration if you're going to park your asset there, no custodians last that long. And so they're all still thinking in the single custodian mindset. And the economically rational thing to do is as the price appreciates and the risk appreciates, whether it's with individuals, cancers, all the things that we see in the market where people are feeling the pain of having to be trusted, that person that's trusted with the wealth, it's a rational thing to do to upgrade your custody. But if Fidelity and others are offering the same thing, it gets really hard. It got hard enough to just adopt Bitcoin. It gets impossible to say, "Oh, now we're going to do a completely new form of custody." the the analogy I say is it was nearly impossible for people to adopt a new form of money. >> Now say there's a new form of custody for a new form of money. It gets pretty much on the long tail and that's really where you see the native firm stepping in. >> Yeah. And so I I also think it's just that companies walking right over over a long enough time frame. I think that the this just like the adoption of Bitcoin this just takes a lot of time for people to to figure it out. But eventually, like you said, 6040 is dead. Like this this money will will dry up. Um, also because people are leaving into Bitcoin or Bitcoin related uh products and I I don't know if we talked on here about the oh well we tal we mentioned the private credit and and and people cannot you know the institution they cannot take money out and stuff like that. It's all just signs of a change. Let's call it a change, right? But what I'm also very excited about and you mentioned this before as well that uh and and also you know when you worked at at Weiwork there were all these huge companies right uh you know with hundreds of people and hundreds of engineers etc. But now you can just have like a five, six, seven person team plus AI being able to do the exact same thing and and and get to a certain speed that you would need way more people for um um before. So I also see a lot of disruption happening there. What what do you think? Like do do you think that just AI also comes at the right time for the people that want to build to actually be able to out compete in the in the technical resources way, you know, these incumbents that just have been there before. >> Yeah, 100%. I mean, this ties into you've been there at the beginning on the uh venture side and realizing couldn't have forecasted it would play out exactly this well or like this, but it's people that have been disenfranchised, marginalized at their companies, the meritocracy not existing because of the bloat that exists at the companies either being laid off or holding Bitcoin and having that um uh parachute to leave. And then to your point, it sounds so simple. I hope it works. I think it will work but Bitcoin gold dollars in today's world with the plumbing is not actually a structural thing per se. It's a taste thing, right? Like that's really where the value is is how do you package taste, get distribution. And so those are more of constructs around the barrier is less on what existed before with capital and infrastructure. It all ties back to the understanding of the market where it's going. Um so yeah, it's it's I think that it's going to be the most opportune time especially as more of the plumbing and then more of the the need. I think that's the big thing we just forget is like we're still in this new this is all an experiment and Bitcoin being at 70 to 120K is also a new thing. We the last alltime high was 67 and so as the price starts to run up the existing market looks the exact same since 2012 or 14 outside of ETFs when ETFs are still like going backwards if you think about it because you put a wrapper around the centralized custodian. So the demand of the market, those individuals will demand things and that's where the entrepreneurs step in um to build. I want to show you this really quick uh just because it's fire and we're having a new website and this is this is actually um just really quick. So this is a new deal Matt Ball put together. Um but the one thing I want to call out cuz this will be live. I don't know if there'll be any left, but this is the main. So, this will be our little stretch competitor, uh, where you can kind of put how much cash versus BTC you want to hold in cold storage. And on a blended rate, we say that, you know, risk adjusted, you end up with more more dollars, but also less risk. Um, but the the big thing I want to call out is we have 210 Genesis program. So, anybody that fits within that 210 gets locked in at all these high rates we talked about. They get some Bitcoin and then we got our buddy Parker signing books and a whole like welcome kit uh and a bunch of other stuff. You'll find it on the website, but I just got to show it because Braum might want to be one of those first 210 uh and we'll get him in as a global client. >> For sure. For sure. Check it out. So, um it's funny you mentioned like this and and I and we we have our own quarrels and discussions, but I think you and I both agree that there's a certain direct on the direction that we're going, right? And one of the things we're also seeing like less than 1% or maybe 2% of people are actually paying for these AI tools, these LLMs, right? And they already have like crazy valuations, but but less than 0.01 or something% of people have an actual like material um Bitcoin allocation and like we're talking about there there's going to be you're building, but there's more people that are going to build. How early do you still think we are? Like is is it you know and I I say it a lot and you sometimes you know smirk or or laugh but I just I wanted to get your take like how early is it still? So perfect question. I truly believe we're so early that we hadn't figured out custody and the analogy that I use and the way I think about building is you're going to get to a penetration point of like 1 to 3% of the market. There'll be hundreds of thousands of dollars in Bitcoin and a market standard will form where people won't know anything that we're talking about. they will just go to trusted places where they don't have to think about it and they just know whatever I think of it is like low yield high yield that the market will co coales around low yield savings is like gold high yields bitcoin and the analogy that I use is if you go to or the precedent that I use is if you go to the 70s and you look at PCs it was groups like this that go to meetups and they were arguing around what was the best multisig setup and the best hardware device and in that analogy they were arguing about the motherboard board, the hard drive, how to put together the right computer. And then it took people that came into the space and realized the value that if everyone could have it but not have to worry about it. And so they shipped the personal computer. And so I think of what we're trying to build and even if it's not us, there will be somebody that builds generational companies. I hope it's us. I plan it to be us that effectively ships MacBooks. And what that means is it just works. You click a button, you get access to the hardest form of money. You don't have to worry about the custody. You don't have to worry about the financial services. you know it works. You get to preserve your wealth, go back to your family and time and uh delivering value in the same way you open up that MacBook. But the MacBook has x amount of value when it's money. It's all the value in all the world. So that's how early we are that we haven't see that. And until we get that, that's when you see this thing actually really taking off globally. It's funny, right? Because I also sometimes think like may maybe we are the crazy ones, but I think all the early people ever have been the crazy ones, right? like it is just part of being >> I think it's rational. >> I don't think we're crazy. >> No, I also think I mean it's it's depending on who you ask, right? Um I also think it's rational just like I said, but what I wanted to ask you because you've been building longer in this space like what you know also to to to kind of like wrap up like what has changed for you? Like I think like I just said, we agree on the direction, but is there anything that makes you like more bullish today on on Bitcoin's role like globally than it did like 3 years ago? >> Definitely. I think the three things that we talked about here, but to like recap, it's the the insane I mean it came out today. I haven't even got to play with it. Opus 4.7. So the insane velocity of AI and growth and the natural convergence that Bitcoin will play an insane role there and have to uh because of the the permissioning and tooling is more robust than stable coins even though I expect stable coins to take off first. The Iran conflict and the reality of settling commodities that are existential for a sovereign in Bitcoin. These are things that were talked about for decades that are happening now. And then the last one is the realization that Trady is going to follow what retail does because if they don't the assets will leave their platform and that's bullish for everything we're doing uh or anybody wanted to build because if that's true is and the main reason maybe to go uh double click there is because we're we live in a society that's been top down driven and so you expect well I can't compete with Morgan Stanley I can't compete with Fidelity but you can especially when the whole notion of building a startup is you're going into a growing market a institutions don't serve the largest market which is individual holders. ers still hold the vast majority of Bitcoin in offline cold storage and they're feeling that pain. But then B, if that continues to be the case and Bitcoin's growing in adoption, that means that total addressable market is growing and nobody's servicing it. And so you get like uh it's like uh Bitcoin amplified, right? You're true Bitcoin squared for true amplified Bitcoin is you literally get the trend of a hyperrowth company on a hyperrowth asset. Uh and what is that multiple? It's it's significantly above Bitcoin. All right, to to wrap up, if you could leave your kids with just one piece of of financial advice for the next 30 years, and it cannot be buy Bitcoin, what would it be? >> Oh, that's easy. Money doesn't grow on trees. >> So, just money doesn't grow on trees. Like, value derives from actual work and effort. U that there's no such thing as a free lunch. That's the thing we all forget about. Um, so when everyone gets excited about all these speculative investments, if it's too good to be true, it's too good to be true. I had to learn this, I don't want to say the hard way, but I grew up, you know, you always, you want to be fast, you want to be quick, and you learn, you just get burned. Uh, and then it kind of carries with you, and then you live in this space, and the whole game of this whole thing we're talking about, whether you're building or investing, it's just capital at risk. You don't die. You just need to stay alive. Um, and there's just way more bodies that flow down the river than people uh hanging out and then you just never hear from them again. >> That is true. That is true. All right, that's that's great advice. Well, thanks again for this uh great conversation. I hope people found it valuable and uh yeah, we probably talk tomorrow. So, >> we're talking tomorrow. Good one, Braum. >> Cheers, brother. I hope you enjoyed this episode. If you did, you can click here to find more just like it. and click here to find all Bitcoin for Millennials podcast episodes. Also, if you want to help me shine a light on the message of Bitcoin, please like this video and subscribe to stay connected. I hope to see you for next episode. Bye.