“Just like Blockbuster didn’t notice Netflix, that’s what’s happening in our monetary system today [with Bitcoin].”
Jeff Booth is an entrepreneur and technologist serving as a leading Bitcoin advocate. He is the author of The Price of Tomorrow: Why Deflation is the Key to an Abundant Future.
With ever growing debt, governments are incentivized to continue printing more money to service that debt. The necessary inflation acts as a deflation on wages as assets are kept unnaturally high, continuing a cycle where the government is required to spend more and ultimately consolidate more control. Bitcoin acts as the systems change needed to escape this inflationary cycle, by creating a currency that allows for deflation. “Exponentially advancing technology changes the world… What that should look like in a free market is price decline. There’s a requirement, if we want that abundance, that currency allow for deflation.”
The systems change that Bitcoin represents not only offers individuals protection against inflation, but will also serve as the eventual off ramp for governments. It is likely the U.S. government will eventually hold Bitcoin as a reserve asset.
LISTEN AND SUBSCRIBE
SPEAKER
Jeff Booth
Author
The Price of Tomorrow
MODERATOR
Anthony Scaramucci
Founder & Managing Partner
SkyBridge
EPISODE TRANSCRIPT
Joe Eletto: (00:07)
Hello everyone. And welcome back to salt talks. My name is Joe Eletto and I'm the production manager of salt, which is a global thought leadership forum and networking platform, encompassing finance technology, and geopolitics salt talks as a series of digital interviews with the world's foremost investors, creators and thinkers. And just as we do at our global salt events, we aim to both empower big, important ideas and provide our audience a window into the minds of subject matter experts. And we are very excited today to welcome Jeff Booth to salt talks. Jeff Booth is a visionary leader who has lived at the forefront of technology change for 20 years. He led bill Dereck, a technology company that aim to simplify the building industry for nearly two decades through the.com meltdown, the 2008 financial crisis and many waves of technological disruption in January of 2020, Jeff relief disburse book titled the price of tomorrow.
Joe Eletto: (01:04)
Why deflation is key to an abundant future, and it, Jeff offers his provocative thesis about the current state of our economies and what must happen to enable a brighter future. He is a founding partner of OTU labs, co-founder of Addie invest.com and knock, knock, and serves on the boards of Terra Mera, cubic farms, llama zoo, Cynthia, and the Richmond hospital foundation, as well as numerous advisory boards and hosting today's salt talk is Brett MECing, president and chief operating officer of SkyBridge, a global alternative investment firm. Now I'll turn it over to Brett to conduct today's interview.
Brett Messing: (01:40)
Thanks, Joe. And Jeff, thanks for joining us. Um, you know, I'm a bit of a fan boy, uh, your book along with, uh, the price of tomorrow, along with BJ boy, potties peace, the bullish case for Bitcoin, uh, where I think two of the most important things that I read and that, you know, led us here at SkyBridge to really lean into Bitcoin. And, you know, we now have approaching $600 million of Bitcoin across our funds. So, you know, obviously it's worked out quite well as we talk today. I think Bitcoin's around 57,000 or so. Um, I think it, it's, it's interesting time for us to get together. You know, the, the name of your book is the price of tomorrow subtitle. Why deflation is the key to an abundant future. And today president Biden signed the $1.9 trillion stimulus. And, you know, the 10 year has backed up to, you know, north of 1.6, it's come in a little bit, uh, there's increasing concerns about inflation. There concerns about, you know, rates rising, uh, adversely affecting the economy, you know, before we sort of dive into the general thesis of your book, I like to get your reaction because I think to these events, because I think it does interact nicely with the things that you wrote about
Jeff Booth: (02:54)
And what happened what's happening is in, uh, in a currency event that is going on. We, we all tend to look at the short term news, we get caught into what's happening, um, zoomed in and instead of zooming out and to see what's really happening in a macro level. And, and that macro level, when you understand what the game board will look like, um, on both sides of the game board, um, it's gonna look a lot different in the future and as the existing system, flails, it is bound to be choppy on both sides so we can get into specifically the 10 year and everything else, but it's more important to understand the game board and the game board is technology is creating exponential efficiency and that efficiency, um, is, uh, is deflationary and exponentially. So most of the deflation is in front of us.
Jeff Booth: (03:51)
And, and, and, and so what, when I kind of wrote this book and I looked at, uh, the other side of this, what's stopping that deflation. So we see in consumer price index, we see consumer price index was lower, again, lower than expectations. Again, it's because technology is driving some prices down faster than we can print into it. And so what's stopping that from reaching society that would typically be a good thing, are prices going down? We want prices to go down, we get more for less that's what technology does, but on the other side of the coin, because we've lived in an inflationary world, our entire lives, and that that world requires more and more credit. Um, governments are trying to stop that price, those price declines by lowering interest rates first, um, lower and lower and lower, which drives massive debt debt, bubbles to try to, to try to grow out of what's happening. And so those two giant forces are colliding in society today and require a different solution. So the existing, the existing system and inflationary world cannot work with the technology where it is today. It's impossible.
Brett Messing: (05:09)
Um, you know, I find interesting is, is you sort of identify these by, I think zooming out your book, I think was published at the end of 19 or
Speaker 4: (05:18)
Over foods before. Right.
Brett Messing: (05:21)
So a lot of the issues that we're talking about, I think have been highlighted right. For all of us. I mean, I can just tell you, for example, at SkyBridge, we used to have a very large travel budget. I mean, even once everyone's vaccinated, we're going to travel 80% less right. Than we used to travel. Right. So airplanes, hotel, food, right. Just think about all the jobs and right. Multiply that across. So I think it's sorta, it's sorta hit hits home. Um, you, I guess, can you talk about how Bitcoin helps us? Right. You know, and through this, out of this, to the other side of it. Yeah. And so,
Jeff Booth: (06:02)
So, so if you, if you think about, okay, first on the, um, when I said how much data has been created over the last 20 years, kind of pre-writing the book? Um, so, so, so there was, uh, the end of 2019, there was $250 trillion of global debt to support to an $80 trillion approximate, $80 trillion global economy. Um, and, and that sounds like a lot, and it is a lot. And there you, maybe you could have a thesis that somehow we could find new industries to grow our way out of the debt, maybe. Um, but when you realize that if the, for my thesis to be true, it's exponentially driving technology down and exponentially driving debt accumulation, to be able to try to stop it. When you realize that $185 trillion of the debt, uh, came in the last 20 years, it takes your breath away. And that's just the start, right?
Jeff Booth: (06:56)
So COVID accelerated these trends. Exactly what you said. So, so now you said, now you have in the world, you have approximately 130 to $130 trillion of negative, real interest ponds that people deem safe. And that becomes the economic calculation for every other economic calculation. And they're there on their best day. You're going to lose money on it. And you know, that governments have to print a lot more money because the existing system, if you allow inflation to happen, unwinds everything, and there's nothing backing it, banks fail, everything fails all the way to the ground, and there's just counterparty risk all the way down to the ground. So just like, and so, you know, from reading this, I, I was intent, how do you find a solution out of this problem? How do you, but, but COVID accelerated everything and governments did what they tell you what to do.
Jeff Booth: (07:55)
They printed a printed and print it into it. And Bitcoin is a solution out of that problem. It's a system change. And just like, just like, uh, I, I compare a lot of these examples in business, uh, blockbuster with 9,000 stores and all the attendant costs, all they missed was how fast technology was moving and now, and has technology changed, download speeds. Um, and Netflix had the advantage and all of a sudden blockbuster had the disadvantage. Um, the, uh, everything changed in an instant. And, um, and what blockbuster did is added candy aisles to their stores and you laugh at it. But if you think about what economic policy is today, is that in candy owes to the stores, it's a cannot get out of this. And so this is going to be a system change.
Brett Messing: (08:51)
So it's funny, you know, I'm an Angeleno. I was in LA week ago, I'm in New York and with, with my daughter and I got met her that early for dinner, and I walked down this sort of Brentwood village, quarter mile area, and where I used to get my blockbuster videos is now a first Republic bank. And I realized that there are eight different bank branches in this quarter mile stretch. And I just started sort of laughing. Like I felt like I was looking at at bookstores or blockbuster videos everywhere. And it sort of underscored this idea of change, but I guess, Jeff, I understand why Bitcoin is good for me, for you, for an individual, right. Against the systemic problems that I think the pandemic has really brought into focus, but I have trouble understanding how it's good for the United States of America or for your, you know, how do we get from where we are to where we want to be with Bitcoin, as opposed to Bitcoin as being, you know, as it has been, I think appropriately characterize a monetary life raft, right. To protect against systemic collapse, right. Or this shut calls it, you know, schmuck insurance.
Jeff Booth: (10:02)
Yeah. I, I think it's way more than that. Um, I think it's a, I think it's a requirement today as a life raft. Um, it it's a must in your portfolio, but I, I believe it's way more than that. So if you just think exponentially advancing technology changes the rules, look at your phone and look at all the things that are free on your phone. The, and that's that free is coming everywhere. It's word ordinarily free price declines are in front of us. And more and more price declines are in front of us in every industry because of technology. And there's nothing that governments can do about it because, because why does a CEO add technology it's to redo, remove labor and give more for less? That's kind of the point technology is supposed to free our time. And so, so what that should look like in our life is in a free market is, is price declines next year, less, less, and in a free market would make sure that the abundance gained from technology would be broadly distributed to society.
Jeff Booth: (11:08)
So with technology and with technology, how it's changed the rules, just like a change, the rules for blockbuster technology has changed the rules and that. And so there was a requirement if we want that abundance in society, that that currency allows for deflation, the only way to stop that. And just, uh, the only way to stop that is by consolidating control. So giving more power. So inflation is giving more people, a giving, giving wealthy more money dividing, essentially inflation is the same thing as wage deflation. So you're picking the pockets of some and giving it to the others and holding prices on naturally high, which, which causes you to print more money to consolidate control. It looks more like communism over time. And eventually the free market does, there is no free Marka. You have a market that's owned by the biggest hug.
Brett Messing: (12:13)
Okay. So I have to out myself as being a pretty traditional liberal Democrat. I worked in city government in Los Angeles. Um, technology everyone's life is better with technology, right? It's, it's inarguable in terms of our, day-to-day not of content. We can get food delivered like on and on and on, but it is concentrated wealth, right. In ways that make the Teddy Roosevelt trust, busting seem quaint. Right? So, um, isn't there a revolution headed?
Jeff Booth: (12:46)
I love that you asked that the reason it's concentrated wealth is because we're operating two systems, we're operating a non-free market system into technology. That's doing the more that you're doing it. You're driving wealth into the technology companies way faster. So the same thing that's manipulating market is creating those tech monopolies,
Brett Messing: (13:13)
But on a fundamental basis, Jeff don't technology companies, which are, you know, Marc Andreessen famously, software's eating the world. They just don't need as many people. Right. So what, what do we do with all these people need jobs? Right? So, um, I I'm, I believe in the free market, but I don't completely believe it that we just leave it alone and everything's going to be okay.
Jeff Booth: (13:37)
So, so th and this is a really hard concept because we grew up in a different world and every, every politician you hear and every, and I grew up in the same world, and it was her hard concept for me to even agree in. Right. And so I'm going to out myself there too, to rewire my brain and understand what was happening because of a rule change. Um, because of what technology allows for was really hard for me to comprehend because it changes everything. So we, we want more jobs. And the reason we're keeping more jobs is by driving wages down in a global fight to keep wages down, wage deflation or inflation is wage inflation. Well, technology takes them anyways. And what, by, by doing that, we're holding prices high. So the people that are leading the companies and technology companies and the people that have the assets are winning everything, and we're dividing society as a by-product.
Jeff Booth: (14:40)
And that is a, that is a human condition stopping the natural force of technology prices would fall. So, so, and it's, it's really hard concept to understand, but you don't pay for the air you breathe, and why it's the most important thing in your life. You don't, because it's abundant. And technology is a creating that abundance everywhere. And that, and that, uh, as, as more people are competing for that abundance, people think that a lot of the apps on your phone are free because, because they get advertising dollars, they're free because it's your flashlights, a line of code and it scales and scales everywhere. And it never has to be written again. Um, it's free because your phone app looks like that too, or you, so your, your, uh, your camera app looks like that too. And we take way more photos today. We have an abundance and photos, um, for, uh, for no cost, whereas before we had to take individual photos and it looked totally different as those industries change and provide abundance, they should fall in price. And if we hold up price on naturally by trying just cling to a system that's inflating, then, then we divide society.
Brett Messing: (15:58)
So, Jeff, um, well, Jan, Janet Yellen's comments about Bitcoin, notwithstanding she and I went to the same college brown. So I'm sort of proud that, you know, we have the treasury, but that being said, let's assume with a, we elbow her out of the job. And we, you know, we put Jeff Booth in the job. Okay. And you have all the tools, including Bitcoin, most importantly, at your disposal fix stuff for us. How are we going to use, how is Bitcoin used, right? How, how, how would a wise, you know, policy maker use Bitcoin to navigate the challenges that we're facing on a macro level.
Jeff Booth: (16:37)
So I think you would argue, you would, you would agree with this, the problems that we're facing on a macro level have been made exceedingly worse by ignoring the problems that created them in the first place and papering them over. And the externality is created by a papering over those problems. First in 2000, if not in 2008, before 2008, but then in 2008 and now more, and just like I predicted in the thesis, if, if is driving exponentially this way, then you needing exponential money printing to fix up this way. Now, the problem is so bad that the government is 26% of all income, personal income. So, so the government is the market there. And, and, and, and it's holding really prey, price of commercial real estate. Shouldn't not be anywhere near what commercial real estate is in, in COVID. Yeah, let's try
Brett Messing: (17:38)
If I can interject. So one of the, the SCCs resistance to a Bitcoin, but Bitcoin ETF is that the market has manipulated. Right. Right. What do you think about what let's start with the oil market, right. Where we have OPEC, right. We have the strategic petroleum reserve and to say nothing of where you were headed, um, in terms of market manipulation, just,
Jeff Booth: (18:01)
But, but again, you're holding prices high, preventing the market, the natural clearing functions in the market to take hold to, to, to allow, to re, to regrow the other side. And by doing that, there's a whole bunch of people left out of that wealth. So some people are you've made money on naturally, and you pick the pocket of other people to give them now those same prices in real estate houses, rents, everything else that you've unnaturally kept high. Then this, then a whole bunch of people that can't pay for their food or housing, come back to government and say, I need some money. So I can pay for my, uh, my food and housing, which they made the problem in the first place. And no actor in the system can change that. And by the way, if I came in, I couldn't change. Uh, I couldn't change that because it's a system problem.
Jeff Booth: (18:53)
And, and, and again, when the rules change, smart people change technology has changed the rules, the existing system will fail and, and, and the geopolitical mess. Normally these systems fail through war and they get to get reset. And first through, in a lot of times through revolution, then war, and then they get reset. I wish that wasn't the case, but the existing system creates more and more instability in the system because of, because of ignoring fundamentals. In other words, stopping creative destruction at the company level and the economy level, all that happened is creative destruction moved to the, to the currency and monetary level.
Brett Messing: (19:38)
Come on, Jeff. You're supposed to be a utopian technologist. Tell us, tell us, tell us how we use technology in the form of Bitcoin to, to get through this. You know, now
Jeff Booth: (19:48)
That now the, the, uh, now the other side, right? If, if governments today stopped printing or fiscal or anything else you would ever depression on your hands that would look like the thirties would look like a walk in the park, it would, you would have everything collapsed down to 90%. Uh, it would collapse by 90% banks would fail. All the banks would fail. Governments would fail. So that's why they can't let, because, because deflation, the debt can never be, you can't let deflation happen, and that can never be paid back. But, but the natural market is deflation because if technology, so enter a system change from outside the system, that's what Bitcoin is. It's a currency that would over time allow for deflation. So if you measured your life in Bitcoin and Bitcoin, you will see the natural market and pricing that the true pricing and prices will have everything over time will keep falling. Bitcoin will rise. But if you measure, if your, if your currency standard is Bitcoin is up, if that's what your unit of account is, you'll see over time, the natural market. And so if that happens slow enough and, and, and Bitcoin moves broadly into society, then, then that is a great thing, because it also is a forcing function for technology to be able to move broadly to society.
Brett Messing: (21:21)
Um, so, so you're setting that, that the, for an individual, right, owning the Bitcoin is a way to defend yourself. Well, what's the government doing that records. The government is, is, is in that same, same position you just, you discussed, right? Which is if they try to shut the machine off the economy collapses, they've got to find a way sort of let things out sort of slowly, right? So,
Jeff Booth: (21:49)
But what's happening right now right now, geopolitically, and this is connected. The so, so China is printing more than the us to keep their, a dollar lower, to keep their labor rate lower so that we buy more. So us buys more goods, and you asked us trying to, uh, to devalue their dollar, to be able to gain jobs lower their labor rate when technology is TA, because if you lower your layer of labor rate, then technology won't take the jobs as fast. So that's, what's happening all over the world. And it's kind of a race to the bottom on currency, more and more of this as happening. And that is creating the same geopolitical tension, um, around or around the world. Communism is defunded by a free market. If there's anybody that knows this, it's a U S U S was founded on, on these principles on the rights of the individual and a free and a free market. And, and so the only way to control citizens is through if, if, if you, if you actually, so I suspect that that the best way for, for the U S to actually kind of emerge, emerge, or really strong out of this is to embrace Bitcoin because China won't embrace Bitcoin. So when
Brett Messing: (23:08)
You say embraced, you mean, hold it as a reserve asset. So sell our gold and buy Bitcoin, what does embrace, how does that manifest itself
Jeff Booth: (23:17)
That'll happen eventually? Um, and it might happen quietly, uh, early on, but first it'll be, uh, uh, regulation around their own ramps off ramps and the whole new industry ecosystem. That is, uh, that is, that understands where technology is going and why that's a good thing for, uh, for humanity.
Brett Messing: (23:41)
Have you willing to call me back? So I, you know, I would have rightly I think, well, not really people would probably accuse me in the fall of being too bullish on Bitcoin. And the last six months, it's just been remarkable, you know, the events in terms of the institutional adoption, um, you know, banks committing to it, right from BFA Mellon, JP Morgan. I mean, they're being pulled by their invest by their clients. Like, they're not, you know, they're not going into it. They're, you know, they realize they have to do it or, or their customers are going to go somewhere else. What is it, is this what you expected? Is it happening faster? It's
Jeff Booth: (24:20)
What I expected. Um, I th uh, I, I think, um, I think in this cycle, we'll see it continue like this. And, um, and then in the next hinder, the next habit know, trade sideways for some time, it'll go away up from here this year, I believe. Um, then it'll trail back down into the next cycle, as it trails back down and, um, it down and choppy for the next kind of two years after that, um, people will bias why it's doing that because they'll say, okay, government is going to regulate it or this or this. And then into the next halving cycle, I believe it's going to take off again.
Brett Messing: (25:00)
So I want to press on this. Um, I'm not an economist, but you know, I have been a trader. And what I have experienced is that all great obvious trades eventually go away, right? So the gray scale arbitrage, where it was a great trade and we've done it. And I had this instinct in September when those to not do it and gratefully, we didn't do it, which falls in the category of like better, lucky than good. Um, but it feels to me like half the world has the following trade on. I buy Bitcoin at the having, and then I sell it 14 to 18 months out. And that feels to me like the gray scale trade. And so it's my personal view. I like your reaction to this, that one of two things is going to happen. I think this cycle looking for like the other cycles is a less than 10% chance.
Brett Messing: (25:49)
So I think either it's going to this cycle ends much sooner than people are expecting, right? And we head into a crypto bear market, you know, earlier, or, and I'm wearing a Bitcoin hat. So you can imagine this is the one I think that we're going to get to a high number. People will sell their Bitcoin, some OJI Bitcoin holders. You may even see hedge funds, short Bitcoin, and it's just going to laugh at everybody and keep moving higher. Not saying we're not going to have cycles, but that it will go higher. And that the bull market will last longer from a temporal standpoint than people expect. And then of course, if you have any thoughts on that, cause there's, I, I love that. I, I love
Jeff Booth: (26:32)
That you said that I, so, so one of the things that when, when you hear the FID around Bitcoin, um, you realize how early we are in this cycle. So you might not early and to, to make the investment or bet that you did with your funds and everything else, you would have done diligence. Like I did diligence and then every attack factor, what does this look like? And come to the realization that it's not Bitcoin that holds the risk. Bitcoin's an asymmetric bet. It's the, an existing system and everything priced in other dollars, it holds the massive risk. And there's very few people that still understand that. And so we are so early in the cycle. Um, and, and so now to you're having cycle, I agree with you. It won't look, it will, I, I suspect it won't exactly match. And whether it matches closer in this cycle or the next one, at some point that are ill arbitrage out.
Brett Messing: (27:28)
Right. Because right. It just seems there's too many people playing from the same playbook. And it, my experience with markets is, is that it just never, whenever, when there's such a strong consensus and, you know, people are treating, where are we in, in this? Where do you think we are in the cycle? You know, it just doesn't play out that way. Um,
Jeff Booth: (27:48)
But what I would say is if you ask most people, like you're, you're deeply in here in YPO, around my technology, friends and, and, and very wealthy individuals, not the foggiest, like it's really early.
Brett Messing: (28:07)
Oh, no, I, I, you know, again, I mentioned I'm from LA and, you know, my collection of friends there, all of whom, you know, done reasonably well, none of them, any Bitcoin, I mean, any Bitcoin zero, we actually, uh, last week we figured out that a lot of the emails that our sales team send out have been getting bounced back. We weren't aware of it because we have the word Bitcoin, like in a footer with like a, for a regulatory disclosure. And there are servers, a decent number of them that if they see the word Bitcoin, it's like the word Al-Qaeda. So, um, when, when I heard that, I was like, that's awesome. It's, uh, it's early. Um, and I, you know, I think that, I think that makes it, makes it very exciting. So there, so think
Jeff Booth: (28:51)
About some of the, these things, because by the way, what, um, what, um, some of these concepts that we talk about, so government today, one of the concepts about Bitcoin is bad for the climate, right? It uses energy. Now let's dig a little bit on, on that. Um, and say, so number one, I think, you know, this, that Bitcoin, which searches for low cost energy. And so it actually helps the grid of solar expand and it, uh, and, and, and that should happen at it should, can continue to advance solar because it's the Bitcoin miners are constantly searching for the lowest cost energy, but that's actually the small part of the conver conversation. The bigger part of the conversation is this technology, including energy is deflationary. And so energy is 9% of the global GDP. And it's a number one input of everything else. We do.
Jeff Booth: (29:52)
A lot of things become, they work, or they don't work because of energy. In fact, the, the, in, in entire entire oil, um, uh, us, uh, on oil reserve, everything else was about energy, low cost, low cost, energy securing energy, and it's a geopolitical game, but now, now you have new solar not ready to transition all the solar renewables, but you have new energy competing at the lowest cost additive to the energy grid. So that must therefore be deflationary and additive to deflation that we're already talking about on a kind of an exponential layer. Cause it talks, it cut, cuts across everything. Now, what do you do as a government? Because what you're trying to do, what you're saying is I care about climate. So I'm going to fund innovation and climate to reduce planet climate damage, uh, CO2 emissions. And every time that you increase more energy from lower cost, clean energy, it's lower cost.
Jeff Booth: (31:04)
And so I have to offset that lower costs by printing money to make oil prices go up, to make other things work, to be able to buy more and more and more. So, um, the existing monetary system of the world can, you cannot grow forever on a final finite planet. Growth with technology is different than growth for the last hundred years. Growth with technology makes things free or lowers the costs so much that it changes the economic calculation. And that's the thing that people are really missing. It's a penance and it's a big deal. It's impossible to solve climate, um, out of the existing system. In fact, the existing system is the cause of climate change.
Brett Messing: (31:52)
No, like I think I actually think that for the next year or so, this issue of ESG investing and Bitcoin being bad for the environment, it's going to be the single biggest obstacle to further adoption. And I think it's sort of funny that JP Morgan, you know, Jamie diamond is calling Bitcoin a dirty asset because there is probably no company in the world that has contributed to ruining the climate and the environment than JP Morgan. If we were to look at his sort of long history, including right now where it's representing Exxon in a proxy battle. Um, and I think by trying to characterize Bitcoin as a quote dirty asset, right, that would slow. I think, you know, there are investors are becoming more on that in the construction of their portfolio, but we have a challenge because, because our, that is a soundbite and you're providing a nuanced right. Intelligent, but not soundbite response. And, and, and this is something we as a community I think, need to work on.
Jeff Booth: (32:57)
I think so too, because here's what I really had believed if technology and it's not an F technology is advancing exponentially, that that technology should be giving us an abundance for less. We don't need as many things. It gives us more for free and jobs come out of there and jobs can come out of the equation. As things go to free, we don't have to be on a most wheel forever working our entire lives to try to save enough money to retire the last 10. It looks different. But in that model, which is required for the change in technology, it's a structural change in that model. Bitcoin might be the only thing that saves the planet.
Jeff Booth: (33:40)
It's actually exactly the opposite to what people are talking about. What they're talking about is the same reason they talk about real estate, always going up without measuring, because they're measuring from within a system and real estate always goes up from within a system. If you don't look, let hit $185 trillion of stimulus, it took in the last 20 years to make real estate always go up. But again, what you're talking about, even if you looked at the CPI index and everything else is, imagine the CPI index, what that would look like without that $185 trillion of stimulus over the last 20 years. So it wouldn't just be, TV's getting bigger and cheaper. It wouldn't be just your computers, the CVI index, and all of that is all the technology products are out running that at a scale and driving price
Brett Messing: (34:39)
Never I've had fracking, right. He made fracking possible. Right? All that capital was lost. Right. But it was, it was easy money that financed, right. That's sort of dirty. And I'm an energy guy. I spent a lot of time trading energy. Um, uh, no, I look, I think it's fascinating if you, right. If you look out 50 years from now, we're not going to be using fossil fuels. Right. And what general motors says at 2030, or they don't want to sell any cars right. That you, other than electric cars. So this problem self-corrects right, because let's face it. It is true that over half of Bitcoin is not renewable. Right. And some portion of it is dirty coal coming out of AutoMark Mongolia. Right. I mean, we, we, we can't hide from that. That is true. Um, but it's also true back to my roots in LA that approximately 28% of the electricity that goes into your Tesla is coal because the power that that DWP gets, it used to be about 50% coal. They've got an under 30, but they have coal plants that they own, not in California, Nevada and Utah, they have transmission lines. And so you're pouring you almost 30% of what you're putting your Tesla is coal. So it's, it's sort of all around us, but, but, you know, but, but, but, but, but, but again,
Jeff Booth: (35:59)
What ends up happening is technologies. It happens really slowly. So they happen fast, but we misjudge, we overestimate the impact early on, and then we massively underestimate the impact later and you've read it in the book, but that would be a fail. If I fold a piece of paper on itself, 50 times that piece of paper will reach from here to the sun. I've re I've asked that question to people all over the, uh, all over the world to audiences. And most people, guests, 99% of people, guests about two inches. Um, that was a piece of paper would be two inches, but it shows, and I'm not doing it for, okay. Look at a parlor Trek. What it does is shows how badly we misunder standard exponentials and is the same reason why we S we, we early on in solar, we think it's gonna work and it costs way too much. And nobody pays attention because it doesn't hit an economic calculation that matters. And, and then we underestimated on the other side because the, as, uh, as the economic viability increases, all the market moves there. Well, as the market's moving there because of lower prices, it's going to transition faster and faster and faster. And the corresponding offset for the existing inflationary system has to be more and more printing of money to try to eradicate that technology gain.
Brett Messing: (37:26)
So Jeff, if we're wrong, right. And, um, you know, embarrassed by the fact that I wore a Bitcoin hat for the rally of 2020, 21, I'm like a pitcher with a no-hitter, I'm afraid to take it off. Um, why are we going to be raw? What do you worry about, um,
Jeff Booth: (37:49)
If there's one thing I still, uh, um, uh, think about, or I'm curious about it's, uh, and, and in the next years, I'm not worried about it because I'm pretty deep into the technologists around it, but, but quantum, uh, is, is a, um, and, and next five, 10 years. And I think the network is designed in a way that it'll get, uh, um, it gets stronger and stronger against us. So it should be post quantum, uh, uh, uh, uh unfavorability and everything else in a network of ill evolve it's designed into the network. But, but that is something that, uh, that if I said to an edge case, if I was looking for edge cases of the very, so there's a non-zero chance if I'm saying technology is moving this fast, and it's hard to forecast how fast, fast technology is moving, then it would be really ignorant of me to say, it's impossible, no matter what that something is something, uh, as something that was. So I watched for that, I think right now it's almost a zero probability, um, where we are today, but, but I'll continue to watch for that.
Brett Messing: (39:07)
And how, and where would we see that bubbling up? In other words, you know, uh, uh, uh, you know, is it, I actually was an energy investor and I rightly underestimated the speed through which renewables would take the legs out of the energy market. Right. So I learned from that. Um, so I do learning from that experience, like, what are the signs that this is something that we, that is sort of happening and we need to pay really careful attention to.
Jeff Booth: (39:36)
So, so it's, it'd be hard to go into because the attack factors, aren't what people think, and there's not. Uh, and so to say, it's going to nullify the whole network. I don't believe that. And the algorithm change, uh, the, uh, the hashing changes to be able to admit, uh, to, to update that in as well, quantum computers are really bad at algorithms. And so, so it, it makes it today maybe for the next 10 years, technically unfeasible to be able to do that. But if you, if you broke through that earlier, at some point, some of their early Bitcoin, um, in the, in the wallets, weren't, weren't, uh, they were public keys or whatever. And so you could cack those, you might be able to hack those and by doing it by doing so, not vault, not invalidate the network or anything else, but it would create an incentive at some point down the road, unless the protocol changes too, to try to, because there's so much value in those early coins. So there's, there's a, there's a bunch of when you look at these different, different things, is it risk to the entire network? Is it the rest of the blockchain? Probably not, but where, where could it hold, uh,
Brett Messing: (41:02)
The value for some time? Well, look, Jeff, I follow you on Twitter. So I hope you'll tweet about it, cause I probably won't otherwise like, be aware that there's, so I'm going to count on your Twitter feed is, you know, uh, to let us know, you know, that we need to be, uh, you know, be careful, uh, this has been great, you know, um, I'm sorry if you say something. No. And, and, and, and I think the
Jeff Booth: (41:29)
Beautiful thing about this, uh, and, and, and probably the best way to at this as if you think about all the sharp minds defending this network and the innovation that's coming onto this network, and the amount of now capital innovation, the, this, the smartest technology minds, um, Bitcoin Twitter is a really great spot. It's harsh sometimes, but, but it constantly evolves in its, in its hits. It's kind of clarified the best information wins.
Brett Messing: (41:59)
No, I actually joined Twitter in September of last year, just because I, I had been told that I should follow a big one Twitter and you're right. It is a great exchange of ideas. Um, and what's really impressed me is the number of smart minds, really smart minds in Bitcoin. And then the other thing that really got me super comfortable so much. So, you know, I put my personal capital in first, but I'm riskier with my own money than I am when I'm a fiduciary of others, was that this was great. As I said, BJ's piece was great. There's a bunch of other stuff that, that not as good as the stuff that was helpful. And when we, when we started marketing, you know, uh, talking about Bitcoin, you know, regulators like us to have things that are fair and balanced. So we had to find stuff that was giving the, the negative case on Bitcoin. And there is a negative case, but there are no really thoughtful pieces out there. There is no counter to this or BJ's piece where you read it and you're like, that's really compelling, right? So you, I don't know that that, that helped me a lot because it's one thing for Nouriel Roubini to fire off tweets and write a column here, but their ad hot on the ad hominem and text. Um,
Speaker 4: (43:13)
Here's, here's what, and I'd seriously ask,
Jeff Booth: (43:16)
Ask anybody, ask on Twitter, ask anybody, how are you going to make the existing system work without concentrating all power in the state against technology, moving at this rate? And they, and, and, and what you'll find you'll find is a whole bunch of crickets on that. They'll say, well, we can't allow deflation because deflation would be bad for debts it, which is true and everything. And, but you'll find a whole bunch of crickets on that con con uh, conversation that I just had. Cause it's impossible. But then that's why I said, this is a structural change to society. And those structural changes don't come around very often. And we don't notice someone. They do just like blockbuster. Didn't notice Netflix. And, and, and that's, what's happening in our monetary system today. And there's very few people that are, are really understanding what it means for everything else, the rules, all of the rules change. It's almost upside down from the way we grew up. And, and well, I don't know if I was ready to like that or anything else. It doesn't change. It doesn't change the facts. So we better start to design. We better start to design a system that is congruent with that system.
Brett Messing: (44:35)
Well, Jeff I've become a Buddhist. I don't like, or just like, I just accept things as they are and make
Speaker 4: (44:41)
Love that.
Brett Messing: (44:43)
Well, thank you so much. This was awesome. I'm going to flash your book again, which I highly recommend the price or tomorrow. And, um, you know, this has really been great, you know, thank you for taking the time and you know, uh, let's, uh, let's stay in touch and hopefully we'll have you, you know, we're having a salt in New York in September, and we'd love to have you on a panel, uh, talking Bitcoin deflation, monetary policy. I'd
Jeff Booth: (45:05)
Love to love to do that. Thanks again for having me.
Brett Messing: (45:07)
That'd be great, Joe. You want to take us out?
Joe Eletto: (45:10)
Absolutely. Thank you again, Jeff. And thank you Brad, for leading this conversation. I'm glad we got the hold of the book and be advertorial about that. So as Brett mentioned, we are coming to New York for salt, New York in September 13 through 15. So more information will be available on our website@sault.org. If you're looking to learn more about salt talks, listen to us on podcast, salt.org backslash talks, where you can also find our full library of previous salt talks dating back to may of 2020. We're also on social media. If you want to watch any of these or engage with our conversation on Twitter, it's at salt conference, YouTube salt tube, and we're also of course on LinkedIn and Facebook, but on behalf of the entire salt team, this is Joel Leno signing off for today. We'll see you again soon.