David Bailey, CEO of BTC Media (including Bitcoin Magazine) rejoins me on the show to chat about the latest: Bitcoin 2021 is coming and it’ll be huge!
We chat:
- Bitcoin 2021 and the guests
- The feeling of live conferences
- Bitcoin Magazine content
- Bitcoin’s growth in recent years
- Bitcoin culture
David Bailey links:
Prior episode:
Sponsors:
- Swan Bitcoin
- Hodl Hodl Lend
- Compass Mining
- Unchained Capital (code LIVERA)
- CypherSafe (code LIVERA)
- CoinKite.com (code LIVERA)
Stephan Livera links:
- Show notes and website
- Follow me on twitter @stephanlivera
- Subscribe to the podcast
- Patreon @stephanlivera
Podcast Transcript:
Stephan Livera:
David welcome back to the show,
David Bailey:
Stephan thanks for having me on.
Stephan Livera:
Yeah, so there’s been a lot going on since we last spoke on the show formally that is. But I’m very excited. There’s a lot of things going on. You’ve got the Bitcoin conference 2021 coming up. There’s a lot of stuff happening with Bitcoin Magazine. So I’m excited to get into that. So tell us a little bit about what’s on your mind lately.
David Bailey:
Well first and foremost putting together the biggest Bitcoin event in history. So, I mean, that’s a bit of a challenge, especially with COVID, especially with the politics, et cetera. So there’s been some ups and downs, but I mean, it’s all coming together beautifully and this is going to be, I mean, no one’s ever have seen an event like this before. I mean, this is like the, you know, our experience of the events is that as you get closer to the event, they ramp in terms of the number of people buying tickets, the quality of the speakers you get, et cetera,
Stephan Livera:
Everyone leaves it to the last minute, right?
David Bailey:
Yeah. Where we’re at right now, a hundred days out, we can barely handle what’s going on now. We expect it to 5x to 10x from here. I don’t even, I don’t even know what we’re going to do. So like our biggest we’re like trying to get ahead of the scaling challenges here. But I mean, this event, if we could legally sell the number of tickets, I think this could be a 15,000 person event. I don’t think legally they’re going to let us have that many people, but it’s getting wild.
Stephan Livera:
That’s awesome. And I mean, I recall from Bitcoin, 2019, you had at least a couple thousand, it was probably three or four, maybe 5,000 that people, that many people there.
David Bailey:
Yeah 2,500, but it was a good size. Yeah. That was the biggest Bitcoin only event that I think that ever happened or maybe tied with the biggest, and this is so much bigger. And I mean, like, you know it went from us people that would be like headliners that would be like our top speaker. We’re now getting someone like that almost every day who’s writing. So it’s pretty crazy. So, I mean, we’re excited. This is going to be like the challenge that we were trying to deal with yesterday. I won’t name their name, but a very famous investor that people people would know, value investor. We’re having to find a spot where he can park his 300 foot yacht so that he can bring the yacht in and host a party on his boat for Bitcoin whales. So, I mean, it’s like, okay, those are cool challenges to have to be dealing with. So we’re like really amped up about the conference. And I mean, it’s going to be nuts.
Stephan Livera:
Man. You’re giving me major FOMO. I’m like doing my best to try and get out of here and get over there. But it’s kind of like in the Australian circumstances, it’s like, there’s travel restrictions and you have to like apply. And I don’t, I honestly don’t know if I’ll be able to make it at this point. I’m obviously going to do my best to try and get there myself. But I had a great experience at Bitcoin 2019 I’m really based on, you know, the guests that you have already for this one, this round, it’s going to be huge. I mean, you’ve got so many big names. You’ve got Nick Szabo, Dorsey, Saylor, you know, all of these people. So it’s just Tony Hawk. Like how can you not go?
David Bailey:
We had a, I’m trying to be careful saying names because a lot of people listen to your podcast. I don’t want to offend anybody who’s listening. But we had someone who’s one of the highest ranking officials in government who agreed to speak. His people were trying to negotiate a keynote for them. They were like, look, we like the guy he’s doing cool stuff, but I’m sorry, like this just, we have a more important, like we have other people that we have to have keynotes. We can’t make one happen for you. And they’re like, okay, it’s okay, we’ll be on the panel. And this is like one of the biggest, you know, government officials in the country. And it’s like, yeah, sorry, we can’t take your spot.
Stephan Livera:
So tell us a little bit about now for listeners who haven’t been to these Bitcoin conferences. One really cool thing is actually make sure you turn up a little bit early because there will be pre-events. Some of them official, some of them unofficial, and it’s just a good opportunity to just hang out and meet with a whole bunch of Bitcoin people who you might’ve interacted with on Twitter before, but you’ve never met in person. So can you tell us David a little bit about what you’re thinking in terms of pre-events and what’s the situation there?
David Bailey:
Yeah, so we’re working with partners now we just announced the Miami move about three weeks ago or so. So a lot of people are trying to figure out where, to, how to move their events from what they were expecting to do in LA to Miami. There’s going to be a mining specific event. We talked to a partner the other day that wants to have a Bitcoin for sex workers event educating sex workers on how to use it. I mean, it’s the whole spectrum of who makes up the Bitcoin community, everything from the libertarian side to the let’s say shady anarchist side to the venture capital side to the, you know Larry Summers and Goldman Sachs side. Like it’s the whole spectrum. So yeah, I expect that there’s going to be 20, 30 different satellite events happening around the conference. For the conference itself, we have kind of two different types of tickets. One is general admission. So it’s like the two main days of the conference plus an after party. And then we have what we are calling the whale pass, which is for basically it’s like the investor ticket and we have an extra day for whales that want to come in and find investment opportunities. And, you know, the whales are also subsidizing the conference for everyone too. So we’re very appreciative for bitcoin whales out there. So it’s going to be an awesome opportunity hopefully to get some more hedge funds and institutional funds deploying major dollars. And you know, we’re trying to make sure that they get a taste of the Bitcoin counterculture and know what we’re all about. Like we don’t, we’re not trying to make Bitcoin anything other than what it is. And you know, we’re not gonna put a suit and tie on Bitcoin just because you’re a hedge fund. It’s like, no, this is the Bitcoin. You come to Bitcoin on Bitcoin’s terms, or you’re welcome to become a hodler if you want. But like, you know, you have to kind of take the whole project and the whole community, if you want to be part of it.
Stephan Livera:
Right. And I think it’s really fascinating how as this thing has grown up so much, and I know you were around in the early days, it’s grown up so much now that there are different sub groups, if you will, there are almost different tribes inside the Bitcoin world, you know, and there’s, it’s not what it was in, you know, the legendary 2013 days.
David Bailey:
Yeah. I mean, you know, that was kind of the whole ethos of why we did Bitcoin 2019 is like, because the tribalization had gotten to the point where the groups just didn’t talk to each other very much. And it’s like, okay, we’re all passionate about the same thing. If we can bring everyone together in the right environment, there can be that kind of cross pollination going on. And so I think especially as Bitcoin’s price goes up, the ability for Bitcoin to not pretend to be something other than it is just like, it is what it is. It’s a trillion dollar asset class. It’s the biggest movement happening in the world you can be a part of it, or you don’t have to be a part of it. But that kind of confidence that comes with the community I think is really like letting people, what’s the word peacock talk Reagan whatever they call it.
David Bailey:
So yeah. And you know, the one thing that I’m really, I’m sad that we’re going to miss from this year’s conference is like in 2019, we had a huge contingent from the Chinese Bitcoin community. We had a huge contingent from the South American Bitcoin community. I think we’ll have still a lot of people from the South American Bitcoin community, but the China community is like, it’s a nightmare right now trying to figure out all the travel restrictions. And so yeah, you know, what I love about Bitcoin so much is that there is a, Bitcoin naturally self filters for the type of people that are interested in it. And so, you know, if you’re living anywhere in the world and you’re passionate about Bitcoin, there’s something that attracted you to it that you share in common with someone else in the community that maybe has completely different life circumstances. And so, you know, it’s cool to meet somebody that you think you share nothing in common with, or very few things in common, but like you have this instant kind of connection. That’s actually a very deep connection. And you know, we’ve been able to kind of make friendships with people all around the world because of this kind of shared passion for Bitcoin. And I hope that Bitcoin 2022, that’s going to be back on display, but for 2021, it’s going to be probably heavy North American. Yeah.
Stephan Livera:
Gotcha. Just from a travel and restrictions point of view, unfortunately, that’s kind of the way it might be and, you know, yeah, it’s a real shame, but hopefully things open up more and people can start traveling safely and all of that.
David Bailey:
I will say that I can’t name the company yet, but a household brand name company that everyone listening to this will know, is partnering with us to bring like the best live stream experience possible for people around the world who will be watching. So we’ll have like a roving camera team. We’ll have, you know, a dedicated livestream stage. We will really try to make a top quality experience for people around the world who just can’t be there in person. And we’ll miss you. But there’s always 2022.
Stephan Livera:
Yeah. And I would say as well, even from my own perspective, when you go in person to these events, it is a huge deal because the, I guess it’s hard to explain and put it into words, but it’s just like the energy you get from just like meeting people in real life and actually hanging out with some of these Bitcoin people like who you might’ve seen online, or you might’ve, maybe you’ve heard them on a podcast, but you’ve never met them. Or maybe even from my perspective, I might’ve interviewed them, but never met them in person. And it’s just a fantastic experience if you can go in person so that I would really encourage people who are able to go, definitely do.
David Bailey:
You know, we really try hard to create some awesome activations. So like one thing we’ll have this year, we’ve had this already done for a year and a half. And so we’re very eager to see it come to fruition, but Tony Hawk will be there. We have a half pipe that we’re building for him to skateboard on some of his, like, I think they’re they’re called the bird group. And so like you’re at a business conference or whatever this conference is. And like literally just off to the left, Tony Hawk will be just shredding on a half-pipe, you know, and like, we’re trying to find Sumo wrestlers that we can bring in. You know, we’re trying to figure out how we can get a swimming pool put on the back of like an 18 Wheeler. Like it’s it’s not just like a intellectual experience. It’s a little bit of like the smell, the sights, the sounds, you know, it’s the full –
Stephan Livera:
One thing I enjoyed as well, even in the 2019 conferences, you had some of these gaming machines and you were using, you had Lightning. So I think Open Node had done like a collaboration to set up. So you can have like these little pinball machines and a whole bunch of other gaming machines and you would pay with Lightning and back then Lightning was still like, even Lightning today is still early, but even then it was really early. So you kind of, you know, and like, I think you literally paid one sat just on Lightning just to kind of have an experience. Right. But I think it’s, yeah,
David Bailey:
We’re trying to take that to the next level this year, too. You know, a lot of, a lot of vendors to be coordinated, so it’s more challenging this time around, but yeah, I mean, one of the things we want people to leave the conference with is to be inspired about what can be done with Bitcoin and to say, Hey, like, that was cool, but I can do it better. And like, we want people to walk away and like have their next startup idea or the next like garage project that they’re working on to spring out of this. And so making Bitcoin like front and center is kind of number one priority for us.
Stephan Livera:
Yeah, I’m actually curious then as well from I guess Bitcoin and the different narratives that exist. Right. You’ve got, you know, obviously the Michael Saylor corporate treasury style, you’ve got this kind of it, you know, maybe the individual, the sovereign individual aspect of it. You’ve got this idea of Bitcoin as F-you money. Right. I want to be able to spend it whenever I want and you can’t stop me. So I guess, how do you see those? And I guess what’s your view of that over this last, you know, year or so?
David Bailey:
Yeah. So we kind of conceptualize the content and agenda so far as kind of three different tracks of content Bitcoin -the movement, Bitcoin – the technology, and Bitcoin – the asset. And so you know, those are three very different prospects, you know, I will say like the team had a pretty big debate the other day about what exactly is Bitcoin relevant? What does that mean? What is Bitcoin only even mean? There are projects out there right now, like RenBTC wrapped Bitcoin you know, there are people that are trying to create kind of Ethereum based smart contracts that you can leverage your Bitcoin within. Is that Bitcoin relevant? You know, or is that where exactly is the line drawn between what it is and is not part of the Bitcoin ecosystem and protocol? So it’s a tough question. I don’t think we have an exact answer, but it’s been interesting to see how these things start lending together. Like, especially in the Ethereum community right now with DeFi, like the technology and the assets are blended so tightly together is pretty interesting.
Stephan Livera:
Yeah. Gotcha. So in terms of the different tracks then, is, are they going to be like, is it going to be like a main stage and then kind of like side show, the side stages going on with like tech track or what’s going on with that?
David Bailey:
Exactly. And what we’re trying to work right now is also like what type of breakout spaces where we’ll have you know, we don’t have a hackathon this year, but we’re pretty disappointed about, you know, we don’t have, there are a couple of things that we wish we had if we had had more time to find like the exact venue, but for us, like having an in-person event was the priority and just executing and making it happen. You know, we have right now two different stages, a live stream stage, and then the content for what’s called “The Deep”, which is where whale passes you access to. So the investor investor content, really startup pitches, product pitches about like, Hey, take your money and literally deploy it into this. So that’s how we’re breaking it up. I think we’ve only kind of formalized, maybe a third of the content so far. But we’re right in the throws of it.
Stephan Livera:
Yeah. And I’m sure a lot of it, as you said, a lot of it just kind of comes together at the last minute. So then you kind of have to quickly arrange things and get them into a presentable format.
David Bailey:
One thing I’m really a little bit worried about is like Bitcoin 2019. We had the smaller stage of 2019 where it was like all user submitted content. So you had like a pitch of what you want to talk about. And we were selecting the most interesting topics as one way to surface new projects. This year, It feels a little bit more Hollywood. And I don’t like, you know, it’s like, Oh, you know Michael Saylor’s speaking, he’s a really big deal. We need to get him involved. He has noteworthy things to say, but I liked surfacing interesting ideas from people you’ve never heard of. So we got to figure out how to, how to work that back in like the Brandon Quittem did his presentation on Bitcoin as mycelium now that’s, I think a huge concept. A lot of people like appreciate that at that time. It wasn’t we had Nick Bhatia do risk-free the Lightning relay rate which at that time was a pretty niche topic. So yeah, we got a lot of work to do.
Stephan Livera:
Yeah. And even if, even then the challenge that also is kind of like people’s attention will naturally go towards the big names, right? Like if Michael Saylor or Jack Dorsey are speaking, like, you know, 95% of people are going to go for that. So you kind of have to balance things out in some way.
David Bailey:
We really don’t feel like this is our conference. We feel like we’re custodians of a conference that is really for the community. And so, you know, after this year, when there’s like some breathing room, we’re going to have to assess it all, how do we do content going forward? Because we don’t want it to be a popularity contest. You know, it’s like, this is about the ideas and it’s about builders. It’s about inventors. So, you know, we got to really surface the great ideas and make sure that that doesn’t get lost in the mix.
Stephan Livera:
Yeah. And actually, that’s probably a good spot to chat a little bit about the content strategy with Bitcoin Magazine. Can you tell us a little bit, I know the strategy has perhaps shifted a little and you’re kind of doing more maybe in the podcast direction and live streams and things like that. So what’s the approach nowadays with Bitcoin magazine.
David Bailey:
Yeah. So I, you know, when was the last time we talked the last time I was on the podcast?
Stephan Livera:
Oh, it would have been before 2019 before we spoke. It would have been. Yeah.
David Bailey:
Yeah. So, you know, we basically, when we made the decision to go all in on Bitcoin part of that decision also was, you know we’re really gonna invest into bringing Bitcoin Magazine back to full greatness and we’re going to also take our entire corporate treasury and put it all in Bitcoin and just YOLO. And I think both of those things have played out really nicely since the last time I was on your podcast. CK Christian, the one and only Christian Keroles, is now the product manager and really business manager for Bitcoin Magazine. And he’s just taking it to the next level. He’s very passionate, super hard worker. And like he loves Bitcoin. And, you know, we have a rule at the company. Everyone has to be a Bitcoiner who works here now. So it’s like live, breathe, eat, sleep Bitcoin, 24/7, 365. And I think CK really embodies that. He’s brought that attitude. And you know, our, the amount of content we’ve been creating has gone up a lot, you know, we’ve been very active in the taproot activation discussion and trying to further that dialogue. We have someone Joe Rogers, who has come onto our team to lead community. Nick cantmine on Twitter, who now leads our social for us. And we’re, I signed like three new employment agreements in the past two days for new hires, at Bitcoin magazine. So that team just keeps growing. And you know, we want Bitcoin Magazine to be the number one most influential and influential isn’t the right word, like the platform to enable the Bitcoin community to discuss the important topics of the day. Like we want to give Bitcoin a true home, go at it. And I think the energy that we’ve brought the past six months has really kind of shown a taste of what’s to come, but the next six months is going to be even better. I mean, it’s no longer will there be a non Bitcoin only media publication that is number one in our industry.
Stephan Livera:
Yeah. And that’s great. And I mean, even for me, I’ve obviously I’ve collaborated with you guys and the team over the years. And I had the opportunity to do an op-ed at the end of last year as well, like, you know, just a 2020 year in review from my perspective. So certainly that was really good. And I think that’s really great really great job that you and the team are doing in terms of kind of promoting Bitcoin. And that’s important.
David Bailey:
I want to be clear that I deserve no credit in any of this. It’s really like our hardcore team of Bitcoiners making it happen. You know, the one, you know, we have several different goals at Bitcoin magazine. One thing that we have coming out soon is really revamped tutorials on how to get started with Bitcoin that I think are going to be different and new from what’s out there in the ecosystem now. We’re working on getting together like a FUD busting, dedicated resource of like every piece of news. You hear, we have to take down like Bitcoin is inefficient, for example, or, you know tether is not what’s pumping the Bitcoin price and hyper bitcoinization. I think, you know, we talked about this maybe a little bit. Last time I was on the podcast, but the price of Bitcoin is going to go to $250k, $350,000 this year. And when we get there and we’re at a $10 trillion market cap, people are going to start asking the question, where do we go from here? Like, you know, another 10x event. And now we’re as big as the public equity market. How much bigger can Bitcoin go? And the only answer to that question is really the ideological discussion of like hyper bitcoinization and it can go a lot, lot, lot higher. So I think that there’s very few resources out there on the web about what that vision could look like what that universe looks like five years, 10 years from now. And you know, we want to invest heavily into content around that topic, no matter how radical and crazy it sounds or dumb it sounds like we just want to like get people’s creative juices and intellectual juices flowing.
Stephan Livera:
Yeah. That’s a really interesting theme. And I think for those us who come from a libertarian perspective, as I know, you’re similar to me there, that we kind of see it as like it’s challenging central banks and so on, but again, people have their own different views on it. But I think it’s hard for people to kind of put a final number on what do we do, how big do we actually think this thing goes, right? I mean, people say, okay people will point back to the Hal Finney number from 2010 where he was saying, look, it could be $10 million in purchasing power terms. And, you know, and then there are people who are out there saying, it’ll be more than that.
David Bailey:
It’s one 21 millionth of all things like that’s the ultimate price of a Bitcoin. And you know, the challenge is then the question is like, well, what’s the value of all the things. And no one even can answer that question. No, I mean, like we were talking about like someone needs to build a coin market cap where all it does is visualize all the things that exist. Like there’s this many cows on the world, and if you own a Bitcoin you’re one 21 millionth of all the cows, this like people would be shocked by how these numbers would be like, wow, I’ve had 70,000 cows, like I’d have, you know, 200,000 acres of land. So I, you know, I think it gets really wild. And I think it also gets wild from the standpoint of how it transforms our society from the standpoint of like things like Bitcoin mining, the amount of the amount of wealth that is basically transferred from the Bitcoin network to Bitcoin miners, that’s like direct investment into the production capacity or the hard sciences that enable mining to happen. Like if you look at the cost inputs of mining, it’s like energy or it’s chip fabrication or it’s data center building. Okay. Well, you know, basically if mining’s eating 1% or 2% of the value of the network per year, that’s just transferring value to who can do those things the best. And I think that that will have a transformational effect on what people go to school to learn what, how quickly the pace of science happens across our entire globe. You know, if you think about how quickly mining caught up with Intel and Taiwan Semiconductors on going from the GPU mining to the, you know, 64 nanometer ASICs to like seven nanometer ASICS that timeline was, I mean, seven years, it was insane. What if that was like applied equally across all technology globally? Like we would just be living in a radically transforming times. And so, I don’t know, I think there’s a lot of societal benefits that are unseen that unless you really start exploring the idea and you start thinking from the first principle of, okay, Bitcoin is all that exists. It’s just hard to conceptualize.
Stephan Livera:
Yeah. And I guess the other interesting thing is the journey getting there, because now it seems like things are advancing in ways that enable people to use the fiat system to their advantage. Righ, an example is, you know, people like Michael Saylor issuing debt to buy a Bitcoin doing the Pierre Rochard speculative attack that he wrote about in 2014 or another example would be people talking about how miners so people talk about, Oh, okay, miners have to sell coins to pay their expenses. But then the next level now is you’re hearing miners who are saying, no, hold on. I actually just get more debt. And I use that to pay my expenses so that I can keep HODLing the coins. So I guess these are all factors where it’s really going to start ramping up.
David Bailey:
Yeah. I mean, how long before Nvidia is a, just a Bitcoin mining company? Or, you know solar city is just a Bitcoin mining, you know, like there’s going to be huge companies that are just going to convert their business models, significantly increased the amount of investment happening in those areas. Like, I’m surprised that we don’t have like a forge that’s been built yet, like a direct like Intel competitor specifically for Bitcoin mining chips. Like I think we’ll get there before long, just because of how many billions now are going into fabricating new chips. But that’s been one of the biggest constraints of like forge time for people to be able to tap out a new line of smaller chips as soon as Bitcoiners control those things, we are unleashed. So yeah, it’s gonna be awesome!
Stephan Livera:
Yeah. And so in terms of on-ramps for people, I think that’s also an interesting area as well, because, you know, obviously we’ve got the whole dollar cost averaging stuff and we’ve got even, I mean, the sats back kind of companies, right? The Lolli and the Folds of the world that kind of offering this new way for people who maybe they’re not fully sold on Bitcoin itself, but they’re happy to just start with some Bitcoin rewards and maybe that’s their stepping stone before they come down the full rabbit hole and become a full orange pilled Bitcoiner. So what do you see is like on-ramps and very viable on-ramps in this next year or so?
David Bailey:
Well, the number one on-ramp for people long-term is their capacity to earn Bitcoin. I mean, I’m a true believer that like people’s labor is that’s their number one ability. That’s the number one on-ramp. And so if we can get people to start paying people for creating value in Bitcoin like that, you know, there are no artificial constraints. As long as we define the on-ramps in our system as using the banking system to get involved, you’re shutting out over half the user base of what’s gonna use Bitcoin. You know, I also think like, you know, when I joined, when I got involved in Bitcoin, I was a young, like I was a libertarian, I was a young kid, but I was, you know, I still was like a normal person from the standpoint of like, Bitcoin’s high risk. I’ll never have, you know, 1% or 5% or 10% of my money in Bitcoin. Well, as time has gone on and I’ve gotten more and more comfortable and confident, you know, I’ve lost complete confidence in the legacy system. I mean, I look at that. It’s like, why anyone hold political money when they could hold math-based money? I mean, I don’t even understand, especially with COVID times and the insanity we’ve seen in the past three or four years. So you know, I’m kind of looking for this developing trend here with people that enter into the Bitcoin ecosystem and enter into Bitcoin, they lived their entire lives inside of Bitcoin and they never exit the system. And so like now I have 95% plus of my net worth in Bitcoin. I’m looking to get the other 5% into Bitcoin. And I’m looking for financial products that allow me to barely touch the financial system. And only like the limited number of cases I need to, but I never want to exit from the system. And so, you know, I take my payment, if people owe me money. I take my income from the business, pay me in Bitcoin. And I think that, like, that happened pretty far down the rabbit hole to be there. But every year we go, the number of people that are like that far deep down the rabbit hole grows. I think exponentially, like, I think tip like, you know, maybe a few years ago there was 10,000 people like that. Now there’s probably a hundred thousand people like that. One or two years from now, there’ll be a million people like that. And those are the people that are really, I think treading the path for all people to follow. Like this is how to completely divest yourself from the legacy financial system and be able to live a normal life. And as more and more people live entirely inside of Bitcoin, the on-ramps become less important because any economic activity that happens with any of those people that are a hundred percent all in Bitcoin, it happens in Bitcoin terms.
David Bailey:
You want me to invest into your startup? I’m going to write the investment in Bitcoin. You want to work at our company. Okay, well, we’re going to pay you in, you know, maybe a dollar denominated, sum in Bitcoin. And so I think that those on-ramps are just going to become more and more sizeable. I mean especially when you have companies, like, let’s say if Tesla it gets far enough down this path and they have 10,000 employees that overnight that they want to start paying their salaries in Bitcoin, I think those are, those are the on-ramps that really matter long-term.
Stephan Livera:
And in terms of the hurdles for people earning Bitcoin today, the typical ones you hear are: Oh, look, my payroll and accounting system, isn’t set up for this, or, you know, I, you know, the accounting is a burden for me that those are the typical burdens or hurdles that we hear today. What do you see as the main hurdles and how do you see those being overcome over the next year or so?
David Bailey:
The reasons you hear from people about why they don’t do what let’s say, payroll in Bitcoin are the same reasons that you heard from people about why they don’t accept Bitcoin at their store five years ago. And you know, at this point in time, there’s literally no reason not to accept Bitcoin, unless maybe like you’re worried about government intimidation against you or something like that. But other than that, there’s no reason why you shouldn’t be accepting it. But it’s just not a high enough priority for people. The prioritization of, you know, integrating that into your stack, which takes one hour of time from an engineer. It only shows up when all of a sudden there’s demand. And so when the price starts going up, now it’s a priority for everyone. We just talked to a fortune 500 company last week that’s about to announce that they’re accepting Bitcoin. It Was not a priority for them until Elon Musk said he was doing it. And then they’re like, Whoa, we gotta do it. So, you know, I think prioritization follows the price. And you know, I think that three or four years from now there’ll be zero excuse for not doing payroll in Bitcoin. Zero.
Stephan Livera:
Yeah. That’s really fascinating because I think at one level, Oh, sorry, you cut out there for a second. But yeah, what you were saying, there was very fascinating because I think it’s all just part of the journey, right? Obviously long-timers, who’ve been in your net worth is basically, you’re close to a hundred percent in Bitcoin, but it’s hard for people who are coming from a more Fiat mindset where they still need the access to the Fiat rails. And they’re not kind of to that level of thinking about their net worth in Bitcoin terms that they still kind of need that tether to the, you know, no pun intended, you know, to the fiat system.
David Bailey:
It sounds insane to anyone who hasn’t had 10 years of going through it and then like the shift in your mind that comes. But eventually as long as you stay part of the community, you’ll get there. And you know, I think when you think of Bitcoin as a hundred year revolution you realize that like, you know, this whole Bitcoin experiment, it doesn’t even start until Bitcoin is no longer created for Fiat currency. Like that’s the beginning of the experiment when you can’t buy Bitcoin with fiat currency anymore. And so, you know, I think maybe the next 10 years it’s really gonna matter the fidelities and the CashApps and the Coinbases, they’re gonna matter. But I think, you know, when we get to a point where there’s a billion plus people around the world using Bitcoin in a semi-regular frequency it’s going to be so common for business transactions to happen natively in Bitcoin assets that like that’s going to be the economic activity and then, in terms of the inducement of people to care and prioritize.
David Bailey:
If there’s a whole universe of economic activity going on, that you can’t be a part of it, unless you adopt the technology, you’re going to adopt it. It’s like, that’s the reason a lot of people joined the internet. There was all this stuff happening on the internet. And it’s like, if you want to be a part of it, you got to get online. So, you know, I think we’re just now getting to that point when we’re at a trillion dollar asset class, but when we’re at a $10 trillion asset class at the end of this year, like, you know, people are going to be joining in Niagara falls like.
Stephan Livera:
Yeah, right. So I’m curious. And if you had to, I mean, some of this stuff is like finger in the air stuff. Right. But as an example, people have said, you know, over a hundred million people in the world, hold some form of Bitcoin. Now maybe some of them have, and some of those might be very shallow level in terms of their kind of mental investment in understanding and learning about Bitcoin. And then you go down in a few more levels, you kind of get to, you know, what would you say are the kind of relative numbers today, if you kind of just, you know, finger in the air said how many, like hardcore Bitcoin people there are today versus that kind of larger, you know, call it a hundred million people who hold some exposure to Bitcoin?
David Bailey:
Yeah. I think Coinbase kind of revealed some of those numbers today a little bit. I think they said that they had 50 million active people who are customers who have KYCed and they have 2.1 million monthly active users that are buying every month. I think that probably means if I had to guess Coinbase has like 10% plus market share 15% market share of global Bitcoin activity. So that probably means that there’s 20 million monthly active Bitcoiners. And I’d probably put them in the camp of people who call themselves Bitcoiners. If you’re buying Bitcoin every month, you know, you’re starting down that path. And then I think that probably 10% of that crowd is like really hardcore Bitcoiners. Like, you know, like they’re in the divesting, everything but Bitcoin mode. So probably one or 2 million.
David Bailey:
But to put that into context, there was probably only one to 2 million Bitcoiners in 2015, you know, I mean in 2014, so that’s what seven years ago. So, you know, we’re seven years away from there being a hundred million people that are a hundred percent all in on Bitcoin and like, you know, use it every day in their daily lives, the revolution. I mean, that’s a lot of people. So I think we’re two or three bubbles away from hyperbitcoinization, like being here and as more and more people go into that, all in on Bitcoin camp, the carrying costs of the from the legacy system is spread across fewer and fewer users. And so, you know, if they’re hyper inflating, if a country’s hyper inflating their currency and they lose half of their users to Bitcoin, well, all of that inflation is now being carried by the half that haven’t left yet. So I think that this accelerates, I mean, each bubble accelerates this phenomenon and integration into our daily society and life faster and faster, I think.
Stephan Livera:
So, do you see it then, like what in your view would be an indicator that we’re in a quote unquote final cycle and that we are actually just not going to have a big 80% drop and actually this time, maybe it’ll be like little dips on the way up. What do you in your mind, how would you try to distinguish?
David Bailey:
I think we’re near, we’re close to the end when you have, let’s say one of the top six or seven central banks in the, in the world publicly buying Bitcoin. When you have like, let’s say the ECB or the federal reserve or I’m blanking on England’s Bank of England when you have them publicly buying Bitcoin, all credibility is lost from the monetary system, which I mean to the people who are “insiders to our financial system”, the credibility is already shot. But I think that, like, it becomes glaringly obvious to everyone when a central bank is printing money and divesting it quickly to buy a digital asset. So, you know, we’re a ways from there. It’s not going to happen tomorrow. It’s not going to happen in this bubble for sure.
David Bailey:
But you know, I think we’re not that far, the game theory kicks in fast. I mean, you got the Iranian central bank buying Bitcoin, you have the Venezuelan central bank buying Bitcoin. I bet it won’t be long before the Turkish central bank is buying Bitcoin. And like, you know, it only takes probably, you know, 10 or 20 of these people like buying Bitcoin before every central bank is. So I don’t know. I think that there’s also one, like what’s going to really blow people’s minds is that there’s way more money in the world than people realize. I think that there’s a huge game played of hiding money. And in this next bubble let’s say in 2025 people are going to have a hard time explaining why Bitcoin is worth more than all public equities and all commercial real estate in the world. Like how do you explain. That math does not make sense unless there’s a lot more cash floating around in different assets in different countries than is recognized today? I think that’s probably the case.
Stephan Livera:
Yeah. And arguably Bitcoin sucks a bit of the value out of some of these overinflated asset classes. Let’s say people are using property as their store of value on, you know, in various countries around the world. You know, even here in Australia, there’s a massive property cult, it’s all about buying property. You got to buy property. If you don’t hold property, you’re a loser or whatever. Whereas those of us in the Bitcoin world are more like, no, we actually see Bitcoin as a better long-term store of value. So you need to be holding Bitcoin instead. So yeah, but I think it’s an interesting point you make around, you know, the cycles of it and potentially it’s 2025, maybe it’s 2029, who knows.
David Bailey:
And there’s many enabling technologies that I think are really important. Like I’m very bullish on Starlink from Space X the global satellite based telecommunication system. That is such an important piece of infrastructure in terms of allowing people around the world to bypass the date that’s placed on telecommunications companies and kind of crackpot countries around the world. And so when anyone has access to a free and open internet and they have access to free and open money, it’s just going to happen faster and faster and faster. So I don’t know. And, you know, there’s the saying like he who controls money, controls the world. And it’s like Bitcoiners now control the money or the money. And now
Stephan Livera:
Its that captain meme. Look at me, look at me.
David Bailey:
I actually see this kind of corruption. And I mean that in a positive way of the political system actually happening where like Bitcoin is, or it might take control of the political realm in a way that I think a lot of people did not see coming. Like they saw like, Oh, there’s going to be this big political crackdown. And it’s like, I don’t know. I mean, if we have the money, so politicians are like super eager to please the Bitcoin community. So yeah. I mean yeah.
Stephan Livera:
Speaking of politicians, how’s how’s things been with is it Francis Suarez, the Miami mayor? I think that’s very positive that he was kind of welcoming of the Bitcoin community.
David Bailey:
Yeah. so I want to give him a shout out as one of the political leaders in the United States, who’s truly leaning the most forward on Bitcoin. And there’s a lot of people who are going to be trying to copy what he’s doing in Miami, but he’s really put his neck out there. There are people who are trying to trip him up or to turn it into a liability for him. And he has so much energy and passion on the topic that, he’s just plowing right through them, like a true toxic maximalist. So, just massive shout out to him. It was a nightmare dealing with the state of California and with the city of Los Angeles, a nightmare. And he has shown incredible leadership in making this happen. You know, we were on a call with him yesterday and he’s like, this is a strategic priority for the city of Miami.
David Bailey:
And this event must happen here. Anything that has to, any hurdles that we have it, we have a tiny hurdle. We had to deal with any hurdles that come along. It’s like this hurdle will be quashed. And this is like the most important thing happening in Miami. And I also want to give a shout out to Ron DeSantis’ office, also the governor of Florida. Who’s been very supportive but, so we’re on this call yesterday and, we haven’t announced the venue yet, so I can’t say the person’s name, but the owner of the venue that the conference will be at was on the call with us. And he’s you know, very powerful person. And he’s big on blockchain, not Bitcoin. And so Mayor Suarez is like, we forgive him that he’s, you know, he hasn’t really understand what’s happening on here, but we’ll learn and he’s going to come to the conference if you will be a Bitcoiner by the time this is all said and done, it’s like, Oh, hell yeah. So you know, mayor Suarez, if he runs for president United States, he’s got my vote.
Stephan Livera:
Awesome, man. That’s great to hear. And I think it does you know, you hear this kind of government’s going to ban Bitcoin, but really you look at some of these other examples where they’re saying, yeah, come here. We want you here kind of thing. So, you know, I think it’s a good example.
David Bailey:
I can’t I feel like I’m normally so transparent everything, but your podcast has gotten so big. I know that, I don’t want to screw myself over, but in the past couple of weeks, we’ve had multiple chiefs of staffs of senators reaching out you know, the politicians are coming around, wanting donations from the Bitcoin community, wanting to wanting to build a Bitcoin lobby. And you know, I think that it’s actually going to be a much more I don’t know, a minimal set up people think maybe so. We’ll see.
Stephan Livera:
Yeah, it seems to me like, I mean the main things, at least again, so it’s a big world out there. There’s, you know, whatever 200 countries, obviously, but obviously the US is a very important one, but it seems from my perspective, at least as I kind of talk to people in the industry and stuff, it seems like the most concern is around things like, okay, fine, AML, KYC, Sanctions, you know, some of that stuff. But other than that, it seems more like government’s actually more concerned about like stable coins and they’re are about Bitcoin. So, you know, it seems like,
David Bailey:
Yeah, of course. Yeah, no, it’s incredible. And then they’re like, you know, eager to launch their own central bank coins. That’s just going to like accelerate the on-ramp. Talk about on ramps maybe where everyone gets paid at digital us dollar and they’re one click away from dumping that and buying Bitcoin with it. You’ve just saved the biggest hurdle for us. So yeah. I don’t know. I’m very bullish.
Stephan Livera:
David, I’m also curious on your thoughts on any of the you know, peer to peer markets and peer to peer trading of Bitcoin. What’s your view on that whole world of Bitcoin?
David Bailey:
Well, we, I think we talked about a little bit earlier, but like, what are they trading into? A peer to peer trading into Fiat currency pairs?
Stephan Livera:
Yeah. Just, you know, as ways for people who want to let’s say, buy a Bitcoin peer to peer, you know, if they want to, if there are peer to peer traders and things like that, do you kind of see a role for that part of the ecosystem as well?
David Bailey:
For sure. I mean that’s just person to person economic activity and I’m very bullish on that, but I’m bearish on people trading Fiat for Bitcoin or better said trading Bitcoin for Fiat longterm. And so I’m more interested in like, what does the Chicago Mercantile exchange that Bitcoin look like? Like where can I swap out my, my barrels of oil or my bales of hay or where am I, you know, true investment grade commodities for Bitcoin peer to peer. That’s what I want to see.
Stephan Livera:
Yeah. So I guess your view then in some ways it’s like, obviously for now, you know, as much as you and I are hardcore Bitcoin people, there are people who still have fiat and they still to get out of fiat and in to Bitcoin obviously. But I think maybe your view then is that you’ll see a lot more people earning Bitcoin as opposed to like directly buying it. Yeah.
David Bailey:
Exactly, I mean, think about the dollars people have in their bank accounts. How many of those dollars did they get by selling assets that they own to get the dollars versus the amount of dollars they get from earning them from their employer? Like 99% comes from actual earned income. So, you know, like when I’m really bullish on seeing is like, I want Iran to start selling their sanctioned oil for Bitcoin natively. Like that’s a Bitcoin only market it’s for a commodity, you know, like that’s the type of activity that, you know, Venezuela. Do you want to start selling your oil reserves for Bitcoin? That I think really start building commodity markets that are authentic and that help those are the things that will help in time bring down the volatility of Bitcoin.
Stephan Livera:
All right. How about now the technology aspects of Bitcoin, you know, the developments in Bitcoin, obviously Taproot is a big feature here. But yeah. What kind of things are you looking forward to on that front, in a Bitcoin technology point of view?
David Bailey:
Yeah, so I think, you know, for hyperbitcoinization to happen, scalability is still a massive challenge. I think Lightning has, I’m a little bit disappointed in the pace at which it has been commercialized by businesses in the ecosystem. Yeah, I won’t share any, name names, or anything, but I think every company needs to take on the responsibility of pushing the boundaries of Bitcoin and like, that’s a critical thing that needs to happen because we can’t support a hundred million daily active Bitcoin users right now, not even close. And like, you know, I think the system has the right kind of incentivization models that where when fees go astronomical, you’ll see a lot more progress made a lot more quickly, but we need to be stress testing the system. I will say the lending side of what’s been going on where you can collateralize your Bitcoin and borrow against them that has been incredibly useful for people to be able to do one transaction and be able to get a lot of purchasing power for investments, et cetera.
David Bailey:
You know, I don’t know what’s going on in the secondary markets with re hypothecation. And I think that that can be a challenge we see come up, but I think lending has actually brought, taken a lot of stress off the system, you know, I’m following I’m blanking on his name, RGB, the color coins implementation. Let’s start with last on top of Bitcoin, Giacomo’s project. I think that that could be very cool. You know, again, I know that it’s not kosher to talk, DeFi Ethereum, especially with all the that’s there, but there are cool elements to what’s going on. And I think like this NFT action hyper speculative, and, you know, a lot of people are going to be wrecked, but also authentically, if you go onto the NFT gateway, like some of these tokens, like I saw one the other day that that’s a NFT, a famous artist cross with deadmau5, made a custom like beats to the art.
David Bailey:
And it’s like, that’s like a cool digital sculpture. That’s actually unique that can be done on Bitcoin. So, you know, I want us to get to the point where like the original NFTs were built on top of Bitcoin. Your pepe cash. And so you know, there’s a project out there, I think called scarcity. That’s trying to bring in NFTs to Bitcoin, but let’s get back to stress testing the system. Can we do NFTs on top of Lightning network? Can we do some of these experimental things that bring a culture of experimentation, you know, layer one has ossified, but like layer two and layer three. I mean, there’s a lot of places for people to move fast and break stuff within Bitcoin. So I hope we see a lot more of that this year. I will say that just from the conference perspective over the past, you know, let’s say two years, the pace at which new businesses are being created right now in Bitcoin that are reaching out to us has dramatically increased. Like, I mean, I would say we’ve probably had 20 businesses that haven’t launched yet, maybe 30 businesses that haven’t launched yet that have reached out to us about, about the conference, which, you know, I don’t even know if there was 30 new Bitcoin businesses of significant size that were started in all well in all of 2019. So that’s the type of rapid increase in innovation that I hope continues to happen and it needs to happen if we’re going to be ready for our hyperbitcoinization moment.
Stephan Livera:
Right. Yeah. And so yeah, I mean, look, personally, I’m not as into the whole NFT thing, whatever, but, you know, whatever people are gonna find ways to, you know, do things on side chains and on Lightning, you know, that’s cool. I mean, it all kind of, I guess in some form it’s additive, to me, the most interesting part is obviously the sound money part, which I’m sure you also too.
David Bailey:
It doesn’t work without the sound money part. That’s the whole, the whole core crux of it, but like once nd, andndyou have sound money, magic can be made to happen and I want to see people make magic, you know, so.
Stephan Livera:
Yeah. You mentioned also the lending aspect of it as well. And I think that seems to be an interesting trend as well, because people are talking about this idea of, Oh, okay, don’t spend your Bitcoin collateralize it. And you know, now disclosure, I have some sponsors who, you know Unchained Capital offer this as a service and Hodl Hodl Lend lend offer that. So just for listeners, but I think that’s an interesting area as well, because potentially the more people who use those kinds of services, now there is some risk, you know, there is a risk of being liquidated, but for the people who do it responsibly at a small amount, it could really reduce the sell pressure going into this bull run, basically.
David Bailey:
Well, at least push the sell pressure to the extremes of the bell curve. But I think Unchained Capital is an awesome business. I think how they’re thinking about lending in general is kind of maybe the evolution of where this goes in terms of choosing who your counterparty is and actually like making you take responsibility for what the counterparty risk is because of course, you know, there is counterparty risk, but yeah, I think the less money you have to pay out to the government the better. So I think lending has been absolutely incredible for allowing people to turn what would have been short-term capital gains into the long-term capital gains. And for people to be able to really preserve their Bitcoin to the best of their ability and, you know, on the lending front, I think there’s also some interesting, I’m very interested in this cycle, what the IRS, how their view of Bitcoin as an asset and how they tax it and treat it is going to change because there’s some topics that DeFi have really has brought to the surface that they have not weighted on that.
David Bailey:
I think it might kind of shift how some of the lending stuff works at the end of the day. I’m also very interested in how the Lightning lending market’s evolving. We have a Bitcoin fund on the side, UTXO management, and we’re always looking for places to get yield with our Bitcoin. And so the lending market it’s evolved a lot, but there’s also a lot of the behind the scenes. If you were to map out the flow of money, there’s a lot of shared risks that people are not appreciating, you know, like, Oh, I’m not using Blockfi. I’m using so-and-so. And it’s like, okay, well, both blockfi and so-and-so are using the same fund behind the scenes. And then that fund is using the same platform. And it’s like, Oh, like, honestly, this is way more connected. And I’m sure there will be a, Oh, moment. But you know, the awesome thing about Bitcoin is there’s no central bank. So when things blow up, you have to learn the lesson from them and the market gets better the next go around. So I think there’ll probably be a disaster that comes from the lending side, but it will probably make the entire ecosystem way more robust.
Stephan Livera:
Yeah. It’s a short-term pain for long-term gain, I guess. And I guess as this ecosystem grows you know, how in the internet circles, people talk about this idea of eternal September, right? Like, because there’s not enough, basically the idea that there’s not enough kind of OG people who are enforcing a certain culture that there’s like all these new people coming in, do you see that happening? Or do you see it more like, okay, now we’ve got, you know, we’ve got Bitcoin magazine, we’ve got podcasts, we’ve got YouTube, we’ve got all these kinds of ways that new people coming in, learn the ethos and the values of Bitcoin. What’s your view on all of that?
David Bailey:
Yeah. So this is a deep question. You know, this is probably not a good thing to say on a podcast, but I’ve really come around with the idea of Bitcoin as a religion. And I say that because like religion uses symbols and effectively what are memes in order to convey ideas that are actually deep intellectual, philosophical, psychological concepts that your average person just does not have the time or the need to completely appreciate and march down. And so you distill a super complicated idea down to like, HODL, you know, like we could go into Austrian for like three days or just hold. And it’s like, okay, you know, and like HODL is like our version of like, you know, a meme or something, you know I think that it’s a natural progression for the community to make, to memify and to develop a culture that allows our ideas to transfer via osmosis. So like, I don’t think every person is going to, it’s even realistic it’s think people, every person will be a cypherpunk, but I do think it is realistic for us to imbue religious importance to cypherpunk concepts.
David Bailey:
And that those will permeate throughout society. Because without them, you will be led astray within the ecosystem of which, what is Bitcoin, if you don’t HODL, you’ll be massively financially punished. If you don’t hold your own private keys, then you’ll eventually be robbed. Like the memes are born out of a true realization that people have to appreciate in one way or the other. It’s just how deep do they want to go and actually understanding why they do what they do. So yeah, I, and that’s one of the missions that we have with Bitcoin magazine and the conference, which you just alluded to. It’s like, we need to take Bitcoin culture and we just need to shout it from the mountain tops, because otherwise we’re going to be living in Groundhog day where the same lessons get taught over and over again. And maybe that’s how it has to happen. God, I hope not. I mean, there hasn’t been an Mt. Gox since Mt. Gox. So that does give me some hope that like we’re getting better, you know.
Stephan Livera:
Yeah. I mean, there’ve been exchange hacks, but just not as big, I guess, So the relative the relative size of them is not as, yeah.
David Bailey:
Mt. Gox was 80%, 90% market share. You know what I mean? If you told someone that 90% of market share Bitcoin was a Ponzi scheme that was going to implode and everyone who had money on that platform, you know, 50% of users were going to lose everything they had, you would think that that’s just like the definite death of Bitcoin. And it wasn’t, that’s just one of those parts of the history that I just still can’t believe that that’s how antifragile our system is. But anyway, that’s another topic.
Stephan Livera:
Yeah. I mean, people say, you know, Bitcoin it just, how many times have you seen people, have people come out and said oh Bitcoin is dead and, you know, whatever. That’s like now the meme that, you know, even if Bitcoin pumps like 5x and then it drops just a little bit, like the media people come out, they’re like, Oh, I see Bitcoin is dead. It has crashed. It is never going back.
David Bailey:
Well, people, I got the tether article that went out I had a bunch of people message it to me. So, I mean, I guess it really went viral and they’re like, you know, is Bitcoin pumping for this reason? And could this be the end of Bitcoin? And it’s like, I was like, even if it was a Ponzi scheme and, you know, even if it was 90% of trading volume, we’d still be fine because look at Mt. Gox. It’s happened before
Stephan Livera:
It’s all happened before and it’s all going to happen again. So look, David, I think that’s probably a good spot to wrap up here, obviously, before we let you go, where can listeners find you online? Where can they find the conference and where can they find Bitcoin magazine
David Bailey:
So I’m on a Twitter strike right now so you can find me at Bitcoin magazine. You can also find the conference at The Bitcoin conference (https://b.tc/conference/). You can check out all of our different media properties and events and community stuff that we’re doing at https://b.tc. And you know, please get involved, please read Bitcoin magazine content. If you have a great idea that you don’t hear anyone else talking about, please write in about doing a contribution. We would love to publish it and come to the Bitcoin conference and come in full glory espousing everything that’s fantastic about Bitcoin and you know, wear it loud and wear proud man. I mean, this is, we are the tip of the spear of a cultural revolution that’s happening right now, a true cultural revolution. And, you know, it’s the people’s money and it’s truly power to the people. So thank you everyone for listening to my rants here. Thanks for being part of what we’re doing. Stephan, thank you for letting me come onto the podcast. And I look forward to seeing everyone in Miami.
Stephan Livera:
Fantastic. Thank you.