SLP322 Perth Heat – The Baseball Team on a Bitcoin Standard

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Steve Nelkovski (CEO) and Patrick (Chief Bitcoin Officer) of Perth Heat, join me to talk about being the first sports team to go on a full Bitcoin standard. That includes players, staff, merchandise, tickets, sponsorship, and holding Bitcoin on the balance sheet. We chat: 

  • The journey of going on a bitcoin standard
  • Having a Chief Bitcoin Officer
  • Handling payment
  • The benefits of being on a Bitcoin standard
  • How it will change sport

Links:

Sponsors: 

Stephan Livera links:

Podcast Transcript:

Stephan Livera:

Steven and Patrick, welcome to the show.

Patrick:

Thank you so much for having us.

Steve Nelkovski:

We’re glad to be on, Stephan. Thank you.

Stephan Livera:

Yeah. So this is really cool to see a baseball team going full Bitcoin. Let’s hear it. So let’s hear a little bit about you guys and where you’re coming from? Just tell us a little bit about yourselves.

Steve Nelkovski:

We’re the Perth Heat baseball team, Australia’s most storied baseball organization. There’s been 10 players that played for the Heat that have gone on to play in the MLB. A couple of those I’ve known have been Graeme Lloyd who won the world series with the Yankees back in ’96 and ’98, and also now we’ve got Liam Hendriks with the Chicago White Sox right now who was just named reliever of the year. So we’re really powerful baseball organization, 15 championships—the number one team in the country. And we’re now ready to revolutionize sport with what we’re doing by operating on a Bitcoin standard. We realized this is the future of sport and we’re so excited by the announcement on what we’re going to do moving forward.

Stephan Livera:

That’s awesome. And Patrick, tell us a little bit about how you got involved with Perth Heat?

Patrick:

Yeah. I am a Bitcoin pleb through and through. And I think we’re going to start to see versions of myself—if we haven’t already—start to pop up more and more where Bitcoin has been really good to me from a financial point of view, and it has allowed me to free up my energy to pick my head up from the sand and say, Where can I be most beneficial? Where can I be most useful? Where can I get the most leverage out of the information that I have been lucky enough to acquire from people like yourself or others out there in the educating space to really move the needle? And that’s how I got involved with the Perth Heat—just the process of, you know—you can only be so long in the Bitcoin space before you start to think of yourself as a bit of an orange pill expert. You get better and better as time goes on and you start practicing your skills and drawing on where people get sucked in and what people latch onto. And that was my experience—basically having conversations with Steve late in 2019, just dropping little hints with, This might be a thing!, just on an individual level and then that starts to trickle through, and then Steve starts to notice, Okay, well, this actually makes a lot of sense. This is the way that it should work. And then—wait a second: if it works on an individual level and Steve is in charge of an organization, which is just a group of individuals who are channeling their energy at a very specific goal, why wouldn’t it be better for an organization? And that’s really how this whole process got started. And fast forward 18 months and here we are talking to you.

Stephan Livera:

Yeah, that’s great. So what were some of the early conversations like? As you were saying, you get orange pilled yourself and then you then try to now orange pill the organization. What was that process like? Was there initial resistance?

Patrick:

Yeah well it’s the same thing. The initial resistance—luckily enough—by the time that the orange pill process had started for Steve, I had had enough practice and really, to be honest, the thing that no one really talks about is just how much improvement we have seen in the baseline level [knowledge] of just your average nocoiner, right? They are so much better educated because now it’s not just the thing for criminals, it’s not just the Mt. Gox thing, it’s not the Silk Road thing. People are starting to realize, so the baseline is better. And from there, the main problem when you’re orange pilling people—at least that I find—is you’re not just describing the benefits of the Bitcoin network. You have to start even earlier than that, right? Because no one—99% of the population—has no idea what money is. Zero. They’ve never thought about it. They’ve never considered it. It’s just the system that they’re born into that seems to be working, for all they know. You know, you go to work, you feel like you can attain some things and some things are out of reach, but they never question Why. So really you have to start at that base level of What is Money in a real quick and easy way to do it. And again, the more conversations that happen, the more the ideas start to crystallize and they start to form, even in a group setting Bitcoiners are now better at explaining these things because of people like Parker Lewis, because of people like Michael Saylor. What is Money? Well, money is two things, right? It’s a representation of accessible energy. And then you go the Parker Lewis route of, Well, how are we going to describe this from first principles? It’s a tool. And a tool is a technology that can be improved. And once people start to understand that and they see it, and you say, Well Bitcoin is the next iteration, right? The invention of Bitcoin, the discovery of absolute scarcity leads to all of these efficiency improvements, which allows us to then harness more energy. And so you start to lead them down the path and you start to show, Well these are some of the efficiencies, right? Just imagine if I can give you value, if I can hand you energy digitally and there’s nobody in between us—just that one little savings, times [multiply] that by all the people on the earth, and you can imagine everyone’s life is improved by having access to more energy. We just unlocked what was previously required. You had to do it the old way. Like for Steve, I’m sure we’re going to get into—one of the main things with the Heat is that they have international players come in and they need to be paid. And the first five days that they’re on the ground here—for an organization—what they’re after is we need to get them up to speed with playing baseball, with being part of the team. We don’t want them to spend five days in a bank because they forgot a piece of paper. Now they have to communicate with another country. It takes time and energy—back to the energy thing—away from what we are paying them to do, which is to go out there and play baseball and to do a really good job. And that’s why it’s exciting to be sitting here with you because over the last 24 hours I imagine it’s been significantly worse for Steve—doing all of the media with the legacy system, the fiat world if you will, versus yourself who know all these things, and everybody listening—you have all these ideas in your mind. We can finally get to the next level in this conversation of like, What does this actually mean when Steve and I say, “This is going to change sports”? What does that actually mean? Versus, you know, the questions ar,e What’s Bitcoin, What do we do about Bitcoin? How are pro players going to get paid? We can hopefully in this conversation get to that next level. But it’s just about identifying efficiencies. People start to latch on, and then they start to figure out, Wait a second—this actually works! And that’s been the biggest step, and that was the biggest thing for orange pilling Steve and then the organization which he’s done a great job at.

Stephan Livera:

For sure. And Steve let’s hear it from your perspective: what was it like? What were some of your initial reactions to what Patrick was telling you?

Steve Nelkovski:

Oh, I was intrigued! And with every conversation I wanted to learn more and more and more, but it got to a point where learning is great, but we have to take the next step. And we could continue to learn—which we’re all learning daily, weekly in regards to the future—but we wanted to make sure that we weren’t left at the train station while we’re learning. We also want to demonstrate the benefits of operating on a Bitcoin standard. Already, if we look at the energy that’s been created over the past 24 hours, it’s so exciting. And over that process, as we continue to do major interviews and podcasts with yourself and others, within Australia and around the world, we can already see how we’re joining dots for people and we’re educating. And they’re understanding how operating on a Bitcoin standard is the way forward. It’s so encouraging to see. And as you’re having conversations with people, you can almost see the Bitcoin drop. They go, “Right—okay.” That’s how the process is. It’s actually not that complicated. It’s actually the reverse. It’s: “Yes—that’s the way we should be operating. And I’m so glad you came over to explain it for us.” And almost, “We’re so happy that you’ve decided to take this step,” because funnily enough, a lot of people aren’t thinking about it. Or they haven’t had the courage to take that next step.

Stephan Livera:

Right. And for you guys, it was important to be first, right?

Steve Nelkovski:

Oh, we want to be pioneers. We’re a progressive sports organization. Yeah, I’m always thinking about how can I better the organization? What is the next step in the process of the Perth Heat to make us better on and off the field? And for me, it became so obvious that operating on a Bitcoin standard was the only way forward. And ever since the announcement yesterday, it’s like, Yes, let’s go! Let’s bring others along on our journey. Now we can’t wait for the avalanche of teams that are going to come behind us. And we want more and more and more to join us because the more teams that are operating on a Bitcoin standard, the better it’s going to be for Perth Heat and the better it’s going to be for the Bitcoin community and the better it’s going to be for the globe.

Stephan Livera:

Yeah. And as you mentioned, The Bitcoin Standard, the book by my friend Saifedean—obviously that must have been part of your journey for both of you, right?

Patrick:

Like I said before, with each step in the level of education that is out there, it makes it significantly easier. You know, I’ve got the whole document down of basically, This is your first 100 hours in Bitcoin. And that is part of that because it [takes] the conversation to the realization that, Wait a second, not only is this possible, but it makes sense. And it fills a hole often, like Steve said before. When we’re having these conversations with people that are even outside the system and they felt like, “You know, there’s something missing. There’s something just not right.” And they’ve been looking for a solution. They’ve been looking for a reason to feel engaged in the people around them and the world around them and feel like they’re participating and doing good. And you just start that path—again, with something like The Bitcoin Standard where it makes so much sense and it’s so easy to see in it’s thinking. And you’re like, Well, yeah. I mean, how can you argue? It’s very difficult to argue with that. And the book has certainly been helpful in that process. So yeah it’s getting easier and easier.

Stephan Livera:

Fantastic. And so, in your own words, what are some of the benefits for the team of being on a Bitcoin standard?

Steve Nelkovski:

There’s endless benefits. And we’re only just scratching the surface really, but yeah, if I revert back to what Patrick mentioned earlier when we get our imports that come in from the US and around the world—you know, we’re blessed that we’ve got an incredible partnership with the Tampa Bay Rays—but that legacy system and setting up those bank accounts is just a nightmare. We have players that turn up— first they need to find a bank. They seem to be closing down daily. They’ll walk around downtown to try and find one that’s open. They eventually request them for paperwork. The paperwork they may not have because suddenly they need a birth certificate—the original. So they’ve got to come back to their apartment, then reach out to their folks back home in the US—I’ve got to get something sent over or find something equivalent. I go back to the bank the next day, they set up the account. It then takes the best part of a week for it to be processed and approved, and then Perth Heat need to pay him. But that payment process can take another four days. For the best part of two weeks, they haven’t received any payment and they’re eating crackers. I want these baseballers paid immediately and I want them on the baseball field. I don’t want them running bank errands. And then on the flip side, when they leave Australia, they’ve got to take every single cent out of that bank account because they can’t leave it in an account here, otherwise they can’t access it when they head back to the United States. We’re trying to win championships. I don’t want them asking to take out the last dollar. It’s just crazy! Like this is 2021, and we’re still operating like that. Like spare me, please—come on. Now there’s one. I need my players on the field, not in banks. And I can have all this set up even before they leave. Our whole organization has been so, so supportive of us operating on a Bitcoin standard. A lot of the questions in Australia over the past 24 hours have been about the payment and getting paid in Bitcoin and how it works. And the players are all-in and have been so supportive and excited about the process. Today I’ve had a message from my GM of baseball operations—we’ve now had a player who’s requested five years of salary to be paid upfront with Bitcoin, and he doesn’t want any additional payment at the end of that term. So he would like it upfront today. Today’s value.

Stephan Livera:

Yeah. So I’m curious then as well—of course I’m all about Bitcoin myself personally, but of course I can understand if maybe there was any hesitation on the part of the players or were they saying, Oh, I’ve never used this before. Was there anything like that or were they all just fully onboard?

Steve Nelkovski:

Now having a Chief Bitcoin Officer—and I encourage every sports team around the world to hire one—I’ll just note now: Patrick is unavailable. Long-term contracted to the Perth Heat. So anyone out there in MLB, NBA, NFL—sorry, Patrick’s contracted. But look, his understanding—I’m a fair bit behind Patrick in the journey. Hence the importance of bringing Patrick on board and giving him an important role within the organization, which right now I think is the most important role: having a CBO [Chief Bitcoin Officer] and educating us. So having Patrick guide the players and staff through the process and demonstrating the benefits and how this will work has been crucial. Without Patrick, it [wouldn’t have] been able to work. Because I’m very much still learning so much about Bitcoin every day. So have the players been responsive? They’ve been outstanding. But then today, to have one of the players reach out to our GM of Operations and ask for five years of salary in Bitcoin as quickly as possible, I think we’ve advanced pretty quickly already, which is great. And we want to continue to do that. We want to be innovative and we want our players to understand the benefits of operating on a Bitcoin standard.

Stephan Livera:

So Patrick, as the Chief Bitcoin Officer, I’m sure people are thinking, What the hell is a Chief Bitcoin Officer? What is that role, right? Tell us—what is the role of a Chief Bitcoin Officer?

Patrick:

Yeah. I mean, it is being created as we go, as you can imagine. I haven’t heard of it before, but it makes perfect sense. You know, Michael Saylor wrote the playbook on how to do it at a corporate level, right? Which is huge. You have access to public markets, you have a team of lawyers behind you, you have engineers that work at your company. You’ve got lots of resources. And rightfully so—it’s a big company. They’ve got a lot of energy to push around. It makes sense. He wrote the playbook on how to do it there. But as Steve said, there is a tsunami of small organizations like ours—under 100 employees, under 50 employees, where we don’t have those resources. Or they don’t have those resources. So then it becomes about, Okay, I’ve heard about this thing. It makes perfect sense. You see it working with MicroStrategy. You see it working with other companies. How do we get involved in that? And much like you, yourself, Stephan, has done in the past, it’s like you have to offer opportunities to educate people at the best of your ability. The things that we have learned from the space, that is what this entire transition process has been about—educating and trying to help and push down the right path and try and steer people to: these are the ideas. This is what has worked in the past. This is the options that are available to us. Because as you know, this space is changing so quickly, the infrastructure behind the scenes. [But] really for the Perth Heat, the Number Go Up technology is important—that investment, the lowering of the time preference is really important, but it’s actually the network that is achieving all of these efficiencies, which is why it makes sense for the Heat to go on. And early on, it became those conversations after the initial, “Well, this makes a lot of sense and there’s a lot of efficiencies we can find in this and there’s a lot of ways, we can leverage this to become a better team, both on and off the field.” You know, every single meeting that we had with Steve and the leadership team was: their job is to make the happiest, healthiest, wealthiest organization that you possibly can. And how do you do that? Well, Bitcoin can help you in all of those aspects. It can make you better than the legacy system. Well, if that’s the case, how do we plug into that? And then my job becomes, Okay, well what does that actually look like? Do we do we become completely self-sovereign as a company? Is that the easiest way forward? And then what is the trade off between ease—like we can jump on right now, we can take payments right now—which I’m sure Steve is going to get into about all the the interest in the merchandise from around the world of people looking for caps, looking for the jerseys that have Bitcoin on them, all of this stuff. That has been made possible because of the infrastructure that has been built around using partnerships like OpenNode. We could have gone down our own path, but it’s like, Do we jump on the train right now? Do we learn as we go? Do we get involved as quick as we can? Because like you said, it’s important to be first, right? To the Victor goes the spoils of being first and going, We’re going all in. The writing is on the wall. If you can’t recognize it, there’s thousands of hours of past podcasts where we can talk about the benefits of Bitcoin to an individual. It’s like, No—this is the next level. This is what the Bitcoin community—at least myself, when I think of myself as a Bitcoin pleb—it’s like, What would I like to see happen in the business world for this to gain traction and for the efficiencies to actually start paying off and to pay back the community? Like, this is that next step. And how do we get on board as quick as we can? So my job is just communicating with the companies that we’ve partnered up with to make sure that everyone understands, to educate with the players, with the staff members, giving them the opportunity and the option to learn: this is what Bitcoin is. This is how it can help. These are some of the ways that you could interact with it. And like I said, it’s become so much easier. I often use the analogy where it’s like selling someone—if you can imagine in today’s modern age—someone had never seen a car before. And you’re selling them on the idea of a car. And in 2016 and 2017, it used to be: the person would have to go to the car dealership, and rather than seeing a fully built car, you would just have all the parts laid out and you’d be like, That’s the engine. It drives the thing and it moves the shaft and then the wheels move and the wheels are over there and they’re made of rubber because that’s important. Whereas today, all of those components have come together. You don’t have to talk about, Well, in the future, it’s gonna be able to do this or in the future when you put it all together, it’s going to go like this. Now you just take a person for a test drive because you see the smile on their face when you’re doing burnouts in the parking lot. It’s like, This is a car. This is why it’s good. It’s not that complicated, you know? And as long as the thing works—which it does now—it just works. You plug it in. I’m sure Steve can attest to this: like going through the process, going through the due diligence of like, Hey, this is possible, these are all of the things that this can solve for us, these are all the companies that we have to partner up to make this a possibility—that was the hard part. The easy part was just plugging into the system! That’s all we did. You know, you just hook up like you’re signing up for an e-mail account and we’re in. We’re the first team ever to do it. We’re operating on a Bitcoin standard now—taking payments in Bitcoin now, taking sponsorships in Bitcoin now, holding that sponsored Bitcoin for the duration of the existence of the organization. And I’m sure we’ll get into more of what that actually means, but the role of the Bitcoin officer from now on is: yes, educating, but really it’s going to the board meetings once a month from a financial point of view and saying, What’s our strategy? It’s to HODL. It’s to HODL—forever. The same as Michael Saylor, right? I mean, why break it? That’s the idea. Like, has the investment thesis changed this month? No. That’s my job. I go home. HODL, don’t sell. That’s it. That’s how we win.

Stephan Livera:

Yeah. Excellent. And so I’m obviously very much pro-HODL myself, but I can imagine people might be thinking, Oh, but what about volatility? If things are priced in Bitcoin, how are we dealing with that? What’s your thought on that?

Patrick:

For the volatility in terms of like payment for players? Or the volatility for merchandise and things like that?

Stephan Livera:

Yeah. So let’s say payment for players. Like, were they comfortable with a Bitcoin denomination?

Patrick:

Well they’re comfortable with the idea that all of the contracts up until this point have been in Australian dollars and we’re happy to honor that going forward. You are correct that the volatility at the moment doesn’t make for the best unit of account. It’s an emerging asset—you know this—I’m preaching to the choir here. So the idea that the contracts will be denominated in Bitcoin—we will get there one day. That’s a matter of fact. If the trend continues, the volatility has been up and to the right. Like if you zoom out, the graph is up and to the right. So do we want to go up and to the right with the organization? The answer’s yes. So let’s tap into that and let’s use it for the moment. Now, giving them the option with providers like OpenNode, those give them the option to say—of course, our players, the local ones and the international ones—they’re going to have bills to pay. They’re going to have things that they need to transact with regularly right now in Australia, much like the rest of the world. The way that Bitcoin is taxed is not the most efficient for spending on a day-to-day basis for these things. So they can take a portion of their salary in Bitcoin, they can take a portion of it in any fiat that they choose that OpenNode allows for, and that is a whole host of currencies. We’re giving them the freedom. But the important part, and the difference that the Perth Heat is making, is—you know, you hear players like Aaron Rogers, Saquon Barkley, or Russell Okung, these guys are leading the charge in taking portions of their salary in Bitcoin—this is different because this is coming from the top-down, saying, We’re giving you Bitcoin. From there, you can do whatever you want with it. If you want to change it out, you can change it out. If you do nothing, if you do the default—which is what we are suggesting that you do, because we want you to be as successful as you possibly can—the default is Bitcoin. So do extra work if you want to get Australian dollars or if you want to get US Dollars. You can do that work. And we’ll help you there. But we’re going to try and educate you to make you as strong and as functional and as efficient in both the team and in your life so that you perform better both on and off the field. And I think that’s the real goal.

Stephan Livera:

Yeah. It’s going to cause change. And I think this is something many Bitcoin holders see in themselves. They start to think more about the long-term. So it might be an interesting behavioral shift that we see amongst the players, amongst employees, amongst yourselves, as you progress down this pathway, wouldn’t you think?

Patrick:

I think might be, is the wrong word! I think—and Steve can speak to this—but inside the organization, I think we’ve already seen it in the players, in the people, in the staff, at the organization. Yeah. I don’t think you can hide that.

Stephan Livera:

Steve, do you have anything to add?

Steve Nelkovski:

Well everyone’s 100% on board. It shows where the mindset is of our organization, our staff, our players. There has been no fight back at all, and that’s partly due to the exceptional education that Patrick’s provided. But I think they also are bright individuals who are seeing what’s happening around the world, and the benefits of HODLing and being involved with Bitcoin. So yeah, as Pat said [inaudible], I think we’ve seen.

Stephan Livera:

That’s excellent to hear. And I’m curious as—many people, when you come into Bitcoin, there are certain moments that are magical moments, right? The first time you ever send your Bitcoin transaction, the first time you ever recover a hardware wallet, or the first time you ever send your Lightning transactions—especially a Lightning transaction in-person. So what has that been like teaching the players and the staff? What kind of moments have they had when you see it click for them?

Patrick:

I think the biggest one, like you say—and which brings us back to that analogy of test-driving a car when you first hit the accelerator and you feel that rush—that is showing the transaction between one wallet to the next and explaining that there is no one in-between. There’s nothing that can stop that. And that is a mind-blowing experience, right? If you frame it before it happens, it’s a beautiful thing to see, and you see people start to put two and two together. It’s like, Okay, well what does then this actually mean for the future of things? Like we just eliminated—what was required before is now not required—and what can we do with that extra energy? What can I do with that time that I now have? Or that ability that I now have? How can I tap into that and make it better? And really that’s the thing that getting involved in the Bitcoin ecosystem allows people to do. It reevaluates everything that you knew about how you are operating in society at large, but also in your own life. That shifting of time preferences. And the big thing is like that’s an immediate, easy win every single time. It’s like, There’s no one can stop that. There’s no one that’s in-between us. We just sent it and nobody can trace or track it or be there or stop it or do anything with it. And you just see the players and the staff just light up when it happens.

Steve Nelkovski:

And I want to reference two totally different things aside from Patrick: one of the very, very cool things happened on the weekend with my little son, Jordy, who’s best two and three years old, and he found a coin outside in the yard and he picked it up and said, Daddy, I’ve got a Bitcoin! And to start the education process on the three-year-old—yeah, I was pretty chuffed by that. And then I think for me personally, tomorrow is going to be a significant day. This announcement’s been timed this week to coincide with our pay cycle, and salaries are paid out tomorrow. So for me as the chief executive of the Perth Heat and baseball club, to get my first paycheck paid out in Bitcoin is going to be incredibly humbling, and a day I’m really proud of. And I can’t wait then to see for chief executives around the world in all industries proudly display that paycheck when they receive it. So I’m counting down the hours to when that payment’s made tomorrow to see that go through, and yeah [for] that journey to start.

Stephan Livera:

Yeah. And are other players and the staff, are they all comfortable with Bitcoin wallets? Are they going to basically receive an automatic payout? What’s the way it’s being executed there?

Steve Nelkovski:

Yeah. I think they will continue to evolve as they see the process now map out—and how efficient it is, how clean it is. So obviously we’ve spoken about it and they understand it, but unless you’ve had those transactions—and everyone’s position is a little bit different—we’ve had a really good split of where the staff and players are in terms of how many would like to HODL, how many would like to take out payments, et cetera, et cetera. So, yeah, in Perth, in Australia, there’s not too many places that you can actually purchase or make payments with with Bitcoin at the moment. We hope with what we’re doing will certainly speed up that process and that will give them more flexibility moving forward as to how they can use their Bitcoin or if they just HODL it. So yeah it’s been a pretty even spread across the board in terms of what they’ll do.

Stephan Livera:

Yeah. And I mean even in that case, there are the likes of Bittefill, right? There are companies that sell vouchers, and there’s all these other Australian companies. So you can sort of go via the likes a Bitrefill as an in-between. So that’s one idea as well, or one thing that they can use. And also you’ve changed the whole designs for everything, right? The merchandise, the jerseys, and everything. Tell us a little bit about that.

Steve Nelkovski:

Well, it’s pretty simple. This is not a piecemeal announcement now. The Perth Heat are all-in. And for us to be all-in—that’s across the board. So we’ve redesigned our logos, we’ve redesigned our jerseys, redesigned our caps. It’s important that we are recognized as the Bitcoin baseball team. We’re here to demonstrate to the world the benefits of operating on a Bitcoin standard. And what’s the best way to do it? Well to fully embrace the community because that’s what we’d like to do. And we’ve been so thankful for the response over the past 24 hours. We haven’t released the merchandise—we’re doing that in the next 24 hours. It’s really nice. We’ve had a couple of people find some links to the online store and we’ve already had some purchases from the United States and also one from Europe. But it’s awfully exciting to show the very first Bitcoin baseball jersey, which has been designed by New Balance, our hats which have been designed by DOME Headwear. So yeah, we’ll continue to embrace Bitcoin with everything we do. The next part of that is pairing up with like-minded companies who are also operating on a Bitcoin standard. And moving forward, our partnerships and sponsorships are now paid in Bitcoin. This is the way that we’re operating. This is not just a patch on our jersey with a partnership, or this is not just one player. This is Perth Heat saying, We are all-in. We are ready. And yeah, I love the design of the jersey. So I’m really excited to be able to share those with the community very, very, very soon.

Stephan Livera:

Fantastic. And obviously you must be also using OpenNode there to take payment as well. So people can make Lightning payments, and that’s something as well, because if you’re a new merchant, sometimes they might not have Lightning yet, but in this case it’s like [snaps fingers] straight away. And so, especially for smaller value items, it’s really handy to have Lightning there so any customer can very quickly and easily get that merchandise also. And I presume as well you are also thinking about it from a tickets point of view also?

Steve Nelkovski:

Yeah, absolutely. So we’ve got a movie night here at the ballpark on the 4th of December, it’s The Sandlot, and you can go online and you can purchase with Bitcoin. We’ve also launched a Bitcoin membership, which will be online later today as well. So yeah, it’s not just the merchandise, it’s memberships, it’s ticketing, and we’ll have all ballpark concessions when the venue is open for games. Absolutely. Anything that we can offer our fans, our members to purchase with Bitcoin that will be there at the ballpark or throughout our operations. So yeah, it’s great that we can now offer a membership. It’s great that we’ve got an event in two weeks. Fans can purchase tickets with Bitcoin. And obviously the merchandise is really cool as well.

Stephan Livera:

Yeah. What’s the response been—and I presume out of your current fans, and I’m sure you’ll probably have a lot of Bitcoiners who are going to become fans—so what’s the response been out of the current fans?

Steve Nelkovski:

Awesome. It’s overwhelming in a lot of ways. And in some ways you’re always nervous about yeah, How, how will this be received? But from what I’ve noticed, it’s almost been a relief on people that have potentially been investigating or learning about Bitcoin. And wondering, Is the time now that we purchase our first portion? And what is the next step for us? But to see a company of the size of Perth Heat who are fully invested in operating on a Bitcoin standard, they’re like, Yes, thank you so much for leading us and putting all this together for us now. We are so grateful that a company has said, Yes, we’re in, because we’ve been waiting for someone in this space to go, Oh, should we, should we—Perth Heat? Yes. Okay. This is the way forward. And that’s what I’ve noticed with everyone I’ve chatted to and reading the comments across the board, has been: Thank you for leading the way—we’re now more comfortable and we’re ready to take the step ourselves. So yeah it’s been wonderful to see.

Stephan Livera:

And as the first sports team to do this fully, I guess that’s also going to put you on the map and hopefully win you some new fans. And then that means that you’ll have a whole new base of people who are buying merchandise, buying tickets, and things like that. Maybe if you could just give us a sense of how many people turn up to an average game, or give us a sense of where things are at now and where things might go.

Steve Nelkovski:

Yeah. Well look, we always think globally in terms of wanting to build our brand. We fully recognize with the announcement that this will assist us with building our presence in different markets. We’d like to take the team around the world. And there’s no limitations on what we’d like to do as the Bitcoin baseball team. Let’s bring it Perth Heat to the United States. Let’s bring it to Asia. Let’s go to Europe. There’s plenty of leagues throughout there. There’s no reason why we can’t tour worldwide. For a series here in Perth, our attendance is somewhere around the 7,000-8,000 mark over a weekend, but again, I think that’s going to explode with what we’re doing now. And I’m really excited in the efficiencies that the company will now have, which will allow us to invest in the game day experience and bringing more to the fans of Perth. So yeah, this is really only just the start of what I think we can do globally. And that’s the exciting part, is we’ve seen the reaction in 24 hours. It’s, Okay—Wow. What’s next? And how can we bring others on the journey with us? Because it’s fantastic for us to be the pioneers, but we want everyone else to join us. This is not just about Perth Heat. This is about bringing everyone else onto the same Bitcoin standard as us and us as a community reaping benefits of operating on that standard.

Patrick:

Yeah. And to add to that, just the bit about speaking with the existing fan base that has come up, one of the things that we have continued to harp on—as people are more and more interested in the process of how this actually goes down—is just the shoulders of the giants that we are standing on. Like, we are not coding this thing up to make it all work. We’re not doing anything! I mean, we plug in—that’s as easy as it is now. So basically in those conversations with Steve, it’s like one of the main benefits of doing this is: all of a sudden now, as a CEO, Steve has just hired yourself, Stephan. He’s hired Jack Mallers. He’s hired Pomp. He’s hired Michael Saylor. Everyone now is essentially improving the baseline of what we are operating on as the Perth Heat. Everyone is in the system. We get access to all of those individuals. And our message to the fans and to every other company that has reached out—you know, in this process, working with the different partners that we have, word gets out of, This is what’s happening, and you start to talk to a few other organizations like ourselves, and they start to get whispers of these things—and the thing that we have been passing on is that this is as easy as you can possibly make it. The hard work is being done by all of these people around the world that we will never meet. And we get to tap into all of that, doing nothing. We are just benefiting from the system that everyone else is doing. So that allows us to then go Well, okay, if everyone else is taking care of those things—you’re taking care of the education process, Bitcoin core developers, they’re taking care of that, other people are doing other things, what can we do? We can do sports. Well, what value does sports actually bring to the network? And that’s the next level—like people realizing, Wait a sec, this infects every single area of society, right? Why are professional sports run the way that they are? Like, that’s a huge topic that is completely ignored and it’s all based off of the money. Everything comes back to the fiat system. It permeates into everything. And that’s why not only is this going to change for Perth Heat—which is important, it’s huge as an organization to be able to use this leverage—but the sporting world will never be the same. And it’s not just because of us. It’s not just because, Okay, some team in Perth decided to go onto Bitcoin standard. That’s great. There’s a tsunami of organizations behind us, because it will change what individuals want to get out of sports. Why do professional sports exist in the first place? What is the utility that they have that they provide to the system? What is it? Nobody ever goes that far because you can’t. Because you get stuck in the process of, Well, how do we make money for next season? How do we get sponsors for next season? How do the players get paid for next season? I need all my money now because who knows what might happen? And the fans—the exact same thing. They’re just used to seeing a watered down version of why sports exist in the first place, especially professional sports. And we are aiming to change that. But the whole goal this entire time with the fans and the company alike has been, This is an easy process. We are tapping in to all the hard work that has done been done before us. And as someone like myself, just a pleb looking to say like, Well, what would I want to see in a company? What would I want them to do? Yeah, I would like them to pay players. You know, that would be really nice. That would be special. I’d like them to pay staff. I’d like them to let me buy stuff with Bitcoin. I’d like them to hold Bitcoin on the balance sheet. I’d like them to go—as Steve said—I don’t want someone pussyfooting around. I want someone to go all-in. Let’s see! This is it. This is the experiment. Does it work? If this works, we win in a huge way. You know, this is not like a, Well, we get 10% more efficiency. No, the salary that Steve is paying out this year to the players, that will be the equivalent to what the New York Yankees will pay in 2035, right? Like the leverage that you are able to gain from the system—no one is bullish enough. It’s not possible to be bullish enough.

Stephan Livera:

Right. And so, Patrick, I mean, that’s a great topic as well, in terms of changing sport. If you had any predictions about this, in what way do you think Bitcoin will change sports?

Patrick:

Every aspect. Every aspect of sport when it trickles through to the players, as you start to see—and probably the biggest idea is just that shift in time preference, right? As an organization—a shift in time preference—we’re able to build for the future. If so much time is dedicated to things that mean absolutely nothing to the end product. So much time—like Steve mentioned—the players going and having to do all this bank stuff. It’s like, No, their utility in society is to get better at playing baseball. And you say, Well, okay, what sense does that make? How does that actually help? You know, if you understand what money is, if you understand that money is energy and that it is a tool for exchanging energy, we need to come up with ways to be more efficient. We need to innovate to be more efficient. Well, how does baseball fit into that? It doesn’t make a whole lot of sense at first, until you realize that the whole benefit of professional sports is that it is there to teach and to inspire the community around them, to show off what hard work looks like, what perseverance looks like, what overcoming difficulty looks like—everything that is not high time preference—everything that is low time preference. You have to practice to be the best, right? That’s hard to see over a lifespan of an individual, but if you go to a game and you see it in three hours and you follow along with the season that takes 12 weeks and you start to see, Oh, they got knocked down there. They came back. That inspires everyone in the crowd. It teaches them a lesson that they can then go out and use that information to say, Oh, now I can unlock more energy in my own job. I can do my best. I can try a little bit harder. I can do these things. I don’t have to worry about when the guy hits a home run, he throws the bat in the air and he’s shouting and chanting and this is all me—look at me, give me more fiat, give me more money as quick as you can. It’s not about that. It’s about: the main goal for professional sports is inspiring people to do better, to take the community and make them do better. Inspire them to do better. Because then that provides value and it provides utility because you are giving them a show of what life is like in a three-hour time span. And that is worth something. And we’ve gotten away from that, right? It’s become entertainment. And yes, it is entertaining to watch along with the game, but there’s deeper purposes behind why they exist in the first place. And Bitcoin unlocks that. It was previously not accessible. Bitcoin allows that to happen. And I think it’s going to be a huge change. Not only in baseball—it’s in every professional sport, right? These things have been polluted with this fiat mindset. And now slowly but surely with announcements like this and players around the world like Aaron Rogers, like Russell [Okung], like all these individuals who are realizing, Wait a second—okay, I can start to plan for the future. How do I then go out and be the most productive person to society around me? Because I know if I get better at my job playing baseball, that adds energy to the system. And Bitcoin—the unique thing that it does—is it takes all of the accessible energy in the world and it caps it at 21 million. It stuffs it all in there. So if you are an owner of that supply, if someone anywhere around the world finds more energy, you can only transform that energy from inaccessible to accessible. If we’re able to control more energy, they shove it into the system. It doesn’t matter where they are—you benefit, right? That’s why the HODL mindset works, because you are doing the most altruistic thing that you can possibly do, which is: you have unlocked energy somewhere out in the world in your job—it doesn’t matter what it is. The only way to get Bitcoin—there’s only one way, really: it’s exchanging energy. The miners are doing it. They’re holding it. Then you’ve got to get it from them. You’ve got to give them energy. They take it out of the system. The Bitcoin system is self-regulating. If you take it out of the system and you use it and you don’t come back with more energy, what happens? You get eliminated from the system. You’re not able to buy back as much control of the total energy supply. So you’re out. So it rewards people—it’s self-regulating—it rewards people that put energy into the system and say, I’m not going to touch it. Because there’s people out there that can use it more efficiently than me. Unless I have a really good idea, then I’m going to take it out of the system and I’ll come back with more—and everyone is going to win. So it’s the tip of the iceberg of what is going to change from announcements just like this—you cannot be bullish enough. Even like the infinity over 21 million, it’s like, that’s really hard to picture—but it’s true. And the effect is like a flywheel. It only gets faster. It only gets faster, because the more that people realize this, the more that we are able to innovate, which makes us more efficient, which gives us more access to energy, which goes back into the system, which happens again and again and again. And because the price of Bitcoin—for the very first time you have this immutable ledger that cannot be altered, tampered with, manipulated in any way—all of a sudden we have the perfect information. It’s the hive mind of human beings. That’s what has come together in this. Because it’s a form of intelligence that we never had access to before. It is everyone speaking the truth to each other at all times. The transactions on the Bitcoin network, that’s the data. The data—which cannot be fake, can’t be altered in any way, can’t be forged in any way—that becomes the information, which is the price. Now the price—that information turns into the knowledge. And we apply that knowledge, the intelligence of: where do we allocate energy to? How do we allocate the energy? How quickly do we do that? We don’t even have to talk to each other. Human beings don’t even have to talk to each other. We know for a fact—I can tell. It’s back to dergigi’s idea of The Map is the Territory. Your head will explode if you think about it long enough.

Stephan Livera:

Yeah, that’s awesome. And I think this is so many things that’ll really change as more and more people adopt a Bitcoin standard, a Bitcoin mindset, and really start to think of it like if I’m saving and I’m valuing my net worth in sats or in Bitcoin—and so it’s such a fundamental change. I’m also curious—and I think that’s also part of what helps—once you’ve really built up your conviction, that’s also what helps you if there’s a bear cycle or if there’s a dip, because obviously it’s easy to sing, Rah-rah, look how good it is when there’s a big bull-run happening, but it’s actually also dealing with these things that, like, Let’s say there’s a dip. Let’s say there’s a bear market. And being able to actually realize: that’s an opportunity to stack more sats cheaply, or at least relatively cheaply compared to if the bull run just continues apace.

Patrick:

Absolutely. And I think this is something that I have found in conversations with Steve, [and] in conversations with everyone that has been orange pilled. There is a moment where like—you’re into Bitcoin for a while and you start to see the benefits. Like you say, it’s really easy in the bull runs. But I think you become a veteran Bitcoiner when you wake up and you see that it has gone down and you’re excited. It’s like: now’s my chance. Because sometimes in the morning you’ll wake up and you’re like, Oh man, I gotta get more. I can’t, I can’t—it’s gone up too high. Like, it’s going to run. People are going to find out. You know, Michael Saylor talks about waking up in the middle of the night and being like, I am so behind the curve. I’m under-allocated. Like this thing is gonna run away. Other people are going to find out this information, because people like you are out there doing podcasts like this. We gotta stop this! You know, you want everyone to do good, but it’s like for the past 12 years now, the Bitcoin community has been pushing this idea up this hill. And you just feel it. You feel that it’s just cresting over—this giant rock is cresting over the hill. And it is about to run so quickly. And it’s about to change so quickly. It’s just a matter of time. And like you said, there will be bear markets—there’s no doubt about that. But it’s about educating and building that conviction, and hopefully we’re doing that with the organization.

Stephan Livera:

Yeah. So look what’s going on in Australia. For listeners, most of our listeners are actually not in Australia. So Commonwealth Bank of Australia—the biggest bank in Australia—recently came out saying, Yeah, we’re going to start allowing customers to buy, hold and sell Bitcoin in the app. And now we’ve got a sports team going all-in Bitcoin. What’s going on in Australia?

Steve Nelkovski:

Well, it’s great. This is what we’d like to see and we encourage more of it. So I think probably in reference to the rest of the world, we a little bit off the pace. Naturally, yes. But you know, with announcements like our own, with CommBank, there’s a partnership in the AFL that the Western Bulldogs have—this will continue to to educate and lead the way. So yeah, we encourage more. We’re excited by CommBank’s announcement a fortnight ago in terms of their position and naturally now we expect others to follow very quickly in 2022.

Patrick:

Yeah, you have to imagine the Commonwealth bank thing—I mean talk about putting—people from outside Australia don’t know just how big an announcement that is. If you’re any other bank across the country and someone comes out and says that and you haven’t been paying attention, you’re behind the curve by 24 months. It’s going to take you that long. You’re going to have to get a team together to figure this out. And the best part is the brain drain that is happening from those organizations to ones that are in a Bitcoin standard. Like the amount of interest that we have had just from coming out with this announcement. People want to be involved in this, the younger generation who are eyeing up the potential. It used to be that those minds would go to your places like Commonwealth bank or ANZ or any of these other bigger banks here. The youngsters are recognizing, Hey, wait a second. This legacy system, we call it legacy for a reason. They’re in trouble. So you’re just now starting to see that shift. You’re just now starting to see these things fall, and it will be one after another after another. And pretty soon, this news—which is why it’s important to be first here—this won’t be news anymore. Just like the El Salvador news. It won’t be news when Romania does it, when Pakistan does it. Like, it’ll just be common. It’ll just happen. And if you’re ahead of the curve, you’re going to reap the benefits of that. But really in the end, everyone gets the benefit of it. It’s just how outsized will that benefit be?

Stephan Livera:

Yeah. Now I don’t want to be like a Debbie Downer. But I want to ask this question just because I think listeners might be thinking it, or someone might be thinking about it—the tax consequences. So if it’s treated like a sale on spending of coins, is that gonna cause an issue because of the current tax laws? And I’m just thinking out loud, maybe in practice, it means people or employees or whoever’s receiving their payment in Bitcoin has to think, Okay, how much fiat do I actually need for my day-to-day living expenses versus, my savings rate is X percent, that’s how much I’ll take in Bitcoin. I’m just curious what’s been your thought there, and what’s been the approach in terms of how people are thinking about that aspect?

Patrick:

Yeah. I think it’s a matter of education. It’s true, like they are going to do everything in their power to make this as uncomfortable as possible because it’s an emerging asset that is completely eating everything that it comes in contact with. It’s scary to the legacy system. So right now, yes, there are some inefficiencies in the way that it is taxed and it prevents it from being used as a day-to-day currency. The kind of merchandise that we are offering now, the kind of ticket sales, all those things that the Perth Heat are doing at the moment, really that is to get the community excited about the possibilities. That you are basically taking a hit if you wanna participate in order to support startups like this, like organizations that are doing this. But it makes perfect sense in terms of the staff, Steve, anyone else that is taking their salaries in Bitcoin—you really do have to think through the process. And that is the Chief Bitcoin Officer’s role here is just, Hey, Hey, Hey, everything is good. It’s all beneficial. If you think about the tax implications though and how it works here in Australia, the trade-off is: would you like your money to increase in purchasing power by 100% a year and pay a little bit of tax, or would you like to lose value every single day? Have it sucked away from you because someone else is in charge of the ledger? The choice is up to you. And very rarely are you going to have individuals say, Well, I’d rather have someone else in charge. It’s like, No, that’s just not the way it works. And of course, but these are the things that is very hard outside of a podcast setting like this, where we have a little bit of time with people that have an understanding of the implications inside of the system and inside the legacy system—it’s hard to get that information out. So I don’t envy Steve having to do all this media with the mainstream media, just because you get asked the same questions and it’s the same thing, and it’s really hard to educate in that process. But the deeper that you go—like any rabbit hole—the deeper that you go, the more you start to understand, Oh, I see what’s going on. I see why this is happening. And then the question becomes, Well, how do we position ourselves, even against all these odds, to take ultimate advantage of it?

Stephan Livera:

Excellent. Yeah. And sponsorships—what is changing there? Are you trying to, again, denominate in Bitcoin there? Or start off in AUD terms and then change over in the future? What’s the thinking there?

Steve Nelkovski:

Bitcoin! It’s pretty good. Like all our partnerships moving forward are in Bitcoin. And we’d like to pair with like-minded companies. I think if we say we’re all-in, we need to behave in that way as well. So yeah, we’re open. And our assets here are on the table across the board. We do what we can do with the jerseys, what we can do with our naming rights, what we can do across the board. We would like to partner now with the community. If we’re going to be the Bitcoin baseball team, we want to be fully engaged with the whole community and demonstrate the benefits moving forward. So yeah, simple answer—Bitcoin.

Patrick:

It’s also interesting too: you hear so many of these announcements that have happened even in the past 48 hours since the Rockets and the Lakers deals and all these deals just floating around—because people are starting to realize in the exchange world that the exchange is the new bank, right? And how often do you change banks? So it’s about legitimizing yourself. If you are a company out there that wants to show to the world that you understand where this is going and you want to be first there, you have to get out there and you have to legitimize yourself and you have to partner with like-minded people to make that available. Because as soon as you do, as soon as you experience that first Bitcoin purchase, very rarely are you going to then go from Commonwealth Bank to ANZ or whatever it is. That’s the next layer. So it is like a race to this point, especially just given the last 24 hours and the response from companies that we have seen. It’s been so exciting to realize that folks have been waiting for an opportunity like this to say, Okay, this is our chance to get behind an organization. And it’s going to be fun to see where those announcements go, and to see where that interest has been. But like Steve said, we are open for sponsorship in Bitcoin. That’s it.

Stephan Livera:

Yeah. I think that’s going to be a really cool thing to see. And as you were saying, being first is important here because you are the Bitcoin baseball team. And now if someone else tries to do that, it’s not going to have that same kind of ring to it. It’s not going to have that same kind of flair. And I’m sure you will benefit a lot from the press that will come out of this also. So I think you’ll get a good, solid benefit out of that. And anything else that you wanted to mention about this? I think I’ve pretty much ticked off most of the things I was interested to ask you. Is there anything else?

Steve Nelkovski:

I think probably in a sense, if we’re wrapping up, we just really want to be thankful for the community who’ve embraced allowing us to come in and even terming ourselves as the Bitcoin baseball team. We understand there’s a responsibility there as well. But yeah, it’s been so humbling with the the reaction we’ve had and the support we’ve had in the past 24 hours, but also the support that we’ve had by tapping into the network to get us to this to this point. Everyone we have communicated with have been so, so supportive and willing to help and to educate and to get us to this day. And we can’t thank everyone enough for giving us their time so generously. I have absolutely loved it. You know, Patrick’s certainly more advanced in his education than what I have, but everyone’s time for us has been wonderful. And we’d love to say a collective thank you for everyone who we’ve come across so far on our journey. And then we’d like to say Hello to everyone in the community. We are a Bitcoin baseball team and we hope we represent you in a really, really positive light. The future of sports has started, and we’re excited by our journey ahead.

Stephan Livera:

Fantastic. Alright. Well let’s leave it there then. And listeners who want to find you online, where’s the best place for them?

Steve Nelkovski:

Online we’ve got a website perthheat.com.au. I’m obviously Twitter @perthheat on all platforms. So yeah, we look forward to engaging and moving forward.

Stephan Livera:

Fantastic. Well, thank you for joining me, Steven and Patrick.

Patrick:

Thanks for having us.

Steve Nelkovski:

Cheers.

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