Conza (austro-libertarian writer and organiser of Mises Seminar Australia) joins me on the show to talk about praxeology, and common bitcoin misconceptions. We chat:

  • Praxeology basics
  • Why it’s not ‘mere preference’ 
  • Why accuracy is important
  • Classifying bitcoin vs IOUs
  • Inaccurate analogies about energy, time, violence/weapon



Stephan Livera links:

Podcast Transcript:

Stephan Livera – 00:00:08:

Conza welcome to the show.

Conza – 00:02:38:

So far thank you. It’s good to be here.

Stephan Livera – 00:02:40:

Yeah. I’m big fan of your work online as our friend Saifedean and says you’re like the attack dog, the guy who just kind of knows every little point about every little quote, whether it’s Mises or Rothbard or some other Austro Libertarian legend. And I wanted to get you on and hear a bit about your perspective as an Australian Austro Libertarian and get into some Bitcoin misconceptions because I think there’s a bunch out there. But yeah. So for people who haven’t heard you, of course I recommend my friend Saifedean episode as well. But just for anyone who hasn’t heard that one, tell us a little bit about yourself.

Conza – 00:03:16:

Yeah, well, probably about 14, 15 years. I’m like a product of the Romper Revolution. You could probably see the the image in the background kind of he was my first, you know, the pathway introduction to these ideas and very much gone down that rabbit hole around 2007. And from there it was no labor of love, but like almost autistic or obsessive with just, hey, there’s this to throw myself under the bus, just like the love of passion, of intellectually honest is kind of a key principle I have and being open to reason. And it was just going down this rabbit hole of my word. There’s this whole school of knowledge like, why does Ron say what he says? And I was parroting that for a while, but it was then really like thinking about I got tripped up on a forum, one of Ron Paul forums or one of those fields way back, and it was, okay, why does he think what he thinks? And it was Austrian School of Economics, you know, what Mises and, you know, Rothbard. And so from then on, it was instead of studying university, it was up at 03:00 a.m. Reading journal articles just devouring and getting my mind blown in a variety of different ways and just that. And on top of that, with Libertarianism and how they pair together. Yeah, it’s born out of a passion for justice and an original point of going, I’m completely ignorant, and being kind of seeing the light of what Ron was saying. But it was also where he was saying it was kind of proof of work. He’s in the Republican debates and he is on the stage with the Republicans and calling them more warmongers and making these some emphatic points to just hit home to myself being a young person who is more idealistic. You’re like, wow, that makes complete sense. Although the free market side is a bit radical. But you then learn, you go down the pathway and give it a benefit of the doubt and then wait, you learn. You read Human Action and you read Economics in One Lesson and Bastiat’s The Law and you get all these introductory texts and away you go. Yeah. So that’s kind of my bit of the background about the Austrian Economic side and Libertarian side. And in Dovetails, I looked at this the other day, everyone’s kind of the story of when you first heard about Bitcoin, where were you when it was in the Mise’s Community Forums. Like, August 7, 2007, 2010, sorry. And someone had piped up like, they’re going to be paying taxes. It’s almost going to end the state. And I kind of was critical of that. I was kind of looking back on it when I did the other day. We got the archives are still up if you want to check them out at Mise’s Community. It was like, wow, I was kind of right. I don’t think it’s still going to end this day. It’s going to provide the rich foundation for the intellectual, intellectual foundation to be outside the system and fu. Money is a good freedom. Money is the good kind of monikers that symbolize that. I’ll summarize that, but it allows. So I was like, all right, because there’s taxation in Swedish cantons accepting Bitcoin for taxes. And so it’s like there’s still an avenue, I think, for these liberty related arguments in Austrian Economics to help make this case against the state, because Bitcoin is all about separating money in state. So there’s a lot of symbiosis there. And, you know, partly I was right specifically, but wrong in all these other ways in terms of I had a similar mindset of the Peter Schiff argument, like, not so much value is intrinsic, but it needed an objective use value using Mise’s Regression Theorem, tracing that back to a commodity or like an other use case. And I was wrong. Konrad Graf I give a lot of homage to and respect to, commits me while I was wrong and early 2013 or so. But, yeah, that’s kind of the origin story of sorts, and sitting on the sidelines for quite some time, foaming in a little later. Not this class, but previous class, so not an OG, but I’ve been on the sidelines for quite some time and very much fully loving the community and the pathway we’re all on now.

Stephan Livera – 00:07:46:

Yeah, for sure. And I think you mentioned Konrad, and he was also one of my early influencers, if you will, right. Like back in 2013 when I was a noob and I was learning it was Konrad Graf, Tuur Demeester, Trace Mayer, Roger Ver back then before he went Bcash, and of course, my friends, Michael Goldstein, Pierre Rochard. I think they were probably some of my initial influences at the same time that I was talking and writing about Bitcoin. And so I think one thing that I want to hit as well is this whole well, we’re going to get into Praxeology and all of this stuff, but I think the high level way I want to come at it is when I talk to people about Bitcoin or sometimes I see this sentiment out there, people talking online about Bitcoin or they’ll say, oh, you Libertarian people, you’re just kind of coming at it with your ideology and you kind of want it to be a certain way. But they sort of make this argument as though it’s like preference. Right. I’m curious. From your point of view, why is it not just a preference or certain aspects of it not like everything about the Bitcoin of you is ordained in stone or whatever. But why is it that certain aspects of this are not merely a preference?

Conza – 00:08:56:

Yeah, great question. And just before kind of diving into that, I wish there was a bit more you’ve discussed this as well, like terms of Libertarians angles. Like, if you’re coming from an ideological kind of point of view, it’d be like, well, I wish there was a bit more of the case where with Libertarians we’ve engaged with it’s like, this is almost the solution of separation of money and state. Before you hear about a bit of a tangent like the Taxi cartel, I’d be like, that’s one of the last things that would get wound back. But then, practically speaking, the existence of Uber comes along and it’s like obliterates that passionate discussions, theoretically with friends like, who heard about Uber early on, they’re like, that’s insane. You’re going to jump into random strangers car and it’s a much bigger proposition to convince them. And then literally booked it. And he came along, his lawyer, and his mind was blown. And then, practically speaking, you don’t need to make those little arguments anymore. Similarly with Bitcoin and separation of money and state, like, what do you mean? You get rid of Central Bank? That’s crazy. Of course we need the state to define what money is and all that angle. It’s like, well, Bitcoin the practical example. It’s like proof of work. It’s there. It’s working medium exchange. And we’ll go into that a bit more. But yeah, just on that tangent, I thought, yeah, it’d be good. Some of Libertarians don’t haven’t been as that practical mindset of like, we’ve been pushing to various communities where among in and I wish there was more uptake. Maybe we can talk a little bit more about that later on about why. But yeah, coming back to your question about why is it not just a preference, like a personal opinion, right? You always hear that that’s just your opinion. And it’s like one thought, your individual hot take versus my own individual hot take. And it’s this kind of sea of almost there’s no objective real truth you can lock down on. It’s a bit nihilistic, it’s a bit, well, you know, oh, that’s just your your opinion. So the rich body is a praxeology, which we can get into. It’s just the logic and science of Human Action. There’s a lot of different ways you can come at it from a philosophical point of view, like a Kantian take. So it’s like a priori the knowledge is prior to experience. And you’ve got a posteriori, which is knowledge that’s post experience. So it requires experience. Or there’s an Aristotelian kind of philosophical take, it’s all about it’s self evident or it’s based on axioms self evident truths. So with the commentary that Austrians and libertarians or praxeologists come up with, it all is based, it’s descriptive, it’s not ought, it’s not prescriptive, it’s essentially value free taking a scientific approach. And it’s all about not having imparting unscientific premises or preferences in the body on the field of knowledge that it is. So kind of the praxeology method begins with the self evident reality of human action and it’s some immediate implications establishes universally valid laws of human action, laws that claim validity without respect to the place, time, race and nationality or class of the actor. And yeah, the easiest way to summarize it is it furnishes laws in the form of if X and Y remains unchanged, then Z will result. So at its core, yeah, it is based and follows the axiomatic deductive approach. It’s like based on logic. It’s akin to apply logic and economics being one of the biggest, best developed branches of praxeology. And from that you start at the premise that with the axiom that humans act, they use means to obtain certain ends. The fact of scarcity is involved, there’s all these different little avenues can add. But at the core of it, it’s not an opinion in the sense of if the process of there’s no flaw in the process of deduction. So it’s not like we’re just like all opinions are like, for one better word, god given or absolute. It’s like there’s a deduction process. And if there is a flaw in that deduction, like pointing it out is valid, but if there isn’t one, it’s conclusions that are reached along that line of chain of reasoning they yield essentially must be valid out prior because the validity ultimately goes back to that ultimately goes back to nothing but the indisputable action of axiom. And it kind of helps. The element is like a mental tool, right? And we can go into some examples in a little bit, but if the situation changes, like you might be operating from Robinson Crusoe, kind of like an individual perspective trying to make the principles clear in a Robinson Crusoe world, this is what happens. It’s obviously I prioritrue only for that circumstance and what it is. So it’s like think of it as like a formula, as being cast of sorts or it’s like a mathematical proof, essentially. And then, yes, in the real world does this apply or not. And that’s, I guess the idea of economics as praxeology. You don’t need to if, for instance, on the other hand, the situation hasn’t changed and it can be identified as real, perceived and conceptualized by real actors and then the conclusions are obviously the appraisal true propositions about the world as it is. And that’s the key distinction between schools of economic thought like economics. There’s variety of different schools. That kind of is the key difference between the Austrian School and the Chicago School or the Monetarist, the Keynesians, Neoclassical, Marxist. It’s that the ultimate disagreement between Austrians and their economic colleagues is their pronouncements cannot be deduced. Also, the Austrians pronouncements can be deduced from the axiom, axiom of action, and they stand in clear cut contradiction to the propositions. Also, the colleagues stand there the arguments of Keynes, Marx, Friedman, that it’s all standing in clear cut contradiction to the proposition that can be deduced from the action of axiom. So often, it’s like needing testing to be done. We need to go get a grant often handed out by a Central Bank or university. It’s like, okay, we need to go test to see if the minimum wage increases or decreases employment. And it’s absurd proposition, but there’s some other clear cut practice, logical laws, equitable laws.

Stephan Livera – 00:16:11:

Yeah. So let me summarize, I think. So Austrians relates to the method of reasoning, and I guess it comes in that bucket of epistemology, right? It’s how we know what we know. Right? That’s kind of the bucket that we’re dealing with here. And so, as as I’m sure you’re very well aware, a great book to read on this is Economic Science and the Austrian Method by Hans-Hermann Hoppe. Great book. He really spells out very clearly the chain of reasoning. And so what we’re trying to get at here is this idea that it’s not just merely subjective preference, it’s actually a kind of objective reasoning style, and it’s deductive. So the idea is we start from certain ideas. Like, so, for example, man acts purposefully. Right? We start with that. Right. Because if you didn’t want to change something, then you wouldn’t act. So therefore you have a reason you’re acting purposefully. And then from there, you can sort of reason out various other ideas, like this idea of the law of diminishing marginal returns or various ideas like that. Right. So could you give us a couple of examples of that chain of reasoning so that people can be a bit more clear about what’s going on here?

Conza – 00:17:18:

Yeah, absolutely. That was probably one of our oversights with the Seiffedine giving elaborate all the clear cut examples. So, yes, some examples of those typical economic propositions. And one being. So whenever two people, A and B, engage in voluntary exchange, they both must expect to profit from it, and they must have reverse preference orders for the goods and services exchange, so that A values what he receives from B more than more highly than he gets, more highly than what he gives to him. And B must evaluate the same things the other way around. Or consider that whenever an exchange is not voluntary but coerced, one party profits at the expense of another, you’ve got, obviously, the law of Marginal Utility, so that whenever the supply of a good increases by one additional unit, provided each unit is regarded as equal serviceability by a person, the value attached to each unit must decrease. And then any additional unit can only be employed as a means for the attainment of a goal that is considered less valuable than the least valued goods satisfied by unit of good. If the supply were one unit shorter. And then you’ve got Ricardian law of association. There’s minimum wage, like as an example for minimum wage laws, essentially when they’re enforced, they require wages to be higher than existing market wages, and an involuntary employment will result. And then the last one is like a quantity of money. So whenever the quantity of money is increased, while the demand for money to be held as cash reserve on hand is unchanged, the purchasing power of money will fall. So similarly, like FX, the quantity of money is increased while the demand so then why is the demand for money to be held as cash reserve is unchanged? Then the result will be purchasing power, money will fall. There’s some, I guess, clear cut examples.

Stephan Livera – 00:19:14:

Yeah. And so just to contrast an Austrian way of thinking with, let’s say, what you might see at university, they’ll get some parts right? They may say, okay, we’re trying to do things under this idea of ceteris paribus, right, which is that same idea, which is that ladder, and saying for basically all other things equal, we’re going to try to assess this. But then what happens in typical university in the fiat universities is they will get into these crazy economic models where they’ll start with this crazy idea of a perfect and then relax assumptions. Or they’ll start and then do all these really complicated computer, mathematical, statistical modeling and then come out and crunch out some idea that see, in this example, historically, at this time in this place, when we change this one thing, but the problem is there’s no alternate reality to go to and test, right? It’s not like we can go and test. Imagine Australia with a minimum wage of $10 versus Australia with a minimum wage of $11. Well, it doesn’t exist like that. And at best, what you can find is maybe like a so called natural experiment, like, let’s say maybe two neighboring towns, maybe one town has this rule, another town has that other rule. But fundamentally, that’s the reasoning issue. That’s the problem with the reasoning that I think an Austrian would take issue with that and say, hey, actually you’re not reasoning from a priori, you’re not reasoning in a deductive way. Right.

Conza – 00:20:38:

And often the premise there for that they’re modeling, whether it’s mathematical modeling or the premise of our perfect competition or things that aren’t real, per se. Von Mises has a good point that there’s no constance in human action. And so there’s always with these formulas, there’s a human element to it. And I think, why do we think in this method or like is more appropriate? So Mises have got this quip that used to use these lectures. It’s kind of obviously the purpose of the end of science is to know and understand reality. Right? And we accept the fact Austrian praxeologists accept the fact that there’s a different methodology required for the human sciences, social sciences versus the natural sciences. And the good quip that Mr. Soros has is to capture those difference between the natural sciences and the human sciences. You throw a rock in water, it sinks. You throw a stick in water, it floats. But throw a man in water and he must decide to sink or swim. So he was not denying yet the scientific nature of economics with that tale of human volition, but rather he’s getting across the essential defining character of human sciences and that must study man and his purposes and plans and with the modeling and all that, it’s like, well, there is no constant human action. Humans can adjust to those tests and the models. Generally speaking, there’s no knowledge to be gained from that. And there hasn’t been in terms of the field of economics, the rich history, there isn’t really any valid knowledge that has been gained from, like, doing empirical studying and tests.

Stephan Livera – 00:22:25:

Yeah, and I’m curious your view as well, because while we’re talking about what actual economics is, what let’s say the TV economics is, right, there’s these macro economists who come on TV and basically these are financial talking heads. And so they’ll get on and say, oh, look, this guy is an economist and he’s from whatever. And can you explain how you’re viewing that as opposed to is that economics?

Conza – 00:22:49:

Yes, it’s an interesting one. I almost like trying to distinguish from another example is that sorry, mate is going in many different directions here. So at the essence of it, there’s theory and there’s history. And so Mises.

Stephan Livera – 00:23:04:

He’s got a book called that.

Conza – 00:23:05:

Yeah, exactly right. And one of his most underrated ones tends to be the name of it. But it it kind of hits on the point that he goes there’s no such thing as historical method of economics or a discipline of institutional economics. There is economics and there’s economic history. The two must never be confused. All theories of economics are necessary, valid in every instance in which all the assumptions presuppose are given. Of course, they have no practical significance in situations where the conditions have not been established. So the theorems referring to indirect exchange and are not applicable to conditions where there is no indirect exchange. But that does not impair their validity. And what he’s really getting as that distinction and so when I hear then has a letter quip about Milton Friedman, so he’s asked about almost what do you think of Milton Friedman as an economist? And he’s like, he’s not an economist, he’s a historian. And so, like statistics, modeling, all that stuff is history, is economic history. So Milton, from being a positivist or empiricist, going back to that fundamental distinction before about what’s, a priori, like, your methodological epistemological dualism so it’s like focusing on that distinction. There’s the human sciences one that’s got a valid method and then natural sciences with a different valid method. It’s a scientific method for the natural sciences and particularly when it’s like for universal laws and in human action, Praxiology, which is the logic and science of human action, is a massive player. So where Friedman isn’t that so it’s hard to distinguish where yes, like, okay, maybe they’re in the economics profession but it’s almost easy column like they’re not economists doing economics and the distinction. So Frédéric Bastiat also has a good clip around the good economists and bad economists. The good economists see the whole picture. So it’s the scene and the unseen and you have the bad economists, which is basically all of them who will call themselves that, where they focus on very many kind of like hyper specialization in one particular area and they give it all these different names. Yeah, institutional economics, whatever it is, historical method of economics, different stuff that really isn’t applicable and it’s just looking at one off in the scene and not understanding the whole big picture of the unseen as well, right?

Stephan Livera – 00:25:35:

Yeah, because there’s a big world out there in terms of what could have been, right? The unseen or I believe Per Bylund also has a book kind of trying to explicitly call that out as the unrealized. That’s another example, right? Like we can imagine, okay, imagine this world without this particular regulation or without that monetary intervention. What kind of world could we have had? What kind of businesses would have been created? What kind of jobs would be there? What kind of technologies would have been invented? What kind of prosperity would we have had in this unrealized world that we unfortunately didn’t get to see because of government intervention? And so I think that’s an interesting way to think about or at least clarify and understand. Now, that’s not to say there are not market commentators who maybe have an excellent knowledge of the market of the gold or the copper market or the oil market or things like this, where they are very intricately familiar with the market for oil around the world or something like this. And maybe they can offer an interesting comment because they have good knowledge of that. But at the same time, the whole point of all of this stuff is that we need prices. Well, firstly we need private property rights which give us exchange, which gives us prices, which reflects a lot of the information in ways that no one human mind could have done even if you were some super genius.

Conza – 00:26:50:

Yeah, absolutely. And yeah, prices. You nailed it when it’s like the private property rights angle. Like you need property before you can get prices. And it’s some really good, interesting exchanges. You can now down there where people might reflect. On prices as like the signal and it’s as the communication mechanism and Hulsmann Guido goes into it fairly well where he’s like it’s not actually the which talks about bigger point we could talk about in terms of misconceptions metaphors and analogies where pricing it’s more the anticipation for entrepreneurs anticipating how much they can get. There’s a historical price that is historical, it can potentially help inform but there isn’t necessarily any direct connection to prices that will abide by and future and the entrepreneurs will put in place to try and get their products. And so he kind of nails down whether there’s a hierarchy in kind of notion around what is communicated by prices and it’s like he’s like no, it’s not so much that it’s more the existence of private property which is the kind of bedrock of it.

Stephan Livera – 00:28:04:

The necessary precondition if you will.

Conza – 00:28:06:


Stephan Livera – 00:28:07:

So let’s get into that. You were talking about this idea of misconception. So this is one topic I wanted to hit. I think in the let’s call it Bitcoin, Twitter, world or kind of podcast circuit, there are some misconceptions that kind of get propagated around and I think sometimes that’s because people are making analogies and I understand sometimes that’s useful to spark the curiosity in somebody. Like let’s say somebody is not in this world already, they’re not interested in Bitcoin. And if maybe you make some analogy and it pulls someone in it energizes them to think about it. But then the downside could be that it’s imprecise and then it’s leading people in a wrong way. Like the map is not the territory. Right? So there’s this idea that you kind of get pulled in on this idea but then actually you realize it’s not like that. So I’m curious from your perspective, what are some of the common Bitcoin misconceptions that you see?

Conza – 00:28:56:

Yeah, great question and before I tangent it’s, the essence of why and I can be appeared to being hypocritical or very I have a preference for accuracy or I appreciate it. And partly the reason for that is yes, there’s this Bastiat quote which is the worst thing can happen to a movement or a good cause is not to be skillfully attacked but ineptly defended. And absolutely yes, like metaphors, analogies, there’s a value to that certainly piqued interest. But there’s also a risk where maybe if someone hasn’t done the work per se yet and understand oh, that’s a good way of framing it or trying to peak that interest. But if then they take it literally and then there’s some maybe things that aren’t so good that come from that. So just on the terminology, like the benefits of using clear terminology as an essential to understanding. So Böhm-Bawerk, early Austrian student of Menger, founder of Austrian School he kind of goes on and since it would be an absurd undertaking to banish from the language of economic theory every manner of speaking that is not literally correct. But it also would be sheer pedantry to prescribe every figure of speech, particularly since we could not say the hundredth part of what we have to say if we refused ever to take recourse to a metaphor. One requirement is essential that economic theory avoid the error of confusing a practical habit indulging for the sake of expediency with scientific truth. And ironically, in his memoirs, Mises also accuses Böhm-Bawerk in their dispute over Cantillon effects of being led astray by the idea of friction and other metaphors from the physical sciences. But so there’s a few misconceptions with that disclaimer out of the way. Yeah, there’s a few we can kind of nail nail down now. We want to tackle them later on but obviously the Bitcoin is violence. One is probably the best to last there’s Bitcoin is energy which we can kind of go into it’s digital energy. Bitcoin is stored time. So there’s a few there and I know there’s other misconceptions maybe from a precoigner perspective like where there’s the usual FUD so fear, uncertainty and doubt about talking about thinking a whole Bitcoin is all that is there’s no sats 100 million not aware of that also not going to focus on the misconceptions from a technical perspective. I know there’s some good points about it’s not like a wallet, instead it’s a key chain that’s a better framing as opposed to wallet. Mine is chronologist instead and I think the right one is like it’s not blockchain, it’s the time chain. But yes, we can get particularly about any of those but I think that’s been handled a lot better, a lot of those everywhere else but specifically on some of these misconceptions. Where would you like to start?

Stephan Livera – 00:32:03:

I think the stored time one is a good one to talk about because I think we’ll kind of get into like what is money, why do we hold it? And what more precisely is it as opposed to this idea of stored time? Now, to be clear, we’re not attacking my friend Gigi, right? I like his piece and his piece about Bitcoin is time is not about this idea. I think I’ve seen other people though put out this idea and sort of promulgate this analogy that, oh, it’s kind of like you can store your time with Bitcoin and it’s an overly loose, imprecise way of framing it. So what’s the issue with this idea of Bitcoin is storing your time?

Conza – 00:32:38:

Yes, and that’s it’s interesting because it’s all about trying to economize, right? Like economizing time. So like, okay, people talk about saving time and it’s interesting because it’s not time itself that can be economized rather is like the attitude of how to spend time choosing this way over that way. But yeah, which really more refers to the content of action experience in time rather than to the time itself. So time itself really is like a given fact which can be addressed in different ways but never altered. It’s the ultimate basis of preference. So like the preferring is in the how, the where, the doing of what, the with whom, of how, to quote, unquote, spend time, but is spent somehow, and how that somehow is the sphere of choice and human action in a way. It’s not really economized. You can’t economize it directly. The easiest way to think about this is, go ahead, try not to spend some time and save it for later instead. Right. Nailing down that. But all this talk about saving time is obviously metaphorical. None of this shows any actual effect on time. It’s a metaphor for trying to make the best use of it as it is passing, but all it is ever going to do is pass. And that’s inalterable. But the risk is treating it as a resource. And you have seen similarly, yes, that Bitcoin is, quote, unquote, a claim on time. I think it’s like linked to obviously, like, almost Bitcoin timestamp server is one way it’s been characterized. Is there’s a link as a reference to time? Obviously difficult adjustment. There’s a technical layer versus the economic layer.

Stephan Livera – 00:34:31:

Got you. Let me try to frame this then. So the typical way it might have been framed is this idea that, oh, look, see, you work so hard for your fee at dollars and those dollars are going down in time. And then it’s kind of framed like, oh, see, why don’t you save your time with Bitcoin? And it’s sort of like it’s imprecise in a few ways, right? Or at least let me take a shot and then I want to hear how you would differ or agree or disagree. So the way I would answer that is I would say, look, money is the most saleable good. We think of it as the most sale. That’s the way Menger explained it in the Origins of Money back in like, 1871. But the thing is, money doesn’t have a stable purchasing power. So you can save money and we can analogize to the idea of store of value. I think most people are comfortable with that idea, but I think the danger might be that if you thought that you could store your time in Bitcoin, it’s not going to like, let’s say I store my time into Bitcoin in 2022. It’s not there’s no guarantee of, like, what that will be in 2025 or whatever. Right. We just don’t know that because the purchasing power and even if you think in terms of purchasing power, that is changing all the time too. So that’s how I would critique that notion I’m curious how you would.

Conza – 00:35:42:

No, you’re absolutely right. And it’s very close to the Bitcoin as energy angle, where it’s like Bitcoin is digital energy. Like Bitcoin allows you to store energy over time or transport it from one place to another. So that similar kind of moniker is very close to, I think, the storing of time. Like, it’s just a different resources being referred to instead of energy. It is time. And there’s a few memes to that digital energy piece as well. So if we kind of slightly segue into that Bitcoin obviously doesn’t allow one to store, transport, or transfer energy, of course. Although yes, absolutely, miners use energy to create Bitcoin, but they cannot convert that Bitcoin back into energy used to create it at another time or another place. So the energy used to create Bitcoin in Sydney today cannot then be used to heat a house in Sydney next year or a power a stove in Melbourne today because it was used already used to create Bitcoin in Sydney. There’s no getting that energy back now. Right. I think that’s fairly understood. But it’s recognizing that Bitcoin miners might use energy that might otherwise would have been used. So recognizing that fact that Bitcoin is miners might use energy that otherwise would have been wasted elsewhere doesn’t change that fact. And that kind of dovetail into the Bitcoin is a battery meme. And so there’s a great article of the same name. Essentially, Bitcoin is not a battery by William Luther. And you’re like, yes, it is a metaphor. And yes, energy is used to create Bitcoin, but they can spend that Bitcoin at some point. And yes, it can be used to be spent in the future that energy is put in, but you can’t get that energy back out directly. But again, Bitcoin is on a battery. It’s not storing energy. Rather, you could yeah, I think stores value, but value is subjective. And so there’s like an almost danger in that as well. But the name kind of leads many to believe that the source of Bitcoin’s value is the energy used to create it, which kind of goes cost theory of value. So, like, where good cousin of the labor theory of value. It’s like that’s why that’s where Bitcoin gets his value from. And there’s a danger there putting the horse before the cart. A bit where you should, as a general rule, never reason from cost to value. It’s the other way around. You should always reason from value to cost, which should be obvious.

Stephan Livera – 00:38:08:

And also related. I think it would be good for you to touch on this is this idea that and I can understand where this comes from. Right? So the argument might come the no coiner will say Bitcoin is not backed by anything, and then some Bitcoin is to say, oh, no, but it’s backed by the energy. And it’s like, no backed by typically means you can redeem. Right. It means there’s no central counter that I can take my Bitcoin to and redeem into energy. Yes, I can use Bitcoin to buy energy, but I don’t think it’s precise to say Bitcoin is backed by the energy consumption of the miners. Right? In that sense.

Conza – 00:38:42:

Yes, and it’s almost like this when we kind of get to a point of how do we categorizing Bitcoin from an Australian, which I think is the best way to do it is a rival risk digital commodity on an open source monetary network. And to speak to your point, it’s like talking about another commodity. So, like, gold. What’s gold backed by? Well, it’s like it’s the commodity itself with Bitcoin. It’s not a claim on something else, not credit money. It is the rival versus digital commodity itself. And yet asking what’s it backed by kind of indicates you don’t understand what it is, which is obviously what’s the case with the new coiners or pre coiners questioning it. But I think it’s a wrong answer, as you indicate, to refer them to the energy. Like, yes, that is an input into it and there’s a cost involved with that. But it’s still ultimately talk about Mises’s regression theorem there, where it’s traced back to, at certain point in terms of a commodity, its origins as a medium exchange. You can trace it back. And I think Konrad graph’s take is eventually committed to what was actually Bitcoin is the best example of that theorem uses regression theorem.

Stephan Livera – 00:40:00:

Yeah. And I think you really squared the circle really well back in 2013 with that on the origins of Bitcoin. Yeah, but go back sorry, go back to your point.

Conza – 00:40:08:

Yeah, so elaborating about summarizing. So trying to categorize Bitcoin. So, yes, the top line summary, I think, is like, the rival is digital commodity on an open source monetary network, but reconnect kind of goes through as, one, yes, it’s an economic good. Two, it’s a rival good, which is a subtype of scarce good. And if we want to kind of elaborate that define a non rival good is a good that is copyable with perfect remainder of the original and usable by multiple actors simultaneously without mutual interference, and then arrival good. So, like, yes, the blockchain essentially, but arrival good is a good that is not copyable with perfect remainder with the perfect remainder of the original and is not usable by multiple actors simultaneously without mutual interference between physically incompatible uses. And in the broad economic sense, the word scarcity can encompass both rival and non rival goods. But, yes, it nails that down. And then three, it’s a type of rival good known as a commodity, as we’ve elaborated. And then four, it’s a new type of commodity called a digital commodity. And then five, which is really is it’s a digital monetary commodity with unprecedented monetary characteristics. And, yeah, it kind of creates an almost new asset class. But there is a very handy image from Guido Hulsmann’s book, a Theory of Money and Fiduciary Media that updates a theory of money and credit in terms of there was some mistranslations for Mises’s book and so, like, Credit theory of money and credit credit really should be probably translating to fiduciary media. We can kind of go into that a little bit later. But there’s a lovely chart there that maybe we’re having the show nodes all I can try describe, but within that it’s kind of a taxonomy of money and we get to very specific breakdowns of where Bitcoin sits and you’ve got like commodity money. There’s the precious metals, and then below that there’s Bitcoin, which is kind of a rivalry as digital commodity. It’s new on the scene, but I think it’s the most accurate way to categorize it.

Stephan Livera – 00:42:20:

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Conza – 00:45:14:

Yeah, absolutely. And very much the distinction. There’s Bitcoin, it’s a rivalous digital commodity. And looking at that framework, look, there’s money in the broader sense, and then there’s which we can kind of speaks about, it’s everything under the umbrella of there’s money in the narrower sense, and then there’s the clear cut distinction. There is money substitutes. So you’ve got, say, money in the narrower sense. You’ve got commodity money, there is credit money, and there’s fiat money under that, but then under the money substitutes, that’s where historically, you’ve obviously got the physical gold, the commodity money. But then money certificates would be like the piece of paper that’s backed, say, 100% bank deposit would be the money certificate. It’s meant to be one to one. And then within the realm of money substitutes, there’s also money certificates being 100% backed. And then you’ve got fiduciary media, where the categorization is that it’s not backed freely at face value. So essentially, the definition of money.

Stephan Livera – 00:46:19:

FTX Bitcoin, FTX Bitcoin is fiduciary media.

Conza – 00:46:25:

And exactly right And it gets into there’s a free bank, quote unquote, free bankers and gammon, and there’s a variety out there that like even a Bitcoin magazine article posted recently about how the answer is, I guess, the free banking trying to jump on that bandwagon, and it’s necessary. You need a growing money supply for civilization, which is nuts. But just back on fiduciary exactly right. Like FTX, the whole point of Bitcoin is to remove trust. And one of the whole point, a bit, a large point like you’re trusting financial institutions and with centralized exchanges exactly like FTX, Binance and others, there’s that risk that you’re either at best going to have a money certificate. So some maybe could claim that where it’s all the customer funds, one to 100% backed. And then, yeah, there’s the fiduciary media angle where, hey, that looks like you’ve got Bitcoin. It says you’ve got Bitcoin. But unless, as we know, not your keys, not your coins. And if you’re going to have full control over that, there’s a big chance that it’s fiduciary media. It’s backed by there’s no real reserve there. It’s essentially what is it? Money substitute freely accepted at face value, which consists in claims to payment on demand for specified sums, but it’s in excess of those reserves so there’s a few things there, but it’s like you’re really risking it, not holding. Why wouldn’t you hold the asset yourself?

Stephan Livera – 00:48:07:

So I think on this point, I think it would be good to clarify then. So in your view, does it come down to a debate then on like, let’s say, whether that exchange is full reserve or fractional, whether it is a money certificate or whether it is whether it’s fiduciary media. Right. So as an example, the debate is raging now about Binance, is Binance fractional reserve. So would you qualify that then as a bank deposit or a money certificate? Like, let’s say you deposit one Bitcoin to Binance and I think we can probably all agree if you deposited one Bitcoin with FTX, well, sorry, bad luck that’s fiduciary media. Like they clearly have, they were running some kind of Ponzi or fraud operation. But in the case of, let’s say a Binance, does it turn on whether they actually have the coins?

Conza – 00:48:54:

Yeah, great question. And it’s certainly I’ve had these discussions with some fractional reserve proponents, free banking proponents, who look at striking the route, okay, what’s in the contract? But often the heated point is so speaking within the fraction reserve bank, I was like, yes. FTX like a clear cut example of this rehabilitation, like the contract stating that the customer funds are theirs. And then they’ve gone and violated that, essentially and committed fraud and loaned out more than they don’t actually have. Or sold Bitcoin that they don’t actually have. And so, yeah, it kind of comes down to really looking at the contract, but almost a given even with that, say, bank. So like the current banking establishment, right, so a fractional reserve banking has been in full effect for many, many decades. Even then customers who have, say, signed the contract. There’s a good study, a comparable study that looked at in the UK banking and polled 10,000 people. And the question were several is like, do you think you own the funds in your bank account? Like 70% were like, yes, absolutely, that’s my money. Like a demand deposit. Like that I can demand my money back at any time. It’s like a savings account, essentially. And then the other contrast and given this debate is the term deposit, where, yes, there’s no problem if I agree to contract, I give that to the bank and I know I’m not going to use it. And there’s a certain period of time they can loan that out. There’s nothing wrong with a term deposit or time deposit. But where the fraud comes in with fractions of banking customers, people think that, oh no, I’m just a savings account, it’s my money, I own it, I can control it, they can’t loan that out. But on the contract, in the current state, the state has essentially enabled this kind of fraud to exist given a state approval. And that’s like essentially the modern banking system where they can take people’s impressions of term deposits or like their demand deposits sorry, their money, and the banks then can land it out willy nilly. Looking at FTX and exchanges, okay, specifically, probably what is on the contract. But absolutely even after Rothfield has equipped, even after months of him drilling into his students, that given the banking system is like, it’s not there, it’s not yours. Essentially, people still think and feel that it is. So it’s a hard thing to overcome. But the real solution is, like, again, there’s a trust element that gets reintroduced. It’s unnecessary. Things like BISQ exist, decentralized exchanges that are still on chain and verifiable noncustodial. I do think there is a spectrum. So obviously there’s institutions that allow auto withdrawal. They’re going to be far better than the other alternatives. So there’s a less risk potentially. But yeah, there’s a flat spectrum. It’s either but within that, like, yes, the one to one say noncustodial or fully backed, maybe it’s multisig signature. It’s there, you know, verifiable. Then there’s the 0% tokens in fiduciary media where it’s not. And I more often than not, I’d almost it’s, it’s not. And partly this is as well. You, you see see some of the pushback Twitter like it’s why people giving you not FUD on Binance or whatever. It’s like no, if it’s actually there, there’s no risk to insolvency. If they’re one to one, it’s like, okay, you’re paying fee, I’m getting fees from you with either withdrawing or they’re going to come back on. If they’re solvent, it’s a non issue. But if they are insolvent and there’s a run on the banks, that’s certainly an issue and you don’t want to be the last person in that line to get your funds out or hope that they are there or your funds. Exactly right. Even still, like, it’s hard to get out of it’s not yours, it’s not Bitcoin, it’s paper Bitcoin. It’s almost like, say on an example like Binance, B dash BTC, you don’t have Bitcoin unless you’ve got the keys.

Stephan Livera – 00:53:24:

And I think this is an interesting point as well, because this is where the fractional reserve comes in, right, is particularly if those fiduciary claims trade around and circulate in the economy as though they were Bitcoin. And I think that’s probably the crucial thing, and I’ve spoken about this on the podcast many times, even with Michael Goldstein and others, but that’s the crucial thing, that let’s say a Kraken Bitcoin is not treated the same as an FTX Bitcoin, as a Binance Bitcoin, as a Swan Prime Trust Bitcoin. Each of those things should be treated separately as a Van Gogh’s Bitcoin, for what it’s worth, right? Like each of those things should be treated separately. And Bitcoin that you hold in your own wallet is actually a Bitcoin right that you have self custody. And I think that’s an important point for the community to appreciate and keep them separate. And I think it’s fair to point out, I think this is like the full reserve case. Let’s say that these fractional reserve casinos don’t survive long term without a bailout, without daddy government coming in to bail them out.

Conza – 00:54:21:

Exactly right. And that was a question posed in the Mises’s seminar, Australia group and one of the gents there going, well, we used to have these epic debates. Fractures are banking like it’s almost a dead horse. You have to beat like ten years ago, just all the rage. That was the topic and we’ve hashing those things out, but it was almost like this is a use case, in essence, of the quote unquote free market, the wild west, if you want, with crypto and not so much state intervention yet. And what have we seen? Like, these exchanges? They don’t last long. Like there’s a run on the banks. And Rothbard used to talk about having like, anti bank vigilante leagues where people would encourage, like, hey, this bank doesn’t have funds. And like, trying to encourage actively run.

Stephan Livera – 00:55:09:

On the bank, basically bank runs.

Conza – 00:55:11:

And similarly here we can see, well, I guess at the beginning of the internet that can happen a lot quicker and faster. But again, there’s nothing wrong if it’s actually solvent like those funds being withdrawn. And it’s a system indirectly cleansing itself shouldn’t happen to begin with. And that’s why I’m a big proponent of BISQ and things like that, where there’s that non does to what Bitcoin did to the state, like separation money state Bitcoin does for the exchanges, essentially, of separating that need for trust. So, yeah, hold it yourself. No, there’s nothing but risk for, I think much more risk than keeping it on the exchanges and just.

Stephan Livera – 00:55:56:

Maybe more of an academic point. But I’m curious if you view something like LBTC as a money certificate, because this is a system where you can verify every Bitcoin that has gone in. So if you can see whatever, let’s say there’s 1000 Bitcoins locked into Liquid and LBTC is controlled by a multiSIG. So obviously it’s not self custodial, it is controlled by that multisig of the federations, basically. But I think fundamentally it would count as a money certificate. Right. Because we know 100% it is verifiably backed by Bitcoin. So each LBTC is the money certificate for one Bitcoin.

Conza – 00:56:35:

Yes, I’d say yes under the.

Stephan Livera – 00:56:38


Conza – 00:56:39:

Categorization and you got money certificates and then within that yeah. How is it being treated on the market, essentially? And so I think as a contrast, LBTC was a Liquid with, say, Lightning. And I think Lightning is operating on a one to one with Bitcoin. So you got in this framework, you got on the money in narrow sense. Bitcoin itself is the rivalry of digital commodity. It’s on the far left there as a commodity money, and then you have within the money substitute side and then specifically money certificates. Then a new category should be Lightning on its own, where it’s a one to one with Bitcoin. Essentially, Lightning is essentially treated as Bitcoin. Now, LBTC, I think, is maybe just because of that trust element federation, because that’s not objection, is why it might not be as one to one. Or maybe it’s not getting such play and treated as for anyone asking themselves, like, I could have Bitcoin or have Lightning. It’s like, yeah, sure, right. There’s no real feeling of objections there, really. And then Bitcoin or LBTC, maybe there’s some very niche use cases or traders or people who are like, oh, yeah, absolutely. But for the vast majority of folks, I think it’s like, no, there’s an element of trust there. It’s not one to one. Maybe it’d be closer to it, but I’d still say, yeah, as a money certificate. Maybe it’s like that quote unquote 100% bank deposit piece. But there’s like this newer or the category of Lightning, I’d probably put it slightly different. Or it is currently being treated one to one.

Stephan Livera – 00:58:24:

Yeah, look, at the end of the day, what we hold, when I hold, let’s say I have a Lightning channel with you, what we really hold is a pre signed Bitcoin transaction. It’s a valid pre signed transaction that we can broadcast to the network to claim back any coins. So it’s just a matter of being able to get your transaction confirmed in the Mempool. So, I mean, theoretically, it probably just counts as the same as Bitcoin on chain. There is a security trade off, though. There is an aspect where you need to be able to get that transaction confirmed hypothetically. So that is there. But I think it’s probably fair to say.

Conza – 00:58:56:

It’s what the market is treating it as. And for most people, yeah, it’s one to one, essentially.

Stephan Livera – 00:59:01:

if it’s seen as interchangeable, although that’s it, I mean.

Conza – 00:59:04:

Perfect money substitute.

Stephan Livera – 00:59:05:

But even then, there are, let’s say, exchanges where you can swap between and yes, they charge a fee, but it’s kind of like that. Maybe that’s more like the operational aspect of having to swap between on chain and Lightning, or kind of the liquidity flows and being able to what you’re paying for is that certain liquidity or certain channel being open to you from this direction, let’s say. Yeah. So it may be a bit more complicated. Okay, so let’s move on. We got to chat about this whole Bitcoin is violent, or I think he has shifted away from that term a bit, and I think he’s now going for this idea of Bitcoin as a weapon. So what do you think about that?

Conza – 00:59:43:

Yes, look, ideas are important and the narratives setting the frame is such a big thing in terms of blackwood movements and how things are characterized. Look, I was going to try and start a clip. There’s this, like, Rothbard and Keynes. It’s like a 30 second clip. And it’s like, look, there’s a preemptive strike against critics. He’s like, I’m using. An ad hominem and it’s like an ad hominem argument is like, obviously tacking the person and he goes like and this is clear if he’s talking about Keynes, he’s like, no, first I’ll attack the arguments and then the person. And there’s a lot of laughter and chuckles. But look, so my approach is obviously like being intellectual honest and open to reason. And there’s a very we’ll, I think, specifically address some of the arguments, but and then get towards them more probably why from a personal angle, like, he sees a certain individual see things through the lens of violence or like Bitcoin being a weapon. But, yeah, I think I’ve been very heartened by the plebs in terms of who’ve done the proof of work, essentially like proof of work from them understanding Austrian Economics praxeology. Those who’ve done that work get it and they can see very easily how it’s an obvious tax vector from the state for it to at least setting that up, even whether the intentions are that or not. But that being the consequence, almost inevitable consequence of that narrative. So, yeah, completely absurd. And really it gets to we can talk about we talked about epistemology, like going from first principles. He’s indicated that’s what he’s doing, but we know that’s not the case. So it’s very scientistic approach where appeals to physics and there’s no use for economics, quote unquote, doesn’t work. And look, you can try and get benefit of doubt in terms of if he’s referring to economics and what we’ve previously critiqued is not economics, but that’s not the case. There’s no actual understanding of epistemology. There’s a different methodological approach for the social sciences and natural sciences, and what he does is often partly of what this line framing as violence or as a weapon. It blurs the line between voluntary and aggression. And he uses a physics definition of force, but then conflates that within the realm of human sciences. And so we can kind of the epistemological approach, which is like, the foundations are essentially invalid and it’s like everything that kind of goes on top of that. You can dress like Whack a Mole a little bit, but if your premises are incorrect, invalid, then so the arguments built on top of it. And that’s partly a little bit of like there’s a great clip from Hopper, it’s about how to talk to address Paul Krugman. Right? And the trouble is, you shouldn’t get into technicalities about the kind of Keynesian modeling and stuff. It’s like as simple as if you’re speaking to a child. How does increase in the money pieces of paper and society for money increase society’s wealth? And similarly, a little bit with this as the narrative of Bitcoin is violence. It’s like, how is running a node like, choose individual action, voluntarily choosing to adopt a savings technology or a rivalrous digital commodity mining, that it’s just absurd on the face of it. And I know a lot of supporters are of his or I don’t think have done the work. The vast majority, I think they hear this narrative and it kind of makes sense. But when you do have the backing of the Austrian school and Praxiology, you can kind of see quite clearly that the premises aren’t there aren’t valid.

Stephan Livera – 01:03:53:

Yeah. So he seems to be making this idea that I’ll see. If you qualify it as a weapon, maybe you can use this to a Second Amendment protection and this idea that somehow that’s going to help stop the government. From stopping Bitcoin or intervening in Bitcoin and that he seems to have been going down this pathway of saying, oh, but governments are going to do mining somehow. And to me it just seems like I thought that actually safety had a good thread on this also because he was saying, look, mining is a business like any other Bitcoin. Mining, to be clear, it’s a business like any other. There’s not a specific reason why a government would need to undertake mining because when you’re mining, it’s not like it’s kind of like the overall network is being chronologized. Let’s say you’re kind of helping chronologize or help the validity of transactions as opposed to the security. So it’s not like some particular specific country has to mine in order to defend their own transactions. It doesn’t really work that way. And I think it’s more precise to think of it as the node is what’s defining the validity and the security of Bitcoin as opposed to mining. Right. So I think that’s one area as well. So that’s kind of a high level of how I’ve seen his arguments, but yeah. Anything you want to touch on there?

Conza – 01:05:07:

Yeah, no, definitely there’s many. So we’ve talked about the First Principles piece and probably to the frame that he’s like, obviously coming back to that simplified approach of like, there’s political means versus voluntary means, you know, kind of goes back to Oppenheimer. But it seems like he’s got almost it’s it’s a might is right framework. Talk about the power projection and look, it’s almost a might is right, which is Ragnar Red bids kind of take, and Hopper gives a good breakdown of this. It’s like you can give two very different interpretations to that statement. So obviously the first one he goes is, I know the difference between might and right. And as a matter of empirical fact, might is in fact frequently right. And most, if not all public law, for instance, is might masquerading is right. And then the second interpretation is like, I don’t know the difference between might and right, because there is no difference. Might and right is might and the interpretation there is he talks about it self contradictory. Because if you wanted to defend this statement as a true statement in an argument with someone else, you’re in fact recognizing your opponent’s property right in his own body. You do not aggress against him in order to bring to the correct insight. You allow him to come to the correct insight on his own. And that’s basically you admit implicitly that you do know the difference between might and right, like right and wrong. Otherwise there would be no purpose in arguing. And so the same incidentally is true for Hobbs’s kind of famous dictum that man, that one man is another man’s wolf, in claiming that statement to be true, you actually prove to be false and zooming out. That kind of draws down that strikes at the root of, I think, the underlying force philosophy that he lends. He looks everything like looks through for everything. One example is like there’s a particular series he has which there’s a thread eye paints line by line essentially Henry Hazlitt approach to the fair of new economics, where it’s like a line by line reputation of Keynes do the same take and look. One call out was he has Lowry saying all law, the thing that predates all law, the military that exerts the power to establish is essentially the military exerts power to establish the rule of law. Contrast to Bastiat and property in law, it’s like property does not exist because there are laws, but laws exist because there is property. So he’s got again flipped it completely around the wrong way, but also honing in more on that. So he talks about like an agrarian society and what he’s really dancing around don’t particularly aware of in his thesis, I think is talking about the origin of the state and really whether it’s exogenous. So conquest versus endogenous or internally. And the answer is endogenous, it’s internal. So how the states come about, he erroneously claims exogenous or conquest. So Hopper talks about this best in political economy and of monarchy and democracy. And he’s like, yeah, it’s difficult to accept, but historically, like natural elites being around and with in terms of a monarchy, he’s like this is the fundamental resource sociological insights. And that is that the maintenance and preservation of private property based exchange exchange economy requires as its sociological presupposition the existence of voluntary acknowledged natural lead. Now, the natural outcome of this voluntary transactions between various private property owners is non egalitarian. So he kind of talks about his hierarchy as elitist. But the issue is that over time, so these individuals who’ve got superior achievements of wealth, wisdom, bravery and a combination thereof, they kind of become a possessor natural authority. So when you got a conflict between two individuals, let’s go to this independent third party. This guy is kind of the first among ankles and he can give us his decision. And so over time though, these heads of families with long established records of superior achievement, far sidedness and exemplary personal conduct that men go to for that, for their decisions or judgments of on, they then essentially having an essential principled approach to justice. But then what’s happened is that over time. So monarchy, as opposed to he goes on here. In fact, the endogenous origin of a monarchy as opposed to its exogenous origin via conquest, cannot be understood except for the background of a prior order of natural elites. And then small but decisive step in that transition to Monica Rule. The original sin per se consisted precisely in the monopolization of the function of judge and peacemaker. So through their skills and talents become the go to person in society and then families, and that’s the tradition. And then it’s become they’ve at some point monopolized that and then moving on from that. Law enforcement became more expensive instead of being offered free of charge or as a voluntary payment. And then kind of goes on to how that eroded and the issue. So that was like their downfall with democracy. So the confusion that it caused though, prevailed where people recognized that they didn’t recognize that the problem lay with monopoly, but they thought it was with elites and nobility. And so then like, democracy all about the people rising up. So, yeah, he’s got a lot to say about that. But coming back to I don’t believe any of that is understood. When he talks about going society and the premise and the foundations he builds, his kind of power projection thesis, it’s incorrect. But then even more than that, when he talks about the chain of custody for these assets is written in blood. And there’s like maybe add to the show notes. So everyone’s probably aware there’s this like, little diagram he has. And there’s several assets here he’s referring to like land, real estate, gold, oil, equities. None of those assets have a monetary premium. He specifically says every one of these assets carries a monetary premium that we defend with human lives. But yet none of those assets have a monetary premium anymore. Like gold essentially lost it. We’re not in the gold exchange standard anymore. When I buy a house or some oil not written in blood, like when that voluntary exchange, you think, what about Iraq war and whatever that could have come from Texas, though. Like the oil just from Texas. So it’s not a priority, it’s not prior experience. Like there’s rights violations potentially some of this stuff, but not at the level that it’s just ingrained is what is the premise is. And yeah, so look, and he also goes on about when he talks about power, he literally means jewels per second. So where the question becomes like, okay, political power. For him, it’s all about being able to plan ideas and other people so that they steer their jewels, their energy. It’s like, okay, well, how much power does like, what’s the jewels per second? Power of the POTUS, like President of the United States or like a politician? It’s comical, but coming down to the Second Amendment argument, right? Again, it’s very clear he’s not read Rothbard his Anatomy of the State or Ethics of Liberty, which talks about the inner contradictions of the state. It’s almost you’re destroying it’s a narrative. I really feel it’s the second amendment case, his argument, it’s kind of a cover for a rationalization for the Bitcoin is violence, or it’s a weapon narrative. Now, I can understand because he’s paid by the state, he is this state employee. That’s his employer. He can see everything from that angle. But out of the anatomy of the state and ethics of liberty, if you understand any of that, it’s pointing out like that the constitution will not be able to keep government limited. It’s a monopoly. The supreme court selected by the same self government and grants the power like they’re being granted, or the ultimate decision making over all the political ends, will favor always the broader or loose interpretation of the wording of the constitution. And as you can see, like Saunders Buddha arguments, it’s been powerless, the constitution have been powerless to stop the growth of the state over the last 200 years. Like, America has become the world’s leading superpower despite the bill of rights and all that. And so it’s almost like you’re destroying the narrative of peaceful narrative around savings technology on the pipe dream. Hope that you’ll get a favorable court ruling from the state courts by state judges who are paid out of taxes and whose incentives are completely aligned to continue such a system they spent their whole life in and sworn an oath to serve as you’ll get a favorable outcome for Bitcoin. It’s absurd. But even on top of that, from a libertarian perspective, the second amendment is invalid from that proper point of view in that you don’t have a right to guns, we have a right to private property speech as well. This gets conflated. You go to first amendment, you have a right to speech. It’s like, no, you don’t have a right to speech. You’ve got a right to private property to write, hire a hall, make a blog and a website, like, own the printing press. That’s the rock solid foundation. And so, yes, if a property owner, they can set the rules, or it’s only justifiable for them to set the rules on their property. If they don’t want to have any guns in their property, that’s their right. Like, it’s not necessarily wise, but you get this rich mosaic when you focus on private property rights and all these other areas where it’s a rich mosaic of choice. And so even just on the face of the second amendment argument appeal, yeah, I find it incredibly hard to feel, to think that someone’s genuine, that I can understand. You are in the military, and that’s your worldview. And he calls himself a spook. He puts it out there, but it’s almost like owning it is trying to diffuse it. And even if his intent is genuine and that’s actually worse, it’s almost like you’re doing the job of the political ruling elite deep state for free. And I’m sure if you had all these alphabet letter agencies, just think about, like, if you’re trying to run a psy op, which we know exists, has existed, and you’re trying to get the Bitcoin as violence narrative out there. Bitcoin is a weapon going, I didn’t see how it would play out much differently to how it has. And regardless of what the intent is, like, okay, the consequence is pretty clear cut. And from him to he wants to get invited to the white House and.

Stephan Livera – 01:16:33:

It chased the clout, chased the career.

Conza – 01:16:35:

Yeah, there’s all that personal things that can be irrelevant. It again comes down to the premises, which we can point to. It’s almost the nation state. Like, it’s a national security issue, but Bitcoin is critical for national security. As kind of said, it’s like if you there’s a distinction between nation state and nation. So, like, American people amazing nation state, like the American government, like, hell no. Why would you want to have them hold the asset that Bitcoin is and to get enriched by with hyper Bitcoinization and you’re empowering the ruling elite or the ruling class versus the ruled. So, like, you’re wanting to encourage your nation getting better ahead. If that’s the case, it’s not encouraging the nation’s state to get more empowered in mind Bitcoining. It’s to create laws that allow your citizens to get the benefits of that get out of the way, set private property rights, like a proper framework. And yeah, it’s like understanding that this proper class analysis of rules versus ruled can really set the scene. And that’s why I think so many plebs get it, but certain individuals don’t. And it’s funny, you see those that tend to be promoting Dennis Porter or whatever, it’s like their policy, washington, whatever, they’re talking to politicians. That’s their world. It’s like another narrative that you kind of push and get some courage in favor with. But to me, it’s like there’s that trojan horse meme. Bitcoin isn’t a citadel, essentially, and you got Larry King of like offering in the Bitcoin advanced or Bitcoin is a weapon narrative. And most Bitcoin is well aware encrypt the proof of work they’ve done of understanding philosophy and economics.

Stephan Livera – 01:18:25:

Got you.

Conza – 01:18:25:

Yeah. Health ranching.

Stephan Livera – 01:18:28:

I’m with you there. In terms of the libertarian analysis and obviously starting from the framework of private property. Right, obviously I’m with you there. Now, I’m curious, your view, do you think if you had to talk to a status, do you think it’s better to use the one a the first amendment and kind of frame Bitcoin as speech? Right. Like it’s a message. My note is sending a transaction to you. It is a cryptographic message. Do you agree with that idea? Or how would you try to if you’re talking to a status.

Conza – 01:18:55:

Yeah, I’d be like, what’s? Trying to figure out what the end goal is. The end is and how Bitcoin can help cater to that if yeah, like, you keep talking the courts, I think, well, if you’re trying to appeal on their terms, making a legal case, like, in a defensive nature, I think certainly the Bitcoin is speech or narrative is far superior to a Second Amendment approach. But again, it’s a rivalous digital commodity, I think, that just nailing down that is simply then the whole narrative of it’s a weapon or whatever. It’s like you can see it’s like saying the same thing about gold is like, okay, you’re crazy, mate. It’s not a narrative gets anywhere. And so it’s like by blurring these lines and definitions and almost seemingly getting really technical language. But if we bring it back to the simple case, it’s like, it’s voluntary.

Stephan Livera – 01:19:57:

The framing matters.

Conza – 01:19:58:

It does. Hopefully. I’m trying to convey a bit of that.

Stephan Livera – 01:20:01:

Yeah, because if it’s framed like this idea of it’s savings technology, you use it to protect yourself and your family, but it’s not a weapon per se. Right? It’s like, if I stop funding somebody, am I attacking them? Well, no, it’s more like I’m choosing to put my funds elsewhere. Like I’m choosing to put finance some other thing instead of, like, let’s say there’s a very violent man who thinks he controls the neighborhood and he purports to rule over the neighborhood, and I have some way to withdraw my funding from him and put it towards my family instead. Am I somehow attacking him or is it a weapon that I’m using against him? Not really, right? It’s only in a very loose analogy that you could even argue that at best, it’s like a very loose analogy, and really, it’s not the right way to categorize what’s going on there. Right?

Conza – 01:20:56:

Yeah. It’s only like if you say your target audiences, say, want gun nuts or whatever, and no issue with that. But as a wider narrative, the population just understanding of using that term or anything. He’s almost tried to walk it back recently, and recently, I think, because of the pushback, it’s like, oh, no, it wasn’t really me this way. I haven’t used that for over a year. That phrasing. But it’s very strongly implied in terms of recently. Again, he’s called it a peer to peer electro cyber war fighting protocol, software protocol. And the implications of that is like, yeah, it’s like a weapon, right. Or violence is the image.

Stephan Livera – 01:21:47:

How people fight people do warfare, and it’s not accurate in the slightest. Anyway, I think we’ve done that topic. We’ve also got to chat a bit about this idea that I think we’ve covered a lot of the stuff, but I think one other area that would be good is just to explain to people, why does the money supply not have to expand along with the economy? Right? There’s some people and some of this is kind of coming back to what we were talking about with the fractional reserve people and the so called free bankers where they seem to buy into that idea, they seem to buy into this idea that somehow the money supply has to grow otherwise the economy won’t grow. And of course we have, like you said, that standard Hopper kind of two minute clip where he basically says, look, if printing more paper money tickets made us richer, why haven’t we just gone and done that? Right? I guess that’s kind of the simple way. But do you see where this idea is coming from, this notion that somehow the money supply has to grow in order for the economy to grow.

Conza – 01:22:46:

Yeah, and you’re right. And his other point to that with Hopper clip, it’s like we’ve been done, like the amount of printing pieces of paper, like kind of easy, like trillions. Why isn’t everyone a lot wealthier? Right? So if it worked, if that’s the case, that their premise is right, why hasn’t it? And look, simplifying it is just I’m yet to see, out of the 15 plus years of asking that simple question to those that have this premise, to get a valid answer. And even particularly noting you talk about free bankers like George Selgin, Nick Carter has gone down that pathway again. It’s kind of like a mind virus that the fractions of banking are the quote unquote free bankers where they do feel this need that there needs to be an increase in the money supply for society to be better off. Otherwise there’s this devilish deflation that society can’t function with. There’s many myths there, but it comes back to banking theory. Rothberg points out, took a very bad term with equinox free banking and it’s really just the old currency and banking school arguments rehash. And it’s the doctrine there that the banking school doctrine that the needs of business require an expansion of money supply and credit. And then moreover, that essentially violate the basic principle Ricardian doctrine that every money supply, every supply of money is optimal. So it’s essentially like once the market into money is established, a marketing money is established, there’s no longer any need for more money. And the key point is there. And so yes, like measles and human action are rolled out a lot is that as the operation of the market tends to determine, a final state of money is purchasing power at a height at which the supply of and the demand for money coincide. There can never be an excess or efficiency of money. Each individual and all individuals together always enjoy fully the advantages which they can derive from indirect exchange. And the use of money. No matter whether the totality of money is great or small, the services which money renders can be either improved or repaired by changing the supply of money. So the quantity of money available in the whole economy is always sufficient or secure for everyone and all that money does and can do. And so it’s like even if for instance taking Bitcoin everything is doubled. So like there’s 42 million Bitcoin and everything else translates down in terms of 20 minutes, blocks or the time framing if all that was the case and the supplier schedules doubles as it uniquely goes down. The purchasing power of money like as it is getting adopted would reflect that maybe naturally the price, whatever it is now, would be double. But that’s in fiat terms or whatever it is, there’s still supply and demand that impacts it and purchasing power. So people talks about it. You don’t want units of money. It’s what that can purchase in terms of goods and services. One way to think about it probably is I guess the impact of the money supply. And if something’s already established as illustrative of talking about inflation about how some of that can be stolen that purchasing power through legal tender laws. A lovely analogy. There’s a ducktails episode actually where Scrooge has got his pile of gold money and then the other little guys have a particular ray gun that doubles, can double things and almost like think of an angel like everyone in society, you got your bank accounts and overnight an angel comes and doubles the money supply. Everyone’s bank accounts are doubled. Those who work up first in the morning would wow, what’s this going to go out and spend that? And the prices might not initially reflect that. Like they won’t there’ll be different prices rising in different areas in different sectors of the economy and then as people wires it up you’re at the end of the day and words gotten out there’s a general tendency like the cost of everything would have doubled. So yeah, speaking specifically about they feel this need that and often a confusion it comes from to talk about credit. So Nick Carter and others go on a little off France based on nothing against Rothbar type folks such as myself and yourself all reservists that we’re against credit, we’re against credit. And it’s like no, there’s commodity credit which is backed savings backed by real things and then there’s fiduciary media circulation credit. Yeah, circulation credit. So there’s nothing that’s wrong with the contrast measles has like commodity credit versus circulation credit. And with circulation credit being it’s credit extended by banks in the form of bank notes or demand deposits but as opposed to credit. So it’s credit extended by banks in the form of bank nodes or demand deposits especially created for this purpose as opposed to the credit granted by the loan of a bank of its own funds or funds deposited by its customers. And so the extension of circulation credit makes available to borrowers newly credit funds which do not decrease or restrict the funds available to anyone as they do in the commodity credit. So it’s like someone’s not you be able to use something in commodity credit and circulation credit which is what he.

Stephan Livera – 01:28:34:

Refers to being ex nihilo created.

Conza – 01:28:37:

Credit expansion, that’s what it’s got.

Stephan Livera – 01:28:37:

Just to explain that. So the idea is let’s say you’ve got Conza Bank and you’re a full reserve bank and I come and deposit my 100,000 stats or whatever, right? But the idea is if I’m giving them to you in a term deposit, I have relinquished control. And so now we’re in a full reserve context. You can go lend out that 100,000 sats or whatever to somebody else because I’ve relinquished control. That’s the crucial difference in a fractional system. It would be kind of like, I still think I have access to it, but actually you’ve actually also gone and issued out credit to somebody else. And we both think we can access those coins or sats and spend them freely. But that’s where the problem where we run into this problem. Because even though there’s only 21 million Bitcoin or just under, we’re acting as though it’s not like that. And that is what misses calls like he says that’s the reason for the business cycle. That’s the Austrian business cycle theory. So I think that’s kind of the easy, simple way to understand that distinction. Commodity credit, the circulation credit. And of course, Caitlin Long has also been very vocal about that too over the years, as have all the other, you know, full reserve people like yourself, myself, safetyne and others out there.

Conza – 01:29:45:

And I think that’s the biggest attack vector as well, like the biggest risk going forward. So you see, oh, Fidelity’s got a new app or something and it’s like, oh, you can buy Bitcoin. It’s like, well, can you withdraw it? Can you actually own it? Like the keys to that and moving forward. That’s why we got to encourage run on the exchanges, withdraw those funds, use Biscuit PeerToPeer stuff. It’s you go to the ones that are, you know, the least trusting, you required the better, and owner yourself, you know, have your own node. It’s it’s key to minimizing their ability to do that.

Stephan Livera – 01:30:21:

Yeah. So it kind of remains to be seen where it all goes. But I think, as our friend Pierre Rochard would say, we are obsolete the fractional reserve system here. So we’re going to be moving into a world where people, they just simply don’t use as much of this fiat credit like they do today. And so I think that’s where it’s difficult for some people. He’ll still trapped in the old paradigm and I think maybe people like George Gammon are kind of in that paradigm where even though he is mostly libertarian and mostly free market, he seems to be still trapped in this idea that you need the money supply to expand for, again, similar reasons that we’ve gone into. Right?

Conza – 01:30:56:

Yeah, absolutely. It’s like frac reserve Bitcoin would be IOUs, and then his comments about if each IOU is fungible, you increase money supply. He’s like, it’s so simple. Either you have a fixed money supply. Or you have fractional reserve, you can’t claim to have both. And as we’ve broken down, if you’ve got Bitcoin on Bitcoin exchange, it’s not Bitcoin, it’s fiduciary media, or it’s not money in the narrowest sense or money proper. You don’t have the rival as digital commodity itself. It’s quote unquote Bitcoin or 100% money certificate at best. At worst, fiduciary media, it’s literally backed by nothing. As 0% token coin of sorts, it’s been reopened, so don’t fall victim to the fiat games that are being played, would be my suggestion. And there’s a lot of alternate ways to take control. And don’t reintroduce trust. Like the very first sentence of Satoshi’s White Paper in the abstract, even, is what’s Bitcoin it’s. A purely peer to peer version of electronic cash would allow online payments to be sent directly from one party to another without going through a financial institution. So, yes, again, naturally, some do it better than others, like instant withdrawals. So there’s a bit of a spectrum, non custodial type stuff, but very much encourage folks using BISQ and that type of stuff, where it’s all verifiable and peer to peer get to those local meetups. If you don’t have one, start one. I think that this parallel kind of making our own economy, especially with seeing something like the World Economic Forum, what’s kind of coming out like the plans are. There’s nothing but good come from meeting with like minded folk, discussing these ideas and really like different offshoots of skills and division of labor. We’ve got Bitcoin, meat groups, direct connection to the farmers, there’s all these other rabbit holes and we can all go down, but couldn’t. I know you pushed the community angle a lot and I couldn’t agree more how vital that is.

Stephan Livera – 01:33:21:

Yeah, fantastic. Well, look, I think we’ve been going for a while, so probably a good spot to wrap up any final closing thoughts for people. And where can people find you online?

Conza – 01:33:29:

Conza on the Twitter sphere. Also YouTube through Australia. Look at so. so. Like from a few seminars way back. We had Hopper out. Walter Block, Jeffrey Tucker. There’s 50 odd lectures within Australian context. There all principled, timeless, universal stuff that isn’t going out of date. And call out is yes, get your quote unquote Bitcoin off the exchanges so you can verify you’ve got Bitcoin itself.

Stephan Livera – 01:34:00:


Conza – 01:34:01:

Thanks for thanks, Stefan.

Stephan Livera – 01:34:03:

I hope you found this episode informative and useful. You can get the show notes over at Thanks. Thanks for listening and I’ll see you in the Citadels.

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