Mark Goodwin is the Editorial Director for Print at Bitcoin Magazine. He joins me to chat about the dynamics of Bitcoin and the Dollar: 

  • Warring factions in the govt
  • Monetary dominance 
  • Protocol risks created by stablecoins?
  • Bitcoin still surviving and thriving



Stephan Livera links:

Podcast Transcripts:

Stephan Livera  -00:02:48:

Mark, welcome to the show.

Mark Goodwin – 00:02:51:

Stephan, thanks for having me so much, man. Longtime listener, first time caller, so excited to be.

Stephan Livera – 00:02:56:

Fantastic. Yeah, that’s great. And I’ve seen you have some interesting perspectives both in your written contributions and work for Bitcoin magazine. I know you are also the print editor there, or print director and also some of your commentary online. I think I’ve seen a lot of interesting commentary and I think it’ll be interesting just to chat to hear the pros and cons of stablecoins on Bitcoin. I know this is something you’ve been writing and speaking about also. So do you want to just open with some of your high level thoughts about this notion of stablecoins and Bitcoin and quote unquote, crypto world and whether it’s on balance, is it an opportunity, is it a benefit or is it a risk, is it some kind of downside?

Mark Goodwin – 00:03:40:

I mean, it definitely depends on who you’re looking at, where the risk is and where the upside is. But, yeah, the way I look at it, the market is coming to realize it’s really about Bitcoin and it’s about the dollar. And those are the two things sort of competing out here in the mass market. And stable coins are a huge part of the modern dollar market. The US has to sell its debt somewhere and one of the biggest buyers of these short term, these T bills, has been stablecoin issuers. And I think it’s a really important lever of the US dollar system to combat inflation, to have as many users on the dollar system as possible. Right. And stablecoins, I think, are totally within the benefit of the dollar coalition. And I don’t really see them as being opposed to the FED at all. The FED always has sort of used private entities to deliver these bonds to and then have them create credit and give it out to their users. And I don’t think that’s a lever that really will just be given up very easily. So I think sort of at a high level, I think the Bitcoin and the dollar are kind of coming head to head. And the way that will be fought, if you will, will be like in liquidity, in pairs on a USD level. And kind of one more thing to sort of round out the pieces, this kind of idea of the Bitcoin dollar sort of akin to the petro dollar. So this idea that we want to tie our money system, our fiat system, to an energy standard like gold, like oil. So we went off kind of the gold standard, Nixon shock. And then we spent the next three decades in the Middle East kind of creating this dollar monopoly on petro, which is where we get that phrase, the petrodollars. So a big part of my thinking of what’s going on kind of a very broad reductive stroke in the macro sense, is this idea of the bitcoin dollar having really been created in the last few years. And we’re just seeing this huge lion’s share of kind of in a similar way, of creating this monopoly on this heavily demanded energy commodity. So we’ve kind of recreated it with bitcoin. You want to buy bitcoin, you got to buy dollars first. You want to cash out a bitcoin. The highest liquidity easily is going to be in US Dollar pairing. So I think the dollar system and bitcoin are strange bedfellows, and I think we’re going to see a lot of developments with that in this year. I think this will be the year of the bitcoin dollar, I think.

Stephan Livera – 00:06:32:

Yeah. So I think one comment I wanted to highlight, I think you made a really good point. It’s bitcoin and the dollar that in terms of  “crypto”, as much as I dislike that term, over the years, we’ve seen all these different narratives, right? So in the earlier years, we saw things like namecoin or have a coin to have a domain. And then we saw things like all kinds of things. We saw this narrative of litecoin the silver to bitcoin, to the gold of bitcoin, and we saw all these different utility coins. We saw all of these different coins that existed to try to keep you inside a system. But for all of that, all of the usefulness of “crypto” has really boiled down to bitcoin. Obviously, decentralized money, call it whatever you want to think of it. Is it a digital gold? Is it obviously the best thing? And stablecoins. And it seems like that’s really the use. I mean, that’s really what it is out there. And of course, I think if you were to talk to most people or even myself, I thought I probably thought four or five years ago, I probably thought all this stuff would just get regulated out, right? Like, I just thought the government would come and shut it all down, right, that tether would just get shut down. Not that I, you know, like the government, but in terms of what do I believe the government is likely to do? Are they likely to shut these things down? Yeah, probably. Now, it’s only in recent years that we’ve seen this thesis of, oh, do stable coins potentially help governments in some way of asserting or maintaining that dominance, of dollar dominance as an example. And I think maybe that’s where they’ve at least been permitted to exist. And of course, it’s also important to point out governments are not a monolith. There are different departments inside the governments, and they can even be warring with each other and fighting for control. Because on one side, maybe the KYC AML risk is we don’t want this, and then on the other side, it’s kind of like, well, hang on, maybe this is a good thing for our monetary dominance. Overall. So maybe we should tolerate that KYC AML sanctions risk because it’s going to help us retain dollar dominance. So I’m curious if you have any thoughts on that aspect of internal wars inside government departments.

Mark Goodwin – 00:08:45:

I mean, absolutely. I look at it as sort of, I say like the dollar coalition or some folks use like Team FED or whatever. But it’s something we see time and time again in history. There’s always warring factions whenever there’s any sort of special privilege or power to be taken. And what greater special privilege than the right to print money of the reserve currency of the world at such a hyper globalized moment? It’s a humongous lever. So yeah, I totally think that there are warring factors within. There are sort of these private entity institutions that these are the people that I think will sort of step up to be, again, the buyers of who’s going to buy us debt, probably these private banks to issue coins, who’s going to be king made. Basically, that’s what this week and the next couple of months are sort of seeming to come to where it’s just, the SEC has clearly made its move. We’re going to see which just to.

Stephan Livera – 00:09:47:

Listen to who aren’t familiar. Do you want to just spell that out? What move did the SEC make here?

Mark Goodwin – 00:09:51:

Yeah, for sure. I mean, it kind of started at the end of last year, in the fall of last year, around right before a lot of the big FTX fallout happened, the SEC kind of made their first real definitive statement against a security offering. And so they went at this ICO that was called Library Coin or LBRY, and they basically set the precedent that, yes, this is a security, and these laws are very black and white. They’re 90 years old. I think the securities act was in 33, and these are black and white laws. And so the SEC filed against this company and said that they had not registered as being a security and they had profited off of this. And it really set a big like, across the whole industry because and we saw huge fallouts right after with one of the big things, I think, in this FTX debacle was the FTT token was this exchange token that they issued, which, based on sort of the actions that have come through in the last few days, very likely would be considered a security for basically every reason. And it ended up being a self issued security that was behind like 40% of their holdings on the books and the liabilities. And once that all came out, everything very much so collapsed. So I guess when I say the SEC is making their moves, they’re looking at stablecoin providers, they’re looking at exchanges, they’re looking at token issuers, and they’re beginning to say at least, hey, the regulatory regime is here. What is going to happen? That it’s here and it’s loud and proud and starting to mess things up for people. We don’t exactly know what that will resolve to, but I’m certain that the stablecoin regulation will be humongous moving forward. Which one of these private entities gets to sort of be the de facto CBDC, sort of for the United States? Whether that’s going to be a circles USDC, which is very possible, right? I mean, their reserves are held by BNY Mellon, which is one of the digital dollar pilot partners, which they’re running right now. They’re one of the biggest institutions in the world. They have their hands in almost 20% of the money in the world, and they hold the paper for Circle. Right. So there’s a lot of who’s going to get this unbelievable privilege to be able to print dollars. And I use print loosely there, but yeah, it’s going to be incredible to see what really comes of this regulatory action.

Stephan Livera – 00:12:32:

So if we were to look at the marketplace today of high big stablecoins so it’s probably three main players, right? So obviously Tether, it’s the elephant in the room. It’s the biggest stablecoin by far, most liquidity by far as we speak today. It’s february 16, 2023. Tether USD’s market cap, as I look, is about 70 billion. Next on the list is USDC, which is the Circle as you said, which kind of arguably might even be the regulator or the government’s favorite, or at least they’re trying to position themselves that way.

Mark Goodwin – 00:13:08:


Stephan Livera – 00:13:08:

So USDC is about 41 billion. And then Binance USD, which obviously has taken a big drop recently. It’s about 14 billion. Now, the interesting move with BUSD as well, and I think you called this out in one of your articles, is that Binance tried to make a play a few months ago where they force converted people’s stablecoin balance out of USDC into Binance USD. But then what we saw finally recently is there was an enforcement, there was some kind of action. I think it was SEC versus Paxos, who is the US. issuer of Binance USD. So it’s sort of like there are these big moves being made and played around who gets to be the stablecoin top dog.

Speaker B – 00:13:52:

100% and right before the FTX implosion, he was on a podcast and SBF said that they were looking to make their own stablecoin and they were looking for the right partner to do it. And within weeks they filed Chapter Eleven. That’s not something you just bring up loosely, right? That’s something that sort of triggers the self preservation incentive levers of the whoever is in the warring factions of the US. Dollar system. And FTX was really kind of systematically taken out because they did a fraud. I mean, obviously they’ve screwed up. They were committing crimes commingling users funds, but also they were very publicly they let loose their liquidation position for FTT and that Peg was attacked. And then right before that, right, we saw another stablecoin attempt with the Luna Terra. I’ll just call it a fiasco. They tried to create their own stablecoin and, you know, buy or they did create their own stablecoin, buy billions of dollars of Bitcoin, and then, you know, their algorithmic Peg, got attacked, 30,000 Bitcoin get liquidated on Binance and it’s all gone. So, yeah, stablecoins are incredibly, if you can wield and create a Liquid one, it’s a hell of a tool to have in your belt. And obviously, of course, there’s an incentive for these huge exchanges to close positions in USDC and say, hey, we can just make our own stablecoin. Why not? We can easily get it up to ten plus billion dollars worth and it’d be totally fine because we have so many users. So every exchange you would think would be incentivized to do that. And so FTX went to go do that and boom. And then they’re out.

Stephan Livera – 00:15:42:

And remember, it’s highly profitable.

Mark Goodwin – 00:15:45:


Stephan Livera – 00:15:48:

There was a comment recently that Binance is literally making more money, or was, I don’t know now the situation, but it was making more money out of BUSD than out of the spot trading on Binance, like literally one of the largest platforms on Earth. So there is a lot of money in this game. So I think it’s also important to remember that. But I think then it kind of comes to that risk aspect of it, because as Bitcoiners, I think obviously we have to recognize the world as it is today and understand, okay, yeah, we’re in a dollar denominated world today. Of course we would like it to be a Bitcoin denominated world. We want to try to get to that. The question is, what are some of the right ways to get there? Right? If you are a Bitcoiners today, whether you are just a hoddler, a stacker, or whether you are trying to build some kind of business, how much interaction with stablecoins should we have? And I think that’s also coming into this question about should Bitcoin products and Bitcoin wallets and applications, should they have stablecoin support? And I think this kind of brings up and when you bring this up online, there are big debates online about is that the purpose of this thing? Is that the right way to go? Or is it driving a high risk of capture?

Mark Goodwin – 00:17:03:

Yeah, it’s strange that, you know, you’d like to think a Bitcoiner would be anti fiat anti dollar complex, the military industrial complex behind it is frankly one of the biggest terrorist organizations in the world. And it seems so strange to see so much stablecoin support. It’s like these are petro dollars, these are petrodollar derivatives that run on usually like Ponzi Scheme, Alt chain Rails, where these fees are going to these people that I think very arguably are not operating in good faith, running some of these smart contract platforms. I don’t want to tell anyone what to do with their money ever. And I obviously understand why people want access to the dollar when it’s hard to have access to. It’s a great technological tool over every other fiat currency ever, but it’s still fiat currency and we’re buying the debt of this corrupt and criminal organization. So I’d like to think Bitcoiners would be averse to stablecoins when they really understand what they are. They’re not decentralized, they’re issued by a central issuer, they run on decentralized and name only Ponzi rails. And at the end of the day, the economic policy of the greater dollar system is still sort of directing the value and sort of security, if you will, of these products, these petrodollar derivatives. So I don’t like to see it personally. It seems to be that there’s sort of a push towards introducing these technologically into the base layer and then using them in sort of taro assets on Lightning. And that’s a big talking point that a lot of people in the Bitcoin community are really excited about. This is this killer app, this single Lightning wallet that has bitcoin and dollar operability and it just raises a lot of red flags for me. We saw kind of what happened with Ethereum and the merge and now there’s this heavily o fat compliant chain that I think a lot of it was because of this perversion of the native asset of Ether to not really be the lion’s share anymore of the economic value on the system. We saw stablecoin swell to like 100 billion and we saw it be this very dominating presence for where Ethereum was going to fork to next. Ethereum is very fork by nature. Luckily bitcoin isn’t. But I still have some hesitations about introducing US dollar non-native assets into Bitcoin. Now, of course, Bitcoin will never use dollars natively. You always have to go to Satoshi, it’s the atomic unit of Bitcoin. But anytime you go up against such a huge system like the dollar and you introduce this non-native asset interoperability, it brings up these questions of liquidity needs. And I believe stake will always flow from those with shorter time liquidity needs to those with longer time. They don’t have a lot of liquidity needs, right? It’s going to naturally flow that way no matter how distributed it is at the beginning. If all the Hodlers have to sell their bitcoin first, it’s going to flow to whoever has less liquidity needs in the short term. And there’s no one that has less liquidity needs in the short term than the US dollar system. I mean, they can create money at will to sort of the de facto shareholders of the FED. So I worry about introducing that into the Bitcoin system. I think that’s definitely an attack vector and I would see a lot of Bitcoin flowing to the entities that surround the, whether it’s the digital money printer or the regular one. So that definitely does worry me. But then again, I understand why people want to use dollars, I do, but I like to think that we know that there’s a much bigger mission here and bitcoin has a huge role to play in the dollars upcoming future. But I think in the rest of the world and society at large, obviously we all love Bitcoin. And so I think to break some of the purity of it and introduce petro dollars to it, to me, it seems very anti Bitcoin.

Stephan Livera – 00:21:41:

So I’m sort of agreeing and disagreeing in certain ways, I think I certainly see there’s some risk there. But I think there are also a lot of people who it’s going to be hard to just tell them, go bitcoin only. I use bitcoin only in terms of how many stable. I have a test amount of USDT on my Blockstream Jade, right? As an example, I have like $10 or $15 worth of USDT or whatever just to play around. But thinking of somebody who’s in a country where you don’t have US dollar access, you don’t have US bank account access, and your fiat is just continually devaluing, it’s probably a difficult thing for us to just say, hey, just go bitcoin only if you all kind of and I think the other aspect of it is stable coins might help those people who are in bitcoin, because you might need to be able to sell. And those OTC traders a lot if you talk to them and you want physical cash, oftentimes what they want, they want, you know, today, at least here in the UAE, from what I understand, a lot of them want either the ERC 20 version of Tether or the TRC the tron version of Tether. That’s what they want. Now, some of them are willing to still deal with directly with Bitcoin, but some of them are just like, no, we only do Tether, and not even any Tether, ERC 20 Tether or TRC 20 Tether. So then the question is, how do you live in the world today without having that? Because unless you can afford to pay everything with bitcoin directly, or you have enough people that you can sell for cash, but what’s the use if the person you’re selling to, he needs to use a stablecoin because he’s going on some exchange somewhere? I can sort of..

Mark Goodwin – 00:23:24:

Totally Yes, I mean, it’s difficult because I mean, I don’t think it’s appropriate financial advice to tell someone to 100% use Bitcoin right now. We’re not quite at that place where, I mean, we’re pretty damn close. It’s definitely the easiest it’s ever been to predominantly or entirely use Bitcoin for all of your financial transactions. There’s tools, there, a lot of them do skirt around and end up going into dollar for sure, but I think it really depends on your situation. But I would push back on this idea of people that don’t have access to the US dollar it’s like, well, the US dollar is a very mediocre thing that is attempting to dollarize and globalize the world. So are we building freedom technology? Are we helping empower people ultimately to get out from underneath these huge banking regimes and these imperialistic coalitions? It’s tough. I definitely understand the use case and I used dollars, but I try to minimize it as much as possible, truly. And I save in bitcoin. But yeah, I think it’s a bit much to ask of the world to drop a lot of these habits and tools. I mean, the dollar is a fine technological tool for money in a lot of ways, but also it’s failing in a very big way. And so we’re going to have to be dealing with a lot of monetary inflation eventually when we increase units because of the price inflation that we’re going through. So I don’t think the dollar is really a safe thing to try to build out new rails or establish either in regards to from a freedom technology standpoint. But in terms of a day to day like microeconomic standpoint, yes, it totally makes sense to keep your daily spending in dollars if you’re in an area that accepts it. You need to use the liquidity pairs that have liquidity in your day to day. And so you’re pointing out a couple of those, the tron token and Ethereum tether. But again, it’s like you’re touching tron, you’re touching Ethereum. There’s money going to these people, there’s money going to the issuers and there’s a very special privilege being given to the stablecoin issuers. So it’s tough to ask an individual to take the plunge and de-dollarize. But I think as we get further along and bitcoin really starts to get a lot of adoption, hopefully those granular points will diminish enough where we really can move away from the dollar. But it’s not going to be that fast. I mean, we all want hyperbitcoinization now in a lot of ways, but in a lot of ways that would be really ugly. A lot of people would get left behind if bitcoin went seven figures tomorrow. How many people wouldn’t be prepared, would be priced out from ever being able to hold any really significant percentage of their wealth in bitcoin? We’re already getting to that point. What average person has $25,000 or whatever we’re up to today and extra capital to spend. So people are going to continue to get priced out again. Yeah, it’s a lot to ask, but if you set the stage.

Stephan Livera – 00:26:47:

Yeah, and I think one other aspect of it is the method of using it. Right. So as an example, with Tether bitcoin as in sorry, Liquid USDT, there is no altcoin. Right? Because I view LBTC, it’s more like it’s custodial. Yes, because the federation controls it, but it’s not an altcoin because LBTC is pegged directly with bitcoin. So it’s kind of like it’s in a bit of a special category, whereas yes, with TRON and Ethereum Tethers, you are using the Altcoin as the gas or the fee asset when you transact with those. So I guess maybe you could maybe make a distinction there. And then there are different means that people are using to offer stablecoins. So, for example, I did an episode a little while recently withnar Yuraj Bednar, he’s from the Czech Republic and he’s fully in the kind of libertarian Cypherpunk angle. And his view was that he didn’t want to use those stablecoins. Similarly to you, because the underlying holder is holding government back debt bags. You’re funding the government, right. By holding some of these tokens, you are in a sense funding the US government, right. Because you’re helping them dump their debt, their debt bags. And so, you know, for a libertarian or a person who’s anti the state or at least wants the state smaller, it kind of makes you a bit okay, yeah, I need to think about that. Right. But then there are alternatives. So, as an example, there is this notion of synthetic like crypto, euro, dollars. So I think historically the idea was people would use BitMex and they would go one X short. And this seems to be a thing that traders would do when they wanted to be neutral. And now there are people who are productizing that so, for example, I know Kollider with a Kollider with a K and I know LN Markets has this product and of course Bitcoin Beach Wallet or from Galoy has a feature called Stablesats. And so these products are not holding government debt bags. They are instead using a synthetic position with a bitcoin or a crypto exchange to replicate the US dollar value. And so maybe there’s something there that if you can use one of these products, you put Lightning in and yes, it’s custodial. So of course there’s a trade off. Listeners beware there is a custodial trade off here.

Mark Goodwin – 00:29:01:

There’s always a trade off for anything.

Stephan Livera – 00:29:04:

Yeah, but so let’s say people could deposit in with Lightning, flip it into the synthetic USD or synthetic URL, and then at the point they need to spend withdraw over Lightning and spend over Lightning. And so Lightning can maybe become a bit of the glue there for people to.. absolutely, yeah.

Mark Goodwin – 00:29:21:

Absolutely. Yeah, and also we’re seeing some interesting developments with more of the Federated model with like Fediment and Cashew, which are sort of E-cash protocols where they’re interoperable with Lightning. But then within the federation themselves, you can create kind of synthetic assets like that. Yeah, there’s no shortage of good ideas and there’s a lot of cool people building a lot of really cool stuff. I’m not incredibly familiar with that specific Stablestats, but I have heard of them. Yeah, I think it’s a little bit better. It’s a little more kosher, if you will, like not touching government debt. But yeah, of course there’s always going to be. Some trade-offs there when you’re trying to create a market like that. And liquidity is such a big part of it. And the dollar is one of the things that it is because it’s so Liquid. Huge amounts, huge amounts of dollar movement. I think people should experiment with that stuff. And I think that will be a big part of the Lightning network’s growth as a payments network. When we have these federated kind of chomi and mint styles that are sort of this bridge, this nice blind pretty anonymous bridge to maybe more legacy traditional style of a payment network which probably institutional Lightning will be we’ll be able to see the Cypherpunks be able to come in and use these protocols to sort of keep their balance hidden, but still be able to interact with the greater Lightning Network. And then of course, we’re seeing stuff like with jack Mueller’s just announced, I believe yesterday was like a dollar API for the strike network that has some sort of market maker where the dollars are not using stablecoins. He’s very specifically said not using stablecoins, but there’s a market maker within their API that allows them to use dollars and Lightning Satoshis interoperably, which is really interesting. But yeah, I’m not a huge fan of the dollar in general. I try to unit of account when thinking about my bitcoin is always in bitcoin. But of course, price drives everything, even just the excitement of the last few days and whatever you’re seeing, things definitely happen when numbers go up. And I think that’s a big thing that we need to really consider when dealing with how we want to really build bitcoin here. Understanding the dollar system is right there. It’s just a huge part of the choices we have to make moving forward.

Stephan Livera – 00:32:00:

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Mark Goodwin – 00:35:04:


Stephan Livera – 00:35:05:

What kind of risks do you foresee? Is it mainly a regulatory sort of attack, or is it more like, okay, as an example, let’s say the TARO end points are the ones where the regulator or the government will try to go after them because they are the ones doing that final exchange between Tether, TARO and bitcoin as an example.

Mark Goodwin – 00:35:27:

Yeah, it does bring up some potential for regulatory capture, although I’ve been thinking a lot about this and I don’t think the government needs any more reason to go after bitcoin than it does bitcoin taking away this level, we certainly don’t need to bait them on to do anything else. But yeah, I do see there potentially being a money transmitter law, some sort of regulation there where if nodes are now actually holding dollar assets through this TARO asset Merkle Tree native on-Chain I think a lot of people look at it as sort of a Lightning protocol because of what it will do with Lightning and having US. Dollars and Lightning channels. But it is a bip and the actual storage of the Merkke Tree is on the main chain. So there is some potential there for advanced regulatory capture or some sort of notice requirement. But I think I’ve been thinking a lot about this stuff in regards to witness data, right? So Taro is witnessed data just like Ordinals and a lot of people have brought up this legal debate when talking about Ordinals and it’s a big fear that this will exacerbate someone trying to the government coming at you because there’s illegal activity on your node or whatever. And I think the greatest kind of reaction and answer to that is like the government needs no more reason to go after this than it already has. So I think I’ve pushed back on some of the heat there of the regulatory capture now that I’ve kind of seen a use case that has used the witness data in a similar but very different way and thinking about how the government would react to it. So I don’t think there’s really regulatory capture, I think there’s a little bit there but again, I worry about bringing in this very Liquid fiat system, this leviathan into the bitcoin system. I feel like it is something we should be just be very careful however it is developed. And I do think I understand why people are very bullish on it and I understand why people see it being a huge multitrillion dollar industry which in many ways I do agree. I think the payment channel model enlightening is the shared UTXO model is just technologically more efficient than our card processing that we use now. It is a huge industry and it could bring great liquidity to Bitcoin and interest to bitcoin the network. But I do have a little bit of hesitation of what it will do to the asset and the holders of the asset and going up against this entity that needs no short-term liquidity because I don’t want to see bitcoin dollarized or captured in any way. And I think it has a much smaller attack surface than an Ethereum, but there are some attack surfaces there through mining and through some of these other things that can be subsidized. Like, hey, let’s pervert away good custodial practice by giving you USDC yield. Easy. And so anytime that we cozy up with the dollar system, I think bitcoiner should just be very cautious because it doesn’t have our best interest in heart and I don’t think we should have its best interest in heart either.

Stephan Livera – 00:38:40:

So in the Ethereum case, we saw tether and circle, the creators of USDT and USDC both come out in favor of the merge. And so I guess in that case it was uncontroversial. But let’s say there was a fight about it. Let’s say there was some controversial thing. Do you believe that shows an example of where capture is? I think that’s probably an example where capture is possible. Right?

Mark Goodwin – 00:39:08:

Yeah, totally. And I think that everything was copacetic because all the players that were involved in the merge were all totally okay with how the power would shift away from minors from ETH minors to ETH stakeholders. And I think there was no big hoopla there because everyone was in alignment about sort of what the future of ETH would look like in a post-merge world. Bitcoin doesn’t have that. The consensus is not tied to stake in any way in bitcoin, which is one of the things we love about it. That’s not necessarily as true in a proof of stake system that uses a lottery based validator system. That is, the more votes you have, the more lottery tickets you have, and who gets to validate the next block is based on how much share you have. So we’re seeing these centralizing economic forces, and then we’re seeing that compounded, and that stake is never going to be caught up to by any of the other smaller entities. And so when you’re giving validation in a weighted manner, I think proof of stake opens itself up for its consensus to be perverted by centralizing forces. And I think we’re seeing that with this over 70% OFAC compliant validation. But, yeah, I mean, nothing happened because I think everyone was happy with who owned the stake and what was going into the next part of the Ethereum life cycle, if you will. I think everyone was very happy with it. So that’s why we didn’t see anything. But the miners never would have been able to slash or fork away and create a minority right system because of how great the stablecoin, the 100 billion plus assets on the chain. If they tried to do anything, they would say, okay, well, we’re going to blacklist all of the USDC addresses on your dumb fork, and USDC Eth is going to be the king made coin right, or fork. And that can’t really happen in bitcoin, thankfully. But they can buy up a lot of bitcoin, they can buy up a lot of miners, and we can see them attempt to sort of chip away at this honey badger. But luckily, this is why we like bitcoin. This is why we like the Nakamoto consensus. This is why we like proof of work. It’s an open competition every time. And so you can’t really just get ahead and stay ahead. You have to distribute your wealth, you have to spend bitcoin. You literally have to spend it. You can’t just hold your ETH gain yield and then sell the yield you need to literally distribute the wealth that you have to utilize the system. And that has a sort of a self regulating mechanism within its consensus that it never coagulates in that same way.

Stephan Livera – 00:42:04:

So what would you say is the main capture vectors then? I could imagine a skeptic listener might be thinking, well, hang on, Mark, I think Bitcoiners just so much harder to capture. So is it really such a problem if people would build out stablecoins? Because what’s the vector, right? They could come to you and say, well, what do you think? The miners are going to be the vector? Or do you think it’s like the regulators are going to come after the Lightning node operators in the US. Or is it some kind of protocol thing?

Mark Goodwin – 00:42:27:

I think it’s a combination of a lot of that, of a lot of things. I think mining has a huge part of it. I think we’ve seen sort of these business models of these big miners. We’ve kind of seen what they were worth or maybe what they were intending, where hash prices plummeting, we should be seeing shutdowns of these, these very large mining operations, and instead we’re seeing breaking all time highs in hash rate. There’s something going on there that’s not as economically incentivized to be throwing on hundreds of Exahashes of hash. And yet here we are at 310 exahash. So I think there is some centralizing forces in mining. I think obviously, from a privacy standpoint, I look at bitcoin really as a transparency technology, but the more we let, especially with the Lightning Network, it costs money to probe the network. So by introducing this very easy Liquid exchange of dollars to satoshis, it could potentially be easier to probe the network for Lightning surveillance. I think we could see some regulatory pressure. But again, Stephan, I’m obviously very bullish on bitcoin, and it’s like this is one of the things that I love about it. I think I’m very skeptical about bitcoin only sort of as an act of love, and I’m sort of thinking about how things could go wrong. But there’s a reason why I am as invested in bitcoin literally and with my work, professional life and as my hobby and everything, is because I think it really does offer a counter as this sort of unique database commodity thing, network monster to the dollar system and to a lot of the things that we’ve used before. And yeah, it is very special. I do think it’s dangerous to maybe continually preach and say that bitcoin has already won, because it certainly hasn’t. But at the same time, I do think there is some sort of escape velocity that has happened in bitcoin that of course we’re going to have boom busts, we’re going to have down cycles, bare cycles. But I do think enough people are sort of invested in the game of Bitcoin that will keep this thing going for a really long time. The network effects and the game theory of the economics of bitcoin on an issuance level, on a consensus level, really does create this very socially strong network of trust communication. And so, yeah, I’m incredibly bullish on Bitcoin’s ability to resist the state and that is why it’s a very special thing. I don’t know if that is a cop out, but I address a lot of the concerns. But I also think in so many ways, bitcoin is ultimately, I think, going to have to be used by governments and states around the world because I think it will be an inevitability economically. They’ll have to have some exposure, although get left behind. So I think we’re definitely in the then they fight you phase. And we are now absolutely in, I think probably round two, even of the dollar system versus bitcoin. We’re going to see this play out through the stablecoin sort of pawns in this game. But again, I do think bitcoin will succeed with its robustness versus the political social nature of fiat. I do think bitcoin will win ultimately, but the dollar certainly will not go down without a fight and I think most likely will end up being this sort of strange leech on bitcoin, certainly for our lifetimes.

Stephan Livera  – 00:46:06:

Right. And I think the important point is just to remember, of course, I would like to hide bitcoiners sooner than later, of course, but a lot of people today have their value in the fiat system. And so then the question is, how do they get out of the fiat system and into bitcoin? And to be clear, what we’re talking about here is the number of dollars is the same, but the people who hold those dollars, like what we’re talking about, is the relative valuations shifting, right? Because the same number of bitcoin exists, the same number of dollars exist, but it’s just those relative valuations have to shift. And so I think that’s why there’s this tension, because the bitcoin economy still today needs that connection with the US dollar economy, because there’s all these people with dollars who want bitcoin or there are people who have US dollars and we’re trying to teach them why bitcoin is better or at least put our message out there. But they still need a way to connect and not everybody will be ready and willing to do everything peer to peer or earn. So fundamentally, there’s going to be all these dollars in these US bank accounts all around the world still have to find their way to bitcoin. Right, so I think that for me is where the tension is.

Mark Goodwin – 00:47:17:

Right, yeah, totally. And I mean, we saw a bunch of people rush into the dollar, the DXY, the DXY, the sort of relative strength, not relative strength, but comparative strength, sort of index against these other national currencies. We saw the dollar crush 30 year highs back when we saw Paul Volcker in the mid 80s cranking up interest rates to plus 10%. We saw a huge jump into the dollar, colloquially kind of known as the dollar milkshake theory. And we saw that kind of play out because we saw mass amounts of inflation in fiat currencies all across the world from lockdowns and pandemic responses from governments and so we saw massive inflationary effects and then we saw people running into the dollar because it was a better technological tool. So we saw all these people move into the dollar around the world. There was huge demands for stable coins, we saw stablecoin issuance explode in the last three years, huge demand for dollars. But that came out of sort of a failure from their current system pushing them into a better money, this Gresham’s law kind of thing. And so people are less likely to move out of the dollar system when there isn’t a forcing agent pushing them out of the dollar system and into bitcoin. And a lot of us have seen that, have felt that know that you can’t just print x amount of trillions of dollars and not have inflation. We all kind of saw this happening and prepared ourselves in some form, but still in the day to day. Sure, inflation is not great in the US or in Australia or in Europe, but people are still able, generally to eat and pay their electricity bills. And I hate to laugh there because some people aren’t. But generally things are like, okay. They’re like, okay. But that very easily could turn not okay really quickly with escalation of war, with escalation of energy and currency crisis and more. So that forcing function to push towards a bitcoin standard I think will come out of kind of a necessity, unfortunately. So yeah, right now there’s a lot of privileged, and I kind of hate that word, but the dollar is a good tool at the moment. But the dollar has to deal with its own issues shortly. It can’t keep kicking this can down the road. We’re smashing into the debt limit again. The interest that we pay and our debt service every year is now past the amount that we pay just to service the debt, past what we pay to protect it with the military. Our debt spending is now above our military spending, which is like you think of one of those fulcrums of when a currency has kind of with the tipping point, right? Yeah, it’s like oh, you’re actually spending more to uphold the currency than the guns that uphold the currency. We’re a zombie company. The US is a bankrupt zombie company. You would never invest in it. You can look at the numbers and know how many trillions of dollars we need to pay and how many billions every day we need to pay just to service the debt. So I think there will be a forcing function at some point. Whether it’s a worldwide recession, I’m not sure. The first thing people are going to want to do is go buy bitcoin if there’s a recession. But I think probably the second thing they’re going to want to do is how do I prevent this from happening again and protect myself? So I think there’s a lot of forces, a lot of things going on in macro and the regulatory regime. There’s a lot of things that we’ll see, I think, play out in the next ten months or so, finishing out this year, that we’ll know a lot more about the future of the dollar, about the world economy and bitcoin’s role. To both of those, I think by the end of the year, I think we’ll have a pretty good idea and then it’s like, happening and the cycle starts all over again. So this is going to be a very interesting one. Bitcoin is matured, it’s on the big dance, it’s on the dance floor and it’s ripping stuff up so that doesn’t get ignored for too long. So, yeah, it’s going to be fun. I’m excited and I hope it’s not too bad.

Stephan Livera – 00:51:33:

I’m also curious if you see any okay, as an example, let’s say the US government starts to really regulate hard. They try to put the hammer down on stablecoin US dollar stablecoin issuers and people working with that kind of thing, do you see a chance that people could try to switch away to other currencies like the Swiss franc or the pound or the euro? Do you think people might try to shift volume into other stablecoins or other fiat currencies? Or do you think it’s just kind of like overall, it’s just US dollar dominated?

Mark Goodwin – 00:52:09:

I mean, where there’s an opportunity and an arbitrage situation, I think people will always take advantage of that. We’ll see, I think, interesting things with people that are involved in Japan’s banking system. They always do very creative, interesting things. They’re, I think, our biggest creditor. So I think we might see some interesting things with the yen. The yen is a very interesting one. It moves around, it’s very volatile and they have negative inflation or sorry, negative interest rates. At the moment, I believe they’re even below zero. So a lot of creative things going on there. We could see some people move some elements of their wealth around, but really, yeah, what we are seeing, I think, generally on the global scale, is sort of a currency war. And so we are seeing these people kind of coming against the US dollar coalition. We’re seeing petro futures settled in euros between China and Russia. It’s like, what does that even mean? I mean, thinking about that happening, you know, you know, ten years ago, 20 years ago, that would never, never happen. Obviously, the euro is very young as well, but that’s a really creative strains interesting thing to see from two of the issuers of two of the other most important currencies in the world, in Russia and China, using the euro as a petrol settlement. So I think we will see a lot of creative anti-dollar activity from the global economy. And I think we are kind of generally seeing that it’s definitely a cold war, but it’s a cold currency war. I don’t really personally see a significant chunk being taken out of the dollars chokehold outside of a true alternative of a system. But I could be wrong. I mean, the dollar is generally historically kind of right at that point where world reserved currencies start to go. And arguably we probably should have lost economic Hedgeman in 2008 in the great financial crisis and instead we just kind of pretended it didn’t happen, printed a bunch of money, bailed everybody out, didn’t put anyone in jail, and then we’ve only blown out the debt ever since. I definitely see people the dollar for the first time in a very long time is showing signs of weakness, is seeing high inflation, people are noticing this runaway debt. We’re having political issue within our own country of which direction we want to go. Do we want to print a lot of money? Do we not? It does look weak, so people will try to take advantage of it. But I think from like a user standpoint, there’s just so much demand for dollars. I don’t really see that getting that going away lightly.

Stephan Livera – 00:54:49:

Right, because I think people have become so used to stablecoins now that they’re not going to let them go so easily, especially the US dollar stablecoins. So I guess the moral of the story we’ve been speaking about the potential risks of stablecoins on Bitcoin. And so while there are some risks, I guess the moral of the story is bitcoin is unlikely to get captured by them, though there is a risk. And so we’re just going to carry on over the next I mean, who knows how long this takes? It might be ten years, it might be 20 years for hyperbitcoinization that people will use these stablecoins or other means, things like stablesats and so on, and synthetic crypto dollars, let’s say, to help transition over into a bitcoin economy. So I guess is that the kind of the overall summary? Is that how you’re seeing it or how would you sum it up?

Mark Goodwin – 00:55:39:

Yeah, definitely. I mean, one level back, I think, not even to the stablecoin level, but just dollars in bitcoin I think are going to play. The future of the dollar is really on whether or not we can service our debt or not. And the way that we do that is by sort of ideally targeting bitcoin as sort of this inflation metric, sort of replaced CPI with bitcoin and using the inelasticity of bitcoin as a commodity to be able to blow out the dollar while still having some unit that you have on your books. You print tons and tons of dollars, but you hold a lot of bitcoin, which I think is what a lot of these big banks will do when BNY Mellon comes out with a stablecoin. Or maybe that is what circle with USDC is. Or when bank of America JPMorgan, they release these coins, they’re going to be a big part in servicing the debt of the dollar and getting onboarding users to help deal with the inflationary effects of monetary inflation. So that’s already absolutely happening. And then you actually look at how will that actually work. And I think the biggest way that it will work will be exchanges and banks that offer bitcoin purchasing custodial services and dollar services, issuing large amounts of stablecoins and using those stablecoins to service bitcoin users so they’ll be able to hold bitcoin on the books, buy bitcoin with stablecoins, and we’ll see it, I think, very much so, naturally. Sort of evolve. I think we’ll see the majority of exchanges and banks heavily dealing with dollars and heavily dealing with bitcoin. So, yeah, I’m less worried about the capture, more interested in how the economics of the dollar playout and how quickly they move to printing and move away from this higher rate, rising rates environment. And I think the way that they do that is by onboarding tons of users, printing a bunch of stablecoins and having these private banks buy up all of these T-bills from the fed. I honestly don’t really see any other way out for the dollar. They’re not going to peg it back to gold. I don’t think the petrodollar monopoly is politically popular anymore. We can’t just willy nilly be invading people. There’s at least public concern against that. So I really see it as stablecoins being the tool that helps preserve the dollar by buying up T-bills and getting more dollar users. So that’s kind of how I see it playing out. And I think ultimately it will be incredibly good for bitcoin and less good for the dollar as it goes on. That will definitely trend that way. But for now, I think it’s in the dollar’s best interest to create as many dollar derivatives as possible and try to get as many dollar derivative users as possible.

Stephan Livera – 00:58:33:

Yeah, I mean, it’s like an expansion of the euro-dollar system. It’s the crypto-euro-dollar. I think that’s the system that they in their interests would probably prefer. Right. Despite the AML KYC sanctions and all that, they would still probably prefer that. So let’s see where it all shakes out. Let’s chat a little bit about the print edition of the bitcoin magazine. So tell us a little bit about what you guys are doing there. And yeah, just tell us a little bit about that.

Mark Goodwin – 00:58:59:

Yeah, totally, man. I’ve been full time with Bitcoin Magazine now for just over a. Year. I’ve been writing for them before that and in the Bitcoin space for years before that. But, yeah, it’s been amazing to work on this print product. It’s super fun. We’re definitely a freedom technology. We’re looking at Bitcoin adjacent stories. We have tons. The online has a legendary contributor network, yourself included. A lot of amazing folks dropping tons of amazing stuff on there. We have 300 plus contributors and then so the print product is really almost like a quarterly coffee. It’s a pretty thick mag with tons of writers from all across the board. Different viewpoints. I think at this, .one of our main missions is just sort of understanding that what it means to be a Bitcoiner has changed radically and it will continue to change radically. And if we really are doing our jobs as a Bitcoin sort of freedom of speech platform, we need to be showcasing all of that. So we always do a theme cover story. So the last one was the Broke issue. We had SBF on the cover all kind of dolled up as a Bahamas pig with a fake Forbes cover, which was a lot of fun. But, yeah, it’s a great team. Germano, Mike Germano is our publisher, the great Pete Rizzo is our editor in chief, and then it’s me and Peter Chawaga, the two editors in the print product. Joe Rodgers is our GM, Super Savage, and then AB Annabelle is our designer and she’s absolutely incredible, does amazing work. Yeah, it’s super fun. It’s an absolute pleasure to work on it. I get to read all my favorite writers a couple of months before everybody else and it’s an absolute honor. And, yeah, I hope we’re doing the Bitcoin community for shooting them as well as they’ve treated us. So, yeah, it’s a lot of fun. It’s at Barnes and Noble. You can find it online at store Yeah, we release one a quarter. So got a really nice fresh one coming up that I’m working on right now. Got a great cover. It’s going to be a lot of fun. It’s going to be very heavy. It’s going to be great.

Stephan Livera – 01:01:09:

Fantastic. Well, I think that’s pretty much all we’ve got time for. So, Mark, where can people find you online?

Mark Goodwin – 01:01:14:

Yeah, totally. Obviously all my writing is I got a book coming out in a few months called The Bitcoin Dollar talks about a lot of the stuff we talked about today. You’ll be able to find that at Bitcoin magazine as well. You can find me on Twitter @Markgoodw_in and there’s an underscore between the W and the IN. And then find me at the BTCMag is the print magazine Twitter handle. So, yeah, come follow, come read, come say hi, submit a submission. Obviously, Stephan, you got to write for us. You do amazing work on so we love to have you in the print. And yeah, thanks so much for having me. An absolute pleasure again. I love your podcast. I think it does great job at doing culture macro. And you really get into the weeds technologically, which is really nice. So, yeah, absolutely. An honor to be here, man. Thanks so much.

Stephan Livera – 01:02:01:

Fantastic. Thank you. Mock show nodes are available at Thanks for listening and I’ll see you in the Citadels.

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