The Bitcoin Handbook is a new visual and simplified explainer of Bitcoin concepts by Anil. Anil has been making awesome graphics and explanatory content about Bitcoin and he joins me on the show to chat:

  • Meeting people where they are 
  • Different ways of explaining bitcoin concepts
  • Why property should not be your piggybank
  • Property Bubbles and investing around the world
  • The intransigent minority
  • Where to get the book



Stephan Livera links:

Stephan Livera  00:00:00

Anil, welcome to the show.  

Anil Patel 00:00:02

Thanks for having me, really excited to chat.

Stephan Livera 00:00:04

Yeah, I’m a fan of your work. You’ve been doing some great stuff in terms of helping simplify Bitcoin concepts and the challenge for people is Bitcoin is a very complex thing and there’s all these different ways you could look at it. There’s different fields that you might need to go and do some research. I mean, it’s not that you need to be the master of all of these things and some amazing polymath. But you might need to do a little bit of work on all these different areas. Just to grasp what’s going on here. So do you wanna just tell us a little bit for people who don’t know you, can you tell us a little bit about yourself and a little bit of your journey into doing what you’re doing?

Anil Patel 00:00:41

Absolutely. So, I, like many bitcoiners, was pretty much just completely absorbed into it. The more I understood it. And could appreciate what it could actually do for me, for my family, for my community, and I don’t come from a technical background, so I really didn’t know how I could contribute to this space. The gap I guess I saw was really around helping other non-technical people understand what Bitcoin is and Bitcoin is many things, as you pointed out. So how do we build assets or almost like an arsenal of content that Bitcoiners could use when helping to educate their friends and family, who maybe are coming from almost zero understanding of what Bitcoin is? Or maybe having never even? Out of it so I just started a side of the desk as a hobby, creating little visuals, infographics wrote y ou know, started writing a newsletter and overtime, you know, you refine your messaging a little bit and you see what hits and I just kept doubling down. And you know, now I’m really happy to be in a place where the community is kind of accepted my work and there’s huge amount of support that I’ve gotten and I’m really grateful for and here we are.

 Stephan Livera 00:02:06

 I think it’s important to point out that in the earlier years, there just wasn’t a lot of high-quality information and that even if there was, it wasn’t the popular information. I think some of the ideas like Austrian economics and things like this. Yes, they were around and there were people talking about them. People like let’s say Tour de Mr. or Peter Serta. Conrad Graff, at least at the time I was coming in, they were some of the people who were writing and speaking from an Austrian perspective, and of course my friends Pierre Rashard and Michael Gold. I mean and only later that we started to see people find new ways to sort of crunch it down, simplify it, put it into simple terms. And like you said, I think it comes from having a lot of practice. A good example is young Pritzker, when he made inventing Bitcoin, that was actually the result of him teaching a lot of high school students. Over and over and over, here’s how you learn about Bitcoin. And then he just found certain analogies that used to work. So, what’s that process been like for you finding what works? How do you skillfully convey the basic?

Anil Patel 00:03:06

Yeah, you’ve you absolutely nailed it and you know, just to point out, very little of what I produce is my original ideas. You know, I’m standing on the shoulders of giants, you know, many of which you just mentioned, which were instrumental in my own journey, including yourself. You know, I kind of ran into that brick wall by sending friends. So fairly well-educated friends with a with a financial background or economy. You know I might send them a podcast of yours, maybe talking to tur or to Pierre from five years ago. And it just wouldn’t connect with them even though it was incredibly high signal content. It’s just in their maybe normally lifestyle or world there, there isn’t really that inclination or the space in their calendar to kind of sit down and make an effort to grasp something like so yeah. How do you then take something like an hour’s worth of, you know, content and condense it down into maybe just one or two images that someone glancing? You know, scrolling through their phone might stop and it might force them to reconsider something they believed before so it was really just a process of first creating what what’s already out there. You know, we already have a fantastic cannon of interviews of, of books and you know, how do we curate that maybe for that kind of top of the funnel? Group as they’re just starting to dip their toe into this field. So yeah, It’s definitely an iterative process. There’s, already a huge amount of incredible knowledge and work and out there on the topic, it’s how do you help someone find what they need at that particular point in time on their journey?

Stephan Livera 00:04:51

Yeah, I think that’s an important point. Also, it’s selecting the right tool for the job because you could be talking to a person in the Western world who maybe this is already a high net worth individual and maybe they already have access to U.S. bank accounts or you know you know high level bank accounts and things like this. So, you could be talking to somebody who is maybe just an average. Every day you know Joe from the street, you know Joe 6 pack or someone like that and

 you sort of have to find the right message that might resonate. With them and at the same time, people talk about as an example coming from first principles. So do you want to just elaborate a little bit on that idea of first principles and why you have to use that approach?

Anil Patel 00:05:30

Yeah, it’s very easy to get swept up in the world of hype and price prediction, and that might help maybe bring you in initially to understanding, say sound money. But it won’t keep you there. You’ll probably get burned to have some pretty bad experiences, so maybe you’re better off served understanding these kind of fundamental frameworks, rules, laws, which are generally correct over time. And I mean that through we could survey history and see what were the incentives in a particular situation. And what was the outcome and? Not that that’s necessary. Really inferring what happened, but if we can patent, you know, use some patent recognition, then we can kind of arrive at these, you know, frameworks and rules that are just helpful to understanding not just Bitcoin but the wider world. So, you know, I’ve tried to put together this book for myself. I really just wrote it for myself. This is a book I wish had existed when I first started learning about Bitcoin. And it’s a reference style book that you can kind of justice keep jumping back to and flipping through. You know, I don’t have an encyclopedic, you know, mind, I don’t have a photographic memory. I kind of just need it. Something within grasp to pick up, click through. Ohh yeah, that’s right. This is reminiscent of this particular framework or this particular concept might apply to this situation and when looking at it through that lens, I have a rough idea of what the incentives are and what might happen or what’s most likely to happen. So, it’s just it just helpful for sort of planning your future basically.

Stephan Livera 00:07:05

When it comes to money, people say people have this idea and maybe this is a bit steam tweet I’m repeating here, but it’s something like whoever can print money will. And I think that’s an interesting tweet sized motif or idea that maybe helps motivate the point of Bitcoin, doesn’t it?

Anil Patel 00:07:23

And he’s really a master of, you know, naming these absolutely massive ideas into, you know, tweet form and yeah, it’s an incredibly powerful. Way to do it because it kind of goes back to what I was saying earlier. If you can just get someone to stop, you know they don’t have to suddenly be encouraged to go down the rabbit hole. Can they just stop what they’re doing? Does it cause them to pause in their thought and kind of break something in the model that they hold up the world and most people? Just do not understand money at a very basic level. They’ve never stopped at that moment and had to reflect on OK, why is this what I’m using to exchange value with other people? So, you know, yeah, he’s someone I really admire for. For what he does and some of the earlier pieces he wrote. So yeah, I really. Hope to do something similar but just visually I suppose.

Stephan Livera 00:08:19

And as you write about in your book. Well, you have graphs and things like this. You talk about this idea of scarcity and monetary premium. So how do you bring that up? Like, let’s say you’re, you know, you’re talking to somebody and maybe casually sort of Bitcoin comes up and maybe, you know, we’re following the advice of better deal. We’re shilling lightly. We’re not sort of being over the top with people, but you sort of see an opportunity where maybe you could bring something up. And it maybe it gives you an opportunity to introduce the concept in a socially savvy.

Anil Patel 00:08:47

Yeah, yeah, absolutely. So, the most common one for me at the moment. So, I’m currently based in Canada. We’re both Aussies. Yeah, something that’s in common with those two countries for our generation has been the topic around housing affordability. Now everyone has an opinion as to how to fix it, whether that’s, you know, misguided or actually, you know, perhaps useful in the short term very few people are willing to go back, you know, take the symptoms as a snapshot and try to figure out the root cause. So, without even mentioning the B word when that topic of conversation comes up, it’s a very easy opportunity. To introduce the concept of scarcity of money, because very few people who maybe are concerned about housing will have any idea of the trajectory of the money supply during the same, you know, period of housing appreciation. And if they can kind of maybe connect those two dots, then they can sort of begin to even explore the concept of, you know, monetary premiums and how they nest into those financial assets. As you know, Preston pitched likes to say so. It’s kind of this step-by-step process I kind of use something I’d like to call it the Bitcoin marketing funnel and that’s, you know, a Normie will look out into their world. They will see they know something is wrong. They cannot put their finger on it. They’re looking at these symptoms and if they can be curious enough to kind of look for the root cause of that, they may then, you know, be very interested in inflation because that’s kind of explaining that price appreciation. Well, then they’ll look into the factors that go into how we calculate inflation. They might have some issues with how that’s done. If they’re a fairly critical thinker, and then you know from there they look at well, OK, what is money? So, everyone kind of has that different. Staircase that they climb to get to the point. But you know it, it’s almost unavoidable in this day and age, given where we are in the cycle of the monetary systems around the world. So, it, I think our jobs getting easier and easier as the monetary system does it poorer and poorer job.

Stephan Livera 00:10:57

Right. I think in some ways people stumble towards the truth, right, so that. Even if you can point out ohh look, there’s a system that it solves this problem. It sort of it takes time for people to realise that, and as you point out rightly so, Australia and Canada have some of the worst property bubbles on Earth. I think maybe Hong Kong might be the worst, but I think Australia and Canada definitely up there and there’s big conversations going on. I think in both countries about housing affordability, people are talking about. Things like, Oh well, you know, the birth rate is going down in these countries, but we’ll just fix it with immigration. But then now the conversation is coming and saying, well, actually, even if immigrants come here and yes, they can earn more in Australia or Canada versus, let’s say Sri Lanka or India or something, but then even with that higher salary in Australia or Canada, they still can’t afford to own. A place near to where their work is in that you know newer country and so it’s a big conversation and we see a lot of people having that. I think it also comes into Speaking of things like scarcity. People talk about the supply of new housing, right? Because there’s, you know, as, as I’m sure you have conversations with people about this, people talk about how they’re blocking development or how they need to develop more properties and apartments. But then you also get that conversation about how some people are to the same question around monetary premium. You get this question about people who are using apartments. High value apartments as a store of value. They just buy the apartment because they want to get the money out of China or whatever other country and they. Don’t even live in it, right?

Anil Patel 00:12:28

Yeah, we actually hear the term, I hadn’t heard it till I moved here, but for, I guess waterfront condo properties here that you largely sit vacant, they’re called safety deposit box in the sky. That’s just the term that’s used here, which I think perfectly captures what’s going on, right. But the overall, I guess the higher point to all of this is we’re touching on a pain point. There’s something going on in people’s lives. That is upsetting them. It’s not what they’ve been told and they’re having that moment of something is wrong. Someone’s taking advantage of me, perhaps, and you know, am I willing to do the work, figure out what’s going on here. So, you know it’s sort of an individual journey.

Stephan Livera 00:13:07

So, then I think the question is how do you get them to come with you on that journey? And of course, I’m sure you know, as I’ve had, there’ve been so many times where I try to bring someone along and you know, you just find OK, they’re not really willing to go with you. So, you kind of have to focus your effort on the people who are willing to listen, or at least. Trying to at least open minded to exploring, what is this idea of like what makes a better money?

Anil Patel 00:13:34

Look, you’ve had. You’d be the master at this. You’ve had thousands of conversations about this exact topic, right? So, I should I should be asking you this question. I guess my own belief now where I’m at is completely agree with you can’t force someone down the rabbit hole and your time is probably better spent guiding people who are. Already open minded have maybe lowered their ego enough to be willing to look at other options and admit they were. Think about some of the beliefs they had. So yeah, you there. There’s no point using your energy when others are more willing to kind of come with you on that journey. It’s less of a battle and the most frustrating thing for me is so I went to Business School for my undergrad and did an NBA, so I was kind of in that I guess Fiat Business School.

Stephan Livera 00:14:19

The yuppie, elite kind of world.

Anil Patel 00:14:21

Exactly. And that’s exactly what I was going to reference. Is Jesse’s article that that particular group they’ve spent so much time and effort and sweat climbing this particular ladder that to get them to climb back down it and up a different ladder, is just asking so much of them. So I get why they would be one of the most hesitant groups do that. And that’s the big battle I had, because just a lot of my friends by default happened to come from that world. And they’re lovely people. They mean well, doing well. They just maybe had the wrong guide at a certain point in their life that took. Them in that direction. So now I really focus a lot of my time and energy on especially younger people. You know, you look at a 15-year-old and how they interact digitally. They’re never going to accept a kind of closed proprietary system when an alternative option exists where they can transact frictionlessly with their friends. And you know that. They’re very skeptical of what’s kind of coming down the pipeline. So yeah, I would, I would encourage people listening to focus their time and energy on younger, digitally native people and those who are already maybe open to the idea of going down the rabbit hole. And they’re just looking for you to maybe hold their hand.

Stephan Livera 00:15:32

And I’m with you on the idea of focusing on the younger generations. I think we do need to do that. Whether that is writing books that young people can read or even TV shows, I know the Tuttle twins recently did one about Bitcoin, so that’s a great example. But you know what? Even? There are problems too, right? Because a lot of younger people, they might be stuck on. Let’s say TikTok and you know that’s not an open network. It’s just like a proprietary you know, so there’s still people who are stuck, but nevertheless, I think that is the pathway that we have to go down and we have to be willing to sort of play that longer game of focus like firstly having lots of our own children and also helping put out educational material that is viable for them. Also, whether it’s video content or books or whatever, because fundamentally that’s who we need to get right. Like as wealth passes down. As you know, older generations of society passed. You know, pass away, they pass their wealth down to younger generations. Like it’s if you if you’re focused on winning with those younger generations, you’re gonna win in the long run. So that’s sort of how I. Seeing it I but the, I guess the challenge that I see is as well is we’re living in this attention economy where it’s you have to sort of be able to seize people’s attention at the same time. And people have such short attention spans that, you know, listening to a one hour podcast is maybe a big ask or reading a big book is a big ask for somebody, but that’s also where I see. Some value in in in your book as well the Bitcoin handbook because it’s sort of a quick page Turner sort of thing like you could give it as a gift, it might be sitting on somebody’s coffee table as an example and then, you know, maybe a visitor comes by and they just kind. Pick it up and they start flicking through and maybe they see a few ideas. Oh, OK, this is the scarcity. This is monetary premium. Ohh, that’s Canton effect. What’s this, right.

Anil Patel 00:17:17

Yeah. What was I just about to say you, you touched on something really interesting, I think. Yeah. Sorry. The inherited wealth piece of wealth being passed down from generation to generation and someone who may not want to listen to A1. Our podcast, but those that do will be, you know, rewarded in an outsized manner. And that’s kind of the, the system we’re living in now, where a huge amount of wealth gets passed down and is inherited where now we’re existing during the birth of this new monetary system where the only people who will be rewarded have to take some kind of risk. Have to list that one hour have to read that book because they need to build eviction and then act on that and sort of, you know, perhaps nominate their saving in in that new monetary asset so. It’s I think beautiful in the sense that, you know, it’s proof of work it those are the people who will hopefully be better off in. The future of those that you know are willing to take the time to really think through things in in a first principles manner. And you know, I see a future that’s doesn’t have as much malinvestment, you know, doesn’t benefit insiders, all kind of these political talking points that we hear. So often you know, Bitcoin really can deliver, so I’m really hopeful. I’m really, really hopeful but you’re in Dubai, you see a huge amount of wealth on display and getting passed around your what’s, what’s your view on?

Stephan Livera 00:18:32

It so I think a lot of people got, well, kind of going back to the events of last year with, you know, the multiple failures of quote UN quote crypto, right, FDX Block 5, Voyager, you know, 3 hours capital, Terra Luna, etcetera. I mean, I’ve probably that’s probably only half of the failures that happened last year, but I think some people got burned on those, sadly. Not obviously not. People in the ******** kind of bitcoiner crew, obviously where you know. My closer circle of ******** Bitcoin of people, you know, we’re all self custody, Maxis type of people. But let’s say one or two layers out, the people who are into quote UN quote crypto, I think there’s a bunch of them who got wrecked. Unfortunately, on the likes of FX and you know sometimes rectification, I think someone made that someone made-up that term and I think that’s an important one. For some people, it’s sad, but maybe that’s what it takes for some people to learn. And I think because a lot of people are stuck in a gambling mindset or stuck in this kind of I need to just chase some yield. I just need to get something, otherwise you know I’m just going to get wrecked or I’m going to fall behind. And whether that’s falling behind on inflation or maybe they don’t want to fall behind versus their peers, maybe their peers are getting richer than them and it’s keeping up with the Joneses. Maybe there’s a little bit of that. I think it’s all of these things it’s a slow process, right? You have to sort of think about, OK, what makes a better money. And I also think this whole idea of insiders, right, I think the canteen. That’s something that I think Bitcoin is a helped. Popularize that idea and I think. That idea was not well understood out, obviously outside of the Austrian circles, like the Austro libertarian circles. Of course, they knew what the canteen effect was, that the average person had basically no idea what that was. So I’m curious how you do you end up. Do you ever end up having to explain that for people? And what’s your approach like if somebody says to you oh hey. You know what’s this cantone effect? Why should I care about it?

Anil Patel 00:20:24

Yeah, I mean it just the idea that let’s just talk about, you know, banking for a second. And the idea that when you take out a mortgage, a bank is lending money into existence, that breaks a lot of peoples might if they really think about it, that you’re increasing the supply of money and that’s going to have an impact on other things around you in a complex adapt. You know not to always go back to housing, but I find that’s the thing people are most obsessed with, where I live and mortgages that. That’s just a really interesting topic, you know, because if you think about it, someone asked me quite recently what do you think will happen to the house just in a general. Request and their view was that things will continue to appreciate and I just asked them, OK, what would happen if banks weren’t willing to lend you money? The banks weren’t willing to extend credit to you. What do you think would happen? And they just never considered that question. They couldn’t even comprehend a world where that was the case, which it is for many parts of the world today. If you’re in that bubble or you see someone who’s inside that bubble, and you can pose a question that gives them. That moment that breaks their brain a little. I mean, yeah, that just sends them on a completely new journey and the canteen effect is a great example because people see wealthy, nonproductive people getting continually wealthy, disproportionate to everyone else. And you know, if you’re willing to stop and ask why is that not? How do you feel about that? But why is that the what’s the actual mechanism that allows that to happen? You know, they’re usually gonna say, well, it’s corruption. OK. Well, how does corruption actually function in that situation? And the idea of, you know, of money. And that people being close to that would benefit that.  That makes sense in a lot of peoples minds if they understand that money is created centrally in this Fiat world we live in, then obviously people closer in proximity to where money is created and how it is allocated into an economy in an expansionary period, those people are going to, you know, have information asymmetry.

Anil Patel 00:22:19

They’re going to be able to. Bit up scarce asset. So yeah, if you could just slowly walk through a process like that with people in, in words, they can understand. You know I when I first started learning about Bitcoin, I felt like an idiot. I still do most days. And part of that is because I need things explained in a very simple way for it to ****. And so when I talk to other people who are, you know, pre coiners. Recliners be really conscious. Don’t use words that they’ve never heard before. You know, if they’re complaining about the price of assets and you say Ohh well, county in effect that that doesn’t mean anything to them. You know, they almost put up a wall because they see you almost as like that academic elite that we may be rail against. So yeah, talk to people in their own terms. And try to just think through it visually yourself and how you would explain it to someone else. So metaphors are really powerful concept of a tap. Literally pouring money you know, people can see that. They can understand that and that really makes a stick. You have to use the word cantan.

Stephan Livera 00:23:14

No, that’s a fantastic way to put it and something I’ve occasionally found success with is you may have heard. It’s like a funny little short way of putting it, but people say ohh that money. The bank, firstly, it’s not yours, it’s not there. And thirdly, it’s not money and I think that can sometimes like certain ideas like that can. Sort of push people and then they can be like, wait a minute like it’s not my it’s not there. It’s not my what do you mean, like and then you have to. Then you’re able to sort of explain. Wait a second. If you if you if everybody if every customer of your bank. Went to the bank to try to take the money out. It wouldn’t all be there. And then you can start to sort of go down that track of. Ohh wait a SEC. I thought my money was, you know, they thought their money in the bank was theirs, right? Unfortunately, it’s a difficult concept for people to grasp because the effect is at a net aggregate level, right? So when that bank issues that credit he when the banker issues that loan, let’s say I’m the banker and I give you that loan. You are now running around thinking, let’s say, $100,000 loan. Whatever. Just get the number. Simple. You are now running around with $100,000 that you think you’re able to buy stuff with, which you are obviously you’ve received this $100,000 into your bank account, but there’s someone else running out around out there who has his money and he thinks it’s immediately callable or accessible for him too. So two people are running around thinking sort of with the. Claim when there’s really not that much money to go around per say. And so that’s where the confusion is. And that’s where this extra money is being created ex nihilo, right, as we say. And so that’s where the canteen effect occurs, right, because you got issued that new credit, you’re able to now go become a property speculator or whatever you’re going to do with that. Known and everyone else in the economy has been diluted and especially the people who lose the most are the savers, people who were saving in Fiat currency. And I think that’s a cultural aspect as well because, you know, you talk to people and sometimes they’re stuck in a mindset. Just ohh, how many dollars do I have or how many? Whatever the Fiat currency is, I just need to stack more of that or they just think the only way to save is with say property, right? They don’t it doesn’t enter into their mind of I could save with Bitcoin or I could, you know, do something else rather than just trying to get a property.

00:25:27 Anil Patel

And that’s it. I mean, I everyone understands the concept of they just think of different vehicles as what is the Piggy Bank of the moment and that’s, you know, property is the example right now that’s usually something that’s been passed down previous generation and when that mindset exists, it’s usually not going to continue if a previous generation saved in a particular asset then then passing down the knowledge to the current generation to do the same. Really works out if you kind of look back through, you know, modern. And what’s really upsetting, I think for a lot of people, especially, you know, Bitcoin as sound money advocates is right now we’re seeing this demonization of saving when, you know, saving savings is basically just saying that you’re not spending everything that you earn. So you create value in the world, you are rewarded or compensated. And you choose not to immediately spend everything you see the difference of that is your seat that allows you to delay gratification, and that allows you to make investment for which you bear the risk. No one’s you know, no one’s bailing you out on that on a personal level, but that allows you to invest. So the idea that someone who has that mindset is being, you know, looked at as a source of the problem of, you know, the current financial system. Is just really evil. That’s a very just dangerous angle and turn that we’re kind of seeing play out right now. I for a period of time work in a Business School in admissions and you see how applicants and students look at their student debt, how they think about it. And again, it kind of goes back to what we’re talking about with banks and mortgages. Would houses be worth so much if banks weren’t lending, sending credit for purchases and the same thing? Exists in academia, you know, if the government wasn’t willing to underwrite certain loans. To allow individuals to borrow from banks at very favorable rates, would education be as expensive as it is in the, you know, traditional system and you know you run into the same line of questioning? Well, probably not, you know, could the average person save up fifty 100K to go to Business School? Probably not. So then what would happen? OK, demand. If universities are serious, they’re gonna have to lower their prices to kind of meet, you know, where supply and demand intersect. And yeah, it’s just it’s. It’s sad, really. It’s sad, really. How few people understand the concept of saving, you know, everything’s debt.

Stephan Livera 00:27:43

So let’s hit this topic. I think this is an interesting one for. Why is it the case that people should not be looking at property as their Piggy Bank in the sky as their safe deposit box? I think as an example, a lot of people, they and I’m sure you’ve seen this in Australia, you know, back when I was there, I’m not there anymore obviously. But when I was there, I remember I would go to, you know, barbecues or parties and people. It was, it was the topic Dejour right it was. I bought this property here I’ve got a 2 bed apartment there and whatever I bought it for this much enough. Worth this much there’d be no consideration of inflation. So the real term, the real price of that property or the real gains that they experienced, there’d be very little discussion about the interest expenses they were paying the maintenance. And you know, sometimes you’d get people to appreciate that. Sometimes these properties can just be a money hole, right? It’s just like a money pit that they’re throwing all this effort in repairs and maintenance gets something breaks, or the Council needs this or the. The HOA is saying you need to fix this other thing because the apartment broke and you’re trying to. You’re trying to fix it up and there’s all of these little hidden costs that people don’t appreciate. For example, the transaction costs that you pay when you are regularly turning over houses, I think that’s another one. A lot of people forget there might be a stamp duty or some kind of land tax that you’re paying. There’s all these little hidden. Loss that people are just completely neglecting. Or maybe they’re if they’re more savvy, maybe they sort of understand, but they’re sort of gambling on enough price appreciation to account for or deal with all of that. And so it just becomes. This situation where people haven’t really thought through the broader costs of it and they don’t understand why property should not be the Piggy Bank.

Anil Patel 00:29:23

Yeah, I’ve been the fundamental level. You kind of talked about, you know, at a BBQ, people at a barbecue and they’re not having an honest conversation about their financial situation. They’re playing status game. They’re saying you I made this particular bet. I’m very smart it’s gonna pay off well and with property. Anyone can take a very highly leveraged bet on the direction of the real estate. Thanks to the Fiat system and everyone having the same interest rate, basically price that they have to pay, which is insane in no world should you, I and five other people have exactly the same. Interest rate with someone lending money because. We all pose different levels of risk to that institution, but real estate allows people to do that. They’re all in the same playing field. So I just see it as like a very much a status game and it’s I understand it because being outside of that circle at the BBQ is incredibly lonely. As someone who is at those barbecues very frequently. And the topic of conversation is always that one thing real estate and you can sub that in for other markets in different parts of the world depending on what is the you know asset of the. Like it’s incredibly lonely and you’re only able to tolerate that if you have a lot of conviction in what’s actually going on. To listen to those conversations, to not get highly reactive, and you’re kind of incredibly good at that. And I think that’s why a lot of people listen to you is cause you deliver messages in very calm ways where the average person would get. Quite worked up about some and if you get very worked up in emotional people just glaze over.

Stephan Livera 00:30:53

Thank you. Yeah.

Anil Patel 00:30:55

They shut down, they take a step back. You know you’re a threat to them, basically. So yeah, it’s unfortunate, but I get it from a social perspective. You don’t wanna be left out. You see all your friends taking a particular action. You’re probably going to copy them, because then you’re talking about the same things. You know you have it you have a huge number of things in common immediately, and that’s kind of generally what you want to be. Accepted into a group if all your friends have big mortgages homes, and they’re talking about Renaults, they’re talking about interest rates and you’re there saving in Bitcoin. Renting, it’s you look like crazy You know, to convince that entire group who have made this life changing decision, who’ve put probably all their savings into a deposit and now highly levered along the direction of the real estate market to get them to change their opinion on how best to preserve their purchasing power is a very tall us. So in those situations now I kind of just, you know. Shut my mouth I don’t wish any pain on people, but. It’s I’m able to do that because I have other bitcoiners I can talk to and you know users points of reference to say hey, wait, am I the crazy one in this situation? But it’s, yeah, it’s a willingness to be lonely in, in your perspective.

Stephan Livera 00:32:13

Yeah, I will say it’s funny that if you’re a long term Hodler and stacker of bits. Then you basically spend three years looking like an idiot, and then one year looking like a genius and then you rinse and repeat. You spend another three years looking like an idiot, and then another. You’re looking like a genius, and that’s at least that’s historically how it has played out of course, no guarantees. I don’t have a crystal ball about what the next three years and one year will look like, but I think. It touches on this same idea of wanting to fit in, and I think this is something where most people and this may there may be actionable lessons for us as Bitcoin is also here. So I’ll give you an example, I think most people, I think it’s true to say this. I think most people would rather be wrong, but with the group than correct and on their own, bitcoiners tend to be that person who’s willing to kind of buck the trend, be on their own. And Hoddle and the long term bitcoiners have won out, right compared to, you know, generally speaking, but that represents a bit of a challenge then is it that most people? Are just looking to whoever is high status in their society or in their group. Because it’s all about fitting in, and maybe there’s like an evolutionary reason, maybe thousands of years ago, if you didn’t fit in with the tribe, you were out. And that was basically a death sentence, right? If you didn’t fit in with the tribe, you’re screwed. You gotta, like, fend for yourself, and you’re probably going to die. So maybe there’s like an evolutionary reason for that, but maybe now it’s kind of maladaptive given our modern day world and our modern day. You know capitalist well, we wish it was more capitalist economy, but then the here’s the lesson. Maybe it’s that most people.

Stephan Livera 00:33:45

Unfortunately, I’m going to learn the hard way and so maybe we have to focus our efforts on, let’s say I’m going to guess 15 to 20%, right? Or, you know, someone like Francis Pouliot or Michael Goldstein might call them the remnant, right? Like we have to focus our efforts on that 15 to 20% of the population who can be reasoned with, who are the open-minded people who are not, let’s say, the yuppie. Elite in the Jessie, you know Crisis model, right? Because the yuppie elite people are in that 80% now, they may be intelligent, but they’re in that 80% group of people who just want to fit in. They just want to fit in into elite circles, not into kind of the everyday circles because they want to be in the elite. Right. But I think that perhaps is our task. Our Calling is to call out to and find those people in the 15 or 20%. Let’s say roughly and ideally make content that is appealing in to a broader audience. But you know also to young generations. So that’s how I’m seeing it. Now I’m curious, what do you think?

Anil Patel 00:34:42

Yeah, I think you’ve absolutely nailed it. You know, the 8020 rule or a peretto print. It’s also touched on in the book because it’s so powerful it transcends the psychological aspect of, you know, how humans behave. But then it you also see it popping up in finance all over the place. Howard Marks wrote a really good book called Mastering the Cycle or Mastering the market cycle, I think. And he just kind of really methodically. Goes into detail about all the signposts you see in a market cycle, and he mentions exactly what you just pointed out, is that in any? Mark it and you see it most clearly during times of bubbles is 80% of people are going to get fleeced. Unfortunately, you know it’s not that the 20% are making that happen. It’s just that about 80% of people have that tendency to get sucked into things, go with the group. And not really think critically about what’s actually fundamentally happening beneath, you know. So yeah, you see that in Bitcoin as well, they’re really. There are a very few number of people who are willing to be in that 20% bucket because you know, as we talked about it’s a very lonely journey. But now we’re, what, 14 years in? There’s enough data and enough of a track record to look at this thing with, you know, very practical eyes and make it individual. Decision because when you’re talking about preserving your own wealth or planning for your future or your family’s future, that’s a very unique journey, and it’s gonna be a very unique decision to make based on your particular circumstances, how old you are. What your goals are in the future, so you know if you’re trying to fit in by making a very significant life altering financial decision. I mean, that’s just wrong to begin with. You know, it’s a very personal decision it should be treated that way. And I think a lot of Bitcoin is are just very analytical people. They’re looking for evidence to either confirm or reject certain theses. So maybe you know it’s not that Bitcoiners are special, it’s just maybe the critical thing has just become Bitcoin is by default is maybe how I see.

Stephan Livera 00:36:57

And I think another thing that’s very important is to run the numbers right and this is also like a bit of a meme in Bitcoin circles. It previously people talk about this idea of there’s a command in Bitcoin, Bitcoin, Dash, CLI, get, TX outset info. I think it’s called and basically this sums up the total number of Bitcoin and I guess it’s kind of the point or the lesson of it is that hey, we can verify our supply. And I think a lot of people in the normal world who aren’t in the Bitcoin world yet, they could benefit from running the numbers a lot more. Right. Whether that is even with property? Doing a rent versus buy calculation. Now how many people would actually go and do that right? Or even if they do, maybe they buy us, they tip the scales in the favour of buying a property because they really want to fit in, right? So maybe on their own running the numbers calculation they build in, let’s say, a very overly optimistic property appreciation. Right? So they say, oh, I’m gonna buy. Property and let’s say whatever the interest rate is 5% whatever, but I’m going to build in an assumption that property goes up 10% per year or something like that. And then if you build in these crazy assumptions, of course it’s going to look like, yeah, you should buy because the property is going to go up 10% per year. But is it in real terms over the longer term, it might not be true. It might be going up in nominal terms, but not in real terms. And I think that is the important point. And the importance of really running the numbers and not just naively extrapolating on the last, let’s say, 10 years or 20 years depending on which market you are. The world, because that is not likely to be representative of real returns going forward. It may be of nominal returns, but not of real returns, is how I’m seeing it. What do you think?

Anil Patel 00:38:36

And that speaks more to this insidious, I guess outcome of the current state of financial literacy is that the ability to do basic economic calculations like. That has kind of been destroyed and that’s not a criticism of an individual. That’s like there’s all these forces acting against the average person to make it overly confusing, unnecessarily complex. You know, it’s a tall order to ask the average person. To sit down, make a comparison like that without emotion, without confirmation bias, and understand all the complexity in both those decisions and kind of end up at, you know, a reasonable outcome. So yeah, I mean again just. Going back to just simplify, just simplify things to the absolute bare necessity and then make your decision because like you said, you know, if we’re talking real estate, yeah. There’s all these extra. Costs or aspects that you don’t consider interest rate risk and what we’re really talking about is uncertainty. You know, do you have certainty over particular aspects? Of this particular asset and you just mentioned Bitcoin with supply, yes you do and that’s what a lot of the draw is for people is Bitcoin, is uncertainty reduction technology in a sense. So yeah, it’s a crazy point in. Time it really is.

Stephan Livera 00:40:03

Yeah, I think that’s a good point to hang it on there. And also, one other interesting point, I think it’s interesting to discuss is the world of financial influences today, right. So there’s all these finance influences and if you look at the system to the point you were saying to the. Point you were making there are a lot of people who have not done the work to teach themselves personal finance concepts, interest rates, accounting, finance, all these base? The concepts and so they’re just looking at the junk food of social media. They’re looking at some TikTok, financial finance influence, the type of person who is telling them about, you know, maybe credit card hacks or something like this or maybe they’re shilling some nonsense like master works, right? This you might have seen on YouTube. Some of these finance influences every now and again. I check in on what they’re saying. And you look at what they’re advertising and they’re showing like masterworks, they’re saying, oh, yeah, everyone go like, let’s all invest in, like, fractional artwork or something like this big and. And, you know, even like, well known, like big influences, you know? Multi 100,000 or millions of followers, influencers or subscribers, they will be shilling this garbage like this and they’ll be saying Oh yeah, follow me for all these tips on you know whether it’s stocks to buy or how to do real estate stuff. But also here’s this like masterworks. Whatever this art investment thing, and it just seems like a recipe for disaster and people are so poorly equipped to critically assess the claims that they are, you know, just seeing every day when they’re scrolling on TikTok and Instagram and all the rest of it

Anil Patel 00:41:35

Yeah. Again, yeah, the comparison to junk food I think is spot on because if there was a word for, say perhaps being obese and comparing that into, you know, your financial health or economic understanding, the 8020 rule would absolutely apply. There and again it’s just are you surprised given the incentives of the Fiats, when you look at what algorithms reward in terms of the attention economy, you look at the monetization, I guess set up of how the Internet is currently structured it. It makes perfect sense when you understand the incentives, but it’s. Recipe for disaster it’s only going to make people poorer, sicker, more stressed and unfortunately, that’s how the Fiat system is kind of designed so.

Stephan Livera 00:42:22

Yes, I have to so I think the important concept and we’ve been touching on this idea throughout our chat today, is the intransigent minority, right? And I think now of course we have our we you know I think we all have our criticisms of Nassim Taleb, but I think the concept, the intransigent minority, is an interesting one. Do you want to explain how you see that and perhaps explain? The relevance of that for us as Bitcoin is.

Anil Patel 00:42:46

Yeah, it’s really a nod to the idea of a tipping point that it only takes a very small group of very, I guess, headstrong individuals to, you know, opt out of a system or kick up a fuss. But in a constructive way you’re gonna have to either show the path of an alternative or offer an alternate system. It’s not just about complaining. You have to actually act on that you have such a small critical threshold to force a system change. I think most people think in, you know, democracy terms of ohh until 51% of people do something. It’s not gonna happen or we’re not gonna change. But the truth is that in any system where individuals are free to choose. And you know the financial system and Bitcoin world is a perfect example because most everyone starts in system A, which is the Fiat monetary system. In our current timeline, in the future, that won’t be the case. But everyone begins in System 8, and then we’re seeing enough people or a certain percentage of the population opt out in the and. The question is always at what point does everything kind of flip and do we move into hyper Bitcoin ization whatever you want to call it? And I again also don’t have a crystal ball I have no idea what current level of adoption we’re at. It’s very difficult to you can make estimations, but to have any precision is quite difficult. But the number is much lower than most people understand. It only takes you know, I think the example used in Tellabs book is maybe I think it’s 4%, two to 4% very, very small number to kind of really force a change and that that doesn’t just happen because that group overruns everyone else. It’s, it’s also in the evidence that results from that, if I leave. If I stop consuming junk food and all of a sudden I’m starting to become healthier, stronger, my immune system fares better. And when you know under attack, people will see that from the current system and they’ll then start to reconsider their choice. So, you know, I don’t like to use the word influencer, but you almost become an influencer. In your community and you demonstrate behavior and results that are admirable, that are people desire, and that’s how you kind of, you know, get a system to change.

Anil Patel 00:45:00

And I know people maybe don’t, especially bitcoiners in terms of how they feel about Caleb, but let me just tell you an idea that completely helped me on this. Rabbit hole journey and that’s this concept of separating the person from their ideas. So, if someone you fundamentally dislike thinks an idiot and they present an idea, a concept, can you look at that independent of them? Can you put aside your emotions for a second? And just assess what they’ve put forward that idea because in many cases the most valuable things that will help you are going to come from people you dislike. So yeah, learn to make that that distinction.

Stephan Livera 00:45:41

And I agree with you there I think the intransigent minority is pretty much something that we are. As Bitcoin is trying to grow that, that’s definitely part of the thesis. With Swan Corey’s written about that as well. And I think growing that group of people who are trying to use Bitcoin as a savings or ideally be a Bitcoin native, earn Bitcoin and spend Bitcoin. I think that’s the ideal case though. You know, I would encourage people to do that, but I’m not trying to shame. Holders for not spending or whatever. You know, if you’re huddling, you’re still helping. As far as I’m concerned. And if we could grow that base of hodlers and stackers, I think that is the main metrics that we that we could grow. If we could grow that number so people can read your book and you know, teach each other, teach their family, teach their. You know, influence the people close to your life, right? Not in, like the cheesy kind of influencer way, but actually in the real, genuine person to person, family or a close friend influence way. I think we’d be making a lot of progress in that way, so let’s finish it up there. I know where can people find you online? Can they find your book?

Anil Patel 00:46:42

I’d say you can find the book on Amazon, or if you prefer to pay in Sats, you can find it through consensus network through their online shop. You can find me on Twitter and in my bio there is a link to a site where you can get pretty much all of my educational materials for free there and it’s available in multiple languages because Bitcoin is are awesome and they’ve helped me translate those works into a whole range of different languages and also another. So we’ll see how the future plays out for that but open protocols for the win usually seems to be pretty a good view to hold Stephan. I also just want to say thank you for all the incredible content you’ve put out over the years. I’ve learned a huge amount from. From just having you ask thoughtful questions to really intelligent people and being a fly on the wall in that situation helped me a lot. And you know, I think having thoughtful conversations in public is also helpful. You know, Twitter is kind of a public forum in that sense. And people sometimes confuse. Arguing on Twitter for a waste of time, but you also have to take. Into account who’s? Viewing this and how might their thinking be influenced by this?

Stephan Livera 00:47:55

So yeah, thanks for having me. It’s been a pleasure Hey, thank you. I appreciate the kind words and listeners. Make sure you check the show notes Stephan You can find all of our little. Thanks, Anil, for joining me.

Leave a Reply