1 00:00:01.000 --> 00:00:05.600 Bitcoin ETFs are not in Korea yet 2 00:00:05.600 --> 00:00:08.650 but everybody is waiting for it to happen 3 00:00:08.650 --> 00:00:17.050 But some people worry about Bitcoin ETFs expanding to these many, many major countries 4 00:00:17.050 --> 00:00:22.800 Do you think Bitcoin ETFs, spot ETFs will eventually manipulate the Bitcoin price? 5 00:00:22.800 --> 00:00:27.500 I mean, any buyer manipulates price almost by definition, right? 6 00:00:27.500 --> 00:00:33.300 So anytime anyone buys it, that means there's a little bit more demand 7 00:00:33.300 --> 00:00:38.000 And anytime someone sells it, then there's a little bit more supply and so on 8 00:00:38.000 --> 00:00:43.000 So by definition, yeah, it manipulates the price 9 00:00:43.000 --> 00:00:46.400 Now, is it going to be done at the level that like 10 00:00:46.400 --> 00:00:48.850 the Federal Reserve does with the stock market 11 00:00:48.850 --> 00:00:52.200 or treasury interest rates or something like that? 12 00:00:52.200 --> 00:00:54.850 I mean, there are arguments to be made on both sides 13 00:00:54.850 --> 00:01:00.450 but I suspect not really because these are, I mean 14 00:01:00.450 --> 00:01:03.900 it's possible that they start rehypothecating the Bitcoin 15 00:01:03.900 --> 00:01:06.800 and selling Bitcoin that doesn't exist and stuff 16 00:01:06.800 --> 00:01:12.950 But if you get, and they're talking about this right now 17 00:01:12.950 --> 00:01:15.450 those are cash redemption ETFs only 18 00:01:15.450 --> 00:01:20.150 So if you want to take out a hundred Bitcoin, 19 00:01:20.150 --> 00:01:23.400 I think that's the trench or whatever that you have to get 20 00:01:23.400 --> 00:01:26.550 to be able to withdraw from the ETF 21 00:01:26.550 --> 00:01:29.000 You get cash instead of Bitcoin 22 00:01:29.000 --> 00:01:32.000 But they're talking about actual Bitcoin settlement 23 00:01:32.000 --> 00:01:37.750 And if that rule goes into effect, then all of that will be very obvious 24 00:01:37.750 --> 00:01:42.000 You know, if they're trying to sell Bitcoin that doesn't exist 25 00:01:42.000 --> 00:01:45.450 or, you know, sort of do the fractional reserve stuff 26 00:01:45.450 --> 00:01:48.800 that got banks in trouble years ago, 27 00:01:48.800 --> 00:01:52.700 what a lot of people suspect is going on with like the gold ETF and so on 28 00:01:52.700 --> 00:01:58.000 So, you know, there's a bit of that 29 00:01:58.000 --> 00:02:01.000 It's hard to tell and we don't really know, 30 00:02:01.000 --> 00:02:05.850 but the volumes on these ETFs are absolutely huge and for a good reason, right? 31 00:02:05.850 --> 00:02:07.000 Like price is going up 32 00:02:07.000 --> 00:02:10.900 I think it's one of the best performing assets in the past year 33 00:02:10.900 --> 00:02:13.750 It doubled last year, doubled this year 34 00:02:13.750 --> 00:02:18.400 It's like it's looking pretty good for most people that have been in it 35 00:02:18.400 --> 00:02:21.550 and, you know, people are coming around to it 36 00:02:21.550 --> 00:02:25.150 So obviously there's a lot of interest institutionally, 37 00:02:25.150 --> 00:02:31.500 a lot of pension funds and so on that have significant gaps 38 00:02:31.500 --> 00:02:32.500 They're underfunded 39 00:02:32.500 --> 00:02:37.850 and they're assuming sort of like 9% annual return for like the next 20 years 40 00:02:37.850 --> 00:02:41.100 They need riskier assets except they're not allowed to invest in them 41 00:02:41.100 --> 00:02:46.000 So, you know, having a Bitcoin ETF can certainly help with that 42 00:02:46.000 --> 00:02:52.300 Now, how that affects Korea or other countries when they have it, I don't know 43 00:02:52.300 --> 00:02:57.400 It probably depends on sort of like the public union infrastructure 44 00:02:57.400 --> 00:03:01.700 and any sort of like pension plan that your country has 45 00:03:01.700 --> 00:03:04.000 I'm not familiar with that at all about Korea 46 00:03:04.000 --> 00:03:06.750 But if any of those are underfunded, 47 00:03:06.750 --> 00:03:09.850 then I suspect that 48 00:03:09.850 --> 00:03:12.500 this sort of thing would become a little more popular 49 00:03:12.500 --> 00:03:14.000 because at a certain point 50 00:03:14.000 --> 00:03:16.000 you're going to have to start taking risks, right? 51 00:03:16.000 --> 00:03:20.300 Like if you're an underfunded pension and you're assuming 9% returns 52 00:03:20.300 --> 00:03:22.500 and you've been getting six or seven, 53 00:03:22.500 --> 00:03:24.250 you're going to have to do something different 54 00:03:24.250 --> 00:03:26.850 And this is like the one hope for them 55 00:03:26.850 --> 00:03:30.100 And yeah, who knows? We'll see 56 00:03:30.100 --> 00:03:33.450 But that's sort of the role it has in the market 57 00:03:33.450 --> 00:03:36.950 I don't know if it's going to be manipulating Bitcoin price 58 00:03:36.950 --> 00:03:39.000 as much as just adding demand 59 00:03:39.000 --> 00:03:41.200 And we know Bitcoin has a fixed supply 60 00:03:41.200 --> 00:03:45.000 And the more demand there is, the higher the price goes 61 00:03:45.000 --> 00:03:47.150 Right, right, absolutely 62 00:03:47.150 --> 00:03:51.350 I think it's Hester Pierce, the SEC congresswoman 63 00:03:51.350 --> 00:03:55.700 She's the one who's advocating for this Bitcoin redemption, right? 64 00:03:55.700 --> 00:03:57.400 In-kind redemption 65 00:03:57.400 --> 00:04:00.600 So everyone who purchases Bitcoin ETF, 66 00:04:00.600 --> 00:04:06.850 when they sell ETF, they can get actual Bitcoin out of it? 67 00:04:06.850 --> 00:04:08.000 No, no, no 68 00:04:08.000 --> 00:04:12.100 The way ETFs work is that they're tied to a commodity, right? 69 00:04:12.100 --> 00:04:16.000 So a gold ETF is supposed to track gold 70 00:04:16.000 --> 00:04:19.850 And the way they make that track exactly is 71 00:04:19.850 --> 00:04:24.000 the ETF has a certain amount of gold that it possesses 72 00:04:24.000 --> 00:04:26.600 But if you have enough of the ETF shares, 73 00:04:26.600 --> 00:04:28.200 and it's usually a large tranche 74 00:04:28.200 --> 00:04:33.000 So it's something like, I don't know the exact number, 75 00:04:33.000 --> 00:04:38.250 but 1,000 ounces of gold worth of the ETF 76 00:04:38.250 --> 00:04:41.500 You can redeem only in 1,000 ounce increments, right? 77 00:04:41.500 --> 00:04:43.750 So you have to give... 78 00:04:43.750 --> 00:04:47.950 But that gives enough of an arbitrage opportunity to a big player 79 00:04:47.950 --> 00:04:50.000 so that if the price goes out of whack, 80 00:04:50.000 --> 00:04:54.000 then they'll either put in more gold into the ETF 81 00:04:54.000 --> 00:04:57.000 or they'll withdraw the gold from the ETF 82 00:04:57.000 --> 00:05:01.000 So that's the idea, is that there would be market makers 83 00:05:01.000 --> 00:05:06.000 that create that strong link between the two 84 00:05:06.000 --> 00:05:09.000 Because if they're able to withdraw Bitcoin, 85 00:05:09.000 --> 00:05:14.000 not at the 0.001 Bitcoin level, 86 00:05:14.000 --> 00:05:17.050 but probably in tranches of 10 Bitcoin or something like that, 87 00:05:17.050 --> 00:05:19.000 a million dollars worth of Bitcoin 88 00:05:19.000 --> 00:05:21.550 You have to have a million dollars worth of the ETF 89 00:05:21.550 --> 00:05:24.150 to be able to withdraw 10 Bitcoin, something like that 90 00:05:24.150 --> 00:05:26.200 And it's only in multiples of 10 91 00:05:26.200 --> 00:05:29.650 Then that would give enough of an escape hatch 92 00:05:29.650 --> 00:05:31.800 that it would be very strongly linked 93 00:05:31.800 --> 00:05:35.700 and almost guarantee that it's not fractionally reserved 94 00:05:35.700 --> 00:05:40.500 Yeah, I think it's almost similar strategy with the Japanese yen carry trade, right? 95 00:05:40.500 --> 00:05:45.850 These Japanese rich people in Japan called Mrs. Watanabe, 96 00:05:45.850 --> 00:05:53.450 they, throughout the period when their economy was so down for almost 30 years, 97 00:05:54.000 --> 00:05:57.800 they have to invest in something stronger than yen 98 00:05:57.800 --> 00:06:01.650 So they just used dynamics, right? 99 00:06:01.650 --> 00:06:05.100 They borrowed with a cheap interest rate in Japan 100 00:06:05.100 --> 00:06:08.800 and then they invest into something much stronger 101 00:06:08.800 --> 00:06:14.000 And I think the most of the money came into the US, 102 00:06:14.000 --> 00:06:15.400 the stock market 103 00:06:15.400 --> 00:06:17.650 I think nobody can deny that 104 00:06:17.650 --> 00:06:22.450 the reason why NASDAQ, or S&P 500 has gone up so dramatically 105 00:06:22.450 --> 00:06:24.500 for the last 20 or 30 years 106 00:06:24.500 --> 00:06:27.000 was because the money from Japan, 107 00:06:27.000 --> 00:06:29.000 this Mrs. Watanabe, 108 00:06:29.000 --> 00:06:32.400 they had to invest in something stronger than Japanese yen 109 00:06:32.400 --> 00:06:35.250 So that's one of the reasons 110 00:06:35.250 --> 00:06:38.600 that why the US stock market was so good 111 00:06:38.600 --> 00:06:43.500 And I think the US corporations are doing the exact same thing with the dollar and Bitcoin 112 00:06:43.500 --> 00:06:46.400 That's how I compare these two strategies 113 00:06:46.400 --> 00:06:49.200 Yeah, I'd say that's pretty accurate 114 00:06:49.200 --> 00:06:55.000 The yen carry trade wasn't nearly as profitable as the Bitcoin trade though, 115 00:06:55.000 --> 00:06:59.400 because the Bitcoin trade is just, 116 00:06:59.400 --> 00:07:01.300 he's just printing stocks 117 00:07:01.300 --> 00:07:05.000 and using that to collect money and buying Bitcoin 118 00:07:05.000 --> 00:07:10.000 And because the multiple is higher than one, 119 00:07:10.000 --> 00:07:14.000 then it's kind of an infinite money glitch 120 00:07:15.000 --> 00:07:20.000 And he's buying billions and billions every week 121 00:07:20.000 --> 00:07:23.700 It's just absolutely insane 122 00:07:23.700 --> 00:07:25.600 And he's not going to be the only one 123 00:07:25.600 --> 00:07:28.000 There are other companies starting to do that 124 00:07:28.000 --> 00:07:31.350 And at some point, that ball gets rolling 125 00:07:31.350 --> 00:07:35.100 It's okay, we have this much Bitcoin on our balance sheet too 126 00:07:35.100 --> 00:07:39.000 But right now, micro strategy is king on this score 127 00:07:39.000 --> 00:07:41.300 But I mean, there's going to be competition 128 00:07:41.300 --> 00:07:43.000 There already is in some ways 129 00:07:43.000 --> 00:07:47.000 I think the world economy is in a really strange situation now, 130 00:07:47.000 --> 00:07:51.000 because the US is decreasing the interest rate 131 00:07:51.000 --> 00:07:54.300 At the same time, Japan is about to increase the interest rate 132 00:07:54.300 --> 00:07:58.000 And China is devaluing their currency 133 00:07:58.000 --> 00:08:03.000 And then they just rolled out this new huge plan 134 00:08:03.000 --> 00:08:06.000 to bail out their economy 135 00:08:06.000 --> 00:08:11.000 And there's two wars going on in Middle East and Europe 136 00:08:11.000 --> 00:08:12.250 So I don't know 137 00:08:12.250 --> 00:08:15.700 The uncertainty is even bigger than before 138 00:08:15.700 --> 00:08:16.800 It's so big 139 00:08:16.800 --> 00:08:21.600 So nobody can expect what to happen the next year or after two years 140 00:08:21.600 --> 00:08:25.850 But do you still think the global liquidity will increase eventually? 141 00:08:25.850 --> 00:08:29.000 Because the correlation between the two is so high, right? 142 00:08:29.000 --> 00:08:33.150 The Bitcoin and the global M2 supply increase 143 00:08:33.150 --> 00:08:36.350 I think Bitcoin price is going to go up dramatically 144 00:08:36.350 --> 00:08:39.500 when the global M2 increases 145 00:08:40.000 --> 00:08:43.400 Do you think even in Trump administration, 146 00:08:43.400 --> 00:08:46.500 the US will still print money, issue the new bonds? 147 00:08:46.500 --> 00:08:49.000 Yeah, I mean, I think they kind of have to 148 00:08:49.000 --> 00:08:53.450 We'll see how much of a cut like Doge will do and so on 149 00:08:53.450 --> 00:08:59.000 But the biggest liabilities on the US budget are, 150 00:08:59.000 --> 00:09:05.150 the biggest spending things are Medicare, Social Security and defense 151 00:09:05.150 --> 00:09:08.100 I mean, there'll be some cuts administratively and so on 152 00:09:08.100 --> 00:09:13.350 But the unfunded liabilities on Social Security alone is like 300 trillion 153 00:09:13.350 --> 00:09:16.250 And you're going to have to print, right? 154 00:09:16.250 --> 00:09:19.500 Because you're not going to collect enough in taxes to pay those out, 155 00:09:19.500 --> 00:09:22.000 especially as population decreases 156 00:09:22.000 --> 00:09:27.000 So there's no slowing down that train unless you inflate your way out of it, 157 00:09:27.000 --> 00:09:32.000 which is typically what governments do when they have obligations that they can't meet 158 00:09:33.000 --> 00:09:38.400 But what you were saying about Japan is increasing the interest rate 159 00:09:38.400 --> 00:09:42.900 and the US is lowering it somewhat 160 00:09:42.900 --> 00:09:45.300 Well, that's taking away the Yankee trade, right? 161 00:09:45.300 --> 00:09:49.100 And that was a big hole the last few years 162 00:09:49.100 --> 00:09:55.000 And that was a big driver of the stock market increase in the US, like you said, 163 00:09:55.000 --> 00:09:57.000 similar with China and so on 164 00:09:57.000 --> 00:10:00.000 There's a lot of people there that wanted to park money 165 00:10:01.049 --> 00:10:02.650 Somewhere other than China 166 00:10:02.650 --> 00:10:06.950 So, they're buying up real estate all over the world 167 00:10:06.967 --> 00:10:10.392 especially places like Vancouver or Toronto 168 00:10:10.392 --> 00:10:12.072 -Dubai -and places like that 169 00:10:12.300 --> 00:10:15.782 It's just kind of crazy 170 00:10:15.782 --> 00:10:21.382 But that's been happening as a part of 171 00:10:21.419 --> 00:10:26.692 sort of almost like derisking of the 172 00:10:26.692 --> 00:10:29.992 putting all your eggs in like China's basket or whatever 173 00:10:30.240 --> 00:10:32.940 Because I think a lot of people are kind of nervous 174 00:10:32.940 --> 00:10:36.890 Okay, what happens if something really goes down? 175 00:10:36.890 --> 00:10:39.190 How is everything going to work out? 176 00:10:39.190 --> 00:10:40.990 And, you know, people feel that 177 00:10:40.990 --> 00:10:46.090 the world, the wars that are happening right now 178 00:10:46.090 --> 00:10:47.890 certainly don't help with that 179 00:10:47.890 --> 00:10:55.190 And just, the amount of sort of economic turmoil that this has caused 180 00:10:55.190 --> 00:10:59.320 like the Ukraine war, for example, as Europe is just absolutely insane 181 00:10:59.320 --> 00:11:05.620 Like Germany, economic stagnation, significant economic stagnation there 182 00:11:05.620 --> 00:11:08.320 but even places like Canada, just bad management, right? 183 00:11:08.320 --> 00:11:16.170 Like, they had almost near parity with the US in terms of salaries and so on 184 00:11:16.170 --> 00:11:17.520 like 20 years ago 185 00:11:17.520 --> 00:11:20.559 but it's like fallen behind by a significant amount since then 186 00:11:20.559 --> 00:11:24.110 So, you know, you get a bigger brain drain and everything else 187 00:11:24.110 --> 00:11:28.440 Yeah, there's a lot in the world that's kind of weird right now 188 00:11:28.480 --> 00:11:31.930 And I think this is why a lot of people are turning to Bitcoin, 189 00:11:31.930 --> 00:11:36.480 because at least the people that understand what it's about 190 00:11:36.480 --> 00:11:41.839 at least the people in the meetups that I've met in a lot of these places, they get it 191 00:11:41.879 --> 00:11:47.879 They're like, okay, yeah, this is like a pristine asset that is not controlled by a government 192 00:11:47.879 --> 00:11:49.199 It's politically neutral 193 00:11:49.199 --> 00:11:54.480 And it's not at the whim of some central bank or somewhere 194 00:11:55.160 --> 00:11:57.440 That becomes extremely attractive 195 00:11:57.680 --> 00:12:00.230 I think it will continue to be so, 196 00:12:00.230 --> 00:12:04.480 you know, as a lot of these fiat institutions sort of like are aging out 197 00:12:04.480 --> 00:12:07.040 they're sort of collapsing in on themselves 198 00:12:07.040 --> 00:12:12.940 Like there's like a bureaucratic black hole of money sucking 199 00:12:14.890 --> 00:12:16.759 The event horizon is expanding 200 00:12:16.759 --> 00:12:19.679 So it's just, it's getting worse and worse 201 00:12:19.679 --> 00:12:24.829 So I suspect that that's going to be a big part of the next 202 00:12:24.829 --> 00:12:27.679 however many years until we get on a Bitcoin standard 203 00:12:28.039 --> 00:12:28.919 Yeah, 100% 204 00:12:28.919 --> 00:12:31.039 I agree with you like 100% 205 00:12:31.039 --> 00:12:38.119 And I think more people escape to Bitcoin to prepare for this uncertainty 206 00:12:38.119 --> 00:12:41.399 And on the other side, there's the government, right? 207 00:12:41.440 --> 00:12:43.520 The government wants to control people 208 00:12:43.559 --> 00:12:47.839 They want to especially control the finance out of their people 209 00:12:47.839 --> 00:12:50.559 Then their solution would be CBDCs, I think 210 00:12:51.399 --> 00:12:57.649 I don't think US government is trying to issue CBDCs anymore, 211 00:12:57.649 --> 00:13:01.720 because of the Trump administration said they would ban CBDCs 212 00:13:02.160 --> 00:13:05.119 But Korean government is still exploring into it 213 00:13:05.119 --> 00:13:07.759 And China has already launched it 214 00:13:07.759 --> 00:13:11.080 And then they're beta testing in different cities 215 00:13:11.440 --> 00:13:16.919 Europe is experiencing, exploring into CBDCs as well 216 00:13:17.119 --> 00:13:19.639 Do you think CBDCs will be a threat to Bitcoin? 217 00:13:19.880 --> 00:13:21.180 Do you think it's going to come out 218 00:13:21.180 --> 00:13:28.440 and eventually the surveillance level from the government will be harsh, more harsh than before? 219 00:13:28.479 --> 00:13:31.279 And everybody will be suffering from the financial repression 220 00:13:31.279 --> 00:13:32.960 from the government because of the CBDCs? 221 00:13:33.800 --> 00:13:38.039 I actually don't think CBDCs are that close 222 00:13:38.080 --> 00:13:41.480 And the reason I say that is because I'm a programmer 223 00:13:41.480 --> 00:13:45.919 and I know how badly government does anything IT related 224 00:13:46.160 --> 00:13:51.210 And if you think about how well a CBDC has to work 225 00:13:51.210 --> 00:13:54.320 it has to be up 24-7, can't ever have any downtime 226 00:13:54.759 --> 00:13:57.479 And it has to work the first time 227 00:13:57.479 --> 00:13:59.000 It has to be really convenient 228 00:13:59.520 --> 00:14:05.620 Everywhere that's tried a CBDC usually falls to technical problems, 229 00:14:05.620 --> 00:14:08.600 user interface problems, user experience problems, and so on 230 00:14:09.160 --> 00:14:12.310 Nigeria released one, like just nobody used it 231 00:14:12.310 --> 00:14:15.440 because it was like way too difficult to use 232 00:14:15.440 --> 00:14:19.200 And they're like, we're used to cash, cash is easier 233 00:14:19.600 --> 00:14:24.550 And I've seen this, like even in other industries, 234 00:14:24.550 --> 00:14:28.400 this tends to be the case where you try to digitize everything, 235 00:14:28.400 --> 00:14:30.239 like put everything online or whatever 236 00:14:30.600 --> 00:14:32.320 It takes way longer than you think 237 00:14:32.600 --> 00:14:39.200 And it's only with many iterations and a lot of failures 238 00:14:39.200 --> 00:14:41.359 that you finally get to something even usable 239 00:14:42.040 --> 00:14:44.390 Like I used to work in health care, for example, 240 00:14:44.390 --> 00:14:49.559 and a big thing for a long time is electronic medical records instead of paper or whatever 241 00:14:50.000 --> 00:14:53.450 And you'd observe these doctors use a piece of paper 242 00:14:53.450 --> 00:14:57.200 and they can go through it in like two minutes and mark up everything that they need to 243 00:14:57.640 --> 00:15:01.519 And they go on to a website that they're supposed to fill in all their information 244 00:15:01.519 --> 00:15:02.519 It takes them 20 minutes 245 00:15:03.040 --> 00:15:07.920 There's no way that they're going to go with something that takes 20 minutes versus two 246 00:15:08.279 --> 00:15:10.320 So their time's just too valuable 247 00:15:10.640 --> 00:15:15.340 I suspect that's what's going to happen with a lot of CBDCs is, 248 00:15:15.340 --> 00:15:17.200 governments want it, don't get me wrong 249 00:15:17.239 --> 00:15:20.689 And I think it's a central banker's wet dream, 250 00:15:20.689 --> 00:15:25.559 but they're not going to be able to do it because they're not that good at IT 251 00:15:26.559 --> 00:15:30.679 Like you could hire really good people, I guess, or whatever 252 00:15:30.679 --> 00:15:35.879 But generally, the people that a government hires to do this sort of thing, 253 00:15:35.879 --> 00:15:37.440 they're not that good at it, right? 254 00:15:37.440 --> 00:15:39.990 Like they get it because of political favors 255 00:15:39.990 --> 00:15:44.690 or because they know the processes for government procurement 256 00:15:44.690 --> 00:15:47.920 and have the right connections to get that contract 257 00:15:48.200 --> 00:15:50.519 They're not actually good at making software 258 00:15:50.559 --> 00:15:55.559 So, you know, I just don't think it's like, I know China's trying 259 00:15:55.559 --> 00:15:59.200 I mean, they might be able to pull it off because they're very authoritarian 260 00:15:59.640 --> 00:16:04.940 But, you know, the U.S. or whatever, if you saw what happened with healthcare.gov, 261 00:16:04.940 --> 00:16:11.440 think, the website went down like the first day and couldn't handle more than 50 users or whatever 262 00:16:11.799 --> 00:16:17.600 Like that's the level of disaster I think we're looking at with any sort of CBDC rollout 263 00:16:17.600 --> 00:16:18.640 It's not going to happen 264 00:16:18.640 --> 00:16:20.239 It's way too politically risky 265 00:16:20.239 --> 00:16:21.600 It's going to be way too costly 266 00:16:21.600 --> 00:16:25.850 So for most of the people that are going to push for it, 267 00:16:25.850 --> 00:16:29.600 it's just going to be too big of an uphill battle to make happen 268 00:16:29.720 --> 00:16:31.480 What do you think of the stable coins then? 269 00:16:31.679 --> 00:16:34.239 Everybody wants to issue their own stable coins 270 00:16:34.239 --> 00:16:37.410 We pull just issue their own stable coins 271 00:16:37.410 --> 00:16:43.580 And the reason why XRP price shot up recently was because of that issue, right? 272 00:16:43.580 --> 00:16:45.600 Authorized stable coins 273 00:16:45.600 --> 00:16:47.720 PayPal issued their stable coins 274 00:16:47.720 --> 00:16:49.920 Tether is so dominant 275 00:16:51.920 --> 00:16:55.270 So some of my subscribers asked me, 276 00:16:55.270 --> 00:16:59.970 Do you prefer making this dollar checking account in the bank 277 00:16:59.970 --> 00:17:03.839 or purchasing Tether and storing the private wallet? 278 00:17:04.079 --> 00:17:05.839 Which one do you think is a better option? 279 00:17:05.839 --> 00:17:09.559 And I'm surprised that people ask these questions 280 00:17:11.109 --> 00:17:16.820 I still believe owning the actual dollar in the bank account is a safer option of course 281 00:17:16.820 --> 00:17:18.880 Tether is just issued by one company 282 00:17:19.160 --> 00:17:26.640 But people just trust USDT as the super, super safe investment option these days 283 00:17:27.399 --> 00:17:29.440 Do you have an opinion on Tether? 284 00:17:29.760 --> 00:17:32.460 Yeah, I mean, I think I might disagree with you there 285 00:17:32.460 --> 00:17:36.560 because in a sense, like if you hold dollars at your bank, 286 00:17:36.560 --> 00:17:37.510 Yeah 287 00:17:37.510 --> 00:17:40.399 they are fractional reserve banking 288 00:17:40.399 --> 00:17:44.160 They lend out way more money than they have in reserve 289 00:17:44.440 --> 00:17:48.790 The savings of everybody that hold money at the bank is like 290 00:17:48.790 --> 00:17:51.359 10 percent of the loans that they give out 291 00:17:51.359 --> 00:17:54.709 Like the reserve ratio in that case would be 10, 292 00:17:54.709 --> 00:17:58.909 where you have maybe like a million dollars in deposits 293 00:17:58.909 --> 00:18:00.959 and you lend out 10 million, something like that 294 00:18:00.959 --> 00:18:04.279 Like that, that would be a reserve ratio of 10 295 00:18:04.679 --> 00:18:08.359 You look at the reserve ratio of Tether and the assets that they have 296 00:18:08.760 --> 00:18:17.600 And it's like I think for every dollar they have like a buck ten in like reserve stuff 297 00:18:17.959 --> 00:18:21.079 But it's like overfilled 298 00:18:21.079 --> 00:18:29.600 So in that sense, for me, the lesson of Tether is that's what a bank should be 299 00:18:29.679 --> 00:18:34.320 It's literally like just like they're performing all the functions of a bank 300 00:18:34.599 --> 00:18:36.479 They have 50 employees 301 00:18:36.679 --> 00:18:41.039 They have like one hundred twenty five billion dollars assets on their management 302 00:18:41.039 --> 00:18:45.000 And they're probably worth more than any U.S bank 303 00:18:45.280 --> 00:18:51.320 Which like Chase Manhattan, I think alone employs like two hundred thousand people 304 00:18:51.599 --> 00:18:53.239 Right? Tether has 50 305 00:18:53.599 --> 00:18:57.449 Like that tells you how inefficient the current banking system is 306 00:18:57.449 --> 00:18:59.559 that they have to have all of that 307 00:19:00.239 --> 00:19:05.820 But that's because they're a protected industry essentially by the government and so on 308 00:19:06.270 --> 00:19:13.280 You know, to me, stable coins are just like wildcat banks or something like that 309 00:19:13.280 --> 00:19:17.280 or less regulated banks of some kind, 310 00:19:17.280 --> 00:19:22.000 because they're they're doing the functions of a bank where people just want to save dollars 311 00:19:22.039 --> 00:19:23.159 All over the world 312 00:19:23.200 --> 00:19:26.599 Whether you're in Nigeria or Japan or wherever 313 00:19:26.760 --> 00:19:28.880 And and that's that's all they want to do 314 00:19:28.880 --> 00:19:35.359 And they just don't want it to be debased using their own crappy currency, which debases way faster 315 00:19:35.719 --> 00:19:37.320 So let's just give us dollar 316 00:19:37.320 --> 00:19:44.000 So we at least keep up better than our neighbor who keeps it in the local currency 317 00:19:44.760 --> 00:19:46.479 That seems to be the main use case 318 00:19:46.919 --> 00:19:51.719 Now, the bad part about Tether is that it's not that liquid 319 00:19:51.760 --> 00:19:57.840 You have to you have to convert it back to U.S dollars or whatever your local currency is 320 00:19:57.840 --> 00:19:59.919 And there's sort of like friction around it 321 00:20:00.679 --> 00:20:03.879 So if they could solve that problem, which, 322 00:20:03.879 --> 00:20:10.129 again, that's sort of like the medium of exchange dilemma for almost everything is, 323 00:20:10.129 --> 00:20:13.329 you know, getting a merchant to take it is actually quite difficult 324 00:20:13.329 --> 00:20:15.159 unless the merchant really wants 325 00:20:15.200 --> 00:20:18.520 So, yeah, I mean, that that that's what Tether is to me 326 00:20:18.520 --> 00:20:20.280 And that's what like stable coins are 327 00:20:20.280 --> 00:20:26.119 And this is why like a lot of other stable coins are trying to come onto the market 328 00:20:26.119 --> 00:20:30.069 But I really don't think it's going to be easy to take that mantle away from Tether 329 00:20:30.069 --> 00:20:31.599 because there's a network effect 330 00:20:31.599 --> 00:20:36.499 Like, if one person is willing to take Tether, 331 00:20:36.499 --> 00:20:37.899 they're not suddenly going to say, 332 00:20:37.899 --> 00:20:40.640 Well, all right, do you take Ripple dollars? 333 00:20:40.960 --> 00:20:43.080 No, no, no 334 00:20:43.440 --> 00:20:45.280 Why would I like that? 335 00:20:45.280 --> 00:20:46.479 That's too much of a headache 336 00:20:46.679 --> 00:20:47.679 Why would I do that? 337 00:20:47.679 --> 00:20:49.840 Also, how long has Ripple dollars have been around? 338 00:20:49.840 --> 00:20:51.880 Like a month, right? 339 00:20:51.880 --> 00:20:54.799 Like Tether has been around for like 10 years now 340 00:20:54.799 --> 00:20:58.799 It's a lot more of a brand name 341 00:20:58.799 --> 00:21:01.840 and it's something that people trust because it's been there a long time 342 00:21:01.840 --> 00:21:05.719 And that leads only going to get bigger as they've lasted longer and longer 343 00:21:05.719 --> 00:21:11.719 So, yeah, like all these other stable coins I have I have doubts about, 344 00:21:11.719 --> 00:21:16.200 like there's some weird rumors going around USDC, for example 345 00:21:16.880 --> 00:21:21.479 But, you know, like Tether seems to have won that stable coin market 346 00:21:21.479 --> 00:21:25.520 And I'm not sure there's really like demand for any other kind of stable coin 347 00:21:25.520 --> 00:21:30.520 They've they've tried launching like stable euro or stable yen or whatever 348 00:21:30.559 --> 00:21:31.840 Like nobody wants any of that 349 00:21:31.840 --> 00:21:34.520 It's they just want the dollars 350 00:21:34.799 --> 00:21:35.549 Right 351 00:21:35.549 --> 00:21:41.679 You know, there's a really big clothing wholesale market in Korea in Dongdaemun 352 00:21:42.000 --> 00:21:43.119 It's called Pyeonghwa Market 353 00:21:43.359 --> 00:21:45.960 It's a really famous wholesale market 354 00:21:45.960 --> 00:21:50.260 So people, the merchants come out and sell the fabrics 355 00:21:50.260 --> 00:21:55.080 or even garments like jeans and T-shirts and jackets and as well 356 00:21:55.440 --> 00:22:03.559 So a lot of Chinese online shopping sellers come to Korea and purchase a lot of the fabrics there 357 00:22:03.799 --> 00:22:09.239 And then they import it to Chinese mainland and then they sell it to Chinese market 358 00:22:09.599 --> 00:22:11.849 And from the early this year, 359 00:22:11.849 --> 00:22:16.159 I heard these merchants in the Pyeonghwa Market, they accept USDT Tether 360 00:22:16.200 --> 00:22:16.840 Oh, wow 361 00:22:17.119 --> 00:22:21.619 Yeah, everybody, the Chinese sellers, Chinese buyers, actually 362 00:22:21.619 --> 00:22:24.719 Chinese buyers come to this market and then they pay with the Tether 363 00:22:24.840 --> 00:22:25.559 That's what I hear 364 00:22:26.080 --> 00:22:27.730 Yeah, I guess that would make sense 365 00:22:27.730 --> 00:22:32.580 because it's easier for them to interact with that rather than 366 00:22:32.580 --> 00:22:36.330 because if they were to try to pay in yuan 367 00:22:36.330 --> 00:22:38.960 then they would have to convert it to dollars and then convert 368 00:22:38.960 --> 00:22:40.479 the dollars to yuan 369 00:22:41.280 --> 00:22:44.520 That's like two round trips that they avoid just by using Tether 370 00:22:44.840 --> 00:22:51.290 And if they get other, their suppliers pay them in Tether 371 00:22:51.290 --> 00:22:53.479 then they can they can like actually go through 372 00:22:53.960 --> 00:23:00.919 And that's kind of what international trade is mostly conducted in anyway, is the dollar 373 00:23:00.919 --> 00:23:03.799 So if it's close enough to the dollar, I guess that would make sense 374 00:23:03.960 --> 00:23:04.479 Yeah 375 00:23:04.520 --> 00:23:06.640 So I think this will be the last question 376 00:23:07.559 --> 00:23:12.109 After the martial law taking place a few weeks ago, 377 00:23:12.109 --> 00:23:17.359 there are growing people who want to try self-custody for the first time 378 00:23:17.840 --> 00:23:21.740 You know, the majority of the crypto investors in Korea, 379 00:23:21.740 --> 00:23:26.119 they purchase Bitcoin and leave it in their crypto exchange account 380 00:23:26.119 --> 00:23:29.840 But this demand for self-custody is just growing and growing 381 00:23:30.359 --> 00:23:34.159 So I try to educate as easily as possible to these people, 382 00:23:34.159 --> 00:23:37.559 but it's still, you know, difficult, very difficult 383 00:23:37.559 --> 00:23:44.409 And people have a hard time understanding what these private wallets do 384 00:23:44.409 --> 00:23:49.960 and the private key do, what the public key is, etc. 385 00:23:50.320 --> 00:23:55.479 What do you think will be a game changer for the mass adoption of self-custody? 386 00:23:55.679 --> 00:23:59.379 What do you think will be necessary for people to 387 00:23:59.379 --> 00:24:02.840 learn the self-custody and actually exercise self-custody? 388 00:24:02.880 --> 00:24:10.880 Yeah, I suspect a lot of those people are either non-technical or old or something like that 389 00:24:10.880 --> 00:24:13.159 There's some barrier to that, right? 390 00:24:13.159 --> 00:24:19.100 And there's probably not that many resources on how to do self-custody and stuff 391 00:24:19.100 --> 00:24:26.919 And my thesis has been for a while now that, right now you have like sort of two extremes 392 00:24:26.919 --> 00:24:29.319 You can leave your coins on an exchange 393 00:24:29.319 --> 00:24:32.159 and that's sort of trusting the exchange 394 00:24:32.320 --> 00:24:35.320 And then there's self-custody where you don't have to trust anybody 395 00:24:35.599 --> 00:24:38.399 There's sort of nothing in between where 396 00:24:38.399 --> 00:24:42.359 you can trust somebody that you know or something like that 397 00:24:43.000 --> 00:24:46.100 So I think we'll naturally go in that direction 398 00:24:46.100 --> 00:24:49.400 because I don't think everyone should self-custody 399 00:24:49.400 --> 00:24:53.960 If you have a 10-year-old kid, probably shouldn't be self-custody, right? 400 00:24:53.960 --> 00:24:56.919 I don't care how careful they are 401 00:24:56.919 --> 00:24:59.440 They're probably going to lose their seat or whatever 402 00:24:59.760 --> 00:25:02.919 Also similar with like 85-year-old grandpa, right? 403 00:25:02.919 --> 00:25:08.039 Like probably not like, you know, starting to go senile or whatever 404 00:25:08.039 --> 00:25:12.039 Probably not a great idea to have them, you know, self-custody either 405 00:25:12.760 --> 00:25:17.080 And there's a lot of people that I think just don't want to bother 406 00:25:17.080 --> 00:25:23.180 So I think what's going to happen or the way it's going to evolve, 407 00:25:23.180 --> 00:25:25.940 and like to some degree this already happens is 408 00:25:25.940 --> 00:25:29.479 you're going to keep it with somebody that you trust that's sufficiently technical 409 00:25:29.479 --> 00:25:33.559 So I know I am that for a lot of my relatives, right? 410 00:25:33.559 --> 00:25:39.039 Like my parents keep their Bitcoin with me and like, you know, I tell them, 411 00:25:39.039 --> 00:25:40.239 Okay, you have this much 412 00:25:40.239 --> 00:25:42.719 Let me know whenever you need it or whatever 413 00:25:42.719 --> 00:25:50.080 That I think is going to be the way that you're not going to get exactly self-custody, 414 00:25:50.080 --> 00:25:51.599 but at least off the exchanges, right? 415 00:25:51.599 --> 00:25:53.919 You don't have to have the central honeypot 416 00:25:53.919 --> 00:25:59.599 Instead, it's sort of like smaller, like little federations or something 417 00:25:59.599 --> 00:26:02.699 And who knows, maybe that's like a good place for 418 00:26:02.699 --> 00:26:06.320 something like e-cash protocols of some kind 419 00:26:06.320 --> 00:26:11.760 where, you know, you can trade those with privacy and so on 420 00:26:11.760 --> 00:26:19.919 But that seems to be, that I think will help at least have the coins not be on exchanges 421 00:26:19.919 --> 00:26:22.000 and be with somebody that you trust, right? 422 00:26:22.960 --> 00:26:28.640 And, you know, like for the truly paranoid, you can still go in self-custody, 423 00:26:28.640 --> 00:26:32.799 given you have sufficient technical aptitude and so on 424 00:26:33.599 --> 00:26:39.520 But that's where I think, you know, like especially in a place like Korea, 425 00:26:39.520 --> 00:26:42.080 where you have a very trust-based culture, right? 426 00:26:42.080 --> 00:26:49.039 Like you have close relatives and, like most families have like at least one guy 427 00:26:49.039 --> 00:26:52.719 that's like at least somewhat technical to figure this stuff out 428 00:26:53.440 --> 00:26:59.200 You know, I suspect that that'll be something that will become popular 429 00:27:00.239 --> 00:27:02.479 Maybe there's a business in there for somebody 430 00:27:03.440 --> 00:27:07.280 I thought it would be really amazing to have some kind of a cold wallet 431 00:27:07.280 --> 00:27:09.280 that has a Neuralink feature 432 00:27:09.839 --> 00:27:13.280 So it can be connected with my brain with Neuralink, 433 00:27:13.280 --> 00:27:18.319 and then they can read the private key or seed phrase is imprinted in my brain 434 00:27:18.319 --> 00:27:22.640 and then activated whenever I get close to the wallet, right? 435 00:27:22.640 --> 00:27:23.520 It would be awesome, right? 436 00:27:26.400 --> 00:27:30.050 Like the way Neuralink works from what I understand is that 437 00:27:30.050 --> 00:27:31.839 you need to train it, right? 438 00:27:32.800 --> 00:27:38.800 So then it sees the pattern many times and then it understands, 439 00:27:38.800 --> 00:27:40.880 OK, this is what you want or something like that 440 00:27:40.880 --> 00:27:47.430 So you would have to train it somewhat in like 441 00:27:47.430 --> 00:27:50.719 recognizing what you want before it would do it 442 00:27:51.520 --> 00:27:58.319 But I mean, like just I'm very wary ofhaving any sort of like machine part in my brain 443 00:27:58.319 --> 00:28:02.160 that could get hacked in some way against me 444 00:28:02.160 --> 00:28:08.719 So I get it for people that are paralyzed and don't have loss of certain functions 445 00:28:08.719 --> 00:28:12.160 And it's the only way to interact with the world 446 00:28:12.160 --> 00:28:14.560 But I don't voluntarily putting it in 447 00:28:14.560 --> 00:28:17.439 I know how many security holes there are in software 448 00:28:17.439 --> 00:28:19.520 It's just not a good idea 449 00:28:19.520 --> 00:28:21.359 Take it from a programmer, don't do it 450 00:28:22.160 --> 00:28:22.800 Right, right