37 - Crypto is Empowering | Phil Bonello

Transcript

[Music] welcome to banget or re-explore the frontier of Internet money and internet Finance this is how to get started how to get better and how to front run the opportunity this is Ryan Sean Adams I'm here with David Hoffman and we're here to help you become more bankless David fantastic episode today awesome episode today what do you think about it yeah this episode with Phil was a big step back away from the intricacies of Defi and the intricacies of cryptocurrency

and into the world of cryptography and how crypto as in cryptography is impacting the macro world right because cryptocurrency is really just one instantiation of the use of cryptography and something that the bank list I think really relies on are not just cryptocurrency but tools that empower the individual and all of these tools that were seeing come out of the world in 2020 and even in and and earlier than that are all based in cryptography and so this episode with Phil is how crypto is empowering and it's changing the world in so many different ways and we go into a lot of those ways here on this podcast it's really that's why we called

like Bank list you know a movement right because it's really a political movement that we're talking about here power to the people power to the individuals power to small groups to coordinate without necessarily the big he heavy infrastructure of a nation state that's a pretty powerful concept and uh Phil wrote this fantastic paper um the sovereign individual investment thesis paper I think he took a lot of the ideas that like were you more you made them more concise he applied them to crypto but from a book that both of us really enjoyed the sovereign individual a book that was written in like what 1999 1997 yeah wow okay yeah like maybe because we don't talk about a lot in this in this

uh conversation with Phil but maybe you should give folks an overview of that book The sovereign individual was written by these two guys that I think it's for a book of When It Was Written was one of it is one of the books with the most foresight I've ever read ever except for the fact how the F first chapter is all about the Y2K so you can if you guys want to read that just skip over that chapter you won't miss anything but in 1997 they talked about cyber currencies that are outside the purview of the nation state right and what the impacts that happen as a result of the existence of these quote unquote cyber currencies uh and so like they didn't know about blockchain they didn't know about Satoshi but they they just figured out that at some point there's

going to be money on the internet and it's going to be outside of the nation state and so they use that and and they also talk about just what they call changing returns to violence and what that really means is you know violence maybe puts that in a a violent image in in your head but it's really talking about who in society do we allow the privilege of having a monopoly on force and coercion and right now in our society that's the police and the military right and so we give over the right to be violent to the nation state and the nation state coordinates us with that privil right and what Phil talks about in the his sovereign individual investment thesis which is based off of

the sovereign individual book is that cryptography really reduces how advantageous it is to have this Monopoly on violence and one way to illustrate that is that you know with your private Keys no one can take away your ether right no one can take away your D no one can take away your Bitcoin it doesn't matter how much force how many nuclear bombs how many tanks a nation state has because cryptography doesn't respond to violence right it's in a different Universe it's in a different Paradigm and there's just a lot of different implications that results on just the invalidation of what makes a nation state powerful and so that's what we get into in this episode with Phil yeah we talk about some of those Downstream

implications of course we often talk about money Printing and the macro landscape and we certainly touch that here but we also talk about changing labor markets which is I think uh an interesting take about how education and population uh like labor in populations are going to change as a result of this power transfer to individuals so it's a fantastic fascinating discussion and we're glad you are joining us for it one really good example that Ryan and I came across recently that is evidence of how this sovereign individual thesis is playing out is how we got a graphic designer for the bank list Q3 token report which you guys should totally check out by the way uh but we uh tweeted it out we need a

designer we need a graphic designer because we have this report coming out and we got people in our Twitter DMS you know ask peaked about the job and we ended up selecting this individual from Nigeria who really uh worked hard to produce a really good uh template for how we wanted our token report to work the power of internet communications along with our ability to pay this individual in die instantaneously without a wire transfer without permission of a bank without talking to any nation state Authority we just sent him his die for his labor what this is really going to do is really even the playing field between labor markets across the whole entire world this is

going to be a massively globalizing force and Phil what Phil talks about is how you know first world Nations you know developed Nations have have this advantage that he thinks cryptography is going to erode away and because Global labor markets are about to become far more equalized because you know somebody in in some developing Nation can do similar jobs as somebody in a developed nation and likely do it for a lower cost than what was what would be the market rate in the developed nation and so Phil sees this pattern playing out not just in labor markets but also in education and just almost almost every single industry has implic implicative changes as a result of cryptography the 2020s

are certainly going to be a decade of of changes and so will the rest of the century it's going to be exciting to watch so before we get into this conversation with Phil we've got to mention an event that is coming up it is an opportunity if you are a defi developer to help make the world a bit more decentralized a bit more serverless a bit more bankless it's the file coin accelerator you have the opportunity to earn a 20K Grant by applying to the accelerator along with a $1 million in follow-up funding we're huge supporters of what filecoin is doing with ipfs and with its standards to bring about a decentralized storage Network so if you want to apply if you're a defi developer

or an entrepreneur you want to apply go to the link in the show notes and do that by the 15th of November David you're actually serving as a mentor for this too David you're actually serving as a mentor for this too right yeah I'm I'm really excited about the development and growth of filecoin and I'm looking forward to seeing what value I can add to this accelerator uh for those that don't know filecoin is a decentralized storage solution so think Dropbox think Google drive but decentralized right and this is you know perfect time to talk about how cryptography is changing markets everywhere I wonder what happens when the world has you know just freely accessible and abundant storage in the cloud that is outside of the control of

any one single individual right that is what file coin is all about providing persistent and persistently available data uh to the world I think that's a really cool thing to strive for and so I'm really excited to see what is going to come out out of this accelerator so to take advantage of this just apply for the filecoin frontier accelerator by November 15th using the link in the show notes all right guys we're going to get into this episode with Phil about how cryptography is changing the world around us and empowering the individual but first we're going to talk about some of sponsors that are also empowered by cryptography when you own crypto what really matters is the security and

ownership over your assets being a part of the bankless nation means having complete sovereignty over your crypto the easiest way to do that is with a ledger Hardware wallet a hardware wallet is a little device that manages your private keys for you so you don't have to worry about proper private Key Management your Ledger Hardware wallet keeps your private Keys private but still lets you have easy access to your crypto the combination of my ledger Hardware wallet and metamask lets me store my crypto Assets in the most safe way possible but still lets me easily access Unis swap or all the other defi apps that I use on a daily basis if you already have a ledger wallet you can use the Ledger Live app to participate in some of the money verbs that we

discussed in the bank list program The Ledger Live app is your headquarters for managing your personal crypto Finance it's a great tool to manage the assets you hold on your Ledger as well as receive a portfolio summary of all the assets that you have stored using The Ledger Live app you can buy Bitcoin ether and stable coins and have it sent directly to your Ledger Hardware wallet skipping Over The Trusted exchanges and getting your assets into your control you can even use The Ledger Live app to swap crypto assets natively inside of the app so you never need to send your crypto assets away from your ledger to make a trade buying a ledger is like buying a fire extinguisher the best time to get one was yesterday especially if you're doing something silly like holding your crypto in a hot wallet

that's always connected to the internet if you haven't gained full control over your crypto yet go to the link in the show notes and get your Ledger today bankless Nation do you want to go fully bankless but in the real world monolith is the defi account that you need it wraps your eth address in a bankless Visa card and it does so much more it closes the loop from Fiat to defi so you can onboard Fiat to die on monolith with zero fees then you can convert that die to a die which is an interest bearing savings account again zero fees and then you can spend that interest in the real world on a Visa card so you can finally buy your cup of coffee with interest earned in defi guys

this is Magic this is the closest thing to the Holy Grail crypto card and monolith gives you all of it you need to download the app at monolith doxyz to get your bank list Visa card it's optimized for European listeners they'll be coming to the US soon and when you get that Visa card the monolith card tweet about it when you do I love seeing people unpackaging their beautiful bankless Visa cards and makes me realize that the revolution is here search monolith in the App Store all right guys let's go ahead and get right into this episode with Phil [Music] Bello all right bankless Nation really excited to welcome Phil Bello who is the

director of research at grce scale he he was formerly an iei asset management and before that massari so he's been around the block in crypto really knows his stuff we're going to talk with Phil today about his sovereign individual thesis paper in in general how crypto empowers the individual this is a technology for the People by the people as David and I have talked about so many times this is a central theme of the bank list Nation and we're really excited to have Phil join us to talk a little bit more about it Phil how you doing today I'm doing really well thanks uh thanks for having me Ryan Dave oh it's super exciting I think we are uh

Kindred Spirits um specifically after like re reading some of your writing I want to start with this question do you think cryptography is inherently an anti-authoritarian technology you know I'm not sure if it's anti-authoritarian I I would say that it's a it's a very empowering technology um and you know vitalic I think put it probably best the best that I've seen and I I'll just quote him here it's is that cry cryptography is truly special in the 21st century because cryptography is one of the few Fields where adversarial conflict continues to heavily favor the defender so and then he goes on to say the average person's

keys are secure enough to resist even state level actors you know and I think that's that kind of sums it up really well um throughout history and we'll get we'll get um into this through the podcast but throughout history uh The Leverage of violence has really favored the the attacker and so um it's cryptography has kind of been this uh this balance for the defender let's get into the conversation of defensiveness vers attacking and I think a lot of people might not um understand where we're coming when we talk about you know the The Leverage leveraging of violence uh because you know we're not talking about like a a bar fight or you know two people you know with bloody fists what

what are we talking about Phil when we talk about the uh Monopoly over violence and being defensive or offensive in terms of Technology it's helpful to take a step back a little bit and uh look throughout history and this is kind of what the the sovereign individual uh does uh so you think back to hunter gatherer times no land no possession rule by tribe right uh there's no idea of personal property uh then you go to the agricultural age there's land possessions uh these are things that there's the idea of personal property there are things that you have to defend um and because of that feetal Lords emerge and there's this protection as a

service that kind of Rises out of this era and then you go to the Industrial Age and we see the rise of armies with guns and factories run by nation states you know so there's continuously consolidation of power uh and then we go to the nuclear age and uh even more leverage on violence right we see the development of superpowers in in today's world and then finally you shift to the information age which is kind of a a big shift in in the leverage of violence like we talk about um not only from the point of view of cry cryptography um where it makes it it makes it easy for you to defend your personal digital property uh you know

whether it's it's money your you know your non-f funable tokens or um your digital digital assets that are crew cash flow whatever it may be you know those things are now they can now be defended through cryptography um along those same lines we have Global access to information uh weapons really have become information we have virtual reality you know it kind of balloons from there and one of the things that I think it's important for people to understand is is that know who the The Entity that is uh authorized by the people in the social contract to use violence is ultimately the The Entity that we that we all trust to use that

power correctly right but sometimes these structures these uh you know the nation state structure but also just like the power structures the the hierarchies that uh are generated throughout history that we give authority to uh sometimes they don't act in ways that we really want them to and what cryptography is is doing is really giving a very strong tool that the individual can leverage against the power structures of authority uh in order to retain their freedom right and and a good illustration on this is is you know a nuclear bomb or nuclear missiles no matter how many nuclear missiles the world generates can't force anyone to you know give up their

Bitcoins from their private keys right it doesn't matter the strength of the physical power of an authority because cryptography is always more powerful than that so so understanding this Phil how how does the world change as a result of the leveraging of cryptography yeah so you know I think they there are a few uh different vectors I mean one you you can you can have a lot of things that really happen outside of the perview of governments and and I I don't mean this in like an anarchistic or libertarian way it's it's it's really just empowering right you can you can conduct transactions without any anyone's permission which literally was impossible before you know from

around the world right and I I think that's been really evident in the past six months with the rise of defi uh kind of the rise of decentralized autonomous organizations where um people can actually transact without a middleman um and there's there's really Bountiful you know transactions occurring and people are organizing themselves through Discord uh so so you know not all of this not all of the communication not all of the organization has to happen in an encrypted environment but the uh the power of encryption and the recent rise of you know these cryptographic networks uh has allowed for Value transfer in a way that uh we haven't seen before um I

think that's pretty powerful I think you know one one question that's uh been on my mind recently Phil with all of kind of the H has it been an increase in regulatory actions uh lately I'm not sure but it seems almost like it so finsen uh with bitmex we talked about that on a previous uh you know state of the nation uh finsen also um you know actually the doj um fining coin ninja which is a you know privacy technology on bitcoin for $60 million I mean do you think that nation states will be okay longterm term with their citizens retaining this powerful technology this this cryptography technology there was a

time as I understand it cryptography was was sort of a you know just a um a national security sort of Technology only nation states uh could actually use it it wasn't necessarily legal for individual citizens to use it now now anyone can use it at this point in time but are we in this special era of History where you know maybe it's okay and could nation states suddenly change their mind and out law cryptography do you do are you concerned about that you know I think there is some concern there there's been some recent guidance on uh the worries of endtoend encryption and I think with uh some of the upheaval that's been going on in society and online specifically and how much power is aggregated in a few media

platforms and in in the hands of a few companies I I think the public starts to look towards uh you know Central governments to say you know protect us fix this and that that's a kind of slippery slope because when you start to ask the government to fix these things you then Place more power in the hands of the government um and you know that's not necessarily a bad thing all the time but it it uh you know absolute power corrupts absolutely and so I I think this the whole trend of uh encryption and cens ship resistant applications is a really important one and I think probably a year or two ago when if you're talking about censorship

resistant applications uh you you're pretty much going to get blank stairs nobody's going to really understand the uh the reason behind it and and that was true throughout the 2017 2018 you know crypto Market uh where you you try to argue for you know why these applications may or may not be valuable and you start to get into censorship resistance and it's like well people just don't care um and so you know in this sovereign individual investment thesis that I put together one of my thesis was people won't care until they have to so you know it it as bad as it sounds things have to get wor worse before they get better and uh I think we've been kind of lulled into

this uh idea of um you know Outsourcing our defense right right and now we're entering a period where it's easy to defend uh yourself from outside attackers so uh you now with this restored power uh I think people are going to start to take take control for themselves right um and and so I I've been really hopeful in the last year to see developments with some some of these censorship resistant uh Technologies uh different parts of the web three stack so to speak you know whether it's uh kind of defi growing up a bit on ethereum or you know live Pier doing uh

doing some really good work and like getting some strong adoption or like filecoin and sea and these these cool projects just building out different parts of the web three stack and I think that'll be really important you know Ari Paul um recently put out a tweet and you know I've been seeing this kind of thing for for a little bit in different words but but he put it like this he said that um he thought the right to cryptography should be a constitutional right basically so you know in the US of course we have you know freedom of speech the right to assemble that sort of thing uh we should also he says have the right to cryptography that should not be illegal banned by the government uh would you take it that far do you agree with that take yeah and honestly I think part of what's so powerful about

cryptography is at some point it won't matter whether it's um legal or illegal it's just uh people will be able to uh transact and use this technology because it's available because it exists that that's that's part of kind of like why I I I think cryptography is so important it just it it doesn't matter what you think it doesn't matter what I think it doesn't matter what centralized organizations think uh it has the power to exist outside of their purview you're saying they can't Outlaw it to a certain yeah to a certain extent and I do want the listener to understand that we're not just talking about cryptocurrency we're not just talking about Bitcoin and

ethereum we're talking about the technology that enables these really these things which is cryptography uh which enables a bunch of other things that are highly relevant to what we're talking about and what we're going to be talking about in this podcast where uh communication nowadays you know and even when we roll back the clock uh where communication was like a a letter in the mail right where you would need government infrastructure a government utility to communicate uh across any distance that's you know you know any any further than a human to human uh conversation right so if you want to communicate with somebody Across the Nation you would need government infrastructure to um to facilitate that by sending a letter right and you know

with the growth of the internet we no longer needed the government but we still needed Central centralized intermediaries uh you know Facebook Messenger for one or SMS text messaging is still using a data provider uh and and so even at with the growth of the internet we still didn't have a a individual to individual conversation replicated over the long distance without having like a centralized intermediary facilitating this and so in addition to replicating cash transactions like where where Bitcoin can replicate the handing of cash from one individual to another cryptography also replicates the instantiation of having one person converse with another

person without any centralized intermediary and so what is really interesting to me Phil and I think what something that that you've tapped into is that this uh cryptographic protocols be it a cryptocurrency system or cryptographic communication seems to be creating Public Utilities uh internet-based public infrastructure for replicating peer-to-peer Behavior both as cash transfers and communication and privacy as well and we now are able to have internet-based privacy or Secrets without an intermediary and so when this world of Public Utilities that are cryptography based that are peer-to-peer based comes

into existence in a world where the only alternative was a centralized intermediary and so so the the centralized world has everything to lose and the cryptography the new cryptography cryptography protocol world has everything to gain what happens when there is the ability to exit what is the the most the the through line behind the ability to exit into the system what happens to our Legacy systems from from an individual level I think it's just an equalizing Force right uh everybody kind of has access to the same markets the same information uh the same uh job market and and and that that's going to be a

really interesting shift it could be a really great thing for developing countries and it it may be a tough pill to swallow for developed countries right because developed countries have benefited from these asymmetries for a long time and uh you know the developing countries have kind of suffered and so as as we as we kind of move into this this Paradigm uh you know people from developing countries they may live in uh areas that are lower costs previously they may not have had access to higher education um previously they may not have had access to high-paying jobs um

but now in this world of uh you know you can call it kind of like a the crypto economy you know whether it's specifically talking about cryptocurrencies and things built on bitcoin and eath and so forth you you can actually transact uh in like this trustless environment and uh feel good that you're going to receive your payment and and that you can you can uh do work from anywhere in the world right and so it it's uh it's really interesting I think what you're saying is all of these developed countries so-called all of the centralized infrastructure they've built no longer matters or it matters a lot less now that we have cryptography enabled

Technologies like cryptocurrencies like cryptographic communication that sort of thing right yeah yeah yeah I mean it goes further than uh just cryptography which I you know I think we'll get into a little bit but uh I think cryptography is kind of The Last Mile for the execution right uh to actually be able to transact and to be able to participate in these markets uh you know trust is trust is really the the backbone of of uh really flourishing markets and and now you can you can have trust on a global scale to me the big thing that I see is the relevancy of borders seems to just fall apart in this

cryptographic infrastructure world where you know the the border that separates United States and Mexico means less when I can you know pay uh pay money and receive services from somebody in in Mexico or any other country like never mind any bordering country to United States I can immediately have a relationship with someone across the world and so you know kind of what what Ryan was getting into is the the countries that have all of this great infrastructure set up in order to you know promote the well-being of their citizens and perhaps have much better infrastructure than uh you know developing or third world countries that matters less because now third world countries and developed countries are accessing the same infrastructure so I I

I know you pay attention to the subject of uh you know an internet-based economy where you know it's outside of any particular nation states you know Authority or Reg talk talk about a an internet based economy that leverages these cryptographic protocols what does that look like and how is that different from the economies that we are familiar with today I I think the internet based economy uh really just allows allows people to uh let their skills flourish right they um don't need to depend so much on uh accreditation and uh you know the four-year educational system uh they can participate in in something like a a dow like you know we saw with WiFi and

all all these all these uh communities that arise on Discord and you can become a Community member uh you can you can help develop the protocol um and it doesn't matter what your background is right one thing one thing I find super interesting about this you were talking earlier Phil about like um cryptography and crypto crypto economies being the great equalizer right I mean thinking about like um have you ever asked yourself what's the value of assuming your US citizen as well like what's the value of your US citizen right um it's interesting that's like you know primarily a product of of where you were born it's sort of a geographic Lottery um and what are the benefits of living

in the United States there's some drawbacks of course but over the years there have been tremendous benefits right that's why um sometimes you have individuals immigrate here to the US and traditionally it's been things like well it's got a you know sound legal system that um protects property rights and protects uh corporate law right um so that's a benefit it's oh it also has a a robust uh Financial economy so has a great banking system oh and you know it's got a good way to set up a business and create Capital so you can create your Delaware LLC company and you can start to raise capital from like Wall Street uh or Silicon Valley it's got all of these places well it's interesting in crypto and what you're saying with like

the these Dows and these internet communities all of that becomes flattened because now if I can I can set up a decentralized autonomous organization a capital pool on the internet uh using ethereum I don't even need I don't need uh you know the the US legal system to do that I don't need the US banking system to do that I have decentralized Financial tools like like compound and I have a nois multisig for my bank account right I can do all of this stuff um at a even a higher level than I can plugged into the US system so this is like a great equalizer it doesn't matter if you're in India or you

know South America or any part of the world you have access to the exact same super Financial infrastructure super economic infrastructure that everybody else does you're no longer locked out so it's it's no longer a product of the geographic Lottery everyone gets access to this stuff that's what's so cool to me it like what do you think about that yeah and I I think uh to expand on that it's it's this idea of like automated trust automated trust that's successible anywhere in the world um and that's what's so powerful to me it's the that these markets are these markets are just now available anywhere to everybody um and you can depend depend on them like

you were saying you know all of these different Primitives are being set up so that uh you can really you can really do most of what you need on the internet uh and without the need for a trust uh trusted third party and that's that's really empowering that's really powerful uh for the individual what Ryan and I call the bankless nation is kind of this nebulous uh set of people that you know are leveraging this new system uh for their finance and also and also for their labor too right and you know one one thing I that um and so Phil you call this like a new trust system but what the the Legacy nation state system is is

you know a a nation state is itself a trust system but it has very you know bookended geographic regions regions with borders where they don't really commit to any trust uh and and to me that's what a cryptograph a decentralized finance system that's based on cryptography what that is really creating is an internet level trust system to create a a platform for economic activity and for people from across all labor markets to participate in uh and one thing I'm I'm particular and you kind of something I want you to expand on is how you know this is a tough pill to swallow for you know the well-developed Nations like the the

United States and you know perhaps a boon to the undeveloped Nations uh of the world can can you elaborate on on why highly developed Nations might have everything to lose and why undeveloped Nations have everything to gain here yeah and and to do that I'll I'll take a a step back for a second so I think it really to me starts with education and uh formalized education is becoming much more informal you know so I you know like Bank list Nation for example I I look at you guys as Educators right uh another example is you can uh go on code academy and you can learn how to be a a pretty decent python uh developer and

then you know hone your skills in a community community chats and and with other uh higher level developers right and so that that that first step of being able to become educated without going to um a college and spending $200,000 that's a really big deal um and when everybody in the world has access to the same information they can become educated in the same way right so so now everyone in the world is on the same playing field from an education standpoint and when everyone in the world is on the same playing field from an education standpoint now they you have to look at the the next level which is the market where are these where are these educated individuals going so

they're going now to um the open market to the job market and before the job market was a little bit more segmented you know from one nation to the next well now um through cryptography and and through some of the tools that are being built on things like ethereum anybody can participate in these markets right and when anyone can participate in these markets the people who are in the developed worlds who have higher cost of living who paid $200,000 for their education who expect um you know much higher wages for the work that they do those people now have to compete with uh the people in these developing

countries which they didn't even the the people in the developing countries didn't even have the opportunity to go to these uh four-year uh institutions right they they didn't have the opportunity to spend $200,000 um their cost of living is is a fraction of what is seen in in the developed countries so now they can perform work for a fraction of the cost as well so so this competition between the developed the developing countries which have uh they can deliver work at a fraction of the cost and the developed countries which have a you know they have a much higher Baseline for for their work uh that you know that's going to be an equalizing force and so I expect over the coming years to see the

wages in the developing countries go up substantially and um it might be you know we might see some difficult times in uh the developed countries and and and what this also speaks to is that there's increased competition for workers right people who uh you know increasingly are viewed as maybe unskilled laborers or or who work for a given organization and U do XYZ because now there are more people in the world who can do XYZ right it is increasingly a great environment for uh people who are creating things right because you can create an organization you can create a newsletter you can

create a podcast you can create whatever it may be from your living room with a laptop and an internet connection uh I would also say it's probably a great time for Capital allocators because there's going to be so much creativity um these Capital allocators have I think a larger pool of things to allocate to um so you know long story short it's an increasingly competitive environment for workers um and an increasing uh and an environment of increasing leverage for creatives creators and uh capital allocators and I think we can definitely take lessons from what has recently happened with the the covid crisis uh two cities that have

seen Mass Exodus are San Francisco and New York possibly the world's most dense cities with the highest cost of living right and you know people want to move away from places of concentration because that's where covid is you know that's where the highest risk for Contracting covid is but also I would say that that could actually be secondary for people wanting to move away from you know $3,000 a month studio apartments right where you know the they are already working from home and so if they're going to be working from home like CO's not going away anytime soon and so they are going to likely move from places of high cost High concentration out to places of low cost

you know low density uh because they can still do their best work through that Medium because Technologies like slack like Discord and also payment techn Technologies like cryptocurrency enable this to happen right and we don't have to talk about the migration from you know San Francisco out to you know the middle of California or like Tahoe but we can also talk about the migration from you know first world uh from countries like the United States or uh you know other other highly developed countries into lesser developed countries that are more tax friendly or are um just more um have less and also just have less restrictions I think we're seeing Raul Paul uh who has doing

a great job with real Vision live in the Cayman Islands it's a fantastic place to live uh you know who doesn't want to live in the Cayman Islands all day and I think this is kind of going to be the story of the next few decades is a a a mass migration a mass a mass restructuring of where people want to live as a result of these Technologies so one of the big themes in the sovereign individual is this idea of uh treating citizens like customers right I in in a free market if if you're if you're taxing or charging your customers uh a really high price for a really poor product then they will go to another

product um and I I think we'll start to see some of that happen uh Singapore over the last 40 50 years has been a prime example of a country that has uh really supplied a great product at great prices right so uh the taxes are are really friendly and they've been really efficient with the income that they have generated I I think there's a case to be made that there there is a lot of bloat in some of the developed countries uh there's a lot of bureaucracy involved and uh that starts to weigh on people

right and so uh you know like you said since this is all accelerated since uh co uh kind of hit hit the whole world where uh people are looking to be a little bit more efficient with how they're living their lives so um I I think I think we we saw like a really big surge right out of the gate of people exiting cities I'm I I think I I still expect to see cities Thrive and I expect to see a flood back to cities in the short term but um people start to move out to the country right we've seen a lot of people uh look at uh places out in the mountains or Wyoming where taxes are

super friendly um or look at like the Cayman Islands or uh Singapore but you know pretty it it's now becoming really difficult to even get into some of these uh tax Havens uh some of these jurisdictions that are being a little friendlier uh to Citizens and so I actually think think that's a really interesting Vector of study is is just how how can how can we work with countries to uh you know develop really interesting programs for people who do want to uh kind of leave but don't know how um you know I think we're in the early days but uh I think we'll see a

surge in that in the next few years it's kind of interesting because that's exactly what the the sovereign individual thesis I guess um I guess predicts right and um crypto crypto uh cryptocurrency anyway seems to be bringing that closer to fruition hey guys we're going to pause the episode with Phil and talk about some of these fantastic bankless sponsors that make this show possible if you're going bankless you need a good ethereum wallet Argent is one of the best wallets for the bank list journey two words to describe it simple and secure what do I mean by that first simple there's a mobile app you download you can get set up in 60 seconds this makes going defi easy easy easy that means One Tap access you can trade any

token at the best price you can earn interest and invest with a set compound Unis swap many of the other money Legos that we talk about on the bank list program second it's secure its security is Battle tested it's been in the field for more than 2 years securing millions of dollars that's why some people now have over a million dollars in their Argent wallet in some ways it's even more secure than a cold storage wallet because you can set transfer limits on the daily basis there's no seed phrases to lose it's always backed up through social recovery you can even use Argent as a multisig for large transfers lastly they just launched a DEX router that means if you're trading in Argent you get access to the best rates across the top 10 exchanges in one tap you can go

to Argent linkbank list to download the Argent wallet on IOS and Android and get started that's Argent l/ bankless lonn is def's first self-building project on ethereum focused on producing products for those who are interested in earning yield in defi y earns various products are all built to sue each individual Investor's preferred level of risk from various Vault strategies that leverage defi tokens to the safer earn system which relies on stable coins vaults are aggressive yield farming robots each with a unique strategy that is designed to maximize the yield of the deposited asset y earn employ from the most informed Developers in defi to keep the

Vault strategies updated with the various yield farming opportunities on ethereum for customers who are more risk adverse the Y earns earn product may be for you earn is a yield aware Dynamic money market that automatically seeks the best interest rates across the various dii protocols and regularly migrates your deposited stable coins between the dii protocols that are returning the best yield at the present moment WN is a system that is just a little over 4 months old so things are still very much an experiment however this this hasn't stopped people from depositing over $700 Million worth of assets into the Y earn system in order to find yield on ethereum perhaps the people that deposited all this money were tired of constantly making daily transactions to follow the best defi

interest rates and maybe the gas fees that they were paying ended up eating too much into their profits with W earn it doesn't remove the risk of these various protocols that it leverages but it does remove the overhead of constantly trying to make sure you're finding the best yield and also so that you don't have to pay for gas to switch up your assets check out the products that y earn has to offer at y earn. Finance that's yn. Finance which they also have a nice statistics page to see what other people are doing it's like it goes back to the question I asked earlier like what is the value of your US citizenship right um well you get to be proximate to a pretty good economy like a Global

Financial system like you know the S&P all these public traded companies well what if those Network effects start to become less valuable um even like the reason why some people immigrate is as you're saying Phil like uh the Fantastic postsecondary education system that the US has traditionally had well if that becomes less valuable well there there's less reason to to immigrate the value of the US system as a network decreases and the value of your citizenship uh decreases as well but but to your point you know um it it is somewhat a geographic Lottery depending on on where you were born but it's also something that you pay for on an annual basis

through taxes and if those taxes get out of whack then you start to wonder as I guess a customer of your government what exactly am I paying for it's it's sort of interesting like you know Dave and I launching launching Bank list that sort of thing we try to use crypto systems as much as possible so uh obviously have to maintain traditional bank accounts because there are some bills that just you know you have to pay in Fiat right but the bulk of all bankless activity is actually on crypto networks right and so when the bulk starts to transfer outside of the US Network and we start to to rely Less on the US Network and like doesn't really matter where we live to work for a protocol which is what Dave

and I do we work for uh cryptocurrency protocols well you start to wonder what what are we paying for from a from tax perspective and there's certainly tons of things we are paying for right like you know public education there's lots of things but it starts to erode the value proposition of these developed Nations and these traditional networks yeah absolutely and and I think it uh it goes further to when we we discuss how more and more is happening outside of the jurisdiction of you know regulatory bodies right so uh traditionally we pay for uh these type of regulatory bodies to keep trust intact uh to keep markets

uh functioning properly to keep us safe um but more and more like we've talked about this entire episode those things are happening outside of the purview of regul uh regulation and so if those things are happening outside of the purview of Regulation then we're not necessarily paying for those Services uh so it's further to the point that uh there's a growing disconnect between what we're paying for and what we might actually be receiving um as a you know customer you know quote unquote so um yeah I mean I I I think um and this is all not I'm not trying to bash you know the us or developed

countries you know I'm I'm proud you know to have grown up in a in a great City you know in the city of Chicago and uh I'm fortunate for how how I was brought up but I just think that there are trends that uh signal that um you know there's reason to kind of exit the cities uh and exit um exit developed countries if if the the price that you're paying isn't in line with the service that you're receiving one one question I have about this uh customer model of the world which is sort of what the self- sovereign individual uh kind of talks about right citizen as a customer of the state is there's a difference uh if I'm a customer of

Amazon and I opt out of Amazon or I do something that they don't think is okay or that that they don't like um whatever they can't do anything to me right but with the nation state because we talked about earlier this Monopoly over violence uh if I do something the nation state doesn't like or doesn't agree with um you know they could throw they could throw me in jail so uh th this is a different type of relationship maybe than a customer just a little push back on that what's what's your reaction to that like in a typical customer relationship the the company who's providing the service can't throw you in jail doesn't have a monopoly on violence but the nation state does does that put

individuals in a bit of a different position than a customer no it absolutely does but I I think uh I don't think this is controversial necessarily it's the state exists to serve its citizens and so if uh if enough um I guess unjust actions happen from the state towards its citizens especially in this age of free flowing information uh it becomes evident that the citizens should uh take a stand I guess um so you know I think the relationship still holds um you know in in that people can either say you know

they can either stand up or they can exit and yeah I think the barrier to exit is probably lower than it ever has been uh because of all the different things that we've been talking about the fact that you can leverage education from anywhere in the world you can leverage Global markets from anywhere in the world uh you can protect your currency uh you know and just by knowing your private key right uh you can protect all your data just by knowing your private key and and we're continuing to see systems that will empower the individual you know to act more as a customer to exit a system if they uh if they feel strongly about it

um and and so so I I I think it's you know I think it's just a positive trend it's just a checks and balances system right and uh in the information age the individual has the ability to um to do a little bit more checking the line that I think we're circling around that I remember from the sovereign individual book is that nation states won't be able to charge more for their services than the value of the services than that they offer and the authors of these books uh had incredible foresight because they wrote these things over a decade before even Bitcoin came around and 15 years before ethereum came around and you know just supposing these two systems you know that the nation state is a system

that is supposed to scale Trust across all of its constituency and it's also supposed to be this massive property management system right like according to the nation state they know who knows what like which piece of real estate which piece of you know stock certificate or money who owns what that's kind of they're kind of the master node of the massive Ledger of the nation state whereas Bitcoin and ethereum do very similar things where they use cryptography to replicate that to replicate the scaling of trust across you know at the widest reaches possible and also keep track of who owns what those are like the main roles that Bitcoin and ethereum play however there's a fundamental difference where you know the United States Nation is uh

also or any nation state is a generalized bureaucracy right and one of my one of my friends CK said this very well where any institution or organization is always interested in expanding itself right like every institution wants to get bigger and you know ethereum and and Bitcoin don't necessarily have that baked into their social contract right like ethereum is based off of cry cryptography which means that it actually has hardcoded limits as to what it can and wants to do right and so the United States Nation the average tax rate is 34 is percent but ethereum the average tax rate is the gas that you pay on your transaction and so it's EXT it's explicitly a pay per

use taxation system which I think is the most ultimate Fair way to view things and so so when Phil when you say that there's just this massive checks and balance between these two systems that that's what I see where you know the United States has this arbitrary tax rate or any nation state has this arbitrary tax rate and ethereum and Bitcoin have this tax rate that's a very pay peruse type of type of system one way to view this is you know checks and balances but another way to view this is that Bitcoin and ethereum are diametrically opposed to the nation state you know is is this an acceptable way view things or or is there flexibility with how to view the opposition between things like Bitcoin and ethereum and nation states yeah I I

personally don't view it as binary I I think again like there it's it's a check it's a check on on the power right there there's reason to have uh regulations um but there's there's reason to not allow those regulations to get too too large and too burdensome and I think your comment uh just minute ago about uh these systems these companies uh these uh government organizations they naturally want to get larger right that's that's often their goal they uh each sector wants to have more right and and so there's a there's a constant

reach there's a constant overreach and uh to then have these systems that are outside the purview of government uh kind of take away some of them that I think is just a healthy is just a healthy check on the on the whole system and I I would maybe push back a little bit in in the idea that you know Bitcoin and ethereum are not trying to get you know as large as they can be right and I think ethereum and Bitcoin have done a really good job of uh programming uh uh certain focal points into their into their communities right Bitcoin is is this uh idea of uh sound money something that can that can't be

stopped uh you know you can't change the supply and and because of that there's been a religion that has been built around it and similarly with ethereum right like it's a it's a different ethos and uh you know they're the whole ethereum ecosystem is is trying to build uh kind of like the Bitcoin ecosystem but more expan more expansive and uh kind of pushing the limits a little bit more and you know I I I don't think this is controversial either to say that both of those communities are are uh really fighting hard to uh to be bigger than each other right and so so I think it's

I think it's just a kind of natural it's a natural competition and um it's healthy it's just healthy to have more competition and so uh the rise of Bitcoin the rise of ethereum the rise of uh digital money and these digital Goods is a a healthy check on kind of the the physical the meat uh kind of the meat space that that we've grown up in one of the topics of conversation that is frequent on the bank list podcast and in the bank list newsletter and everything about Bank list is the protocol sync thesis where we think that protocols like Bitcoin and ethereum and also defi protocols found on ethereum are quote unquote dense right they fall down to the bottom of a stack and and one thing

I think is relevant to this conversation is the possibility that you know rather than being diametrically opposed to the nation state there is room for the nation state to sit on top of these protocols where maybe we have like a nation state that is quote unquote powered by ethereum right or powered by Bitcoin have you thought about this world yeah I think that's absolutely right uh these these systems uh definitely they provide optionality right they sit at the bottom like you said um of of the whole stack that can be built on top and so not everybody wants to interact in a trust list way all the time um not everyone cares about that level of of security or sovereignty right and so I I think it's

it's about building building all these different options on top of these completely trustless uh self- Sovereign protocols and uh optionality is just you know such an important characteristic of of these uh of these networks I do think that that's the right model it's like uh the protocol sync model for for this for nation states you know there might be a time where nation states feel like crypto is threatening just like there was a time where nation states felt like the internet was threatening and then they'll figure out how they can actually leverage uh not not take over not control but actually leverage these credibly neutral protocols for their own purposes right for examples so uh the great thing about ethereum and Bitcoin

is these are um inational protocols and by that I mean like nation state to nation state uh you don't have to trust Russia doesn't have to trust uh the United States of America in order to send Bitcoin or ether on a network to them right there's no banking system in the middle there's no Swift transactions there's nothing it's just a lower um like in the Pro in the in the stack um in infrastructure that they can leverage and like there there could be tons of ways that nation states wake up to how this technology is useful I was just reading this morning uh that Goldman Sachs right what our our favorite Banking Company just got caught by the doj stealing 600 million doll from the

country of Malaysia $600 million so the doj caught him red-handed uh and um Goldman is paying a $2.3 billion fine um all of this is done behind the scenes it makes one Wonder like about all the other theft we haven't caught in these uh these mass of banking organizations and banking companies but what if a whole bunch of that activity was on public open ledgers right like the the doj and Regulators could kind of tap into that it would be transparent it would be open we wouldn't have to like listen in on closed conversations and go look at the evidence and and track down

uh trans actions so there could be ways even Regulators start to use these crypto systems um to to you know to help to even enforce uh their their National laws is that is that kind of what you're saying Phil like you you agree with that vision of the world yeah and I think it's a constant uh push and pull right throughout history of of kind of the Old Guard versus the the new upand cominging technology I I I was I I think I saw a Twitter thread recently that uh was looking at uh women riding bicycles um and and and maybe just bicycle riding in generally like 80

years ago or something uh and it was comparing that to kind of the the Uproar of social media and the control that uh these big corporations have over us and the reason I bring up that that idea is just that when new when new ideas when new technology come to the market they seem spooky um and sometimes they are and sometimes they have the the potential to do to do bad for society but oftentimes you know they can be used for enormous good um so I I think it's it's just uh it's just about educating everybody and

I think that that is uh that's really what it comes down to and education is just a it takes a it takes a while and you guys are you guys are uh doing you know God's work just uh educating everybody on ethereum and all these ideas and uh it just takes time yeah you know on the time thing I got I got to be honest too like the bankless nation probably skew is uh a lot younger than the general population right I like I wonder if some of this is just going to be generational Phil right so you know um it's really difficult to understand this stuff but if you grow up with it it's difficult to it's it's far harder to understand the Fiat system you know

so maybe that's why some of this needs to play out over decades yeah absolutely I I I completely agree with that and just uh you know it it just takes time it's simple it's as simple as that almost Phil the reason why we got you on here is because you wrote this fantastic piece called the sovereign individual investment thesis where you labeled five different characteristics that align with human motivation uh acquire defend Bond learn and feel can you elaborate on these five characteristics and how they relate to some of the ideas or thoughts that we've been uh describing here so far on this podcast yeah so when I read the sovereign individual uh I was trying to kind of

develop a worldview and I was between jobs and I was you know just trying to just trying understand what was going on and uh what I wanted to do uh especially with respect to kind of the crypto market and what was going on at the time so I you know I was looking at some of some of what was going on in ethereum and some of what was going on in Bitcoin uh the adoption or the lack thereof in some of these applications and I was trying to figure out a way to um kind of develop a framework to eval valuate why some of these protocols or applications will or will not be adopted

right and so uh I I think I borrowed these from the book drive so the the five the five motivations are uh acquire defend Bond learn and feel uh so this is really just like greed fear belonging curiosity and feeling uh as like kind of the these core human motivations and the reason Reon that I kind of went down this road was uh the the quote from Jeff Bezos is talking about you know 10 years out people ask me what's going to change and I think a better question to ask is what is not going to change well human motivations don't really change it just I think they just shift right a little

bit and my my uh I think my assertion is is that right now people are uh kind of under indexing The Fear Part of things or or the ability to defend um and and the the reason they're doing so is because for a long time we've outsourced um defense right there there hasn't really been a way to uh uh you know mount a really uh good defense for one's personal property you always had to Outsource right whether that is to um a govern organization or whether that is

to uh a third- party entity like a business or a bank they're going to hold your data they're going to hold your money uh they're going to protect your uh personal property and now that has changed a little bit you know we talked about uh cryptography earlier in the episode um uh now you know we think about like money uh we think about our data uh the trend is just starting to change where I think people are starting to take a little bit more ownership over those over their own wealth and over their own data um the some of the systems aren't in place yet you know to be to be fair right like it's really hard to interact on the internet as an

individual if you're not super technical and not have data leak so so it's still early days but I I um that is kind of the lens through which I looked at the sovereign individual and then evaluated kind of the three different pillars um the three different pillars being um you know the fact that instant information dissemination uh sort of breaks down barriers to entry and exit uh the other being that non-sovereign digital money really uh decreases the power that Nations have for inflation and Taxation and then the last one is like the fact that encryption gives the the ability

for for uh applications to exist outside of the purview of Regulation um so so I I walk through each one of those pillars um through the lens of and and I mostly focus on uh the the acquire and defense mindsets and how uh censorship resistant technology and some of the applications that have been built thus far um why they have or have not kind of gained um adoption I see this Dynamic being particularly saling in bitcoiner culture where there's there's two things that bitcoiners emphasize above almost all others which are stack ATS and you know uh hold your private Keys yourself right

where where acquire Bitcoin and then you know you leverage the maximum power of cryptography to defend defend them right defend your stack um but this emphasis on defense implies that there is something to defend against so what are we so worried about you know you know coming to to take our Bitcoins what are we trying to defend against anybody who who wants wealth right I think uh I think there are always people who will uh be trying to uh U take wealth however they can and uh uh through through Co coercive forces and you know this isn't just this isn't just uh governments or

um you know it might just be uh someone the street a hacker of some sort and so I I I think the idea is just we now have the the power uh so with that power uh let's take some responsibility for uh for our own Goods um and and like I said you know a lot in in a lot of instances it feels good to have layers of abstraction in between but what's important is having that optionality to to kind of say okay you know I I saw something thing here or there and I now no longer um no longer want to trust an organization or or uh an institution um you know but but I think that need will

always exist and and that that want will always exist to to have an easier way to interact and to kind of take the burden take the blame take the responsibility off of the individual and uh ask someone else to kind of you know carry some of the so Phil when you filter things through this sovereign individual investment thesis particularly through the lens of acquire which is like plays to basic human greed desire like and then defend which plays to basic human fear uh you went through a whole bunch of different I guess Technologies or Industries what did you kind of Come Away with what are some of the the the strongest I guess assets or Industries or categories that um really exemplify

the the sovereign individual thesis you know I think I think we're in a really great industry in the whole the whole crypto industry uh it's it's uh it's really kind of the perfect industry for the sovereign individual thesis uh and all of this has been accelerated since covid right so with uh with all this money printing that we've seen there's been uh uh a reaction and that reaction has been okay maybe this digital scarce money something like Bitcoin uh makes a whole lot of sense right and so I I think that has that has resonated with a lot of Institutions it's resonated with a lot

of individuals uh around the world and uh and I think we've you know we've seen adoption uh just start to tick up in the last couple months uh you know again with increased upheaval uh there is censorship there's a call from censorship even by uh the citizens you know of of our country of countries around the world um and when there's censorship of these applications then there will ultimately be a cohort of people that uh kind of opt out and create alternative platforms and so I think we've started to see that too um we've started to see uh people develop

on on something like you know herbit or something like ethereum and develop these applications that are outside the purview of government regul so those are those are two big ones uh obviously remote work I I think we've seen the pendulum swing you know super aggressively into the on onto the side of remote work and you know no one's going into the office I expect that to to kind of shift back a little bit but uh um I I think in the long run uh iners work will be more of a luxury than it is a necessity uh and and I think the tools to make remote work feel as much like inperson work will will be a big area

for improvement um I mentioned education the educ education is probably the most interesting and important Vector to me uh just because you can educate people without even know like without without them even knowing they're being educated right and so I've said said this a couple times but you guys are educating your audience and that's that's a huge service I I think educators will kind of be like the next celebrities like the next uh the next wealthy cohort uh the people that uh are looked up to that are paid the most uh and you know I think we kind of

see that already like you look at kind of what's what Rogan has done on podcasting I think has been really powerful bringing in uh people from all walks of life and educating his audience on uh you know a bunch of different topics that I don't think they would have previously thought thought about uh pomp has made some really interesting uh developments recently so he's kind of taking personal finance responsibility to the Tik Tok crowd I forget who the exact person he he partnered with was but I think that's a really interesting uh angle uh so yeah disc education I think is just massive and it's a it's a really empowering tool um and then this and we're still so early in

this part but the idea of being able to do work for a DA for a decentralized autonomous organization and to you know just to just plug yourself in as part of this organization nobody actually needs to know who you are as a as a person they just need to know who you are as like a this digital identity is super powerful um whether you're contributing code or you developing memes for the community or you're uh organizing the Discord chats or you're developing the token structure these jobs can be done from anywhere in the world and you don't even know you don't need to know who the

individual is um so I think those are a couple of the the big uh the big trends that I see uh you know being in the in the crypto space I'm I'm really excited about Bitcoin and ethereum and and all the Innovation that's that's going on there yeah one example recently you know David and I so Bist Nation we were looking for someone to do some graphics design work for us uh someone just within our Circle uh part of the bank list Nation uh from Nigeria just stood up uh send us his portfolio of work send us an eth address did some fantastic work for us we sent him die from our bankless bank account transaction done work delivered deled I

don't know how this individual was educated he lives in Nigeria didn't really matter didn't matter at all for the work uh product did an excellent job and that's all part of this new digital economy that's that's rising up um Geographic barriers don't matter we didn't have to wire AC transfer funds from One bank account to another he didn't even have to open a bank account maybe he doesn't have a bank account I don't know it doesn't matter once again because this system is completely uh equal for everyone who has an internet connection it's powerful stuff yeah absolutely you know just you're just basing you're you're basing the the transaction based on uh the quality of

the work you know and then and that's it and that's really cool to me what I'm seeing and again especially with covid and how covid has changed the world is a pretty strong reaction against uh Universities at least with private uh higher education universities ities especially private universities and they very exorbitant costs and on the Jesse Walden podcast that we did a while ago talking about the ownership economy he described this like s-curve of adoption and was mainly talking about uh Silicon Valley Tech platforms like Twitter and Facebook where they these systems initially start off as something more or less a public good or a public utility like Facebook as a public utility to

socialize with your friends on the Internet or Twitter as a public utility to you know share your thoughts and as these platforms grow they you know grow to the size of the world size of the internet uh but then they can't grow anymore and so they start to turn extortionary right in order to grow the value of their shares they need to you know first expand to absorb as many people as possible and then and then extract as much you know advertising Revenue out of these individuals as possible and I I think we can say that this s-curve of growth of you know first being a useful utility and then being an extortionary institution also applies to the nation state but I want I want to keep this conversation on education

because I think we're seeing that same education uh that same scurve of growth apply to private universities where universities grow uh based off of being like a utility a useful service and then you know especially with Ivy League schools they kind of have been like resting on their Laurels right and you know it has turned into a Institution for education and it has then manifested into a system of generating Hoops for people to jump through right just to provide them a quarter million dollar piece of paper at the end of four years so that you can share that piece of paper with other people to sh tell them all about the Hoops that you've jumped through and maybe that's a a

disingenuous or incomplete illustration of what the university is but it's at least some part true and going along the theme of using tools or having a new world or economy that kind of does away with all this superfluousness and just you know valueless work in order to get a piece of paper that shows all the Hoops that you've jumped through in in lie of a world where you know Merit and you know your actual labor as your resume I think that's what a lot of this technology really enables do you you have any thoughts on that yeah and I think it it goes with what we uh mentioned earlier right that organizations uh tend to want to

continue to grow right there's there's just there's continuous reach and I think that's what we've seen with uh education institutions right they've just continued to grow uh because that's that's their goal and uh you can't knock them for it uh but a as you grow like there are going to be more administrative cause more Bureau uh there's going to be more bureaucracy it's going to be harder to U Move as fast and we've just seen alternative Technologies and alternative education systems uh come to fruition that it it it just makes it difficult for the brick-and mortar uh uh system to kind of keep pace and to

deliver the same education uh for the same cost so uh you know I I don't think it's like you know evil Corporation or evil education systems I I just think that it's a sign of the times and uh the technology and the uh systems have uh developed to a point where you can you can do all of this you can become educated uh informally at a fraction of the cost the the last I think and I think it's been pretty agreed upon that like one of the things one of the main uh value propositions of these institutions is is not necessarily the accredit or the

education but rather the accreditation right uh and you mentioned this you have you finish your education you have a piece of paper that says you went to school um and I think that that is one of the key uh key missing pieces in the uh online economy right now you know how how will accreditation be handled um because if you're not going to go to school if you're not going to be a writer uh you know what is it so and I think GitHub is probably a great a great tool your Twitter presence uh uh writing is a great tool um if you have like a trade log then a trade log is a great

tool you know just to be able to show that you are competent in the field that uh you hope to work in so let's finish with this Phil uh let's talk about another system institution that just wants to grow like a rent seeking H hungry monster and that's the banking system um and that's both uh the Central Banking apparatus that we have and also uh the commercial banking system and similar to education right like the whole bankless journey is like okay what what happens if we don't need you guys anymore right if if we we can Outsource all of this and our security and our property rights management and our entire monetary system to a series of public available ledgers what happens then when individuals have the option to

opt out maybe let's first start talking about um central banks right so we've got modern monetary um policies in in full swing with modern monetary Theory which is basically um you know fiscal stimulus to print money uh and it it seems like the governments doesn't matter which political party is in charge doesn't matter where you live in the world uh they're just going to continue to print money um but now crypto has entered this space what effect will that have on government's ability to do that do you have any insights into how the sovereign individual plays a role and how crypto

plays a role in the banking institutions today Bitcoin and ethereum it it decreases the exit cost right so governments can and I think will continue to prce a lot of money and that's fine that is their tool there's no there's no use in my opinion in getting angry about it or you know worrying about uh their policies because uh now we have a tool to just kind of opt out of that if if you don't think that it's right that the US um is printing a a ton of currency that's fine then you should hold an alternative

currency and now there are other Alternatives um and so I I I think that again that opt ality that ability to opt out of the system is uh really powerful um and then so like we'll see how far you know how far it goes before uh a majority of the population decides to kind of take that road and uh decides to opt out we're seeing I think the just the very beginnings of that and um you know I I certainly think that we at grayscale have seen uh that Narrative of you know trying to escape uh dollar debasement uh grow in 2020 whereas

previously I think that was kind of a you know it was kind of a dream uh so actually for the first time in 2020 you know because of all of this printing The Narrative has actually be begun to solidify itself one dot I want to connect for the listeners is earlier we were talking about about the demand or desire for uh defensive Technologies or things that allowed you allows an individual to uh you know defend against capture or extortion Etc and uh one thing I'm thinking about right now is is Bitcoin specifically bitcoin's hard cap and along also it's its uh you know unconfiscatable ility uh is a defensive

technology specifically against money printing right where you know cash under your mattress is pretty assured to be there right you know there's always the risk of of theft but if you you know you can you there are plenty of ways to securely hold cash in your house uh that prevents against confiscation or theft uh but there's the concept of the money printer where you know you can have your cash and but because it's dollars the money printer can confiscate value from you regardless right it can it can steal the value from your cash under the mattress and by printing new dollars and is what we call inflation right and so bitcoin's hard cap is itself a defensive

technology because and this is what bitcoiners love about Bitcoin is that no one can steal away your percentage share of all of all the Bitcoins out there is that is that an appropriate use of the term defensiveness as you were using it in your paper yeah absolutely and and so to expand their there are two main Revenue generating mechanisms in my view for uh nation states for governments and and that is you know number one uh money Printing and number two Taxation and inflation and you know uh printing uh more money typically has benefited the wealthy because the wealthy uh hold assets which appreciate

uh in that denominated currency right um however uh as in like on the inflation or on the taxation side of things the wealthy don't necessarily always win and there's a growing uh narrative that I've heard uh you know pleading for a wealth tax pleading for a tax on not realized gains but unrealized gains on literally just the money sitting in in one's bank account and I think that creates a really slippery slope and I think that will be uh a wakeup call to a lot of wealthy individuals who you know may be keeping

their money in a bank account on Shore somewhere right and and and so you start to think about those two uh those two vectors of revenue for the government um and I think it's a pretty scary thought and that is Bitcoin fixes fixes that on on on both of those angles uh right like it's unconfiscatable you you you unless you know the private key you can't take Bitcoin away um and it's resistant to inflation it's resistant to uh Supply changes and so you can touch it you can just leave it alone you don't have to touch it and your Bitcoin will be safe it won't be devalued it won't be debased

over time and I think both of those are just really really powerful characteristics that uh the majority of the population has has yet to appre appreciate but I think we're kind of at a Tipping Point Phil it has been a pleasure to have you on the bankless podcast thanks for going through your thesis what's so exciting is that even in a world of increasing control increasing authoritarianism increasing feeling like your digital rights are being taken away from you something emerged which is cryptography which gives those rights back to the individual gives those rights back to the people and uh it's certainly tools that we can use news in our everyday lives that's what the Bist journey is

all about so thanks Phil for coming on and talking about that a little bit more absolutely thanks so much for having me it was it was great uh taking some time to discuss these topics it's uh it's quite a fun time in the crypto space and uh I'm excited for the years to come it is an exciting time to be alive folks we were born at just the right place and time for crypto uh we may have missed the early internet but crypto is upon us now take advantage of it a couple of action items today read the sovereign individual thesis by Phil we incl will include a link in the show notes as well um of course the sovereign individual book is a fantastic book written in 1999 but is still super relevant today I just

finished reading it not too long ago um and it you know it's lot lots of lessons that I think you guys will apply here um the second thing you can do is become a member of the bankless nation so that's more than just subscribing to the podcast or the newsletter or connecting with the community those are all those can all be part of it but this is about taking control of your money using these cryptoeconomic systems going bankless so that you don't have to depend on Central intermediaries in your everyday life this is the new competitive Advantage this is the new citizenship and we want you to take advantage of it so start using crypto start using defi start using ether and Bitcoin in your everyday

life and of course guys risk and disclaimers none of this was investment advice uh the assets we talked about today are risky including Bitcoin and ether so is all of crypto so is defi you could lose what you put in but we are headed west this is the frontier it's not for everyone but we're glad you're with us on the bangas journey thanks a lot [Music]